Australia: Infrastructure contributions reform in Queensland - Part 1

Last Updated: 8 April 2012
Article by Ian Wright

Introduction

This article discusses the practical, legal and public policy issues arising from the reform of Queensland's infrastructure contributions regime which commenced on 1 July 2011. This article is based on a presentation to a seminar of the Planning Institute of Australia delivered in Brisbane on 26 July 2011.

Executive Summary

Infrastructure charges reform

The Queensland government has made significant changes to the infrastructure contributions regime that is to be applied by local governments and South-East Queensland distributor-retailers.

New infrastructure contributions regime

A new infrastructure contributions regime has been implemented through two legislative instruments:

Significant practical implications

The new infrastructure contributions regime has made significant changes to the infrastructure contributions powers of local governments and SEQ distributor-retailers including the following:

  • First, infrastructure charges capping has been implemented for infrastructure charges that may be levied by local governments and SEQ distributor-retailers.
  • Second, the general power of local governments to impose conditions for infrastructure contributions for development infrastructure has been removed and replaced with specific powers which are aligned with the powers of SEQ distributor-retailers (that are currently delegated to local governments). These powers increase in scope once a local government makes a priority infrastructure plan.

These changes will have significant practical implications for all stakeholders; local governments and their ratepayers, SEQ distributor-retailers and their customers as well as developers and landowners.

Themes of paper

This paper has four themes:

  • First, the paper analyses the capping of infrastructure charges for development infrastructure levied by local governments and SEQ distributor-retailers.
  • Second, the paper analyses the limitations imposed on local government conditioning powers for infrastructure contributions for development infrastructure.
  • Third, the paper considers the response of local governments and SEQ distributor-retailers to the new infrastructure contributions regime.
  • Fourth, the paper considers some of the practical implications from a legal and policy perspective that arise from the new infrastructure contributions regime.
  • Finally, the paper concludes with some observations on the public policy implications of the new infrastructure contributions regime that will be further developed in a paper to be presented at the forthcoming Planning Institute of Australia State conference.

Capped Infrastructure Charges

Implementation of reform

Turning then to the first theme of this paper, the capping of infrastructure charges. The new infrastructure contributions regime has implemented infrastructure charges capping through the following:

  • First, the Minister is given the power to make a State planning regulatory provision (adopted charges) (Adopted Charges SPRP)(See section 648B of the Sustainable Planning Act 2009 (SPA).)
  • Second, where the Minister has made an Adopted Charges SPRP, local governments and SEQ distributor-retailers are prevented from exercising their financial contribution powers under the previous infrastructure contributions regime. (See sections 345, 347, 848 and 880 of the SPA.)
  • Third, where the Minister has made an Adopted Charges SPRP, local governments and SEQ distributor-retailers may only levy their respective proportions of an adopted infrastructure charge. (See sections 648G and 755A of the SPA.)
  • Fourth, a local government may make an adopted infrastructure charges resolution which states an adopted infrastructure charge. (See section 648D of the SPA.)
  • Fifth, an SEQ distributor-retailer's board may decide matters about an adopted infrastructure charge. (See section 755KA of the SPA.)

Adopted Charges SPRP

The Minister is given power to make an Adopted Charges SPRP which contains the following:

  • The Adopted Charges SPRP must include an adopted infrastructure charges schedule containing maximum adopted charges, which may be stated for different development in different parts of local government areas. (See sections 648B(3) and 648B(4)(a) and (b) of the SPA.)
  • The Adopted Charges SPRP may include a priority infrastructure area for a local government area. (See section 648B(4)(c) of the SPA.)
  • The Adopted Charges SPRP may include the relevant proportion of an adopted infrastructure charge that may be levied by a local government and SEQ distributor-retailer, if agreement cannot be reached between them. (See sections 648B(4)(d) and 648G(2) of the SPA.)

