A landmark former orphanage site in Surrey Hills could be transformed into a new residential community under plans lodged by <a href="https://www.apartments.com.au/developers/antipodean-land-developments">Antipodean Land Developments</a> that would deliver 76 apartments and townhouses while restoring some of the suburb's most significant heritage buildings.

The burgeoninng Melbourne-based developer has submitted plans for the 9,158 sqm site at 1 Kent Road and 24 Durham Road, home to the former St Joseph's Home for Destitute Children, a historic institutional complex dating back to the late 19th century. The proposal seeks to adaptively reuse several heritage buildings while introducing two new four-storey residential buildings set within extensive landscaped grounds.

Designed by <a href="https://www.apartments.com.au/architects/woods-bagot">Woods Bagot</a> and Kerstin Thompson Architects, the project has been conceived as a contemporary residential village embedded within a restored heritage precinct. The development team describes the design approach as "The Village in the Garden," with new buildings positioned among mature landscaping by OCULUS and significant heritage structures.

<img alt="First look: Antipodean Land Developments plans heritage-led apartment community in Surrey Hills" data-entity-type="file" data-entity-uuid="44ec8c1b-c0b6-44ae-859e-5811b3e6a023" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Untitled%20design%20%281%29.png?VersionId=p.p1_KFh4iQoV4nisdnPfQBAsWNi7m79" />

The proposal would deliver 76 dwellings comprising a mix of apartments and duplex-style residences, significantly increasing housing supply on one of the largest privately held residential landholdings in Surrey Hills. The development includes 127 car spaces, 24 bicycle spaces and more than 1,000 sqm of communal amenity, with the existing chapel building earmarked for conversion into resident facilities.

According to the planning submission, the project centres on the restoration and adaptive reuse of the site's most significant heritage assets, including the original c.1889 St Joseph's building, the chapel designed by architect Augustus Andrew Fritsch, and the historic brick perimeter walls and entry gates. The proposal also incorporates the retention of other contributory buildings including the former infirmary and school building.

Tract Consultants, in the planning report accompanying the application, said the scheme had been shaped through extensive heritage analysis and design development.

"The shared vision for the Site by the project team has culminated in a scheme which successfully breathes life back into a historic site while delivering upon the objectives of Victoria's Housing Statement in a carefully curated and contextually responsive manner."

<img alt="First look: Antipodean Land Developments plans heritage-led apartment community in Surrey Hills" data-entity-type="file" data-entity-uuid="7263b7d8-95ea-400f-9531-6ca7d22c3c33" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Untitled%20design%20%282%29.png?VersionId=4cR1tiWOsDpgxEOwZi5vVFcyvvOsYkIE" />

The proposal is being assessed under Victoria's Significant Residential Development with Affordable Housing pathway. As part of the application, three per cent of the project's residential development cost would be contributed to the Social Housing Growth Fund. The development would also provide a diverse mix of one, two and three-bedroom residences targeting a broader range of buyers than typically found in Surrey Hills' detached housing market.

Sustainability initiatives include an anticipated 66 per cent BESS score, natural cross-ventilation to 80 per cent of apartments, 28 per cent deep soil landscaping and a canopy cover outcome exceeding local planning requirements. The proposal also sets aside more than 1,083 sqm for communal indoor and outdoor resident amenity spaces.

<img alt="First look: Antipodean Land Developments plans heritage-led apartment community in Surrey Hills" data-entity-type="file" data-entity-uuid="33fad46f-fe26-4d0a-acfd-6b776e1c6a3d" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Untitled%20design.png?VersionId=D9F6WVSyYCtGvSUmith35LRp6R7PQkw_" />

Planning documents describe the property as one of the largest underutilised residential sites in Surrey Hills, arguing it presents a rare opportunity to introduce "missing middle" housing in an established inner-eastern suburb while preserving and revitalising a significant heritage precinct.

Antipodean Land Developments has built a reputation for design-focused residential projects across Melbourne, particularly in the medium-density sector. Previous developments include Neighbourhood in Brunswick East, delivered with Breathe Architecture, and Balfe Park Lane, designed by Kerstin Thompson Architects.

They've been very active in site acquisition as they build out their future development pipeline. They recently launched Thornubury House, 45 apartments above a mix of commercial, retail, and food and beverage tenancies, and have plans for a boutique project in Fitzroy and another <a href="https://www.apartments.com.au/news/vic/antipodean-plan-apartments-for-deepdenes-missing-middle-on-whitehorse-road">"missing middle" project</a> on Deepdene's Whitehorse Road.

