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18 November 2021

Industry Issues 18-11-2021

From the CEO

As we edge our way closer to more certainty around when borders will reopen, issues and concerns around housing supply are gaining even further momentum.  With materials and skills shortages now at critical levels, combined with a range of challenges that impact on new land and housing delivery, just how industry will meet demand for affordable, appropriate housing over the coming months and years is undoubtably in the spotlight.  I have been speaking about the issues around future supply consistently to Ministers, government agencies, the media and relevant stakeholders for many months, in an effort to form a collaborative response to this key issue.

The sheer popularity of our lunch with the three relevant Ministers last Friday is testament to how critical the current situation is.  Over 630 guests packed the room to hear from the newly formed Residential Lands and Housing Delivery Ministerial Oversight Committee (which I have now codenamed “MOC”) to find out how seriously the State Government is taking these issues.  I have faith that we are being heard and that the Ministers equally understand industry’s concerns.  The question and answer session was extensive and Minister’s Saffioti, Buti and Carey were willing to tackle the key issues in relation to ongoing planning reform, social housing delivery, development opportunities on government owned land and local government reform.

We received a record number of questions via our online platform Sli.do and I want to assure our guests and broader membership that these questions will be acted on. We have distilled down the over 100 questions from the audience into six key themes and we will present these to the Ministers for response.  The questions fall under the areas of affordable housing; infill development; building costs and skilled labour; planning and design; transport and infrastructure; and taxation reform. I look forward to sharing the responses with you all when we can.

In the meantime, UDIA remains focused on playing our role in ensuring that our industry is able to respond when the floodgates open early next year.

Delivering Housing Choice

Over 630 guests attended our final Industry Luncheon for 2021 on Friday to hear from the three Ministers on delivering housing choice in WA.

Together, Minister for Housing; Local Government the Hon. John Carey MLA, Minister for Planning; Transport; Ports, the Hon. Rita Saffioti MLA and and Minister for Finance; Lands; Sport and Recreation; Citizenship and Multicultural Interests, the Hon. Dr Tony Buti MLA form the State Government’s Residential Lands and Housing Delivery Ministerial Oversight Committee and have elevated the delivery of housing choice to a more collaborative Cabinet level which the development industry applauds.

During the lunch we received in excess of 100 questions ranging from resolving affordable housing challenges in the regions to what the government is doing to ensure the delivery of infill targets and most pertinently right now, what the government is doing to alleviate the current skills shortage.

In responding to the questions put to him Minister Carey reiterated his focus on social housing highlighting the $875 million social housing investment announced in September, however highlighted there was a clear need for the community to get on board with the idea of social housing for it to be successful.

“One of the key challenges we face is that everyone in the room will say yes to social housing but as soon as we try and build it somewhere, you get resistance,” he said. “We need to get social housing integrated across communities.

“The other key challenge we have is ageing stock; we have around 36,000 social housing properties, many of them are in the 30 to 40 year time frame. This stock will have had a number of tenants come through the system meaning is significant wear and tear that requires significant investment.

“That’s why we put $12.8 million aside to assess around 10,000 properties in the system to better plan for investment in the future. We are also doing programmes working with water core, working with energy agencies to retrofit these ageing stock. And clearly that has great sustainability outcomes in terms of energy use, whether it’s water or electricity, but of course, it’s also saving dollars for those who are vulnerable in our society.”

Minister Saffioti said one of the main priorities for the Government was around providing housing choice, however to do this they need to make it easier to do infill and good density.

“In relation to that we’ve developed the METRONET precinct strategy but more generally, the issues in relation to density is we want to try and reduce planning risk,” she said. “The other key thing is overcoming some of those obstacles in relation to infrastructure provision, whether it be energy or also water, which is why we’re looking at how we can better do structure plans.

“Getting better at coordinating referral agencies is something the government has been discussing and primarily, that’s why this committee was established. Because whether it be government owned asset, lazy land and other land, trying to look at what obstacles are there to help developments.

“Trying to reduce some of the landlording costs by providing greater planning certainty is what we’re trying to implement to support the density of the key process.”

The third member of the panel, Minister Buti said social housing was one of the greatest challenges facing the McGowan Government’s second term and was part of the reason behind the committee being formed.