Previous financial contribution powers excluded

Where the Minister has made an Adopted Charges SPRP, local governments and SEQ distributor-retailers are generally prevented from exercising their existing financial contribution powers. In particular:

  • Local governments without a priority infrastructure plan (or an infrastructure charges plan) cannot condition a financial contribution for development infrastructure under a planning scheme policy. (See sections 345, 347, 848, 863 and 880 of the SPA.)
  • Local governments with a priority infrastructure plan (or an infrastructure charges plan) cannot levy an infrastructure charge in accordance with an infrastructure charges schedule in the priority infrastructure plan (or infrastructure charges plan) or a regulated infrastructure charges schedule. (See sections 629, 863 and 880 of the SPA.)
  • SEQ distributor-retailers cannot levy an infrastructure charge in accordance with their SEQ infrastructure charges schedule. (See section 755K of the SPA.)

However, the financial contribution powers under the previous infrastructure contributions regime can continue to be exercised in respect of development in a declared master planned area, unless the local government has made an adopted infrastructure charges resolution which states that an adopted infrastructure charge is to be levied for that development. (See section 648E(c) of the SPA.)

Adopted infrastructure charge

Where the Minister has made an Adopted Charges SPRP and the existing financial contribution powers are excluded, local governments and SEQ distributor-retailers may only levy their respective proportions of an adopted infrastructure charge in respect of development that is not excluded by the Amended SPA.

An adopted infrastructure charge is the following:

  • for an adopted infrastructure charge levied by a local government:
    • if a local government has not made an adopted infrastructure charges resolution - the charge equivalent to the lesser of the maximum adopted charge in the Adopted Charges SPRP and an amount calculated under an existing planning scheme policy, infrastructure charges schedule in a priority infrastructure plan (including an infrastructure charges plan) or regulated infrastructure charges schedule (See sections 648A(1)(b) and 863 of the SPA.);
    • if the local government has made an adopted infrastructure charges resolution - the stated infrastructure charge (See section 648A(1)(a) of the SPA.);
  • for an adopted infrastructure charge levied by an SEQ distributor-retailer:
    • if an SEQ distributor-retailer's board has decided to adopt a charge - the adopted charge (See section 755KB(2) of the SPA.);
    • if an SEQ distributor-retailer's board has not decided to adopt a charge - the distributor-retailer's relevant proportion of the adopted infrastructure charge. (See sections 755KB(2) and 755A of the SPA.)

Respective proportions of an adopted infrastructure charge

An adopted infrastructure charge levied by local governments or SEQ distributor-retailers must be limited to their respective proportions of the adopted infrastructure charge.

The proportions of an adopted infrastructure charge for a local government and SEQ distributor-retailer is to be determined as follows:

  • if the local government has not made an adopted infrastructure charges resolution - the relevant proportion being the proportions agreed by the local government and SEQ distributor-retailer or otherwise stated in an Adopted Charges SPRP; (See sections 648G(2) and (3)(b) and 648B(4)(d) of the SPA.)
  • if the local government has made an adopted infrastructure charges resolution - the proportion that would have applied before the resolution took effect being either:
    • the proportions under the previous infrastructure contributions regime being an existing planning scheme policy, infrastructure charges schedule in a priority infrastructure plan (including an infrastructure charges plan) or regulated infrastructure charges schedule; or
    • the proportions agreed by the local government and SEQ distributor-retailer or stated in an Adopted Charges SPRP.
    • (See sections 648G(3)(a) and 755A of the SPA.)

Excluded development

Local governments and SEQ distributor-retailers must not levy an adopted infrastructure charge for the following development:

(See section 648E of the SPA.)

Adopted infrastructure charges resolution

As noted earlier, local governments may make an adopted infrastructure charges resolution which includes an adopted infrastructure charge.

The adopted infrastructure charge must accord with the following:

  • the maximum adopted charge in the adopted infrastructure charges schedule in the Adopted Charges SPRP (See section 648D(1)(a) of the SPA.);
  • the respective proportion of the adopted infrastructure charge for the local government and SEQ distributor-retailer. (See section 648D(2) of the SPA.)

Discount for existing usage

The adopted infrastructure charges resolution may also state that an adopted infrastructure charge is to be discounted to take account of the existing usage of trunk infrastructure by the premises to which a development relates. (See section 648D(1)(d) of the SPA.)

