NSW Budget targets much needed improvements to NSW Planning System

Urban Taskforce CEO, Tom Forrest, today welcomed the budget announcements of changes to the stamp duty tax system, new funding to fast track the planning system and a reversal of the GSC’s ban on mixed use development on dilapidated industrial land.

It took a health and economic crisis to get the NSW Planning System to pay attention to its failings – but today’s budget shows that the Government is listening.

The Budget Papers have explicitly recognised the handbrake that NSW Planning has been on the NSW economy. Urban Taskforce congratulates Planning Minister Stokes for invoking the spirit of Churchill “never let a crisis go to waste”. For the first time, the budget acknowledges that the planning system is making NSW uncompetitive with other states and it targets planning reform with funding. This is very welcome.

Funding is provided to implement the NSW Productivity Commission’s Review into Infrastructure Contributions, including the implementation of a e-monitoring system to track infrastructure contributions and expenditure. Further reforms on infrastructure contributions are expected with the completion of the NSW Productivity Commission’s Review within the next week.

Money is also there to support the Planning Delivery Unit – DPIE’s own fast-track team.

The planning reform benchmarks (33% reduction in the time taken to assess a planning proposal for the re-zoning of land or changes to the associated Local Environment Plan controls and 17% reduction in the time taken to process State Significant Developments) for improvement in planning timeframes are modest – given the size of the problem in NSW, but the new focus is welcome.

Today’s new announcement of a plan to seek community views on reform to stamp duty is great news. Urban Taskforce has led the push for reform to this highly inefficient tax as it distorts behaviour and reduces productivity across the economy. The proposal in the budget is nuanced and reflects the excellent work undertaken to date by the NSW Productivity Commission.

The Treasurer deserves great credit for taking on this long vexed yet universally acknowledged contagion on the tax system. Reform of Stamp Duty will make home ownership easier for young families and all new home buyers. It will remove the disincentive on moving for those who seek to down-size.

The change to the payroll tax threshold will also be welcome by small to medium sized businesses across the state.

An important planning policy announcement which is somewhat buried in the budget documents relates to “optimising industrial land use”. For the first time since the GSC’s District Plans inexplicably killed-off the use of dis-used and dilapidated old factories for anything other than industrial uses, the Budget commits to review this failed policy to create greater flexibility and secure greater economic value and employment.

The budget papers also acknowledge the need for a less prescriptive planning system with the announcement of plans to simplify and consolidate employment zones. This will create greater flexibility and allow businesses to change and adapt to changes in demand. This is particularly important in this fast changing COVID-19 world.

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