Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
SELECT COMMITTEE ON HOUSING AFFORDABILITY IN AUSTRALIA
14/04/2008
Barriers to homeownership in Australia

CHAIR —Welcome. The council has provided the committee with a submission. Thank you very much for that. It is submission No. 37. I invite you to make a brief opening statement and then we will go to questions from members of the committee.

Mr Papageorgiou —Thank you very much for the opportunity. Housing affordability is an issue that Brisbane City Council has taken great interest in. We reflect in our submission our concern that it not be treated as a very simple issue or in a simplistic way. From our experience, we have great difficulty in actually influencing a positive outcome. I just want to summarise some of the items that appear in the submission and then, as requested, explore further any questions.

The key point that we make in our submission—and it is a relatively brief submission—is that we really want to emphasise the need for a holistic approach to understanding and responding to the issue. We do have some information that relates to the context that Brisbane is in that illustrates some of these complexities for a metropolitan area. We also have some comments that relate to the impact of infrastructure charges that we have intimate knowledge of; the impact of regulatory systems, particularly the planning system; and the land release issue, which is our biggest concern in terms of the simplistic approach. Obviously land release is part of the solution, but we are worried that some segments of the whole supply chain that delivers affordable housing raise it as the most important. I have got some points that relate to that relative to Brisbane’s position.

A point that we touch on in our submission that I would like to expand upon is employment growth and its impacts. We have quite substantial growth forecast for Brisbane and south-east Queensland, but the geographical location means that some of these solutions for housing affordability then get linked to the provision of infrastructure, in particular transport infrastructure. A final point is the real need for investment in urban infrastructure that actually complements the housing facility within the metropolitan areas. That relates to the issue of both renewal areas within cities and further expansion of greenfields developments, principally on the fringe.

I will just mention some contextual information for Brisbane. Brisbane City Council covers a population of just over a million people and we have some 380,000 residential dwellings in our area. Under the regional planning work we have been doing with the state government, there is a forecast for 2026 for Brisbane to grow to 1.2 million, which is relatively modest compared to the growth of some of our adjoining cities. The regional plan has set us a target of 145,000 new dwellings to be provided in that period; 115,000 of those will be infill dwellings, and the remainder, 30,000, will be greenfield.

The contextual issue for us is that we actually do not have a lot of opportunities for greenfield left within the boundaries of Brisbane City Council. So that 30,000 will be a tall order. We are also finding that the infill is a tall order because it is more complex development. It does mean that you can use existing infrastructure, but in many of our renewal areas we have found that the infrastructure needs to be replaced to take the denser development. So you can have substantial costs that are equivalent to the sorts of costs in greenfields areas, with the added complexity of existing residents and existing facilities to be managed.

The issue that I want to highlight that relates to the employment figures is that we have recently done a study with our state government and the regional partners in SEQ. It was undertaken by the NIEIR, the National Institute of Economic and Industry Research. That has forecast quite substantial jobs growth within SEQ, but the majority of that jobs growth will be in key areas, particularly within BCC. The CBD and fringe and the Australia TradeCoast ports area will have the lion’s share of that growth.

The issue that we have is that we will have many more jobs forecast for Brisbane. Around 685,000 jobs are forecast to be created by 2026 at the moment. But according to this study we will have 1,050,000 jobs. There will be more jobs within the municipal area than the residential population of our city. That means that most people will be travelling from the surrounding LGAs. The issue of housing affordability compounds that in that if the only affordable housing available is on the fringe—for the reasons that I gave earlier—then we have a real issue with transport infrastructure. The council believes that part of the answer is good, efficient development in our surrounding councils. But we would also like good, affordable housing in our renewal areas and to be exploring the mechanisms to provide that. I might leave it at that.

CHAIR —Thank you very much. What do you call good, affordable housing? What is the cost of what you see is in that context?

