The Weston Creek Community Council (WCCC) welcomes the opportunity to contribute to the review of the Land (Planning and Environment) Act 1991 of the ACT.
The Land Act Review
The Allen Consulting Group
19 Pitt Street
SYDNEY NSW 2000
REVIEW OF THE LAND (PLANNING AND ENVIRONMENT) ACT 1991
The WCCC is a voluntary, non-political lobby group that lobbies government and bureaucrats for services and facilities for the residents of Weston Creek. The WCCC functions irrespective of the government of the day. In fulfilling its role the WCCC acts on behalf of residents (or groups of residents) to take issue with the government. In many cases residents or groups wish to remain anonymous and the WCCC lobbies on their behalf. More details can be found at our website http://www2.dynamite.com.au/wccc
The granting of leases in the ACT has had some tangible and substantive impacts on the residents of Weston Creek. The non-competitive nature of some of the processes in part V and VI do appear contrary to the intent of the National Competition Policy. We are not completely familiar with the technical nature of the application of the Act however we are able to provide examples of concerns in the use of the Act for leases and the development approval (DA) processes.
Concerns have been raised by residents that organisations can request of Planning and Land Management (PALM) in the Dept of Urban Services consideration for a block of land for a particular use. Such organisations are offered a choice of blocks based on their claim that they are who they are eg community group for a community lease. There appears to be no checking by PALM of their credentials. We understand that some groups present themselves differently in different fora. The exact details are deliberately not provided here for obvious reasons, but we are sure the Review Team understands this issue. The example here, we believe, is repeated over and over in the granting of non-residential leases in Canberra.
It is difficult to understand how
â€˜the guiding principle is that legislation should not restrict competition unless it can be demonstrated that:
- the benefits of the restriction to the community as a whole outweigh the costs and
- the objectives of the legislation can only be achieved buy restricting competitionâ€™ (source Feb 2000 discussion paper page 5).
could be applied to the granting of a lease in a closed process without advising the community at large that these the leases were even available on the land release program or that PALM were offering leases on a restricted basis to those who approached them. Others may be interested in a particular lease and PALM [for the benefit of the community] should offer leases competitively.
A second example has arisen where a developer has been offered several parcels of land in Weston Creek by PALM, without a competitive process and not informing residents that these land parcels were the subject of offers. The benefits of the restriction to the community as a whole outweigh the costs were again very difficult to believe.
In both the above cases actions restricted competition because the actions conferred differential benefits on particular persons/entities. In both cases the community was advised after the Government signed the lease with the developer.
In respect of the development application (DA) process the use of the legislation may not in the strict sense stifle competition however access to information as to what is proposed on a particular parcel of land is often not available.
We have addressed the questions, on which we take issue, in the attached. The executive of the WCCC is available to discuss the above and attached at a mutually convenient opportunity.
12 April 2000
Review Issues – Questions
1 To what degree is the granting of concessional leases anti-competitive?
Concessional leases, from a community perspective are anti-competitive because the government (on behalf of residents) is making a decision to forego revenue. The applicants could well be able to afford to enter a competitive process. The bona fideâ€™s of the applicant need to be properly scrutinised by PALM through ASX, ASIC, ATO etc.
There is also anti-competitiveness in the fact that not all potential â€˜buyersâ€™ of a lease are aware that the lease is available. This restricts information and therefore limits the possible opportunities for the purpose to which a block of land could be put.
2 What are the public benefits associated with the granting of concessional leases? How do the benefits associated with the different types of concessional leases differ?
Public benefits could be described as higher employment levels if a firm is offered a concessional lease to locate in the ACT. The financial impact of the extra employment generated needs to be offset with the costs to the public of foregoing a â€˜marketâ€™ price on the block of land. The public â€˜paysâ€™ for the foregone market price – who benefits from the increased employment levels?
The benefits of different types of concessional leases vary; eg benefits from concessional leases to non-profit aged care providers vary to the benefits from issuing a concessional lease to a commercial age care provider.
In some cases the ACT Government cannot explain the public benefit of a concessional lease provided to a community group; and in many cases there appears to be no requirement to explain their action to the community that is impacted upon.
3 Can the public benefits created by concessional leases only be achieved by restricting competition? If â€˜noâ€™, what less restrictive legislative and/or non-legislative approaches could be adopted to maintain the current public benefits?
No, public benefit can be achieved without a restrictive closed process by using competition in an open process, which is predicated on the purpose clause of a parcel of land. A legislative process needs to be used, because a non-legislative process would not trigger community consultation mechanisms.
