Mayors fight government plan to reform infrastructure contributions

Picture: Simon Bennett
Picture: Simon Bennett

More than 20 councils across Sydney, including Liverpool, Campbelltown, Sutherland and Bayside, have banded together to fight a plan which could increase rates for their residents.

The twenty-three metropolitan councils launched a campaign demanding the NSW Government abandon its plan to divert local government funds into state revenue.

The NSW Government is attempting to take up to half of local government developer contributions funds under the proposed Environmental Planning and Assessment Amendment (Infrastructure Contributions) Bill 2021.

These funds are used by councils to help pay for local infrastructure projects such as playgrounds, sports fields, libraries and parks.

The councils have published an open letter in the Sydney Morning Herald and Daily Telegraph, to raise public awareness of the 'detrimental impact' this levy change could have on their communities.

The councils argue that developer levies should be spent where they are raised to ensure new development is accompanied by appropriate investment in the surrounding area.

"As you know, the NSW Government imposes housing targets onto local councils to accommodate Sydney's population growth," the letter states.

"And in turn, our communities rely on our councils to deliver the essential facilities and infrastructure needed to support this growth, and make people's lives and local environments better.

"This infrastructure includes everything from roads and footpaths, to sports fields, parks and netball courts, to playgrounds, pools and libraries.

"We can only deliver these facilities because we are able to collect contributions from property developers to help fund them.

"However, the changes now being planned by the NSW Government will divert a large proportion of these developer contributions away from councils and into a Treasury-controlled fund, with no clear accountability or transparency of how it will be spent."

The letter states that the government is proposing that councils raise their rates to make up the revenue we are losing.

"This breaks the nexus between where contributions are made and where they are spent. This threatens the ability of every council to deliver much-needed new community facilities, and transfers that burden onto our ratepayers," the letter states.

"Premier, you are forcing us to choose between cancelling projects and raising rates. And this is at a time of pandemic-induced financial hardship for many people in the state.

"On behalf of our communities, we urge that you withdraw the changes currently before Parliament."

Modelling by the Centre for International Economics (CIE) estimates that the proposed Bill would give the NSW Government an additional $793million per year in revenue (averaged over 20 years).

Liverpool mayor Wendy Waller said the potential detrimental impact of these legislative changes would be felt strongly in NSW's fastest growth areas, like Liverpool and Macarthur, for decades to come.

"Leaving councils with no option but to increase their rates to cover the revenue shortfall is not the answer," she said.

"Our estimates suggest a significant annual rise would be needed to cover the shortfall if this Bill progresses - an increase our ratepayers would simply not be able to afford."

The 23 signatorie councils are directing communities to visit to find out more.

The signatories are: Bayside, Blacktown City, Blue Mountains, Burwood, Campbelltown, Canterbury Bankstown, City of Sydney, Cumberland, Hawkesbury, Hunter's Hill, Inner West, Lane Cove, Liverpool, Mosman, North Sydney, Penrith, Randwick, Ryde, Strathfield, Sutherland Shire, Waverley, Willoughby and Woollahra.