On November 25, Queenslanders choose their government for the next four years.
For the property and construction sector, this raises questions about the policy directions of major parties as well as the issues which developers, builders, architects, engineers and others would like to see addressed.
To understand these, Sourceable spoke with representatives from four key bodies: the Australian Institute of Architects, Engineers Australia, the Master Builders Association and the Property Council of Australia. We have also looked at significant major party policies which have been announced to date.
Of course, there are stakeholder groups which lie outside those considered here (architects, builders, developers and engineers). These include subcontractors, suppliers, employees/unions, urban planners, building certifiers/surveyors, the environment, prospective home buyers and building industry consumers. Whilst not considered here, needs of these groups are obviously important.
Below is an outline policies announced thus far (as they affect property and construction) and priorities of each of the main stakeholder groups.
Major Parties and Their Policies Thus Far
By far and away, the focus of major parties as relevant to the built environment revolves around infrastructure.
On this front, Labor’s promises include: $21 billion over four years to improving the Pacific Motorway between Brisbane and the Gold Coast; $1 billion annually to upgrade the Bruce Highway; $175 million initially plus $200 million annually to target productivity, safety and flood resilience projects along the road (Bruce Highway); an extra $308 million to build and upgrade schools through its Building Better Schools program; creation of a third government owned power company to deliver 1,000MW of new renewable energy projects; and a boost of $200 million and up to 6,600 additional employment opportunities through its Works for Queensland program which will building regional infrastructure and improve the disaster resilience of regional communities.
Labour is also pursuing wide-ranging reforms in the construction sector under its ten-point building plan.
Of relevance to engineering, meanwhile, Labor says it will employ at least 3,700 new teachers over the next four years and beef up investment in science, engineering, technology, and mathematics skills (STEM) as well as reading skills.
On the LNP side, infrastructure promises include a $5 million study for western suburb transport options; $215 million to build the Sunshine Coast Hospital Link Road; $30 million to support the Brisbane Metro Project; duplication of the Sunshine Coast Rail Link from Beerburrum to Landsborough; $2.5 million to prepare a business case for a Very Fast Train Network linking the Gold Coast, Brisbane, the Sunshine Coast and Wide Bay; $100 Million to Improve M1 Ramps; $80 million to upgrade road bridges; $60 million to upgrade regional roads; $250 million (matched by Federal money) to build a Second M1 as an alternative to the Pacific Motorway; investigation of alternative routes for major SEQ arterial roads such as the Pacific Motorway, Centenary Motorway and Bruce Highway; $152 million to build the Smithfield Bypass in Cairn’s North$176 million toward the Cairns Convention Centre Project; upgrading the Haughton Channel and duplicating the Ross River Dam pipeline to improve water supply in Townsville; full retention of the Transport Infrastructure Development Scheme; and a $1.3 billion program to build new dams.
The LNP also wants planning reform to make it easier for new projects to proceed. This includes using performance targets to reduce major project approval timeframes and establishing a Ministerial Council on Infrastructure Bidding Costs. The party will also reform the ‘market-led proposals scheme. These reforms will include a maximum four-month assessment period, clearer parameters about the types of proposals which the government wants and changing the Project Assessment Framework to relax the current ‘uniqueness’ test and place greater emphasis upon value for money and capacity to deliver.
On electricity, the LNP says it will deliver cheaper household electricity through greater wholesale market competition, scrapping Labour’s 50 percent renewable energy target, writing down the regulated asset base, ending subsidies for renewable energy and building low-emissions coal fired plants in North Queensland. To ensure viable renewable projects can get off the ground, the LNP will pursue an efficient regulatory framework, a one-stop shop for renewable energy approvals and support of the National Renewable Energy Target.
In terms of skills development, the LNP has promised $5,000 incentives for Queensland businesses who employ apprentices, $500 vouchers for tradies who complete their apprenticeships to buy tools; $4,000 grants for young Queensland (15-24 year) startups and a bonus to employers who employ apprentice under the Apprenticeship Boost and Job Start Incentive through employers having that worker’s wages excluded as part of the next year’s WorkCover premium calculation after twelve months of continuous employment of each eligible participant. Labor, meanwhile, wants to boost investment in training centres and hire 40 more apprentices in the Housing and Public Works’ Building Asset Services. Labor will also pour money into beefing up compliance for a policy under which apprentices must comprise 15 percent of all labour hours on government projects.
Neither major party has said much about housing affordability.
Of most concern from the development industry’s viewpoint are policies coming from The Greens, who have adopted a hostile attitude toward the development sector and who have taken aim at the sector. A video message posted on The Greens’ web site declares that property developers ‘in league with politicians, have taken over our cities and towns’.
