Sydney Infrastructure Funding

10 June 2022

Sydney Infrastructure Funding

(Private Members' Statement, 9 June 2022, Legislative Assembly, NSW Parliament)

Development must always correspond with high‑quality infrastructure that meets the needs of residents, workers and visitors. Without it, neighbourhoods become wastelands of disadvantage and local residents are more likely to raise objections to proposals. Access to bike paths, footpaths, parks, libraries, community centres, pools and childcare centres makes a neighbourhood liveable and ensures it can cope with increased density. Councils provide these infrastructure services in response to new development using contributions from developers. But the New South Wales Government is planning to change the way these contributions are collected and allocated through a bill that has already passed this House—snuck through as a budget appropriation bill last year—and is under consideration. The proposal will radically change how infrastructure is planned, funded and delivered in my and other electorates.

While the Government has promised that these planned changes will not leave any council worse off, councils across Sydney, including in my electorate, inform me of massive cuts to revenue that will prevent them delivering the infrastructure essential for planned population growth. Woollahra Municipal Council reports that it will lose nearly $50 million over the first 20 years of operations and the City of Sydney will lose $193 million over the first five years, reaching a loss of $650 million by 2040. Under the proposed scheme, contributions collected in densely populated areas can be redirected for Regional Infrastructure Contributions to spend elsewhere in the State, putting local amenity, safety and economic viability at risk, along with the wellbeing of residents and workers.

New urban infill development creates significant pressure on infrastructure, essential facilities and services, and that will always require local infrastructure delivery. The City of Sydney has also identified significant flaws in the modelling that was used to calculate regional infrastructure contributions that fail to properly reflect the projected growth in homes, work and tourism expected in the inner city. There are plans to further restrict the types of infrastructure that can be funded from developer contributions to what are considered to be essential works, with social infrastructure significantly restricted. The approach ignores the fact that different locations have very different needs and that facilities like libraries are often what attract people to an area. Social infrastructure is regularly used by developers to advertise new builds.

Proposed new calculations for contributions would make the system much more complex, thereby increasing the potential for disputes among councils and developers. Exemptions from contributions are proposed for schools, which already do not pay rates but put significant pressure on infrastructure, including transport and recreation. Woollahra council points out that there are seven large non‑government schools in its local government area that regularly propose upgrades and expansions. The infrastructure provided by councils is not provided by any other level of government. In the case of child care, no level of government has been identified as responsible, but councils have responded to growing demand by building and running world‑class centres.

Contributions make up 22 per cent of the City of Sydney's financial plan and would make up significant revenue for most inner‑city councils. The city is implementing significant growth in the inner city, and its capacity to do this responsibly should not be constrained. The changes put at risk the city's ability to support Australia's global city, which is a major contributor to the New South Wales economy. Councils have been subject to cost‑shifting policies over decades that have increased their responsibilities and operating costs. They have foregone revenue to deal with the pandemic to help businesses stay afloat and are investing heavily in economic recovery. Many councils now also have significant clean‑up and rebuilding costs as a result of the devastating floods. With the cost of building new and upgrading aging infrastructure increasing, it is difficult to see how the infrastructure we need and have come to expect with new population density will be built.

At a time when we need infrastructure such as bike lanes to reduce greenhouse gas emissions, and infrastructure such as flood‑resistant drainage systems and water recycling to survive the impacts of climate change, we should not be thwarting councils' capacity to deliver this. Allowing councils to charge higher rates to cover the loss in revenue just transfers the cost to ratepayers. The rate increase needed to cover the shortfall has been estimated to be as high as 13 per cent annually. Ratepayers will suffer from the loss of adequate infrastructure and significant rate rises. Proposed infrastructure contribution changes provide no benefit to community or industry and will not result in any housing affordability improvements. The Lord Mayor of Sydney, Clover Moore, and I recently met with the Treasurer to urge him not to proceed with the bill. I call on the Government to withdraw plans and work with councils to deliver high‑quality infrastructure across the State.

Let's work together to celebrate and protect our great city!

 

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