Opposition on Mr Fluffy Variation (DV343)

Speech in the ACT Legislative Assembly

27 October 2015

Madam Speaker, I too rise to speak on the report into variation 343. Firstly, I would like to thank the committee members and the secretary, Mr Hamish Finlay. I would also like to thank the other people in the committee office, the attendants and the Hansard department who helped facilitate the inquiry. I also want to extend my sincere thanks to the witnesses who came before the committee. For some of these people it was an extremely emotional event where once again they aired a very sad chapter in their lives.

The Canberra Liberals are very concerned with this variation. It is a variation which does not have a sound planning basis. It is simply an ad hoc cash grab by the government that will do a disservice to our community. Repeatedly I asked the planning minister what the planning rationale for the variation was. I asked:

How does it stack up to have two blocks next to each other with separate rules, even if they have the same attributes?

I asked again:

But what is the planning rationale for having two blocks next to each other that may well have exactly the same attributes in terms of dimensions but have different planning controls? What is the planning rationale?

And again I asked:

Could you explain to me a situation whereby there will be two blocks next to each other and both might be, say, 850 square metres but they have different planning controls attached to them. Where would that be the case somewhere else in Canberra?

And again I asked:

I am particularly interested in the view from planning experts and the planning minister about what is the planning rationale. Is there any planning rationale for having two blocks treated differently if they are next to each other?

I did not get an answer to any of these questions. Madam Speaker, this variation was before the planning committee and we were to produce a report on the planning issues. There is no planning rationale for variation 343. I believe that there is a need for dual occupancy blocks in Canberra and I would like to see more of them in Canberra. However, they have to be the right blocks in the right locations.

A witness, Ms Hunt, said it very well:

We believe DV 343 is what we call “unplanning” and unfair. We find that it is inconsistent with planning zones. DV 343 targets random blocks. It was not planned or coordinated. You might as well just throw darts at a map of Canberra, and that is no way to plan a city, we feel. Allowing greater development on random RZ1 blocks undermines the integrity of the whole planning system.

Indeed, our own report says that the government has stated that the primary reason for this draft variation is to minimise the overall cost incurred to the territory budget as a result of the scheme and, as a result, to the ACT community. So the primary rationale was not planning. The primary rationale was revenue raising. However, even that was flawed because we heard the actual facts. In the vast majority of instances these blocks are not going to be appropriate for dual occupancy developments. We also heard that in the vast majority of instances the highest value is going to be achieved by simply having them as a single stand-alone dwelling, not as a dual occupancy.

To that end we have a situation whereby we have put already traumatised people through even more trauma for an outcome whereby most blocks will not be appropriate for dual occupancies. Even if they are, they probably will not be used as such because of the finances or economics behind it. This was unnecessary trauma for hundreds of Canberra families that are already traumatised by this scheme. This has been an unfortunate, a very unfortunate, incident and I think we have done a tremendous disservice to many involved.

Further to this, the cost of the scheme is quite unclear because of those concerns that I just outlined regarding many of the blocks not being appropriate for dual occupancy and many of the blocks achieving a higher price for a stand-alone single dwelling. The cost of the scheme or the income expected to be derived as a result of this variation is unknown. We repeatedly asked: what is the financial return of this draft variation? How much extra money is the government going to get as a result of this draft variation? There was no figure.

I fully expect at some point that someone opposite is going to try to say that the opposition has cost the territory $X million as a result of not supporting this draft variation. If that is so, then somebody has been dishonest to the committee because in the committee hearings we heard that there is no known figure for the cost or the income of not going ahead with this draft variation. That is backed up by numerous professionals who said, in effect, that stand-alone single dwellings are likely to return a higher income level for the government.

Further to this, Madam Speaker, I am concerned about the potential for negative equity as a result of this scheme. In effect, the government is spot rezoning several hundred properties. If they are spot rezoning several hundred properties into dual occupancy, presumably if they are bought as dual occupancy blocks and used for dual occupancy it is because a higher value has been attributed to those blocks.

However, if this government at some point in the coming few years decides to broaden the dual occupancy policy to other blocks, then the premium that people paid for those blocks under the Mr Fluffy rezoning will have been lost. Therefore, we run the very real risk that negative equity could come about if this government broadens the dual occupancy policy to other blocks in Canberra. In effect, the premium that people would be paying for a dual occupancy block as a result of draft variation 343 would be eroded if the government were to release more dual occupancy blocks into the market.

We also heard that it is just wrong to have stand-alone or separate schemes within zones such as this. RZ1 is no longer just RZ1. It is RZ1 and RZ1+. Some blocks are RZ1. Other blocks are RZ1+ because they have got the additional right for dual occupancy. That seems to me like a new zone. That is not RZ1. That is a new zone. The difference is that there is no transparency because RZ1 is still there on the map. It would be clearer for everyone if they did actually call it a new zone. That way for all time people would be able to look at what blocks in Canberra have what privileges with regard to development.

Instead, we are going to have this cryptic system whereby there are going to be several hundred blocks in Canberra that are going to have additional rights and additional privileges but no-one is really going to know which ones they are because they are all zoned as RZ1.

Madam Speaker, this government in 2001, 2002 and 2003 blew up the dual occupancy market in Canberra. They campaigned against it fiercely when they were in opposition. I am not saying that the dual occupancy market or the dual occupancy provisions under the former Liberal government were ideal. But this government railed against them. When they were in opposition Mr Corbell, as the shadow planning minister, railed against dual occupancies. Here they are now doing a spot rezoning.

As I quoted earlier, this is “unplanning”. As a result of this, once again this government could blow up the dual occupancy market. There is a need for dual occupancies in Canberra. There is a need but it has got to be done properly because we saw, as we read in submissions and as we heard through witness statements, this is a very controversial part of planning policy and we have to get it right. But as a result of variation 343 we may well see the dual occupancy policy become further politicised, become even more controversial. We have to do dual occupancy planning properly. It cannot be by throwing darts at a map of Canberra.

There is a need and there are many appropriate blocks for dual occupancy development here in Canberra. But they cannot be chosen by throwing darts at a map. They have got to be done properly. For example, I think a good place to start would be large corner blocks where you could have separate entries or separate frontage. That would be a good place to start, I would think, but let us have a genuine discussion about how to do this.

Ms Fitzharris just said that we are now starting a conversation about dual occupancies in Canberra. It is a funny place to start after a decision has been made. This is the typical way that this government consults. It makes a decision, then reverse engineers and tries to rationalise it afterwards. I call on the government to put this variation on hold and to start a genuine debate, a genuine discussion about how to best achieve higher density on the right blocks in the right locations, because throwing darts at a map of Canberra is not the way to do it.

Finally, regarding the scheme more generally I do have concerns as to how it is going to be implemented. I think it is extremely unfortunate that many people will not be able to afford to return to their block. The government is patting itself on the back regarding land rent being an option for Mr Fluffy owners. However, I think it is extremely sad, extremely sad, that for some people in Canberra who owned their own house and land, the only option to stay on their own block is to rent it off the government.

They formerly owned their own house and land. The government is patting themselves on the back that people now have the option of being reduced to renting that land off the government. I think that is sad. I think that is extremely sad and I think the government should be very careful before commending itself on this option.
It was a useful inquiry. It was a good opportunity to hear from many witnesses about the many issues with this scheme. For the reasons I outlined in this speech and for many others, I do not support draft variation 343.