‘Favours for mates’ rife in Queensland planning

By Dr Cameron Murray

Town planning systems should coordinate our city development in the public interest, guiding development in socially desirable ways; ways which have been established through decades of research and analysis of the world’s most functional, attractive, and popular cities.

Often, these systems are run for the economic interests of political mates, who use discretionary elements of the planning system to give themselves massive economic gains. These gains come at a cost to the public, and undermine the social benefits desired by the planning system.

Political determinants of re-zoning decisions
Between 2012 and 2014, I undertook the largest ever study on the political determinants of re-zoning decisions to see just how this game is played, and what it costs the rest of us. Using six major planning decisions undertaken by the Queensland government agency, the Urban Land Development Authority (ULDA), I looked at the characteristics of landowners who were re-zoned, and landowners adjacent and across the road, with comparable sized properties that could have been re-zoned, but weren’t.  This is what I found:

  • If you were a landowner with connected relationships – common business connections, member of lobby groups, directors with business connection to the ULDA board – you were far more likely to be re-zoned.
  • 60% of the re-zoned landowners were connected.
  • 90% of the re-zoned landowners were clients of professional lobbyists.
  • The lobbyists had a 100% success rate, with no landowners who employed lobbyists missing out on the re-zoning.
  • 70% of re-zoned landowners were political donors.

During my research, I identified three core ingredients in political favouritism, all of which the Queensland planning system has in spades:

  1. The first is that there must be a honeypot; a valuable economic gain able to be given to private entities with a degree of discretion about who receives it.
  2. The second is that there must be loyal group of mates who are able to sustain an implicit system of trading favours.
  3. Third, there must be a plausible cover story to lets the public believe that this trading of favours is in the public interest.

The honeypot arises from the many discretionary decisions in the planning system. Where developers seek to exceed codified limits, such as height and density restrictions, they can mount an argument that exceeding these limits improves outcomes for the community. Councils have a massive amount of discretion over the interpretation and acceptance of arguments developers make.

Loyal group of mates
Handing out favours is only politically expedient when you get something in return. By establishing trust – a loyal group – through common membership of clubs and industry groups, family and business connections, and by signalling your intention to reciprocate with political donations, politicians and other group members can give favours knowing they will receive them in the future. Instead of taking direct bribes for each decision, they simply give favours to other group members, who later reciprocate amongst themselves, ensuring that any wealth diverted to the group is eventually widely shared amongst all members. This is a mafia-like system, and indeed, my study showed that the relationship network structure of the Queensland property developers was almost identical to that found in other studies of the US-Italian mafia.

Lastly, the pervasive myth widely promoted by the loyal group of mates is that without re-zoning and removing costs from developers, no housing will be built. This is utter nonsense. The best way to get development built is to put time limits on planning approvals and harsh penalties for not meeting the promised new housing supply within the limits. The group of mates use these myths as cover stories to deflect public scrutiny of their actions.

Public protest needed to change the system
This glimpse into the shady world of planning and development in Queensland suggests that the main challenge for creating beneficial change in the planning system is that the system itself is now run by insiders in a game of favour-exchange. It will take aggressive public action and protest to first battle the myths, to then expose the favours, and finally propose better systems and find the political levers necessary to get them passed.

Dr Murray is an economist with a passion for improving society and cutting through the noise to find the real signals in public policy. Specialist areas include environmental economics, rent-seeking and corruption, and property markets. He recently co-authored a book with Professor Paul Frijters, ‘Game of Mates’ which examines the way Australians make money.

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