NSW Chief Economist Must Reform Planning System To Boost Housing Supply

The appointment of Stephen Walters as NSW Chief Economist opens an opportunity to reform the complex planning process that is making housing more expensive, says the Urban Taskforce.

“With his background in the private sector Stephen Walters will bring a fresh set of eyes to the impediments to the supply of new housing,” says Urban Taskforce CEO, Chris Johnson. “His early statements about the need for a streamlined process to boost the construction of homes is exactly what is needed.”

“The appointment of the Chief Economist by the NSW Treasurer, Dominic Perrottet, follows his recent appointment of Peter Achterstraat as the NSW Productivity Commissioner. These are very positive signals that the NSW Government understands that the planning system needs to be streamlined so that housing approvals happen more quickly. Currently, there is a muddled system between the state and local government with overlapping responsibilities.”

“The current negative attitude by many Sydney councils towards what they see as overdevelopment has led to a culture that has no incentive to process planning applications efficiently. Yet it is the NSW Government that is rolling out significant metro rail infrastructure that underpins where growth should occur. The NSW Government must drive the new development that responds to the government’s metro rail infrastructure.”

“The reality of housing supply is that it is an economic system that relies on the private sector to deliver the new housing stock yet state and local governments put a brake on the supply process that can add years to a project. The lost time from our current slow planning system simply makes projects more costly thereby raising the cost of homes. On top of this, a range of well-meaning taxes and levies that councils want from developments only makes the housing even more expensive.”

“A report by the Centre for International Economics in 2011 estimated that over 40 percent of the purchase price of a new home in NSW comes from taxes, levies and delays.  Clear,ly a review that looks at the productivity and economic issues behind this massive cost should try to reduce the burden on the purchasers of new homes.”

“A review by the Urban Taskforce in 2017 found that if Victorian design standards were used for an average apartment $150,000 could be saved from the purchase price.”

“The Urban Taskforce believes that the NSW Productivity Commissioner and the NSW Chief Economist must look very closely at ways to reduce housing costs so that housing can be more affordable for consumers.”