Performance benchmarking of Australian business regulation: Planning, zoning and development assessments

• Planning systems vary greatly across the states and territories - but all suffer from 'objectives overload' which has been increasing.
• The success of local councils in delivering timely, consistent decisions depends on their resources as well as their processes. It is also influenced by the regulatory environment created by state governments - in particular the clarity of strategic city plans, the coherence of planning laws and regulations, and how well these guide the creation of local level plans and the assessment of development applications.
• Significant differences in state and territory planning systems include the degree of integration between planning and infrastructure plans, and how capably the states manage their relationships with and guidance for their local councils.
• Significant differences between jurisdictions are evident for:
  • business costs - such as the median time taken to assess development applications and the extent of developer charges for infrastructure
  • the amount of land released for urban uses
  • the provision made for appeals and alternative assessment mechanisms
  • community involvement in influencing state and city plans, in development assessment and in planning scheme amendments (such as rezoning).
• Competition restrictions in retail markets are evident in all states and territories. They arise: from excessive and complex zoning; through taking inappropriate account of impacts on established businesses when considering new competitor proposals; and by enabling incumbent objectors to delay the operations of new developments.
• Leading practices to improve planning, zoning and assessment include:
  • providing clear guidance and targets in strategic plans while allowing flexibility to adjust to changing circumstances and innovation (so long as good engagement, transparency and probity provisions are in place)
  • strong commitment to engage the community in planning city outcomes
  • broad and simple land use controls to: reduce red tape, enhance competition, help free up urban land for a range of uses and give a greater role to the market in determining what these uses should be
  • rational and transparent rules for charging infrastructure costs to businesses
  • risk-based and electronic development assessment
  • timeframes for referrals, structure planning and rezoning
  • transparency and accountability, including for alternative rezoning and development assessment processes as well as having limited appeal provisions for rezoning decisions
  • limiting anti-competitive objections and appeals, with controls on their abuse
  • collecting and publishing data on land supply, development assessment and appeals.

Benchmarking Planning, Zoning and Development Assessments

A report released by the Productivity Commission has identified wide-ranging differences in the ways all levels of government plan and zone land uses and assess development proposals.

In Performance Benchmarking of Australian Business Regulation: Planning, Zoning and Development Assessments - a report commissioned by COAG - the Commission compared the regulatory frameworks, land supply processes, developer contributions, assessment and referral processes, and the impacts of planning and zoning on competition in retail markets of the jurisdictions.  Governance, community engagement and transparency and accountability were also explored.

Commissioner Louise Sylvan said: 'By its very nature, planning and zoning land to enable uses that will optimise the welfare of communities and the nation is complicated. However, this complexity can be managed better to deliver better outcomes.'

The planning task is also suffering from 'objectives overload', according to the Commission. A growing number of issues and policy agendas impact on land-use considerations, including population pressures, climate change and risks posed by fires and floods. The many cases where the costs of a land use are borne by people in localised areas, while the benefits are shared across a whole city or region - such as major residential developments or waste disposal sites - pose a core challenge.

The report identifies numerous 'leading practices' which can contribute to smoother processes and improved outcomes, such as:

• ensuring that local plans are more quickly brought up to date with the strategic city plans
• completing structure planning of greenfield areas before development commences
• ensuring alternative development and rezoning assessment mechanisms are transparent and independent and have clear criteria for triggering them
• engaging the community and business as partners and clients in planning.

Although each jurisdiction is home to at least one leading practice, the report concludes that there are opportunities for all jurisdictions to improve the way they operate in this important area, in order to reduce burdens on business and costs to the community, as well as to increase competition and improve the liveability of cities.

