Open for business A submission to the NSW Government on

. . . . . . . . . Open for business A submission to the NSW Government on development assessment reform Property Council of Australia June 2007 . . . . . . . . . . Executive Summary The Property Council of Australia welcomes the opportunity to provide this submission on development assessment reform (or ‘DA reform’) to the NSW Government. The Property Council is the peak national representative of the property industry. Our members help shape, build and finance our cities and have a long-term interest in the future of our urban areas. Our members include the bulk of the state’s investors in office buildings, shopping centres, industrial parks, tourism accommodation and infrastructure, and major developers of commercial and residential property. The NSW local development assessment system is crying out for reform. Despite the NSW Government’s impressive planning reform agenda in recent years – including a roll-out of strategic plans for Sydney, key regions and regional cities, commencement of the simplification of planning instruments, and the creation of a new major projects assessment process – reform of development assessment at the local level has been overlooked. Approximately 99.7% (around 120,000) of the State’s development applications ranging from minor household projects to multi-million dollar housing and employment generating projects are determined at the local level. The current DA system has reached its use-by-date. It is not outcome focussed. It impairs the efficient and effective delivery of the various priorities and targets identified under the State Plan – A New Direction For NSW and regional strategies including the Metropolitan Strategy. The risk and uncertainty associated with the current DA system is discouraging development, business activity and economic development. It even impacts housing affordability. In this regard, the DA system must be treated as more than just a ‘planning’ process. It is fundamental to overall economic growth and sustainable communities. First and foremost, the problems and failures of the current system are evidenced through increasing costs (direct and economic) and delays, spiralling complexities, uncertainties and politicisation, and a diminished confidence from the general public and industry on its relevance and value. Two key issues arise in this regard: (1) Unnecessary and avoidable costs and delays, and (2) The lack of a separation of powers and thus, the conflicting roles of local councillors as elected representatives and policy makers and as members of a decision making consent authority. In 2004/05, the average NSW DA processing time was 53.5 days – 34% higher than the statutory 40 day timeframe. Further, over the past six years delays are 20% worse despite 18% less DAs being lodged – and total DA processing took 7 million days or 19,000 years longer than the statutory timeframe. A snapshot of our member’s experiences with the DA system paints an even more disturbing scenario: 200+ day delays on multi-million dollar housing and employment generating projects; $12,500 printing costs for DA documentation; six weeks to allocate a planner to assess an application, and council refusal of projects in contradiction of consistent staff, expert and IHAP advice – and ultimately Land and Environment Court approval. Independent critiques of the DA system have also noted the problems including: • • • the Independent Pricing and Regulatory Tribunal’s (IPART) 2006 red tape review, the Percy Allen report Are Councils Sustainable? (2006), the Independent Commission on Corruption’s (ICAC) Discussion Paper (2005) Corruption Risks in the NSW Development Approval Process, and Property Council of Australia submission on Development Assessment Reform Page 2 . . . . . . . . . • the Development Assessment Forum (DAF) which includes membership from the Commonwealth, all State and Territory governments and key stakeholders. Secondly and more concerning, the current problems will worsen if left unchecked given both the State’s development projections and growth challenges, as well as the increasing pressures and competing demands facing NSW local councils. The Property Council believes that failure to commit to and implement a targeted and comprehensive DA reform agenda will continue to have negative effects on the State’s growth and the ability of local councils to properly focus on strategic issues. DA reform is needed for more than just improvement in processing times. It is about increased clarity, certainty and consistency. It is about better design and improved urban and environmental outcomes. In this regard, there is no silver bullet. We believe the following suite of solutions is needed for successful DA reform: • • • Development controls developed by councils that are consistent with Regional strategies through improved preparation and assessment of LEPs and DCPs. A State level Development Assessment Commission to assess major projects not submitted to the Minister for Planning. A separation of powers and depoliticisation of decision making through the establishment of mandatory Independent Planning Panels as the consent authority for all applications not assessed under delegation by council staff. Reduce red tape and significantly extend the use of exempt and complying development and the use of private certifiers. Reduce red tape through a major rationalisation of State agency concurrences. Develop and pilot an electronic planning system to improve information access and speed up the handling of DAs and referrals. Encourage innovation through enabling Independent Planning Panels to assess noncomplying proposals that deliver urban growth strategies. A fast track assessment process for an additional fee or enabling applicants to opt for a third party external assessment. Establish a meaningful, comprehensive and ongoing performance monitoring and reporting framework as part of the DA system. • • • • • • State government leadership and support, partnerships with key stakeholders and effective communication is required for successful development assessment reform. In this regard, the Property Council recommends that the NSW Government: 1. Publicly announce and commit to a new development assessment reform agenda which includes the suite of solutions noted above. 2. Hold an independently facilitated DA reform summit with key stakeholders to seek agreement on the key problems and solutions and recommend priority actions. 3. Introduce legislation to Parliament before the end of 2007 to give effect to DA reform priorities. 