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A NELLP11 EQ 4.1
PRIME MINISTER
TRANSCRIPT OF JOINT NEWS CONFERENCE WITH TREASURER KEATING,
PARLIAMENT HOUSE, 3 MARCH 1989
E 0 E PROOF ONLY
PM: Paul and I decided that we would like to do this
together because as you know it was our joint idea after the
price index figures came out that we should have this
conference and I thought it appropriate that Paul should
join me as we both report on the conference and give you the
opportunity of asking questions that you might direct to us.
Now the first thing I obviously was to say is that it was a
good meeting. A very positive, constructive meeting, the
atmosphere within the meeting was totally constructive,
totally constructive and I think that it's borne out by the
last paragraph of the agreed press release. I just point
out that we all agreed on the obvious, that is that there's
no quick fix to the problems confronting the housing
industry at present. However the constructive and
cooperative approach participants at today's conference
which all have agreed to continue into the future.-We've
laid the ground work for substantial relief to the supply
side constraints effecting the industry and as I said in the
press conference this morning in the lead up to a conference
like this it's inevitable you're going to have some things
said. I express the hope you'll recall this morning prior
to the conference that there would be such a constructive
approach and in the event that's exactly what happened and I
want to pay tribute an unqualified tribute to all the
Premiers and the Chief Minister for the spirit in which they
approached the conference. Without that we wouldn't have
been able to get the positive outcomes that we did.
Let me just briefly without reading it summerise the press
release which has been agreed to by us all. The point is
that we've agreed to cooperate in addressing the problems
confronting the housing industry, particularly on the supply
of suitable land. I've told you of the Commonwealth's
decision to release something like 27,000 blocks over the
next five years, a further 31,000 approximately in the
following five to ten years.
Premiers and the Chief Minister responded favourably to
this. They raised questions as obviously one would expect
about blocks and they thought that other areas may be
more suitable and we've agreed to have discussions with them
about both the areas that we have decided are available and
to discuss with them what they think they might be able to
( PM cont) identify as other or alternative more suitable
blocks. So we'll have now a series of bilateral discussions
with the states on these issues. understandably they also
raised the questions of the need to provide infrastructure
for these further blocks and we agreed that the Premiers
would put forward specific proposals in regard to this and
that we would give serious consideration to them in the
Premiers Conference and the Loan Council meetings later this
year. Specifically also in regard to the proposal from the Premier
of NSW who put up the concept of a joint venture proposal
between the State and the Commonwealth we said we were
prepared to examine that, to get some prima facie interest
for us and under those arrangements as you appreciate the
Commonwealth would receive no proceeds from the land until
the final sales were made and that arrangement will
facilitate the capacity of the states to more rapidly
develop those proposals. Questions were raised in the area
of Defence housing and we've agreed to get quickly into
bilaterals with the states who wish to try and expedite the
handling of that area.
One of the issues that was raised also was the question in
a sense as they see it the maldistribution of migration
intake, a lot of pressures in Sydney in particular. We
reminded the states and they were appreciative of the fact
that under the new immigration program there is a system
of bonus points to those who come from sponsors in nominated
states. In other words if you're coming from Tasmania, the
sponsors who are coming from Tasmania, or South Australia,
parts of Queensland and the Northern Territory, there will
be bonus points in that. An attempt to try and diversify a
bit more than the current situation does the flow of
migrants around the states.
I think that Paul may want to refer in more detail to some
of the discussions with the NSW people about the point they
raised in regard to rental property trusts. As I told you
this morning before the conference we've developed a package
of measures which were directed not only at land supply but
the questions of building regulation, land regulation and
local government approval processes. Now they are rather
complex issues and Senator Button will be releasing a more
detailed paper on it.
Could I just quickly indicate broadly what those specific
measures would involve. It includes a three year program of
work to address inadequacies in the availability of data on
land supply and the composition of demand. That work will
be done through the Indicitive Planning Council and with the
full support of the states.
Secondly, the States and the Northern Territory have agreed
to participate in a joint program under which the financial
and technical assistance would be provided over the next
three years to local government to review the technical
content of residential land development regulations.
( PM cont) Thirdly, we've announced a program to promote
demonstration studies, cooperation research and information
dissemination designed to stimulate improvement in the
administrative aspects of approval processes at the local
government level. We've also endorsed unanimously the
setting up of an expert task force drawn from the
Commonwealth State and Local government to design
professions in the building industry to examine the scope
for significant reforms of technical regulation of building
codes and standards.
