Free up land to lift housing stock

The Albanese government’s Help to Buy shared equity scheme, which is mired in the Senate, would help up to 10,000 first-time property buyers purchase homes. Aside from the complication of investing taxpayer money in private property transactions, experience shows government involvement in housing markets has rarely produced good outcomes. That does not detract from the need to overcome the current scarcity of homes, including new builds, which is why a sensible proposal from the Business Council of Australia merits serious consideration. It has the potential to accelerate building approvals around the nation beyond what the government’s scheme could provide. The 176,000 new homes built across the nation in 2023-24 fell 64,000 dwellings short of housing targets.

In view of the role of local governments in approving land releases and building applications, the BCA wants state governments to be granted the power to strip low-performing councils of their role in building applications, Rhiannon Down reports. We especially like BCA chief executive Bran Black’s proposal for a report-card system tracking local councils’ performance on approval processes. Tardy responses to planning applications are a major impediment to developers, builders and homebuyers in too many local government areas. As Mr Black points out, while some councils are highly professional, others are unresponsive and take months to make decisions. They need to lift their game.

Inadequate land releases and glacial approval processes are at the root of housing shortages in many regional and outer suburban areas that should be affordable for first-time buyers. Improving approval times in those areas would help the property market work more efficiently in the interests of buyers. The same applies to projects that increase housing density in established areas, close to cities, for buyers and renters. If adopted, the track record of some corrupt players in state governments in the past in overriding local council planning processes for the wrong reasons – sometimes to benefit political mates and donors – would necessitate transparency and accountability.

Freeing up supply also would negate the need to reform negative gearing for the purpose of making housing more affordable. Experience suggests such a move could make the private rental housing market even tighter if mum-and-dad landlords opted out. Such reform, if undertaken, should be as part of a wider review to the tax system to reduce dependence on PAYE taxpayers.