NSW Government scraps controversial reforms to infrastructure contributions

Confirmation that the NSW Government will not proceed with its flawed reforms to infrastructure contributions has been welcomed by Local Government NSW.

LGNSW – with the support of several NSW councils – had been advocating against changes to infrastructure contributions, unless the NSW Government was able to clearly demonstrate that no council would be worse off. The government failed to do so, and the withdrawal of the legislative changes was the right thing to do.

Infrastructure contributions are paid by developers to supplement local government funding for vital community infrastructure such as cycleways, footpaths and roads, parks and flood proofing drains, childcare services and performance spaces.

Crucially, the contributions help ensure that population growth and new developments are accompanied with the necessary infrastructure capacity to support it.

Under the reforms initially proposed by the NSW Government, however, contributions made by developers would have been significantly reduced, with concerns local government funds would be diverted into state revenue.

LGNSW President Darriea Turley said the intent of the reforms was to shift costs from developers to local government and would have forced councils to choose between cancelling critical infrastructure projects or shifting costs onto ratepayers.

“The decision by the NSW Government to scrap these reforms is a huge win for the local government sector,” Cr Turley said.

“At a time when councils are under unprecedented financial pressures due to a rate cap system that is not fit for purpose, it is essential that the costs for new infrastructure to support growth not be shifted onto councils and ratepayers, but rather to those who profit from development.

“I would like to thank all the mayors and councillors who joined with LGNSW in publicly opposing these reforms. We will continue to work together to oppose any attempt that will reduce infrastructure and services for our communities.”

While welcoming the decision to scrap the NSW Government’s proposed reforms to infrastructure contributions, LGNSW broadly supports sensible changes to the contributions system that will reduce complexity, improve transparency and equity and release the financial burden placed on councils and ratepayers as they provide infrastructure to support population growth and the changing needs of communities.

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