Is the NSW Productivity Commission joking?
State and federal governments should make it a priority to stop spending money on infrastructure to free up the construction industry to build more homes, according to a detailed analysis conducted by NSW’s key productivity adviser.
Governments “diverting resources from home building to public infrastructure projects” is a major reason why there are so few new homes being built, which has made housing more unaffordable, the NSW Productivity Commission says.
“Australian governments have spent significantly on major infrastructure over the past 10 years. These projects are outbidding developers for labour and materials. This makes many residential projects unfeasible and holds back the supply of new homes,” commissioner Peter Achterstraat writes in a review.
I am not going to debate the relative merits of building houses versus infrastructure.
The only point to make is why lower immigration isn’t canvassed as a productivity driver for both.
Getting workers around quicker and cheaper from houses nearer their work is a productivity win-win.
But it is only possible with lower people inflows.
