«Staff present: Mr R Hansen (Research Director) Mr P Douglas (Principal Research Officer) Mr K Holden (Inquiry Secretary) PUBLIC HEARING—INQUIRY ...»
While the government has indicated to us that yet again they are working on yet another guideline to define residual impact, this does not allay our concerns. If it does not set the threshold for residual as it currently does for significant, then there is not any benefit. Nor is it acceptable that there is not a parallel commitment that the guideline will be completed to the satisfaction of all parties prior to the bill being debated. This continues an ongoing trend of governments—not just this one— progressing the introduction of new legislation without having developed core supporting documentation, whether that is regulations or associated guidelines. The removal of this threshold is also entirely inconsistent with the Commonwealth’s offsets policy, which has been in place for more than a decade.
Driving industry down the path for accounting for any residual impact will be an extremely costly exercise for both companies and taxpayers, who will ultimately fund the unnecessary reassessment of developments. As I said, we attached a number of detailed case studies to our submission which describe the impact to the resources sector in the event that particular businesses did not have that significant threshold at the time of their current project approval process. The solution is a very simple one: that the bill’s proposed provision to omit the word ‘significant’ from the threshold of residual impact in the Environmental Offsets Act be removed. If the focus is only to focus regulatory changes on agricultural development, there are far better options available such as the existing guidelines which could be readily modified, and there are two—which we have always said is silly—guidelines which could be combined into one and may be reviewed rather than starting from scratch again.
We emphasise our serious concerns with this bill, particularly in the context of coming so hard on the heels of various other pieces of legislation which have just passed: the chain of responsibility act, the re-opening of options to all parties through the Mining and Other Legislation Amendment Act and just very recently the premature closure of mining operations on North Stradbroke Island. Any unnecessary cost impacts on the resources sector in the current economic context as well as any Brisbane - 47 - 3 Jun 2016 Public Hearing—Inquiry into the Vegetation Management (Reinstatement) and Other Legislation Amendment Bill further loss of investor confidence must be recognised as potentially having consequences for jobs and the economic return to the people of Queensland. We therefore seek recommendations from the committee which will see a fairer outcome for the resources sector. We also have other matters in our submission which I will not raise here but I am happy to take questions on. We urge the committee to recommend against the substantial change. I would be very happy to take any comments.
CHAIR: Your submission states— Driving industry down the path of accounting for any residual impact will be an extremely costly exercise for both companies and tax payers, who will ultimately fund the unnecessary reassessment of developments.
Can you explain a little bit more about that and why you think costs will be passed on?
Ms Hayter: There are a couple of matters there. If we are talking just in the first instance about the assessment process, every time a company puts in an application for an amendment there is a cost associated with that. There is a cost associated then if the government says, ‘Now you have to go back and reassess.’ There is a processing cost, there is an administrative cost and there is a time cost. There is an associated government officer who has to work on that. The company has to potentially get consultants out, flora and fauna experts et cetera. It is about a package of having to reassess something which is currently in approval condition, and that is also related to a key issue with the act, which is that there aren’t any transitional arrangements recognised either.
Then of course there is the actual cost that a company needs to find an additional offset or a much larger offset because of the change in threshold. As we said in our submission, we are talking about millions. In fact, the resources sector is really the only industry that has actually spent any considerable amount of time being involved in the Environmental Offsets Act.
Mr PERRETT:. I know other governments made certain claims that this legislation will not affect the mining and resources sector. It seems quite clear from your submission and testimony today that it will have significant potential impacts on that sector. Can you inform the committee what consultation the government had with the resources council prior to the introduction of this legislation into the parliament?
Ms Hayter: Zero. I can expand on that if you would like.
Mr PERRETT: I am interested because the claim has been made with respect to certain aspects that will not affect the resources and mining sector of this state. I am keen to know, given the claim that that was the case, your experiences around the consultative process and what contact the government had with you. I note that your submission mentions it being rushed into parliament and the absence of proper consultation, so I am keen to get your views on why it is important that government consult properly with all sectors.
Ms Hayter: The bill went in on the 17th, as has been noted before. The following day the usual announcement comes out from the parliament that such and such a bill has been introduced. I saw that it included some amendments to the offsets act and I thought I would have a look. At least the last two pages were all omit the word ‘significant’, omit the word ‘significant’. Consequently I rang my boss in a bit of a panic who immediately got on to the minister’s office and we were able to have a meeting with him the following Monday at which we were informed that he had been advised by his department that the bill would not impact the resources sector. What can I say? That is clearly not the case or at the very least there was never any question of asking our views on that. I have absolutely no idea the basis for the advice which the minister appears to have been given.
CHAIR: Thank you very much.
CHESSHER-BROWN, Ms Kirsty, Director of Policy, Research and Sustainability, Urban Development Institute of Australia (Queensland) MACOUN, Ms Sarah, Chair, Planning and Environment Committee, Urban Development Institute of Australia (Queensland) CHAIR: Welcome. Would you like to make a brief opening statement?
Ms Chessher-Brown: Thank you for the opportunity to provide further feedback to the committee. We appreciate it. UDIA represents all sectors of the development industry throughout Queensland, and our aim is to help our members deliver better communities. This bill is critically important to the urban development industry and we believe it will directly impact on the future of communities throughout the state. It is our view that it will add significant uncertainty and additional cost and that burden will sit with homebuyers which will threaten future investment in Queensland and a redirection of funds and jobs to other Australian states. Our submission details our concerns with the bill in full. Today we would specifically like to focus on one of those issues which is the removal of the word ‘significant’ in relation to the offsets act.
