Major projects driven from NSW by council delays

23 February 2010

Local councils are taking too long to approve large development applications and are driving investment away from NSW, according to the Urban Taskforce.

An Urban Taskforce analysis of the NSW Governments Local Development Performance Monitoring Report 2008-2009 has ranked NSW councils based on the time it takes them to deal with major projects. The report was released this week.


The Taskforces chief executive, Aaron Gadiel, said its taking local councils longer to process large development applications.


An application for a project of more than $5 million in value is stuck in council bureaucracy for an average of 230 days, he said.


This compares with an average of 74 days for all development applications.


Councils are wilfully ignoring the current legal benchmark which is between 40 and 60 days to decide development applications.


Mr Gadiel said the larger a project, the longer it takes for a council to deal with it.


Projects valued at more than $20 million now take an average of 324 days to process, up from 286 days in the previous year.


Development applications worth $30 million or more now take an average of 370 days to be dealt with – up from a previous figure of 300 days.


The projects that will inject more than $50 million in the economy now take 384 days to process, up from 315 days in the previous year.


Mr Gadiel said that despite the rhetoric about getting the planning system working again, the situation has deteriorated for those wanting to invest large sums in NSW.


These delays can increase the cost of building new homes and business premises by 15 per cent through extra interest payments on debt and through the money tied up in unproductive capital, he said.


Long processing times for development applications and the uncertainty about the outcomes are now a major reason why people havent been investing in NSW.


This is real tragedy – for every $1 million in construction expenditure, 27 jobs are created throughout the broader economy.


The states performance in attracting construction dollars has been appalling.


NSW now has less construction activity than either Victoria or Queensland.


Based on the most recent ABS data, since 2004 the real value of building activity in NSW has fallen by 19 per cent, while in Queensland it has increased by 10 per cent, and in Victoria it has jumped by 17 per cent.


The state government has also contributed to the long processing times by councils.


Eleven per cent of development applications are referred to state government agencies by local councils and the average time taken by those agencies to deal with the application blown-out from 49 days in 2007-2008 to 54 days.


The construction activity made possible by property developers contributes $78 billion to the national economy each year and creates 849,000 direct jobs.

[A full ranking of council performance in handling large development applications is set out at the end of the PDF below.]



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