34 - General Public Services · 2011. 10. 24. · Chapter 34 - General Public Services REGULATORY AND OTHER SERVICES: SUMMARY OF THE CGC 1999 REVIEW METHODOLOGY Component factors

Chapter 34 - General Public Services

34) GENERAL PUBLIC SERVICES (INCLUDES FORMER REGULATORY AND OTHER SERVICES)

Key Points of ACT Argument � Planning and development in the ACT has to achieve a balance between the

interests of the nation and the interests of the Canberra community unlike the planning obligations of State counterparts. This has a consequential cost impact.

National Capital Influences � The ACT contends the evidence supports the continued assessment of a

national capital isability factor in recognition of onwealth involvement in the detailed planning of Canberra, and an increase in the allowance to $11.3m reflecting three separate claims:

� part one relating to additional planning costs incorporating: � the additional cost burden on the ACT’s capital works program

($1.0m); � the additional ‘layers’ of planning and negotiation necessary for the

ACT to implement its urban planning policies and for development projects ($2.0m); and

� the impact on the ACT of maintaining the ACT Leasehold System which has administration imposts ($2.5m);

� part two relating to foregone economic opportunities and associated costs ($5.0m) comprising: � revenue losses through a reduced capacity to lease land for

residential and/or commercial uses; � the underutilisation of infrastructure necessary to support urban

populations in the ACT’s townships; � economic losses to the ACT arising from revised and/or reduced

scale of development proposals; � economic losses to the ACT arising from the inherent delays in

negotiating and finalising development proposals that require the input and/or approval of relevant Commonwealth bodies;

� revenue losses to the ACT due to the timing for project approvals and ongoing ‘rent stream’ and other receivables;

� economic and revenue losses hrough he release of Commonwealth lands for residential and/or commercial purposes; and

� part three relating to the ACT’s role in the strategic planning of the local region estimated at $0.8m.

Scale factor � The assessment of diseconomies of small scale and input costs faced by

the ACT in maintaining a planning regime with a lease hold system should be continued.

d Comm

t t

ACT Main Submission to the 2004 Review 689


Background

34.1. The former category titled Regulatory and Other Services comprised expenditure on administration, regulation, support and operation of government services not elsewhere classified within the Commission's functional classification.

34.2. In line with the Commission proposals to reform the scope and structure of the standard budget for the 2004 Review, it is now proposed by the Commission to allocate the expenses under this category to the appropriate functional categories under the heading of Economic Activities with any residual expenses included in General Public Services.

34.3. The former Regulatory and Other Services category specifically included expenditure on:

� consumer interest and protection affairs including licensing, sales practices, labelling of packaged foods and other goods intended for household consumption, regulation of weights and measures, price control and rationing schemes operating through retailers or wholesalers;

� retail shop inspection;

� hotel industry such as licensing, liquor control commission, and all hotel and restaurant affairs;

� the ombudsmen, administrative appeals tribunal, land titles office and the like;

� administration of crown land tenures such as pastoral and perpetual leases, conditional purchases, special and other leases;

� management of crown land reserves, including public reserves and road reserves;

� labour and employment issues such as employment creation, regulation of working conditions, conciliation and arbitration, and anti-discrimination programs;

� general economic and commercial matters which cannot be allocated to a functional subgroup, such as general regulation of monopolies and other restraints on trade and market entry, regulation of co-operative societies, friendly societies, credit unions;

� ethnic affairs, registry of births, deaths and marriages, overseas representation etc;

� overall community development mainly concerned with the planning of new or rehabilitated communities with the aim of improving the quality of life;

� plans involving housing and the administration of concessions to decentralised industries;

� plans involving facilities for health, education, culture and recreation; ACT Main Submission to the 2004 Review 690


� administration of zoning laws, regulations on land use and building standards;

� inspections enforcing building standards and research into construction methods, materials and productivity;

� other environment protection programs such as development and monitoring of standards covering pollution and air quality, control and the prevention of erosion of beaches and foreshores, flood mitigation in urban areas; and

� planning, research, regulation and co-ordination of passenger and freight transport services.

34.4. The ACT’s position relative to the States, based on the 1999 Review methodology and using the latest available data is illustrated below. This sees the ACT being assessed by the Commission as having positive needs in this former category.

STANDARDISED, ACTUAL & AUSTRALIAN AVERAGE EXPENDITURE: REGULATORY AND OTHER SERVICES, 2000-01

Aust. Avg.

0 50

100 150 200 250 300 350

NSW Vic Qld WA SA Tas ACT NT

$pc

Standardised Actual

Standardised expenditure is the amount that the Commission deems the ACT is required to spend if it isto provide an average level of service.Actual expenditure is the actual funding spent by the ACT on this category in 2000-01.

34.5. A former category structure is provided in the following table, which illustrates the major components of the current assessment, together with comments on how the ACT is affected by the application of the different factors.

34.6. The bulk of ACT expenditure in this category related to the planning and lease administration components of ACT Government operations. In light of the new proposed category structure, the bulk of the ACT expenditure transfers to the General Public Services category and not to the separately identified Economic Activities.



