The Guardian 6 February, 2008
NSW councils rebel
against state planning dictatorship
Peter Mac
The NSW state government has announced its intention to resume Section 94 funds derived from fees imposed on developers in order to fund the provision of local services such as libraries and swimming pools. In response, last week 250 NSW councils and shires agreed to refuse to cooperate with the government, and to retain the hundreds of millions of dollars they already hold.
The government’s push is part of a highly controversial set of proposed amendments to the state’s planning laws, which would result in councils being largely stripped of their powers to block unpopular new development proposals, and the state planning minister gaining almost dictatorial powers. (See Guardian January, 23, 2008)
At the moment developments are contestable by councils and local residents on many grounds, which may include pollution, overshadowing, invasion of privacy, excessive noise or traffic, or damage to the streetscape.
However, under the proposed planning amendments, the government intends to increase the number of development applications which are dealt with by private assessors, who are independent of the council concerned and who are commissioned by the developers themselves.
Moreover, small to medium size development proposals could be approved by special planning panels which would be appointed by the government and which could override objections from the council or residents. Local residents would lose the right to object to projects involving home renovations up to $1 million in value.
In the case of very big developments, the proponent could appeal to a special Planning Assessment Commission, and if necessary to the Minister himself, in order to gain approval.
The amount of Section 94 fees, which currently provide councils with between $400 million and $600 million per annum, would be slashed. Income from the fees would become the property of the state government, which would make the decision as to how that money was spent.
An emergency meeting of local government leaders in Sydney last week declared that the amendments to the planning laws could send many councils bankrupt, and agreed to organise a media campaign against the planning law amendments.
Gina McCaffery, the Mayor of North Sydney and joint president of the Local Government and Shires Association, described the amendments to the planning laws as "The most dramatic changes that have ever been proposed in NSW". With regard to the loss of Section 94 development levies, she commented: "These funds are critical. This is not about building huge art galleries. This is about fundamental community infrastructure, what makes decent communities worth living in."
The development organisation, the Property Council of NSW, has of course supported the planning law amendments. The Executive Director of the NSW Property Council, Ken Morrison, stated that homeowners were overwhelmingly dissatisfied with the current planning approval process. He also implied that residents of new housing developments actually carry the entire cost of development levies, that this is unfair to the residents, and that the new planning laws would save them between $50,000 and $60,000 per dwelling.
In fact, developers bear the cost of the development levies, which average between $13,000 and $15,000 per dwelling according to Ms MacCaffery.
Developers’ statements on such matters ignore the fact that house prices are largely determined by a range of "supply and demand" factors, including the general level of income among prospective new home owners, the overall supply of new and existing housing, and the availability of housing for sale in alternative areas.
The majority of development fees come from the developers’ collective pocket. And that’s why they are so enthusiastically supporting the government’s amendments to the planning laws, which are clearly of benefit to the big developers in particular.
The developers have also claimed that funds from development levies have been diverted from the provision of council services, or have simply remained in council bank accounts. Councillor MacCaffery has replied that development fees are collected and held under strict rules, and that delays in spending the funds almost always result from staged development and the need for councils to save funds for their own building projects without going into debt.
The NSW Local Government and Shires Association considers that the state’s planning procedures are certainly the most complicated in Australia, and agrees with the government that undue delays in approving development applications should be overcome. The Association has drawn up a list of actions which the Government could take in order to overcome such problems, without, as they say, "compromising the character of neighbourhoods or community input".
In the meantime, the rebel mayors are gearing up for a fight. As Councillor MacCaffery recently stated: "The fact that councils have united on this issue is testament to how serious we believe it is. … We will not back down."