New levies for the Hunter and the Illawarra

We have consistently critcised the present system, in regional NSW, where unpredictable defecto state infrastructure contributions are imposed through “voluntary” prior to or following rezoning using project-by-project planning agreements. These impositions have created significant uncertainty for land acquisition decisions, as the amounts involved cannot adequately be factored into development feasibilities.

The NSW Government is now propsing to introduce a State Infrastructure Contribution System for the Lower Hunter and Illawarra.  This proposal is being pitched by the government as a solution to the current problem.

Documents will be placed on exhibitionwhich will call for a contribution of $73,219 per hectare of residential land and $29,180 per hectare of industrial land in the Illawarra and $105,341 per hectare for residential land and $42,134 per hectare of industrial land in the Lower Hunter. The government says that, assuming close to 12 lots per hectare, developers will pay $6,180 per residential lot in the Illawarra and $8,780 per residential lot in the Lower Hunter.

The proposal will go on formal exhibition on 21 January (Friday next week) and submissions will close on 25 February. If a final decision is to be made by the current government, it will need to be made by 4 March 2011 (when the government goes into caretaker mode), otherwise it will end up on the desk of the incoming government. The government’s media release for the Lower Hunter is here, and its release for the Illawarra is here.

The full details of the plan have not yet been released and apparently will not be made public until formal exhibition commences next week. We’ll be scrutinsing these proposals closely. We’ll be looking for government’s detailed funding plans for regional infrastructure and when the investment will take place. We’ll need to consider if key infrastructure upgrades, crucial for future urban growth, have been left out of the plans, or have been postponed. If the timely delivery of new infrastructure is not guaranteed, new housing and workplaces may have to carry the cost of this levy as well as bearing the burden of additional negotiated contributions.

Some development projects will clearly be more expensive, as a result of this charge. However, other projects may face lower costs, because the government says it will remove the need for site-by-site negotiation of levies.

We’re keen to hear from members on this issue. A meeting of the Urban Taskforce’s Lower Hunter Subcommittee will take place in the first week of February in Newcastle. It will also be discussed at a meeting of our Steering Committee in Sydney in early February. If you do not normally attend either of these groups, but wish to attend the meetings to discuss these levies, please feel free to contact Catherine Ross at our office (additional attendees will be contingent on meeting room capacity). If you want to provide any suggestions or comments outside of the meeting please feel free e-mailing or calling Aaron Gadiel.