REGULATORY AND OTHER SERVICES: SUMMARY OF THE CGC 1999 REVIEW METHODOLOGY Component factors assessed ACT position

Scale affected expenditure The Commission assessed above average needs for the (wgt 19.44%) ACT due primarily to diseconomies of small scale. Admin. scale Input costs

General regulatory services (wgt 69.01%)Economic environment Dispersion Input Costs

The ACT’s negative needs arise mainly from the relatively small number of industries and smaller size and complexity of the ACT economy compared to other jurisdictions. These negative needs were partially offset by the high cost of wages and salaries in the Territory.

Job creation (wgt 10.00%) Socio-demographic composition Dispersion Input costs

The below average needs assessed for the ACT are due mainly to the low need for labour market programs in the Territory, as measured by the numbers of Commonwealth unemployment benefit recipients and also Aboriginals on the Community Development Employment Prospects scheme.

Isolation (wgt 0.38%)

Land rights (wgt 0.07%) The Commission assessed this factor for the Northern Territory only.

National capital (wgt 0.31%) National capital

A national capital factor was assessed to compensate the ACT for the additional costs incurred by the Territory resulting from the National Capital Plan (capital costs only), the unique leasehold system in the Territory and cross-border planning issues.

Native title administration (wgt 0.79%)

This component was assessed to account for the costs to jurisdictions arising from the Commonwealth Native Title Act 1993.

SUMMARY: The majority of the ACT’s positive needs in this category derive from the Commission’s recognition of the diseconomies of small scale faced by the Territory.

34.7. The pre-existing 1999 category titled General Public Services, on its own, did not cause the ACT concern, hence, this chapter focuses on those components of the Regulatory and Other Services category that will be carried over into General Public Services. In particular, the ACT is seeking the Commission to:

� address a number of perceived weaknesses in the application of the national capital factor as it relates to the planning and associated administrative arrangements in place in the Territory including the lease hold system; and

� continue to assess diseconomies of small scale and input costs disabilities experienced by the ACT in maintaining a planning and lease administration regime.



Introduction

Canberra - The Nation’s Capital

34.8. The Australian nation came into being on the first day of January 1901. The Australian National Capital, Canberra, is a symbol of this unity and a place that is a source of pride for all Australians – a place that embodies the nation’s heritage, aspirations and values.

34.9. Canberra began its existence as an obligation arising from Section 125 of the Constitution. The role of Canberra as the National Capital creates special needs and standards of development, which has been influential on the way Canberra has developed and on its character as a city.

34.10. From the 1911 international design competition won by Walter Burley Griffin, the role of landscape has been an essential element of the city’s development. The main design features of the plan were the lake, hills and long straight avenues. A major principle of the plan was that the hills and ridges flanking the city were to be preserved in their natural state as forests and parks. His suburban areas were laid out as low-density garden suburbs.

34.11. Walter Burley Griffin’s design was formally adopted in 1925 as the gazetted plan for the layout of the city of Canberra and its environs.

34.12. Landscape unifies the city and creates its unique character and the setting within which development takes place.

34.13. To accommodate the growth in the population, two separate reports, being Future Canberra (1965) and Tomorrow’s Canberra (1969), set down principles to guide the development of the city. They included the development of new towns each with a town centre, transport system that would consist of inter-town public transport route connecting town centres and a peripheral system to keep major inter-town movements out of urban areas and a landscaped open space system to be used to reinforce the natural hill and ridge systems around the urban areas. It is the National Capital Open Space System that extends the National Capital concept throughout the ACT.

34.14. Canberra as the National Capital is a product of national goals and aspirations as reflected in a range and proliferation of institutions such as:

� the Australian War Memorial, the National Library, the High Court, the National Gallery, the National Museum;

� National Capital uses including the Parliament, the Mint, diplomatic missions;

� conference facilities, government offices spread throughout the city (eg Parkes, Barton, Civic, Campbell Park, Russell, Woden, Belconnen, Tuggeranong), the ANU, Duntroon, Australian Institute of Sport, HMAS Harman etc; and



� federal functions such as the Therapeutic Goods Administration (formerly National Biological Standards Laboratory).

34.15. Consequently the image of the National Capital is important – the design planning and construction should reflect credit on the nation. This image is conveyed throughout the city not just in the Parliamentary Zone but also on areas of special requirements such as the main avenues, approach routes, and the National Capital Open Space System. Griffin’s plan for the Capital inextricably links the urban structure and cultural life of the city to its landscape and urban setting. The management of this plan, the landscape as well as detail design requirements, signage, lighting, building quality and other policies contained in the National Capital Plan (NCP), while supported by the ACT, does impose extra administrative and financial burdens on the ACT Government.