Joel Robinson

First look: Antipodean Land Developments plans heritage-led apartment community in Surrey Hills

Developer <a href="https://www.apartments.com.au/developers/auyin-property-development">Auyin</a> is the latest to turn to the Victorian Government's Development Facilitation Program in an effort to secure approval for its long-planned, mixed-use project in Elsternwick.

In 2018, Auyin lodged plans with Glen Eira City Council for a 14-storey building, however Council approved a reduced eight-storey scheme. A subsequent VCAT appeal in 2019 upheld the eight-storey height limit.

The project was later amended to nine storeys, but Auyin is now seeking to revive something closer to its original vision. The developer argues that the planning context has evolved significantly over the past decade, particularly within the Elsternwick Activity Centre, where higher-density development has increasingly been encouraged along Glen Huntly Road.

The proposal would transform the 1,239 sqm site at <a href="https://www.apartments.com.au/new-apartments/7-12-horne-street-elsternwick-vic-3185">7-15 Horne Street</a>, opposite Elsternwick Railway Station, into a 13-storey residential and retail development designed by CBG Architects, with 40 apartments

The site currently comprises three commercial properties.

<img alt="First look: 13-storey mixed-use tower planned for Elsternwick activity centre" data-entity-type="file" data-entity-uuid="5f465dd4-509b-4082-a669-0253b313914b" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/elsternwick%20podium.png?VersionId=72frWi0SmQ5AVJ3ARRhX5ILUYObhTm7x" />

The proposed apartment mix comprises 25 two-bedroom and 15 three-bedroom residences above 200 sqm of retail space at ground level. Residents would have access to a 90 sqm wellness facility, a 351 sqm communal indoor and outdoor terrace on the third level, and extensive landscaped areas throughout the development. A publicly accessible 135 sqm plaza would be created on the north-east corner of the site, providing seating, landscaping, and a new gathering space adjoining Horne Street.

The design adopts a four-storey podium that references the finer-grain character of the surrounding streetscape, with the upper tower recessed behind generous setbacks on all boundaries.

<img alt="First look: 13-storey mixed-use tower planned for Elsternwick activity centre" data-entity-type="file" data-entity-uuid="e637e763-2abc-4c34-a0aa-5c7ad36fae18" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/elsternwick%20open.png?VersionId=J1AoOpZgTyaF.KeeFSX6lMjEScX8KKRi" />

A key element of the proposal is the reconfiguration and widening of the surrounding laneways. Vehicle access would be retained from Lois Lane, with upgraded pedestrian connections linking Ross Street and Horne Street. The development would provide 58 residential car spaces, two retail car spaces, and 52 bicycle spaces across two basement levels and ground-floor facilities.

Architecturally, the building draws inspiration from the established character of Elsternwick Village. The façade combines dark charcoal brickwork, textured concrete, bronze-toned metal detailing, and extensive planting integrated into podium and tower levels. The design also incorporates a chamfered corner treatment and publicly accessible plaza intended to strengthen pedestrian activity around the station precinct.

Elsternwick's last new development completion was&nbsp;EVA Elsternwick by Pitard late last year. <a href="https://www.apartments.com.au/developers/milieu-property">Milieu</a> is working away on its nature-led neighbourhood, <a href="https://www.apartments.com.au/new-apartments/elsternwick-gardens-by-milieu-8-gordon-street-elsternwick-vic-3185">Elsternwick Gardens</a>, on Gordon Street, with its first stage expected to complete next year.

First look: Auyin seeks mixed-use apartment project in growing Elsternwick Activity Centre

<a href="https://www.apartments.com.au/new-apartments/otium-parkdale-123-125-como-parade-east-parkdale-vic-3195">Otium Parkdale</a>, the 13-residence boutique development by&nbsp;<a href="https://www.apartments.com.au/developers/huxtable-property">Huxtable Property</a>, has entered its final stages of delivery, with completion expected within the coming month and more than half of the residences sold.

The Como Parade East project is nearing the finish line at a time when opportunities to purchase new apartments in <a href="https://www.apartments.com.au/developments/parkdale-vic-3195">Parkdale</a> remain exceptionally limited. Fewer than 10 per cent of dwellings in the bayside suburb are apartments, making developments like Otium a relatively rare addition to a market traditionally dominated by detached housing.