Finally within this package of measures resources will be
devoted to create the capacity for the analysis and
development of policy in relation to housing supply within
our Department of Industry, Technology and Commerce.
Now that package of measures, which you will see is
specifically going to detailed issues which can improve the
situation on the supply side to all of the measures welcomed
by the States which they will cooperate and implementation
to some extent in funding, is a package of measures which
will cost us about $ 9 million over the next three years.
So you can see that as well as addressing the question of
the supply of land the conference embraced the concept that
we've advanced of bringing forward these measures which we
hope will provide a clear indication of the capacity of the
three levels of government, Commonwealth, State and Local to
accelerate the supply of land.
Now I just want to go to an area now which I think in the
light of some of the events leading up to the conference is
particularly interesting. The conference reviewed and it
warmly applauded the performance of that concept that we've
been using now for some time. It has the rather grand title
of the Joint Venture for more Affordable Housing. It's also
known as Green Street. And you know what's involved there.
The concept is jointly supported by Commonwealth, State and
Local governments as well as industry and what it's been
about is trying to demonstrate to Local governments and to
the industry and to consumers the wider range of housing
choices that are available and the use of more innovative
building and land development techniques. It's applauded by
all the Premiers as it was in a meeting we had last week
with the industry and local government and it's applauded
for the very simple reason that it has demonstrated the
sorts of savings that are available by not being locked in
simply to traditional concepts and what housing's about. As
we say in the press release here and as was embraced by the
Premiers, the project has achieved savings of up to 24% on
house and land development. we agreed that we will be
working with the States to expand awareness of this concept.
Very significantly I would think in terms particularly of
some of the sort of things that were said about Paul
Keating's observations in this area, the conference also
agreed enthusiastically, unanimously, every Premier and the
Chief Minister picked up very enthusiastically the
( PM cont) proposition that was advanced by Paul and his
exposition in this area that we would give early
consideration to joint Commonwealth/ State demonstration
programs of higher quality medium density housing in the
inner cities, particularly older industrial and commercial
areas. In other words there you had all the State Premiers and the
Chief Minister saying in response to the Treasurer's
suggestion, which is consistent with the Joint Venture for
More Affordable Housing which looks towards the other end of
the market. Here was a proposal to look at the same sort of
concept for higher quality medium density housing in the
inner city areas because there's a recognition of what the
realities are that we musn't in this country when we're
trying to talk about meeting the housing needs of our
citizens be hide-bound by simply the traditional ways of
going about it.
So I repeat, and as Paul implicity it's not to say that
for those who want into the future to have the traditional
approach, the quarter acre block and so on out there, that
that is not going to be available. of course it is but we
ought to recognise that there are other ways of doing it and
that for a lot of the Australian population these
alternatives are what they want. So I think it's very
significant that the Premiers unanimously and
enthusiastically endorse this concept so what we will be
doing in more than one city, we can't say we'll be doing it
in every one, but in more than one city we will undertake a
joint Commonwealth/ State demonstration program of what can
be done in this area. I think that will mark a signifcant
turn in community thinking about this important issue.
Finally let me say that we also talked about the area of the
supply of skilled labour, agreed that we should try and do
all that we could to accelerate the supply of skilled labour
in that area and the States undertook to review legislation
regulations under their control with a view to improving
their systems of land supply and use.
They raised questions about the First Home Owners Scheme,
some of them thought they had some ideas how we might
without necessarily additional outlays but to use the same
amount of dollars effectively said good, any proposals
you've got on that let's have them.
So I think you can see in total colleagues that a) it was a
very very useful positive constructive meeting, that firm
relevant decisions were taken not only on the question of
land supply but we've now made some very important decisions
in regard to the basic questions of the alternative sorts of
developments that are available to meet the question of more
affordable housing.
JOURNALIST: Prime Minister when can we expect these
measures to be given..?
PM: Well I had that question this morning. I give the same
answer now. One can't honestly say that it's going to
happen tomorrow or the next day. We said there's no quick
fix. what you've got to do however is two things I think.
