Turnbull Government’s cities agenda takes shape

Despite the loss of Jamie Briggs as the first Minister for Cities and the Built Environment in December, the Government’s cities agenda is taking shape, as revealed in a keynote speech by Greg Hunt last week.

Environment Minister Greg Hunt (pictured), who currently has responsibility for cities, has spelt out the key elements of the Turnbull Government’s agenda, which has five parts:

  • Long term and integrated planning with state and local governments
  • Renewed focus of policy makers on housing affordability
  • Strengthening the link between housing and jobs.
  • Green initiatives to make cities more liveable
  • Investigating the role of value capture in encouraging growth.

Importantly, the speech committed the government to including housing affordability in the review of the taxation system. With the average stamp duty paid on a house reaching $35,000 in Sydney, $32,000 in Melbourne and $28,000 in Darwin, taxation is impacting the capacity of Australians to buy a home close to where they work.

But as Minister Hunt recognises, affordability is more than tax, it’s also about the connectedness between jobs and housing. While our cities perform favourably in the international rankings – with Melbourne topping The Economist’s international rankings for a fifth straight year – congestion is looming as a major drag on national productivity.

As Minister Hunt put it. “When the only affordable housing is located an hour and a half away from work, this does not support liveability – and it is terrible for productivity.”  It’s a pressing issue for Sydney with the city requiring up to 664,000 new homes and 689,000 new jobs in the next 15 years.

The Turnbull Government wants to tackle affordability by increasing the number of jobs in residential areas, by increasing the supply of housing in areas of high job density and by improving transport connections between areas of housing growth and areas of employment growth.

The Minister, himself the son of a Victorian Planning Minister, believes the challenges can be met by bringing together federal, state and local authorities to develop an overarching physical roadmap for the next 30 and 50 years. The Minister’s call comes on the eve of the launch of the Greater Sydney Commission.

Green cities initiatives continue with cities to set goals out to 2050 for increased tree coverage and through the National Clean Air Agreement, which was endorsed by State Environment Ministers in December.

The Federal Government, under the direction of Major Projects Minister Paul Fletcher, continues to study the issue of value capture as a new revenue source for government. However, there are risks that the idea will cut across the government’s affordability agenda. 

As Ken Morrison, Property Council chief executive, put it, “Property owners already pay stamp duty, land tax, and capital gains tax, and we are wary of government adding a value capture tax on top of them. The danger for the government is that it might end up with its own version of a VCT – Very Cross Taxpayers.”