Infrastructure Contributions Review

In April 2020, the Hon. Rob Stokes MP, Minister for Planning and Public Spaces, requested the NSW Productivity Commissioner undertake a review of the infrastructure contributions system and report back with recommendations for reform.

The Commissioner completed his Review’s Final Report in November 2020. The Report made 29 recommendations to deliver an efficient system that is easy to understand, is transparent and consistent in its application, and provides greater certainty to market participants.

Priority recommendations included:

  • amending the local government rate peg to allow councils’ general rate income to increase with population

  • section 7.11 local contributions plans based on efficient costs of delivering development-contingent infrastructure

  • requiring local contributions plans be published prior to rezoning

  • retaining the simplicity of section 7.12 levies for specific circumstances, but with a higher maximum rate for residential development

  • introducing rigor in the application of section 7.4 planning agreements for both state and local infrastructure

  • broad-based regional contributions in Greater Sydney, Central Coast, Hunter, and Illawarra-Shoalhaven to fund State infrastructure associated with development (replacing special infrastructure contributions plans)

  • an additional transport infrastructure contribution, applied to new development capacity in the service catchments of major investments to help recover costs

  • a cost reflective biodiversity contribution

  • restoring cost reflective water charges for Sydney Water and Hunter Water

  • simplifying the system with digital tools, benchmark costs, and standardised templates.

In March 2021, the NSW Government accepted all 29 recommendations.

The Environmental Planning and Assessment Amendment (Infrastructure Contributions) Bill was presented to Parliament in July 2021. Over September and October 2021, IPART published reports on amendments to the local government rate peg, benchmark costs, and review of the essential works list. Also, in October 2021, the Department of Planning, Industry and Environment (DPIE) published draft regulations and guidance material.

NSW Parliament is scheduled to consider the legislation in early 2022.

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