Hunter and the Illawarra levies

24 January 2011

On Friday the NSW Government released the public consultation documents for its proposed $8,800 levy on new homes in the Lower Hunter and a $6,200 levy on new homes in the southern Illawarra. The government’s also proposing a $42,100 levy on each hectare of new Lower Hunter industrial land, and a $29,000 levy on each hectare of Illawarra industrial land.

An initial review of the documentation raised the following issues:

  • There is a paucity of information on the infrastructure program – with a single A4 page for each of the Lower Hunter and the Illawarra.
  • The NSW Government is proposing to fund $81 million of its $200 million contribution to the Hunter Expressway through a levy on new local homes. In the Lower Hunter this component alone will equal around $1,000 a home.
  • There are no timelines specified for the delivery of infrastructure – other than a broad-brush 25 year horizon for the Lower Hunter, and an even more relaxed 40 year horizon for the Illawarra. The documentation directs the reader to “Budget Paper No. 4” to see the government’s firm commitments, but this document doesn’t even mention most of these projects.
  • In the Illawarra, the government is planning for an average of just 640 extra detached houses a year, compared to the Lower Hunter’s anticipated rate of new house supply of 2,640 a year.
  • No scope of works is presented or defined for named projects. Some descriptions are very generic, so it will difficult to hold the government to account. For example the list of infrastructure includes upgrades of two anonymous sections of the (very long) Princes Highway that have been valued at $14 million.
  • The government has disclosed how much of each infrastructure project it thinks should be recovered through levies, but it hasn’t disclosed the full cost of these items. This means, in most cases, it’s not possible to tell how the cost of the project has been apportioned between existing residents and new residents.
  • Finance costs have been built into the costings, to take into account the fact that some infrastructure will be delivered prior to the receipt of levies. However no information has been presented as to which infrastructure has what financing component. Nothing is said about how much is to be borrowed, the applicable interest rate and the expected pay-back period.

We are seeking more information from the Department of Planning. The Department of Planning’s media release is here. Their fact sheet is here.

The Lower Hunter exhibition documents are here (this includes a list of all greenfield release areas anticipated for the region in the next 25 years, not already subject to standalone infrastructure arrangements) and the Illawarra exhibition documents are here.