New South Wales

NSW Councils urge government to reverse decision to cap developer contributions

NSW councils are calling on the Premier Kristina Keneally to revoke a State Government decision to place a $20,000 cap on developer contributions by this Friday, and commit to working with councils to deal with the problems of housing affordability in NSW.

The calls came today in a meeting of the Local Government and Shires Association of NSW (LGSA) and mayors, general managers and planning staff from high growth councils across the state, including Blacktown, Camden, The Hills Shire, Hawkesbury, Campbelltown, Holroyd, Pittwater, Ku-ring-gai, Penrith, Wollongong, Lake Macquarie, Liverpool, Wyong, Maitland and Leichhardt.

"Councils in these growth areas are facing massive shortfalls in infrastructure funding running into the billions of dollars," says President of the Local Government Association Cr Genia McCaffery.

Cr McCaffery said the decision to cap developer levies will result in "dramatic" rate rises and deferral or cancellation of local infrastructure projects.  She said that revoking the decision is not an "unreasonable ask" and that a failure to revoke the decision will result in councils "undertaking a very aggressive media campaign."

President of the Shires Association, Cr Bruce Miller, said that local government wants to work with the State Government to improve housing affordability and supply, but that placing a cap on developer contributions was not the way to do it.

"It will starve councils of much needed funds, and deprive new communities of basic recreation and community facilities that are taken for granted in existing suburbs. We need to investigate more effective ways of addressing the land supply and housing affordability issues that will benefit councils and communities - not just developers," Cr Miller said.

The changes to developer contributions were announced earlier this month and capped the levy imposed on developers that is used to fund community infrastructure at $20,000 a dwelling. The rationale of the change was to reduce the price of new housing. The levies, known as Section 94 contributions, are levied by councils on developments in their area in order to pay for community facilities.

If a council wants to levy more than $20,000 per dwelling, it can apply to the Independent Pricing and Regulatory Tribunal.

Earlier in the month, the Property Council of Australia welcomed the government's changes to developer contributions. Property Council of Australia NSW Acting Executive Director Glenn Byres said: "The package will help drive housing supply, introduce greater cost certainty for home building companies and encourage financial discipline among councils."

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