I have to admit, I’d never heard of this guy before. But boy, is he a breath of fresh air! He's basically revealing why real estate is so expensive… Something that anyone who has been involved in development has experienced first hand.
But who is this Bob Day?
Bob Day, one of the senate newbies, has used his maiden speech to call out government corruption, and the tyranny of ridiculous planning laws. It was a barn-burner and it could change everything.
The new senate looks like it’s going to be a barrel of monkeys, maybe literally. But it finally seems we might have a pollie who gets housing, and just might have the balls to do something about.
Meet South Australian Senator Bob Day. He’s from the Family First Party. I don’t really know what they’re about. I guess they’re pro-families, but you know, who isn’t?
(I’ve been thinking about starting a pro-anti-pollie party…) Huh?
Anyway, Senators usually use their first speech in parliament to lay out the issues that are most important to them, and the issues they plan to be going hard on.
And so what’s Bob Day about?
More specifically, how corrupt planning regimes and bureaucratic idiocy keeps land costs up, and housing out of the reach of young Australians.
And he actually knows what he’s talking about. He used to be a builder, and his story here about the rigmarole he went through trying to develop a block of units is cracker.
But let’s take a look at a bit of his maiden speech. After a few pleasantries, he cuts to the chase:
…The single most important factor affecting housing affordability has been land. In no other area of the economy has the interference of government been so pronounced, so unsuccessful in its implementation and so catastrophic in its effect.
That’s it Bob. Kick those complacent pollies square in the nuts.
The deliberate policy to limit urban growth—that is, limiting the supply of land on the urban fringes of our cities by introducing urban growth boundaries and, at the same time, promoting urban densification—has been a disaster socially, economically and environmentally. And it was all designed for one purpose: to make money.
This is where he really got my attention. Was he really going to call a spade a spade and expose the corruption at the heart of our planning laws? Yep.
Land developers, in cahoots with state government land management agencies, have made billions of dollars and, at the same time, ruined the home ownership prospects of a whole generation of young Australians. If there is one commodity Australia is not short of, it is land. Yet, to buy a block of land on which to build their first home, young couples are forced to camp out overnight by rent-seeking land developers and their state government cronies for the privilege of paying an exorbitant amount of money for a measly one-tenth of an acre of former farmland—land that developers and state governments between them managed to convert from $10,000 a hectare to $1 million a hectare. It leaves all other forms of price gouging in its wake.
Ouch. But he’s got it right. By locking up land (and making it harder to develop the existing city) we’re tying our kids to mountains of debt. And he’s calling the pollies out on their complacency.
When challenged about this and asked, ‘Why are you letting this happen?’, a senior state government politician admitted, ‘We need the money.’
It is why politicians are so easily captured and conned by the constant procession of rent-seeking crony capitalists whose job it is to enrich one group of Australians—themselves—at the expense of another: first homebuyers. Rent seekers are the scourge of business and politics. They tarnish the political process, distort the market and, in the case of land development, distort the entire economy.
Bang-flippin-on. Crony-capitalism is the biggest threat to freedom, prosperity and meat-pies there is. To hear a politician call it out is a breath of fresh air.
But what I really loved about Day’s speech is how he jumped from the macro picture, to street-level view…
The second barrier is the proliferation of federal, state and local government planning and building controls, which add cost, confusion and delay. Let me give you one example.
A few years ago I bought a block of land on a very busy main road in one of Australia’s capital cities. I submitted plans to the local shire council to build 12 semidetached home units on the land and, as the zoning allowed for such a development, I did not expect any problems. That was, of course, until I came up against the shire council town planner, who said he would recommend the development for approval subject to the provision of noise attenuation devices across the front of the property. ‘Noise attenuation’ is a fancy name for soundproofing.
I tried to point out to him that there were thousands of kilometres of main roads across the country with many hundreds of thousands of dwellings along them and that it seemed to work in most places without sound attenuation… But he was having none of it. He wanted his noise attenuation devices. He rejected all my pleas and I had an acoustic engineer design a front fence to assist with noise attenuation. No sooner had I finished the job than the royal society for the deaf bought the units—all 12 of them!
We’ve all been there. And we all know we’ve got to build up the inner city. Unless we stop our cities growing (never going to happen), all those people have got to go somewhere. Unless we want to keep sprawling out and creating ‘suburbs’ 4 hours from the CBD, we’ve got to build up. And yet, councils can make it a nightmare.
And of course, this supply-phobia keeps prices on the up and up, and out of the reach of young Australians.
This issue deserves to be front and centre. Good on you Bob for taking a stand. I think you’ve got a difficult road ahead of you – the major parties aren’t going to like it, but I salute you.
Tell me some of the ridiculous charges, costs and stupid red tape you’ve had to live with in the real estate development process… Let it rip!