Ideas@TheCentre
How dare you build that!
Barry O’Farrell’s victory speech on Saturday night trumpeted his government’s priorities: fix roads and rail; upgrade hospitals; and hire more nurses, doctors and police. No surprises there. But he also promised to ‘scrap Part 3A’ and ‘rewrite the planning Act.’ The crowd cheered, but did they know what for?
Ever since NSW local councils were granted substantial planning powers in 1945, the web of planning rules that developers must negotiate has become thicker and stickier. Everyone, except the people buying, selling and developing, has been given more ways to thwart a development. Even Species Impact Statements, which thrash out the impact of a development on local frogs, for example, were introduced in 1995.
Part 3A was a legislative counterweight, shifting power away from local councils to Macquarie Street.
The NSW Labor government inserted Part 3A into the Environmental Planning and Assessment Act in 2005, empowering the Minister for Planning to approve larger developments without having to pay much attention to what local councils, residents, or environmental lobbyists thought. Hundreds of projects, often controversial and worth billions of dollars, are being expedited through Part 3A.
Local decision-making should be encouraged when it impinges mainly on local residents. Local government is inherently more accountable and its outcomes more observable. For good reason, the great French liberal thinker De Tocqueville wrote, ‘local institutions are to liberty what primary schools are to science.’
But local planning must balance the needs of local and potential residents, who are often younger and poorer. Unless local councils have the right incentives, they may be reluctant, for example, to release new land and approve higher density developments. A greater supply of units or houses reduces the value of ratepayers’ (and councillors’) homes, at least in the short term. Classic ‘Not In My Back Yard (NIMBY)’ behaviour is especially tempting in Australia, where perceived home values are commonly flaunted.
The ability of property owners to stop developments in their local area is a valuable right that is inextricably bound up in house prices. When that right is expanded or diminished, the value of property changes accordingly. Abolishing Part 3A could increase house prices, other things being equal, as valuable powers devolve from a Minister in Sydney to local residents and councillors.
Arbitrary ministerial power over planning is not desirable. But nor are undue constraints on the provision of housing and establishment of businesses in a fast growing country like Australia. As Kevin Rudd would say, it’s about getting the balance right.
Adam Creighton is a Research Fellow at The Centre for Independent Studies.