You've got to first of all recognise as the Premiers and the
Chief minister did, the reality that the constraints are on
the supply side. I repeat what I said this morning in 1988
house prices increased by 35%, medium house price increase
increase in interest rates so it is on the supply
side, supply of land and associated matters. Now what's
happened today is not simply that we've made arrangements
ourselves to make more land available and the states have
undertaken to accelerate the processes of making land
available and the processes of zoning and so on in
cooperation with local government but also importantly as
I've said and given emphasis to we have agreed that we will
undertake joint programs of looking at higher quality,
medium density housing alternatives. It will actually
undertake joint Commonwealth/ State programs in a number of
cities. Now obviously that won't happen tomorrow. I mean
the program is not coming We've agreed to start on that
and you can see that we're enthusiastically commited to it,
the states are. So we are changing both the capacity to
supply land. Secondly, we are going to together accelerate
the processes of land release, zoning processes and so on.
And thirdly and in probably some sense in the long term
more fundamental sense we are together Commonwealth and
State Governments accepting that there are other ways of
attacking the problem of housing simply than in the
traditional method and that is not merely in the outer areas
whether the joint venture for more affordable housing has
proved successful but now looking at that in terms of higher
quality, medium density housing opportunities in the inner
city areas.
JOURANLIST: On that demonstration project you're talking
about will federal funds be allocated this financial year to
PM: We're now March, we're getting towards the end of the
financial year but quite clearly we'll start work now and
our consideration leading up to our Budget and coming up to
the Premiers Conference, which will be held within a couple
of months, we're commited very seriously to this project and
there won't be any short comings, there won't be any
hesitation on our part in moving to get this going. I mean
we're not looking at financial year considerations, we want
to get this off the ground as quickly as possible. I think
the states do too so we'll have the opportunity in the
period now leading up to the Premiers Conference. a lot
of work to be able to move to implementation of this.
JOURNALIST: Which Premiers raised the question of interest
rates the question of economic settings and what did you
say to them?
TREASURER: Basically the non-Labor Premiers and the reply I
gave was that we couldn't accommodate this level of
investment in equipment, in business investment generally,
in residential construction and non-residential
construction, without something having to give. That was
either it went on to the current account or we reduce
dramatically the call by the public sector upon Australian
savings. That is even more than we have to date or monetary
policy would be employed in moderating that investment. And
of course you wouldn't need to guess what option they
thought was the better of the three of those and that was
that monetary policy should moderate those investments.
That is the 5 percentage point of GDP shift we've had in
investment, in plant and equipment, business investment,
plus residential, plus non-residential construction. it
could only be accommodated if the public sector was
continuing to save to a very large extent. Now every 1% of
GDP is worth $ 30004 so when I pointed out to them that 5% of
GDP would cost $ 15B if they would prefer to ease monetary
policy that way and I think then they perhaps thought maybe
that the current policy settings were probably just about
right. JOURNALIST: Prime Minister is there any for public
housing in the
PM: It wasn't a question at this conference of allocating
funds to the private sector or the public sector. I mean
the question of what we'll do about the level of funding to
public housing is something that comes up in the
consideration that we have as we lead up to our Budget and
it was understood. I mean this was essentially a supply
side conference. Now this doesn't mean that those other
issues don't have a significance but what everyone really
understood is that you don't solve the problems that we were
talking about by throwing more money on the demand side. We
had to deal with a fundamental problem which is reflected in
the statistics I gave you this morning and again this
afternoon 35% increase in medium house price in 1988, the
interest rate 7% increase in that period. They
essentially have got a supply side problem and that's
essentially what the conference was about today.
JOURNALIST: What were the concerns expressed about the
First Home Owners Scheme and how serious are you about
addressing them? Do you for example consider pouring more
money into it?
PM: No, I wanted to make the point clearly Laurie that they
were not putting to us the observation in terms necessarily
of more money. They actually used the phrase that they had
some ideas which they didn't spell out and I'm not saying
that critically but they said they had some ideas about
how for the existing number of dollars you could get more
effective outcomes. So we naturally said if you've got any
such ideas that can make our existing outlays more
effective, sure, let's talk about it.
JOURNALIST: On the question of skilled labour, were any
ideas discussed that showed some promise?