4. Develop and implement a comprehensive communications strategy on DA reform and urban growth. We would be pleased to discuss this submission and our recommendations with the Government. We would be pleased to assist in the development of long-term policy solutions and approaches for successful and sustainable DA reform. Property Council of Australia submission on Development Assessment Reform Page 3 . . . . . . . . . Contents Table of Contents Page Executive Summary 1. Development assessment in context 1.1 1.2 1.3 2. State Plan Metropolitan and regional strategies Regulatory review and red tape 6 2 5 Damning critiques – calls for reform 2.1 2.2 2.3 2.4 2.5 2.6 2.7 IPART red tape review Percy Allen report to the LGSA ICAC Development Assessment Forum (DAF) Productivity Commission Prime Minister’s Regulation Taskforce Other 3. Problems with the current system 3.1 3.2 3.3 Costs and delays Increased politicisation No discipline or accountability 8 4. 5. Objectives for DA reform DA reform solutions 5.1 5.2 5.3 5.4 5.5 5.6 5.7 5.8 5.9 Clearer rules through improved strategic planning Depoliticisation – Development Assessment Commission Depoliticisation – Independent Planning Panels Slash red-tape – extend exempt and complying development Slash red-tape – rationalisation of State concurrences Electronic planning Encourage innovation – non-complying proposals Fast track assessment Better monitoring and reporting 14 15 6. 7. Next steps Contact 20 21 1 Property Council of Australia submission on Development Assessment Reform Page 4 1. . . . . . . . Development assessment in context . . 1. Development assessment reform in context The DA system is fundamental to achieving the NSW Government’s objectives and priorities set out in the State Plan, Sydney Metropolitan Strategy and various regional strategies. The DA system is fundamental to economic growth, housing affordability and sustainable communities. 1.1 State Plan The State Plan – A new direction for NSW was launched by Premier Morris Iemma in November 2006. The Plan identifies goals, priorities and targets under the following key activity areas for the Government: • • • • • Rights, Respect and Responsibility, Delivering Better Services, Fairness and Opportunity, Growing Prosperity Across NSW, and Environment For Living. DA reform is consistent with achieving the priorities and targets under the State Plan including: P1 – Increased business investment; P3 – Reducing the regulatory burden on business; S8 – Measure, report and improve customer satisfaction with Government services; E5 – Jobs closer to home; and E6 – Ensure a supply of land and a mix of housing that meets demand. 1.2 Metropolitan and regional strategies The Metropolitan Strategy City of Cities – A Plan for Sydney’s Future was released in December 2005. The Government has also released planning strategies for other key growth areas including the Far North Coast, Mid-North Coast, North Coast, Lower Hunter and Illawarra and South Coast. In the case of the Metropolitan Strategy, the Government has predicted that 640,000 new homes, 6.8 million square metres of additional commercial floor space and 3.7 million square metres of additional retail space will be required over the next 25 years. DA reform is critical to ensure the efficient and cost-effective delivery of these key requirements under the Metropolitan Strategy. These requirements will only be met through new developments that will be subject to assessment and approval through the DA system. However, the DA system currently presents a barrier to development and thus, the achievement of these requirements. This is particularly the case given the increased complexity and politicisation of development assessment and the appeal of investment opportunities in other States and jurisdictions. 1.3. Regulatory reform and red tape The NSW Government established the Office of Better Regulation and made a number of commitments to improve regulatory efficiency and reduce red tape in response to IPART’s Final Report (November 2006) Investigation into the burden of regulation in NSW and improving regulatory efficiency. IPART noted that unnecessary regulatory burdens on business have lead to uncertainty, unintended consequences, inconsistency and duplication, regulatory creep, excessive requirements and delays. In its final report, IPART specifically concluded that DA reform is a top 3 reform priority given the significance of the system to the economy and society as a whole. It was noted that ‘planning and DA should be a high priority area for Government attention in terms of introducing (and monitoring/reviewing) measures to improve the regulatory framework’. In this regard, DA reform should be a priority area for the Government in relation to overall business regulation reform. Property Council of Australia submission on Development Assessment Reform Page 5 . . . . . . . . . 2. Damning critiques – calls for reform The State’s DA system has been subject to various damning critiques and calls for reform over recent years. 2.1 IPART Red Tape Review As noted in the previous section, IPART’s final report Investigation into the burden of regulation in NSW and improving regulatory efficiency1 identified the DA system as a ‘high priority’ area for reform and that the Government should investigate opportunities and efficiency gains further to the recent planning reform agenda. 2.2 Percy Allen Report to the LGSA The Final Report – Are Councils Sustainable?2 (May 2006) - of the Independent Inquiry into the Financial Sustainability of NSW Local Government commissioned by the LGSA and chaired by Percy Allen AM notes a number of ‘realities’ with the local development assessment process that are leading to increased costs and delays. These include a multiplicity of planning controls, complexity and risks of error. The report (at page 179) also suggests that the ‘local council planning, and the DA process in particular, has become discredited and is the source of the greatest number of complaints to the ICAC and the NSW Ombudsman’. 2.3 ICAC – Corruption Risks ICAC’s discussion paper Corruption risks in the development approval process3 identified corruption risks and potential for real and perceived conflicts of interest of local councillors and politicians in dealing with local development applications. This included the conflicting roles and responsibilities of local councillors as elected representatives under the Local Government Act 1993 and as policy makers and members of a consent authority under the Environmental Planning and Assessment Act 1979. 