Housing key to economy
The property industry is the lifeblood of Queensland’s economy, and in a time of market slowdown, a healthy property industry is more vital than ever.
While Townsville boasts a diverse economy, over 13 per cent of gross state product generated in the region comes from the property industry.
Our industry employs over 10,000 full-time workers, or more than 12 per cent of Townsville’s full-time workforce.
When the property industry is doing well, the benefits are felt by the broader community in the form of additional jobs, housing, economic growth and broader tax revenue – including additional ratepayers.
Last month, the Property Council congratulated Townsville City Council for being the first local government in Queensland to commit to the Fair Value Infrastructure Charges Schedule.
This optional schedule of charges was developed as part of an infrastructure charges reform package introduced by the Queensland Government in July.
Only councils that sign up to these lower charges (reflective of the actual cost of infrastructure delivery) are able to access new, state government-controlled infrastructure fund.
Townsville City Council has a history of actively looking to encourage investment in the region, and this decision is another example of council recognising the whole-of community benefits that flow from development.
As we have seen in the media this week, there is often a narrow focus on the hypothetical cost of lower infrastructure charges to council’s bottom line.
A sensible discussion includes an assessment of the benefits that flow to the community as a result of the region being a more attractive and viable place to invest and develop.
For example, within seven years, a new 900-lot subdivision will not only provide housing for 900 families, it will create over 500 construction jobs, contribute over $120 million to gross regional product, and provide over $28 million in additional taxes – such as rates, stamp duty and payroll tax – to state and local governments.
Infrastructure charges add a significant upfront cost burden to projects, and in many instances render developments unfeasible.
Through council actively seeking to lower infrastructure charges for desirable developments, they are helping to tip projects into the “viable” category, ensuring they can proceed, and the community is able to see the broader benefits.
The returns council will see from these developments far outweigh any hypothetical revenue forgone. As noted in the Bulletin last week, council’s CBD incentive scheme is credited with attracting more than $270 million of development in the inner city.
While the article notes the scheme has cost $7.5 million in lost revenue, it does not acknowledge that the revenue would never have been realised, as without the incentive scheme, most of these developments would not have proceeded.
It is refreshing to see a local government that understands the whole-of-community benefits that stem from development, and is actively seeking to attract new projects that will generate ongoing returns for the region.
Chris Mountford is the acting Executive Director, Queensland at the Property Council of Australia.
This piece was first published in the Townsville Bulletin.