Mr Papageorgiou —For some of the objectives that we have for housing we use the affordability definition from our state government, which is pretty standard across Australia—the 30 per cent measure that the Australian Bureau of Statistics also uses. Current figures tell us that all of Brisbane is becoming unaffordable. That is a real challenge for us. The affordability work that we have looked at shows that within the inner city we have real pressure on single person households, particularly for rental accommodation. That is a point that I should have made. It is not just homebuyers; there is the rental part of the affordability equation as well. In the inner city, we have real pressure on that rental accommodation, particularly for the single person households and the smaller households. In our outer suburbs—and Brisbane does extend quite a distance—we have problems with the traditional greenfields development and the house and land packages being difficult to afford for the family households, particularly in the purchase area. The objectives that we have are to have a proportion of affordable housing across all of those price points. Yes, there is the welfare housing equation, but particularly there is what we call key worker housing, which is housing that at the moment is just under the affordability level, particularly in the inner city and in some of the key locations throughout our city.

CHAIR —When you mention the welfare housing equation, does that mean that the council works in with the Queensland government in providing areas within your boundaries as welfare housing? Is that what it is called in Queensland—welfare housing?

Mr Papageorgiou —That is just the term that I am using to separate the different segments.

CHAIR —Is it public housing or housing commission housing?

Mr Papageorgiou —Yes, it is public housing. The sorts of initiatives that councils are working cooperatively with the state government on include the Brisbane Housing Company, which is jointly funded by the state government and the council. That looks to provide a variety of housing products. It is an excellent initiative, but the volume of units that it is producing will not be enough to meet the demand that we are learning about in terms of current pressures. The segments that the council in particular is trying to address include servicing the homeless. We have a particular interest there. In our negotiations and cooperative work with the state government, we pay particular attention to that segment. What I call the welfare housing area is largely a delivery issue for the state government, but we work closely with them in terms of land development and sites. We have more recently taken an interest in what sorts of initiatives the council could support that would provide more worker housing in some of these areas of great employment growth.

CHAIR —Worker housing, did you say?

Mr Papageorgiou —Worker housing.

CHAIR —That is for the key workers that you were talking about earlier.

Mr Papageorgiou —Yes.

CHAIR —You said in your remarks that opportunities for greenfields development are limited.

Mr Papageorgiou —Within our boundaries it is quite limited.

CHAIR —And opportunities for infill are challenging, to characterise it in the way that you did. How are you going to—

Mr Papageorgiou —How are we going to achieve our targets? We have prepared a response to the regional plan, which is called our Local Growth Management Strategy. That shows that we can, with the greenfields land that we have left and our identified renewal sites, approach that target that I mentioned. We will be able to develop. We have some large greenfields areas that we are currently working on. They are both in the south. One is called Rochedale. That is now subject to planning permits for major residential subdivision. There is another one that is a bit earlier in the process called Oxley Wedge, which we are working through and which may deliver something in the order of 6,000 dwellings. Rochedale would deliver about 7,000 dwellings. They are our two largest greenfields components left.

There are scattered throughout the fringes of our municipality areas that we have identified for urban subdivision. They are bits and pieces and they are dependent upon rolling out the infrastructure—water and sewerage, road infrastructure and other services—to those areas. They will add to the complement. So we are comfortable about meeting the greenfields target that was set. With the infill target, we have identified enough renewal areas, but the point that I am emphasising is that, when we go to those renewal areas, it does take quite a long time to actually prepare them for redevelopment. We find that there is often substantial investment required, either to make those areas good for residential development—things like contaminated land—or to upgrade all of the basic services. Typically, the sewerage services need to be upgraded in these areas. Then there is the really difficult issue of providing good quality transport.

Another example of a renewal area is Northshore Hamilton—a very substantial piece of port land that is to be redeveloped. A key constraint is that its main access is Kingsford Smith Drive, which is at capacity now—you would have seen that. So trying to get about 7,000 new dwellings plus additional jobs into that quite large area will require some substantial investment. It will not just be about widening or increasing the road capacity; it is about the public transport services as well.

CHAIR —What diversity of dwelling is envisaged for those greenfield developments you were talking about? One of the issues which we have been talking about and grappling with is the large numbers of estates developed particularly in south-western Sydney—very much three- or four-bedroom and two-bathroom houses as far as the eye can see with not a lot of diversity built into the estates. I do not know whether it is a matter for the councils in terms of what planning requirements you impose in those developments.

Mr Papageorgiou —It is.

CHAIR —We talked to Campbelltown Council about it, and I thought they had an interesting approach. So I am wondering what your council’s approach is.

