Unpick tortuous red tape patchwork to cure housing woes

19 February 2024

This opinion article by Business Council chief executive Bran Black was published in The West Australian on 19 February 2024

No one needs to be told how bad our housing crisis is. What we need are some practical solutions and they aren't always flashy.

Businesses know a big part of keeping grand plans in planning stage, and going nowhere fast, is regulation.

A patchwork of tortuous regulation across the nation is contributing to making us unproductive and slowing housing developments.

The problem is the incentives for reforming regulation that holds back our productivity - such as lengthy planning approvals for new housing - aren't there at a WA State level.

And that's a bad thing because productivity matters.

When we undertake reforms to be more productive, the dollars returned on that investment mostly go to the Federal Government on an 80-20 split, with the States getting the pauper's share despite doing the heavy lifting.

That's why the Business Council of Australia has proposed a National Reform Fund, funded by the Commonwealth, that rewards States for efforts to break down these barriers.

Barriers like years-long paths to getting a new apartment building off the ground.

The idea is that this fund would provide ongoing payments to States and Territories that implement productivity-generating reforms, such as simplifying their planning approvals for housing.

There are other areas of reform where we need to incentivise States to help us be more productive, too, such as consolidating payroll tax into one national system so it's easier to hire new workers.

We could also improve retail trading hours or remove stamp duty.

All these kinds of reforms can make us more productive. Productivity is bureaucratic jargon but it's important.

It means getting more out of every dollar invested and hour worked. It's not about making everyone work harder. It's doing more with what we have. And it's what improves our quality of life.

The best example is red tape on businesses. Even if no one worked a single hour more, if we cut some of the complex regulations that consume business owners, then those hours get spent on creating things of value such as jobs.

If there is regulation restricting new housing from being built, let's fix it.

If it's hard, and costly, let's incentivise the ones who have to do that work. That means payments from the Australian Government to WA to fix the problem and turbocharge the housing market.

The concept has worked before. After the Hilmer Report in 1995, the Federal Government paid $5 billion to States and Territories when they followed through on the competition reforms. And guess what: the investment worked, with the reforms contributing at least $60b in today's dollars to our economy.

It's not just housing approvals getting held back.

For example, there are eight payroll tax systems for national businesses to manage. Imagine if all that time and energy devoted to complex compliance hurdles could be spent on real work, growth and jobs.

As outlined in our submission to the Treasury, the first step should be a five-year “Ease of Doing Business” agenda through Cabinet, aligned to Productivity Commission advice.

There are changes which could happen tomorrow and make a difference, such as pulling back on destructive workplace relations legislation that just passed Parliament.

There are also many which would require concerted effort, time and will from governments, which is why the size of payments to States and Territories must be enough to genuinely incentivise them.

It's one way we can build homes faster, and sustainably grow wages, grow jobs and maintain our quality of life.


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