• Preliminaries
  • Copyright, Terms of reference, Foreword, Abbreviations and Table of Contents
• Overview
• Leading practices
• Chapter 1 About the study
  • 1.1 Objectives of planning, zoning and development assessment systems
  • 1.2 Defining planning, zoning and development assessment
  • 1.3 What has the Commission been asked to do?
  • 1.4 Conduct of the study
  • 1.5 Outline of the report
• Chapter 2 The efficient and effective functioning of cities
  • 2.1 The functioning of cities
  • 2.2 Challenges to urban efficiency and effectiveness
  • 2.3 Broad indicators of the functioning of cities
  • 2.4 Partial indicators of city functioning
  • 2.5 Conclusion
• Chapter 3 Regulatory framework
  • 3.1 Planning and zoning systems
  • 3.2 Development assessment processes
  • 3.3 Appeal processes
  • 3.4 Recent and proposed reforms
• Chapter 4 Urban land supply - policies and strategies
  • 4.1 Economic context for land supply
  • 4.2 Planning for adequate supplies of land
  • 4.3 Areas for improvement and leading practice insights
• Chapter 5 Urban land supply - processes and outcomes
  • 5.1 Delivering adequate supplies of land
  • 5.2 Land supply outcomes
  • 5.3 Leading practices and areas for improvement in land supply
• Chapter 6 Infrastructure
  • 6.1 Trends and emerging issues in infrastructure
  • 6.2 State and territory frameworks for infrastructure provision
  • 6.3 Developer contributions for local infrastructure
  • 6.4 Delivering infrastructure
• Chapter 7 Compliance costs
  • 7.1 Data sources
  • 7.2 Nature of compliance costs in development and rezoning applications
  • 7.3 Direct costs of development approvals
  • 7.4 Planning approval times
  • 7.5 Alternative assessment pathways
  • 7.6 Leading practices in development assessment
• Chapter 8 Competition and retail markets
  • 8.1 Competition and regulation
  • 8.2 Impacts of planning on competition and efficiency
  • 8.3 Barriers to business entry and operation imposed by planning and zoning
  • 8.4 Implications of barriers for particular retail groups
  • 8.5 Barriers presented through government implementation of plans
  • 8.6 Business gaming of planning systems
  • 8.7 Concluding remarks and leading practice approaches
• Chapter 9 Governance of the planning system
  • 9.1 The importance of governance
  • 9.2 Consistency and certainty of planning instruments
  • 9.3 Resources, activity and performance
  • 9.4 Mediating national, state and local interests
  • 9.5 Allocating planning and assessment functions to different levels of government
• Chapter 10 Transparency, accountability and community involvement
  • 10.1 Transparency and accountability
  • 10.2 Government involvement with community and business
• Chapter 11 Referrals to state and territory government departments and agencies
  • 11.1 Involvement in the planning system of other state-level bodies
  • 11.2 Referral of development applications
  • 11.3 Leading practice approaches to address state and territory coordination issues
• Chapter 12 Commonwealth environmental and land issues
  • 12.1 Environmental Protection and Biodiversity Conservation Act 1999
  • 12.2 Interaction of EPBC Act and state/territory environment legislation
  • 12.3 Commonwealth land
  • 12.4 Leading practice approaches to address Commonwealth coordination issues
• Chapter 13 Comments from jurisdictions
• Appendix A Conduct of the benchmarking study
• Appendix B Approach to gathering information
• Appendix C Indicators of the functioning of cities
• Appendix D Overlays and council development restrictions
• Appendix E Urban land supply
• Appendix F Jurisdictional infrastructure contribution arrangements
• Appendix G Development assessment pathways used by local government
• Appendix H Competitive aspects of retail markets
• Appendix I Involvement of the state and territory environment, heritage, transport and fire fighting services in planning
• References

Community survey results

This data was collected for the Productivity Commission by AC Nielson through an internet survey of registered participants in 24 Australian cities. The survey was conducted in January 2011.

Data is provided by the Productivity Commission subject to the following caveats:

1. The Productivity Commission retains ownership of the data and use of any part of it should make reference to the following report of the Productivity Commission:
   
   Productivity Commission 2011, Performance benchmarking of Australian business regulation: planning, zoning and development assessments, Research Report, Canberra.
2. Any analysis or estimates which are made based either wholly or partly on the data should not be attributed to the Productivity Commission or to the above report of the Productivity Commission.
3. In making this data publicly available, the Productivity Commission does not provide any assurance as to the accuracy or reliability of the data.

Download the results

• AC Nielson internet survey results (XLS - 13 832 Kb)