Beyond Utopia: What does Infrastructure WA mean for the property sector?
Corporate Affairs Director Fran Lawrence looks at the announcement for an independent body, which should — finally — take the politics out of planning.
Earlier this year, WA Premier Mark McGowan officially launched plans for a new capital works advisory body designed to take the politics out of planning the State’s biggest investments.
To be known as Infrastructure WA, the new body is tasked with developing a 20-year infrastructure strategy that identifies areas of growth and opportunity and maps out the investment required to support it.
The announcement, at a Property Council of Australia (PCA) breakfast, was one that had been an election promise and a long-standing request of the sector. It was also made to an audience who were very happy to hear it – a broad cross-section of the property industry, including planners, builders, developers and investors.
Key property bodies including the PCA and the Urban Development Institute of Australia have lobbied hard for some time for the introduction of an independent advisory body and a long-term plan to guide infrastructure needs and spending.
It’s widely accepted that the lack of an over-the-horizon, strategic approach to infrastructure planning in WA to date has seen us miss out on a bigger share of federal funding in this area.
The cost to property
In the property industry, the impact of politically driven planning has been widely felt. Lack of certainty around project timing and progress has affected investment decisions, limited development opportunities, and — in some cases — seen private sector developers bear more than their fair share of infrastructure costs.
Uncertainty around planning affects the ability to secure debt financing and attract capital, and can subject operators to increased holding costs, ultimately slowing down or changing development proposals.
Back in 2014, a report by the PCA warned WA had suffered from considerable underinvestment in infrastructure, putting the value of its stock almost $60 billion below the accepted global average.
On top of that, the report found that in the course of a year a delay to just 10 per cent of property development projects due to poor infrastructure provisions would result in $1.2 billion in deferred value for the WA economy.
The answer, it said, was the formation of an independent body that would take responsibility for planning, prioritising and delivering infrastructure projects with a horizon of up to 20 years. Four years later, it appears we’re on the right track.
The path forward
For property players, the new approach to headline projects — promising to spend “the right money in the right place at the right time,” according to the Premier — could be a game-changer.
Under the new plan, Infrastructure WA will comprise a panel of five private and five public sector experts, headed up by an independent private sector chairman.
The body would start work from 2019, and report directly to the Premier of the day.
The six-week public consultation period on Infrastructure WA has now closed, with industry members and the community giving their thoughts on the proposed body via written submission. From here, the government proposes Infrastructure WA be established through legislation with the aim of having it up and running by early 2019.
With luck, this is the start of something sensible.
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