Sects and the city

The Council of Australian Governments (COAG) is the nation’s de facto board of directors.

It’s the only place where first ministers – the PM, Premiers and Chief Ministers plus the President of the Australian Local Government Association – jointly tackle Australia’s strategic opportunities and challenges.

COAG is important. COAG is Broadway – it’s the only truly nation-wide policy show in town.

You’d think COAG would act as a college of nation building.

You’d think it would meet frequently.

You’d think it would marshal the nation’s collective brain power to design a blueprint for Australia’s prosperity.

You’d think it would maximise its capacity to deliver on the blueprint.

You’d think it would audit and report on its performance to the same standard as any listed company.

Not quite.

COAG has been described as a cross between a bookies’ ring and Fight Club.

Under the Howard Government, COAG meetings often ended in the policy equivalent of a food fight. Miffed Premiers would storm off to Canberra airport spraying bile, blood and acrimony at a delighted media.

Kevin Rudd promised to end the ‘blame game’ by fashioning intergovernmental agreements on headline policy initiatives, such as health, skills etc. He also sought to strike a balance between carrots (greater freedom for the states to spend federal money as they saw fit) and sticks (holding back funds for non-performance).

At last count there were 50-plus agreements managed by a bevy of standing councils, select councils and ‘legislative fora’.

I once gingerly remarked to Kevin Rudd that COAG’s web of committees didn’t seem joined-up and lacked an overarching strategy. There was more chance of mastering super string theory than navigating COAG’s Byzantine byways, I ventured in a muddle of mixed metaphors.

In Obi-Wan mode, the then PM said COAG operated as a mystical labyrinth colonised by mediaeval sects boasting unique belief systems, catalogues of heresies and pathways to purity.

It is remarkable then that last month business got its first (ever) joint meeting with COAG in the form of the freshly christened Business Advisory Forum.

The focus was red tape. The news was good.

COAG recognised the direct link between economic productivity and smarter management of urban and regional growth.

It endorsed six areas of reform crafted by business, many of which directly relate to property investment and infrastructure.

Here are the highlights.

  • A commitment to fix the Environment Protection Biodiversity and Conservation Act – this legislation is a hefty bugbear for investors who can spend years achieving development approvals only to suffer the feds storming in to hold up action at the last minute. The Property Council is directly negotiating new legislation.
  • Streamlining major development approvals – in our view this should extend beyond mega pieces of mining kit, harbour works and the like. A single agency should be given charge of all elements critical to achieving metro planning strategy goals, including housing land/site supply.
  • Better development assessment processes for low-risk, low-impact development – mind you, COAG already agreed to develop code assessed rules for housing, commercial and industrial premises back in 2009.
  • Rationalising carbon reduction and energy efficiency schemes – the starting point must be to fix the massively complex, ambiguous and expensive duplication of environmental reporting that occurs under three different schemes, with three different methodologies run by three different government departments. This reporting lunacy has reached a stage where many of the greenest investors in the country are now forced to spend more on compliance than eco-efficiency.
  • Delivering energy market reforms to increase competition and reduce cost – automatic grid access permits for property owners who invest in cogen and trigen is a priority.
  • Best practice approaches to regulation. We support a Dutch-style quantifiable target for major red tape reduction by 2015, combined with a one-on, one-off rule for new regulation. Why not start with Australia’s quarter of a million pages of planning laws?

We also need to get serious about regulatory impact analysis and apply this discipline to the planning system. Why is it that planning law proposals aren’t subject to a cost-benefit test?

These COAG initiatives are wrapped in a National Productivity Compact to be finalised at the next Business Advisory Forum.

In other positive news, COAG told its Heads of Treasuries (HOTs) to analyse the impact of construction costs on productivity.

The HOTs review will examine disturbing disparities in construction costs. Why is a two-bedroom apartment three times more expensive to build than a two-bedroom house? And why is there so little consistency in construction costs between cities?

It’s not all positive news:

  • Housing – the Federal Treasury report into housing market efficiency was finished ages ago and is still MIA.
  • Cities – COAG said little about the report into capital cities prepared by a high-powered expert group. It’s been shunted off to one of those COAG sects – a prelude to transfiguration or transmigration?