BHP Competitive Advantage seminar: Planning delays ‘a brake on building’

Planning controls are one of the biggest ‘handbrakes’ on productivity, the chief executive of Lendlease Australia has warned.

Lendlease Australia chief executive Dale Connor. Picture: John Feder

Planning controls are one of the biggest “handbrakes” on productivity, the chief executive of Lendlease Australia has warned.

In comments ahead of his appearance at The Australian’s Competitive Advantage seminar in Sydney on Wednesday, Dale Connor cited the housing shortage as one of the major concerns for the long run competitiveness of the Australian economy.

Held in partnership with BHP, the event will examine two important issues facing the nation- competitiveness and productivity.

Mr Connor said the challenge facing the construction sector was not its ability to “pour concrete” and build houses faster; rather, it was delays caused by lengthy planning processes.

“The question (is) how do we get to the start line quicker?” Mr Connor said.

“Our industry has a huge challenge ahead of it to build 1.2 million homes over the next five years to help ease affordability pressures, but the simple fact is the planning system in Australia is the biggest handbrake on productivity, especially in our major cities.”

Mr Connor said planning approvals for projects could vary significantly across Australia.

“We’ve looked at three comparable housing projects in inner city Brisbane, Melbourne, and Sydney,” he said.

“In Brisbane we can get planning approval in six months, in Melbourne we’re looking at 12 months and in Sydney it’s 36 months,” he said.

NSW Treasurer Daniel Mookhey warned recently that his state was losing workers to other states and overseas because of the high cost of housing.

“Housing is a huge reason why we are struggling to attract and retain a workforce in NSW,” he told a Citi Australia Investment conference in October.

“We are losing human talent to other places in Australia and around the world. A lot of people we need go to Queensland.

“Our property prices are such that a lot of people (who might have come to Australia) are also going to Singapore.”

Mr Mookhey said NSW needed to build 55,000 new housing units a year to keep up with the population demands, but he said this had not happened since 2016.

“For the past 10 to 15 years, we haven’t been building as many houses as we need to expand the supply at an affordable level,” he said.

Mr Mookhey said high housing costs were one of the reasons that the state had a shortage of police, teachers, and health care workers.

He said the NSW government was working with the federal government to look at ways to boost the support of housing including reforms to planning regulations to allow for more high density development.

NSW Premier Chris Minns made the issue of his government’s plans to tackle the housing affordability crisis a focus of a keynote speech to the Sydney Institute last week.

The economic impact of the housing crisis in Australia is one of the topics to be discussed at the forum.

Other speakers at the forum include the chair of the federal government Women’s Economic Equality Taskforce, Sam Mostyn, and the president of BHP Australia, Geraldine Slattery.

Mr Connor said there was a need for more certainty around planning processes in Australia if more capital was to be attracted to the sector.

“Certainty around planning would also give greater confidence to offshore capital looking to invest in Australia,” the Lendlease Australia chief executive said.

He said the length of time taken in getting approvals in place for housing projects was making some projects unviable.

“The time taken to get through planning challenges returns which either means projects are unviable, the land value is reduced, or the capacity to provide affordable housing is diminished, further compounding the issue,” he said.

The forum will discuss issues raised by federal Treasurer, Jim Chalmers, earlier this year when he said, Australia “was “not productive enough, not competitive enough, and not resilient enough”.

It will discuss what is needed from both industry and government to address these challenges.