Below is a press release from the UDIA (QLD) Branch – urging immediate state and federal government action to assist the development industry.
29 January 2009
Queensland development industry issues SOS
The peak body representing the development industry in Queensland, the Urban Development Institute of Australia (Qld), has today (29 January) issued an urgent call to the Queensland Premier and the Prime Minister to prevent further job losses in the once-thriving housing sector.
Various industry indicators, including job losses across the sector of up to 30% (in many development companies) and a decline in interstate migration, are now pointing to a massive disruption and the potential devastation of the housing and construction industry.
UDIA Queensland President Brett Gillan called on Premier Anna Bligh to ensure that infrastructure funding received from the proposed federal economic stimulus package would create jobs and provide much needed aid for Queensland’s housing and construction sector.
Mr Gillan said there have been numerous job losses in Queensland’s development industry during the last four months with many corporations reducing staff by up to 30%.
“To date project staff, acquisitions officers and support staff have been the primary areas in which job losses have occurred,” Mr Gillan said.
“Given the diverse nature of the industry make-up, it is impossible to put a figure on exact losses to date but the cancer is spreading to architects, design and planning staff, as well as the building trades.
“Not only is this personally distressing for all of those involved it presents a difficulty for the future in that development sites are not being generated for the pipeline in the 3 – 5 year time frame.
“Further, due to the current cost structure and reduced prices for existing housing, demand is strongest for market-entry housing.
“On this basis, there will clearly be significant demand for entry level housing for the next 3 – 5 years as many existing householders retain there existing homes and choose not to upgrade.
“This means that there will need to be a major reversal of policy by the Queensland government with respect to the charging of infrastructure charges for new home purchasers if Queensland’s industry is to recover from the current economic down turn.
“The writing is clearly on the wall.
“Victoria’s housing industry is not ailing because it has retained attractiveness for first home purchasers.
“The New South Wales Government has finally recognised that the only way to stimulate their failed development industry has been to abandon the controversial user pays charging mechanism that imposed 100% of the burden of the new infrastructure of new home purchasers and return to a model that has worked successfully in Australia for the last 100 years (and which is currently employed in Victoria).
“The Premier should carefully look at the migration figures from Victoria to Queensland as the tide has turned now after many years of predictable growth.
“The latest ABS figures show only 23,085 net interstate migrants to Queensland in 07-08, down from 37,984 in 02-03.
“Queensland interstate migration is now well below the state government projections of 31,500 for 07-08.
“Any funding for major construction should not only address future major infrastructure but the housing sector as well.
“The government should also be conscious that the level of funds currently being provided for the implementation of major state-wide infrastructure is placing massive burdens on the providers of major infrastructure already. It is essential that any funds spent on infrastructure are directed towards areas that will see major employment gains across the board.
“The housing market is one such area where new development sites and affordable housing construction would very rapidly employ many hundreds of people.
“The development industry strongly suggests to the Premier that funds are used to assist Queensland local authorities to provide major infrastructure, particularly related to the distributions of water, local roads, and sewerage treatment facilities in the growth areas where development is likely to occur in the next 3-5 years.
“Infrastructure-led development such as this will, in conjunction with an immediate cap on increases for infrastructure charges throughout Queensland, assist in breathing life into the dreams of first home owners.
“At the same time there needs to be a subsidisation process for those local authorities that already have excessive infrastructure charges to enable development of properties to proceed at a more affordable level.
“These are unprecedented times and the solutions require a comprehensive knowledge of the economic impacts of the housing, construction and development industries.
“Land taxes, stamp duty, GST, infrastructure charges, transfer duty, mortgage duty and a host of other government taxes and charges as well as the flow on effects of company tax and personal income tax are lost when thousands of workers in housing construction are made redundant.
“With declining workloads, the impact of the recession is now starting to bite in the provision of trades and this will in turn affect staff in suppliers, hardware stores, plumbing supplies, electrical supplies and so on.
“The time to act is now in view of substantial job losses to date as well as in anticipation that these losses of jobs will continue to occur rather than trying to put a bandaid solution on far too late.
“Responsible actions need to be swift and pre-emptive rather than waiting for the crisis as we have seen occur in the mining industry in recent weeks and in the provision of many other services in the past.
“Bringing forward spending on existing capital works projects is only part of the solution. We need to kick-start ailing sectors rather than only focussing on major works,” he said.
Media: For more information, please contact Susan McCosker on 0422 567 667.