[smartcode_project:default project_id=134974 project_image_fid=5427]

The three-level development comprises 13 residences, including ten two-bedroom apartments and three larger three-bedroom homes, all positioned above a secure basement car park.

Designed by <a href="https://www.apartments.com.au/architects/almeida-architects">Almeida Architects</a> with a strong connection to its coastal surroundings, Otium combines red brick, exposed concrete and dark metal detailing with integrated landscaping and greenery. Expansive glazing, generous balconies and terraces have been incorporated throughout the design to maximise natural light and reinforce indoor-outdoor living.

Inside, the residences feature engineered European oak flooring, natural and reconstituted stone benchtops, Bosch kitchen appliances, ducted heating and cooling, lift access and secure entry systems. The larger three-bedroom residences on the upper level have been designed with house-like proportions, while the two-bedroom apartments prioritise functionality, flexibility and low-maintenance living.

[smartcode_project:default project_id=134974 project_image_fid=5421]

The project is now in its final stages, with <a href="https://www.apartments.com.au/builders/labco">Labco</a> completing the remaining landscaping and external finishing works following the completion of the residences' interiors.

Otium's location within the heart of Parkdale continues to underpin its appeal. Residents will be just steps from local cafés, restaurants, shops and the newly elevated Parkdale Station, while the beach is less than a kilometre away.

With the project tracking ahead of schedule, buyers can currently secure a residence with a five per cent deposit and benefit from settlement terms of up to eight months. The advanced stage of construction also provides buyers with the opportunity to walk through the near-complete residences and experience the quality and finishes firsthand ahead of completion.

[smartcode_project_cta:default project_id=134974]

Otium Parkdale enters final month before completion as rare apartment opportunity nears sellout

A new boutique apartment development is entering the market in <a href="https://www.apartments.com.au/developments/chermside-qld-4032">Chermside</a>, with Brisbane-based developer <a href="https://www.apartments.com.au/developers/ausdev">Ausdev</a> bringing 33 residences to a well-connected pocket of Brisbane's north.

<a href="https://www.apartments.com.au/new-apartments/parkdrive-apartments-chermside-25-sammells-drive-chermside-qld-4032">Parkdrive Apartments</a>, at 25 Sammells Drive, will comprise a mix of one- and two-bedroom residences positioned within walking distance of Westfield Chermside, The Prince Charles Hospital, and Bradbury Park.

Established in 1989, Ausdev has a long-standing presence across both development and construction, with Parkdrive Apartments representing its latest residential project in Brisbane's northern suburbs.

[smartcode_project:default project_id=152125 project_image_fid=363778]

The development has been designed around open-plan living and natural light, with residences featuring stone benchtops, timber cabinetry, BOSCH appliances, and private balconies that extend the living areas outdoors.

Kitchens are positioned as the centrepiece of the homes, incorporating natural material palettes and integrated appliances, while bathrooms have been designed with a focus on functionality and understated finishes.

Residents will have access to a communal barbecue and entertaining area on Level 3, providing shared outdoor space within the development. Secure parking and lift access are also incorporated into the building.

The project will deliver a limited collection of 33 apartments, with one-bedroom residences priced from $749,000.

[smartcode_project:default project_id=152125 project_image_fid=363782]

Beyond the building itself, the location places residents within easy reach of several of Chermside's key amenities. Bradbury Park is around 350 metres away, while Westfield Chermside is approximately 1.3 kilometres from the site. The Prince Charles Hospital is located within 750 metres, and the Chermside Bus Interchange is around 1.5 kilometres away, providing connections across Brisbane.

Parkdrive Apartments adds to the growing residential pipeline in Chermside, a suburb that continues to evolve as a major retail, healthcare, and transport hub for Brisbane's north.

[smartcode_project_cta:default project_id=152125]

Ausdev introduces boutique Parkdrive Apartments to Chermside's growing centre

<a href="https://www.apartments.com.au/developers/skymark-group">Skymark</a>'s boutique Cronulla development Solis has secured a 10-year Latent Defects Insurance policy through Resilience Insurance, providing buyers of the 16-residence building on Ewos Parade with structural and waterproofing protection that extends a decade beyond the building's completion.

