I think your first paragraph nails it. Developers are holding off development not to introduce artificial scarcity, but to maximise development. So they keep the land empty until either they can convince the council to approve a higher density, or a change in state government gives them an avenue to bulldoze through the council roadblocks.

At least in NSW a single graph is needed to show this relationship: https://www.planning.nsw.gov.au/policy-and-legislation/housing/housing-supply-insights/quarterly-insights-monitor-q1/trends-in-housing-supply the correlation between number of approvals and number of constructions is basically exact. Which means, the roadblock to construction is council approval, not corporate greed or developers gaming the system to generate artificial scarcity or any other conspiracy you can think of.

I do agree that removing infrastructure charges is not a solution. From my perspective, this won’t do anything since developers aren’t blocked because of costs, but either materials supply or council blockades. Removing infrastructure charges solves neither of these issues.