Revealed: Infrastructure charges to hit $14 Billion

03 September 2007

A new report today revealed the total cost of Western Sydney infrastructure charges could hit $14.1 billion.

The report by the NSW Urban Taskforce reveals that local council infrastructure contributions could add up to $8.5 billion, on top of $5.6 billion already imposed by the State Government. The Taskforces Chief Executive, Aaron Gadiel, said that local government was making home buyers pay for public facilities that werent found in most parts of Sydney.

These local government charges are supposed to pay for council-run wellness and massage facilities, beach volley ball courts, yoga and Pilates facilities and media/sound studios Mr Gadiel said.

Most Sydneysiders dont expect their councils to provide these kinds of services.

Whats more, the state governments ˜infrastructure charges include $398 million to buy up and protect 1,725 hectares of native vegetation outside Sydneys growth centres.

This money wont benefit incoming residents as the protected land will be nowhere near their homes. Bureaucrats havent shown any restraint when putting together their infrastructure plans.

Infrastructure charges are now so high that theyre preventing any significant development in the growth centres.

For a typical residential lot to be produced, a developer needs to pay $329,000, including $110,000 in government infrastructure charges, Mr Gadiel said.

But the average sale price for a serviced residential lot in the growth centres will be $300,000.

The loss for each block of land they produce would be $29,000.

Local government is proposing a levy of $47,000 for each residential lot. When this figure is projected across all 181,000 new homes to be built in the growth centres, the total collected by local councils reaches $8.5 billion dollars.

The state government needs to review these infrastructure charges, Mr Gadiel said.

In Queensland infrastructure charges total $16,000 per residential lot. In Victoria proposed charges total $14,000. In Perth there are no state government infrastructure charges and the local council charge is $614.

The NSW Urban Taskforce is a property development industry group, representing NSWs most prominent and important developers, builders and property financiers. The NSW development industrys annual turnover is $35 billion and employs 180,000 people, accounting for six percent of the States total employment. It is the fifth largest contributor to the State economy.