National Capital Allowances

34.16. In the 1999 Review, the ACT claimed $5.5m as national capital allowances for the former Regulatory and Other Services category with the Commission subsequently agreeing to $3.4m per annum. This allowance is based on:

� costs of maintaining designated land, and land subject to special requirements for which the National Capital Authority has planning approval with the Commission subsequently rejecting the claim on the grounds that it was not convinced that additional costs needed to be incurred:

� the ACT does not agree with this outcome. There are numerous examples of the additional costs of planning and administration (as opposed to operational costs) imposed on the ACT which are further highlighted later in this chapter. The cost of maintaining Designated Land areas on behalf of the Commonwealth is further addressed in Chapter 25 - Culture and Recreation;

� capital costs as a result of the impact of the NCP arising from siting and building requirements and additional requirements in relation to infrastructure provision with the Commission deciding by broad judgement on a fixed disability of $1.0m per annum to cover all costs related to the requirements of the National Capital Authority:

� the ACT does not agree with the quantum of the allowance. The allocation of $1.0m by broad judgement appears to be a token recognition and a further claim is outlined in this chapter;

� costs incurred in land swap arrangements in relation to national land no longer required for Commonwealth purposes which the Commission subsequently rejected based on the belief that the ACT Government has the capacity to decide whether or not to enter these arrangements:



� the ACT does not agree with this decision. The issue is much broader than a simple land swap arrangement which is discussed further in the chapter;

� higher costs of the planning and land management due to the existence of the leasehold system with the Commission subsequently agreeing to an allowance of $2.0m per year based on broad judgement:

� the ACT does not agree with the quantum of the allowance, which appears to be a token recognition. The administration and economic costs to the Territory are addressed further in the chapter; and

� cross-border issues relating to the costs of planning functions associated with the integration of ACT services with those in contiguous areas of NSW with the Commission agreeing to an allowance of $0.4m:

� the ACT supports this allowance but seeks an increase due to added responsibilities.

34.17. The vexed question of how the unique planning and land administration system in place in the Territory impacts on ACT Government service delivery relative to the other jurisdictions is always going to be difficult for all parties to reach agreement. It will always entail a degree of broad judgement by both parties.

34.18. The ACT has on a number of past occasions attempted to identify and quantify a reasonable log of claims for disabilities for the Commission to consider. Indeed, the ACT and the Commission have been working together for a number of years in defining this area of assessment both pre and post self-government.

34.19. This is particularly difficult given the specific nature of the allowances. As the claims impact directly on the ACT from an operational perspective only, it is incumbent on the Territory to develop all claims in-house without the benefit of the normal assessment development phase which the Commission and States engage when examining assessments common to all.

34.20. The ACT itself is still coming to grips with the unique operating environment it is forced to conduct its service delivery obligations within the Commonwealth State framework. The knowledge base and operational understanding is maturing as the ACT benefits from the financial reforms of the past five years. This has enabled Departments to better identify their demand and cost of service requirements, and in many cases, improved the identification of costs underpinning many of the ACT’s past claims for national capital influences particularly in this category. The ACT’s further claims building on the Commission’s response to the 1999 Review are outlined in the following paragraphs.

34.21. It is important to note that the claims for a National Capital allowance in this chapter relate to the planning controls in operation in the Territory pitched at the State level of operation, and is exclusive of municipal controls. They are also quite separate to the claims foreshadowed in both the National Parks and Wildlife Services Chapter relating to the direct impact of the National



Capital Open Space (NCOSS) system and the Culture and Recreation Chapter which outlines the overprovision of urban open space and recreational sportsgrounds.

The Planning Framework

34.22. Planning and development in the ACT has to achieve a balance between the interests of the nation and the interests of the Canberra community unlike the planning obligations of State counterparts.

34.23. Nationally, it is about protecting and enhancing Canberra as the National Capital of Australia. The National Capital Authority undertakes this work, through the NCP, on behalf of the Commonwealth Government. The NCP provides the principles and sets the framework within which the TP specifies land use policies for the Territory (see below).

34.24. Canberra’s role and function as the National Capital remains a responsibility of the Commonwealth Government. Under the Australian Constitution, the Commonwealth remains the owner of land in the Territory, even after the granting of self-government.

34.25. Territory level planning is about the city, the Territory, the region and the place that the ACT community lives and works. It is guided by the TP and is administered by the ACT Government. The TP sets the goals (policies) for a wide range of different planning needs.

34.26. The dual local/national role of Canberra means that the Territory Plan (TP) and the NCP are essentially two parts of a whole. Often both have legal effect and generally they need to take account of the other plan.

34.27. This is especially so with the TP as it must avoid any inconsistency with the NCP. This requires strong legislative and practical links between the two, especially as they are managed by different governments, with legislative links being provided by two separate Acts.

Commonwealth’s Planning Role

34.28. The Commonwealth’s Australian Capital Territory (Planning and Land Management) Act 1988 (the ACTPLM Act) establishes the National Capital Authority (NCA) as a Commonwealth Government agency to prepare and administer a National Capital Plan (NCP).

34.29. The NCA’s role includes:

� preparing and administering the NCP;

� recommending works that it considers desirable to maintain or enhance the character of the National Capital; and

� fostering an awareness of Canberra as the National Capital.



34.30. The NCP provides:

� an object “...to ensure that Canberra and the Territory are planned and developed in accordance with their national significance”;

� a framework for land use and development throughout the Territory;

� the means for guiding the planning, design and development of the Designated Land Areas (ie. those areas having the special characteristics of the National Capital, including the ACT’s principal commercial area); and

� specifies Special Requirements for the development of certain areas, desirable in the interests of the National Capital (eg. for main avenues and approach routes such as Northbourne Avenue or Federal Highway, Australian Institute of Sport and Civic as well as National Land not included within a Designated Land Area). These standards are to support the high quality image of Canberra as the National Capital.