2.4. Development Assessment Forum The Development Assessment Forum (DAF)4 was established in 1998 ‘to streamline the processes used for development approval and cut red tape – without sacrificing the quality of decision making’. Membership of the DAF includes the Property Council and NSW Government as well as the Commonwealth, other State and Territory jurisdictions, local government, other industry and professional associations (e.g. Planning Institute of Australia). The DAF Leading Practice Model for development assessment includes measures such as independent planning panels, electronic DA referral, the need for different methods of assessment including exempt and complying development, and the need for more objective and clearer development requirements and controls. 2.5 Productivity Commission The Productivity Commission’s Final Report Performance Benchmarking of Australian Business Regulation5 released on 19 February 2007 identified the development assessment and approval process as a ‘major area a regulatory concern’ and subsequently, a priority area for benchmarking the quality, quantity and compliance costs of regulation to identify unnecessary regulatory burdens. 1 2 3 4 5 Available at www.ipart.nsw.gov.au. Avialable at www.lgsa-plus.net.au/www/html/1389-local-government-inquiry.asp Available at http://www.icac.nsw.gov.au/files/pdf/ICAC_Discussion_Paper_DEC.pdf Refer to www.daf.gov.au Available at: www.pc.gov.au/study/regulationbenchmarking/finalreport/regulationbenchmarking.pdf Property Council of Australia submission on Development Assessment Reform Page 6 . . . . . . . . . 2.6 Prime Minister’s Regulation Taskforce Reform of environmental and building regulation was also a key component of the Commonwealth Government Regulation Taskforce’s final report to the Prime Minister and Treasurer Rethinking Regulation: Report of the Taskforce on Reducing Regulatory Burdens on Business6 released in January 2006. 2.7 Other The need for DA reform has also been highlighted through other work including the NSW Minister for Planning’s Planning Professionals Ministerial Taskforce which reported in 2006 that the complexity of the DA system has contributed to a lack of planners in the public system. In addition, research on the DA system conducted by Eureka Strategic Research for the Residential Development Council identified that 66% of polled residents would support independent planning panels being the decision maker on development applications rather than local politicians. 6 Available at: www.regulationtaskforce.gov.au/finalreport/regulationtaskforce.pdf Property Council of Australia submission on Development Assessment Reform Page 7 . . . . . . . . . 3. Problems with the current system The following section outlines a range of problems with the current DA system that we believe reiterates the need for DA reform. The problems range from a lack of clear rules, too many rules and requirements (e.g. studies) and no service delivery guarantees, to general administrative and procedural inefficiencies and increased politicisation. This includes examples of Property Council member experiences at various stages of the DA system – for various project types in various locations. The problems are presented based on what we believe are the three key or overarching problems with the current system: (1) (2) (3) Costs and delays, Increased politicisation, and The lack of performance monitoring and accountability. 3.1 – Costs and delays The various problems with the current DA system ultimately lead to increased and unnecessary costs and delays on development projects. Department of Local Government Council Comparative Information Each year, the Department of Local Government publishes ‘Council Comparative Information’ in relation to various local council activities and services. This includes comparisons in relation to the planning and development assessment process. Aside from anecdotal evidence such as our member’s experiences noted in the following section – and prior to the release of the Department of Planning’s monitoring report on the local DA system – the Department of Local Government’s annual comparative figures are the only complete set of publicly available figures which enable benchmarking and comparison of the DA system. The Property Council acknowledges the limitations of the data however it does enable trends to be identified in relation to performance measures such as average DA processing times. The following Table 1 highlights development assessment measures over a six year period from 1999-00 to 2004-05 published by the Department of Local Government (2004/05 is the latest available data, published in January 2007). Despite an 18% decrease in the number of DAs being lodged, delays in excess of the 40 day statutory timeframe increased by 20%. Total DA processing time included 7 million days or 19,000 years in excess of the statutory timeframe. This represents an enormous cost to the economy and a waste of public resources. Table 1: 1999/00 – 2004/05 DA comparison No. DAs determined % change (1999/00 to 2004/05) Total number of calendar days taken to determine DAs Mean time in calendar days for determining DAs Average excess days (in excess of 40 days) Total excess days % change (1999/00 to 2004/05) 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 145574 111567 124990 127649 131532 119092 -18% 6468896 5365014 5815996 6448420 7021160 6363540 44.44 48.09 46.53 50.52 53.38 53.43 4.44 8.09 6.53 10.52 13.38 13.43 645,936 902,334 816,396 1,342,460 1,759,880 1,599,860 7,066,866 Days 19,361 Years 20% Property Council of Australia submission on Development Assessment Reform Page 8 . . . . . . . . . The following Table 2 highlights the ten worst councils for 2004/05 in terms of median DA processing times. The top ten are all Sydney Metropolitan Councils. The relevant Metropolitan Strategy sub-regions have been noted to highlight that these councils are in key growth areas in relation to the Government’s housing and employment targets. Table 2: Top 10 Worst Councils – 2004/05 median DA processing times. Comparative Data 2004/05 Median time in calendar days for determining DAs 100 96 91 82 82 78 78 77 75 70 Metro strategy sub-region Housing and job targets (‘000) Inner west, 30K, 10K Inner west, 30K, 10K North east, 17K, 16K Inner north, 30K, 54K Inner north, 30K, 54K North, 21K, 8K North east, 17K, 16K East, 20K, 17.5K West central, 95.5K, 35K Inner north, 30K, 54K Council 1. Strathfield 2. Leichhardt 3. Manly 4. Mosman 5. Lane Cove 6. Ku-ring-gai 7. Warringah 8. Woollahra 9. Parramatta 10. Hunters Hill In relation