New Government Policy on Infrastructure Charges Announced

The State Government has this morning announced a new policy on infrastructure charges for new land release areas and infill areas.

The Premier, Morris Iemma, says the new regime would cut State and Local government infrastructure contributions by 30 to 40 per cent. In the north-west and south-west growth centres infrastructure charge on new homes will be reduced from $33,000 to about $23,000 (assuming 15 lots per hectare), while the local government charge will be cut from $45,000 to less than $30,000.

To help fund the reductions the NSW Government will spend an extra $2 billion.

In addition to reducing levies, the changes also include:

  • an expansion in infrastructure directly funded by the State Government;
  • reducing the type of projects funded through State and Local government infrastructure levies;
  • infrastructure provided by councils to be delivered “in a more timely way … typically within seven years” and must directly service new release areas;
  • the creation of an Urban Improvement Fund to hold State Government and developer contributions for infrastructure in new land release areas;
  • state projects in new land release greenfield areas, including roads, to be put out to competitive tender;
  • levies paid to local government in the growth centres to be held in trust by the State Government to be spent on agreed programs;
  • levies to be payable in two stages as part of the push to fast-track land release to increase competition and improve housing affordability; and
  • the amount levied by the State Government for open space and environmental measures remains unchanged.

The Government says that the new levies framework to be “progressively applied throughout the State including brownfield areas based on local and regional assessments of core infrastructure needs”.  The NSW Urban Taskforce will be seeking further information on this point, among other things.

State Government contributions will be paid to the NSW Urban Improvement Fund. The Government will initially inject $200 million into this fund to deliver a number of “key” roads in the growth centres.

Local government charges for growth centres will be held in trust by the State Government.

The State Government says that the new framework will be implemented immediately, with legislation covering specific provisions for levies to be introduced in early 2008.

The NSW Urban Taskforce will distribute further information to members as soon as it becomes available. We will also issue a formal response to this policy later in the day.

Please Note: In light of this announcement members may wish to book a place at the industry lunch with Michael Costa on Tuesday 30 October 2007, where it is expected that the Minister will discuss this policy in some depth. Please contact Catherine Ross on 9238 3955 or by e-mail to reserve a place or table.