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NSW Department of Planning, Industry and Environment
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Improving the infrastructure contributions system

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

 

The plan involves two complementary processes:

  • The first, a review of the infrastructure contributions system by the NSW Productivity Commissioner, has investigated how infrastructure is funded in NSW.
  • The second, more immediate process, improvements to the infrastructure contributions system to make it more transparent and easier to use until broader reform is implemented.

 

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. To find out more, please visit the infrastructure funding policies webpage.

 

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 forms 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 is considering the report’s recommendations and is seeking stakeholder input in developing a roadmap to implement system reform. A Government response is expected to be released in 2021.

 

Infrastructure contributions system improvements

While the NSW Productivity Commissioner’s review was underway, the department sought feedback on five proposed system improvements to the infrastructure contributions system.

 

The proposed system improvements respond to a range of recent planning system and governance reviews, including the Kaldas Review. The following three have been released: 

 

  1. Planning agreements practice note
    A new practice note has been released to provide greater transparency in the planning agreement process. The practice note reinforces that planning agreements should be used to fund innovative infrastructure solutions to meet community needs.

  2. Section 7.12 fixed development consent levies practice note
    A new section 7.12 practice note has been released including criteria to guide councils on where higher than the standard maximum 1% percentage section 7.12 levy may be appropriate, supporting councils in creating great places.

  3. Environmental Planning and Assessment (EP&A) Regulation amendment
    The Environmental Planning and Assessment Regulation 2000 has been amended to improve transparency and accountability in the way infrastructure contributions are received and spent in NSW. The amending instrument is available on the NSW Legislation website.

    The changes include:
    - new reporting and online publication requirements for councils and planning authorities
    - amendments to provide clearer direction and certainty for planning authorities in drafting planning agreements
    - minor amendments to update some existing provisions.

 

For more detailed information on these recent improvements, you can read the following Frequently Asked Questions (FAQs):

 

The following system improvements are expected to be considered in the context of broader system reform:

  • Local infrastructure contributions plans - proposed reforms for section 7.11 contributions aimed at improving how this mechanism works to deliver the local infrastructure communities need.
  • Draft Special Infrastructure Contributions (SIC) guidelines - guidelines to improve transparency around the purpose and function of SICs.

 

Consultation and feedback

The proposed changes were placed on public exhibition from 15 April 2020 until 12 June 2020. The department has reviewed and considered all submissions received. A report summarising submissions received and the department’s response is now available.

 

Read the submissions report

 

To find out more about the exhibited system improvements follow the links below:

 

More information

For further information on recently released infrastructure contributions system improvements, please refer to the following pages:

Additionally you can call our Information centre on 1300 305 695. If you require translation assistance, please call 131 450.

 

Page last updated: 12/02/2021

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