Posted on April 15, 2020 by Frances Tse and Lindsay Taylor

Proposed reforms to development contributions in NSW

The NSW Department of Planning, Industry and Environment has announced a suite of proposed reforms to the development contributions system in NSW.

The DPIE states that the purpose of the reforms are to ‘...fix the uncertainty of developer contributions to unlock new housing supply, deliver vital public infrastructure and boost investment in NSW. This plan includes a mix of quick wins and longer-term reforms.’

Longer term reforms

The longer term reforms involve a comprehensive review of the infrastructure contributions system by the NSW Productivity Commission. The Commission has been asked to:

• review the infrastructure contributions system to determine whether it meets the objectives of
  certainty and efficiency while delivering public infrastructure required to support development,
• make recommendations for reform aimed at delivering a principles-based system that delivers the
  infrastructure required to accompany growth, and
• identify legislative and regulatory changes necessary to implement the proposed reforms.

Specifically, the Commission has been asked to consider the following matters:

• certainty and transparency for communities, local government and developers,
• the extent that contributions rates reflect efficient costs and the principle that beneficiaries should
  pay,
• the major cost drivers in the contributions system and how these factors can be managed,
• the relationship with local government funding and service provision, and
• implications for the volume and nature of the housing market and the delivery of public open space.

It is expected that the Commission will publish a final report by the end of 2020.

More immediate reforms

More immediate changes are proposed to the following areas of development contributions.

Planning agreements

• The DPIE proposes to publish guidance material to provide more transparency around the planning agreement process.
• A draft planning agreements practice note and Ministerial direction have been published for public consultation.

Section 7.11 contributions plans

• The DPIE has identified ways to improve the review process for s7.11 contributions plans.
• A discussion paper of the proposed changes has been published for public consultation.

Section 7.12 flat percentage levy

• The DPIE has identified a set of potential criteria that can be used in assessing requests for a higher maximum percentage.
• The proposed criteria have been published for public consultation.

Special infrastructure contributions (SICs)

• The DPIE seeks to improve the transparency of the application of SICs.
• Draft SIC guidelines have been published for public consultation.

Amendments to the Environmental Planning and Assessment Regulation 2000

• The DPIE proposes to amend the EP&A Regulation to improve transparency in the infrastructure contributions system.
• The proposed amendments have been published for public consultation.

The Minister’s media release on the proposed reform can be found here.

Details of the NSW Productivity Commission’s comprehensive review of the infrastructure contributions system can be found here.

Details of the DPIE’s more immediate proposed reforms can be found here. Submissions on them will be open until Friday 12 June 2020.

More detailed posts on the above reforms will follow.

To discuss this post, please contact Lindsay Taylor on 8235 9701 or Frances Tse on 8235 9711.