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EXPERT OBSERVER
Urban Taskforce Chief Executive, Tom Forrest, today expressed concern that new home approvals data shows approvals in Greater Sydney have dropped to 16,087 for the 6 months up to and including May 2020 - the lowest half yearly number since May 2013.
Mr Forrest said the Urban Taskforce is on record welcoming the NSW Government’s Planning System Acceleration Program which has seen a number of approvals for large projects come through over the last two months. However, the fact is that approvals were already down to 16,338 for the 6 months leading up to and including November 2019, well before COVID-19 was a factor.
“Part of this drop off in housing approvals is no-doubt due to the close down period associated with COVID-19. But there has been a clear downward trend in new dwelling approvals in Greater Sydney since its peak in November 2016 when 31,000 new dwellings were approved in the six months prior to that date. The figures released by DPIE yesterday show a 48% drop in the 6 month approval data since the peak in November 2016.
“The property and construction industry is a big employer in NSW. Keeping the approvals flowing through the system is critical to employment in NSW and to meeting the demand for housing.
“Approvals today are a clear indicator of work in progress in 12 months’ time. The Department of Planning is pushing strongly for a pro-jobs culture, evidenced by the recent planning reforms and announcement of a new Planning Delivery Unit"
“But culture change is desperately needed at council officer level. Council planning staff need to work with proponents to deliver projects which provide housing, industrial and commercial employment, retail centres as well as open space and public amenity. The key here is working together with businesses to produce financially feasible solutions”, Mr Forrest said.
To quote two great philosophers:
Voltaire (1770) “The best is the enemy of the good.” Confucius (circa 500 BC) "Better a diamond with a flaw than a pebble without."
Mr Forrest said the NSW planning system had slowed down in the context of the 2019 election and a focus on strategic planning. Now is the time to hit the “go” button on approvals. In the current economic context, the planning system needs to grant at least double the number of approvals to half the number of new dwelling completions.
The NSW Government’s draft Housing Policy says that 50,000 new homes will need to be completed in Greater Sydney each and every year till 2040 to meet forecast demand for housing. That means we need 50,000 new dwelling approvals every six months. The DPIE’s most recent data shows that the last 6 months delivered a mere 16,000 new dwelling approvals, as did the 6 months prior to that (well before COVID-19).
“Fast-tracking is good and it has driven a new ‘can-do’ attitude in DPIE, but the entire planning system needs to work together to deliver for the NSW people and the economy”, Mr Forrest said.
TOM FORREST is the Urban Taskforce CEO
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NSW planning approvals drop off: Tom Forrest

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EXPERT OBSERVER
Urban Taskforce CEO, Tom Forrest, today welcomed the NSW Government response to the Independent Pricing and Regulatory Tribunal (IPART) Review of the Local Government Rating System. 
The Government has, somewhat belatedly, decided to reject IPART’s core recommendation that the base for setting rates should be changed from the unimproved value of land to the Capital Improved Value of land.
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“The tax system should not punish those willing to invest in construction and improvement.  It is the land that is the most valuable component of a property and the tax system should encourage investment which best utilises that land. Mr Forrest said:
“The last thing we need during the COVID-19 recession is a disincentive for investment in property and employment.
“IPART’s recommendation for change would have resulted in a manifest disincentive for and owners to invest in the improvement of their property. IPART completed its Review in December 2016.  The Government response has been a long time coming – but on this occasion, it was worth waiting for”, Mr Forrest said.
Mr Forrest said he was disappointed that more had not been done to scrap rate pegging.  The rate pegging system means that Councils with growing populations have been strapped for cash and have progressively pushed more and more costs onto developers and new home buyers.  
“These additional costs are passed onto new home buyers – often those young people who can least afford the extra costs.  The current system works to actively discourage Councils from agreeing to increasing urban density, even around major infrastructure upgrades”, Mr Forrest said.
Mr Forrest said that the Minister for Local Government, Hon Shelly Hancock MLA, has announced some changes to allow Councils to increase their rates as the population grows and this is very welcome.  
The rate pegging system has actually worked to limit growth.  Many Councils have complained that the onerous burden of applying to IPART for special variations was just not worth the hassle.  Urban Taskforce has called on the Government to scrap rate pegging and completely review the role of IPART. Urban Taskforce supports the role of the NSW Productivity Commissioner, Peter Achterstraat, who is now reviewing all aspects of state and local infrastructure levies, taxes and fees.  
“We urge the Government to revisit the issue of Council rates and consider removing or relaxing the pegs on rates in the course of the Productivity Commissioner’s review,” Mr Forrest said.
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NSW Government rejects IPART recommendation to change the Council rating system: Tom Forrest