34.31. Any development proposal in a Designated Land Area is entirely administered by the NCA. Any development proposal in an area subject to Special Requirements is administered through the TP by the Territory in compliance with the Special Requirements specified in the NCP and any provisions set out in Development Control Plans (DCP) jointly agreed by the NCA and the ACT.

34.32. The National Capital's requirements are specified through its detailed land use policies for core national areas and through the general policies and special requirements of the NCP. It sets out where urban development can occur in the Territory. Canberra’s urban form of a series of towns divided by hills and serviced by a peripheral arterial road network provides a wide range of benefits in terms of quality of life (eg. convenience, aesthetics) but with a price tag to match.

34.33. Similarly, Canberra’s development, although now slowly changing, has produced a more dispersed distribution of population than in other Australian State capitals.

34.34. These planning concepts are graphically illustrated in the following three maps showing:

� in Map A - the extent of Declared National Land and Designated Land;

� in Map B - the General Policy Plan for Metropolitan Canberra; and

� in Map C - the extent of Main Avenues and Approach Routes.

34.35. The NCP also defines where development can and cannot occur with areas such as West Murrumbidgee, the surrounds of Lanyon Homestead and the Murrumbidgee Corridor and the various hills, ridges and buffer areas excluded from development.



MAP A



MAP B



MAP C



Territory Planning Role and Obligations

34.36. The Commonwealth’s Australian Capital Territory (Planning and Land Management) Act 1988 (the ACTPLM Act) requires that a TP be prepared by a Territory planning authority responsible to the ACT Legislative Assembly and that the TP shall not be inconsistent with the NCP. This establishes a legislative requirement for the ACT to liaise with the Commonwealth, mainly the NCA, on a range of land use planning issues judged as having a national significance, from very broad Territory-wide strategic planning down to specific development proposals.

34.37. The ACTPLM Act covers most aspects of planning, heritage, environmental assessments and land and administration and development approvals for Territory Land in the ACT. The integration of policy, statutory and administrative frameworks make for the sustainable care and management of Territory Land.

34.38. The Territory Plan provides a strategic direction for the management of land use change and development in the ACT.

34.39. Broad land use planning policies for the ACT are set out in Part A2 of the TP. These are, by law, not inconsistent with the requirements of the Commonwealth, as set out in the NCP.

Part One: Financial impact of multiple planning strategy and leasehold system – Planning and administration costs

34.40. The requirements in the National Capital Plan, imposed because Canberra is the national capital, results in additional planning and administration costs to the Territory.

Development Proposals

34.41. It is estimated that approximately 20%1 of development applications (excluding standard residential) are affected by National Capital influences and these require 30% more effort (and consequent cost) by the ACT to be processed. Duplications and competing priorities and objectives between the two planning systems have a major impact on development costs and development lead times, which are not applicable in other States.

34.42. The statutory requirement for the TP to be not inconsistent with the NCP requires TP variations (almost 2001 since gazettal in September 1993) to be checked against the NCP and often there is a need to negotiate over details. In some instances, the NCA will support a variation to the TP, but this will precipitate an amendment to the NCP to ensure that the TP remains consistent with it.

34.43. Where there is a requirement for NCA concurrence in approval of an application, another layer of administrative procedure is added, which

1 ACT Department of Urban Services.



consumes staff time. Often, negotiation between the ACT and the NCA will occur on the details of a Development Control Plan (DCP) and what it will or will not permit. This can then require additional negotiation with an applicant.

34.44. For example when a development proposal arises on land adjoining Northbourne Avenue (identified in the NCP as a main approach route), a development control plan (DCP) is required to be prepared by the ACT (at its own expense) on behalf of the NCA.

34.45. To have the NCA as a third party ruling on content and requirements in a DCP while it is being prepared and while negotiations with developers are in train creates an expensive system of development control.

34.46. The preparation of a DCP in response to a development application complicates the assessment process, as it is essentially ‘writing the rules as you go’. It would be preferable in any event to have the rules in place before an applicant lodges plans. Where the ground rules are not in place beforehand, the resultant negotiations are more protracted and thus expensive. The direct costs of these practices relate to additional resources required to service the NCA requirements, and the indirect costs related to extended processing times for development and subsequent delays to individual projects. All these requirements have further impacts on the ACT economy in terms of revenue loss and loss of employment opportunities, especially when market conditions are depressed.

34.47. Since 1994, on average there have been 10001 development applications (excluding standard residential) each year. It is estimated that the cost to the ACT of processing these applications due to the National Capital influences is about $2.0m 1 per annum. This includes the planning component and is based on the average full costs of planning, processing, developing and approving each application at a unit cost of $2000 per application. The processing time varies considerably, as proposals range from signs to office developments and a weighted average method has been used less a municipal component plus a factor for above standard effort required over other jurisdictions.

34.48. In Civic, around City Hill to London Circuit, the interests of the ACT and the Commonwealth are interlinked. In some instances the Commonwealth’s planning interests and processes have been counter productive to the ACT Government’s interests of building a strong, financially viable regional centre.

34.49. Some of the more controversial projects are discussed below to illustrate some of the specific impacts caused by Commonwealth planning requirements.

