Speech to Urban Development Institute of Australia (UDIA) Victoria Annual Conference
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I would like to acknowledge the traditional owners of the land on which we are gathered, and pay my respects to their elders, past and present.
Thank you Tony (De Domenico, Executive Director of UDIA Victoria) for your kind introduction, and thank you all for inviting me to take part in your Annual Conference.
I have got to admit when you invited me to address you today, I was intrigued about why UDIA Victoria was holding its Annual Conference in Tasmania rather than Victoria.
But when I arrived in Hobart this morning – for my first visit to this beautiful city in some time – I worked out why.
Hobart really is a great place to visit – and the backdrop of Mount Wellington against the Derwent River is a stunning sight on a clear day.
Not only am I grateful for the chance to visit Hobart once more, I also appreciate the opportunity to talk to you about the Rudd Government’s housing policy agenda, and to raise some of our reform priorities for the future.
The view from Government
When I was appointed Minister for Housing later last year, I was the first person to hold the job since 1996.
While that made it a great privilege for me, it also meant that that there was no national housing policy and a pressing need to increase housing expertise in the bureaucracy to get started with the serious job of implementing some major election promises.
Just as importantly, there were no established, ongoing links on housing matters between government and industry.
No clear lines of communication for the sector to get a message across to the Government about its needs and priorities.
I know that the Government cannot make housing more affordable for Australians and their families on its own.
We need industry support – your expertise, your opinions and your suggestions for reform.
I also need the support of other levels of government – State, Territory and local.
Government commitment to housing
The Rudd Government’s commitment to housing affordability is no accident.
Housing is central to our social and economic agenda because we listened to what the community told us – in their letters, emails and in meetings around the country.
We listened to developers, builders, local government and community groups – and everyone was saying the same thing.
You said that access to secure and affordable housing was fundamentally important to the everyday lives of all Australians.
Every day my colleagues and I were hearing first hand from Australians who were struggling to buy or rent a home, young people who had given up on home ownership, and from parents wondering whether their kids would ever be able to afford a place of their own.
Many people continue to write to me with their suggestions to help people find rental properties they can afford or to increase the number of new houses that people can afford to buy.
We receive advice from architects and builders proposing remedies like mass produced modular housing and the use of shipping containers.
The intense level of interest has reinforced to me that housing really is central to the economic and social fabric of the nation.
It is also why affordable housing is such a critical component of the Government’s participation agenda.
Planning and development
One way to improve housing affordability is to improve the efficiency of the housing market itself.
I know that many of you have been saying for a long time that planning and development reform is needed.
While some the States and Territories have made a start, I accept that there is much to do if we are to have a genuine impact.
Part of the reform process is a mindset shift for all levels of government.
We need our planning system to bring together the aspirations of local communities with the commercial realities of the housing industry to create the best developments we can as efficiently as possible.
One of greatest concerns in this area are the high holding costs our planning system imposes on developers, that are in turn built into the cost of new homes.
We owe it to home buyers to handle necessary planning processes without creating additional costs.
We also need to look at some of the other upfront costs faced by developers that are ultimately passed on to home buyers – like infrastructure charges for the installation of sewerage, roads, cycleways and parks.
As a first step to progressing reform in these areas, the Government is investing $512 million in a Housing Affordability Fund.
This new initiative will improve the efficiency of the housing market itself, lowering the cost of new, entry-level homes by cutting red tape and stimulating reforms to infrastructure and planning systems.
On 15 September, the Prime Minister and I launched the first expressions of interest round for the Housing Affordability Fund, which will close next week.
I hope that some people in the audience today are working on applications with local and State governments.
Applications will be selected via a two round process, with an initial expression of interest process being used to short list applications.
States, Territories and local government will have the opportunity to provide advice to the Commonwealth on applications.
Housing Affordability Fund proposals can be lodged by Local Governments, State Local Government Associations and State and Territory Governments.
To be eligible for funding, applicants will have to show how savings generated by planning or development reform created by the Fund will be passed onto the new home buyer.
We also need to improve the efficiency of the planning and development paper trail – to drag it into the 21st century by making it quicker, more accessible and more user-friendly.
It still seems incredible to me that you can buy plane tickets, book a hotel and even theatre tickets online, but in most places you cannot lodge or track a development application – and if a council wants to send one to another agency, they have to give the paper copy to a courier to deliver.
That is why the Rudd Government allocated $30 million from the Housing Affordability Fund to fast track the national roll-out of an electronic development assessment (eDA) system to make use of 21st century technology to replace a 19th century system.
The use of eDA and an on-line tracking will allow home buyers to check the status of their approval at any time of the day.
The system will also reduce confusion about the causes of delays – such as whether the household has made mistakes in their submissions, or whether the developer or local government is taking too long.
Ultimately it will help reduce development costs and improve housing affordability.
$26 million of the funding allocated to eDA will be provided to the States and Territories to fund new projects, starting in areas of high household growth, ensuring maximum savings to home buyers.
Of this funding, around $6.5 million has been committed to eDA projects in Victoria, with a further $500,000 allocated to Tasmania.
I hope to announce funding for specific projects in the next few weeks.
eDA and on-line tracking systems are one thing, but IT systems used by the different agencies also need to be able to communicate with each other if we are to eliminate the bureaucratic and inefficient paper-based processes that are used now.
To create a modern and national economy we need a single set of standards that allow for the interoperability of existing software.