The purpose to which a parcel of land can be put would be a criterion for inviting expressions of interest eg identified community use land could receive Expressions of Interest from a range of legitimate community groups. The purpose, and impact on the community of their proposal, would be used in determining the final allocation of the land. This may be quasi-restrictive, as only organisations in a defined category would be able to â€˜bidâ€™ for land with a particular land use. This is however removed from the current process where an organisation (in privacy) approaches PALM seeking blocks of land.
4 Are the processes for granting concessional leases sufficiently clear and transparent?
The processes may be clear to the organisation approaching PALM, but there is not the transparency to the public that certain blocks are being offered. The argument that it is a private commercial-in-confidence matter not to be discussed openly is ridiculous as the potential developer is seeking by the nature of the lease a â€˜concessionâ€™. It is in fact the ratepayers who are â€˜subsidisingâ€™ the concession. They should definitely be involved in the debate – before a lease is signed.
5 On what basis can fee differentials be justified?
The ability to pay a fee is a valid basis to have differential fees, and the capacity to meet a cost is a fundamental in a market place. Providing a direct grant to a community organisation, as suggested in the discussion paper, to assist them to pay a fee for a lease is a significant distortion of the market place and creates a distorted subsidy. The government would be paying a subsidy for the non-provision of a service; the community organisation is not generating an output but is being given a subsidy? – This compares to the usual approach where a government provides a grant to a community group to achieve an output.
6 What criteria should be used in assessing different products in terms of the fees they receive?
The criteria to determine the level of fees should be the amount of work (cost incurred) by PALM to validate the credentials of the applicant. PALM incurs a cost in preparing a lease, and would no doubt incur costs in checking on the applicant. These costs should be reflected in the fee for the lease. In reality a community group would pay more because of the difficulty in validating information on a community group and the extra work in a concessional lease (eg preparing a disallowable instrument). A company has already lodged information with ASX, ASIC and ATO and so information is readily (and cheaply) available for PALM to access.
7 What criteria should be considered as common to all concessional leases?
The criteria, which need to be considered in all concessional leases, should include:
-Public benefit (however public benefit needs to be well-defined and quantified)
-Opportunity cost of this development over other uses of the land
-ATO, ASX and ASIC information on the organisation, its structure, parent companies, sister organisations and linkages to other developers.
-The â€˜bidderâ€™ for a concessional lease should indicate how many other concessional leases they hold in the ACT and the types of the leases and when they were acquired.
The capacity clause is an interesting dilemma – a disallowable instrument requires an organisation to show that they have the capacity to build a structure and manage an activity, yet it also shows, by the existence of the disallowable instrument, that the organisation DOES NOT have the capacity (or inclination) to pay a market price for a lease. This issue needs careful consideration as it is setting mutually opposed conditions.
8 Should disallowable instruments be sunsetted?
Yes – a holder of a concessional lease should be asked to prove that they are carrying out the activities they claimed when they received the concessional lease. e.g. light industry, Aged care; community care etc should still be the primary use of the parcel of land. If this is not the case an open consultative process should be used to re-visit the granting of the concessional lease.
The holder of the concessional lease should be liable for the cost of reviewing the disallowable instrument on a regular basis. If there are not significant changes the cost of an updated disallowable instrument will not be high. The issue of including sunset clauses in a myriad of existing disallowable instruments needs to be tackled.
9 After what period should disallowable instruments be sunsetted, if at all?
Disallowable instruments should be sunsetted and revisited after a period of 5 years.
10 Is it appropriate to limit the duration of assessments? If so, what should be the time limit?
Given the controversy arising from the issuing of some leases in the ACT it is very surprising that no panels have been established to conduct an inquiry into controversial leases. It is when leases are offered; and signed between the developer and PALM; and then made public that the controversy erupts. The lease is signed and delivered before the government realises they have a community issue to deal with. The developer has a signed lease, therefore there is seen to be no need for a panel to report to the Executive. However, the community is agitating because they were not consulted. The sequencing of the process needs to be re-visited.
It is not appropriate to limit the time that a panel has to decide and report to the Executive on a particular lease. The composition of the panel, and who decides the skills of the people on the panel, should be transparent and accountable. The panel should also be able to advertise that it is considering a request for a lease on a parcel of land and invite public submissions (both written and verbal). Also if the panel is given a fixed time frame for assessment of a particular development, then there may arise the temptation to set the time to cover a period most disadvantageous to the opponents of the development eg school holidays, Easter, etc.
11 What criteria should be included in any such guidelines?
Prior to asking the question of what criteria should be included in guidelines used by a panel, there is the question of what would trigger the formation of a panel eg community concern; competing uses for a parcel of land; traffic congestion; over-development.
