We heard a lot from the NSW Government last year about how they were going to improve the productivity of the NSW Planning System.
The NSW Productivity Commission published its two seminal papers demanding planning reform:
- NSW Productivity Commission Review into Infrastructure Contributions Click here to see the final Report
- NSW Productivity Commission Green Paper – “Continuing the Productivity Conversation” Click here to see the Green Paper
- NSW Productivity Commission White Paper – “Rebooting the Economy” – Click here to download the White Paper
But the Department of Planning has tied itself up in policy reform knots.
While there have been lots of announcements and lots of worthy consultation, the Department is in decision making paralysis. When the call comes (and it has come from everywhere) for urgent reform of the planning system, the Department falls back on a process to develop a pathway diagram for the process of consultation of stakeholders. No-one has the mandate to simply use the expertise they were employed to have and write new policy to deal with changed circumstances. The Department’s policy development practise has become introspective public service inertia at its worst. And this inertia is founded on a myth – that being the strongly held belief from some in the Department that the lack of approvals and lack of supply is not causing the current boom is housing prices. So, according to this logic, there is no pressing need for reform.
So with Treasury saying one thing and planners asserting another, you end up with confusion. New units to speed up processes and practise on the one hand; new SEPPs (regulations) and prescriptions to restrict housing supply and drive up prices on the other.
It is almost as though the fabled Sir Humphrey Appleby himself has designed these processes to achieve the frustration of policy change.
Responding quickly to changes in circumstance is not in the planners’ DNA. Flexibility and merit based assessment is contrary to the very notion of “planning”. Yes this is what the Productivity Commission’s White paper urgently call for.
Case study 1
The boldly entitled “Planning Reform Action Plan” was announced in July 2020 – the peak of the COVID-19 shut down. The revealing timeframe for completion of the reform process is … wait for it … June 2023! Old-growth rain forests evolve faster than this!
And the reforms themselves are hardly COVID-19 recession busting!
- Rezoning decisions are to be “slashed” by 191 days (33% time savings) meaning that NSW Planning will still have the slowest timeframe in the nation
- Decisions on Development Applications (DAs) for larger, regionally significant projects cut by 91 days (25% time savings)
- Decisions on major projects of significance to the State cut by 20 days (17% time savings).
The government’s own admission that a cut of 191 days represented only a 33% time-saving demonstrates how dire the circumstance is.
Having been intimately involved myself in the delivery of the construction of the venues and the public transport system for the Sydney 2000 Olympics, I can surely assert that if this task had been left with the NSW Planning System, they would not have been ready for the opening of the Brisbane games in 2032!
On other reform initiatives, the same urgent approach has been evident.
Case study 2
The Minister for Planning announced in early 2020 that he intended to create an appeal mechanism for rezoning applications. A year later, we are yet to see any draft – but there has been several zoom conference consultation meetings. However – no sign of any change.
Case study 3
The Treasurer announced as part of the 2020 Budget that the “protect and manage” industrial and employment land policy should be reviewed with a view to more flexible use of land. The Chief Economist of the NSW Treasury, Stephen Walters, said we need to allow more mixed use in CBD core locations as a way to adapt to the exodus from CBD offices. However, this reform area was handed back to the authors of the current policy – the Greater Sydney Commission. This review is now getting started – but there is no real drive for reform, no urgency for the delivery of housing supply.
Case study 4
Since October 2019, Urban Taskforce has been highlighting the plummeting new home approval rates in NSW. Inevitably, I said tie and time again, this would result in a shortage in supply and rising prices. That is exactly what has happened.
On the plus side, the approval rates are just starting to turn around – firstly for separated dwellings (though more serviced land release is desperately needed) and now there are some signs of apartment approvals – but not in all locations and not in the areas where there is most demand for apartments.
The DPIE’s Planning Delivery Unit has been a tremendous success – they are driving cultural change in the Department and in agencies – but they have no influence on policy.
How is it that when supply is at its nadir; when home prices are sky-rocketing; when new home approvals are just above rock bottom; when the Reserve Bank of Australia, the Commonwealth Bank, Westpac and NAB, the NSW Productivity Commission, the Commonwealth Productivity Commission, and the Commonwealth Minister for Housing and Assistant Treasurer; all join the Urban Taskforce to say “planning inertia in NSW is a problem for housing supply and housing prices and it needs urgent attention”, all we get is a plan for a plan to deliver only modest improvement in over two years’ time?
For all the announcements on planning reforms, NSW was ranked 7th in Australia for new-build starts by CommSec. This is despite the record inflation in new home prices.
The answer is that the forced Council amalgamation experience of Mike Baird neutered any contemplation from the NSW Government of Council reform or planning efficiency improvements. Even though NSW Planning had done a stack of great work on precinct plans and key transport corridor plans for development and new housing prior to 2017, they were handed back to Councils and have sat largely idle since. That is the root of the housing supply crisis today.
But as we look beyond COVID-19, we need the State Government to lead urgent productivity and economic improvements, just like they led us on protecting our health during COVID-19. We have seen what leadership looks like during the COVID-19 crisis – now it’s time to focus that same energy and intent from our State leaders to reform of the NSW Planning System and drive approvals and housing supply.