This opinion article by chair of the Business Council's Housing and Construction working group Susan Lloyd-Hurwitz (Mirvac) and chair of the Business Council's Major Projects, Contracting and Infrastructure working group Guy Templeton (WSP) was published in The Australian on 3 August 2020.
This pandemic has given everyone a reason to pause and ask: once this is over how can we improve? Should we go back to the way we did things before, or can we build a better Australia?
Australians’ quality of life is inextricably linked to our built environment. Our homes. Our towns and cities. The infrastructure that connects us and provides us with essential services. Australia is well served in these areas but we all know that things could be better.
The immediate attention of governments is rightly focussed on keeping the economy going by bringing forward shovel-ready investment projects. This will keep many in jobs, including in the construction sector which contributes eight per cent of gross value added and ten per cent of employment nationwide.
We must also have a longer-term focus on the systemic reforms that will make our country better and improve liveability for all Australians. Our focus must take us towards:
- Just cities that are designed, built and adapted to improve liveability and equality
- A globally competitive economy
- Making Australia a magnet for global talent and investment through unrivalled liveability
- Decarbonising our supply chains and infrastructure
- Activating regional Australia for growing populations and economies
These are all challenging but worthy goals. We will need the right long-term policy agenda to give us the best chance of success.
First, population growth needs to be quickly restored. Population growth will slow to 0.6 per cent this financial year – a huge reduction on the average annual growth rate of 1.6 per cent over the past decade.
Australia is one of the best places in the world to live and do business. We are riding the economic and health shocks better than many. If we don’t act now to attract the best and brightest people and world-leading investments in new technology, we will lose the opportunity.
Restoring population growth should centre on getting the critical health safety protocols right to allow us to normalise migration levels, and by increasing skilled migration to address skill shortages and international students to support education exports.
Second, we need to fix distortions in the housing market to ensure Australians have access to quality, affordable, and sustainable housing that also provides access to jobs and local amenities.
Long-term housing supply should be guided by transparent data and modelling that determines the quantum of new dwellings to meet population and affordability goals. State and territory governments should adopt targets for the supply of new housing, land release and fast tracking – and then be held accountable to deliver those targets.
Reforms to support the growth of the build-to-rent asset class will increase the supply of high quality, long-term rental accommodation.
Tax reform is also required. We welcome NSW’s move to cut land tax for the next 20 years for new build-to-rent housing projects to give renters longer-term leases. Stamp duty impedes mobility and should be replaced with alternative broad-based taxes. This will need to be done carefully so it doesn’t increase the tax burden.
And new spending to make existing homes more energy efficient should be encouraged. We need an energy efficiency rating system for existing dwellings, just as there is for new homes. This will support investments to install insulation, seal windows and door frames, and add double glazing to reduce running costs and emissions.
It’s critical we use this time to address the needs of the 200,000 Australians on waiting lists for public housing. Let’s get more private investment in public housing and reduce the backlog of public housing maintenance.
Third, we need to move towards to a better system of continuous planning and investment in infrastructure, and end the cyclical, ad hoc approach to infrastructure investment.
A continuous project pipeline, supported by consistent annual funding, will increase investment certainty and community confidence. It will provide Australians with the essential services they need and reduce congestion. It will enable Australia to grow, de-carbonise and develop our regions.
To get value for taxpayers’ money, infrastructure projects should be prioritised and independently verified as delivering the highest economic and social returns.
Consistent spending on infrastructure means the construction industry will be better able to plan for, and develop, their skills and labour needs which also reduces costs. Best practice government procurement should allocate the risks to the party best able to manage the risk.
The City Deals and Regional Deals are an existing mechanism that can be leveraged to identify and promote projects to drive development. Let’s pick five more city deal locations that can absorb population growth and invest in the infrastructure needed to drive development and economic uplift.
Smaller cities and regional centres want to attract people to their communities. They know that activity from existing employers expanding or new businesses opening their doors creates jobs and brings more people. Investing in infrastructure supports these communities to grow.
Fourth, tying all this together, we need a planning system that takes weeks or months to make a decision, not years, and gives investors greater certainty.
Planning agencies need to see themselves as part of the supply chain. Their performance impacts on job creation and infrastructure provision. Agencies must adopt best practice, set targets for faster approvals and regularly publish performance.
There are some promising recent developments that can be emulated across all jurisdictions: the online portal for major projects in Western Australia and the adoption of e-planning and the creation of a Planning Delivery Unit in NSW.
We strongly support the draft recommendations from the review of the EPBC Act to improve environmental standards while also speeding up approval times and devolving approvals to the states and territories.
To achieve all these goals, we need to build on the collaborative approach that has been fostered between governments through the National Cabinet, between government and industry and the community. We should build on - and not lose - the spirit of ‘we’re all in this together’.
These are our ideas. It’s time we look long term to the enormous value that housing, infrastructure and major projects can bring to Australia’s society.
Chief Executive Officer and Managing Director, Mirvac, and Chair of the BCA’s Housing and Construction working group
President and CEO, Australia and New Zealand, WSP, and Chair of the BCA’s Major Projects, Contracting and Infrastructure working group