A panel should use specified criteria as guidelines in reporting to the Executive. The guidelines should contain criterion such as
-Impact on the community
-Benefit/cost to the ACT
12 Should the process leading to the granting of a concessional lease be set out in legislation or as non-legislative guidelines?
The granting of a concessional lease should be legislative as it confers on all the same â€˜rule bookâ€™ under which to deal with the ACT Government, the developer and the community. Non-legislative processes can be at the direction of ill-defined Ministerial guidelines. The granting of a concessional lease – be it community or business is often agreed and signed before the community is involved.
13 What benefits, if any, are associated with the requirement to have developments approved?
The major benefit of requiring developments to be approved is the opportunity to comment on work before construction. The ACT has an enviable record in the general quality of housing and non-residential buildings. However there are some structures which do not portray ACT building codes in the best light.
The requirement that development work needs approval to commence is valuable in that, through the legislative process, it invokes a consultative process. Some would indicate that there is too much consultation and the â€˜ownerâ€™ of a lease should be able to get on with their construction. This needs to be balanced with the communityâ€™s right to have a say in the built environment of their community. The community in a consultation process is reflecting community standards and expectations – this can be disregarded by a local government at their peril.
14 To what degree is the development approval process anti-competitive?
The DA process could be seen as anti-competitive as it places restrictions on what can be built and how it can be sited on a lease. This may not encourage the consideration (and approval) of a myriad of alternate building and construction approaches. The DA could also be seen to be anti-competitive in that it may (if the development is controversial) slow down the development and therefore add to its cost.
15 Can the public benefits created by the development approval process only be achieved by restricting competition? If â€˜noâ€™, what less restrictive legislative and/or non-legislative approaches could be adopted to maintain the current public benefits?
The DA process needs to be retained and in some respects enhanced. The difference between â€˜substantially affectedâ€™ and â€˜affectedâ€™ needs clarification. If a DA is approved for a large construction adjacent to you -you can comment and have your concerns considered – you are â€˜substantially affectedâ€™. If you are â€˜affectedâ€™ eg the development will bring more traffic and congest the roads and fill the schools to overflowing – you are â€˜affectedâ€™ but on what grounds can you object? It is also difficult for community groups to object to developments, as they are mainly involved with the issues raised in the latter scenario.
16 Is the development approval process sufficiently clear and transparent?
No, the process is not clear, as interested community members are not advised when a developer has lodged the development application. The process needs to be legislatively triggered by an action of a developer on land for which a lease has already been granted.
In addition, the issuing of a concessional lease on a parcel of land by PALM would require them to know what is going to be built and for what purpose it will be used. This is in some respects approving a development application pre-DA submission. Only the technical issues of what a structure will look like becomes the principal focus of the DA.
The Ministers â€˜call-inâ€™ powers with regard to development approval need also to be revisited. The principles on which these powers can be used need better definition and clarification. The Minister needs also to advertise that call in powers are going to be used to effect a DA so that community comment can be sought by the Minister.
17 What are the public benefits associated with the existing orders regime?
The public benefit of the orders as they currently stand provides the opportunity for people to approach an independent body (eg PALM) to deal with an errant leaseholder. It does not put the complainant in the firing line.
There does need to be a less draconian approach to dealing with breeches of leases. The common lease enquiries the WCCC receives relate to leases being used for purposes for which they were not intended (eg running a business from home) and multiple unregistered cars on front lawns and nature strips (failure to keep a leasehold clean).
18 To what degree is the orders regime anti-competitive?
In some respect orders are prescribing the way a leaseholder needs to conduct their affairs. Conversely there would be adjoining leaseholders (and public land) who have a right to reasonable conditions in their surrounding environment. The stripping of motor vehicles at night and on weekends to sell for parts is not an uncommon activity; and reduces the amenity of the neighbourhood – orders give a legal action to rectify an obvious breech of lease purpose.
19 Are there any less anti-competitive ways in which the orders regime can be refined or extended so as to ensure the timely enforcement of lease planning controls?
The four lease planning controls identified at the bottom of page 28 of the Discussion Paper are a reasonable starting point for revisiting how the public can work with PALM to ensure that their rights as adjoining leaseholders are not impinged.
20 Are the processes for obtaining an order sufficiently clear and transparent?
The ease of access to gain an order (from PALM?) by a leaseholder for another leaseholder to take action, or to cease an action, is not clearly articulated to the general public.
If a system of lease planning controls replace orders an education process will need to be undertaken by PALM in the community to alert them to the improved way they can contribute to maintaining the integrity of the lease system in their neighbourhood.