State development agency LandCorp has become a surprise vehicle to deliver on government promises.
THE state government is refashioning LandCorp to deliver on election promises to the regions and salve concerns from industry about the agency's role in development.
In a move aimed at making land, particularly housing, more affordable, the agency is being told to focus on the front-end of the task of developing land and then stepping aside to let the private sector complete the process.
It will focus initially on the regions, notably the Pilbara, where housing shortages created a considerable barrier to business during the recent boom.
LandCorp was criticised by industry for being too heavily involved in highly profitable residential developments in the metropolitan area during the real estate boom at a time when industrial land was hard to come by and housing affordability plummeted.
Many believed the new government would fold LandCorp into the Department of Housing and Works, but it has opted to revamp the agency instead.
Among the changes is the appointment of former National Party politician, Monty House, a long-serving cabinet minister in Richard Court's Liberal government, to chair LandCorp, replacing Terry Budge at the head of a revamped board.
However, not everything is changing. One of the great survivors of the state bureaucracy, Ross Holt, remains at the helm of the agency, his 14th year as CEO.
LandCorp comes under the responsibilities of Nationals WA power broker and Lands Minister Brendon Grylls, who believes a fundamental shift in the agency's focus is one of his most important tasks as part of the new government.
Mr Grylls told WA Business News that LandCorp had to bear the blame for many of the issues that confronted industry and those seeking housing during the recent boom.
He believes the agency would be able to achieve much more by redirecting its attention to the getting projects started, particularly in difficult areas such as the regions, rather than being involved throughout the full life cycle of developments, many of which did not need government intervention at all.
The former Hollywood High School site is an example of a LandCorp development that could easily have been managed by the private sector.
"LandCorp had a strong finger in the pie of many of these projects," Mr Grylls said.
"I am concerned about the number of projects on the go at any one time.
"Does that best use the resources of the agency?"
He said this was a different philosophy to that which previously guided LandCorp, pushing it towards more complex problems, such as the regions, which would attract the private sector after the harder front-end work was done.
For instance, in Karratha the agency was involved in developing lower priced house and land packages, and was even looking at borrowing concepts from retirement villages to create cheaper housing for workers in the region.
The focus was to use the lull in the economy to better prepare for future growth.
Mr Grylls said he had not modelled the impact of these changes on government finances. According to its annual report, LandCorp's dividend grew to $23.3 million in 2007-08 from $7.8 million in 2002-03, peaking during that period at $35.4 million in 2005-06.
Mr Holt said there were a lot of misconceptions about LandCorp's recent role but he denied that profits were ever the key driver.
"Profit is not the motivation for government to have LandCorp," he said.
"Government is much more interested in the private investment we can unleash."
Industry has welcomed most of the changes taking place.
WA Property Council executive director Joe Lenzo said LandCorp lost its focus on industrial land development and had evolved into something very different from what was originally intended.
Mr Lenzo said regional involvement was important because it could stimulate development there.
"Chasing the almighty dollar and trying to make huge profits with apartment developments in the metropolitan area is not their role," he said.
While welcoming much of the strategic change taking place, the Property Council is critical of LandCorp's involvement in the Perth foreshore project, which remains on the state government's agenda, though scaled back from Labor's vision.
"A project of that size needs a dedicated redevelopment authority," Mr Lenzo said.
He cited the role of the East Perth Redevelopment Authority, once viewed by industry with suspicion, as a model for the foreshore.
"Its [EPRA's] record shows that by having an authority of that type that can cut across red tape and approvals processes to the benefit of the private sector," Mr Lenzo said.