to Strathfield Council – the worst council on the above list - an analysis of its 2006/07 DA register available at the council’s offices highlights other reasons for significant concern. There are significant delays with small flat developments and commercial developments, single dwellings and minor household projects that could all potentially be subject to exempt and complying development standards and procedures. The following highlights a number of examples from the register: • • • • • • • • • Erection of 2-storey dwelling | $349,000 | 240 days in DA processing time. Demolish and erect 2 dwellings | $5,000,000 | 250 days in DA processing time. Erection of 3-storey flats | $5,000,000 | 133 days in DA processing time. Use for commercial premises | 223 days in DA processing time. Use of industrial for commercial | 185 days in DA processing time. Household additions, garage, pool, strata subdivision | $255,000 | 171 days in DA processing time. Erection of patio / awning | $6,000 | 116 days in DA processing time. Installation of pergola | 105 days in DA processing time. Construction of fence | $5,000 | 90 days in DA processing time. The following Table 3 provides an example of the experiences of one of our members, including the construction value of the project and the number of days in DA processing time. Each development is well in excess of the average DA processing times indicated through Department of Local Government figures. This is of significant concern given the examples provided are typical of the priority housing and employment generating developments under the State Plan and Metropolitan Strategy. Property Council of Australia submission on Development Assessment Reform Page 9 . . . . . . . . . Table 3: Example developments and DA processing times Council Development Type Construction Value Number of Days in DA Processing Time 122 61 246 164 140 210 180 302 174 178 Day average Department of Local Government reported mean DA processing time (2004/05) 74.45 123.86 123.86 103.05 39.40 103.05 103.05 123.86 103.05 Marrickville Warringah Warringah Ku-ring-gai City of Sydney Ku-ring-gai Ku-ring-gai Warringah Ku-ring-gai 27 dwelling units 7,700 sq.m commercial 6,500 sq.m commercial 63 dwelling units 6,000 sq.m industrial 49 dwelling units 59 dwelling units 14,000sqm bulky goods 34 dwellings units $5,000,000 $11,000,000 $13,000,000 $19,000,000 $4,000,000 $14,700,000 $17,700,000 $22,000,000 $11,200,000 $102,914,700 The following provides a further snapshot of various problems including DA documentation production costs, DA lodgement requirements and inefficient administrative processes within councils encountered by Property Council members that contribute to increasing costs and delays: • A requirement for a fire services plan at the DA stage. This issue is appropriately addressed through the Construction Certificate stage of the assessment process through the Building Code of Australia (a prescribed condition of consent) and Australian Standards and should not be required at the DA stage. The requirement was also requested late in the process of discussions with the relevant local council. A significant increase in production and printing costs through a requirement for multiple copies of DA documentation such as Statements of Environment Effects. Examples include: o Residential development | 35 copies required | $9,679 printing costs. o Industrial development | 30 copies required | $12,664 printing costs. o Residential development | 34 copies required | $10,902 printing costs. o Hospital development | 24 copies required | $9,431 printing costs. o Shopping centre development | 32 copies required | $3,801 printing costs. o Master plan for residential and commercial | 11 copies required | $3,117 printing costs. o Master plan for residential and commercial | 15 copies required | $5,439 printing costs. A six week period to allocate a planner to assess an application, resulting in the assessment process not actually commencing in a real sense until six weeks after lodgement. Ongoing delays with referrals to other departments within a local council such as engineering departments. There is no accountability in relation to timeframes with this process, resulting in significant uncertainty and delays. Further, this is being used as an excuse from the responsible planner as the reason for the delay and that nothing can be done to resolve the problem. Stop-the-clock provisions being used inappropriately by inexperienced planners. In most cases, the information was provided in the DA documentation however the planner had either not located the information or was unable to interpret the information. Similar to the above point, there is no accountability for this abuse of stop-the-clock provisions either directly or indirectly through the tracking of system performance. • • • • Property Council of Australia submission on Development Assessment Reform Page 10 . . . . . . . . . 3.2 – Increased politicisation The DA system is subject to increased politicisation from local councillors. This presents a fundamental problem with the system given the lack of separation of powers in development assessment as well as the conflict between the roles and responsibilities of local councillors as elected representatives under the Local Government Act 1993 and policy makers and members of a consent authority under the Environmental Planning and Assessment Act 1979. The separation of powers doctrine is fundamental element of our Westminster system of government. This doctrine ensures a clear division between the different branches and sources of power within our system of government in order to maintain balance and prevent an abuse of power and control – which at the Federal and State tiers of government relates to the Executive (policy formulation), Legislature (policy making) and Judiciary (policy interpretation, application and enforcement). Not only is the separation of powers doctrine a key element of Australia’s democratic, government and legal systems, it is a key element of corporate governance at both the private and public sector level. As an example, in certain private corporations and institutions, there is a separation of powers between the powers and responsibilities of ownership (shareholders), governance (Board of Directors) and management (Chief Executive Officer). In the NSW public sector, the doctrine has been applied to State Owned Corporations through the clear and separate roles and responsibilities of the responsible Minister(s), Board of Directors and management. This important aspect of corporate governance