Trunk infrastructure planning matters

The adopted infrastructure charges resolution may also state the following trunk infrastructure planning matters if the local government does not have a priority infrastructure plan:

  • trunk infrastructure
  • the trunk infrastructure networks to which the adopted infrastructure charge applies
  • the standards of service for each trunk infrastructure network
  • the establishment cost of each network.

(See section 648D(1)(e) of the SPA.)

The specification of these trunk infrastructure planning matters is relevant to the following:

  • the assessment of development
  • the conditioning powers for land and work contributions for development infrastructure
  • the calculation of offsets against an adopted infrastructure charge for the provision of land and work contributions for trunk infrastructure.

Restricted infrastructure contribution powers

It is appropriate therefore to consider the second theme of this paper; the restrictions imposed by the new infrastructure contributions regime on the powers of local governments and SEQ distributor-retailers to impose conditions for infrastructure.

In general terms, the powers of local governments have been aligned with those of SEQ distributor-retailers (which are currently delegated to local governments) and gradually increase as a local government makes a priority infrastructure plan.

Conditions for financial contributions

Local governments and SEQ distributor-retailers have the following powers to condition financial contributions for infrastructure:

  • conditioned payment for development infrastructure under a planning scheme policy - however as already noted this power has been removed where an Adopted Charges SPRP is made. (See sections 345, 347, 848 and 880 of the SPA.)
  • conditioned payment for development outside a priority infrastructure area - this power applies where a priority infrastructure area is stated in a priority infrastructure plan or an Adopted Charges SPRP. (See sections 650 and 755R of the SPA.)
  • conditioned payment for development inconsistent with the planning assumptions in a priority infrastructure plan (including an infrastructure charges plan). (See sections 650 and 755R of the SPA.)

Conditions for land and work contributions

Local governments and SEQ distributor-retailers also have the following powers to condition land and work contributions for infrastructure:

  • conditioned land and work contribution under a planning scheme policy - however as already noted this power is removed where an Adopted Charges SPRP has been made. (See sections 345, 347, 848 and 880 of the SPA.);
  • conditioned land and work contribution for development infrastructure - this power applies where a local government has not identified trunk infrastructure in a priority infrastructure plan (including an infrastructure charges plan) or adopted infrastructure charges resolution (See sections 626A and 755J of the SPA.);
  • conditioned land and work contribution for non-trunk infrastructure - this power applies where a local government has identified trunk infrastructure in a priority infrastructure plan (including an infrastructure charges plan) or adopted infrastructure charges resolution. (See sections 626 and 755J of the SPA.);
  • conditioned land and work contribution for necessary trunk infrastructure - this power applies where the local government has identified trunk infrastructure in a priority infrastructure plan (including an infrastructure charges plan) or adopted infrastructure charges resolution. (See sections 649, 755Q and 863 of the SPA.)

Dedication notice for land contributions

In addition to conditioning powers, local governments and SEQ distributor-retailers also have the power to give a dedication notice for a land contribution for trunk infrastructure.

This power applies where the local government has identified trunk infrastructure in a priority infrastructure plan (including an infrastructure charges plan) or adopted infrastructure charges resolution. (See sections 637, 648K, 755L and 863 of the SPA.)

Application of infrastructure contributions powers

The effect of the new infrastructure contributions regime on the infrastructure contribution powers of local governments and SEQ distributor-retailers is summarised in the following table.

Infrastructure contributions powers of local governments and SEQ distributor-retailers

As is evident in the table, the new infrastructure contributions regime provides for the infrastructure contributions powers of local governments and SEQ distributor-retailers to gradually increase as they move from reliance on planning scheme policies to the following:

  • first, an adopted infrastructure charges resolution without identified trunk infrastructure;
  • second, an adopted infrastructure charges resolution with identified trunk infrastructure; and
  • finally, a priority infrastructure plan (including an infrastructure charges plan).

Footnote

1This power applies to development in a declared master planned area to which the local government has not made an adopted infrastructure charges resolution which states that an adopted infrastructure charge is to be levied for the development (section 648E of the SPA.).

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.

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Authors
Ian Wright
 
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