As Australia’s population expands, urban renewal and development are needed to cater for growing housing and infrastructure requirements.
To make this happen, the property sector needs to be able to deliver these in a timely and cost-effective manner – notwithstanding the need for robust development evaluation. To achieve this, administrative processes need to be streamlined and efficient.
One area for improvement is where local council has to refer proposed developments to state based agencies for consideration. This could include road or rail authorities, fire departments, environmental agencies or coastal or heritage management bodies. In some cases, approval of the relevant agency is necessary for the application to be approved overall and the agency holds a power of veto over the project. Other times, the agency to which the development has been referred simply provides advice.
Whilst referrals are integral to development assessment, property industry lobby groups say referral processes need improvement. In its Cutting the Costs report, the Property Council of Australia complains of delayed decisions and advice; a lack of clarity surrounding agency involvement; unclear information requirements; a lack of transparency and accountability in agency referral processes and decision making; and delayed responses or the imposition of unreasonable conditions. By improving these, it says Australia could derive up to $360 million in economic value gains and remove impediments to affordable housing provision.
In an interview, Property Council of Australia chief executive officer Ken Morrison said room to improve processes is evident.
He said the Council would like to see referrals managed by a single agency.
“Major projects have to get a range of different approvals,” Morrison said. “Quite often, that is against a whole bunch of stand-alone legislation where separate state government bodies are having to assess a project.
“Instead of having to navigate a plethora of different approval processes, what we are asking for is a one-stop shop where government makes a holistic decision on a project.
“This means that you don’t fall into the trap which governments often fall into now where in general, processes are slow, cumbersome, uncertain and contradictory. Too often, we find that a major project is forced to go and wait in line one after the other around these different state agencies with feedback that is uncertain, slow and often contradictory.”
In its report, the Council outlines several principles it says underpins an effective system. These include:
- Clear identification of referral agencies
- Clear response timeframes
- Established boundaries for each agency
- Clear information requirements
- Encouragement of pre-lodgement discussions between applicants and agencies
- Defined and articulated reasons for referral
- Legislated clarity over whether agencies need to provide conditions of approval, reasons for refusal or advisory information only
- Concise and focused agency responses
- Electronic exchange of information
- A commitment on the part of a coordinating agency to continuously work to improve processes.
It emphasises a principle outlined by the former Development Assessment Forum comprising of industry and government representatives which calls for a single point of assessment.
Under this principle:
- Only one body should assess an application, using consistent policy and objective rules and tests
- Referrals should be limited only to agencies who have a statutory role which is relevant to the application in question
- Referrals should be for advice only
- A referral authority should be able to give direction only where this avoids the need for a separate approval process
- Referral agencies should specify their requirements in advance and comply with clear response timeframes.
As things stand, the Council says performance of current systems varies across states.
In Queensland, a single agency known as the State Assessment and Referral Agency coordinates the entire process and acts as the sole agency through which referred decisions are issued under a one-stop shop arrangement. The agency is subject to performance measurements – performance against which is published in its annual report.
By contrast, New South Wales does not have a singular agency which coordinates referrals. Referral agencies may either provide general advice, concurrence (where the approval of the particular agency is needed) or ‘general terms of approval’ – an in-principle approval in what is generally considered an unwieldy process.
Moreover, where powers of veto exist, the report talks of a lack of transparency and accountability. Current structures throughout the state mean that lines between impact assessment with reasonable mitigation requests and exacting capital improvements are unclear, it says. Accordingly, there are fears that some agencies are using their power of veto to extract excessive demands upon development delivery in order to prop up their own capital budgets.
Against the five principles referred to above, the Council says Queensland is the only state where processes meet all five criteria, whilst the Northern Territory and Australian Capital Territory meet four of the five criteria. Conversely, processes in Tasmania meets only one of the five criteria, whilst those in New South Wales and Victoria meet only two.
Morrison says improving processes will aid affordable housing delivery.
“If you have got housing being provided into a city and it’s complex, slow, expensive and uncertain, then that housing is going to be much more expensive than it needs to be when purchased by the end owner,” he said.
“We have governments around the country talking about housing affordability; here is a practical guide to addressing one of the key blockage areas.”
Planning Institute of Australia (PIA) principal policy officer, NSW & National, John Brockhoff, offers a different perspective. Speaking predominately about New South Wales and in particular about urban renewal precincts, Brockhoff says a critical area to address involves ensuring that funding commitments are announced at the same time as the announcement of land release programs.
Often, he says, politicians facing political pressure announce the release of new land before arrangements for infrastructure have been finalised. Where this happens, he says there are several consequences.
First, questions about what will be needed, where this will go, how much it will cost and who will pay may not have been adequately considered. For developers, this creates uncertainty about the contribution regime – which they may be left to negotiate with several parties, including a potentially hostile local council. For the community, it creates uncertainty about the benefits which development will deliver and undermines confidence in the process.
On a related note, Brockhoff would like to see emphasis on the growth infrastructure compacts being developed by the Greater Sydney Commission. These involve governments, industry and the community working up front to develop a shared understanding about what infrastructure is needed to support growth, how much it will cost, how it will be funded and where it can be delivered.
Supporting all this is early engagement. Establishing infrastructure contributions. Brockhoff says, is a difficult process which should not be trivialised. Where issues are worked through up front, it enables infrastructure commitments and contribution plans to be announced simultaneously with land release and promotes confidence in the process.
Regarding state agency referrals specifically, he said reforms in NSW last year mean that where a state-based agency is required to make an approval decision, the Secretary of Planning can now make that determination on their behalf. Whilst this will rarely happen in practice, Brockhoff says this change has sent a clear message about the need for agencies to be up to scratch in their approval processes.
Another important reform has centred around referral hubs. This sees agencies collaborate on approval decisions and work through issues together. This is more time effective compared with the alternative approach which involves approvals having to proceed through one agency after another in a sequential manner.
Australia needs urban renewal to support a growing population.
To do this, processes including state agency referrals must be as efficient as possible.