Currently under construction and due for completion in late 2027, <a href="https://www.apartments.com.au/new-apartments/solis-cronulla-8-ewos-parade-cronulla-nsw-2230">Solis</a> is one of a small number of new developments in the Sutherland Shire to carry Resilience LDI coverage, a distinction that carries increasing weight as buyer confidence in the off-the-plan sector continues to be shaped by how developers stand behind their product.

Latent Defects Insurance, which entered the Australian market in 2022 when Resilience Insurance was approved to offer the cover, protects buyers against major structural or waterproofing defects for ten years post-completion. Unlike traditional statutory warranties, it operates as a first-resort policy, if a covered defect arises, the insurer responds directly, without the buyer needing to pursue the builder or developer through a lengthy claims process.

Resilience Insurance CEO Corey Nugent has noted that the product addresses something fundamental to the new apartment market.

"The overarching feedback from prospective buyers in the new development space is that they want more confidence and assurances around the quality of the build," Nugent says.

"Resilience Insurance Latent Defects Insurance not only gives them complete peace of mind for 10 years, but it shows the developer they are buying from is standing by their product."

[smartcode_project:default project_id=150499 project_image_fid=370898]

For Solis, the Resilience LDI policy adds a meaningful layer of accountability to an already considered project. The development comprises nine two-bedroom and seven three-bedroom residences, including one dual-level three-bedroom apartment, across a five-storey building on Ewos Parade, positioned between Shelly Beach and South Cronulla.

Garden apartments connect directly to private landscaped courtyards, while upper-level homes capture beach views to the east from level four and above.&nbsp;

All 16 residences include at least one balcony or courtyard, and select apartments on the upper floors feature bar areas and secondary flexible living spaces.

Hiba Sander, Managing Director of Skymark, says Solis offers a rare balance, nestled between the quiet beauty of secluded beaches and the lively charm of South Cronulla's esplanade.

"It's a place to choose your pace and live gracefully, seaside'," Sander says.

[smartcode_project:default project_id=150499 project_image_fid=370900]

The architecture, designed by <a href="https://www.apartments.com.au/architects/ida-design-group">IDA Design Group</a>'s Michael Trinh, draws from the natural erosion patterns of <a href="https://www.apartments.com.au/developments/cronulla-nsw-2230">Cronulla</a>'s sandstone headlands, translating the organic forms of the coastline into soft curves, pavilion-style massing, and a material palette chosen for longevity in a salt-tinged environment.&nbsp;

Textured natural stone, soft renders, and timber-look battens reference the tones of the surrounding cliffs, while the building has been oriented to maximise natural light and passive ventilation, with primary living spaces facing north and east to capture morning sun and sea breezes.

"At Solis, our aim was to create architecture that feels quietly confident, grounded in natural materials like stone and timber, and elevated by light and landscape," Trinh says.&nbsp;

"The buildings are designed to sit gently within their coastal surrounds, with expansive glazing and abundant greenery creating a seamless dialogue between inside and out."

[smartcode_project:default project_id=150499 project_image_fid=370897]

Interiors by <a href="https://www.apartments.com.au/architects/hot-black">Hot Black</a> carry the same material language through to every room. Kitchens feature integrated Gaggenau appliances, sculpted stone benchtops, and Lo &amp; Co joinery, while bathrooms feature natural stone, timber, and brushed metal finishes.&nbsp;

Hot Black Founder and Design Director Sophie Safrin describes the intent as one of considered restraint: "At Solis, every detail has been thoughtfully considered to create a timeless coastal retreat, calm, refined, and effortlessly liveable. From natural finishes to seamless indoor-outdoor flow, Solis offers a quiet elegance that's deeply connected to its surroundings.

The landscape, designed by Julian Brady of <a href="https://www.apartments.com.au/landscape-architect/sitedesignstudios">Site Design Studios</a>, treats green space as an integral part of the resident experience rather than an afterthought.&nbsp;

"Gentle curves and layered native plantings mirror the ebb and flow of the ocean," Julian Brady says, "creating a serene connection between architecture and place."&nbsp;

Coco Republic has provided bespoke furniture packages tailored to the project's coastal palette.

[smartcode_project:default project_id=150499 project_image_fid=370899]

Skymark has an established track record in the Sutherland Shire, with a portfolio spanning Cronulla, Woolooware and Burraneer that includes Isla, Sylva, Bask, Shells, Sula and Mist. Securing LDI on Solis reflects a broader shift in how the developer is positioning its buildings to buyers, at a time when Resilience Insurance expects the policy to become mandatory in New South Wales by 2028.

