Councils say a Labor election pledge to delay developer payments for local infrastructure is a handout to developers that will leave regional towns short of roads, parks, and drainage.
A re-elected Minns Labor Government would permanently defer local infrastructure contributions from the Construction Certificate stage to the Occupation Certificate stage of development, so developers pay when construction is finished rather than before it starts.
The government says the change will reduce upfront costs, support construction jobs, and help get more homes built sooner.
It will also issue directions allowing councils to spend more than $900 million collected under now-repealed contribution plans.
Councils across NSW are holding more than $4.6 billion in infrastructure contributions.
Where councils keep holding significant contributions for an unreasonable period, the government says it will step in and use the money to deliver infrastructure directly.
“New home buyers contribute to their local infrastructure but the system can delay its delivery,” said Minister for Planning and Public Spaces Paul Scully.
“These local contribution reforms will make sure communities across NSW get the infrastructure they needs as they are growing.”
Local Government NSW (LGNSW) says the plan will take vital funding away from communities already facing major infrastructure shortages.
“This policy will give a handout to developers while worsening the housing supply crisis and short-changing communities in the suburbs and the bush,” said LGNSW President Mayor Darcy Byrne.
“This policy would leave councils and communities with even less investment in the roads, parks, pools and playgrounds that make communities liveable.”
LGNSW says councils were not consulted, and the government is offering no extra capital to help councils build the infrastructure needed to make new housing feasible.
It warns that deferring payments would shift financing costs and collection risks from developers to councils and local ratepayers.
During previous deferral arrangements, such as during Covid, councils had difficulty recovering unpaid contributions, adding administrative costs and the risk of costly legal proceedings.
LGNSW also says redirecting contributions already paid to councils would be unprecedented and could face legal challenges.
The government says it will work with councils to manage potential financial impacts, including through the possible extension of financing facilities.
Mayor Byrne said the government should instead adopt LGNSW’s $5 billion interest-free loan proposal.
“Councils have put forward a practical plan to build infrastructure first and recover the costs as development proceeds,” Mayor Byrne said.
“If the Government is serious about solving the housing crisis, it should help councils build infrastructure, not take away their funding.”
The pledge also includes cutting red tape for small businesses.
Development applications in NSW can take up to 130 days to prepare and assess and can cost $30,000.
Labor says it would remove the need for full applications for many common business activities, including minor renovations, internal fit-outs, changes of use, trading hours, and signage.
“Whether it’s opening a new cafรฉ, renovating a shopfront or extending trading hours, small business owners shouldn’t have to spend months navigating complex planning rules and filling out paperwork,” said Minister for Small Business Janelle Saffin.
“We don’t want to become a state where the next generation has to move away because they can’t afford a home,” said Premier Chris Minns.
“We want NSW to be a place where young people can build a life, raise a family and have a future.”
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