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About

<ul>
<li>The State Government imposes housing targets onto local Councils to accommodate Sydney’s population growth.</li>
<li>Communities rely on Councils to deliver the essential facilities and local infrastructure that’s needed to support this growth – everything from roads and footpaths, to sports fields, parks and netball courts, to playgrounds, pools and libraries.</li>
<li>Councils can only deliver these facilities because we are able to collect infrastructure contributions from property developers to help fund it. We develop our local contributions plans in a clear and transparent way, in consultation with the community and industry.</li>
<li>However, the changes planned by the NSW Government will siphon developer contributions away from Councils and into a regional fund, with no clear accountability or transparency of how it will be spent.</li>
<li>This breaks the nexus between new development and new infrastructure that benefits the areas impacted by growth.</li>
<li>This nexus is one of the underlying principles of the existing planning system – so that new development contributes towards the cost of infrastructure that will meet the additional demand it directly generates and benefits from.</li>
<li>This is of particular concern given the Government’s record of prioritising funding to Government-held or marginal seats.</li>
</ul>

Why are infrastructure contributions important for Councils?

<ul>
<li>While the Government has deferred the legislation, it has accepted the recommendations of the NSW Treasury’s Productivity Commission that will reduce revenue for Councils.</li>
<li>The State Government’s own modelling says it will divert an extra $793 million a year to the State Budget from local councils ($16 billion over the next 20 years).</li>
<li>This seriously impacts Council’s ability to provide local amenity and leaving our communities without the infrastructure they need.</li>
<li>Our communities expect us to plan and provide them with the open space, parks, playgrounds, roads, footpaths and community buildings that make their lives better.</li>
<li>The Government is giving us an impossible choice: Stop delivering quality community infrastructure or hike rates to cover the cost. </li>
<li>If Councils are required to raise rates to compensate for losing our developer contributions to the State, we estimate over half the Councils in metropolitan Sydney will need to raise rates more than 6.5%. One high growth Council will need to raise rates by over 40%.</li>
<li>This is unfairly shifting the cost of new local infrastructure that supports development away from the developers building it, and onto existing ratepayers.</li>
<li>Developers pay to develop in and expand our communities. That money should be left in our communities.</li>
</ul>

Why do the proposed changes put community facilities and infrastructure under threat?

<ul>
<li>This claim assumes Councils will significantly raise rates to make up for the loss of revenue from developer contributions.</li>
<li>The amount of contributions Councils can collect will be significantly reduced, while the State Government will reap massive revenue increases through a new Regional Infrastructure Contribution (RIC).</li>
<li>The economic analysis undertaken as part of the Review shows that the net revenue impact to Councils as an average annual impact over 20 years, which masks the short and medium term impact on Councils and our communities.</li>
<li>This is a critical oversight given that one of the key principles of the NSW Treasury Review into Infrastructure Contributions was how to deliver infrastructure in a timely manner, when it is required by new communities.</li>
</ul>

The Government says Councils will be better off – why is that not the case?

<ul>
<li>Councils are asking the NSW Government to withdraw completely the Environmental Planning and Assessment (Infrastructure Contributions) Amendment Bill 2021 now before Parliament.</li>
<li>Councils acknowledge an ongoing need for improvements in the way local infrastructure is provided. However, this is not what has been achieved by the proposed changes and policy settings.</li>
<li>The NSW Government must undertake genuine consultation process on NSW Treasury’s Productivity Commission recommendations and co-design any changes or improvements to the contributions systems with Councils.</li>
</ul>

What are Councils are calling for?

<ul>
<li>The NSW Treasury’s Productivity Commission report said that contributions have a negligible impact on house prices and supply. We agree with the review’s analysis that the maximum price achievable for a new apartment or dwelling will be determined to a large degree by the broader housing market, with consideration of the unique characteristics of the property and its location.</li>
<li>These contributions reflect the true cost of that developments impact on broader society, including the infrastructure that supports them to become liveable. </li>
</ul>

Won’t infrastructure contribution increase house prices?

<ul>
<li>Councils will be dictated to on what and how they can spend local contributions by unelected government bodies.</li>
<li>The Government has initiated a separate process for IPART to review the essential works lists, and benchmark the costs for those particular works.</li>
<li>To further empower IPART – an unelected, government-appointed quango – to review and veto what constitutes ‘essential infrastructure’ across Local Government Areas, and how much can be spent on these works, is yet another weakening of elected representatives’ ability to make decisions for and in consultation with their communities.</li>
</ul>

How will these proposed changes weaken the role of Local Government and our communities?

<ul>
<li>Changes to the infrastructure contributions system were decided without undertaking genuine consultation with the public or Councils to understand the true impact.</li>
<li>The only consultation with local Councils that occurred was when the NSW Productivity Commission released an Issues Paper for formal consultation in July 2020. This was described as the ‘start of the conversation’ on how to fund infrastructure in NSW. It asked conceptual, high-level questions seeking to improve the current system of funding local infrastructure.</li>
<li>Unlike the Issues Paper, the NSW Treasury’s Productivity Commission final report included a range of specific and detailed recommendations that will have significant detrimental impacts on local Councils and their communities. These had not been previously raised or discussed with Local Government.</li>
<li>There was again no public consultation prior to the NSW Government’s acceptance of all the recommendations in March 2021, nor when the NSW Government introduced legislation by stealth tacked on to the Budget. </li>
<li>This has not been an open and participatory process as the Government has claimed. Councils should be involved in designing the changes to the contributions process that we run and use to deliver local projects. </li>
</ul>

The Government consulted with Local Government, why is this an issue now?

You can join the fight to protect your local infrastructure, or stop your rates being hiked.

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NSW Councils currently charge property developers to fund local infrastructure for our growing communities.

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NSW Councils currently charge property developers to fund local infrastructure for our growing communities.

Frequently asked questions

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