At some point in recent months, COAG appears to have lost much of the reformist drive it had in its revived form under Kevin Rudd.

There’s no doubting Rudd’s ambitions for the forum. It is grappling with some of the biggest issues in public policy — so many, in fact, that you doubt whether leaders and their officials can devote the requisite resources that each of them deserve. But more than ever it appears to be spinning its wheels in plans, press releases, schedules and timeframes.

Yesterday, for example, it got to grips with what remains one of the most important economic and social issues facing the country. Despite the best efforts of Adam Schwab and Steve Keen to argue there’s no housing under-supply, COAG decided to charge Treasurers with addressing housing supply and affordability.

“Overall,” COAG declared in its communiqué, “housing supply has struggled to keep pace with recent growth in demand. Population growth is likely to mean continuing strong underlying demand for housing.”

It was the federal government’s failure to move its health-reform agenda forward yesterday garnered all the attention. While catering to the health-care delusions of well-off urban Australians is undoubtedly politically important, the health-reform issue is a furphy. We have one of the best health systems in the world and its serves most Australians very well. Housing, on the other hand, is a policy failure that hurts Australian families and our economy every day.

COAG’s commitment to the issue is welcome, particularly given Glenn Stevens has made clear that it is a critical issue in the context of heading off future asset bubbles.

What governments are going to do about housing, though, remains to be seen. The media release yesterday spoke about expediting the release of land identified in land audits (a process begun under the Howard government when it realised Labor had stolen a march on it on housing affordability), “more efficient approaches to Development Assessment processes”, including nationally harmonised planning principles, and the Henry Tax Review.

Nationally harmonised planning principles are doubtless a good thing. They’re unlikely to get a single extra dwelling built, however. What is required in Australian cities, and particularly its largest city, where planning and development processes are in disarray, is more medium-density housing in established suburbs, rather than trying to build new suburbs from scratch in distant urban fringes hours’ travelling time from major commercial centres and infrastructure.

To do this, however, you need to restore public confidence in the planning and development process at local and state government level. There is an automatic opposition from local residents to medium-density development, and no matter how much it is mocked as NIMBYism, it demands the highest standards of administration in the development approval process. Independent, non-political decision-making, coupled with a ban on political donations, is the only way to demonstrate to communities that, even if they object to a development, it will be assessed properly according to planning and development guidelines and their objections will be considered.

Some of those reforms are well within COAG’s ambit (local government continues to be represented at COAG meetings), but they’re absent from the to-do list handed to Treasurers yesterday.

Instead, there was much talk of the capital city strategic planning systems.

It is easy to be cynical about strategic planning. It’s easy because, in general, cynicism is the only logical response. Strategic planning is a bureaucratic frolic, designed to produce strategic plans that sit on bureaucrats shelves, and have more life in the CVs of public servants than in the real world. One’s cynical instincts are reinforced when one reads in the COAG communique about the capital city strategic planning systems, which are to be “future-oriented”, “support and facilitate economic growth, population growth and demographic change” (as opposed, presumably, to thwarting them) and “clearly identify priorities for future investment and policy effort”.

The biggest problem with strategic plans is that they only ever last about 10 minutes before being ignored and, about five years later, replaced with an entirely different strategic plan. The main value any “capital city strategic planning system” could have would lie in providing a framework to determine whether state government development, transport and infrastructure plans actually addressed necessary issues and were integrated effectively — something that does not happen at the moment in NSW. The odds of governments actually sticking to a strategic planning system over the next decade or so — the sort of timeframe it would take to actually make any difference on the ground — would have to be slim.

“Housing,” the politicians said yesterday, would be “a priority for microeconomic reform for 2010”. Let’s hope there’s more to show for it than some strategic plans and harmonised development processes.

Peter Fray

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