NSW Productivity Commission says NSW Planning System is “not delivering for NSW”

Urban Taskforce welcomes today’s release by the NSW Productivity Commission of their Green Paper on Productivity Reform in NSW entitled “Continuing the Productivity Conversation”.

Today’s release follows from the Publication of “Kickstarting the Productivity Conversation” paper released by the NSW Productivity Commission in October 2019. The onus was on the NSW Productivity Commission to come up with some answers after it controversially declared the NSW Planning System the slowest in the nation in every single category of DA assessment in its October 2019 document.

The Green Paper is an excellent report and a great place to begin a serious conversation about planning in NSW – particularly in the COVID-19 context. When the final document is updated to take into account the Draft NSW Housing Strategy’s assessment that an average of 50,000 new homes will be needed every year for 20 years to house predicted population growth, the importance of the recommendations in this Green Paper becomes clear.

After hearing feedback from industry, councils and community groups, the NSW Productivity Commission has doubled down on its criticism of the NSW planning system. The Green Paper states, in no uncertain terms, that the NSW planning system is not performing. Even though it was commissioned by the Minister for Planning, the Green Paper pulls no punches. The title of section 7.2 reads: “The existing planning system is not delivering for New South Wales”, and it goes on from there!

The planning matters are dealt with between pages 218-253 and are very well worth a detailed read.

The planning recommendations in the Green Paper include:

— Plan for greater housing and business activity in areas where there is spare infrastructure capacity (Recommendation 6.1).

— Ensure planning instruments keep up with housing needs, while taking into account community interests (Recommendation 7.1).

— Review apartment design and car parking regulations to accommodate consumer choice while maintaining minimum basic quality (Recommendation 7.2).

— Rationalise zones and restrictions on permissible business activities; produce strategies to use commercial and industrial land more productively; and Improve the management of the “Retain and Manage” category of industrial lands to optimise employment and productive outcomes (Recommendations 7.3-7.5).

— Continue to implement measures to cut red tape to make the planning system more effective and deliver on the Government’s goal of reducing assessment times (Recommendation 7.6).

— Develop a consistent way to measure the benefits of open and green space, and incorporate it into land use planning (Recommendation 7.7).

— Use the Review of Infrastructure Contributions to find ways to deliver a principles-based, transparent and certain system (Recommendation 7.8).

— Replace inefficient taxes with more efficient ones. Start by replacing stamp duty with a broad-based land tax on unimproved land values. Coordinate payroll tax administration across states and territories
(Recommendation 8.1).

— Use the Review of Infrastructure Contributions to pursue reforms to deliver a more sustainable way to fund the infrastructure we need. Evaluate reforms within three years and if reforms do not provide sufficient funds to deliver services, councils should hold a plebiscite of ratepayers to test support for abolishing of the rate-peg (Recommendation 8.2).

Read the Full Green Paper here.

Peter Achterstraat and the NSW Productivity Commission are doing the heavy lifting in highlighting the need for cultural reform across the planning system as well as legislative and taxation reform. The recommendations in this Green Paper must be considered by Government before any proposals to approve any increase in fees and charges associated with the planning system are approved by DPIE. This Green Paper also raises significant concerns with the restrictive nature of the Draft Housing Diversity SEPP.

Urban Taskforce will liaise with our members and will review the paper in detail. We will provide feedback on the Green Paper to the NSW Productivity Commission.

The Green Paper touches on, but does not deal in detail with, the Productivity Commission’s separate Review relating to NSW Infrastructure Contributions. This Review will be completed later this year.

Download PDF Version.