By Angela Dorizas

The New South Wales Government has announced that it will retain rate pegging, with charges to be set by the independent pricing regulator.

Rates will be set by the Independent Pricing and Regulatory Tribunal (IPART), with a cap of $20,000 a lot for council charges on new development (Section 94 contributions).

The changes form part of the NSW Government’s $44 million strategy to increase housing construction across the state.

Premier Kristina Keneally and Minister for Planning Tony Kelly said the Comprehensive Housing Supply Strategy will deliver additional land releases, lower levies and faster planning decisions.

”These reforms are necessary to increase housing affordability and kick start housing construction,” Ms Keneally said.

In addition to the $20,000 cap, councils will be required to limit contributions in their Section 94 plans to essential infrastructure that is necessary for the development, such as road works and stormwater management.

Special rate variation requests by councils, including variations for essential and community infrastructure, will also be determined by IPART.

“This will provide a more transparent process for rate setting and give councils the ability to fund important local infrastructure,” Mr Kelly said.

“Councils have been telling me that their ability to provide local infrastructure has been hampered by their inability to fund it - which is why Section 94 charges have grown so disproportionately high.

“The Government is now delivering on that request.”

Policy on the run

The NSW Local Government and Shires Associations have slammed the changes as “policy on the run”.

Local Government Association president, Genia McCaffery, said councils were “furious” with new policy and the lack of consultation.

”We’ve had discussions with the government about the need to improve local infrastructure financing, but under no circumstances did we agree to any of these new arrangement,” Cr McCaffery said.

”The policy starts now – with no consultation on details and absolutely no transitional arrangements in place to help councils make these changes.

“All of our Section 94 plans are now virtually redundant, and councils are going to have to start from scratch creating new plans and wasting precious funds and resources.”

Cr McCaffery said it was “ludicrous” that IPART was tasked with reviewing all contribution plans.

“We seriously doubt that IPART currently has the resources to do this and are concerned about how long this process will take.”

Shires Association president, Bruce Miller, said the government was effectively deeming key infrastructure, such as libraries, community centres and swimming pools, as non-essential.

“These are things that build communities and make them places where people want to live, so of course they are critical,” Cr Miller said.

“Communities and new home buyers are likely to be the big losers in this new plan, with higher rates to pay and less facilities for them to enjoy.”