Mr Papageorgiou —That is very relevant to our interests. I think it was some six years ago that Brisbane City Council resolved to rezone the Rochedale area that I talked about from market gardening to urban. The council is obviously quite protective of its green frame. One of the rationales was that if we are to create a new suburb it should be quite a diverse suburb and we should pay attention to the environmental context. A master plan was developed for Rochedale and that emphasised it as being an urban community, not a suburban residential estate—analogous, I suppose, to the master plan communities that the development industry is coming up with, but with some additional provisions that have been written into the statutory document that will be used to approve developments. Some of the key features are that it has a town centre and zonings for denser residential development and mixed use development adjacent to the town centre; it has provisions for denser development along some of the main access routes, which will be the main public transport access routes; and it has some quite high environmental standards for the more normal subdivision of residential lots outside that. That had some resistance at the start because people were saying that that location—some 20 minutes from central Brisbane—should not be looked at to provide units. But now it is seen as quite sensible—that it is actually quite well located compared to some of the other areas that are now being master planned beyond Brisbane’s boundaries. So the planning controls do have quite specific requirements for a variety of densities and a variety of housing products.

CHAIR —Would that have any public housing in it?

Mr Papageorgiou —There are objectives for public housing set out in those requirements. We do not have mandatory requirements for the private developers. We do have interest from the Brisbane Housing Company and from people seeking to take advantage of council’s limited range of incentives for providing affordable housing. We have a program where, in our planning scheme, we give some small additional floor space and some relief from council charges if the developer includes, within their development, units for affordable housing, and they covenant them for 10 years. Our experience has been that we have that 10-year limit and after that it will revert to market housing. So our impact is quite limited, but that is what we are trying to achieve in these areas.

Senator IAN MACDONALD —Do you have a covenant for 10 years?

Mr Papageorgiou —We have incentives for affordable housing.

Senator IAN MACDONALD —What are they, just briefly?

Mr Papageorgiou —They range from floor space to plot ratio increases that apply in different residential zones. Where the developer proposes to include a component of public housing they can get additional floor space. They may get relaxation of car parking and they may also get a relaxation of some of the charges that council applies to the development, such as planning fees. And we are looking at reducing our infrastructure charges. Our legal issue has been that we have not found a sensible way of doing that for the purchase of affordable housing, so this is to maintain a number of dwellings as rental stock, linked to the affordability threshold as set by the state. We would be looking for two things: a covenant with the developer that they will be maintained as affordable housing for a period of 10 years and a management arrangement, so they may well get one of the existing providers to manage those units for them for that period.

Senator IAN MACDONALD —Is that unique or is it working somewhere else?

Mr Papageorgiou —It is a combination. Certainly, other councils in Australia have tried providing similar incentives. I think the floor space incentive has been tried before. We have been reviewing them, because until recently there has not been a very substantial take-up of this offer, and the response we have received is that the additional floor space is not sufficient to change the equation in terms of feasibility. Until recently we were not prepared to give a substantial discount to the infrastructure charge. It has only been in the last two years that the level of inquiry and indeed the level of take-up has actually increased. It has been very modest, but we see that it is now becoming more reliable.

Senator IAN MACDONALD —Do developers have a concern that if they are putting in lower class housing—that is not the right terminology, but you know what I mean—that area will affect the view of the adjoining higher amenity area? Have you had that sort of reaction?

Mr Papageorgiou —Because it is voluntary, we have mainly been discussing this with developers who are interested in the concept. That issue of conflict should not necessarily arise. We are interested in providing affordable housing within those categories that we talked about earlier, so if it is affordable housing set at the key worker housing level then the other tenants or owners should not know. It really would not make much of a difference what rent the people working in the next unit were paying. We have recently adjusted our incentives to make it clear that it can be for a proportion of the development. Before, it was read that the whole development had to be an affordable housing development to gain the incentives. We have clarified more recently that we are prepared to deal with the sort of mix that you are talking about.

Senator IAN MACDONALD —Finally—on your point, Madam Chair—you mentioned legal problems.

Mr Papageorgiou —With the covenant, yes.

Senator IAN MACDONALD —Have you resolved that? Are you able to tie them up for 10 years?

