Queensland CCC's Operation Belcarra: Missing the point on corruption

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Dr Cameron Murray's book focusses on Australia's insidious mates' network

The Queensland CCC is ignoring the big question: why are councillors such targets for corruption, writes Dr Cameron Murray.

ON FRIDAY, 28 April 2017, I am appearing at Queensland’s Crime and Corruption Commission’s Operation Belcarra as an expert witness on relationships between councillors and property developers, and how that leads to favouritism. 

A narrow focus

What is interesting from my perspective is how narrow the focus of the inquiry really is.

Note the main objectives from the Inquiry's 'Terms of Reference' (highlighted in the red box below):

(Image screenshot ccc.qld.gov.au)

Notice that the inquiry is focussed on narrow technical matters concerning laws about donations, disclosure, candidates negotiating in groups, personal material interests, and so forth.

The important question

The big question is missed: Why are councillors such attractive targets for corruption?

After all, I’m not being seduced by vested interests every day. I don’t have hundreds of thousands of dollars placed in my bank account from people I apparently don’t know.

The reason that councillors do is that they have "grey gifts" to offer. That is, they get to decide who wins and who loses in a multi-billion dollar game of land rezoning and town planning. I’ve estimated that the value given away in Queensland from such decisions by councils and the State government to be about $2.3 billion per year (read about it my book).

No wonder councillors are attractive to vested interests. Unlike me, they can make decisions worth billions to others, but that cost them nothing! 

A proposal

My proposal is simple. Remove the value of the "grey gift" by selling or taxing it. It’s not hard to do. The ACT has for over 30 years charged landowners 75 per cent of the value gains from rezoning. Doing that in Queensland would raise $1.7 billion a year, and reduce the potential give-aways down to just $500 million. A much smaller pot to share and one that will attract far less lobbying.

Another alternative is to sell the rezoning rights. Sao Paulo, Brazil, has been doing this for over a decade in certain parts of the city, and has raised over USD $1 billion.

I recommend simply adopting the ACT system here in Queensland. The State could require councils to recover the value increases during the planning approvals process, which would be very easy. It would also deter many speculative planning applications that seek approvals that are far outside the scope of the town plan, as developers who do will end up paying for any extra development rights they get. 

My submission to the Inquiry is here.

Dr Cameron Murray teaches at the University of Queensland, blogs at fresheconomicthinking.com, tweets at Rumplestatskin and his Facebook page is Fresh Economic Thinking

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