1 ACT Department of Urban Services.



Development of City Hill

34.50. The ACT initiated and funded a study to set planning guidelines for the ongoing development of the City Hill precinct, which included the Magistrates Court site.

34.51. The ACT bore the cost of an extensive planning and urban design exercise, resulting in a proposal to construct a six storey building to house the ACT Magistrates Court fronting Vernon Circle. This proposal required an amendment to the NCP.

34.52. The master plan for the precinct was adopted by the ACT Government and, after considerable negotiations, by the NCA Board as the basis for an amendment to the NCP. This amendment was exhibited for community comment. The amendment was referred to the Joint Parliamentary Committee (JPC) on the ACT for its consideration. It was not supported. The NCA therefore did not proceed with the proposed amendment.

34.53. New building designs were commissioned and the subsequent building was approved under existing controls (ie reduced overall height and increased setback from Vernon Circuit). No compensation was paid for the cost of the study and designs, and the ACT was forced to reduce the court building to three storeys, with some functions continuing to be located elsewhere, with resultant operating inefficiencies.

34.54. Additional recurrent costs imposed were approximately $0.5m for the aborted design studies and resources consumed in the negotiation process. Additional capital costs were incurred, resulting in a total additional cost of approximately $3.0m.

ACT Library

34.55. In developing an appropriate scheme for the ACT Library (to be sited between the Canberra Theatre and Playhouse, facing Civic Square) planning conditions imposed by the NCA in regard to the height and other features of the building compromised the functional requirements of the building. The Authority imposed conditions that required new work in Civic Square to be demolished and necessitated extensive modification to the existing Playhouse Theatre.

34.56. The additional costs associated with NCA design and siting requirements for this building included:

� stairs, bridge & trafficable roof $360,000

� facade modifications, roof, structural $815,000

� earthworks $25,000

� Total additional costs $1,200,000



Gungahlin Drive Extension

34.57. The Gungahlin Drive extension, is needed to serve residential development in Gungahlin, Canberra’s newest town. For the route of the road to be finalised, variation to both the Territory and National Capital Plans is required. The NCP is varied by the Commonwealth Parliament. This double process in addition to negotiation and liaison costs, can lead to delays in decisions about the development of the road, which could lead to increased travel times for Gungahlin residents, increased traffic congestion (and associated pollution, accidents) in North Canberra.

North Gungahlin Structure Plan

34.58. Liaison and negotiation costs were incurred in seeking NCA agreement to the changes to the proposed urban structure. A parcel of land (about 70ha) identified by the Territory for development was excluded as a result of the NCA position that its development would be inconsistent with the NCP.

Abattoir site at Oaks Estate (Symonston)

34.59. In the case of the industrial development proposal on the former abattoir site, an amendment to the NCP was needed before the ACT could approve development (the TP, in broad terms, already permitted the proposal). Amendments to the NCP required consideration by the JPC on the ACT. This involved attendance at the JPC hearing by ACT officers.

34.60. Where development proposals require an amendment to the NCP, it is estimated that about $4,000 in staff resources, including site inspection and appearance at JPC hearings for some staff, are required.

Northbourne Avenue Median

34.61. The Northbourne Ave median furniture and lighting refurbishment project could not receive NCA approval until the ACT developed and designed a master plan for all street furniture throughout the Civic areas, despite the fact that much of this area is not Designated land. In addition, the NCA required that the median in Northbourne Ave be fully irrigated, while other medians in Canberra have dry land grasses. This requirement adds to the maintenance cost through watering costs and regular mowing. The ACT meets these costs.

Dunlop 2 Estate

34.62. The NCA required a landscape master plan and management strategy for the Dunlop Stage 2 development, in keeping with its role to protect Canberra’s garden city image. This added additional planning costs over and above what would have occurred if Canberra was not the national capital.

34.63. An increase of the assessed national capital allowance to $3.0m per annum for the added cost of planning, administration and approval consequences of the multiple layers of National Capital ACT Main Submission to the 2004 Review 704


influences in the ACT planning system is supported by the ACT’s evidence. This planning system operates differently from the States, as there are concurrent consultations with the Commonwealth at multiple points. The allowance comprises:

� $1.0m allowance for the additional cost burden on the ACT’s capital works program to reflect project redesign costs, above standard amenity, uneconomic design features, and low yields; and

� the additional layers of planning and negotiation necessary for the ACT to implement its urban planning policies and for development projects to be approved at an estimated cost of $2.0m.

34.64. These claims arise from the delays in proceeding with developments which incurs costs and imposes impediments on both the business and construction sectors of the ACT economy which itself promotes a level of uncertainty within the community. In most instances, the additional costs associated with development proposals, particularly infrastructure-related projects, are currently borne by theACT Government.

34.65. These claims replace the 1999 allowances for the fixed disabilityof $1.0m per annum to cover all costs related to the NCA.

ACT Leasehold System

34.66. The Commonwealth Government is the owner of all land in the Territory. If the Commonwealth chooses, it (or the ACT Executive on its behalf) may grant a lease of land to a lessee for a particular purpose.

34.67. The distinction of the ACT leasehold system from a freehold system is:

� a Crown lease is granted for a specified period of time;

� a Crown lease includes covenants and conditions, relating to the use and management of the land, with which the lessee is required to comply; and

� the grant of a Crown lease is subject to the payment of land rent or a premium.