PM: The discussion there, you could put it in two parts. A
reporting on our part of what had been done with the Housing
Industry Association in NSW and then the broader discussions
which took place last month to look at what may be able to
be done on the migration side. our colleagues in the States
recognised that and welcomed what we'd done there. Secondly
there was an acceptance that they should be prepared to
perhaps even be more flexible because it's their area
basically, the question of apprenticeship provisions and so
on. Paul will handle this side of it and outline the amount
of money we are putting for instance into craft and
associated schemes. They welcomed that and undertook that
they would from their point of view adopt as flexible an
approach as possible to ensure the maximum throughput of
apprentices and other training forms. There is a
recognition that in some States the builders have levies
upon themselves, in Western Australia for instance they've
got that, and in what we've done in the migration area in
negotiation with the Housing Industry Association in NSW
which had agreement for another 250 skilled people up to
July of next year. There is a reciprocal obligation there
on the part of the industry to undertake training for an
amount. So it wasn't just a question of looking at
migration but lifting the training effort as well.
JOURNALIST: Did any of the Premiers say yes we'll take some
of the land you've offered or is there still really hard
bargaining to be done before any of that gets allocated
PM: They welcomed the decision but quite frankly in respect
of certain parcels they raised questions as to whether that
would be what would be most suitable to them. There were
questions that I indicated in my outline in the beginning as
to the terms under which it will be taken. Some of them
have been a litte bit frightened by figures that they've
seen about valuations which weren't our valuations at all.
They were valuations which had been put upon the parcels by
the Housing Industry Association which were not valuations
for unimproved values but for completed development blocks.
So when they understood that the figures that they'd seen
were not the real ones that allayed their concern somewhat.
But we're not trying to shove down their throat a particular
form of disposal. if there are some areas for instance that
they didn't want developed they understood that we may offer
it to the private sector. But the essential thing is that
we've agreed now to a series of bilateral discussions with
each State with regard to the parcels that have been talked
about and further if they've got ideas about other they
can identify which is more suitable within their planning
programs, we'll do that.
JOURNALIST: Without going to John Cain's suggestion of the
Watsonia army barracks?
PM: I can't speak in regard to watsonia because that's a
judgement that would have to be made by our relevant
minister. Neither Paul nor I can say whether there is any
opportunity or option there at all. But we'll certainly
discuss it with them.
TREASURER: I don't think he raised it.
PM: He did mention Watsonia but let me make the general
point in regard to Melbourne, how it came Up. He was saying
the Albion development which is a very large part of what
we're offering there is in the western suburbs. He said in
that area land supply is, available land is not a major
problem relatively. He said most people want in Melbourne
to live in the south or south east. It was in that context
that he made just a passing reference to Watsonia. But
whether that is available or not is not a decision that Paul
or I could make, it's a question that you'd have to ask,
* that we'll have to ask and discuss with our minister.
JOURNALIST: Isn't it the case though that if you offer land
in areas where in areas where there's plenty of supply
that the impact on overall price is going to be minimised,
that is you're not going to reduce prices that much?
PM: I don't think that's right. Let me make it clear that
not all the land comes into that category. It certainly was
the case in regard to Albion that the Premier of Victoria
made that point, but there was just general acceptance, no
question by anyone that if not only in terms of what we make
more available, but if they speed up their processes as
well, that over time most obviously if you're going to
increase the number of blocks that are available it's got to
have an impact upon price outcome.
JOURNALIST: Mr Keating, can you explain
TREASURER: At the moment we have a depreciation allowance
for residential property. The NSW government floated a
trust some 18 months ago where the trust was fully
subscribed to about the tune of $ 24 million. We've been
suggesting that perhaps they might try and float another and
they say that they think it would be uncompetitive and
wouldn't be subscribed. But there was some indication to us
that they don't quite understand the provisions of the tax
law in a way which may otherwise let it be subscribed. So
we've agreed to talk about those things so at least they
understand fully what is available under the Tax Act at the
moment before we consider their general request for a higher
depreciation rate.
JOURNALIST: ( inaudible)
TREASURER: It's directed at low income rental property, the
building of low income rental property for low income
tenants.
JOURNALIST: Mr Hawke, how much of a problem is local
government resistance to medium density housing and what
will today's meeting do to overcome that?
