NSW Government adopts every single productivity commission infrastructure recommendation: Urban Taskforce

The NSW Government will adopt all 29 of the NSW Productivity Commission’s recommendations into infrastructure contributions

NSW Government adopts every single productivity commission infrastructure recommendation: Urban Taskforce
NSW Government adopts every single productivity commission infrastructure recommendation: Urban Taskforce

The Urban Taskforce welcomed today’s announcement that the Government will adopt all 29 of the NSW Productivity Commission’s recommendations into infrastructure contributions (full list of the recommendations is over leaf).

This decision announced by Treasurer Dominic Perrottet and Minister for Planning Rob Stokes is very welcome news.  With JobKeeper about to end, the changes recommended by the NSW Productivity Commission will help stimulate investment in jobs in the property development and construction sector. The Government, through the NSW Productivity Commission, has consulted with all stakeholders, developed a plan and has now committed to its implementation in full.

This is a clear sign that the NSW Government has been listening to the concerns raised by the Urban Taskforce and our members regarding fees taxes and charges associated with local and state infrastructure.  There is much more to be done in planning reform, as the Productivity Commission’s Green Paper (a separate Review) makes clear, but today’s announcement represents strong progress.

  • Councils rate pegs will now be adjusted to take into account population growth – meaning Councils won’t be punished for approving the construction of new homes anymore.
  • Councils and State Government agencies will be banned from gold-plating infrastructure at the expense of new home buyers by allowing IPART to set benchmark costs for infrastructure. Contribution plans will be set prior to the rezoning of land.  This will be a major change and will limit windfall profits from speculative landowners as all the fees and charges will be able to be factored into the purchase price.
  • Infrastructure Contributions will not be paid until the new building is completed and ready for occupation. This is a major change from the current requirement to pay s.7.11 fees up front. This will free up cash-flow to get projects going.
  • Broadening the tax base for “SIC” infrastructure levies which will apply to State Government (s.7.24) infrastructure so the burden is shifted away, to some extent, from new home buyers.
  • Reducing the cost of water connections to new properties by restricting Water Service providers to charge only the actual cost of the connection.
  • Improving the digital tools to allow for user friendly calculations for all Government fees and charges.
  • Hold Councils accountable for the levies they collect and their expenditure on infrastructure.  

Value capture will be actively curtailed and planning agreements will be limited to the recovery of infrastructure development costs that are directly associated with the proposed development.

There is more to be done to boost the number of approvals and relieve the current boom in new home prices – but this is a tremendous step in the right direction and just what the economy needed as we move out of the COVID-19 recession.

Jordan Fidler

Jordan Fidler

Jordan is a journalist at Urban.com.au

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