In my last post, I considered the Queensland construction industry outlook. In today’s post, I take advantage of new data on building approvals at the small area level (ABS SA2 regions) for 2017-18 so far released by the ABS yesterday. The chart below of the top 20 Queensland small areas by the value of building approvals shows South Brisbane and South Townsville leading the state. Residential approvals dominate in South Brisbane, while non-residential approvals, no doubt mainly related to the $250 million North Queensland Stadium development, dominate in South Townsville.

Within the Brisbane metro region (see map below), we again see the familiar pattern of development being concentrated in the inner city and outer-lying areas, partly due to constraints on development such as heritage protection in many Brisbane suburbs, as discussed in Bradley Rogers’s 2013 QEW guest post Old Queenslanders in a new city.

In a recently published research paper Housing in Queensland, Queensland Productivity Commission (QPC) economists Matt Geck and Sean Mackay have noted that such regulations contribute to supply constraints on housing. They allude to the economic idiocy of such regulations when they note (on p. 33):

In large areas of Brisbane’s inner and middle suburbs, for example, character zoning is used to preserve the aesthetics of areas with clusters of well-located low-density housing built in 1946 or before. These clusters often surround some of Queensland’s highest-capacity public transport infrastructure, such as Park Road, Buranda, Dutton Park, Newmarket and Eagle Junction train stations.

That is, Brisbane City Council is restricting development in many of the suburbs best suited for population growth!

Incidentally, the QPC has an impressive capability to undertake economic research and it could be better utilised by the state government. It could, for example, analyse a potential switch from stamp duty to land tax, phased in over a 10-20 year period, as the ACT is doing and as QPC economists Geck and Mackay suggest may be desirable in Queensland (pp. 41-42 of their report).

I recall that, at the Australian Productivity Commission’s horizontal fiscal equalisation hearing in Brisbane in February, Under Treasurer Jim Murphy said Queensland Treasury had crunched the numbers on replacing stamp duty with land tax, but it couldn’t come up with a feasible model. According to the transcript on p. 596, Mr Murphy noted:

We’ve looked very hard at replacing all stamp duty with land tax, but it’s like other states, we’ve found it an incredibly difficult task to do that, especially as the impact on the state in the short-term.

Unfortunately, what happens in Treasury mostly stays in Treasury, so it’s hard for outsiders to judge whether Treasury’s analysis was adequate. Why not have the QPC investigate the issue and produce a public report for community debate?