Pro-economy approach 'best' way to support local industry
Cairns Mayor Bob Manning is refusing to budge on providing broad incentives to local builders and developers, despite mounting pressure from the industry to act.
But when speaking to TropicNow, Cr Manning was adamant council was taking the right approach and too much focus was being put on council's charges and not on the economic settings, government policies and the lending practices of Australia's banks.
"My council is pro-economy and will do whatever it can to support the local construction industry," he said.
But that "whatever it can do" promise of support evidently doesn't extend to headworks waivers or other incentives, at least not in any sense of a structured, consistent program.
"It is essential to find the right balance, we have to be careful about relaxing or waiving charges across the construction industry.
"Infrastructure charges can bring in up to $15 million to council's budget a year, depending on construction activity.
"This money then gets used to provide new infrastructure and helps fund council's capital works program."
While Cr Manning confirmed council's stance that developers can always submit an application for infrastructure charges incentives, he said any waivers or deferrals needed to be focused on projects that would benefit the community.
"We need to look at what infrastructure is needed, apply incentives for these works and then back out," he said.
COUNCIL OFFERS INDUSTRY SUPPORT
At a meeting on Monday between local certifiers and council officers, key figures from TNQ's construction industry said projects worth millions of dollars would go ahead if charges were discounted or waived.
The industry figures said that headworks charges, as well as delays in the development approvals process, are limiting construction and making locally-backed projects unviable.
At the meeting, council committed to working with local developers to ensure projects were not held up unnecessarily.
"The CEO made a commitment to provide one-on-one assistance for people making development applications," he said.
“An officer will be allocated to them early in the piece and there will be regular contact sessions with applications to work through issues.
“We will do whatever we can do to provide support through the development application process.”
CONSTRUCTION FIGURES VOICE CONCERNS
The industry figures attended the meeting after a series of stories by TropicNow and other local media about the dearth of privately funded, small-scale construction developments beyond Crystalbrook Collection's $370 million hotel developments, the Cairns Aquarium and council's own publicly funded projects such as the Cairns Performing Arts Centre.
A range of industry players also raised concerns about a "two-speed market" where international investors were seemingly afforded more support from council than local builders and developers.
Cr Manning said the flow-on effects from major projects, including those supported by overseas investors, would be felt in time.
He cited TNQ's strong tourism market, growth in international and domestic visitors, direct flights from China starting in December, as well as falling unemployment and record low interests rates indicated positives the city's economy.
"As a council our mantra has been if we get the finances right, then everything else will follow," he said.
"Our financial modelling shows we are looking at a low increase rates period into the future and that is good for the whole community."
TROPICAL NORTH NEEDS A BETTER DEAL
He said council was also gearing up to lobby governments and regulatory authorities, including the Australian Prudential Regulation Authority, to try to relax national policies that are hurting TNQ's economy.
He also said the lending practices of Australia's banking industry were currently not supporting construction projects nationally.
"The issue of Australian banks and lending is a big one," he said.
"Australian banks do not have an appetite for supporting construction at the moment.
"A report from Herron Todd White states that regulatory measures designed to dampen property markets nationwide targeted largely at investors have certainly done their job in Cairns and taken all the growth out of the market.
“This is hard on us. There has to be the ability in these measures to differentiate between relevant regions.
"APRA needs to be not so heavy handed on this. It can try to calm the markets in Brisbane, Sydney and Melbourne but Cairns is on a growth pattern and we should be allowed to grow."