How incentives can fix state planning systems
The Federal Government could unlock $3 billion in economic benefits through incentive payments to help state governments fix their planning systems, finds a new Deloitte Access Economics report.
A Federal Incentives Model for Housing Supply, commissioned by the Property Council, outlines how a tried and tested financial model could increase housing supply and ease housing stress.
Property Council of Australia chief of Policy and Housing Glenn Byres says the model is based on the ‘national competition policy’ delivered by the Federal Government for a decade until 2005.
“We need to incentivise the states and territories to reform their planning systems so that we can ‘turbocharge’ supply and deliver practical solutions to the issue of housing affordability,” Byres says.
“The critical ingredient to addressing housing affordability is freeing up planning systems to help close the housing supply gap, which currently sits at more than 200,000 homes.
“There are long-term economic and social benefits from fixing clunky planning systems that strangle projects in excessive red tape and delays.”
The paper outlines five steps to implementing a financial incentives framework: setting targets; allocating responsibilities; modelling benefits; linking payments to action; and engaging local governments.
Byres says the approach “pays on performance”, by setting clear targets, tracking action and outcomes and linking them clearly with rewards.
“Providing incentives for reform could unleash $3 billion in uplift a year and create 3000 full time jobs,” he says.
“State and federal governments will also reap benefits with more housing delivering stamp duty, land tax and GST from construction; and local government will also benefit through rates.
“Housing affordability is an issue owned by all governments, and we should provide the necessary incentives, given the Commonwealth gets a productivity dividend through better cities,” Byres concludes.