Yesterday, Committee for Melbourne members gathered to provide input into the Committee's response to the Victorian Government’s Better Apartments discussion paper. The group noted a number of sound guideline documents which could be readily adapted to suit Melbourne’s needs already exist such as those used in Vancouver or New South Wales' State Environment Planning Policy No 65 (SEPP 65). The main issue will be applying these guidelines in such a way that ensures suitable minimum standards are maintained over time, while also allowing for the flexibility that will be required to ensure they meet the needs of different communities. One of the other key issues we will also need to address is that of affordability. While we can raise the bar on minimum standards, they often come at a cost to the developer, and ultimately, the buyer. We should aim to set some standards that are appropriate for a city that prides itself on great levels of liveability. However, we must also ensure that we are a city that provides affordable opportunities to all its citizens.
Project pipeline a key to economic turnaround
Yesterday, Reserve Bank governor Glenn Stevens called for extra infrastructure spending by governments. He noted there is no shortage of cheap money looking for infrastructure yielding reliable returns, and that we need to be looking to infrastructure investment instead of trying to spur an already over-leveraged household sector as a way to spark demand. Stevens also noted the impediments to fresh infrastructure investment lie around the high cost of building in Australia, our decision-making processes and our inability to reach political agreement on how to proceed. This sentiment was echoed by Christian Gazaignes, head of French company Bouygues Travaux Publics, who said tendering for a construction contract in Australia was five times more expensive than in France and that companies were now being held hostage to politicians. Last week the Committee released its discussion paper highlighting the need for an independent Infrastructure Victoria entity to prioritise a productivity enhancing pipeline of major projects to ensure we generate the opportunities for growth we need. Yesterday, Glenn Stevens said agreeing on a long-term pipeline was necessary to boost confidence. It seems we are all in furious agreement.
We need to incentivise advanced manufacturing
A lack of financial incentives and an uncompetitive tax system are two key reasons why Australia continues to miss out on manufacturing opportunities according to the Australian Advanced Manufacturing Council (AAMC). Currently, Australia ranks 116th out of 142 countries with regard to converting research dollars into innovation and commercial success. With the economy struggling to transition from mining and traditional manufacturing, we clearly need to improve our ranking in this area. Aiming to make Australia more competitive, the AAMC has recommended a number of changes to the Australian tax system with the top priority being the tax treatment of intellectual property. The AAMC notes that in contrast to a majority of OECD countries, Australia does not reflect a 21st century understanding of industry and global imperatives, citing the Federal Government's recent decision to place a $100 million cap on R&D expenditures that companies can claim as tax deductions as a significant backward step. The AAMC also calls for an innovation incentive to provide a reduced corporate tax rate on incremental income from qualifying activities, similar to Singapore’s financial grants and tax incentives, as a way to stimulate investment in this important sector of the economy.
Fintech races ahead
If we are looking to identify those sectors and industries that will be the global economic drivers of the future, then the Fintech (new innovations and technologies that assist financial services organisations and their clients) sector is one we should be paying close attention to. The success of independent Sydney-based start-up Stone and Chalk has proved Australia has many of the ingredients necessary to be a successful Fintech centre, and that if properly leveraged, these advantages can place us front and centre in one of the fastest growing sectors of the financial services industry globally. Stone and Chalk is an industry-led initiative that encourages a collaborative effort between Fintech entrepreneurs, VCs, corporates and government, to incubate and nurture financial services-focused tech start-ups. When Stone and Chalk launched their initiative to establish a physical Fintech hub in Sydney they felt it was a risky move and offered office space to 150 entrepreneurs. The entity outgrew its original office space before it had even moved in, and has now had to double its original planned space to offer space to 200 of the 350 applicants. A great example of innovation paying off.
Planning reform a key to housing affordability
According to the Property Council of Australia’s latest Development Assessment Report Card, states and territories must step up planning reform efforts to take pressure off house prices. Following a comprehensive appraisal of Australia’s planning framework, which included interviews with 1000 industry and planning professionals, the report card concluded that poor planning and antiquated assessment processes are driving up the price of housing and commercial projects. The report notes that effective and streamlined planning and development assessment systems can help drive economic outcomes through investment activity as well as job creation and community development. The Northern Territory continues to outperform other states in its adoption of assessment principles, followed closely by Western Australia while Victoria moved into equal 3rd place alongside South Australia. The latter states showed particular initiative in ‘getting things done’ with Victoria leading by example with a proactive, business-like metropolitan strategy and accompanying new planning authority. The report also included a number of recommendations which included zoning more land for new housing that delivers inner-city density, middle ring urban renewal, and a simpler and less complex approval process.