Development Contributions
State Government announces major cuts to local infrastructure funding
On 4 June 2010, the State Government announced major changes to local infrastructure contributions. The changes include:
- Levies for residential properties under s94 of the Environmental Planning and Assessment Act are now capped at a maximum of $20,000 per lot.
The cap came into immediate effect on Monday 7 June 2010. The cap applies to all councils with s94 levies on residential properties over $20,000, regardless of any previous approvals to exceed the threshold. Councils are expected to make up the shortfall in infrastructure funding through other revenue sources including special rate variations or increases in general rates. - Restrictions will be imposed on the projects that can be funded by s94 levies to 'essential' infrastructure.
The State Government has announced that s94 levies will be restricted to funding 'essential' infrastructure such as land acquisition (for open space and community facilities), roads, stormwater and transport facilities. It appears that councils will not be able to collect local contributions levies to fund recreational facilities, civic or community facilities. The changes are due to come into effect on 1 July 2010 and all councils will be required to prepare new contributions plans to meet the new definition of 'essential' infrastructure.
The Independent Pricing and Regulatory Tribunal (IPART) will be responsible for the assessment of all s94 contributions plans and for approving rate increases and special rate variations. Councils can apply for a special variation on rates to cover the cost of infrastructure that is above the cap or not compliant with the revised definition of 'essential' infrastructure. The details of the IPART process are also not finalised however the 
NSW Planning diagram of Council Funding Arrangements (135KB) provides an outline of the proposed process.
Associations' Campaign
The Associations are running a strong campaign to have the State Government address the significant and negative impact of these changes on Local Government finances.
Associations' media releases:
- Councils urge Premier to revoke decision to cut local infrastructure funding 30/06/10
- Local Government not to blame for housing crisis: Councils agree with report 16/06/10
- Councils band together to fight changes to developer contributions 16/06/10
- Communities slugged by cuts to infrastructure funding 10/06/10
- Councils slam State Government's policy on the run 4/06/10
We are asking all councils to assist us with this campaign:
- Tell us what these changes mean for your Council.
The Presidents sent a letter and survey on 10 June 2010 to all Mayors and General Managers seeking information on the impact of these changes on their Council. - Talk to your local MP and tell them what these changes mean for their local ratepayers and the community.
Parliamentarians, ratepayers and your local community need to understand what these changes mean for them.
Please support the Associations in this important campaign. We are seeking further meetings with the Premier, Treasurer, Minister for Planning and the Opposition Leader and presenting them with information about the community impacts of these changes.
Further information
At the LGSA - for further information or if you have any questions please contact:
- Shaun McBride, Strategy Manager, Finance, Infrastructure and Planning, or
- Judy Birrell, Senior Policy Officer - Planning
Follow the below link to view Premier's media release and Department of Planning Circular:
