“Life is great in the
If you’re part of a national business, it can be hard to explain – the idea that the
One noticeable indicator has been the rapid decline in population growth. Net interstate migration was once the engine room of growth in Queensland, with cashed up southerners moving here with spare cash after buying a better house than the one they left behind, meaning money for the kids’ education, a boat, and a better lifestyle all round. But that trend has now slumped to its lowest levels since records began. From a peak of nearly 50,000 or 1000 per week in the early 1990s, last year the figure collapsed to 9,576 people, or 184 per week. Overall population growth was for a time held up by increasing numbers of overseas arrivals to
(It’s ironic, isn’t it, that only one year ago the State Government was holding a population summit, arguably because Queensland couldn’t cope anymore. And now the problem is insufficient growth. So much for long term planning, and a cautionary tale about the dangers of governments waxing lyrical about the future, rather than focussing on the here and now. As The Pulse warned a year ago: “It would be the ultimate irony if, in the midst of a debate about future population numbers outstripping our capacity to deal with them, that this turned out to be the least of our worries.”)
For an economy which for so long has been reliant on growth, the slowdown is having dramatic effects. Construction starts are at record lows. According to the UDIA’s latest quarterly Development & Construction Industry Performance Report, some 17,000 construction jobs have been lost since 2008, with nearly 8,000 lost in the most recent quarter. Reports this week that housing finance approvals have fallen across the board but most dramatically in Queensland, will mean more bad news on that front is just a matter of time. Beyond construction, the broader economy doesn’t rate much better. In mid April, Commsec released it’s “State of the States” report, which revealed that “Queensland is at the bottom of the list in terms of economic performance, suffering from above-average unemployment and a poor housing market.”
That view was reinforced by a report from the Centre for Independent Studies earlier in the year, which claimed that
Rising costs, taxes and charges and increasing red tape are frequently blamed, and it seems with some justification. In February, the RACQ released research showing that
Of course petrol isn’t the only non-housing cost for average income households to grapple with. The whole cost of living equation, which used to be in
Once again, it’s a reversal of fortune for Queensland, which once (in what seems recent memory) boasted of low electricity charges (that’s history), the cheapest vehicle registrations in the country (now among the highest), among the lowest land taxes and stamp duties (no longer), a quick and efficient development approval system (that was good while it lasted), abundant land for growth and development (now artificially constrained without empirical justification), a solid tourism industry (now being beaten by Victoria – can you believe it?) and of course low cost, affordable housing. The sad reality is that it is now more expensive to buy a block of land in
So what went wrong? Everyone will have a theory, mine traces the roots of this downturn to a few things. First, the series of planning initiatives which sought to constrain urban growth within artificially imposed urban growth boundaries had the immediate effect, combined with the introduction of upfront development levies, of raising the cost of land, which rose relatively fast compared to other major centres. Housing is the biggest single cost for most new families, and once the costs of new housing supply in
Promoted under the guise of ‘sustainable growth’ these land use policies have failed the aspirations of average workers on average incomes of around $60,000 per annum, who can no longer afford new housing product, without considerable financial pain. The phrase ‘growth management’ has become a byword for ‘growth control’ and reflects an outdated and unsupported view (on the evidence at least) that our rates of growth need containment. A state which once sought and promoted growth has become a state which fears it, and we are paying the economic consequences.
Another major contributing factor has been the disconnect between public policy and the people it is designed to serve. Policy initiatives which have sought to direct consumer behaviour through pricing models have not been subject to affordability tests, or financial impact tests. So whether it’s been the raft of new building codes which have added thousands to the cost of building a basic home, or what’s happened to electricity prices, water prices, or any of a number of ‘user pays’ initiatives, it seems few have asked the obvious question: ‘can the user (ie the consumer) afford to pay?’ The combined effects of multiple cost increases have eroded
Finally, we seem to have lost sight of a simple reality: there can be no public sector without a profitable and healthy private sector. The latter generates wealth, the former collects it, and spends it, redistributing wealth according (in theory) to democratic decisions made by the people. But rather than supporting and promoting private sector growth and development, an attitude appears to have taken root which derides wealth creation and which assumes the public sector can do better. That’s most visible in development, where ‘greedy developers’ (who actually provide many times more houses than government, and who pay considerable taxes) are attacked as a group for daring to question the imposts on their industry. It has become a thought crime to challenge planning policies which promote lovely images of future urban growth without a single reference to consumer needs, aspirations or capacity to pay.
Developers aren’t alone – witness the furore on
Economic growth and private sector wealth creation are what will pay for the public hospital beds, school classrooms and expanded infrastructure. Private developers, given the chance, will provide Queenslanders with the types of housing they want, in locations they want, at prices they can afford. Farmers will provide food efficiently if allowed to manage their land without instruction from environmentalists and policy makers. And the taxes paid by miners and farmers and other businesses will also pay for the national parks and environmental standards the community says it wants. This is a pretty fundamental thing to understand, but are we living in a state anymore where this is clearly understood?