Western Sydney Levies

On the 17 December 2008, the NSW Government announced that it would cut state infrastructure charges in the south west and north west growth centres from $23,000 to around $11,000 per lot until June 2011. From July 2011 the charge was to be $17,000 a lot.

The then Premier of NSW, Nathan Rees, said the purpose of the changes was to “simplify the structure of levies, reduce unnecessary holding costs and reduce the overall contribution required from new developments”. The government promised that “revised Ministerial Directions and determinations [are] expected by 1 February 2009”. It took until last Friday to finalise these documents. They were published in the government gazette here. The ministerial direction is at page 31 and the new determination is at page 32.

Please note the charges have been indexed, so (for example) assuming 15 lots per hectare, the residential levy will be approximately $18,000 per dwelling from 1 July 2011.

The government has also made changes to the special contributions area (maps available here).

We have been very concerned about the extended delay in finalising this matter – so, in one sense, it is good that something has finally published. However there are problems with the published documents.

In particular, the Department of Planning hasn’t adequately dealt with the issue of flood prone land.

Such land may be included in a master-planned community development application in order for that approval be granted for landscape embellishment, revegetation, stormwater quality improvement structures and facilities to promote passive recreation, such as paths or cycle-ways. It is possible that there will be legal liability for a levy on this land in this situation. Member companies should consider obtaining legal advice if they are in this situation. We have raised it previously with the Department, and while changes were made they did not fully address our issue.  We will raise this matter again.

Non-government schools continue to be subject to the levy.  Following media activity by the Urban Taskforce the NSW Opposition has made statement implying that it will take a different approach (see article here).

The arrangements for the deferral of the levy are still unclear (and probably unhelpful).  The definition of exempt and levied development is arbitrary. For example, shops selling small daily convenience goods may be exempt, but shopfronts whose dominant purpose is to provide services (e.g. a hairdresser) may not be.

Nonetheless, some of the concerns we raised in our earlier submission have been addressed. Our earlier submission is located here.

These issues are also relevant to the draft Hunter and Illawarra determinations that went on exhibition last Friday (see next article). We will also be pursuing these issues through that process, and doing so, advocate that the shortfalls in the Western Sydney determination be addressed.