Firstly, it is important to note that it is the institute’s view that this is not a reinstatement and the changes to the offsets act are not a reinstatement. The offsets act and the corresponding framework were introduced to combine five pre-existing state offsets policies, some of which even included exemptions for urban uses. The removal of the word ‘significant’ will apply to urban areas, significantly increasing the offset liabilities for urban development sites throughout Queensland.
Since the introduction of the offsets act in 2014, the number of opportunities for an offset to be taken by various levels of government has increased. Today on any given development site a developer may be required provide an offset to three levels of government. The removal of the word ‘significant’ has substantial cost implications which would impact the cost of housing in Queensland and, importantly, really affect the viability of development sites.
Since our submission on the bill UDIA Queensland has undertaken analysis on some of our member sites, focusing on South-East Queensland at this stage, which reveals that on those sites the removal of the word ‘significant’ has the ability to add between $10,000 to $197,000 as an additional cost to each house. This is an extraordinary additional cost impost on urban development which is occurring on land that is zoned urban within the urban footprint. These areas have been identified urban with the explicit purpose of providing and delivering houses for a growing population within Queensland.
The impact of this policy will directly impact sites which contain matters of state environmental significance of less than five hectares in size. Our case study analysis shows that this proposed change has the ability to impact even small development sites—for example, a site with four townhouses to be developed and that may occur by the removal of a single tree. That would trigger an offset obligation. On these sites—we are again talking about a single site with perhaps four townhouses to be developed—the ability to avoid and mitigate the removal of a matter of state environmental significance is highly constrained yet this type of development is often developed in response to the government’s preferred urban form which is in-fill development.
In addition to the cost impacts of this policy, this proposed change will cause significant disruption to the industry across Queensland. We have been operating under the existing Environmental Offsets Act for not even two years and this is a significant change to the legislation that we are currently operating under. Given the time frames involved with delivering a development project, even though small development projects can take five years from the time of acquiring a site to the time that you start construction, an alteration to this relatively new legislation and framework combined with those significant additional costs that I spoke of earlier is likely to disrupt the provision of housing for all Queenslanders. Sarah will now talk on one of the other key issues that has arisen.
Ms Macoun: I will speak very briefly in addition to what Kirsty has raised. The change that is proposed in removing the word ‘significant’ will also create a misalignment between the federal government’s regime and the state government’s regime. I do not know if you are aware but since the offset act was introduced in 2014 there was quite a bit of progress made in aligning the state and Commonwealth’s offset regimes, and a critical part of that is this notion of significant and impacts being significant. Under the federal legislation, a party is required to offset residual impacts if those impacts are significant, but with the change that is proposed now at a state level it is all residual impacts. It is any residual impacts that are required to be offset. We are going to end up with a misalignment between the two approaches to offsetting.
Brisbane - 49 - 3 Jun 2016 Public Hearing—Inquiry into the Vegetation Management (Reinstatement) and Other Legislation Amendment Bill CHAIR: I do not have any questions. I will pass over to Tony.
Mr PERRETT: Thank you for coming along and putting forward your perspective with respect to the current provisions within the legislation. I am interested to hear more about your knowledge of other states. I got a response from the Deputy Executive Director of the Property Council of Australia earlier today, and she raised some serious concerns about misalignment with other states that could potentially impact the growth of this state and jobs that are linked to it. What is your knowledge of how this legislation aligns, or misaligns in this case, with other states?
Ms Chessher-Brown: As Sarah was saying, the core issue is the removal of the word ‘significant’. That is common language when we are considering offsetting and measurement of residual impact. That will certainly put us out of step with other states.
Mr SORENSEN: How long does it take for the process to go through from one end to the other when you are dealing with three different levels of government?
Ms Chessher-Brown: A very long time. It can be very complex. Sarah is able to talk a little more about the Commonwealth system.
Ms Macoun: It can take a very long time, and the difficulty that the industry has faced, particularly recently, is that the laws keep changing. You start off with one set of parameters and they keep shifting. There is continual shifting of what you are required to offset. Every time something changes, there is cost and time associated with that. Ultimately the person who pays the price for that in the development industry is the end user, so the homebuyer.
Mr SORENSEN: How far does it go down? I saw a situation on an industrial estate where they had to leave so many trees per hectare—blocks of land. When the person wants to build a building, does he have to go through that again to shift a couple of trees out of the road?
Ms Macoun: It would depend on the status of those trees. If those trees had some measure of protection at a local level then, yes, potentially you would be looking at an application to remove those trees and possibly an offset requirement for those trees. Similarly, they might have a level of protection at a state level. It is probably unlikely at a Commonwealth level if it is just a couple of trees.
As I said, the Commonwealth has this notion of ‘significant’. They are not interested in looking at something unless it has a significant residual impact. You do not even get into their system. There is a preliminary step whereby those sorts of things are filtered out.
Mr SORENSEN: Do you think some blocks of land will become undevelopable?
Ms Chessher-Brown: Under this proposed bill, yes. Also for sites that have previously been bought we imagine that the feasibility will collapse on this basis so they will not be developed.
Mr SORENSEN: I can see a block of land in Hervey Bay come to that situation with this legislation. I do not believe it will ever stack up.