in relation to the NSW public sector was noted in the NSW Audit Office’s Performance Audit Report: Corporate Governance published in 1997. Unlike other tiers of government and the examples noted above, an elected council’s consideration of a development application reflects no separation of powers. The separation of powers doctrine has been overlooked in the local development assessment process. This has made the system extremely politicised, and lead to increased conflicts of interest, corruption and decreased transparency. As noted above, the South Australian Government has addressed this issue and ensured a separation of powers in the local development assessment process through the commencement in February this year of mandatory development assessment panels. To highlight the implication of increased politicisation in the assessment process, the following provides a description of Property Council member experiences where increased politicisation has created problems on significant development projects. This ranges from councillors changing building envelope requirements during the assessment process, local council elections holding up the process, councillors refusing proposals despite compliance with all development controls, councillors ignoring advice and recommendations from staff, independent panel and experts, and councillors in effect forcing a matter to be dealt with through the Land and Environment Court due to a deemed refusal. Property Council of Australia submission on Development Assessment Reform Page 11 . . . . . . . . . Table 4: Mixed commercial, retail and residential tower Location DA processing time Determination Description of Process Northern Sydney 3 months Refusal by Council • No certainty as Council was unable to agree on acceptable building envelope for site. • Numerous DAs lodged in accordance with changing Council requirements. • Changes in Councillors due to local elections and turnover in planning staff delayed the assessment process. • Recommended for approval by Council officers. • Council refused application. Table 5: Commercial and retail building Location DA processing time Determination Description of Process Western Sydney 18 months Refusal by Council, Approval by Land and Environment Court • Complied with requirements in every respect. • Recommended for approval by Council officers. • Recommended for approval by Independent Panel. • Recommended for approval by Council's expert on key planning issue. • Refused by Council. • Applicant appealed to LEC. • All 6 Court appointed experts recommended approval • Council officers met timeframes for assessment. Delays were entirely Councillor driven. Table 6: Mixed residential and commercial development – 100 units, 4000 square metres of commercial Location DA processing time Determination Description of Process through Council Southern Sydney 9 months Deemed refusal by Council, approved by Land and Environment Court • Recommended for approval by Council officers • Recommended for approval by the Independent Panel. • Recommended for approval by additional independent review of the proposal. • Refused by Council. • Approved by LEC. • Councillors influenced by lobbying of one resident. Grounds for refusal were not grounded in Council’s planning controls. The Property Council strongly supports a strong, effective and sustainable local government that manages competing demands in an efficient and effective manner, is focussed on strategic issues and provides superior service delivery. We also support strong civic leadership and recognise that local government is an important tier of government and representative of local communities. The Property Council has participated in the Local Government and Shires Association’s (LGSA) ‘Strengthening Local Government Taskforce’ initiative including the Taskforce’s business roundtable in November 2006. However, local government is weak, in structural decline and continues to face a number of significant challenges. Many of these were confirmed in the Percy Allen report which uncovered a ‘number of pressing problems that need urgent attention’ – the most significant being a $6 billion+ backlog of infrastructure renewals. Further, one quarter of councils are not financially viable and another 50% are at risk. In this regard, we believe that DA reform will provide local councils with the ability to free up resources to focus on more strategic issues. Property Council of Australia submission on Development Assessment Reform Page 12 . . . . . . . . . 3.3 – Lack of good regulatory practice and performance monitoring The DA system suffers from a lack of good regulatory practice in the process of developing and making planning instruments (e.g. DCPs) and performance monitoring, reporting and accountability. In this regard, the key problems with the current system include: • Councils can develop and approve development requirements and controls that are inconsistent with Regional strategies and not subject to economic or regulatory analysis, LEPs are approved without serious consideration of consistency with Regional strategies, the addition of red tape, or extending exempt and complying development categories. Councils can approve development requirements and controls that are unclear and uncertain. The lack of consistent advice on DA lodgement and assessment requirements, Poor customer focus and service delivery, and The lack of monitoring and accountability on overall system performance. • • • • • A key problem with the current system is the lack of performance monitoring and reporting. As an example, the increasing delays in average DA processing times based on Department of Local Government figures as noted in the previous section has not been subject to any performance measurement or accountability. The delays have been able to go unchecked and worsen. The DLG comparative information is insufficient to understand the real performance of the DA system. The Property Council acknowledges that the Department of Planning has started to collect data from local councils to report on performance. However, the key issue will be whether meaningful information has been collected in relation to the overall performance and impact of the DA system. As an example, if a council has a high proportion of Complying Development Certificates (CDCs) compared to DAs, it is not a measure of good performance if the CDCs are all minor projects and major housing and employment generating projects are still being subjected to the costs and delays of the DA process. Property Council of Australia submission on Development Assessment Reform Page 13 . . . . . . . . . 