Under the cover of grand final weekend, Penrith Council has snuck onto its meeting agenda for tomorrow (Monday) a plan to impose massive new development contributions which will apply to land surrounding the new airport, to pay for local physical and social infrastructure upgrades.
Below is a link to the Council Papers.
http://bizsearch.penrithcity.nsw.gov.au/pccbps/Open/2020/10/CNL_26102020_AGN_AT_WEB.htm
The report included in the Penrith Council papers was prepared for Penrith LGA and Liverpool LGA.
It recommends a 6.5% s7.12 local infrastructure contribution to pay for all the physical and social infrastructure (including land for open and green spaces) in the various Aerotropolis precincts.
Typically, s.7.12 charges are set at 1% of the cost of development. DPIE are currently considering a pathway to allow up to 3% (which is also proposed in the City of Sydney). Penrith Council are proposing a 6.5% levy. This 650% hike in Council charges will kill off investment feasibility and squeeze out funding for any State Infrastructure charges.
This would be in addition to any State Government SIC levy.
Urban Taskforce members strongly object to this matter being rushed through Penrith Council before the Department of Planning (DPIE) has finalised their work on s.7.12 local infrastructure contribution and also before Peter Achterstraat and the NSW Productivity Commission has completed their review (due at the end of November).
The Minister for Planning, Hon Rob Stokes and the Treasurer, Hon Dominic Perrottet commissioned the Productivity Commission Review into infrastructure contributions. They must ensure that this work is complete before Council sets up this charging regime.
The charges proposed in Council’s paper will have a catastrophic impact on employment growth and seriously undermine the work of the GSC and their efforts to develop the Western Sydney airport surrounds for employment and jobs.
Industry acknowledges the need for this land to be properly serviced by physical and social infrastructure. However, the presumption that this should all be funded by industrial developers will be a massive handbrake on the creation of new jobs. Everyone in NSW benefits from economic growth, from jobs and from employment areas. So it is reasonable that the burden of infrastructure costs is spread across the population.
This is exactly what DPIE and the NSW Productivity Commission is examining right now. Any decision on this matter should be delayed until after those works are complete.
Penrith Council are cynically trying to ram this massive increase in charges through before the NSW Productivity Commission brings down its report.
Penrith Council has recently adopted a Section 7.12 Contributions Plan for non-residential development and this currently applies to the Mamre Road Precinct. This plan identifies a contributions amount levied on construction costs of 1% and is appropriate for the Precinct. It should be noted that almost all this precinct is currently owned or controlled by developers who will be managing and constructing all local roads and stormwater infrastructure required for their estates.
The nature of development within the Mamre Road Precinct is employment related industrial development.
All development should contribute to infrastructure but rushing through such a huge impost when properly constituted analysis is currently being undertaken by the State Government is a disgrace and must be stopped.
In the Mamre Rd precinct, the Council Papers detail Council’s intention to propose a Section 7.11 contributions plan for the precinct. Urban Taskforce notes that the rates proposed are substantially in excess of referable precincts it the Western Sydney Employment Area and would make critical employment generating development impossible to deliver in this area.
These Penrith Council proposed infrastructure levies make this important Western Sydney Airport servicing employment area uncompetitive with other areas of Sydney, let alone outside of Sydney and interstate.
Affordability of NSW and, in particular, Sydney for industrial occupiers was a significant issue before the onset of Covid 19 with rent and land values at historic highs compared to Brisbane and Melbourne.
The COVID 19 pandemic has only worsened affordability for occupiers. Given the current economic environment, it is essential that business investment in NSW is encouraged by providing affordable options for businesses to grow and relocate, therefore avoiding the flight of finance and labour to other states (Brisbane + Melbourne) as seen over the last few years.