Sales at Solis are launching soon through Ray White Projects, with an official event scheduled for 11 June. Enquire for more information.

[smartcode_project_cta:default project_id=150499]

Skymark takes out 10-year Resilience Insurance LDI at Solis Cronulla

State Government

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<div>The Office of State Revenue is committed to the NSW Government’s target of having 70% of transactions conducted digitally by 2019.</div>
<div> </div>
<div>One of our digital services, Electronic Duties Returns (EDR), allows authorised agents to process a wide range of Duties transactions from their office.</div>
<div> </div>
<div>This service also allows solicitors and conveyancers to seamlessly integrate with e-Conveyancing platforms and services.</div>
<div> </div>
<div>Currently, some legal firms continue to lodge documents for assessment that could be done via EDR, this is unsustainable.</div>
<div>
Commencing 1 July 2016, conveyancing documents, which can be processed through the EDR system, will no longer be assessed by the Office of State Revenue.
This is the first step of the digital transformation for property with more to come in 2016 and through 2017.
</div>
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jonathanchancellor-7SQnKwU6yx

Property 101: Changes to NSW Office of State Revenue conveyancing document lodgement service

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GUEST OBSERVER
In late 2015, the Greater Sydney Commission was established to oversee metropolitan planning and development in Sydney.
The commission is intended to function as a partnership between state and local governments, with both the power to create overarching planning proposals and the mandate to work with local governments on local planning controls.
NSW Premier Mike Baird has tasked the commission with delivering 680,000 new homes by 2031, with the aim of tackling the city’s unfolding housing affordability crisis.
In December, Lucy Turnbull was announced as the inaugural chief commissioner for the Greater Sydney Commission. In addition to a successful career in commercial law and investment banking, Turnbull has a history in local government – in 2003 she became the first female lord mayor of Sydney – and is the author of the 1999 book Sydney: Biography of a City. Since 2010 she has been the deputy chair of the Coalition of Australian Governments’ City Expert Advisory Panel.
Dallas Rogers spoke with Lucy Turnbull on the establishment of the Greater Sydney Commission, its structure, plans and mandate from the premier, as well as criticism from some urban planning experts that the commission is an undemocratic “top-down” approach to development.
To hear the interview in full, <a href="https://theconversation.com/speaking-with-lucy-turnbull-on-the-greater-sydney-commission-56005?utm_medium=email&amp;utm_campaign=Latest%20from%20The%20Conversation%20for%20March%2010%202016%20-%204476&amp;utm_content=Latest%20from%20The%20Conversation%20for%20March%2010%202016%20-%204476+CID_233775bf67bcd3c3aa2e3c2a6a4a3704&amp;utm_source=campaign_monitor&amp;utm_term=Speaking%20with%20Lucy%20Turnbull%20on%20the%20Greater%20Sydney%20Commission" target="_blank">click here</a>.
Dallas Rogers<a href="https://theconversation.com/profiles/dallas-rogers-5269" rel="author"> </a>is lecturer in Urban Studies, Western Sydney University and author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/dallas-rogers-5269" target="_blank">here</a>.
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jchancellor-FAypfDUnLy

