Coffs ahead of the game on developer cash
THERE is hope that delaying developer contributions for critical infrastructure will help drive jobs creation, but not everyone is excited.
A ministerial directive issued by NSW Planning Minister Rob Stokes has meant developers with projects worth more than $10 million will be able to defer their contributions until much later in the development process.
Development contributions are payments made to councils to provide infrastructure, public amenities and services and the changes were introduced to encourage more development and create jobs in a flagging NSW economy.
While the move was met with caution from Local Government NSW, it was business as usual for Coffs Harbour City Council, who already have policies with similar objectives.
CHCC's Deferred Developer Contributions Policy has been in place since 2017 and enables a delay of for up to 12 months.
In February, it introduced a new 'Enhanced Deferred Payments Incentive' as part of a broader policy to encourage "business investment and reinvestment in the regional economy, when the investment would not otherwise occur".
Developments have to result in "significant economic gain" and allows commercial premises with charges of $20,000 or more to delay payments from anywhere between two to six years.
In response to Mr Stokes' changes, LGNSW issued a statement warning the changes could delay essential infrastructure needed for coping with the increased demands from new developments.
And president Linda Scott said it could put some councils under funding pressure.
"Developer contributions go towards critical infrastructure such as new footpaths, roads, parks and playgrounds that are needed when new developments bring additional people to live in local communities," she said.
"These new rules defer payment of developer contributions to much later in the development process. That means existing communities will potentially have to carry the burden of paying for the infrastructure costs to support new developments until the payments are made.
Under the new rules, developers that previously paid contributions when seeking construction approvals could now delay their payments until years down the track when the occupation certificate is issued.
"Councils already have the power to be flexible about the timing of developer contribution payments, and they make these decisions locally, in the public interest, balancing the needs of economic investment in an area with wider public benefit for existing communities," she said.
When asked about the possibility of infrastructure being delayed, a Department of Planning, Industry and Environment spokesperson said the new rules did not change any obligations on developers to help pay for public infrastructure.
"The NSW Government is encouraging greater investment in large-scale developments, supporting construction jobs by allowing deferrals of state and local infrastructure contributions," the spokesperson said.
"Impacts of this direction on council revenue are expected to be small and other measures are in place to assist councils in delivering their local infrastructure plans in a timely way.
"Councils across NSW already hold nearly $3 billion in unspent contributions, and the Government is working with councils to put these funds towards important public projects.
The department made it clear the change was temporary and all money would still have to paid before occupation of new developments.
"Developers will not be able to obtain an occupation certificate without having met their contributions obligations," the spokesperson said.
"The Government has strengthened the rules to ensure certifiers do not issue occupation certificates for developments that have not yet paid their contribution, which provides councils with assurance that contributions revenues are simply deferred and not lost."