Mr Papageorgiou —We are able to tie them up for 10 years. There have only been a handful so far that have successfully been covenanted this way, though our level of inquiry is actually quite high now. The issue we had was the time. Originally we were looking for a 15-year period or longer. With advice and negotiation, 10 years seems to be defensible. The issue we have is that at this stage we can only apply it to a rental situation. The advantage, if you like, for the developer is that they get these incentives and they provide a proportion of their development and isolate it for this particular purpose. After 10 years it comes back to them and they can continue it or put it back on the market.

Senator COLBECK —I want to ask a question relating to the definition of the 30 per cent benchmark. Is it 30-40—30 per cent of income in the lower 40 per cent?

Mr Papageorgiou —Yes, that is right.

Senator COLBECK —That was something I just wanted to clear up with respect to what Senator Macdonald was asking, because it could be very easy to rent them out to someone who has got a high income and thus get around all your—

Mr Papageorgiou —No, we work pretty closely with the state to make sure, particularly when we are dealing with people who want to take advantage of an incentive, that we are clear about what groups are being targeted and who will be serviced.

Senator COLBECK —The issue from our perspective is that we get different people quoting different elements of that particular definition based on what their perspective is on the day.

Mr Papageorgiou —From council’s point of view, we are very keen to be involved but we do not want to set up our own bureaucracy to define what affordable housing is. We would much prefer to work in with a national or state definition.

CHAIR —Trust me; there is plenty of bureaucracy available on that matter already!

Senator HUTCHINS —I have a few questions. One is on the mix of housing, and this goes to a bit of Senator Macdonald’s question and to people being able to be there. We have had examples, say, in Karratha, where we were last Monday. There are high income earners up there, but they said at one stage that they spend 20 minutes doing the shopping at Woolworths but it takes two hours to get served because there is no shop assistant. It is the same with Sydney; Macquarie Street is full of doctors, lawyers, politicians and all that, who can easily afford to live in Sydney, but again there is no-one to serve you at the shop or do the cleaning because people cannot afford to live in that precinct. Is that what you are approaching with your plan? You understand that you do need blue-collar and semiskilled workers in the city. Could you expand a bit on that for us.

Mr Papageorgiou —Absolutely. In the NIEIR study that was done for us—and it was actually done for the whole SEQ region, in which there are now 11 councils from the Sunshine Coast to the Gold Coast and into Toowoomba—we looked at the forecast for jobs, because that was not covered in as much detail in that regional planning work that I referred to. We all had our residential targets, which we are diligently working up strategies for, but it was a bit rubbery on the jobs front. The work that was done for us, and which has just been finished now, has indicated that we are going to have increased jobs growth over what was forecast two or three years ago and that most of it will be concentrated within the municipality of BCC. There will be some containment of jobs—that is what we call it when we have enough jobs for the dwellings within your municipality—within the Sunshine Coast and the Gold Coast, and there will be increased jobs growth in the west; in Ipswich. But the lion’s share will be in the CBD and fringe—the greater CBD, if you like—and the Australia Trade Coast.

This is a real challenge. We are not there at the moment, but the affordability crisis at the moment suggests that it is going to be a big problem for us. If Brisbane gets priced out of the key worker market, then all our new key workers for these new jobs will have to come in from surrounding suburbs. If the transport system is very efficient that might not be a problem, but we are already having transport problems, especially public transport problems, at the moment. The studies suggest that there is a 45-minute work travel threshold and that after that people start to make different decisions in large numbers. It also suggests that it is not just a planning exercise of rezoning land in other cities and sending the jobs there. If we do not leverage off the concentrations that they are talking about, we will end up with fewer jobs for the region; that is the forecast. So council’s objective from its current planning strategies is to make sure we have enough affordable housing within our boundaries so that some of those key workers can live in Brisbane and not have to commute.

Senator HUTCHINS —Does that include the mix of housing—from one and two bedrooms to three bedrooms to four bedrooms? Is that part of the plan as well?

