Introduction

For a number of recent years, the property industry has been divided on the issue of infrastructure charging. On one side, developers have argued that the increasing costs of infrastructure charges have stood in the way of feasible and affordable development. On the other hand, those responsible for the provision of infrastructure, local governments and State government, have argued that without the contribution of infrastructure charges from developers, they are simply unable to adequately provide the infrastructure on which Queensland relies.

This debate resulted in the Queensland Government setting up an Infrastructure Taskforce, on 26 May 2010. The Taskforce emanated from the Queensland Growth Management Summit held on 30 and 31 March 2010.

On 9 March 2011, the Infrastructure Charges Taskforce delivered a report titled "Recommended Reform of Local Government Development Infrastructure Charging Arrangements". On 12 April 2011, the Queensland Government responded to the Taskforce's report by making a number of commitments about infrastructure charges. Three particularly relevant commitments are detailed below:

  1. maximum standard infrastructure charges
  2. deferred payment of infrastructure charges, and
  3. a moratorium on local-function of State infrastructure charges.

Standard Infrastructure Charges

The Government has committed to identifying maximum standard charges for particular uses. Some of the most relevant standard charges for the development industry are:

  • $28,000 per 3 or more bedroom dwelling;
  • $20,000 per 1 or 2 bedroom dwelling;
  • for commercial (bulk goods) – $140/m2 gross floor area (GFA);
  • for commercial (retail) – $180 /m2 GFA;
  • for commercial (office) - $140 /m2 GFA;
  • for industry uses – $50 /m2 GFA;
  • for high impact industry – $70 /m2 GFA;
  • a fixed rate of $10/m2 of impervious area for stormwater for commercial and industrial uses.

The standard charges are to be introduced in mid-2011 and will apply to all development applications lodged after that time.

So what about development applications that are current at the time the charges take effect?

When the standard charges are introduced

  1. any undecided development applications are to have the standard charges applied in lieu of those in other charging documents;
  2. if an appeal has been lodged about infrastructure charges, the standard charges are to be applied in the appeal; and
  3. the charges will not apply retrospectively to existing approvals.
  4. This means that for many development applications in the assessment system at the moment, it may well be worthwhile a developer either not having the application decided before the standard charges come in, or appealing any decision that is made before the charges come in, and then seeking the imposition of the standard charges in the appeal.
  5. In appeals where a developer is very keen to proceed with its development, the Planning and Environment Court may make an order that allows the development under the appeal to start even though it is under appeal. Such an order is only usually made when the matters under appeal do not affect the actual development. The classic example of this is an infrastructure charge, where the developer will commit to pay whatever charge is resolved in the appeal so that the Court can be satisfied that the development can start.

Deferred payment of infrastructure charges

The Government has also committed to introducing deferred payment of infrastructure charges.

This deferred payment would operate so that infrastructure charges for reconfiguration of a lot are not paid until the time of settlement of the sale of that particular lot. There will be some crafty drafting required to ensure that the payment of these charges is actually made.

This development ought to assist with the cash flow of development projects by deferring upfront costs.

This deferred payment mechanism is to be brought in by 1 January 2012.

Deferred payment of infrastructure charges

The Government has also committed to introducing deferred payment of infrastructure charges.

This deferred payment would operate so that infrastructure charges for reconfiguration of a lot are not paid until the time of settlement of the sale of that particular lot. There will be some crafty drafting required to ensure that the payment of these charges is actually made.

This development ought to assist with the cash flow of development projects by deferring upfront costs.

This deferred payment mechanism is to be brought in by 1 January 2012.

Moratorium on collection of State charges by local governments

The Government has committed to introducing a moratorium on the collection of local-function charges on its behalf. This will come into effect in mid-2011. A typical local-function charge is for the local function of a State-controlled road, which is collected by a local government on behalf of the Department of Transport and Main Roads.

Concluding comments

There is considerable scope for lower infrastructure charges on developments as a result of the Queensland government's response. Those with current development applications in the assessment system should be able to take advantage of these charges when the reduced charges are introduced in mid-2011.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.