The limitations on councils’ ability to raise revenue and the State Government imposed caps on developer levies have led to a shortfall in funding for essential infrastructure.
Penrith City Council in NSW has been vocal in its criticism of a system that unfairly burdens ratepayers, and has recently gained the support of the Housing Industry Association (HIA) and Independent Pricing and Regulatory Tribunal (IPART). Both bodies have called on the NSW Government to find a workable solution and make suburbs functional and liveable.
Infrastructure renewal and maintenance has been identified as the key to healthy suburbs and, with a $10 billion backlog of works in NSW alone, it is not surprising that Local Governments are beginning to speak up. Penrith City Mayor Greg Davies says, “It seems that each week more experts are agreeing with this Council’s view that State Government policies need to support housing supply not hinder it. The former State Government legislation to cap developer levies, currently still in force, is unworkable for ratepayers, developers and communities.”
According to Cr Davies, the $30,000 cap on developer levies, inherited by the present State Government, will lead to “an infrastructure funding gap of some $55 million for Penrith City and its community in just the Werrington Enterprise Living and Learning Precinct alone”. And this means that parks, sporting fields, footpaths and other essential community facilities and infrastructure will lack the necessary maintenance and/or development. “If we continue with this ridiculous cap legislation, ratepayers throughout the City could face paying massive rate increases to pay for this funding shortfall,” comments Cr Davies.
The response from IPART to the current situation stated that the cap on developer levies leaves councils “with uncertainty about how they will fund infrastructure for new development, which has the potential to slow down development”. HIA also supported Penrith City Council’s position on March 9th, saying, “HIA has been lobbying the NSW Government to seriously rethink the consequences of inequitable levies to fund community infrastructure that exacerbate the ongoing low levels of building in the state and negatively impact on housing affordability”.
Cr Davies acknowledges the support and recommendations of the industry bodies, and the fact that the NSW Minister for Planning has said that things need to change, however “we need urgent action because the existing policy has now slowed lot supply for more than a year, all the time adding to land prices and impacting on affordability”.
“Penrith City Council has lobbied vigorously for change. We have stood up for the community because we will not accept new suburbs without important facilities that are provided to older areas or inner-metro areas.”