34.68. The ACT leasehold system, and its operation, has been the subject of many inquiries. Most of the inquiries were supportive of the leasehold system, but critical of aspects of its administration.2

34.69. The recommendations of the most recent inquiry into the administration of leasehold3 gives some idea about the additional costs involved in the management of the leasehold system in the ACT. The Stein report recommended even more detailed reporting and centralisation of activities, to ensure accountability and transparency.

2 Including the Langmore Report 1988, John Mant Report 1988-89, the ACT Priorities Review Board 1990, Access Economics 1992, Baurossa et al 1993, Robert Todd 1993 3 Stein, Troy, Yeomans, Administration of the ACT Leasehold System, 1995 ACT Main Submission to the 2004 Review 705


34.70. The Mant-Collins Report into Land and Planning Administration also advocated the establishment of a separate statutory decision-maker, again to ensure transparency and accountability. Additionally, the land administration system has seen the introduction of more detailed reporting on land management issues, and the establishment of the Office of the Commissioner for Land and Planning, to deal with more complex or controversial development applications.

34.71. Security of land tenure and lead times for processing development applications, especially in depressed economic conditions, may affect the decision on the location of economic activity. The complexity of the Territory’s land tenure system, and the added responsibilities imposed by Canberra’s role as the National Capital, often make it difficult to present Canberra as a preferred location for commercial interests.

34.72. When compared with the typical planning system operating in the rest of Australia, the ACT leasehold system requires an additional layer of control. For any development application in the ACT, consideration must be given to the underlying lease as well as to design and environmental controls. This consideration requires significant additional work and, in respect of many proposals, a comprehensive understanding of the legal requirements of the leasehold system. Further, many development proposals are required to go through a complex lease variation process, with such variations often taking in excess of six months to complete. Extensive public notification and liaison with Local Area Planning Advisory Committees are also often required.

34.73. The evidence supports an increase in the existing national capital allowance to $2.5m for the added cost of the management of the ACT leasehold system.

Part Two: Urban development impediments resulting from planning strategy – the economic cost

34.74. The National Capital Plan’s overall policy framework limits the ability of the ACT to respond to urban development pressures, limiting the choice available in terms of residential settlement and employment location. What is good for the image of the national capital is not always beneficial to the ACT Government that has to manage urban growth and change.

34.75. The ACT contends that the planning process in operation in the Territory not only imposes additional costs for planning and development applications, but importantly, also imposes an economic cost on the Territory in a number of ways. Principally amongst these are the reduced economic activity, extensive Commonwealth ownership of Territory land, sale of such property by its owner, and limitations imposed on the Territory’s future development by the limited land stock available. These matters are graphically illustrated by the many recent examples which the ACT has confronted, or is in direct negotiations with the Commonwealth.



34.76. There has been an emerging trend for the Commonwealth to consolidate its offices in the Russell and Parkes-Barton area, at the expense of Civic and the town centres.

34.77. The result is that existing infrastructure providing access to town centres which were intended to provide major employment are under-utilised, and a need is created to provide greater road capacity and more buses for the resulting longer journeys to Russell and Parkes-Barton. It is also contrary to the objectives of establishing Civic as the metropolitan centre of Canberra, an objective that is central to the future economic development of the city.

34.78. Through the NCP, the Commonwealth has the potential to significantly dictate how the city operates and substantially alter the balance of the local economy, particularly in terms of property investment (eg. office developments in Barton rather than the Gungahlin Town Centre) and infrastructure investment. There is a further layer of complexity, as ACT land tenure is distinguished by land over which the Commonwealth retained direct ownership (National Land) and land which was handed over for management by the Territory (Territory Land). These distinctions are completely independent of the identification of Designated Land Areas under the NCP.

34.79. Undeveloped Commonwealth land with urban potential (eg Defence Department, CSIRO) imposes additional costs on the urban system.

34.80. The clearance zone provisions of the NCP has commercial implications. The Bonshaw Radio Station is an example where all proposals for development within 2 km of the radio station are to be referred to the Department of Defence for examination and comment and such comment shall be taken into account in arriving at a decision. This zone covers part of the eastern end of Fyshwick industrial area and a large portion of the Jerrabomberra Valley broadacre policy area.

34.81. Similarly there are clearance zones for Mt Stromlo Observatory and Canberra Airport which affect the area which may be developed for urban purposes.

34.82. In 1990 the NCP adopted a strategy of providing for additional urban development around the fringes of Belconnen and on the site of the Belconnen naval station where the proposed suburb of Lawson is planned. It now appears that the Belconnen naval station will not be relocated before 2003 and accordingly, the ACT has been denied the use of this prime urban area. The Lawson residential area is capable of accommodating up to 4000 people.

34.83. Similarly the extensive National Land south of the Barton highway, used for CSIRO purposes, imposes an opportunity cost on the Territory.

34.84. The ACT would benefit from the development of such parcels of land as it could use the existing infrastructure, such as arterial roads and schools and providing the ACT with an opportunity to defer the development of greenfield sites with associated infrastructure and travel time savings. This results in development having to leap-frog these areas, requiring longer ACT Main Submission to the 2004 Review 707


infrastructure lengths (eg roads, hydraulics). The opportunity cost of non-development should be borne by the Commonwealth.

