Harper reform model can boost housing affordability

The Federal Government has released its eagerly anticipated response to the national Competition Policy Review, laying the groundwork for a new competition reform agenda.

Responding to what it called “the first root and branch review of Australia’s competition laws for 20 years” the Federal Government emphasised the central role of competition policy in its plan to drive growth and jobs in Australia’s economy.

The final report of what is known as the Harper review (after its author, Professor Ian Harper pictured) received strong support, with the Government accepting 44 of the 56 recommendations and remaining open to the other 12.

In an important development, the Government will proceed with the creation of a new institutional structure, involving the state and territories, to drive competition policy.

Federal Treasurer, Scott Morrison, said the new body includes “the potential for productivity payments for delivery of reforms.”

“This process is inextricably linked with the broader discussion currently underway in relation to creating a better tax system,” the Treasurer said.

The Commonwealth is seeking to use this competition incentive model to drive reform in areas of state and territory responsibility.

The Treasurer nominated planning and zoning as key areas “where reform can deliver real benefits: making our cities more liveable” and flagged this as an area of “early opportunity for the states”.

He stressed the benefits of lifting “the level of investment, and construction, and development, and things which are so important to our economy.”

The Property Council of Australia welcomed the response, saying the Treasurer had put a workable model on the table to get the states and territories on board with reforms to address housing affordability.

“Housing affordability is a major national challenge that needs a new approach,” chief executive Ken Morrison said.

“Applying a competition incentive framework to housing affordability can ensure we get the housing supply we need linked to infrastructure and jobs. “

Morrison said that under a national competition model states and territories would receive incentive payments to reform their planning systems, set their housing supply pipelines and think innovatively about affordable housing solutions.

“This approach would boost federal and state government tax revenues, which could be used to fund the incentive payments.

“The Harper review provides a unique opportunity for the Federal Government to take a leadership role in overcoming the housing affordability challenge.”