HG Alert: Under pressure? Another extension for Councils to adopt new infrastructure charging arrangements - 21 Jun 2010

When the Sustainable Planning Act 2009 commenced on 18 December 2009, priority infrastructure plans for existing planning schemes, planning scheme policies for infrastructure, and conditions about infrastructure for particular applications were to cease on 30 June 2010. This timeframe reflected the comments made by Mr Sterling Hinchliffe, the Minister for Infrastructure and Planning, in his reply to the second reading on the relevant provisions when introducing the Sustainable Planning Bill - namely, "this is an instant where we need to make sure that the pressure stays on councils".

This deadline has now been extended by gazette notice published on 11 June 2010 to 30 June 2011.

As a result, an existing planning scheme does not have to include a priority infrastructure plan or replace a planning scheme policy about infrastructure prepared under section 6.1.20 of the repealed Integrated Planning Act 1997 for a further 12 months. Similarly, local governments may continue to impose conditions requiring contributions under planning scheme policies made under section 6.1.20 of the repealed Act for a further 12 months.

Local governments have had the ability to introduce priority infrastructure plans and infrastructure charge schedules since October 2004 (when significant amendments for infrastructure were made to the Integrated Planning Act by the Integrated Planning and Other Legislation Amendment Act 2003). Transitional arrangements under the repealed Integrated Planning Act originally set a deadline for its planning schemes to incorporate priority infrastructure plans by 31 March 2006. This was then extended to 30 June 2007, 30 June 2008 and 30 June 2010.

The current extension to 30 June 2011 takes the overall period for the introduction of priority infrastructure plans to five years, with only one local government, Gold Coast City Council, having introduced a priority infrastructure plan. This speaks volumes about the complexity of the new infrastructure charging regime, and the cost of implementing it.

Infrastructure charging has been further complicated by the transfer of bulk supply, bulk transport and manufactured water infrastructure to three new distributor retailers. This will be discussed in a separate article, which we will issue soon.

The State government announced recently that infrastructure charging would be reviewed by a taskforce established under the government's response to the Growth Management Summit. Under the heading Promoting liveable and affordable communities, a key initiative is:

"10. Establish an Infrastructure Charges Taskforce drawing (sic) to further reform local government infrastructure charges, including opportunities to simplify charges and provide greater certainty."

Rather than the 12 month extension being related to the work of this Taskforce, local governments simply weren't ready, and faced loss of conditioning powers if the extension had not been granted. The outcome of the Taskforce's enquiries and recommendations remains to be seen. The development industry's position is that there has been unprecedented growth in both the quantum and type of infrastructure charges under the changes introduced by the Integrated Planning Act, without the corresponding transparency, accountability and equity benefits intended by the Act. This has impacted significantly on the cost of developing land and affects housing affordability in Queensland. The industry is therefore seeking a cap on the level of charges, which appears to be one option the Taskforce is considering. In this regard, we note that the New South Wales government has recently imposed a cap of $20,000 for Council-imposed charges on new development (for levies known as section 94 contributions).

There are many interrelated issues we have encountered in advising clients on infrastructure charges that should be considered by the Taskforce. Examples of these include imposing conditions requiring the provision of parkland not identified in a priority infrastructure plan, which, if dedicated, is not creditable under the priority infrastructure plan, as well as the lack of uniformity and the general inequity of the crediting system under planning scheme policies and priority infrastructure plans.

For more information on infrastructure charges, please contact HopgoodGanim's Planning and Development practice.