34.85. Under section 27 of the ACTPLM Act, the (Commonwealth) Minister ‘shall not declare an area to be National Land unless the land is or is intended to be used by the Commonwealth’. The ACT is unclear as to why land no longer required for Commonwealth purposes should not automatically revert to Territory land which would circumvent the need for land swaps or other commercial arrangements. This issue is the subject of intergovernmental discussions, however, from an ACT perspective, there does not appear to be any likely decisions in the short to medium term.

34.86. Under the current arrangements, which are dictated by the Commonwealth, the cost to the ACT of developing prime sites that have been declared National Land, Designated Land or are subject to special requirements is increased.

34.87. As indicated earlier, all applications in National land, Territory land within national capital interest areas (ie. Designated and special requirement areas), Designated Land Areas (requiring comments from the ACT Government) and areas subject to special requirements, are subject to rigorous planning scrutiny and most of them represent substantial development projects. Due to this unique requirement, the ACT Government is faced with additional administrative costs to coordinate planning matters with the NCA, which are not borne by the States.

34.88. There are also issues associated with Commonwealth sales of National Land as illustrated by the sale of Cameron and Benjamin offices.

34.89. In the case of the Cameron offices the Commonwealth sold the land to private developers but without adequate provision for car parking (there is a 600 space shortfall) and without adequate reference to the Territory’s planning intentions for the Belconnen Town centre. Consequently the development will have detrimental impacts on the functioning and amenity of the Belconnen town centre. The return to the Commonwealth was maximised with the ongoing management problem passed to the Territory.

34.90. This is also illustrative of an ongoing problem with Commonwealth land sales in the Territory. In all instances, the Commonwealth is simply concerned with the potential revenue from the sale without adequate attention to the impacts such sales have on the Canberra commercial land market and on the planning intentions for the locations where the sales are taking place.

34.91. With the Commonwealth sale of Benjamin offices, the Commonwealth was again concerned with the revenue from the sale of the site. As a consequence of the conditions of the sale the Territory was required to agree to an additional 9000m2 of commercial space to the future detriment of land sales.

34.92. Difficulties have also been experienced with Commonwealth land sales in other locations including the Woden town centre, Civic and Barton involving considerable negotiation and liaison costs. The Territory has concerns in ACT Main Submission to the 2004 Review 708


relation to the impact on the economy, unresolved design aspects, and how the release of vacant sites in Tuggeranong Town Centre , Civic and Bruce relate to existing Master Plans for Lake Tuggeranong Foreshore, Our City and Bruce respectively.

34.93. The Commonwealth sale of Phillip Section 8 block 58 (a small park) in Woden Town Centre has resulted in the private purchaser proposing a 12,000 square metre office building over blocks 57 and 61 which has required preparation and PALM assessment of a Preliminary Assessment .

34.94. The release of city sections 61 and 63 would have had significant adverse impacts on orderly planning and land release for Civic, adding to the office supply and not taking into account the strategic directions in the “Our City” plan. The Commonwealth subsequently deferred the release of the sites in Civic in order to work on a coordinated planning approach between the Department of Urban Services, National Capital Authority and the Department of Finance and Administration.

34.95. There have been ongoing discussions with potential developers concerning the pending sale of Fyshwick Section 38 block 11 and its potential for bulky goods retailing. This prime site on Dairy Flat Road has a general industry policy reflecting its potential for large manufacturing and freight transport uses and its proximity to the Airport. However, the block size (123,753 square metres) is over double the annual average demand for industrial land in the ACT over the past 7.5 years (52,838 square metres) and double the total land release in Fyshwick between 1994-95 to 2001-02 (51,979 square metres). This Commonwealth sale will defer the sale of Territory land.

34.96. The Commonwealth auction of Greenway Section 13 block 4 has caused the Territory particular concern because of its large size (53,502 square metres) and its location in Tuggeranong Town Centre precinct ‘b’ (Business area). The site was originally intended for national archives, but its location next to the (former) Department of Social Security offices is of critical importance to achievement of metropolitan employment strategies. The Lake Tuggeranong Master Plan February 2001 envisaged this site for a major government department, commercial development or national institution. Its release was proposed for the medium term following the short term release of Greenway Section 16 block 5 which is 70,365 square metres and is in the current Territory Land Release Program.

34.97. Other specific examples include:

� NCA requirements in relation to section 56 relating to road widths, access etc with the resulting reduction in development area and the viability of the development;

� objection of the NCA to the development of certain areas such as lake foreshores in Yarralumla and Curtin Horse Paddocks has resulted in a potential loss of land sale revenue in excess of $2.0m, as well as the consequent rates and land rents; and



� loss of revenue of approximately $2.0m has resulted from NCA objection to the sale of a boat hire facility on Lake Burley Griffin.

