New State Government for Queensland

Queensland started the year with the news that the State Parliament had been dissolved and that a snap election would occur at the end of January. The election saw a change in government, with the ALP managing to form a minority government with the support of independent MP, Peter Wellington.

Many are wondering what impact the new government (and the influence of the Independent MP, Mr Wellington) will have on the property industry. A strong message needs to be sent by the new government to ensure business confidence isn’t further impacted. It’s acknowledged that the new government and ministry comprise of many new members, with a smaller number of ministers responsible for larger portfolios. Consequently, we anticipate it may take ministers longer to become fully acquainted with their new portfolios and associated issues.

Some of the known major policies of the new government include :

  • A pledge not to sell public assets. Queenslanders have spoken strongly against asset sales, and we believe it will be some time before a state government attempts to sell (or lease) assets. We expect fresh interest in Private Public Partnerships (PPP’s) if new infrastructure is to be delivered.
  • No new or increased taxes, fees and charges. Any attempt to back away from this policy promise may be treated ferociously at the next election, so it will be in their best interest to stimulate activity to keep revenue levels up.
  • Prior to the election, the ALP committed to establishing a Construction, Planning and Property Red Tape Reduction Panel.
  • The new government have advised it does not intend to make changes to the State Assessment Referral Agency, the State Planning Policy and the infrastructure charges framework.
  • Building Queensland will be established as an independent statutory authority to identify and prioritise projects that deliver productivity and value back to Queensland. Building Queensland will take responsibility for long-term infrastructure plans and assess business cases for projects over $50 million that are proposed by government departments.

Simplifying the planning process

In a move to streamline and simplify Queensland’s planning and development assessment system, the Planning and Development Bill 2014, the Planning and Development (Consequential) and Other Legislation Amendment Bill 2014 and the Planning and Environment Court Bill 2014 were introduced into the Queensland Parliament in November 2014. These three Bills were intended to replace the Sustainable Planning Act 2009.

Intended changes to the planning and development legislation included:

  • The core components of the mandatory Queensland Planning Provisions will be reduced providing more freedom to local governments with their planning schemes.
  • State Planning regulatory provisions that regulate development will be removed.
  • Unnecessary red tape and processes required in making or amending local planning instruments will be removed, making the process more flexible.
  • The number of levels of development assessment will be reduced.
  • The assessment manager will now have discretion to accept a development application without land owner’s consent. However, they can only refuse an application and cannot make any other decision without consent of the land owner.

On 6 January 2015 the Queensland Parliament was dissolved and as these Bills had not been passed, they automatically lapsed. These reforms may be reintroduced into the next Parliament, however policy positions on these issues under the new Queensland Labor Government are yet to be clarified. In our view, the continuation of planning reform continues to be critical to the Real Estate & Construction industry in Queensland, notwithstanding the change in government.

Reduction of support needed to terminate strata schemes

In 2013 the Queensland Government engaged Queensland University of Technology to conduct a review of Queensland’s property laws and community titles legislation. One of the papers that resulted from this review was the Queensland Government Property Law Review Options Paper – Body corporate governance issues: By-laws, debt recovery and scheme termination (the Paper), which was released in December 2014 and provided commentary on various body corporate governance issues, inviting submissions on these.

An important issue noted in the Paper was the need to reduce the onerous requirements to terminate strata schemes. This issue is of growing importance as, in the next 10-20 years, the number of strata scheme buildings that will reach the end of their economic life will increase. For many of these buildings, repairs and maintenance costs are relatively high, so it is easy to envisage that in a growing number of cases it will be more economically feasible and attractive to demolish and rebuild the buildings. In order to do this, the strata scheme must be terminated. 

Currently in Queensland, a strata scheme may only be terminated by agreement without dissent of all registered proprietors and lessees of the scheme land, or if the District Court makes an order that it is just and equitable to do so in the circumstances. To date only one scheme has been terminated by the District Court in Queensland. The Paper identified various options to solve this problem including reducing the number of registered proprietors and lessees required to agree for termination, and providing legislative guidance on what are 'just and equitable circumstances’ to terminate a scheme.

The Property Council of Australia has recently lodged a submission on the Paper suggesting the best option would be to lower the requirement of no dissent for the termination of a scheme to a requirement that no more than 25% of owners vote against a termination of a scheme in order for the termination to proceed. They also suggested that District Court action for termination should be a last resort because of the financial impediments and delays it would create.

Clearly, a balance needs to be struck between the views and interests of a majority of owners and an owner’s right to deal with their property as they wish, and this is a potentially perilous judgment that will need to be made if the recommendations in the Paper and by the Property Council of Australia are to be implemented.  If the recommendations are implemented, we expect these changes will be favourable to developers looking to re-purpose and regenerate these sites.