4. Objectives for DA reform The Property Council believes that DA reform should be underpinned by a number of clear and measurable objectives and performance targets. We recommend the following DA reform objectives and targets: • • To achieve Government growth objectives and deliver Regional strategies. To encourage innovation and deliver better urban outcomes, particularly on sustainability issues. To implement the separation of powers doctrine into the development assessment process and depoliticise decision making. To achieve a 30% cut in average DA times within three years. To reduce red tape, improve certainty and consistency, and improve overall system performance. To improve public confidence and satisfaction. To implement a performance monitoring and reporting process. • • • • • Property Council of Australia submission on Development Assessment Reform Page 14 . . . . . . . . . 5. DA reform solutions There is no silver bullet with DA reform. A suite of reforms and solutions is needed to address the problems with the DA system and ensure the efficient and effective delivery of urban growth strategies and improve urban and environmental outcomes. 5.1 Clearer rules based on improved strategic planning The Property Council strongly supports improved strategic planning as a means to improve the DA system. This should include a revised LEP preparation and assessment framework and new comprehensive LEPs that give clear effect to the Government’s urban growth strategies and relevant housing and employment targets. In addition, new LEPs should be subject to a ‘red tape’ test and development controls (whether in a LEP or DCP) should also be clear, certain and consistent with urban growth strategies. In addition, we believe the LEP process should be significantly streamlined. There is currently too much focus on process and insufficient focus on outcomes particularly in relation to Regional strategies and more efficient and effective development assessment processes. 5.2. State level Development Assessment Commission We believe a Development Assessment Commission should be established to assess State significant projects not submitted to the Minister for Planning, such as certain critical infrastructure. This is similar to the current approach in South Australia and Western Australia. While we believe that certain projects should continue to be assessed by the Minister for Planning such as critical infrastructure which underpins the State’s growth and economy and stretches beyond individual council boundaries, a Development Assessment Commission would ensure a separation of powers for other major projects. This would likely include a number of projects currently assessed under Part 3A as well as other significant projects which would currently not qualify under Part 3A. 5.3 Independent planning panels We believe that mandatory independent planning panels should be established as the consent authority for decisions not delegated to staff. This is a much needed reform to depoliticise the development assessment process, ensure a separation of powers and reduce the conflict between the role of councillors as elected representatives and policy makers under the LG Act and members of a decision making consent authority under the EP&A Act. This approach is being successfully applied in South Australia (SA) created by the Development (Panels) Amendment Act 2006 which commenced in February 2007. It is worth noting that the South Australia legislation which enabled panels to be established passed through the parliament with bi-partisan support. The appropriate resolution of critical issues raised during the policy development process such as community participation and accountability was achieved. Given the current conflicting roles of local councillors in NSW, we believe independent planning panels would reduce conflicts of interest, politicisation and corruption risks in the DA system. NSW has substantial experience with independent planning panels mainly in the form of advisory Independent Hearing and Assessment Panels (IHAPs) and SEPP 65 Design Review Panels. The NSW Minister for Planning has also been using independent review panels as part of the assessment process for certain major projects. The EP&A Act has also been amended to enable the Minister appoint a panel subject to a council request or where the council has been shown to be corrupt, unlawful or acting outside performance benchmarks. Unfortunately, the current NSW approach to the establishment and use of panels does not go far enough. Property Council of Australia submission on Development Assessment Reform Page 15 . . . . . . . . . The benefits of planning panels have been noted in the Percy Allen report. Further, 66% of polled residents would support independent panels being the decision maker on development decisions instead of local politicians. (Eureka Strategic Research, 2006). We believe the following core principles would need to apply to ensure that the establishment of independent planning panels address the fundamental problem of politicisation in the DA system and also operate in an open and transparent manner: • • • • • • • • • • The establishment and operation of panels be underwritten by legislation, The panel is the consent authority for applications not delegated to staff (i.e. not merely an advisory panel), Comprise a majority membership of independent experts (SA panels have four independent experts and three councillors), Chaired by an independent expert, The panel and its members would be subject to a Code of Conduct (similar to SA), General principles of good governance would apply (e.g. accountability, conflicts of interest), Provide fair hearings and opportunities for community engagement, Clear, transparent processes and reporting on the reasons for decisions, Work with council staff to draft fair, reasonable and enforceable consent conditions. Have a process for complaints investigation. While we consider that independent planning panels should be established across the state, in the first instance panels should be targeted at key growth areas identified under regional strategies. In certain areas, a regional panel may be appropriate. Exemptions may be appropriate in certain rural and remote councils with low development activity. The NSW Division of the Property Council recently visited Adelaide and met with various groups to their views and current experience with independent planning panels. The feedback from all groups – including local government – indicates that the panels are working effectively and delivering improvements in relation to both the assessment process and outcomes. One key issue is that the panels have enabled local councillors to spend more time and effort on strategic issues. Further, it was noted that council planning and assessment staff are conducting higher quality and more rigorous assessments of development proposals. There are also less conflicts of interest and corruption risks facing local councillors in relation to local development as a result of the new independent planning panels. 