Q&A: Reforming Infrastructure Contributions in Nsw | Legal Wise

Breellen Warry, Partner, Georgia Appleby, Associate, and Elizabeth Reed, Graduate Lawyer, at Maddocks share their insights regarding infrastructure contributions reforms. Hear more from Breellen when she delves into this topic in the upcoming Environment and Planning Law: The Reforms Unravelled seminar on Wednesday 16 March 2022 at Cliftons – Spring Street, Sydney.

Legislation has been introduced to the NSW Parliament as part of a package of infrastructure contributions reforms.

The reforms will involve significant amendments to the infrastructure contributions system under the Environmental Planning and Assessment Act 1979 (EP&A Act) and the Environmental Planning and Assessment Regulation 2000.

In this Q&A, we take a brief look at the proposed reforms.

Why is the infrastructure contributions framework in NSW being reformed?

In early 2020, the NSW Productivity Commission was asked to undertake a review of the infrastructure contributions framework in NSW. That review found that the current system is overly complex, unpredictable and imposes undue administration costs. It also identified that the contributions being collected were not being used to deliver services in a timely and coordinated manner.

The Productivity Commissioner made 29 recommendations for reform, which were subsequently accepted by the NSW Government. These reforms are intended to simplify the process, increase transparency, and better capture contributions to deliver essential infrastructure.

How are the reforms being made?

The Environmental Planning and Assessment Amendment (Infrastructure Contributions) Bill 2021 (Bill) was introduced to NSW Parliament in June 2021. The Bill proposes major amendments to Part 7 of the EP&A Act and is currently before the legislative council.

Further documents forming part of the reform package were released for public consultation from 28 October 2021 to 10 December 2021, including the Environmental Planning and Assessment Amendment (Infrastructure Contributions) Regulation 2021.

What are the key aspects of the reform package?

The reform package seeks to make extensive changes to both the State and local infrastructure contributions framework.

For State contributions, the NSW Government is proposing to do away with the existing Special Infrastructure Contributions and will instead introduce a new Regional Infrastructure Contribution (RIC). The RIC framework will impose a flat broad-based charge for residential, commercial and industrial development across 4 key regions – Greater Sydney, Lower Hunter, Illawarra-Shoalhaven, and Central Coast.

For local contributions, key changes include introducing a:

• new ‘land value contribution’, which is a new type of s 7.11 contribution that is to calculated as a percentage of land value and is to be paid on sale or development of the land, whichever occurs first; and
• ‘local levy condition’ under section 7.12 of the EP&A Act, which rather than a flat percentage levy (as is the case now), will be a fixed dollar amount (which will vary according to development type and location and will be indexed and adjusted each quarter).

The Bill also proposes some changes to the planning agreement provisions, namely increased requirements for community participation (through changes to exhibition requirements, for example) and consultation with interagency committees.

When will the new infrastructure contributions system start?

If the Bill is passed, the reforms are expected to commence on 1 July 2022.

The proposed reforms seek to significantly change the way in which contributions are levied in NSW and will impact proponents and consent authorities alike. It is therefore important for authorities, developers and their advisors to understand the changes and the implications for themselves, their industry and their clients.

Breellen specialises in all areas of planning and environmental law. Breellen advises local and State Government clients, in addition to a range of private sector clients, including within the development industry and waste and education sectors. As well as working with private practice, she has worked as an inhouse counsel for a number of government agencies in NSW and in the UK. Breellen has particular expertise in providing practical and strategic legal advice on Federal and State planning and environmental approvals processes. Connect with Breellen via LinkedIn . 

Georgia Appleby is an Associate in the Public Law team at Maddocks, with a particular expertise advising Government and private clients on environmental, planning and local government issues. Her main areas of speciality are development assessment and approval pathways, planning and environmental policy and legislative reform, infrastructure contributions, waste and pollution, acoustics, biodiversity and heritage. She also appears in the Land and Environment Court (including as an advocate) in development appeals, judicial review and civil enforcement proceedings.Connect with Georgia via LinkedIn . 

Elizabeth Reed is a Graduate Lawyer in the Public Law team at Maddocks. During her time as a Graduate Lawyer, Elizabeth has gained experience in legal matters involving planning, local government issues and administrative law for both Government and private clients. In particular, she has worked on matters involving development appeals, merits review and compulsory acquisitions. Connect with Elizabeth via LinkedIn