Mr Papageorgiou —That is right. Because most of our redevelopment will be infill, we are increasingly seeing our new approvals go to medium- and higher-density type developments. I think that at the moment we approve something like 6,000 new dwellings a year within Brisbane, and approximately half now are medium-density dwelling approvals as opposed to a single house. Apart from our greenfields, there are still quite a lot of individual houses being built because of vacant lots or someone cutting a lot in half. That can still occur in many suburbs, so we will continue to see individual houses being part of our development front, but over time the percentage that will be medium density will grow.

Senator HUTCHINS —What about resistance to medium- and high-density housing? We have come across one or two situations where councils would like to do a few things not only on that but on rates, but it is just not in their political interests. Can you explain how you deal with that here in Queensland?

Mr Papageorgiou —Yes. Brisbane City Council has got a long history of working on renewal. The Urban Renewal Task Force, which was set up some 13 years ago or more, has some good successes to point to in Teneriffe, New Farm and more recently West End. We are persevering with that model of redevelopment, which is relatively well accepted for the products it can produce but it is difficult in terms of negotiating outcomes. There is always a debate with the existing community or the existing land owners. Even in industrial areas that are changing over, there is still always a debate. One of the learnings we have is that, if we can show that public amenity will be improved or delivered with the renewal areas, it makes them a lot more palatable. So we have really concentrated on making sure that public services, public land—in particular, parkland—and access to the riverfront are all built into those renewal plans early, because they assist in them being accepted as a useful future for the city. I would not underestimate the complexities involved in investigating and preparing such land for redevelopment, and I have touched on this before. You can have what looks like a great redevelopment site, but once you get in there you find that all sorts of things need upgrading and it needs quite a lot of investment.

Senator COLBECK —I might continue straight on from where Senator Hutchins finished, Mr Papageorgiou, with the comments you just made about the things that you find when you go into a redevelopment site and the cost of those versus, say, greenfields. We heard evidence in Sydney, I think, that a redevelopment type of offering is in fact more expensive than, say, a greenfields development. How does that fit into the overall housing affordability structure, apart from the fact you have got more supply?

Mr Papageorgiou —That is a good point. It emphasises the need to be holistic about looking at the whole chain in delivering housing product. One of the learnings that we have is that, while you would expect that renewal areas of high density should have some sort of economies of scale in delivering housing product, they are often offset by increased development costs. The Australian development industry, as you would have heard from the EDIA, is very, very efficient with a house and land package, but then there are all sorts of complications that come in once the house gets above two stories. They include things like unionisation of labour as well as increased costs for elements such as lifts. So that is quite a complex area and it seems to create a whole raft of new costs once you get above a certain density or type of product, and that is a real problem for us because, as I said, we do not have much of the greenfields left so most of our redevelopment will be in these high-density areas and it will be more expensive. Then we have that comparison issue, which is that if greenfields land some 50 minutes drive from Brisbane is available for development it might be more attractive from a development view because of that efficient house and land package approach, compared to the more complex and investment-heavy requirements of transferring the renewal area—the old industrial land to an urban village—with all of the public benefits that are required.

In terms of our charges, though, there is still a differential. At the moment the median cost of infrastructure charges within Brisbane City for a detached dwelling is around $34,000—and those are our latest charges—and, for an attached dwelling or medium-density housing, it would be around $24,000. So you can still get a better yield from the renewal areas, but the complexity is a factor, I think.

Senator COLBECK —I want to come to the actual development costs and construction costs, because, again, they tend to be more expensive per unit in respect of the medium- to high-density type properties. So effectively the only benefit that you get out of those particular developments is that the land unit cost is potentially lower, and that could be problematic depending on the location and the desirability of that piece of property. So in an affordability sense you have got potentially higher land refurbishment costs, if you like, with decontamination and the upgrade of sewer services—which I understand are particularly problematic—and then the construction costs. With all of those things, in a housing affordability sense, effectively all they do is contribute to supply, because they all add up to be, in the overall sense, a more expensive form of construction—or of supply, I suppose, rather than construction.

Mr Papageorgiou —Yes. They contribute to supply. The most attractive areas for renewal are the ones in the high-value suburbs, and they bring on premium product. That is why councils are interested in those sorts of initiatives we were talking about before: how can we require, encourage or incentivise a proportion of that product to be maintained at an affordable level?

