Mine subsidence boost for certainty

Mine subsidence boost for certaintyA long held advocacy priority of The Property Council of Australia has been to correct the market failure caused by the legacy costs of Newcastle’s coal mining heritage – filling the old voids beneath the surface.The risk of mine subsidence is Newcastle’s unique problem child and the CBD’s greatest barrier to investment. The cost of remediation can run to percent of land value or up to $3 million on a typical CBD development site. In 2013 we developed a detailed policy solution based on the creation of a fund to be used for strategic grouting of wide areas of the city, with the value of the fund maintained over time by a supportive contributions scheme.Our advocacy efforts intensified over the past twelve months as demand began to outstrip supply and it became ever more crucial to remove this economic constraint to future development.So the recent announcement by the NSW Treasurer of a $17 million City Centre Grouting Fund will be a game-changer for development in NSW’s second city.And it’s a smart piece of business from Government – leveraging their $460 million investment in the Newcastle Urban Transformation & Transport Program with a modest fund and very practical policy.On the very day of the Treasurer’s announcement, the Newcastle Herald reported that both Labor and The Greens had backed the Government’s approach.Not only was there bipartisan support, the city was enjoying that rare treat of tripartisan support. But less than 24 hours later, both Labor and The Greens were in the media chasing a sensational headline in the hope of scoring a few cheap political points.Labor’s Tim Crakanthorp, a self described “passionate advocate” for the creation of a grouting fund, said that $17 million was inadequate.The Greens Michael Osborne dismissed it as an ”election thought bubble”. This was despite him calling for the creation of a grouting fund which gave priority to key sites in the West End and on the GPT/UrbanGrowth NSW site in the East End at a Property Council lunch in October 2014.Yet neither Labor nor The Greens could say how much their party would be prepared to spend fixing mine subsidence, nor how it would be done.And in none of their comments do they articulate that the costs occur up-front, can be more than double original estimates and are carried for the duration of the project, often at mezzanine rates.It demonstrates that Labor and The Greens have no understanding of what drives urban renewal projects in Newcastle towards peak debt at an alarming rate.If those drivers were understood by Labor and The Greens, they would have no criticism of the Treasurer’s announcement.And they would know that $17 million is a serious and significant commitment to Newcastle from the Baird Government. One that delivers what investors have been craving – certainty.That certainty represents a huge leap forward in making Newcastle a more competitive city, will give an enormous boost to confidence and provide hundreds of new jobs.The social and economic dividend will be significant.It will make a material difference to the commercial feasibility of projects and accelerate construction starts. Now that the policy and funding has been approved by Cabinet, the Property Council will work with the Hunter Development Corporation and Mines Subsidence Board to finalise governance and administrative arrangements.