State should take over local Government growth centre levies

17 September 2007

The NSW Government should assume responsibility for all levies in Western Sydneys growth centres according to Aaron Gadiel Chief Executive Officer of the NSW Urban Taskforce.

The current collection of local, state and utility charges should be amalgamated into a single levy payable by the developer when the serviced land has been sold to the ordinary homebuyer, Mr Gadiel said.


A single pool of funds should be created and infrastructure should then be prioritised according to need.


This pool of funds should be added to, as necessary, by the State and Federal governments.


This means the State Government would have sole responsibility for limiting charges to a viable level.


Rather than developing wish lists of infrastructure, the government should start with a rational analysis of how much developers can be asked to pay without significantly impacting on the program of land release.


It would be apparent to most people that the construction of main roads, schools, police facilities and health facilities are essential, while a lower level of priority should be given to some projects favoured by local government such as wellness/massage facilities, yoga and Pilates facilities, beach volley ball courts and media/sound studios.


This process of prioritisation is not happening at the moment, because there are separate pools of money and no ascertainable limit being placed on the length of government wish lists.


Local councils could apply for funding for specific projects on a competitive basis, and receive money based on the merit of individual proposals versus other proposals competing for the available funds.


The NSW Urban Taskforces report What Infrastructure? revealed the total cost of infrastructure charges in the north west and south west growth centres could hit $14.1 billion. Local council infrastructure contributions could add up to $8.5 billion, on top of $5.6 billion already imposed by the State Government.


Infrastructure charges are now so high that they are preventing any significant development in the growth centres, Mr Gadiel said.


For a typical residential lot to be produced, a developer needs to pay $329,000, including $110,000 in government infrastructure charges. The average sale price for a serviced residential lot in the growth centres will be $300,000. The loss for each block of land a developer would produce is $29,000.


Infrastructure levies should be used for roads, sewers, water, electricity, regional open space, Mr Gadiel said.


Broader community and government needs, such as new hospitals, major improvements to public transport, new civic centres, etc should be funded by forms of taxation where the whole community contributes.


Any combined charge in the north west and south west growth centres should be a fixed percentage of the final improved land sale price.


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.

Media Enquires:
Aaron Gadiel,
Chief Executive Officer,
Phone: 0417 477 904  or (02) 9238 3955

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