“We have also seen the transfer of Department of Communities assets over $500 million to DevelopmentWA which provides a central agency, a central point of contact for industry, he said. “DevelopmentWA has runs on the board in terms of developing projects and has the expertise to assist with social housing but the key is going to be the ability of Ministers Carey, Buti and Saffioti in regards particularly to the METRONET precincts to work together to ensure that we unlock land and make it available to social housing.”

Following the lunch UDIA distilled down the over 100 questions from the audience into six key themes and we will present these to the Ministers for response.  The questions fall under the areas of affordable housing; infill development; building costs and skilled labour; planning and design; transport and infrastructure; and taxation reform and we look forward to sharing the responses with you all when we can.

As ever we would like to extend our thanks to our sponsors for this event Satterley Property Group, Turner & Townsend, Wormall Civil, JWH Group, Business Events Perth and our networking partner JDSi Consulting Engineers.

New Submission

Earlier today UDIA lodged a new submission with the Western Australian Planning Commission in response to Draft SPP 2.9 Planning for Water Policy.

Within the submission UDIA WA welcomed the release of the draft SPP 2.9 Planning for Water and the accompanying Planning for Water Guidelines. We fully support the intent of the revisions and the attempt to streamline and simplify the current water policy framework, whilst also providing greater clarity around how water-related matters are implemented.

Whilst we are supportive of the intent of the amendments, we have some concerns about the unintended consequences of the amendments and how the new regime will be implemented. Addressing these concerns will be critical to maximising the environmental, social and economic benefits of an effective and efficient Planning for Water SPP and assessment framework.

UDIA provided in-detail response to three key areas as well as providing key recommendations for improving the final policy including strongly recommending that the assessment of Water Management Reports remains integrated within the planning process and includes statutory assessment timeframes and that the Policy and supporting Guidelines provide greater clarity on WMR requirements and ensure that information requirements remain site-responsive and do not become excessive.

In addition, we also provided specific comments relating to the content of the SPP and supporting Guidelines and provided key feedback to numerous paragraphs within the draft policy. To read the submission in full, click here.

Region Scheme Review: Stakeholder Reference Group 

This week, UDIA took part in the first of DPLH’s Stakeholder Reference Group Meeting discussing the Department’s Region Scheme Review Project.

At the meeting, DPLH gave an overview of the scope of the review and set out anticipated reform actions and timeframes over the two year program.

Broadly, the review is seeking to modernize and make the scheme amendment process more efficient. The review is also seeking greater consistency across the Metropolitan, Peel and Bunbury Region Schemes.

At the meeting UDIA called for the establishment of concurrent scheme amendment process and better alignment with planning objectives across government referral agencies. UDIA will keep members informed as the reform program progresses.

Reserve Bank playing down rate increases

This week Reserve Bank Governor Philip Lowe played down fears the cash rate would be raised amid rising inflation figures as he said it is still plausible that the first increase will not be before 2024.

He made the statement during an Address to the Australian Business Economists as he said concerns about inflation have moved to the centre of many people’s radar screens, after years of being at the periphery.

“Most central banks and international organisations have concluded that the increase in inflation is likely to be only temporary,” Dr Lowe said. “In most economies, inflation is expected to be much lower next year, with inflation rates generally clustered around 2%.

“A related question is to what extent policy interest rates will have to increase to achieve and sustain the forecast reduction in inflation rates? It is noteworthy that only a modest increase in policy interest rates is anticipated, with rates expected to plateau at what would still be historically low levels. This is consistent with the view that the current increase in inflation is only transitory and that a period of contractionary monetary policy will not be required to return inflation to target.”

Dr Lowe went on to explain why inflation has risen recently stating that while there are a range of idiosyncratic factors at work, many of the explanations boil down to a simple one – that is, a shift in the balance of demand and supply as a result of the pandemic.

“This surge in demand for goods quickly ran up against a supply side that was not flexible enough,” he said. “Modern supply chains are calibrated to operate on a ‘just-in-time’ basis. This reduces the cost of holding inventories, but it means that the global production system is not well suited to a sudden and large shift in demand. And there was the added complication that at the same time demand surged, supply was temporarily constrained as governments and firms took steps to contain the virus.