Senator COLBECK —Going back to the public housing discussion that you had earlier, do you have any figures on the actual numbers, the volume of public housing? I notice you had several classifications: worker housing, welfare housing and homeless type housing. Do you have any figures on the volume growth or decline in public housing availability?

Mr Papageorgiou —I do not have those figures with me, but I am sure we could get them from the state government. Off the top of my head, something like 300 new state-owned public housing dwellings are created each year for the Brisbane region. If you look at the demand and the waiting lists, we need something like 3,000, so there is a huge difference between that and what is being provided. There are programs that the state government is talking to us about—renewing their quite substantial existing estates, maintaining those and putting new dwellings in those—but again that requires substantial investment, which has not been forthcoming to date. So there is a mismatch between the number of new dwellings being provided and the increased demand that we are seeing.

Senator COLBECK —We would certainly be interested in those figures, because the availability of housing stock has been a factor in all of our hearings so far. In fact, in Campbelltown we heard of one estate—I think it was at Minto—where they had taken something like 800 public housing units out of the stock without any replacement, which is obviously having a significant impact.

Mr Papageorgiou —That would be a concern here too.

Senator IAN MACDONALD —You mentioned in an answer to Senator Colbeck something which I do not quite understand. I think you said that if you are going high one of the additional costs—and you listed a number of them—was unionisation of labour. What do you mean by that?

Mr Papageorgiou —I am not full bottle on this, but there is a different category of construction once you get over two storeys. So all of the trades that are involved move from being subcontractors to being more formally organised, and therefore there are all sorts of additional costs that apply to the actual building and construction. It is to do with the way the project is managed and some of the licensing that is required. They are issues that developers often raise with us. When they have a choice between low density and medium density, unless the medium density is substantially more generous, they say it is not worthwhile going down that path, particularly for smallish developments. So it can be much more profitable to put up two detached houses than to try a small unit complex.

Senator IAN MACDONALD —You say you are not full bottle on it. Who would be the best—

Mr Papageorgiou —UDIA and HIA could give you information about that.

CHAIR —I have a couple of questions in relation to some of the observations in your submission about infrastructure costs and the impact of infrastructure charges. We spoke to UDIA this morning. I find it slightly internally contradictory where you say that industry accepts council’s methodology in terms of how you are funding infrastructure costs—broadly speaking, I suspect, industry says, ‘Well, the cost gets passed on to the consumer, basically’—and then in the middle of that section you talk about subsidising the costs in the order of $50 million over two years. How does all of that match together?

Mr Papageorgiou —How does it all work? On the issue of the cost to the industry: the industry takes a great interest in our infrastructure charges regime—

CHAIR —Not surprisingly.

Mr Papageorgiou —Absolutely. They have scrutinised it and we have been involved in lots of consultation with the industry about how we can improve or make even clearer our provisions. Obviously the industry are concerned, as under the legislation we are only allowed to charge for certain systems of infrastructure—very briefly, roads and public transport, water, sewerage, stormwater, parks and community land. We are restricted to those public services. Theoretically we can charge the full amount created by new development, but in the past we have never been able to charge the full amount. With our fellow councils we have been improving our infrastructure charges plan, so we are getting closer and closer to charging the full amount.

Part of the debate with the development industry is that they are not challenging so much our methodology; they are challenging the outcome. They are saying, ‘The final figure is really high and hard to swallow and we’ll pass it on,’ and they are also saying, ‘Wouldn’t it be better if you funded this infrastructure for new development in a different way?’ They have produced studies to show that government should fund these things because we can borrow more cheaply and we should then spread it across the ratepayers of the whole city. The reason that council has been reluctant to go down that path, with the other councils in the region, is that we have a substantial infrastructure bill coming for maintaining the existing infrastructure for the city and also what we call catch-up—infrastructure that should have been provided to residential areas but was not at the time. That is funded out of the rate base. New suburbs and new developments are funded, to the extent we can, through developer charges.