Under a radical policy, The Greens have pledged to create a new Queensland Housing Trust which would deliver one million new affordable homes over the next twenty-five years – a move which would create around 16,000 construction jobs per year. The Greens would also impose a 75 percent tax on any uplift in land associated with rezoning decisions, raise about $800 million over five years through a special levy on properties which are vacant for six months or more, remove the $20,000 cap on developer infrastructure charges, tighten requirements relating to height limits and setbacks and overhaul the Planning Act to give communities more right to object to developments.
As noted below, these moves are not popular with the development sector.
What Your Sector Wants
As noted above, Sourceable has spoken to representatives from each of the architecture, construction, engineering and property sector about key policy priorities for each of the major areas.
In terms of architecture, Australian Institute of Architects Executive Director Qld Melissa Greenall says the primary focus revolves around enhancing and maintaining the quality of the built environment. This is especially the case with ABS population projections indicating that the overall size of the population in South-East Queensland will increase by around two million over the next twenty-five years.
Toward this end, Greenall identifies several areas for action. First, she would like to see the introduction of rules similar to those in place in New South Wales through State Environmental Planning Policy 65 (SEPP 65), under which all buildings of greater than three storeys in height must be designed by registered architects. Registered architects, Greenall argues, possess the knowledge and expertise to make informed judgements about design approaches which are suitable for different given contexts of buildings.
Greenall would also like changes in public sector procurement for infrastructure projects to shift the focus away from awarding tenders primarily on the basis of cost and toward an emphasis on quality of design up-front and maximising the value of assets over their life cycle – a point she says is critical given that the largest area of cost around an asset’s lifecycle is its maintenance.
Finally, the AIA wants more action on affordable housing. This encompasses more than simply costs and incorporates housing which is within reasonable proximity of amenity and employment opportunities as well as energy-efficient houses which are liveable, comfortable and less expensive to run.
On policies announced thus far, Greenall applauds the current government on its shift toward a more value-based procurement policy with emphasis upon local suppliers as well as their retention of the independence of the Government Architect and the Queensland Urban Design and Places Panel.
As for the LNP, she expresses concern that they might adopt procurement policies which are excessively focused around cost as opposed to long-term value and quality of outcome.
From a perspective of builders, Master Builders Queensland has outlined nineteen points which it would like to see addressed across five areas: payments and disputes, liability, non-conforming products, safety and housing affordability and supply.
The critical area of focus, Master Builders Queensland Deputy Executive Director Paul Bidwell says, revolves around dealing with issues which he describes as ‘unfinished business’.
First, there is non-conforming products. Whilst Master Builders is pleased that the legislation to establish a chain of responsibility and place responsibilities for defective and non-conforming work upon several parties which are higher up within the construction chain (designers, manufacturers, importers etc.) rather than simply lumping the builder with the whole cost of replacing defective products, he says precise details about how the legislation is going to work and what the responsibility of builders in relation to defective products is going to be remain unclear. Greater clarity on this is needed, he said.
Next, there is Security of Payment. In a controversial stance likely to be opposed by subcontractors, Master Builders would like to see the current Building and Construction Industry Payments Act replaced with a new system which was easy to use and fair on all parties.
Predominately, Bidwell says this push has arisen because of changes introduced by Labor which are designed to improve subcontractor protection.
Of particular contention is the introduction of project bank accounts, which will initially apply to public sector projects valued at between $1 million and $10 million from 1 July 2018 and on all public and private sector projects with a value of $1 million or greater from the beginning of 2019.
Whilst these are supported by subcontractor groups on the basis that it will result in cash flowing more freely down the construction chain, industry lobby groups such as Master Builders and the Property Council fear the new system will create a significant burden in respect of compliance without delivering greater subcontractor protection.
Accordingly, Master Builders would like to see the new system reviewed by an independent panel together with builders and subcontractors prior to the extension of the scheme to cover private projects.
Master Builders would also like to see the reversal of an amendment to the adjudication process under the Act (which has been passed but not yet received accession) under which respondents to a payment claim are required to forward a payment schedule even in cases where there is no dispute and it was the intent of the respondent to pay the claim in full and on time.
Third, Master Builders would like a reversal of new industrial manslaughter under which employers who are negligent in the death of workers face penalties of up to twenty years’ imprisonment in the case of individuals and fines of $10 million in the case of corporations. The rules were bought in following accidents at DreamWorks and Eagle Farm which cost six people their lives.
Whilst the new laws are supported by unions, Bidwell says they are unnecessary. Punishment for poor safety practices, he says, was already covered through the Criminal Code and the Work, Health and Safety Act 2011.
Fourth, Master Builders would like the reinstatement of a five percent impairment threshold which those who are injured at work would have to pass prior to being able to push for common law claims in addition to compensation payments received through Workcover. This was introduced by the previous LNP government but abolished by Labor.
