Council fights move to siphon off funds into State’s coffers

LGNSW president Linda Scott.

The local council is fighting to have the State Government withdraw a Bill from the NSW Parliament, holding grave concerns over the future of community infrastructure if the Government proceeds with planned changes to infrastructure contribution rules from developers.  

Led by then Treasurer and now Premier Dominic Perrottet and Planning and Public Spaces Minister Rob Stokes, the proposal involves changes to planning rules, including rules governing developer contributions, through the Environmental Planning and Assessment Amendment (Infrastructure Contributions) Bill.

The Bill was introduced into NSW Parliament in June, with the NSW Budget.

At last week’s council meeting in Gundagai, Cootamundra-Gundagai Regional Council general manager Phil McMurray spoke on the reforms, saying the council holds “serious concerns” over the Bill.

“There’s the chance that monies that are generated from development in our own area could end up not being made available to allow us to build infrastructure that’s dependent in our own communities, and that’s a real concern,” Mr McMurray said.  

“The recommendation that the mayor [put before councillors] follows the pretty strong view of Local Government NSW and the other councils around the State about how dire the consequences could be if this Bill goes through.” 

Mayor Abb McAlister called on councillors to support Local Government NSW’s (LGNSW) campaign on the infrastructure contributions reforms “to protect local government from any amendments to infrastructure contributions which leaves councils and communities exposed to expending ratepayer funds on new infrastructure made necessary by new development, currently the responsibility of developers”. 

“Councils support efforts to reduce complexity, cut red tape and improve transparency and equity. However, implementation of the reforms will have far reaching financial implications for our council and community that are unknown at this stage and there is concern that we may be worse off under the reforms,” Cr McAlister said.

“These reforms may force our council to delay or completely remove projects from our expenditure plan with a detrimental impact not only on community wellbeing and participation in civic life, but also crucially on job creation.” 

The mayor said developer contributions can assist the council in planning and funding a range of infrastructure projects; everything from roads and footpaths, playgrounds, public toilet upgrades, cycleways, community facilities and projects such as the Cootamundra Swimming Pool, the Wallendbeen Silo Art Project and the Old Gundagai Town Site. 

“Councils need to be in a position to deliver quality infrastructure and open spaces if they are to attract homebuyers, housing and commercial development and business investment, and these reforms put this at risk,” he said. 

“Councils also object to the Government’s decision to tie reform of the rate peg to cater for population growth to reductions in infrastructure contributions. Reform of the rate peg is required independent of changes to contributions. This presents a concerning cost shift from developers onto local government and ratepayers. 

“It is premature to push forward with this legislation while so much of the infrastructure reform agenda remains unknown.  

“Local Government NSW has been advocating this position on our behalf and has met with the Minister for Planning and Public Spaces, Rob Stokes, on several occasions to stress that councils and their communities must not be worse off under any reforms.” 

The Bill could: 

• Reduce the type of community infrastructure that could be funded by developer contributions;

• Siphon-off developer contributions into four regional funds, with no guarantees that the money would be funnelled back into projects in the local areas where the funds have been collected; 

• Dictate to councils on what and how they can spend their contributions (through Ministerial directions); and 

• Enable future governments to make further potentially-damaging changes to the system without parliamentary scrutiny.

Other potential impacts include council contributions being significantly reduced while State Government revenue (via regional contributions) will increase.

Councils will be forced to either forego the infrastructure or raise rates, with deputy mayor Dennis Palmer saying that is the last thing the Cootamundra-Gundagai community will stand. 

“We cannot put anymore impost on our community,” Cr Palmer said. 

“I am totally against this.”

The council will now call on the NSW Government to undertake further consultation with the local government sector on any proposed reforms to the infrastructure contributions system. 

LGNSW made a submission to a parliamentary inquiry, opposing the passage of the Bill. 

LGNSW president Linda Scott spoke at the inquiry hearing on July 16, alongside other local government representatives to present a united front on this issue. 

LGNSW says it will continue its advocacy efforts on the council’s behalf and is asking councils across NSW to add their voice in calling on the NSW Government to withdraw the Bill from the NSW Parliament.

Cr Scott said the Bill was “deeply flawed” and threatened to reduce critical contributions paid by developers towards the costs of vital community infrastructure as communities grew and more housing was developed.

“COVID has highlighted the importance of community access to public parks, footpaths and vital community infrastructure that local governments provide,” Cr Scott said.

“The State Government’s dangerous legislation threatens to take us back to the bad old days of suburbs with no drainage, and communities with no parks, by allowing developers off the hook from providing essential infrastructure and services to ensure liveable communities for our future.

“As well as funding vital infrastructure like roads, roundabouts, drainage and footpaths, those funds help pay the bill for the new parks, pools, playgrounds, childcare centres, libraries, and more, to meet the expectations of our communities today.”

She said the legislation unfairly punishes NSW communities by diverting funds councils need to serve their communities to the State Government’s reserves, while cutting the contributions made by profit-taking developers. 

“Councils will be forced to cancel infrastructure needed to support increased demands brought about by development or to raise rates, impacting those who can least afford it,” Cr Scott said.

The Bill was rejected by the Upper House Parliamentary Inquiry, which recommended the Government withdraw it and consult with councils before making changes.

“While the Minister has acknowledged the committee’s recommendation, there is no guarantee that the Bill will be withdrawn from Parliament or substantially re-written to address councils’ concerns,” Cr Scott said.

“The Bill must be withdrawn and substantially re-written.

“LGNSW and local governments are working together to fight any attempt to reduce infrastructure and services to our communities.”


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