In August I announced that the Government would provide $3.6 million so that software used by councils and State and Territory Governments can communicate with one another.
These funds are being used for a national project team that will implement and continuously refine a common protocol for eDA.
This protocol will set out the technical specifications for having interoperable eDA systems, sometimes referred to as the eDAIS.
Development of the protocol will help to ensure that different software systems, built by different vendors across different jurisdictions, will be kept broadly compatible.
By providing a national framework, the Government is ensuring that all affected parties move to electronic systems that ‘talk to each other’ in the most efficient manner possible.
This commitment is one more contribution to establishing a single, national economy.
Other new opportunities
I have already mentioned eDA and the Housing Affordability Fund, but there are other important new opportunities for industry in the Government’s housing reform agenda.
We are also investing $623 million in a new National Rental Affordability Scheme.
The Scheme will help to build 50,000 affordable rental houses around Australia.
Rent for these properties will be 20 per cent below market rates, and tenants will still be eligible for Rent Assistance – making it even more affordable for individuals and families.
We estimate 1.5 million households will be eligible including a number of moderate income workers such as police officers starting out and trainee nurses with a couple of kids.
I am hoping the councils, planners and developers will start to factor the National Rental Affordability Scheme in as they create new communities.
The Scheme is intended to operate an as incentive that can add value to developments and deals to deliver an affordable housing outcome.
A developer may wish to apply for incentives over a percentage of houses in a new development at the planning stage.
We have also established a National Housing Supply Council to forecast future housing need and identify gaps between demand and supply.
This is the first time in a decade that the Government has worked on predicting the future housing needs of Australians.
Every year, from next January, it will produce a State of supply report to improve the information available to the market.
If all levels of government can work together to better target housing supply to meet demand, then we can go a long way to improving housing affordability.
First Home Saver Accounts
The Government is also investing $1.2 billion to establish new, low tax First Home Saver Accounts.
These accounts will provide a simple, tax effective way for Australians to save a deposit for their first home through a combination of a Government contribution and low taxes.
The Government will provide a 17 per cent contribution on the first $5,000 of individual contributions made each year.
This means that anyone who contributes $5,000 to their account will receive an $850 deposit from the Government.
Earning on the accounts will attract the low superannuation level tax of 15 per cent and withdrawals will be tax free when used to buy or build a first home.
The accounts are the first of their kind in Australia – the biggest revolution in our savings culture since Labor introduced compulsory superannuation.
I should acknowledge that the UDIA was among the first to call for this type of initiative before Labor announced its plans in the 2007 election campaign.
The Government is really pleased with the level of interest in offering the new accounts from financial institutions.
Already 25 banks, building societies and credit unions have said that they will be offering the Accounts.
At the same time as helping Australians to buy their first home, the new accounts will also help the Government’s fight against inflation by encouraging greater private saving.
By 2012, it is anticipated there will be more than $6.5 billion in new accounts.
Creating sustainable communities
Sustainability is another important challenge for the future of housing.
While they are important, particularly when you think about our future energy needs, I am not just talking about environmental measures – because sustainability is far broader than that.
It is also about creating the sort of modern communities that people want to live in.
We need to reconsider the future of our cities.
Home buyers are no longer satisfied with an affordable and secure house.
They also want to live in a community that is serviced by transport, schools, shops and other social infrastructure.
They want to live in places that are well-designed, and take advantage of the local landscape – whether it be creeks and bushland, or the inner-city vibe.
I am sure there are many more, but just recently I have visited three wonderful new housing developments – the Delfin Lend Lease Woodlands estate on Brisbane’s southern fringe, VicUrban’s Aurora development in Melbourne’s northern suburbs and Landcom’s development and Victoria Park in my own electorate.
These developments are all terrific examples of what can be done if you bring builders, developers, planners and environmental experts together to deliver high quality urban design and affordable and sustainable housing.
These developments are finalists and winners of UDIA awards demonstrating some of the best quality in urban development.
They also reinforce to me industry is already taking the lead by building communities and not just houses.
You understand the social reality that people do not just want a house – they also want a community to come with it.
I do not underestimate the challenge of driving the cultural change needed across industry and government to make these sorts of developments the norm rather than the exception as we move forward – but I think it is the way of the future.
I think in future the Australian Government will take a more prominent role in urban development and cities policy, issues that have been left to the States and Territories over the last decade.
It is clear to me that long term gains in housing policy require good urban development.
We need development that delivers housing that is affordable in mixed communities that deliver opportunity.
There are obvious links between housing affordability and the growth of urban transport.
I would hope the development industry, working with local councils and State and Territory Governments will be able to use our housing programs as building blocks to support the high quality development that our cities need.
Housing is an integral part of the Government’s overall policy agenda.
Our collective challenge is to show that the Government’s investment in these areas can produce real results for the nation.
We do not want to micro-manage you, but we do want to create an environment where investors, developers and the community can achieve results.
We want to support innovation and creativity: a variety of local solutions.
We want to encourage urban development that deals with the major issues of our time – environmental sustainability, integration with transport and employment and creating socially cohesive communities.
My challenge to you is to work out how your product needs to continue to evolve to take advantage of these new opportunities.
There is a commitment to positive, creative new initiatives to address the serious issues of affordability and availability.
I hope that we can continue to work together to develop new solutions to help improve housing affordability for Australians and their families.
I am sure your input will help us deliver new ideas and a long-term vision to make housing more affordable in Australia.
Thanks again for asking me to speak to you today, and I hope you have a successful conference.