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Proposed developer contribution changes

At last month’s Council Meeting Councillors voted unanimously to make urgent representation to the NSW Government to convey Council’s opposition to the proposed legislative changes to developer infrastructure contributions and request that the Environmental Planning and Assessment Amendment (Infrastructure Contributions) Bill as it stands be withdrawn.

NSW Planning and Public Spaces Minister Rob Stokes, with support from the Treasurer, is proposing to amend a number of planning rules, including the rules governing developer contributions. The Infrastructure Contributions Bill, and associated regulations, introduced to Parliament on 22 June 2021, and then referred to an Upper House Committee for inquiry and report, could inter alia: -

  1. Reduce the type of community infrastructure that could be funded by developer contributions; and

  2. Place developer contributions into four Treasury- controlled regional funds, with no guarantees that the money would be directed back into projects in the local areas where the levies had been collected.

  3. Dictate to councils on what and how they spend their contributions – through Ministerial directions.

  4. Enable future governments to make further potentially damaging changes to the system without parliamentary scrutiny.

The Upper House Committee rejected the Bill and recommended that it be withdrawn and that there be consultation with councils before any changes are made. The matter is to come back to Parliament on 12th October 2021.

Armidale Regional Council Mayor Ian Tiley said the proposed reforms would remove the right of local communities to ensure the development in their area is matched by the community infrastructure they wanted and needed.

“Without at least existing levels of developer contributions, councils will be forced to either forgo the infrastructure or raise rates,” said Mayor Tiley

“Funding could be taken from areas of greatest need, placed in a fund which could be dispersed anywhere by the State Government with no accountability on where or on what funds are expended. The LGNSW regards the Bill as deeply flawed.

“The government is no doubt wanting to secure more development by these measures, but at what cost to ratepayers? Passage of this legislation would provide too much freedom for any future government without consulting. This is another form of cost shifting and would create a need for 

rate increases, which most certainly would not be supported by ratepayers. It would move costs from developers to landowners.

“This is a vital matter for Council. My view is that the changes if implemented would undercut the financial future of local government in NSW. The issue of Council’s sovereignty is also in question. Very little consultation has occurred. There would be impacts for housing affordability – a major concern. Land releases could also diminish.”

23 metropolitan councils have launched a campaign in the national media demanding that the NSW Government abandon these proposed changes. Five of the Mayors have met with the Premier. These councils are attempting to create public awareness of the detrimental impact the developer levy changes would have on their communities. The strong argument is that developer levies should be spent where they are raised to ensure new development is accompanied by appropriate investment in the surrounding area. The proposed legislation would break the nexus between where contributions are made and where they are spent.

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