By Tina Perinotto

11 June 2010 – The NSW Government’s decision to cap developer contributions could see new home owners in greenfields housing estates left without adequate facilities and households facing steep rises in rates, according to the Planning Institute of Australia’s NSW division.

The move, which took effect on 7 June, caps developer contributions at $20,000 and restricts the contributions to  “essential infrastructure,” a term that opponents say is a difficult to define.

Division president Tony McNamara today condemned the NSW Government’s decision and urged it to reverse its decision.

He said the move undermined certainty and confidence in the planning system.

“In reality the cost of basic infrastructure in release areas including essential drainage, roads and open space works and associated land acquisition is $45,000 plus per lot.

“The government’s position is that if councils can substantiate a cost per lot higher than $20,000 then the difference can be paid for by rates increases imposed on existing properties.

“The rates increases could amount to a doubling of rates for new and existing rate payers within the growth centre’s local government area.

“The certainty for new communities that they will be provided with acceptable facilities when they need them has been taken away.

“Councils now face the prospect of releasing new housing estates with very low level facilities, or alternatively, borrowing millions of dollars to provide the facilities.”

He said local councils would  need to reconsider their position on growth and release of new urban areas if the costs and risk to the community outweighed the benefits.

President of the Shires Association Bruce Miller also said in newspaper reports that he was concerned about how essential infrastructure would be defined – parks, playgrounds and libraries could all be termed essential infrastructure; adding that councils were ”extremely disappointed” the new rules had been introduced without an agreement with councils about how they would operate.

Mr McNamara urged the Government to “undertake a comprehensive economic cost-benefit analysis of the impacts of the changes to developers, purchasers and local communities.”

The decision had been undertaken with no consultation with stakeholders and no appreciation of the impacts on infrastructure funding, especially for Urban Release areas.

The contributions, known as Section 94 contributions, had been the primary means available to local government for provision of these services for 30 years, Mr McNamara said.

They had traditionally been used to provide essential services to new communities such as libraries, child care facilities, community centres; recreational facilities such as playing fields, swimming pools, tennis courts; and development infrastructure such as trunk roads, trunk drainage, pollution control facilities.

Councils were also required to purchase the land housing these facilities.

A media release from the PIA also said: “The NSW Government has decided unilaterally that new households only require Key Community Infrastructure costing no more than $20,000.

“The artificial capping of S94 charges at $20,000 and, with the council and the local community taking on the risk of providing the balance of funds, is a major change which has not even been discussed with affected stakeholders.

“The Institute reinforces its view that sound planning is the cornerstone to community confidence and investment in New South Wales. The imposition of artificial capping and the introduction of this government decision with no consultation has undermined that certainty and confidence. “