In a newly released circular, the NSW Government Department of Planning has proposed amendments to limit the types of community infrastructure for which councils can levy developers.
The State Government had previously announced its intention to overhaul infrastructure charges for new land release areas, but circular No. PS 07-018 (Circular) refers to proposed changes that will affect section 94 and 94A infrastructure contributions for all development.
The Circular states that councils will only be able to impose levies under section 94 and 94A for:
- Local infrastructure costs.
- Local bus infrastructure.
- Local parks that service a development site or precinct.
- Drainage and water management expenses.
- Land and facilities for local community infrastructure that services a development site or precinct.
- Land for other community infrastructure and recreation facilities.
The Circular states that 'all other costs, such as facilities benefiting existing communities (including council or district-wide community and recreation facilities) will no longer be permitted to be recovered through [section 94 or 94A] contributions'.
The Circular also states that section 94 and 94A contributions will no longer be permitted to fund land acquisition for riparian corridors.
It would appear that the State Government will attempt to make these changes by requiring all contributions plans to be formally approved, possibly by the Minister or the Director-General and by requiring contributions plans to be made in accordance with new Ministerial Guidelines. It is possible that these changes could be made without amending the Environmental Planning and Assessment Act 1979.
Although the Circular does not go into detail, it appears that, if the changes are made, councils will no longer be able to use sections 94 or 94A to levy for:
- Local community facilities such as libraries and child care centres, other than in relation to the land on which they are constructed.
- Improvements to existing parks.
- Facilities that service more than just one development site or development precinct - that is, facilities that meet demand generated by multiple small developments across a wider area.
These changes may have significant impacts on those local councils that are experiencing a great deal of infill development, as they may not be able to levy for many of the facilities and services required to meet the demand generated by such development, particularly if those facilities have 'district' or 'regional' catchments.
Other changes are also proposed in relation to the way in which section 94 or 94A infrastructure contributions are collected and held.
The Circular proposes that any local environmental plan, planning agreement or section 94 or 94A contributions plan made before 12 November 2007 will continue to operate as if the proposed changes were not made. Once the mechanisms to implement the measures set out in the Circular have been finalised, additional transitional measures will also be put in place.
The full impact of these proposed changes will not be known until we see the detail as to how they will be implemented and what exactly will be affected. We will report further on any progress on the proposed changes.
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