Improving the infrastructure contributions system

The NSW Government has a plan to fix the uncertainty of infrastructure contributions, unlocking new housing supply, delivering vital public infrastructure and boost investment in NSW.

 

The plan involves two complementary processes.

 

The first, a review of the infrastructure contributions system, will assess how infrastructure is funded in NSW and look at matters in and beyond the planning system.

 

The second, more immediate process, is to identify and make improvements to the infrastructure contributions system that will make it more transparent and easier to use.

 

Infrastructure contributions

Property developers pay infrastructure contributions to the State government and councils, helping with the cost of providing the infrastructure needed to deliver great places. This helps fund public spaces, footpaths, cycleways, roads, stormwater drainage and other social and community facilities.

 

Contributions are collected using a suite of tools, including special infrastructure contributions, planning agreements and local 7.11 and 7.12 contributions. You can find out more about the infrastructure contributions system.

 

Review of the infrastructure contributions system

In April 2020 the Minister for Planning and Public Spaces asked the NSW Productivity Commissioner to conduct a comprehensive review of infrastructure contributions system in NSW (the Review). A key objective was to determine whether the system meets the objectives of certainty and efficiency while delivering public infrastructure to support development.

 

In November 2020, the NSW Productivity Commissioner provided his Final Report on the Review to the Minister for consideration. The report is publicly available at the NSW Productivity Commission’s website.

 

The report will form the foundation of reform to create more certainty about how infrastructure is funded and delivered to support new and existing communities.

 

The NSW Productivity Commissioner’s report contains 29 recommendations to: 

• Move towards a principles-based infrastructure contributions system based on certainty, efficiency, simplicity, transparency and consistency;
• Enhance the capacity of councils to support growth;
• Strike a balance between efficiency, simplicity and certainty for local infrastructure contributions;
• Develop a stronger funding base for State and regional infrastructure;
• Make the system more consistent, transparent and easy to navigate; and
• Better align infrastructure contributions and strategic planning and delivery.

 

The Government will now consider the report’s recommendations and seek the input of stakeholders in developing a roadmap to implement system reform. A Government response is expected to be released in early 2021.

 

Infrastructure contributions system improvements

While the NSW Productivity Commissioner’s review was underway, the department sought feedback on a number of proposed system improvements to the infrastructure contributions system to make it more transparent and easy to use.

 

They respond to a range of recent planning system and governance reviews, including the Kaldas Review.

 

Consultation and feedback

The proposed improvements were on public exhibition from 15 April 2020 until 12 June 2020.

 

The department is currently reviewing and considering all submissions received.

 

Your feedback will help inform critical improvements to the infrastructure contributions system in NSW.

 

To find out more about the proposed changes, follow the links below:

• Draft planning agreements policy framework
  Proposed guidance material to provide more transparency around the planning agreement process. It will reinforce the fact that planning agreements are to fund innovative solutions to the community's infrastructure needs.

 

• Improving the review of local infrastructure contributions plans discussion paper
  Proposed efficiency reforms to the review process for section 7.11 contributions plans, which will improve the overall function and application of the funding mechanism and support councils in planning for the infrastructure needs of their growing communities.

 

• Criteria to request a higher section 7.12 percentage discussion paper
  Proposed criteria to provide clarity and guidance on when higher percentage rates for section 7.12 contributions may be appropriate, particularly for centres and economic corridors, to support councils in creating great places.

 

• Draft Special Infrastructure Contributions (SIC) guidelines
  Proposed guidelines to improve transparency around the purpose and function of SICs.

 

• Proposed amendments to the EP&A Regulation
  Proposed changes to improve transparency through more detailed reporting on contributions by councils and planning authorities.

 

For more information

For further information, please see our Frequently Asked Questions (PDF, 94 KB), or phone 1300 305 695. If you require translation assistance, please call 131 450.

 

You can also subscribe to our newsletter for regular updates from the Department.