Lucy Turnbull discusses the Greater Sydney Commission

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The Aussie Home Loans founder John Symond, in an interview with Ross Greenwood on 2GB's Money News, has lashed out at the mooted changes to negative gearing.
Ross Greenwood suggested that he was surprised by the Labor's strategy of only allowing negative gearing on new homes, which was met accord from John Symond.
"Ross, can you imagine?"
"Let's say they introduce that legislation - only new housing - the day you exchange contracts on a new home, it immediately becomes an old home and guess what, it will drop by at least 20 percent in value, and who's going to walk in to that one?"
Greenwood stated that house prices seem to be resilient around the country with investors not shying away from the property markets at the moment.
"The markets have had a bit of a kick up in the last few weeks, but who knows the real reason," Symond said.
In response to Ross suggesting any big tax changes will change the mood and the direction the money flows, John offered an alternative view.
"Conversely I think a lot of people think I better get in now before any changes come in because they probably won't be retrospective I probably better buy a property now."
"Certainly if the government introduced anything that was perceived to be significantly adversed it would prick the balloon of the housing market and that's for sure," he said.
John said his concern is if they scare away the mums and dads from their negative gearing on their housing.
"The average Australian understands housing and they try and build up a nest egg for future years, and they'll run a mile," he said.
"Everyone will be too scared."
"Imagine what that will do to the real estate market."
"Five trillion dollars in asset value for Australian's as a buffer for the future and a government could be so dumb to blow that up."
He said that we already have a shortage of housing in most capital cities.
"Imagine you being a developer, I'd run 100 miles per hour."
Ross Greenwood said that we need to encourage people to build houses with the population projections.
The population is expected to reach 35 million people between 2050 and 2060, with Sydney and Melbourne to have eight million people each and Brisbane and the Gold Coast to have four million.
John said it will have the opposite impact.
"They are really playing with dynamite here and I hope to goodness they don't come up with some crazy idea and totally destabilise the one industry Australia is relying on."
"They can totally blow it up and I'm amazed that they're even talking about it," he said.
Symonds said he hadn't been speaking to many politicians however thinks they are all clutching as straws.
"They got frightened off with the GST and now they're looking at tinkering with super, they're tinkering with negative gearing and these are areas that impacts the vast majority of working mums and dads or retirees."
"I just think they're desperate."
"Unfortunately the tax system has been busted for decades and it hasn't been addressed."
He suggested that every time they have a look at a particular area they get scared.
"I think we're in no different position than we've been in for the last 20 years with a flawed tax system that just doesn't work."
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jrobinson-rf4aSBido9

Expect values to drop 20 percent under Labor negative gearing: Aussie John Symond

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<div>
The NSW Government is set to sell its Land and Property Information (LPI) unit in 2016.
NSW has JPMorgan undertaking a scoping study on the sale, according to the Australian Financial Review column, Street Talk. 
LPI provides all mapping, titles and other related land information services for NSW.
While the sale of the state's LPI would be the first sale of its kind in Australia, Victoria and South Australia are also consider selling their own land titles offices. 
</div>
<div>
The AFR suggest that the NSW LPI is likely to be worth $500  million.
In 2014-15 some 900,000 plus dealings were lodged for registration, marking a 6.7 per cent increase on already strong volumes in the previous financial year.
</div>
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NSW LPI to be sold with $500 million hopes

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The NSW government is selling eight properties in Sydney and major regional cities through Burgess Rawson auction on December 8.
All are on long leases of 5 plus 5 plus years with the tenant paying all outgoings.
The rental increase is a fixed 3%.
Net incomes range from $23,445 per annum to $335,760 per annum.
The properties are at Bathurst (Robin Hill), Cessnock, Deniliquin, Grafton, Mittagong (Welby), Penrith, Unanderra (Wollongong) and Tweed Heads.
Service NSW, and the remnants of the RTA are the typical tenants.
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j.ballantyne1990-6AQqhLzZaK

