Productivity summit turns to building homes, with warnings housing targets will not be met

Australia Broadcast Center

2 days ago

Housing will dominate discussion at the Economic Reform Roundtable this morning, with ministers, business leaders and conservationists all under pressure to solve the wicked problem of building more homes without trashing the environment.
Productivity commissioner Danielle Wood, who will open the session, titled: Better Regulation and Approvals, is expected to explain to attendees that environmental approvals are one of the biggest handbrakes on housing.
In her speech to the National Press Club on Monday, Ms Wood warned "regulatory hair balls" had found their way into "almost every corner of our economy". The result has included massive blowouts in approval times for housing and major infrastructure projects, and she argues it has hurt productivity.
The focus has again turned to aging environmental laws that both the former Morrison government and the Albanese government last term failed to reform.
Under current laws, new developments only need federal approval if they are likely to damage the environment, harm threatened species or affect culturally sensitive land.
That means only a fraction of projects fall within the Commonwealth's remit.
But ABC News understands that even within that smaller pool, there is still a backlog of 30,000 projects, including many of industry's largest proposals, and plenty of room to speed up approvals.
Both Environment Minister Murray Watt and Housing Minister Clare O'Neil will be at the forum today, searching for the balance between protecting the environment and delivering homes faster.
Ms Wood on Monday pointed out that housing approval times had blown out 50 per cent in the past three decades due to regulation. It means "hard conversations" are unavoidable, including about heritage and density restrictions.
Last week, Treasury documents that were leaked to the ABC suggested the government could freeze changes to the National Construction Code to speed up housing approvals as a major outcome of the three-day summit.
Labor derided a Coalition policy for a 10-year freeze at the 2025 election, arguing it would lead to the construction of "shoddy homes".
Now, the government seems to be inching towards a freeze, which is feeding criticism from the opposition.
"The government are hopeless when it comes to balancing the needs of more housing while protecting the environment. Labor are totally paralysed by this dilemma," Shadow Housing Minister Andrew Bragg told the ABC.
"If their only outcome from the roundtable is to copy our policy, you can forgive us for rolling our eyes."
Behind closed doors, Labor MPs admit the scale of the problem. Treasury documents show the government is not on track to meet its own election pledge of building 1.2 million homes in five years.
Senator Watt has been consulting for months with miners, developers, business groups and conservationists on reforms to the Environmental Protection and Biodiversity Act he hopes to legislate by mid-next year after two previous terms of government failed.
A consistent complaint of the current system is duplication. Projects require the sign off of both state and federal departments, with the federal process not beginning until state or territory approval is given.
Stakeholders agrees more housing is needed and that Australia's environmental laws are outdated. The sticking point is how far each side is willing to compromise.
Graeme Samuel, who reviewed the EPBC Act in 2020, has identified a number of areas where approvals can delay and cause real impediments to proper investment.
"The first is local government planning laws and approvals, they can take an inordinate amount of time and of course the NIMBY (not-in-my-backyard) syndrome of local objectors can hold approvals up and in fact result in them never being obtained," he told the ABC.
"The environmental approvals are also important and the recommendations in the review I did back in 2020 are designed to ensure efficiency and, more importantly, to ensure certainty."
The same leaked Treasury documents also recommend a national artificial intelligence plan to cut environmental red tape.
Housing approvals are just one concern of the flaws in the EPBC Act. Another is accelerating approvals for renewable energy projects, which the government considers just as critical in meeting its green energy targets.
A Labor source told the ABC: "Reaching renewables targets and delivering on housing are the hardest challenges for the government politically. The big question for the talks is how to speed up approvals for both."
It is why BHP's Australian president Geraldine Slattery and Australian Conservation Foundation chief Kelly O'Shanassy are central voices at today's discussion — symbols of the tension between growth and conservation.
For Housing Minister Clare O'Neil, the Productivity Commission's report is blunt: red tape is choking supply. In some cases, it takes up to 10 times longer to get approval for a new home than to build one.
She argues this bottleneck is shutting ordinary Australians out of home ownership and driving up costs. Fixing it has become one of the government's most urgent priorities.
While housing dominates today's agenda, Prime Minister Anthony Albanese will step away from Canberra to travel to South Australia to make his first inspection of the state's algal bloom crisis and flex his environmental credentials.
Back in the capital, pressure will remain on attendees to strike the right balance between protecting the environment and solving the housing crisis.
If tensions spill over, Mr Albanese will have the chance to smooth them over tonight, when he hosts union bosses, business chiefs and bureaucrats for dinner at The Lodge.