BCA Chief Executive Bran Black interview with ABC Sydney
17 October 2024
Event: BCA Chief Executive Bran Black interview with ABC Sydney
Speakers: ABC Sydney Breakfast Host Craig Reucassel; Business Council of Australia Chief Executive Bran Black
Date: 17 October 2024
Topics: Housing, supply, economics, productivity, planning approvals, industrial relations, cost of living, zoning
Craig Reucassel Host, ABC Sydney Breakfast: House prices are now being blamed for our low birth rates in Australia as well, causing problems everywhere. But what's the biggest thing holding back housing in Sydney? Is it slow moving councils, foreign ownership, red tape around development or NIMBYs? The Business Council of Australia blames zoning and density limits. It's released a new report called It's Time to Say Yes to Housing, saying that we should be building 15 or 20 storey apartment blocks around train stations. Bran Black is the chief executive of the Business Council of Australia and he joins us now. Morning Bran.
Bran Black Chief Executive, Business Council: Morning Craig, thanks for having me on the show.
Craig: No problem, so high rise around the stations that this is, isn't this what the State Government's already doing with its Transport Oriented Development Policy? Are you looking for something more than that?
Bran: That's exactly right, and we see that the Government is already taking positive steps in New South Wales with respect to zoning around those transport hubs. What the State Government is doing is saying that we can have up to six storeys and they're also saying that that can be within about 400 yards of transport nodes. Our position is that we should be taking on some of the recommendations with respect to zoning that have been made by the New South Wales productivity commissioner. What he said is that we should be looking to optimise the development processes for homebuilders, and they look at about 15 to 20 storeys, and we should be looking to increase the radius away from stations and transport nodes from 400 yards to up to 800 yards.
Craig: Do you think this would be popular with the public though, if we were going to say, I mean, there's been enough of a pushback at the moment? The first building to go through this is actually happening in the Ku-ring-gai Council area, and they're already taking the Government to court over it. There's been a bit of pushback. Do you think we'd be accepting 20 storey buildings?
Bran: I think one of the challenges that we've got here is that it is about balance, and what we're seeing at the moment is that house prices and rents are skyrocketing, and the consequence of that is that people are feeling real pain and pinch, certainly in terms of cost of living pressures. If we are serious about addressing cost of living pressures, if we're serious about trying to put downward pressure on rents and house prices, then we need to address the fundamental issues that are at play in this regard, and that really comes down to housing supply. Housing supply is the issue, and we know from the discussions that the Federal Government's having with the states and the agreements that have been reached in that regard, that we need to look at a 1.2 million increase in homes within the next five years in order to start putting that downward pressure on prices and rents that I just mentioned.
Craig: So, the Business Council of Australia is also pushing for a change to zoning laws, and you're saying to look to the experience in Auckland, where I think three quarters of the zoning in Auckland was changed, and it's changed from kind of being single dwelling properties, you could have multi dwelling properties on it. Has that been effective? Do you think we can do that here in Sydney?
Bran: Yeah, I really think it is something that's important to look at, that Auckland experience. As you mentioned, back in 2016 Auckland rezoned about three quarters of residential land, and in 2022 they did a study to look at what the consequences of that rezoning has been. What they found is that prices with respect to three-bedroom dwellings have on average, been about 30% lower than they would otherwise have been, but for the rezoning. And prices, with respect to two-bedroom dwellings, have been, on average, about 20% lower than they would have been, but for that rezoning. That's the kind of thing that we should be looking to do in order, as I say, to improve housing affordability, and, more broadly, to help drive the supply that we need to do that.
Craig: Isn't this also partly been done by the New South Wales Government, though, you know, not the transport oriented design stuff, but stuff around town centres where you can, for instance, put on duplexes rather than single dwelling. Isn't that also kind of been done at the moment? Are you calling to go more than this?
Bran: We are indeed. What's really interesting about the challenge with respect to housing and the recommendations that we're putting forward, we've got a report coming out, as you mentioned before, with respect to housing supply, and we make about 25 odd recommendations in that respect. But a lot of the things that we're calling for are already done in jurisdictions around Australia. So you might look at South Australia's consolidated approach to zoning, where if you're compliant with respect to the requirements for a particular zone that's articulated in the South Australians single planning document, then you can roll out that development anywhere where the zone applies. Queensland has a fantastic concierge service, which means that if you're a home builder and you need to get a concurrence or an approval from the environment agencies or from a utility agency within the Queensland bureaucracy, there's a single front door that helps you negotiate that system. And then, if you look to New South Wales and the transparency that exists here with respect to council application and approval timeframes with a very easy to access monthly updated website. These are all things by way of example, but already done throughout the country. And our point is, if we could just do the things that are already done in some jurisdictions, in every jurisdiction, we'd see a real, demonstrable increase in housing outcomes.
Craig: Yeah, speaking to Bran Black, the chief executive for the Business Council of Australia. You know, this kind of thing immediately does lead to the text line going crazy. Tanya saying, as someone who lives in a suburb near a metro station, we don't want these apartment blocks to be built. The roads are already so busy, and the public school already has too many students going to them. So some pushback on that. I just wanted to ask you, obviously, cost of housing is a big part that's leading to this cost of living disaster. One way, obviously, to respond to that is with higher wages. You've been very critical of the Government's changes to industrial relations laws, which have seen wages rising. Isn't that part of the solution?
Bran: Well, the industrial relations changes that have been made at a federal level have not led to wage increases. We have seen wage increases that have come about through other processes, but our key concern here is that wage increases that we have seen have not been backed with productivity gains. And what that means is that wage increases become inherently inflationary, and that's the experience that people have in terms of not feeling as though they're getting ahead even though they've had a wage rise. You know, that's one of the big challenges with having a cost of living crisis such as that that we're experiencing now. People see that their wages might be going up, but they feel, at the end of the week, once they've paid their bills and they've paid for their groceries and their rent or their mortgage, that they're actually further behind. And that's true, because when we look at where people are at now compared to, say, in December of 2022 we've seen that there's actually been a real wages decline. So, what we're saying is that in order to get people ahead, we need to see real wage increases. And historically, over the last six decades, we see that real wage increases have best been driven by productivity gains. To drive productivity, we need to have the right type of settings that deliver business investment. So that means better approaches to things like industrial relations. It means better approaches to issues like taxation, but it also means better approaches to planning and housing and that’s in our report.
Craig: Yeah, absolutely. It's interesting, you brought up this example. I think we'll all be looking to Auckland today and doing a bit of research on that. Thanks for speaking to us Bran.
Bran: It's my pleasure, thanks for having me.