“So there was a perfect storm of sorts: very strong demand for goods combined with a hit to productive capacity. The result was a sharp increase in shipping costs around the world, a fall in inventories, increased delivery times and large rises in the prices of many goods.”

In referring to monetary policy Dr Lowe said the recent inflation data indicate that we are making better-than-expected progress towards our inflation objective, which is welcome news but we still have a way to go as underlying inflation has only just returned to the target range for the first time in six years and is only just above the bottom of that target range.

“In terms of the real economy, the recovery is back on track following the interruption caused by the Delta outbreak,” he said. “This recovery is being underpinned by high rates of vaccination and expansionary policy settings. We are expecting the recovery to continue and the unemployment rate to trend lower, reaching 4% by the end of 2023.

“In terms of the cash rate, the Reserve Bank Board has said that it will not increase the cash rate until inflation is sustainably in the target range. It is hard to precisely define what ‘sustainably in the target range’ means. But we want to see underlying inflation well within the 2–3 per cent range and have a reasonable degree of confidence that it will not fall back again.”

To read the speech in full, click here and to read the Minutes from the November Monetary Policy Meeting, click here.

Western Power Update

Western Power have provided the below update to keep UDIA members informed about the current supply constraints being faced by the electrical utilities industry.

Global supply chains continue to be fractured by heavy port congestion, vessel delays and shipping container shortages. In addition, the aviation Industry is experiencing reduced air cargo capacity. These scenarios are universally delaying cargo onboarding, progression, transit and completion, resulting in many Western Power supply chains experiencing continued disruptions. The impact of COVID-19 on Eastern States workforces is currently compounding these issues.

Industry is currently seeing the following challenges:

  • Heavy port congestion at critical ports, vessel delays and shipping container shortages
  • Lowest journey completion reliability on record, driven by high sailing cancellation rates, vessel diversions and the above delays
  • Trucking and rail have extensive backlogs and unmitigated congestion challenges as it responds to the above
  • Aviation industry is still experiencing a comparable fundamental collapse in demand for air services, impacting air cargo capacity
  • Worldwide cargo workforces at ports are at degraded capacity amid COVID illnesses
  • Australian businesses across diverse industries are experiencing supply chain disruptions manifesting as delivery delays and increasing freight pricing
  • Western Power’s supply chains are experiencing disruptions, commonly observed where physical capital, raw material and or components are sourced from overseas
  • Transformers and Ring Main Units that are not in stock will impact the current lead time of c. 180 days (up from 90 days pre-COVID).
  • Disruptions are likely to continue in FY2022/23.

Western Power believes there are opportunities to minimise the supply risk by moving material acquisition forward for those items where risk is present and offers the following suggestions to industry:

  1. For projects designed and constructed by Western Power: customers submit an application and enters into early undertaking contract for long lead items
  2. For projects designed and constructed by industry: customer purchases constrained materials as early as possible via Western Power’s network equipment sales team (https://www.westernpower.com.au/industry/network-equipment-sales/)

UDIA WA CEO talks social infrastructure

Earlier today UDIA WA CEO Tanya Steinbeck was a panel member in the AHURI Research discussion looking at Social Infrastructure in a post-coronavirus context.

Joining University of Sydney Senior Lecturer Dr Somwita Sarkar, Victorian Planning Authority Executive Director Alix Rhodes with Dr Tom Alves from AHURI moderating, the panel discussion looked at data, social infrastructure and planning.

Modular build tender opportunities

The Department of Communities is seeking registered builders to construct or design and construct modular or other pre-fabricated housing across the state.

The following opportunities are advertised on Tenders WA and close on Friday 17 December 2021 at 2.30pm (AWST):

  • Tender DOC9621321 – Request for tender for design and construction of modular housing.
  • Tender DOC9616821 – Expression of interest for modular housing construction (construct only) and other pre-fabricated methodologies (design and construct, or construct only).

For more information, and to download the tender documents, visit www.tenders.wa.gov.au

Home in WA

This Saturday will see a double feature of UDIA segments on Channel 7’s Home in WA as our stories looking at importance of excellent community facilities and the advantages of coastal living are set to go to air from 5.30pm.

