Last week the NSW Government’s quasi-independent adviser on infrastructure, Infrastructure NSW, released the State Infrastructure Strategy 2022-2042 entitled “Staying Ahead”.

This update has positives and negatives.

On the positive side, they have recognised that there is an “issue” with housing supply (the rest of the world calls it a housing supply crisis – but never mind).

The big negative comes in their decision to simply throw the towel in and assume the problem away by shifting the goalposts.  Based on the impact of COVID, bushfires and floods the 10 year population growth predictions have been revised down from 10.6 million to 9.9 million.

While this might seem entirely reasonable, it misses the crucial point on the NSW Government’s Intergenerational Report. That being: we have an ageing demographic.  The number of taxpayers paying for the increased demand on services (primarily aged care and health services) is shrinking.  There are two ways to address this concern.  Increase the productivity of the workforce or grow the workforce (by growing the population).  The reality is we need to be pushing full steam ahead on both fronts.

By simply assuming that no effort will be made to catch up on the lost population growth during the COVID period, it becomes a self-fulfilling prophecy. This will keep housing prices well above any reasonable rate. In the meantime, the ageing demographics in NSW have not changed.  The population continues to age.  The number of people requiring health care, seniors support services and aged care is exactly the same now as it was pre COVID. Infrastructure NSW has determined that while these pressures continue to grow (keeping in mind that the baby boomer generation typically does not have access to sufficient sums of superannuation as many were not contributing to it for the majority of their working lives) – we should simply assume away population growth -hence – there will be less people (and most importantly, taxpayers) to pay for the costs pressures we know are coming.

They have solved the problem of housing supply and shortages in infrastructure by shifting the goalposts, but have ignored the underlying problem.

The Commonwealth, under the former Government, had already promised to increase population to levels beyond those which existed before COVID.  You can be sure that the Albanese Labor Government will also do this.  There will be a catch up period with the doors opening wide to immigration.  But not according to Infrastructure NSW.

Adequate Housing Supply requires timely provision of infrastructure aligned to rezonings and approvals

Urban Taskforce welcomes the explicit recognition of this important point but is disappointed that the Report essentially ignores infill development-supporting infrastructure opportunities.

In fact, the INSW Report barely mentions the need for improved community and economic infrastructure to support infill development at all.  Infill (sometimes called brownfield) development (mostly, though certainly not exclusively arising from Transport oriented redevelopment and also from the conversion of older river-facing industrial estates) has been the cornerstone of housing supply in greater Sydney for the last 30 years, delivering over 65% of all new homes in Greater Sydney.

At present, the total number of new homes being completed each year has dropped right off – and most of that decline was in the area of infill development.  However, Infrastructure NSW Update makes no mention of either: the housing supply crisis (apart from a nod to the difficulties currently manifest on our regions); or anything at all about how to restore planning approvals and supply in the infill areas of Sydney.

We agree with INSW that the creation of the Urban Development Plan and the associated monitor is both welcome and is critical to ensuring that land that is rezoned for new greenfield housing is supported by infrastructure.  Greenfield development will continue to provide choice and continues to be in strong demand.  But more needs to be done to support brownfield development and this is missing from Infrastructure NSW’ analysis.

Many of the projects which have been “kicked down the road” or postponed by this new State Infrastructure Strategy would have supported infill development (housing supply in areas where there is strong demand and rapidly increasing prices).  The Report states:

“Faced with these realities (construction industry capacity, competition from other states, difficulties with supply chains, Infrastructure NSW recommends reconsidering the timing and sequence of a number of large, complex projects that are not yet in procurement. These include – Beaches Link, Parramatta Light Rail Stage 2, the M6 Motorway Stage 2, the central tunnel for the Great Western Highway Katoomba to Lithgow upgrade, any further major Sydney Metro or rail projects (Sydney CBD to Zetland, Western Sydney International Airport to Leppington or Campbelltown) …”p.9

Somewhat perplexingly (given that the Infrastructure NSW Board is made up primarily of senior NSW Public Servants), the NSW Government immediately rejected the findings of the report when it comes to the Parramatta Light Rail Stage 2.  This might be a softening up exercise for delays in funding or delivery – or it might be an explicit repudiation of the Board of Infrastructure NSW.  Time will tell.

Gladys Berejiklian and Mike Baird were widely praised for their vision on infrastructure funding and delivery.  Labor’s repeated failure to deliver infrastructure as promised was one of the causes of its comprehensive demise in 2011.The areas where there have been the greatest difficulties are those where Infrastructure NSW itself has been responsible for project delivery. Infrastructure NSW need to take a leaf out of Mike Baird’s book.  Rather than finding excuses not to get on with the job of delivering critical infrastructure projects, find ways to make it happen.

The Infrastructure NSW State Infrastructure Strategy does quietly kill-off the work of the Greater Sydney Commission on the GPOP PIC (Greater Parramatta and Olympic Park Place-based Infrastructure Compact).  Never has there been a document or process so roundly condemned by stakeholders.  Parramatta Council, the Western Sydney Business Chamber, Urban Taskforce, UDIA, PCA and HIA all smashed the process and the black-box approach to assessment of growth potential, the cost assumptions associated with infrastructure and the precinct release prioritisation.  Even Rob Stokes was quick to distance himself from the GPOP PIC.  It is not surprising that this approach has been shelved with the following ever-so-polite condemnation:

“In December 2020, the NSW Government responded to the recommendations of the Greater Sydney Commission (GSC) PIC model with a direction to the Department of Planning and Environment (DPE) and the GSC to prepare a guide to inform where and when a PIC should be employed in the future, as a PIC will not be appropriate in all circumstances and is ideally suited to places where there are complex, largescale land use planning processes involving multiple agencies. Work is underway to assess the PIC model for scalable and transferable elements for smaller growth locations and precincts.

In addition, a Central River City Program Coordination Office has been established to oversee the delivery of the projects across the Central River City, including GPOP.” P.149

Obviously, no-one from Infrastructure NSW consulted that new body when the decision was made by Infrastructure NSW to recommend delaying the progress of the Parramatta Light Rail Stage two, which is strongly supported by Parramatta Council.  That recommendation was current for less than 18 hours!

The issue of housing supply and housing affordability will be critical as we approach the next State election on March 25, 2023.  Dominic Perrotet would do well to be wary of this analysis and its recommendations for postponing critical infrastructure development.

In their defence, perhaps Infrastructure NSW was distracted by their new Minister, Rob Stokes, who seems to be more focussed on indulging Clover Moore with her proposal to: remove traffic from the Cahill Expressway; then underground the rail line (at what cost?); and replace our magnificent Circular Quay ferry terminal with a concrete slab with the architectural merit of the old Hickson Rd Patricks freight terminal, than delivering infrastructure to support housing supply.

The Inaugural members of the Infrastructure NSW board, appointed soon after the election of the O’Farrell Government in 2011, included Nick Greiner, Max Moore Wilton, Sam Haddad, Phil Gaetjens, Mark Peterson and Paul Broad.  I can not imagine what they would think of this report and its focus on delaying the delivery of critical infrastructure.

By Tom Forrest, CEO, Urban Taskforce

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