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Legislative Council - Fifty-First Parliament, Third Session (51-3)
2009-06-17 Daily Xml
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ADELAIDE HILLS HOUSING

The Hon. M. PARNELL (14:47): I seek leave to make a brief explanation before asking the Minister for Urban Development and Planning a question about development in Mount Barker.

Leave granted.

The Hon. M. PARNELL: In answer to a question I asked on 4 June as to whether any private planning consultants are involved in the preparation of the development plan amendment report for Mount Barker, the minister replied:

What is important when local planning consultant companies are involved in that sort of consideration is that it is made quite clear up front that it is a development plan amendment—whether it comes from the minister or the council, it should be clear who is doing the work—and any connections with developers should be well known.

On Monday night, at the Mount Barker council meeting, a letter was tabled from the minister to the Mount Barker council, which described the DPA process the minister intends to initiate in Mount Barker.

The letter acknowledges the considerable overlap this process has with the growth investigations area project and the 30 year plan for Greater Adelaide. However, before any public or resident of Mount Barker input into these major future planning reports, the minister's letter goes on to say:

Following an approach from a consortia representing landowner interests, I have agreed that they undertake finer grained investigations into the merits and suitability of the subject land for residential and other complementary and supportive urban uses and prepare draft documentation (including appropriate draft Development Plan policy to guide development) for my consideration.

The minister's letter goes on to request the name of the planner who will undertake these investigations on behalf of the consortium.

The fact that the minister has initiated this sweeping change to the character of Mount Barker at the request of a consortia of developers who will be paying a private consultant to write the changes, surprisingly, was not included in the minister's recent press release or his answers to questions in parliament on this issue. The minister has also stated to this chamber that Connor Holmes (the lead author of the growth investigation areas project) has provided the Department of Planning and Local Government with a letter identifying areas that are part of the investigations where the firm has also advised private clients. Given that the minister believes that connections between government consultants and consultants to private developers should be well known, I ask the following questions:

1. Which developers are represented in the consortium acting for landowner interests who approached the minister to initiate the Mount Barker ministerial DPA?

2. Who is the person nominated by the consortium to prepare the DPA investigations?

3. Will the minister release a copy of the letter from Connor Holmes identifying areas in which it has a conflict of interest in its work on the growth investigation areas project?

The Hon. P. HOLLOWAY (Minister for Mineral Resources Development, Minister for Urban Development and Planning, Minister for Small Business) (14:40): I know that the Hon. Mr Parnell is trying to link this. If you are opposed to all development, if you want zero population growth and if you cannot win the debate on its merits, of course you will use proxy arguments, and that is exactly what he is trying to do here: raise spurious issues rather than being up-front and saying, 'Look, I want to stop all development and we should not have any development at all.' Of course he will try to use these sorts of arguments, as he has done in the media with respect to a number of developments.

I made a statement at length last week in which I addressed most of the issues in relation to Mount Barker. Let me make quite clear that, when we first announced that we were going ahead with the 30-year Plan, the decision was already made in relation to Mount Barker. It was one of the areas, along with a number of others, we requested the consultants to look at.

I reiterate the point I made last week: ultimately, the decisions in relation to where growth should be are government decisions. We employ consultants because they have the expertise in that area. As they are out there working for local government and for private developers, they have the expertise in relation to development issues.

Given the volume of work we need to undertake in the 30-year Plan, it is beyond the ordinary day-to-day resources of the Department of Planning and Local Government. Clearly, we have sufficient resources in that department, and we have added to them in recent years, and the merger with the Office of Local Government assisted in that.

Although the department can adequately deal with day-to-day departmental issues, particularly regulatory issues, in relation to a major new exercise, where we are looking at 30 years of growth, we decided to undertake it with consultants, and there was a range of consultants. There were three companies consultants, and each, including the successful one, had expertise in all the relevant areas.

The report of the growth area investigation was input into the plan which was headed by the lead reviewer, Jennifer Westacott from KPMG, who is a former head of planning in New South Wales and who, I might say, has been a very valuable member of the planning and development review committee, which was the forerunner to this. In relation to Mount Barker, the head of the developer consortium, and the one that the government has addressed, is Mr Dean Day. I think seven developers, including several of the largest builders in this state are involved.

I think the honourable member needs to understand that, whenever you have an urban growth boundary, one of the difficulties is that, unless the land within that boundary is owned by government through an agency, such as the Land Management Corporation, you really have little control over when that land might be released.

What we have seen in places with urban growth boundaries is that you can sometimes get congestion in terms of release of the land within the urban growth boundary. If you have individuals with landholdings, it is in their interest to sit on that land because, once there is a finite boundary, if land is not being released, the price will go up.

So, whereas the principal objective of urban growth boundaries is to contain development, as a side effect they can have the counterintuitive impact of driving up land prices within the boundary because, of course, if a commodity is in short supply due to government regulation through a boundary its price will rise. When governments can release land through the Land Management Corporation or other bodies, they can ensure that land prices are held affordable.