At the front end, Master Builders wants more investment in public buildings such as hospitals and police stations. Whilst the civil infrastructure spend had been significant, Bidwell says greater investment in public buildings would boost local economies and commercial builders in regional areas.
In terms of housing affordability, Bidwell says significant gains could be made by incremental improvements to improve the efficiency of planning. This would include replacing local housing codes with a singular state-wide housing code.
Nevertheless, Master Builders remains concerned about any attempt to mandate things such as greater energy efficiency (over and above current requirements) and liveability – issues which have been canvassed as part of Labor’s ten-point plan.
In terms of existing announcements, Bidwell says there has not been a lot from major parties but applauds two announcements from Labor which would increase spending on hospitals and would provide grants to households in cyclone proof areas who take steps to improve the resilience of their home to cyclones.
On engineering, Engineers Australia puts its policy list into six categories, including:
- The creation of an overarching Chief Engineer position to advise on engineering intensive policies and projects
- Registration of all engineers, including engineering associates ad technologists
- Long term infrastructure planning which extends beyond election cycles
- Greater efforts to improve water management and security, especially in improving water monitoring and data access and improving the engineering capability of government departments
- Implementing policies which promote energy security, sustainability and affordability and
- Improving STEM education, especially though investing in more specialist maths and science teachers, encouraging more women to study science and maths and fostering close links between schools, universities and industry for high STEM participation.
Without commenting specifically on individual party policies, Engineers Australia Division Manager Queensland Stacey Rawlings said engineers were looking for continuity around major projects based around long-term planning which extends beyond political cycles. What is critical for industry confidence, she says, is that significant projects which are already on the table now remain that way irrespective of any change or otherwise in government – especially as companies had undertaken significant effort to gear up and put engineering skill sets into teams in respect of some of these projects.
Rawlings laments, however, a lack of attention in respect of STEM education, which she says is critical not only for the future of engineering but also the nation in general. (Note: Rawlings’s comments were made before Labor’s aforementioned announcement in respect of education and STEM.)
In terms of property, the Queensland division of the Property Council of Australia is focusing on two areas: actions which it says will unlock economic activity and create jobs and those it says will promote confidence among investors. Toward the end, its agenda covers twenty-two points.
In terms of jobs, the Council acknowledges that there is little political appetite to one of its preferred methods for unlocking funding for capital investment in the sale and leaseback of government assets or ‘asset recycling’ through selling public assets and using the proceeds to build more assets. Accordingly, it is homing in on other areas.
First, it wants better use of publicly owned land. On this score, Mountford says countless parcels of land across the states could be freed up for uses such as affordable housing in areas of significant housing stress, housing for seniors or simply mixed-use precincts.
Another change which would not involve any government expense would to bring Queensland strata law into line with New South Wales and enable strata schemes to be terminated with approval from holders of 75 percent of the units.
Strata schemes are typically terminated whereby a developer offers to purchase all units within the scheme, often with the intention of demolishing existing units to make way for a more modern and larger scale development. This is considered beneficial as it enables more housing to be delivered through urban renewal rather than greenfield development, enables the replacement of aging and often unsafe or unsightly stock with a more modern alternative and facilitates an exit strategy for owners who have been locked into older and potentially unsafe dwellings where they would otherwise have been unable to afford the investment required to bring the complex up to scratch.
At the moment, however, termination can only take place with agreement of 100 percent of the owners – a threshold considered by many within the industry to be excessive and close to be unachievable. Moving this to 75 percent, Mountford said, would help to unlock greater urban density in places such as the Gold Coast Light Rail Corridor where greater density is desired.
Further, the Council would like a clean-up of what it says is a confusing matrix of infrastructure planning and assessment documents, bodies and processes. Take, for example, the recent Shaping SEQ Regional Plan. This, Mountford says, provides a link to the Queensland State Infrastructure Plan which is tenuous at best, barely mentions Local Government Infrastructure Plans and does not provide a strategy to address the issue of planning for and funding regional scale infrastructure. As a result, he says there is little certainty about the future of infrastructure and how if at all this is tied to land use planning. To resolve this, he would like a consolidation of planning instruments with a view to creating a seamless interaction between land use and infrastructure planning.
In terms of current policy announcements, Mountford applauds several economic policies put forward by the LNP including aforementioned plans to make the market-led proposals framework more accessible. From both parties, he applauds the emphasis upon infrastructure delivery.
On the negative side, he says some of the aforementioned policies put forward by The Greens were ‘not really properly thought through’. The plan to build one million new public homes over twenty-five years, he said, would see the government essentially become the sole provider of new housing. The 75 percent land uplift tax, meanwhile, would add significantly to the cost of delivering new housing.
Mountford also laments what he says are a lack of policies on the part of major parties in respect of housing affordability.
On November 25, Queensland elects its next-term government.
For the property and construction sector, implications of decisions made now could be significant.