5.4 Complying development The Property Council believes there should be a significant extension in the use of exempt and complying development across the State. There are significant benefits of these categories of development including increased certainty and consistency in relation to development standards, assessment process, timeframes and the ability to free up council resources. When developed and implemented properly, these categories can take developments out of the normal DA system. The potential benefits of these categories when introduced in 1997 have not been realised, resulting in a major increase in complexity and a majority of proposals still being subject to the traditional development assessment process. As an example, local councils have been able to become exempt from State policies such as SEPP 60 based on questionable reasons or criteria. Property Council of Australia submission on Development Assessment Reform Page 16 . . . . . . . . . Further, the preparation and assessment of LEPs does not include any requirements to ensure an extension of exempt and complying development. There are no requirements in relation to reducing red tape, developing clear, certain rules or streamlining the assessment process. Clearly, there should be such a requirement as part of the LEP preparation and assessment process. In particular, we believe extended categories in this area should be driven by key priorities and development projects under Regional Strategies and the State Plan such as housing and employment generating projects. This would ensure that developments that are key for sustainable communities, job creation and economic growth are streamlined and not subject to increased complexity and uncertainty. A focus on housing could reduce significant costs and improve housing affordability. The Victorian and South Australian governments have demonstrated leadership and action in this area. The Victorian ‘ResCode’ approach has resulted in most single dwellings and household renovations requiring only a building permit instead of a planning permit and a building permit. This has improved the efficiency of the system and reduced residential development costs. In relation to housing, the Property Council understands that the former Premier’s Urban Design Advisory Council prepared a paper proposing to make detached dwelling houses complying development subject to some standardised design quality requirements. These included standards relating to floor area, landscaped area, building height, solar access, privacy and streetscape. BASIX would apply in addition to these standards. This approach should be further investigated in relation to streamlining development assessment for new housing. A similar approach could be investigated for multi-unit developments using SEPP 65 standards as a framework. A significant benefit of extending exempt and complying development is that councils can focus on the development of appropriate rules to ensure the efficient delivery of Regional strategies. In this regard, we believe a number of State policies currently being prepared or finalised should include an extension to complying development categories including the Six Cities Taskforce’s City Centre Plans (e.g. for commercial and retail development), the Seniors Living SEPP and the Western Sydney Employment Lands SEPP (e.g. for commercial and industrial developments). A major reason that complying development can be expanded is the establishment and commencement of the Building Professionals Board (BPB) to accredit and audit private certifiers. The BPB should be properly resourced to ensure public confidence that private certifiers are operating in a professional, ethical and transparent manner. The BPB and private certification system should be continually monitored and improved. 5.5 State agency concurrences State agency concurrences are a major source of uncertainty and delays in the assessment process. There needs to be a major rationalisation of State agency concurrences, as well as the development of clearer requirements and the improvement of referral and administrative processes. The current approach is highly inadequate. Our members have had various experiences where a referral to a State agency for concurrence gets lost. This includes the problem of knowing the status and location of the application. Further, there is evidence that a culture exists of referring a DA to a State agency for comment ‘just in case’ it needs comment or approval. This approach lacks certainty and in certain cases, it has eventuated that the State agency should have been commenting in the first place. Property Council of Australia submission on Development Assessment Reform Page 17 . . . . . . . . . There also needs to be an improved strategic focus from other State agencies that have an interest in planning and development issues. At this stage, most of the assessment occurs at the development stage of the process. The principle of bio-certification of local plans is supported in this regard. However, we are unsure of the current status of this approach and seek clarification on the Department of Environment and Climate Change’s work program in this area and how this will be assessed through the preparation of new LEPs. 5.6 Electronic planning The planning and DA system has not comprehensively embraced Information and Communications Technology (ICT) as a means to improve access to information and system efficiency and effectiveness. The improved utilisation of ICT – or electronic (‘e) planning – is also a key element of a successful DA reform agenda. The NSW Government has already taken up e-Government in various areas as a key element of public sector reform and there is no reason why this should not be extended to the landuse planning and DA system. This could include a transformed ‘iPlan’ (the Government’s previous, now abandoned eplanning web portal) where zoning and development control information could be accessed for an allotment through a website portal. In effect, this would be an online – and modernised – section 149 certificate that directly highlights all relevant requirements and standards rather than the current approach where it highlights a long list of planning instruments that then need to be separately accessed, purchased and interrogated just to find out what rules apply to a particular development. Another e-planning initiative could include the online lodgement and tracking of DAs, including referral within a local council and to external State agencies. Another aspect of an e-planning system could include an improved development monitoring system. The Government should target councils that require the most assistance and/or councils in key growth areas. As an example, the Government could provide seed funding to develop new systems for local councils in the key centres subject to the government’s increased focus for job creation and jobs closer to home. This includes the Sydney CBD, North Sydney, Parramatta, Gosford, Penrith, Liverpool, Newcastle and Wollongong. This would also leverage the government’s proposal under the NSW Government Statement on Innovation which identifies these centres for new comprehensive wireless broadband networks. We believe that State Government leadership and investment in e-planning will lead to significant overall benefits. There is an opportunity in this regard to leverage off the investment certain local councils have already made on e-planning (e.g. Pittwater Council) through initiatives funded under the Commonwealth’s Regulatory Reduction Improvement Fund. E-planning could also leverage and capitalise on the NSW Spatial Information Strategy developed by the Government’s Board of Surveying and Spatial Information (BOSSI). 5.7 Encourage innovation – non-complying proposals We believe that independent planning panels should be able to assess and determine non-complying developments that deliver urban growth strategies including key housing and employment generating projects. Such an approach would ensure that projects that go beyond existing development standards can be assessed by independent experts on merit. This would encourage innovation. This would allow the private sector to think innovatively about sustainability and design issues and have projects assessed on their merits. The current system places too much emphasis on planning controls delivering the best outcome. In practice, there is evidence that many of our planning controls are out of date and do not foster innovation. This would also improve the current processcentred and slow approach of either needing a re-zoning or the use of mechanisms such as SEPP 1 or the Land and Environment Court. Property Council of Australia submission on Development Assessment Reform Page 18 . . . . . . . . . 5.8 Fast-track assessment Development applicants should be able to pay an additional application fee for fast-track assessment. In principle, this approach could also be extended to enable applicants to opt to have the assessment of an application handled by an external or third party group. This group would assess the application and either make a determination under delegation or prepare a report for the relevant independent planning panel. 5.7 Better monitoring and reporting The DA system needs to be subject to a comprehensive and meaningful monitoring and reporting system in relation to the efficiency and effectiveness of system performance. At this stage, no such system exists. The Department of Local Government’s ‘Comparative Information’ report published each year provides some indication of system performance, however it doesn’t highlight key issues, problem areas or the impact of poor performance on development feasibilities and economic growth. A DA monitoring and reporting system should be a legislative requirement and be integrated with other council reporting requirements where possible. Part of the monitoring system should utilise the performance benchmarking framework recommended in the Productivity Commission’s report Performance Benchmarking of Australian Business Regulation which includes performance and standards benchmarking and performance indicators to better monitor and identify unnecessary regulatory burdens. A key benefit of a DA monitoring and reporting system is that it will enable performance to be monitored and continually improved over time. Predictions can also be made about future performance. In this regard, a DA monitoring and reporting system should be implemented and results reported on a quarterly and annual basis. DA system performance should be monitored on key issues, including: • • • • • • • Local government area / planning region Total development approvals (including DAs and complying development) Breakdown of development type (e.g. residential – single, multi-unit, commercial, retail). Construction value based on development type. State agency concurrences including assessment times. Total, mean and median times according to sector and construction value. Local council capacity (e.g. staff) to assess applications. The report could be linked with the delivery of Regional strategies and the State Plan. In addition, the State Government should establish performance targets for the DA system which can then be monitored through a new monitoring and reporting system. As an example, objectives or targets for the DA reform agenda could include a 30% improvement in assessment timeframes over a three year period as well as 50% of all development being subject to complying development standards. Property Council of Australia submission on Development Assessment Reform Page 19 . . . . . . . . . 6. Next steps The Property Council recommends that the NSW Government: 1. Publicly announce and commit to a new development assessment reform agenda. 2. Hold an independently facilitated DA reform summit with key stakeholders to seek agreement on the key problems and solutions and recommend priority actions. 3. Introduce legislation to Parliament before the end of 2007 to give affect to DA reform priorities. 4. Develop and implement a comprehensive communications strategy on DA reform and urban growth. Property Council of Australia submission on Development Assessment Reform Page 20 7. C . . . . . . . . . Contact Please contact the following about any aspect of this submission: Ken Morrison NSW Executive Director Property Council of Australia Level 1, 11 Barrack Street Property Council of Australia House SYDNEY NSW 2000 t. 02 9033 1906 f. 02 9033 1978 m. 0412 233 715 e. kmorrison@propertyoz.com.au Property Council of Australia submission on Development Assessment Reform Page 21