What we have tried to do in the past is, as we do our new schedules and do our new research and publish our new infrastructure charges plans, we have not automatically gone to the maximum number. Brisbane in the past has taken a stepped approach to getting closer and closer to full recovery. More recently, late last year we agreed to a 35 per cent rebate for two years, and that is the figure you talked about, the $50 million figure. If we had brought in the new charges at the full amount, because we have now rebated at 35 per cent we would stand to lose that $50 million. I gave you some figures earlier for houses and high-density units. The impact of that rebate means that the median figures now, under the rebate, would be around $22,000 for a house and $16,000 for a unit. It is a substantial rebate. The advice from the lord mayor was that we will provide that for the next two years and continue to discuss with the industry what we do after that.

CHAIR —While you say that you do not generally want to run the costs process through city-wide general rates, by subsidising it to the tune of $50 million that is effectively what you are doing.

Mr Papageorgiou —That is exactly what is happening. That is right. It is a response to the pressures and negotiations. We are gradually increasing our charges as we do better work on identifying them, but we are conscious of the impact that it has, so we are careful in putting them out.

CHAIR —Under the heading ‘Land Release’, in the second paragraph you talk about the development industry releasing land in the shortest possible time rather than delaying release to maintain prices and prices growth. Is there an implication in that that you believe the development industry is holding back land?

Mr Papageorgiou —We believe that the development industry, particularly the larger players with lots of parcels of land to deal with, quite sensibly release them to their best advantage.

CHAIR —Well, that is their business.

Mr Papageorgiou —Exactly. That is what I mean about looking at the whole chain of delivery. Even if we provided for a greater amount of land to be released, developers looking after their interests would be making sure that is it is only trickled out to the market in a way that meets their sequencing of development.

CHAIR —My final question is about planning staff, because you are not the only group to have raised with us the lack of planning staff in Australia, broadly speaking. Can you elaborate on that a little for us, please.

Mr Papageorgiou —It has been a real problem for the last three years particularly. It looks like being a continuing problem. We are getting into more complex areas of Brisbane to develop. The assessment planner requires lots of project management skills. We have been losing our more experienced planners over time to the very buoyant development industry. That then compounds the problem of historical high levels of files to deal with. The relatively inexperienced people who are placed on it perhaps lack confidence in some of these key areas. That can lead to extended time frames. Not to treat it in a simplistic way, another issue that I would emphasise, though, is that we could improve our time frames for decision making by encouraging our planners to refuse applications that are borderline. Instead, Brisbane City Council has a very high level of delegation. More than 90 per cent of all of our applications are delegated. We have clear instructions from our council to try and get a good development over the line. That will mean that one that is in a complex area and has perhaps a lot of environmental issues and a lot of local resident interest will take a lot longer to get there. That is because we are not refusing it straight up but trying to improve it so that it can be approved. That then leads to some issues with case studies where they say that it took more than a year for that major development to get approved, and that is true.

CHAIR —Do you have a view about the use of what I believe—if my recollection is correct—the Department of Families, Housing, Community Services and Indigenous Affairs representatives called ‘paraplanners’? They are diploma or certificate qualified planners doing the more mundane work.

Mr Papageorgiou —We are very interested in that. There is a course that is offered by the LGAQ here in Queensland.

CHAIR —Is that the Local Government Association of Queensland?

Mr Papageorgiou —Yes. That initiative started three years ago. People in local government who are already working in a planning office but do not have the qualification are helped to get this paraplanner qualification. That gives us an opportunity to provide more planning work to these people to free up the qualified planners. We have certainly been doing that. We have also looked at some other initiatives, such as farming out some of our planning work. We have a program called RiskSmart, which we refer to in our submission. The state government is particularly interested in it. Low-risk applications—typically industrial applications, but they can be very basic house extensions and other sorts of applications—can be farmed out to a select list of development consultants, who are then monitored for their performance. Where it is a relatively black and white decision, that decision can be made by these appointed consultants. The council still does the paperwork and checks it, but that can mean that there are very quick turnarounds for those sorts of approvals. It means quicker approvals for people in those cases and frees up our staff to work on the more complex applications.

CHAIR —I suspect that we have met the two most popular planners in Australia, and they are two people who moved from Canberra to Karratha to be planners.

Mr Papageorgiou —There you go.

CHAIR —They are extremely popular individuals. Mr Papageorgiou, thank you very much for joining the committee today. Thank you also for the council’s submission. We appreciate that and we appreciate your assistance to the hearing.

[12.01 pm]