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Labor is hurting its own voters

By Graham Young - posted Wednesday, 24 August 2016


The Queensland government is schizophrenic.

It campaigned last election against asset sales, promising no increase in debt or taxes, yet every proposal to accelerate the Queensland economy involves at least one of these.

The latest is the redevelopment, and presumably sale, of government-owned land in Rockhampton and Townsville.

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I have no quibble with its conversion to privatisation, but now they have seen sense, they need to approach it logically.

The evidence from their handling of the Logan Renewal Initiative is not encouraging.

This was a project that, over the next 20 years, would have turned $300 m of government-owned assets (of which $12.9m was cash) into $1 bn.

This is achieved by turning the whole Department of Housing and Public Works portfolio in Logan over to a not-for-profit consortium for 20 years. They manage the portfolio, replace 1,049 of the existing dwellings with new ones, and build another 1,565 of which 800 are either social housing or affordable rent.

The balance is sold off, providing the cash to renovate and expand the existing stock.

The federal government will also contribute $420m.

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This was a project a long time in the baking, having been originally started under the Bligh government. It is not conceptually difficult, and is similar to projects being undertaken in other states, including Labor-governed ones like South Australia.

Yet somewhere around 5 years after the project was initially conceived, and with some contracts already entered into, this government has canned the project.

Instead they intend to spend $17m over the next 4 years building 70 houses. That’s roughly 18 a year versus 146 dwellings, just in the first two years of the proposed Logan Redevelopment Initiative.

Compared to the Rockhampton and Townsville projects this was a real project, ready to roll now and meeting real needs in a depressed community.

Queensland’s social housing waiting list is huge. As of last count there are 15,891 applications involving 30,426 individuals.

No society has a higher duty than to guarantee that all its citizens have a roof over their head, and the people on this wait list are the constituency that Labor claims to represent. (Labor holds all state seats in this area, which includes Woodridge, its safest.)

This project would also have injected huge sums into a local economy where unemployment is 6.5% and on an upward trend.

If you take the government’s cost to build 70 houses as indicative, then the Logan Renewal Initiative would have injected around $380 million, in present-day dollars into the local economy – that’s $19 million a year on average – not counting stamp duty on the sale of some of the housing, commissions and payments to local professionals, and payroll tax.

That’s also not counting the multiplier effect as the construction expenditure cascades through the local economy.

And we know demand is there, because the wait list exists.

While it’s a tragedy for the local economy, tradies, and other local professionals, it is also a tragedy for the people living in the area.

Much of the housing is no longer suited for its original use, and according to reports in the Courier Mail, very poorly maintained.

The redevelopment would have broken up the concentration of rental housing, bringing new home-owners into the area. A larger population also brings other services, like public transport and shops.

With home ownership sinking to 64.9%, a new post war low, the project would also have filled a gap in the affordable housing market from the 770 houses on-sold to pay for the redevelopment and extension of the social housing stock.

There are many reasons for the dearth of affordable housing, with lack of supply being the most significant. If the state government has en globo residential land it can act as a swing producer, helping to cap rises in land prices.

Bizarrely the minister claims the project was cancelled to save jobs. The only jobs directly affected by this project were those of 40 public servants who were to transfer across to the not-for-profit consortium.

Surely the future of thousands of needy Queenslanders hasn’t been canned just to mollify the public sector union.

Combined with other call-ins this cancellation increases the perception of sovereign risk when dealing with Queensland.

Investors will be less likely to do business in Queensland and they will demand a premium to compensate for the risk of state government caprice.

Which means higher costs for all of us, and a harder road for the Queenslanders whose needs this renewal would have met, the majority of whom it is safe to say, would be Labor voters.

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This article was first published in a slightly edited form in the Courier Mail.



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About the Author

Graham Young is chief editor and the publisher of On Line Opinion. He is executive director of the Australian Institute for Progress, an Australian think tank based in Brisbane, and the publisher of On Line Opinion.

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