Creators of Queensland study say visible acts such as donations less significant than membership of tight-knit networks

This article is more than 5 years old

This article is more than 5 years old

Researchers have quantified the value of political connections to property developers in rezoning decisions worth “many billions of dollars” across Australia every year.

A new study, “Clean money in a dirty system”, which examined the record of Queensland’s Urban Land Development Authority (ULDA), found developers connected to networks containing politicians and bureaucrats were 19% more likely – and those at the centre of networks 44% more likely – to win favourable decisions than “outsiders”.



University of Queensland economics researchers Cameron Murray and Paul Frijters said outsiders could, however, buy their way into “the right club” by paying lobbyists such as former politicians, boosting their prospects by 37%.

Murray and Frijters, who linked relationships to property gains through land, lobbyist, donor and company records, said political favours were less a result of visible acts like donations than membership of “tight-knit groups that include key decision-makers and wherein everyone knows each other”.

Political insiders were favoured in a way that had led to “very odd-shaped” rezoned areas that appeared less suitable than others nearby – right down to the opposite side of a street, the researchers said.

“We are now getting high-rise apartments and new city neighbourhoods where the cost of infrastructure is probably much higher than in areas identified as more suitable for development in the earlier (state government regional) plans, simply to accommodate a political in crowd,” they said.

John Menadue, a former senior public servant, diplomat and business executive, said the study highlighted “a very, very serious problem [where] vested interests are corrupting public debate and policy in Australia”.

“The figures frankly don’t surprise me. People with money are able to secure quite remarkable concessions on zoning from various levels of government in Australia,” he said.

The study found politically connected developers gained $410m in profits purely through rezoning decisions that had “wrong-footed” both councils footing infrastructure bills and unconnected property developers.

Connected developers owned 75% of land in areas rezoned by the ULDA between 2008 and 2010, compared with less than 12% in the areas just outside.

The ULDA, which was headed by a former executive of development company Lend Lease, was dismantled in 2012.

Murray and Frijters said Lend Lease were among the large companies which currently indicated in their prospectus they “expect new favourable rezoning decisions in areas that are unlikely to be technically optimal”.

This was “basically showing that these companies are confident they can get new favours from the current politicians that will come at the expense of the general population”, they said.

Their study found lobbyists were “extraordinarily effective at ensuring land is rezoned”, with clients owning 30% of rezoned land and none of the land just outside.

It argued lobbyists were a substitute for membership of networks in which mutual favours result from a “revolving door where property developers and the key political/bureaucratic positions are the same people, exchanging positions over time”.

“Those with advantageous positions in relationship networks are able to get preferential treatment precisely because of their ability to be involved in implicit dealings that take advantage of a missing formal market in political favours,” the study said.

Menadue said forcing lobbyists to publicly “disclose in some detail and quickly who they’ve spoken to and the nature of those conversations [would] cause some of these people to be much more careful than they are at the present time”.



“I also think it’s important that politicians and public servants who retire should not in any way take paid executive or other positions with companies with which they had an association while they were a minister or senior bureaucrat,” he said.

“Ministers and public servants who retire and God bless me, within a few months they’ve got a job with a company they were dealing with – they just change their coat from one day to the next, when there’s clearly a potential conflict of interest.”

The study claims its findings around the ULDA, involving “a tiny sample of planning activities” in Queensland, suggested a likely “avenue for allocating many billions of dollars in development rights to connected land owners annually” when applied to the rest of Australia.



It argues the public is losing out on its claim to these property value windfalls which “could be priced in a market rather than allocated politically and incurring the associated costs” of perpetuating network or lobby influence.

Options included taxes on “land betterment” or public auctions of development rights, the researchers said.

However they noted “the same relationship networks that allow current favouritism to thrive in rezoning decisions will surely hinder any systematic reform of the rezoning process”.