PM: Well, I'll just make a couple of observations about
that. Firstly I think there is a tendency to overstate the
problem and why do I say it? I say it because we already
have with the Joint Venture for More Affordable Housing
evidence in a number of States that we can get cooperation
from the relevant local government units when an alternative
to the traditional zoning approach is offered, which gives
you the capacity to house more people in an acceptable way,
in a way they desire, within a given area. So I'm not
therefore being hypothetical about this when I say I think
there's a tendency to overstate in general terms the
opposition would exist on this ground. We have shown that
under the Joint Venture for More Affordable Housing you can
get the cooperation of the local government. The second
point I make is, it's interesting isn't it that across the
political divide in there today all Premiers
enthusiastically embraced the concept of looking at making
changes which will enable medium density housing to go
ahead, not just at the relatively lower end of the income
scale but also at the high quality end. So obviously the
Premiers there are making the judgement as to what is the
desire out there in the community and I think that the local
government area can't be unresponsive to that.
TREASURER: I was just going to add to the Prime Minister's
answer and say that after the announcement of this
conference we've already had the biggest change in the most,
for the largest State, the one where the problem is greatest
and that is in the NSW Government saying that they will give
a right of appeal by developers over metropolitan councils
to the State Government, whereas under the Local Government
Act now there is no right of appeal. I mean if a developer
wants a medium density innovative housing proposal agreed to
now by local government and it is refused, that is it. This
change will mean, that that is the change portended by Mr
Greiner which arose from the debate about this housing
conference, will mean that developers and the major ones
particularly who are likely to take this, can appeal
this to the State planning authorities against local
government. JOURNALIST: What other changes are needed though to achieve
that? TREASURER: The change here look when we've agreed to,
we're going to look at it, joint Commonwealth/ State
demonstration program for higher quality medium density
housing in the inner cities and some of the older industrial
and commercial areas. Now the problem at the moment is, it
is not to say that none of this is occurring. But it occurs
block by block, it's never occurred in a precinct or a
locality and what is envisaged here as we take a precinct,
for instance, the NSW Government has been speaking of late
about the whole Pyrmont area, has been talking about the
( Treasurer cont) Sydney Showground area. Now I'm not
particularly addressing myself to those particular precincts
but it would give us a chance to do something to show that
medium density can be quality development on a precinct
basis and not just a project which sits then alone against
the background of all the other architectural scenery.
Right? So we're only just develop, we're saying we'll look
at it to develop it but if the Commonwealth was to get in
there with the States, and in Melbourne this is also true,
with the industrial area on the other side of the city,
other side of the river, it could be that the Victorian
Government is interested in so demonstrating the same thing
so that commercial developers will then come along and say
look, there is the model.
JOURNALIST: joint venture, and how does that differ
from the Green Street proposal?
PM: Well the Green Street, which is the shorthand way of
referring to the Joint Venture for More Affordable Housing
has been in outer areas and this is extending if you like
the concept to what is relatively a higher quality level of
development but in the inner city area. I just repeat, I
think the interesting thing about it was the enthusiasm and
unanimity with which this idea was picked up.
JOURNALIST: When will the land be publicly identified so
that community groups can react, will it be subject to
environmental and heritage considerations, do you expect a
fuss about any or all of the land?
PM: Taking the first point. The Minister will now be
engaging in a series of bilaterals with the States about it.
There will be, you know, very early the capacity for a
public identification of the areas and there is nothing
secret about it David. Secondly you ask, will there be need
for EISs. Basically, in regard to the areas that have been
nominated by Stewart West, I wouldn't think so. Thirdly,
will there be a fuss? Well, my experience of life in most
areas of Government decisions there's a capacity for a fuss
but I don't think it'll divert the attention of either the
Commonwealth or the States from acting in these areas.
JOURNALIST: Treasurer, these quality medium density style
houses, sounds very yuppie, you know, sandstone Is
that really where the housing problem lies, shouldn't we be
looking at the lower income sort of housing rather than the
yuppie market?
TREASURER: It just means that Europe was into yuppiedom
from the turn of the 17th century right through the 18th
century. But maybe you know, we've got a better idea of
yuppie architecture than Europeans had.
JOURNALIST: Mr Hawke, which Premiers expressed concern
about the adequacy of funds for infrastructure developments
11.
PM: The two Premiers that dwelt most on it were the
Premiers of Western Australia, Peter Dowding and South
Australia, John Bannon. I think it would be fair to say
Paul that they all took the point but with those two
emphasising it most.
ends