NSW government selling eight properties through Burgess Rawson auction

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GUEST OBSERVER
China’s next Five-Year Plan is due to be formally approved by the National People’s Congress in March 2016.
One of the areas of focus is the role of China’s State-Owned Enterprises, generally viewed with suspicion by the West and also seen within China as bloated and in need of a clean-up.
The Five-Year Plans have become a flexible political tool in the hands of central leaders seeking to shape the behaviour and priorities of diverse ministries and local governments.
China’s Cabinet recently released the latest document in what will be a cascading series of plans and guidelines feeding into China’s policy settings between now and 2020.
The State-Owned Enterprise (SOE) Guidelines are part of tackling China’s larger economic reform challenge. This requires shifting the overall macroeconomic growth model from domestic investment (mostly infrastructure) and a focus on exports, to one of growth led by domestic consumption and an expanded services sector.
The guidelines are the latest stage of an SOE reform process underway since the 1990s, as the Chinese state-controlled economy has made way for a rapidly growing private economy sector.
<h2>The current state of SOEs in China</h2>
The words typically used to describe the SOE sector in China are “inefficient”, “bloated”, and “bulky”.
The sector has been slimmed down a lot over the past decades, but still comprises 110 conglomerates. SOEs accounting for around 60% of total revenue are overseen by the central government’s State Owned Assets Supervision and Administration Commission. And between 25,000 – 150,000 SOEs (depending on which definition of <a href="https://www.bloomberg.com/news/articles/2015-07-30/china-s-state-owned-companies-may-face-reform">“</a>state-ownership<a href="https://www.bloomberg.com/news/articles/2015-07-30/china-s-state-owned-companies-may-face-reform">”</a> is used) are controlled and managed by provincial, municipal and lower levels of government.
The larger SOEs maintain monopolies over key sectors of the economy (energy, mining, infrastructure) and smaller SOEs are characterised by low productivity and high debt levels. A lot of the problems and inefficiencies stem from the fact that the interests controlling SOE behaviour are not necessarily aligned with those of the wider economy or society.
<h2>Time for a clean out</h2>
Authorities have been consolidating and “cleaning up” SOEs for better resource allocation for a while now. China’s two major bullet train makers completed consolidation in the first half of 2015, while China Railway Corporation recently announced an asset-reorganisation with one of its subsidiaries.
Central authorities indicated earlier this year that Beijing would like mergers and acquisitions to result in a figure of around 40 conglomerates under the SASAC.
The real challenge will be in getting the Provinces to cooperate in cross-border mergers of provincial and municipal SOE assets. The ambitious Beijing-Tianjin-Hebei regional integration <a href="">blueprint</a> provides an important testing ground for getting different localities to cooperate, share and consolidate economic and social planning and resources.
<h2>Commercial vs ‘social’</h2>
Schools, universities, medical goods and service providers, and operators of public utilities (water, sanitation, energy, transport and communications) together form a huge and important part of the Chinese economy. It is important that they be run efficiently, but also important that they fulfil the social purposes for which they exist.
Providing equitable access to essential public goods and services means these firms cannot be expected to run on purely commercial considerations. And so the SOE guidelines indicate that SOEs will be categorised as either “commercial” or “public goods and services”, and dealt with accordingly. Commercial SOEs will be encouraged to become leaner, more efficient, and more market-oriented, while “social” SOEs will be encouraged to focus more on the quality of service provision.
<h2>Diversifying SOE ownership</h2>
A key part of making SOEs more efficient and more market-oriented is to allow private investors to purchase ownership stakes.
SOEs will be encouraged to bring in “various investors” through share-rights swaps, issuing new shares and/or convertible bonds and other means. Institutional investors in particular, including foreign ones, will be allowed/encouraged to buy stakes in SOEs, and SOEs will be allowed to experiment with employee share ownership schemes.
Oil and gas, electricity, railways and telecommunications have been identified as suitable for “limited” private investment: indeed, key energy companies Sinopec and National Petroleum Corp have already begun selling off parts of their operations.
While the Singapore Temasek model of state investment has been <a href="">cited</a>, strategic SOEs in China will never fit that model, but will remain under strict state (ie. Party) control.
Improved independent decision-making at board level will be encouraged by requiring the boards of all SOEs to have a majority of non-executive (external) directors. More professional managers will be employed, and a more flexible and market-based compensation system for SOE officers will link pay to company performance.
<h2>Obstacles to reform</h2>
The key obstacle to SOE reform will be overcoming “pushback” from entrenched interests at local, provincial and national government levels. Overcoming this obstacle is made particularly difficult because of the emphasis on leadership of, and control by, the Chinese Communist Party.
Reforming the Party, particularly to reduce corruption, is also an important part of the Five-Year Plan, but loosening the Party’s grip on control is nowhere in sight. The extent to which the politics of the 13th Five Year Plan remain compatible with its economic reform goals therefore remains to be seen.
Alice de Jonge is senior lecturer, International Law; Asian Business Law, Monash University and author for The Conversation. She can be contacted <a href="https://theconversation.com/profiles/alice-de-jonge-118840" target="_blank">here</a>.
 
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China’s grip still tight on state-owned enterprises

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<div class="page" title="Page 1">The New South Wales property market has driven the state into a large operating surplus, with stamp duty revenue on property transfers forecast to have grown 20.6% in 2014/15 and elected to grow a further 7.6% in 2015/16.</div>
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<div class="page" title="Page 1">According to Commonwealth Bank economist Gareth Aird, property transaction related revenue typically, around 10% of total government revenue, has significantly boosted some state budgets. 
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<div class="page" title="Page 1">Like NSW, Victoria is anticipating a surplus in 2015/16 which, if realised, will mean that it extends its run of surpluses that began in the mid-1990s.</div>
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<div class="page" title="Page 1">Strong growth in property transfer duty revenue is offsetting some weakness in income and consumption-based taxes such as payroll and gambling. </div>
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