BUILDING, PLANNING AND LAND-USE REGULATIONS ARE THE LARGEST BURDENS IMPOSED ON BUSINESS BY LOCAL GOVERNMENTS IN AUSTRALIA, ACCORDING TO THE PRODUCTIVITY COMMISSION’S MOST RECENT REPORT, “PERFORMANCE BENCHMARKING OF AUSTRALIAN BUSINESS REGULATION: THE ROLE OF LOCAL GOVERNMENT AS REGULATOR.”
In undertaking this study, the Productivity Commission was requested to benchmark the extent to which local governments, through exercising their regulatory responsibilities, affect costs incurred by business.
A survey of small and medium businesses indicated that the regulation of planning and land use by local governments has the largest impact on business, followed by regulation of building and construction.
Some interesting insights include:
- The average building approval time in 2010/11 was 5-9 days in the City of Mandurah, 1-2 weeks in the City of Swan, 3-4 weeks in the City of Armadale, and over four weeks in the City of Rockingham.
- Prior consultation is considered by local authorities to have the greatest effect on expediting the assessment process.
- A majority of local councils don’t believe private certification speeds up the assessment process.
- According to local councils, workload pressures and incomplete/poor quality applications have the greatest effect on LGA’s capacity to act in a timely manner.
- At a state level, complex legislation and conflicting state objectives are considered by local councils to have less of an effect on timeliness in Western Australia than other states.
Of course the range of issues covered by Local Government on the east coast is considerably different from Western Australia however councils have a significant impact on timelines for urban development. That is not to imply all local authorities are under performing, more that there are such variations in process and capacity that it is creating significant problems for the industry.
Amalgamations are coming, it is just a matter of when, how many, and most importantly, how the amalgamations will happen.
The state government has taken the softly, softly approach of voluntary amalgamations which provoked significant discussion but limited action. This is very different from the Kennett Government reforms of 1994 where, in a little over a year, the Kennett government sacked 1600 elected councillors and replaced them with handpicked commissions; 210 local councils became 78.
The idea caught on with other states and amalgamation fever hit New South Wales in the early 90s (and again in the noughties), South Australia in the mid-90s and Queensland in 2008. The processes were different but all involved significant council amalgamations in the pursuit of improved efficiencies. Indeed, a quick glance at the table below illustrates just how dramatic amalgamation programs have been.
Table 1 – Number of local councils in Australia 1910-2011
| State | 1910 | 1967 | 1982 | 1995 | 2011 |
|---|---|---|---|---|---|
| NSW | 324 | 224 | 175 | 177 | 152 |
| VIC | 206 | 210 | 211 | 184 | 79 |
| QLD | 164 | 131 | 134 | 125 | 74 |
| SA | 175 | 142 | 127 | 119 | 70 |
| WA | 147 | 144 | 138 | 144 | 138 |
| TAS | 51 | 49 | 49 | 29 | 29 |
What the table highlights is that Western Australia is the odd one out. The number and boundaries of local councils in the West have been relatively unchanged for a century.
Whilst amalgamation is strongly favoured by the state government, amalgamation alone is not the panacea, true reform is needed in the operational, planning and approvals processes to ensure that all councils can deliver a modern, streamlined service to industry and the community and have the resources to deliver them sustainably.
Certainly the most recent and, potentially the most significant reform, has been the adoption of Development Assessment Panels which assess development applications previously assessed by local government.
Development Assessment Panels (DAPs) are a step toward one of the Institute’s key advocacy items: decrease, or remove entirely, the variation in process and policy between local authorities that currently impedes an efficient approvals system. So far DAPs have received the cautious “thumbs up” from industry, but it is early days yet. Analysis of their efficacy, including the cost to state and local government has yet to be undertaken.
Western Australia has been slow to adopt reform and a review of regulatory responsibilities is arguably more important in Western Australia than other states. The state’s 138 local councils have regulatory responsibility for 110 state laws, as many laws as New South Wales, Victoria and Queensland combined.