The first story focuses on Belmont Hub which recently won the Excellence in Social & Community Infrastructure category at the UDIA WA 2021 Awards for Excellence and is a fantastic example of a local community facility that has injected vibrancy into the local community.

In the second story we visit Burns Beach by PEET which picked up the Residential Development Award due to it offers luxury lifestyle with great access to the coast, whilst also being brilliantly designed to preserve the natural environment as much as possible and complement the coastal location.

Don’t forget to tune in this Saturday at 5.30pm for these two segments and click here to watch all previous UDIA episodes.

UDIA WA’s media partnership with Home in WA provides an ideal opportunity to showcase the incredible work undertaken by our members and the development industry each and every day.

Making it easier for interstate skilled workers to work in WA

This week the State Government introduced the Mutual Recognition (Western Australia) Amendment Bill 2021 into Parliament to allow for WA’s participation in the Automatic Mutual Recognition (AMR) scheme for occupational licences and registrations.

The scheme allows a person who is registered or licensed for an occupation in another jurisdiction to perform the same work in WA without applying for recognition or paying a fee.

It will make it easier for workers to take up jobs in WA and support current skill needs in WA.

Strong safeguards are embedded into the scheme to maintain high standards of consumer and environmental protection, animal welfare, and health and safety.

Individuals subject to disciplinary, civil or criminal action will be excluded from the scheme and regulators will be required to share this information.

Interstate registered and licensed workers will be required to comply with the relevant occupational licensing Western Australian laws.

It is expected the scheme will commence from July 1, 2022, in line with the majority of other States and Territories.

Consultation with key stakeholders will continue before the scheme commences.

New ESG pack to attract investors

This week the McGowan Government released Western Australia’s first-ever environment, social and governance (ESG) information pack to inform a broad range of investors considering WA as an investment destination.

From an environmental perspective, the pack demonstrates how well placed WA is, through a combination of our economic strength, government leadership and comparative advantage in natural resources, to its commitment to net zero emissions by 2050.

It also highlights how our State is tackling other important environmental issues such as waste recycling and pollution control, and leading by example in areas such as water management and biodiversity conservation to address climate change, help industry grow and create sustainable jobs.

From a social perspective, WA continues to build on our strong foundations in health and education while ensuring those requiring assistance are best supported to reach their potential.

There is also a strong focus on providing increased opportunities for Aboriginal people, greater recognition of cultural heritage and striving to reduce inequalities through policy and program implementation.

For more information about WA’s ESG information pack, visit here.

The importance of ESG and how the development industry is addressing the E was covered in the latest edition of The Urbanist, which focused on climate action and environmental sustainability and can be view here.

Access to UDIA WA website changed

Access to the UDIA WA website recently changed as part of our aim to provide exceptional member services.

UDIA WA has invested in new technology that will integrate our member database with our website and online event registration capabilities with our new UDIA WA online Community Portal providing our members with seamless, integrated services and up to date information at the click of a button.

As part of the change all login details for the website were removed and each member organisation’s Key Representative was granted access initially and the Key Representative can now provide access to a further 2 representatives for their organisation.

All the necessary information was emailed to Key Representatives last week and can be accessed here for more information.

Once active the UDIA WA Community Portal includes exclusive member only access to:

  • Urban Express weekly news
  • The Urbanist quarterly magazine
  • The Urban Development Index quarterly market update
  • The Urban Intelligence economic data report
  • UDIA WA Members Directory listing details of all UDIA WA members
  • UDIA WA Diversity Toolkit
  • Relevant governance documents including the UDIA WA Annual Reports and Constitution
  • Ability to update you and your organisations details

For more information or any queries, email membership@udiawa.com.au

Become a key player in sustainable development

Are you a developer or consultant with an appetite for sustainable development? Join us on November 25th for a 3-hour webinar that is a direct stepping stone to becoming a certified EnviroDevelopment Professional (EDP) or certifying your own project.

The course offers the opportunity to gain knowledge of the EnviroDevelopment program and stay in touch with the latest trends and technologies in green communities across Australia.

Don’t miss out on the opportunity to become an EDP.

The course focuses on all facets of EnviroDevelopment program including the foundations, the technical standards, the certification process, the practical application and case studies.

To book now, click here and for more information email EnviroDevelopment Manager Taylor Hood on thood@udiaqld.com.au.