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The Independent Pricing and Regulatory Tribunal (IPART) is reviewing the fees associated with electronic conveyancing (eConveyancing) for the first time.
Around 85% of property transactions in NSW will be required to use eConveyancing from 1 July 2019.
Transactions such as transfers, mortgages and caveats will have to be lodged electronically.
eConveyancing is designed to be a more efficient and accurate way of conducting the settlement and lodgment stages of a conveyancing transaction.
IPART Chair, Dr Paul Paterson, said IPART’s review is focused on the fees charged by and to the electronic lodgment network operators (ELNOs). 
ELNOs operate electronic workspaces allowing lawyers, conveyancers and financial institutions to exchange data and collaborate to prepare conveyancing documents, settle funds, pay duties and lodge documents with the land registry online instead of on paper.  
“Essentially, eConveyancing allows parties to complete conveyancing transactions (like a sale of land) and disburse settlement funds electronically,” Paterson said.  
“The electronic lodgment network also allows other documents that are not necessarily part of a sale, such as caveats, to be lodged electronically.”
Currently there is only one ELNO in NSW, PEXA.  Another ELNO, Sympli, is expected to commence operations in NSW during 2019, with the prospect of more entering the market soon.
A paper released by IPART today seeks feedback on a range of issues to be considered as part of the review. These include: 
<ul>
<li>The state of the eConveyancing market, including possible barriers to entry such as the lack of arrangements for different ELNOs to participate in a transaction</li>
<li>The maximum fees that ELNOs charge lawyers, conveyancers and financial institutions to use the electronic lodgment network </li>
<li>The maximum fees that the NSW Land Registry Services charges ELNOs </li>
<li>The maximum fees that Revenue NSW can charge ELNOs in the future. </li>
</ul>
“We are also looking at the costs that will be incurred to connect multiple ELNOs when more enter the market, and how these costs should best be recovered to drive efficient outcomes and avoid excessive charges,” Paterson said. 
Submissions on the Issues Paper will be received until 30 April and considered by IPART before a draft report is released by July.
Recommendations on the final prices will be provided to the NSW Government by October 2019.
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IPART to review electronic conveyancing fees for the first time

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Premier Gladys Berejiklian has announced Dr Paul Paterson as the new Chair of the Independent Pricing and Regulatory Tribunal (IPART).
The telecommunications and media consultant Dr Paul Paterson has recently been chief economist at the Department of Communications.
He has held senior roles in the private sector as a strategic advisor on telecommunications since 2004, following six years with Telstra during the transition to a competitive telecommunications market.
He managed Telstra’s role in the process of opening up the public telephone network to competition.
In the 1990s, Paterson worked for the NSW government, first as chief economist in the Premier’s Department during the Fahey government and later as executive director of policy and resources in the Department of State and Regional Development.
He has also worked as chief economist and as director of strategy for OTC Limited.
<a href="https://www.propertyobserver.com.au/subscribe" target="_blank"><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/1/1/Strip%20ad%20keep%20up%20in%202019.jpg" alt=""></a>
The Premier thanked outgoing Chair Dr Peter Boxall for his significant contributions in the role over the last seven years.
“I am pleased to welcome Dr Paterson to the role and have no doubt he will continue to protect the interests of consumers and taxpayers of NSW,” Ms Berejiklian said.
The IPART secretariat has around 130 professional staff for its price setting, quality monitoring and licence compliance roles for energy, water and transport utilities in NSW. It also conducts independent inquiries on economic and regulatory matters for the NSW Government.
Dr Paterson was previously appointed an IPART Tribunal member in 2013, before taking up his senior role in the Commonwealth Government.
He has 30 years’ of experience as a senior industry economist and has held senior roles in several Commonwealth and State government policy, research and regulatory bodies, including:
<ul>
<li>Adjunct Professor, University of Technology Sydney Business School</li>
<li>Head, Commonwealth Bureau of Communications Research &amp; Chief Economist Department of Communications</li>
<li>Director Regulation, Telstra</li>
<li>Executive Director, NSW Office of Economic Development</li>
<li>Visiting Economist, Commonwealth Treasury, and</li>
<li>Assistant Secretary, Policy and Analysis, Commonwealth Bureau of Labour Market Research.</li>
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His first job in 1977 was at the Bureau of Agricultural Economics. In the mid-1980s he was with the Paris based Organisation for Economic Cooperation and Development.
Dr Paterson will begin his appointment as Chair from 11 February 2019. 
He will join existing Tribunal members Mr Ed Willett and Ms Deborah Cope for a five-year term. 
In 2016 IPART undertook a review at the request of the NSW Government on the local government rating system.
The purpose of our review is to develop recommendations to improve the equity and efficiency of the rating system, in order to enhance councils’ ability to implement sustainable fiscal policies over the long term. 
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Paul Paterson to chair the NSW Independent Pricing and Regulatory Tribunal 

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The Independent Pricing and Regulatory Tribunal (IPART) is seeking feedback on the proposed prices that Sydney Water and Hunter Water can charge for wholesale water and sewerage services from 1 March 2017 to 30 June 2021.
These services are purchased by wholesale customers who provide water and/or sewerage services to end-use (or ‘retail’) customers such as households and businesses.
Wholesale customers are typically new, smaller water utilities licensed under the Water Industry Competition Act 2006 (NSW) to service a specific development area.
The emergence of these smaller water utilities has created competition for end-use customers.
The prices that Sydney Water and Hunter Water can charge their retail customers for water and sewerage services for the period 1 July 2016 to 30 June 2020 have already been set by IPART through separate reviews.
IPART Chair, Dr Peter Boxall, said this is the first time that IPART has reviewed and set wholesale water and sewerage prices.
“Competition is important in encouraging greater efficiency in the supply of water and sewerage services. As competition develops over time, this will deliver benefits to customers,” Dr Boxall said.
“The draft decision is to set system-wide prices to reduce the need for potentially costly scheme-specific reviews, while also allowing parties to seek scheme-specific price reviews from IPART or enter unregulated agreements.”
These system-wide prices would apply to new wholesale arrangements, while the opportunity to seek a scheme-specific price review from IPART or agree to an unregulated agreement would be open to all wholesale arrangements – existing and new.
“The draft decisions are designed to encourage efficient entry and competition in the market, given its early stage of development,” Dr Boxall said. “We are interested in hearing industry and stakeholder views about the proposed approach and prices.”
Stakeholder submissions on the draft decisions are due by 7 December 2016. Copies of the report and accompanying determination are available on <a href="https://www.ipart.nsw.gov.au" target="_blank">IPART’s website</a>.
A public hearing will be held on 28 November 2016 at the Wesley Conference Centre in Sydney’s CBD.
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