However, when you have a situation where the land the government is able to influence dries up and the remaining land is in private hands, that can lead to unaffordable housing. That is why it is important that we do what we can, and that is why developers are important in terms of ensuring that we do get development, because it is in the interests of developers to provide that land. If the land is not in government hands, who else will provide that land? To a very limited extent, individuals who might own a block of land may contract a builder to build on it, but the vast majority of housing is built by development groups. Of course, if they do not have access to land and lead the process in relation to zoning, we will get unaffordable housing.

It is interesting that just today the Victorian planning minister, my counterpart Justin Madden, announced a very big increase in the land within Melbourne's growth boundary for that reason, too, because obviously Melbourne has the same problem of keeping its housing affordable. That is why, in relation to these expansions, developers have a part to play. The Hon. Mr Parnell seems to be suggesting that, when developers come up and say, 'We're proposing to use this land for housing,' there is something bad about that. I would suggest that, if that did not happen, as can be the case in some parts within the urban growth boundary where land is tightly held and not made available, the consequence would be spiralling land prices, which is not in the interests of this state.

In various parts of the current urban growth boundary, most of the housing is built by developers or a consortium of developers. We have about half a dozen major ones in this state and, if my memory serves me correctly, in Mount Barker it was seven of those who approached me. The important thing is that the decision concerning the land that will be released will ultimately be decided by the government, in consultation with the local council for that area, and that will be based on planning concerns as to what is the appropriate mix or use of land within that area, in accordance with all of the government principles.

I am not sure that there is much more I can say. The honourable member has raised this issue on radio and I have addressed it on radio. In relation to the issue the honourable member has raised, I received a letter just today from Stephen Holmes, the Director of Connor Holmes, and perhaps I should read it into the record because it does address many of these issues. The letter states:

Dear Minister

Growth Investigation Areas and 30 year plan

I am writing in response to comments made in Parliament on 3 June 2009 by the Hon M Parnell MLC to reassure you that this firm has at all times acted with probity and transparency.

As you are aware, the decision of your department to retain Connor Holmes to provide advice in relation to the Growth Investigation Areas and (via KPMG) the 30 Year Plan projects was taken following a competitive tender process. The involvement of this firm in a large number of major urban development areas and projects on behalf of a range of clients (including the Government itself via the LMC) was clearly disclosed and understood throughout this tender process. Indeed, at the time it was seen as a major strength of this firm. The final decision was authorised by the State Procurement Board, providing an independent high-level probity check.

Mr Parnell appears to believe that our dual involvement in many development areas constitutes, prima facie, an insurmountable conflict of interest. The State Procurement Board clearly does not agree with this assertion. In any event, Mr Parnell's position would lead to one of two potential outcomes—neither of which are either logical or tenable.

The first option would be to preclude the Government from retaining any consultant or adviser with any previous or current involvement in any areas subject to growth consideration anywhere in the Greater Adelaide region. This would disqualify from selection all of the planning firms in this State with the capacity to undertake the work, and would prevent the Government from obtaining the highest quality planning advice.

The second option would be to require that any consulting firm retained by Government terminate its relationship with any clients having an interest in any land being considered for growth anywhere in the Greater Adelaide region. This would undermine the financial success of the firm retained, and would be unacceptable to any large and successful planning consultancy. In this context, the course of action taken by your department, that is, requiring disclosure of any potential conflicts of interest so they can be taken into account in the selection process and in the management of any subsequent contract, is clearly the only tenable course of action.

The illogicality of Mr Parnell's position is compounded by the inaccuracy of his comments, which are incorrect on several points:

Connor Holmes did not table an extract of the plan for Greater Adelaide in a submission to the Light Regional Council, as alleged by Mr Parnell. Indeed, that would have been impossible as the document did not exist, even in preliminary draft form, at the time alleged by Mr Parnell.

We did table and refer to an extract from the published and released document 'Directions for Creating a New Plan for Greater Adelaide' in a submission to Light Regional Council on 19 February 2009. Unfortunately, the source of this extract was incorrectly attributed in the minutes of the council meeting. The error has subsequently been acknowledged by council staff, and the records corrected accordingly. At no time have we disclosed to third parties drafts or working papers associated with either the GIA or 30 Year Plan projects.

During the period of our commission Connor Holmes did not actively lobby either your department or you as minister to seek rezoning of land as implied by Mr Parnell. While we made several representations to councils on behalf of clients, we have fulfilled the commitment we made to your department not to make representations to you or to DPLG until we had submitted our report in relation to the GIA project.

Our disclosure of involvement was not intended to eliminate any perceived or actual conflict of interest, as Mr Parnell seems to believe. Rather, its purpose was to place the risk of perceived conflict on the record so that it could be considered by your department in their assessment of our final advice and their provision of advice to you.

Mr Parnell seems to believe that your department is either unwilling or unable to provide you with independent advice in relation to our recommendations. This is demonstrably false and, as you are aware, there are a number of areas where the department's advice to you is contrary to our recommendation.

In conclusion, it is our view that the comments of Mr Parnell are either incorrect or illogical. We are confident that we have at all times acted with integrity and probity and have provided you and your department with quality planning advice. I trust these comments will be of assistance to you in the event the matter is raised again in parliament.

I think that addresses all issues raised by the honourable member.

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