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Legislative Council - Fifty-First Parliament, Third Session (51-3)
2009-07-02 Daily Xml
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LAND MANAGEMENT CORPORATION

The Hon. D.G.E. HOOD (14:51): I seek leave to make a brief explanation before asking the Minister for Urban Development and Planning a question regarding the Land Management Corporation charter.

Leave granted.

The Hon. D.G.E. HOOD: I was astounded to read in the most recent Housing Industry Association data that median sized new housing lots within the Adelaide metropolitan area are now the smallest out of all Australian capital cities at only 422 square metres. I had always assumed that Adelaide block sizes would be amongst the largest, but even Sydney's are some 541 square metres, on average; Brisbane, 600 square metres; and Melbourne, 561 square metres.

The latest HIA data shows that, because of our small block sizes, the median land price in Adelaide of $360 per square metre is now actually more expensive than Melbourne at $271 per square metre and Brisbane at $340 per square metre.

The charter of the Land Management Corporation calls on the corporation to release land with regard to financial merits and in accordance with the performance target. When setting the price that it charges and its fees, the charter states that the corporation must:

...determine a competitive market rate where possible and set prices at this level and achieve a reasonable commercial margin on its services.

Because of this profit centred charter, the LMC made a profit of some $123 million last financial year. My questions to the minister are:

1. Is the LMC charter, which seems to put profit above all else, hurting South Australian families who just want to build a home on a reasonably sized block of land for a reasonable price?

2. Why should not the directive to make profit be removed from the Land Management Corporation charter and the charter changed so that the corporation should only have regard to the best interests of South Australian families by distributing land when it is most needed, not when most profitable?

3. Finally, how is it that a square metre of land costs 30 per cent more in Adelaide than it does in Melbourne?

The Hon. P. HOLLOWAY (Minister for Mineral Resources Development, Minister for Urban Development and Planning, Minister for Small Business) (14:53): The answer to the last question is that, clearly, we need more land on the market. That is why, in the very near future, the government will be releasing its 30-year plan for Adelaide, one of the key parts of which will be to release more broadacre land. At the same time, one of the main focuses of the government's direction is to try to contain our development along corridors and make that development medium density so that we can deal with all the other requirements of a good planning system.

We not only need housing to be affordable, and that means cheap land, but we also need to make sure that our suburbs are sustainable. They must have good water practice and design, and, with the release of the Water for Good statement last week, that was a key element that needed to be addressed before we released the 30-year plan for Adelaide. There is much within that particular Water for Good statement which deals with that part of it.

We also need transport facilities. Given that liquid fuel prices are likely to rise significantly, in real terms, into the future, it is important that our cities do not become overly dependant on the motor vehicle. One of the key challenges for any planning system is to remove the dependence that Adelaide has on the motor vehicle; much higher, I would suggest, than most other cities in the world, particularly those in Europe and, increasingly, in the United States. It is imperative that we address that issue. They are all just parts of the planning, and affordability is clearly a key part of it.

So, while at the same time we are trying to deal with all these other issues and we see development along corridors as a key solution to that, with medium density development in those areas, clearly, we also have to have land at the fringes to ensure that housing remains affordable. As I have often pointed out in public forums, Adelaide's geography is starting to play its part in its development. Adelaide is a wedge between the Hills Face Zone and Gulf St Vincent, and that is why the city has developed in an elongated fashion so that the farthest suburbs are 40 kilometres or so to the south and north of the city, and that raises particular issues for Adelaide.

The Land Management Corporation, to get back to the specifics of the honourable member's question, is the responsibility of my colleague the Minister for Infrastructure. I will not comment on issues in relation to the LMC's charter and so on, but I want to say that it would be unfair to blame the LMC for any land shortage issues. The LMC has consistently over the past few years put land on the market. Part of the problem we have—and, again, I alluded to this yesterday in the estimates committees of the House of Assembly—is that, within our current urban growth boundary, whereas the LMC has been consistently releasing land in parcels (and I give the example of Broadview in recent times, and Hackham, Seaford and other areas where large parcels of land have been released by the LMC), not all land within the urban growth boundary is held by the LMC. I believe it used to be 66 per cent, or above, and it is now, I understand, getting down to 30 per cent.

So the LMC has been divesting itself of its land and doing its job in terms of making land available but, unfortunately, the smaller landholdings have not been made available. The point I made yesterday during estimates committees is that, if you have too little land within an urban growth boundary, because that land is worth so much more than land outside the boundary, there is a temptation for private landholders to sit on that land and not release it. There are, after all, reduced charges, and the like, for land within an urban growth boundary, but there is a large capital gain to be made when it is rezoned, so there is a temptation for people to sit on it. I am sure that is why the planning review recommended that we need a 25-year rolling supply of broadacre land, of which 15 years' supply should be zoned ready, to keep the pressure off rising land prices; because, if you have enough land that is zoned ready, there will be less temptation for private landholders to sit on it.

If you look at what has happened with the land within the urban growth boundary, originally the LMC's holdings were fairly large areas and it has gradually divested itself of that. Much of the land that was within the urban growth boundary, particularly before it was amended in December 2007, was in smaller holdings, that is, less than 10 hectares or so. So, just because you have sufficient land within an urban growth boundary that should provide, say, 10 years' supply does not mean that you will have 10 years' supply made available over that next 10 years for housing. If people sit on it and choose not to sell it because they can see that they will make a long-term capital gain just by sitting on their property, you have an issue in terms of affordability. That is something that the government is trying to address, as I say, through those changed policies, which will seek to ensure that we have a larger supply and therefore remove the benefit of sitting on that land.

At the same time, of course, we have to achieve the other objective of the good planning system that I referred to earlier. We have to make our city more sustainable and less dependent on liquid fuels. We have to lower our carbon footprint and make our city more attractive and more of a walkable city so that people will live closer to their employment, and so on. They are all factors that need to be traded off. As I have said in this council often enough, it is really the government's objective through the changes we will shortly be releasing to try to get the percentage of housing in the outer suburbs, in the fringe areas, to 30 per cent or less over the period of the 30-year plan.

That will be a big challenge, because it means that there will have to be higher densities along our growth corridors. However, if we do not do that we will have significant urban sprawl, we will be more vulnerable to petrol price hikes in the future and our city will be much less sustainable and less efficient. That is the challenge facing the government in the first instance, in terms of developing the policy, but it is also a challenge for us all to try to develop our city in a more sustainable fashion.

We do need to keep land affordable. I do not think it is fair to blame the LMC for that because, as I said, it is only one source of land. I think the latest information I had was that the proportion of land within the urban growth boundary held by the LMC was about one third. So, there is plenty of other land that could be released if it were attractive to do so.

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