NSW planning system singled out for criticism in Productivity Commission report

25 February 2011

The Urban Taskforce said the case for reforming NSWs planning system has been strengthened, following todays release of a draft research report by the Productivity Commission. The Taskforces chief executive, Aaron Gadiel, said the wide-ranging report singled NSW out for special criticism. The report found that:


¢ In 2009-10, NSW had the highest residential infrastructure charges imposed on developers at an average of $37,300 per lot for greenfield developments, which also covered the broadest range of infrastructure items.


¢ In 2009-10, NSW ($550,000 per hectare) and Queensland ($340,000 per hectare) had the highest infrastructure charges applying to commercial and industrial land.


¢ Highly prescriptive and limited zonings have led to a need for many case-by-case variations. These are inefficient and create an anti-competitive, unlevel playing field. The Commission said that NSW appears more susceptible to this approach than the other jurisdictions.


¢ Queenslands and NSWs planning rules are the most difficult to find and use.


¢ NSW particularly appears to have difficulty in establishing cooperative state-council relations.


¢ In NSW over 220 local and state statutory instruments provide the bases for referrals. In contrast, all of South Australias referral requirements are contained in one location (its planning legislation).


NSW clearly stands out as the state that is cursed with Australias worst planning system, Mr Gadiel said.


NSW is heading for a housing shortfall of 100,000 homes within just three years.


˜Sydneys actual housing supply is running at half the governments target.


The housing undersupply meant more congestion, as people lived further away from their place of work, and higher rents.


Government planners have already assumed that Sydneys annual rate of job creation would permanently shrink by a quarter.


Sydney should be Australias employment hub, yet our planning system is content with painfully slow job growth, running at a third of Melbournes level.


Mr Gadiel said that the NSWs high development levies would not past the tests imposed by the Productivity Commission.


The Commission opposes levying development in existing urban areas for ˜system-wide infrastructure upgrades, but this is exactly what local councils are doing across Sydney, Newcastle, Wollongong and the Central Coast, Mr Gadiel said.


Theyve also found that broadly dispersed social infrastructure should also be funded from government through general revenue, not development levies.


Levies in the Western Sydney growth centres breach this requirement.


Mr Gadiel said the Productivity Commission had an important message for those who want the state government to butt out of planning decisions.


The Commission said that no single local council or group of citizens can be expected to adopt the overarching perspective needed by state and territory governments and leadership will be required at the elected political level.


Whether its ˜Part 3A in NSW, ˜priority development projects in Victoria or the work of the Urban Land Development Authority in Queensland, there is clearly a need for state government leadership in the planning process, Mr Gadiel said.


Without, local councils are free to block development to satisfy the demands of their existing residents, at the cost of the broader communitys need for housing and well-located jobs.


Mr Gadiel said that todays report would help the push for a more flexible planning system.


The community cannot continue to bear the huge social and economic costs being imposed by the current approach, he said.


The Urban Taskforce is a property development industry group, representing Australias most prominent property developers and equity financiers.


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