34.98. The evidence above supports the requirement for a new national capital allowance of $5.0m for the economic cost resulting from the planning and development consequences of the layered planning andconsequent obligations predicated on:

� the reduced level of economic activity and narrower revenue base for the ACT Government;

� extensive areas of the Territory remaining in Commonwealth ownership as National land. The exclusion of such areas from development imposes additional development costs on the Territory,requiring additional infrastructure investment in greenfields areas;

� issues associated with the sale, by the Commonwealth, of National land, highlight the potential revenue loss or additional costs imposed on the Territory, by the extent of Commonwealth land ownership in the Territory. Sales of land in Civic and the Woden and Belconnen Town Centres demonstrate the potential of Commonwealth sales to affect property markets in the Territory (and the return to the Territoryfrom land sales) and the additional costs (eg parking) that these sales can generate; and

� the policy framework established by the National Plan, limits the Territory’s ability to respond effectively to changes in the parameters facing the development of the city. The legacy of a high quality built environment that befits Canberra as the National Capital, imposes additional costs to the Territory in its management. These disabilities, although difficult to accurately quantify, should be recognised in Grant Commission assessments.

34.99. The quantum of the allowance has been derived by the Department of Urban Services using a degree of broad judgement based on extensive experience of the past twelve years of operations with individual claims tallied into one annualised allowance.

34.100. The department has foreshadowed an intention to engageindependent advice to assist in quantifying the direct economic consequences of both past and present commonwealth decisions in the areas of planning and leasehold administration. It is expected that the results will be available in time for presentation by the ACT at the November 2002 Commission inspections of the Territory.



Part Three: Cross Border

ACT Regional Planning

34.101. The ACT has maintained an active presence in the planning for the Territory and its surrounding region.

34.102. There is a strong inter-relationship between a metropolitan urban area and its rural hinterland. The City of Queanbeyan functions as part of the metropolitan urban area. NSW residents travel to work and school in the ACT. Rural residential areas and rural towns in NSW provide housing choice for regional residents. Canberra retailing, industrial activities and health facilities provide goods and services for the wider region. In Canberra’s case, its rural hinterland is mostly located in NSW.

34.103. The ACT has maintained an active presence in the planning for the Territory and its surrounding region through the ACT and Sub-region Planning Strategy which aims to facilitate government coordination of regional planning, development and resource management. The ACT and Sub-region Planning Strategy 1998 was developed over a five year period involving the Commonwealth, ACT and NSW governments and the five NSW Councils surrounding the Territory. This long term planning Strategy aims to guide planning, development and resource management within the principles of ecologically sustainable development. The Strategy contains principles and actions for natural resources, rural land uses, settlement, infrastructure and regional coordination.

34.104. Through this cooperative process, the Planning Strategy identified Lower Jerrabomberra and Gooromon – Jeir as indicative areas with potential for future urban development in the longer term. The Strategy relies on the goodwill of surrounding local councils to reserve rural areas for future urban development, as the ACT options are limited by rural and buffer areas in the National Capital and Territory Plans. Maintaining the bushland and rural landscape setting of the National Capital results in less land available for urban development. Consequently, provision needs to be made for the possible future urban development in the NSW sub-region. This imposes significant costs on the ACT in terms of foregone revenue, on NSW for urban structure planning and on local councils with rural zoning pending future urban growth of Canberra. The ACT has since ruled out residential development in the ACT part of the Jerrabomberra Valley.

34.105. Canberra is the major regional centre in the SouthEast Region of NSW. The ACT participates with NSW local governments, in a range of regional forums.

34.106. These forums provide the basis for cross border coordination. Pre-eminent is the Regional Leaders’ Forum chaired by the ACT Chief Minister, which includes the Mayors of the 17 local shires in South Eastern NSW, now known as the Australian Capital Region (ACR). The ACT also contributes to the Australian Capital Region Development Council (ACRDC), which focuses on initiatives that assist in building the Region’s economy.



34.107. As a city-state surrounded by regional NSW, the small and open nature of the ACT economy ensures that broad regional issues assume significance for the Territory. It is therefore necessary for the ACT to promote effective business and networking arrangements within the ACR.

34.108. The significance of regional issues to the Territory’s economy is a factor unique to the ACT. Unlike the ACT, it is not critical for the economic development of other, much larger, States to have close ties with the regional areas immediately beyond their borders.

34.109. The ACT’s economic region covers territory in both the ACT and NSW, and as such, the different legislative systems within the region impose additional administrative costs, which through diseconomies of small scale are proportionately greater for the ACT.

34.110. The total cost to the ACT of its participation in cross border regional deliberations incorporating the Regional Leaders Forum, the ACRDC and other forums is estimated at $0.8m.

34.111. The ACT’s evidence supports an increase of the existing national capital allowance to $0.8m in recognition of the Territory’s increasingrole in the strategic planning of the local region and as a regional andeconomic centre for adjacent towns and shires in NSW.

Scale factor

34.112. The ACT continues to face higher per capita costs associated with the administration of a dual planning system and associated land leasehold system relative to the other States.

34.113. The ACT has provided more detail on the necessity for scale affected costs to be assessed and can be found in Chapter 7 - Administrative Scale and Chapter 8 - Input Costs.

34.114. The ACT supports the continued assessment of diseconomies of small scale and input costs in the 2004 Review.


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34 - General Public Services · 2011. 10. 24. · Chapter 34 - General Public Services REGULATORY AND OTHER SERVICES: SUMMARY OF THE CGC 1999 REVIEW METHODOLOGY Component factors