Infrastructure Levy

Mr RAY WILLIAMS (Hawkesbury) [1.15 p.m.]: I move:

That this House:

(1) Notes the continuing downturn in the housing market and the subsequent damaging effects on the New South Wales economy as a result of excessive costs of land development due to the imposition of the Government's infrastructure levy in suburbs such as Kellyville and Rouse Hill.

(2) Notes the struggle of small business operators such as bricklayers, concreters, electricians and other building associated tradesmen throughout Western Sydney directly affected by a depleted housing market, with no certainty of continuing work and the negative effect it will have on employment.

(3) Calls upon the Minister for Planning to immediately review the impost of infrastructure levies imposed on the north and south-west development areas of Sydney, which are hindering the orderly development of housing and most of all imposing hardship on working families wishing to purchase a home.

In light of the current circumstances surrounding the Department of Planning, it is prophetic that we are dragging the Government to account and highlighting one of the greatest impediments to housing in New South Wales. The New South Wales Government has neglected to plan for the future housing needs of hardworking families in Sydney's northwest. Evidence can be seen in the Baulkham Hills and Hawkesbury electorates, where the housing development undertaken in the past 10 years is a direct result of planning by the former Liberal Government under Premier Greiner and Premier Fahey. The New South Wales Labor Government has been happy to sit back and reap the rewards of the many State taxes and levies that have applied to these homes and the billions of dollars in stamp duty. Something that always slips under the radar is the income received by the Government from the sale of its own land.

Members will remember that the largest land developer in the Rouse Hill area was the New South Wales Government. This State Government has sat back and reaped those rewards over a long period. Suddenly the money started to dry up. When the well started to run dry and the Government said, "It's about time we put our plan in place." That plan is still being rolled out. The north and southwest sectors are only just coming on board and nothing is happening. No housing development is underway in the north and south-west sectors, simply because of the imposition of the New South Wales infrastructure levy on housing. The infrastructure levy imposed by the Minister for Planning is an impediment and has imposed such a cost on developers that they are simply not developing their land. In the past developers divided up their block of land and worked out the on-costs, the section 94 levies and so on.

When the Government imposed a levy of some $70,000 per block of land the developers simply could not make enough money from the development. They knew that it would be impossible to sell the blocks of land for $400,000, $500,000 or $600,000. These infrastructure levies have brought housing in the north-west sector to an absolute stop. A few months ago the Minister for Planning suddenly woke up and said, "I will have to do something to stimulate the New South Wales economy to give a little hope to the carpenters, builders and bricklayers who are flooding over the border to Queensland because no building is happening in this area." He decided to halve the infrastructure levies but then took the section 94 council contributions to make up the shortfall so the New South Wales Government still got its kick. It maintains its greedy grab for cash. That is where the lack of planning has come in.

The State Government has realised huge benefits from the area but has squandered the profits, stamp duty, taxes and its own money from its own sales of blocks of land. No infrastructure has been built. Today we heard that the northwest rail link, our favourite ghost train, is off the agenda and will not occur. All these major development projects are simply not going to happen. That is because the Government has run out of dough and is almost bankrupt. It is trying to claw back some dough from the sale of the electricity commission to get some money to spread around. It has wasted opportunities because it has failed to plan. The only thing planned by the Minister for Planning, which he is really good at, is his next fundraiser. He can get half a million dollars at a fundraiser from a few developers. At the last State election the New South Wales Australian Labor Party raised approximately $24 million. It is good at planning fundraisers.

Mr Geoff Corrigan: Point of order: This motion is not about fundraising; it is about housing. I ask you to ask the member to return to the leave of the motion.

ACTING-SPEAKER (Mr Wayne Merton): Order! The member for Hawkesbury is referring to the motion generally. I ask him to refer to the motion specifically.

Mr RAY WILLIAMS: I will come back to the motion because it is very important to address it. Council areas such as Blacktown and Baulkham Hills have taken the brunt of housing development across the north-west sector and New South Wales over the past 10 or 15 years. They have implemented world-class infrastructure in relation to local roads, community buildings, parks and playing fields, which do not come cheaply. Both councils have done this transparently and accountably. They have kept their bottom line and stayed in the black while undertaking that massive development. They have done their share while managing their funds—the section 94 contributions that have been attributed to them—in a very effective way.

Mr Steve Whan: Some levies are okay but others are not?

Mr RAY WILLIAMS: That is exactly right. I am glad that the member for Monaro, who never says "no" to anything, has raised that point. Some levies are good because the Government put the section 94 levies in place to pay for local infrastructure. Now, at a time when the Government has run down its own resources so low and has no money, it wants to go back and grab cash from local councils and take away the funds that are said to be sitting in their bank accounts. The Minister does not understand the basic principles of section 94 contributions. In his recent circular he said that these are merely taxes that have no limit. That is absolutely incorrect. They are not taxes that have no limit: they are addressed under strict criteria. A robust status of proportion of apportionment and nexus must be found in relation to section 94 contributions. If that is not adhered to it is not ticked off by the State Government under the Environmental Planning and Assessment Act 1979, but it is appellable.

It is amazing that the only levy that is a tax to councils, and they have handled them so well, is appellable by developers. If councils get it wrong in any way the developers can drag them to the Land and Environment Court and get back some money, which they do from time to time. Councils have to be very careful. The Minister for Planning should take on board the manner in which councils such as Baulkham Hills and Blacktown have conducted their business affairs over the past 10 or 15 years while absorbing this massive growth. They have provided infrastructure and rolled out massive development. A couple of hundred thousand people are now living in that north-west sector and there are plans for more but because of the restrictions and impediments placed by the Minister for Planning on the infrastructure levy housing has now stopped.

Hardworking families in that area not only cannot get a home but the longer they wait the more land prices rise and the situation becomes more difficult. The only answer of the Minister for Planning is his metro strategy. He has based his life—signed it in blood—on the Metropolitan Strategy. What will that strategy achieve? Under the City of Sydney's programs, the metropolitan strategy will see another 500,000-plus dwellings, across every suburb in Sydney. The only way to get 500,000 extra dwellings, across every suburb in Sydney, is to build apartment blocks. And who are the developers who build apartment blocks? I will not go there but I will stick to the motion. That will mean approximately 1.5 million people will be in those suburbs of Sydney. But we are not going to get a rail link, new roads or infrastructure. What impact will that have on Sydney?

Mr GEOFF CORRIGAN (Camden) [1.25 p.m.]: I draw the attention of the member for Hawkesbury to the wording of the motion:

Notes continuing downturn in the housing market and the subsequent damaging effects on the NSW economy as a result of excessive [land costs]

He has just argued against measures put in place by this Government to reduce land costs.

Mr Ray Williams: It will not reduce land costs, my friend.

Mr GEOFF CORRIGAN: When the member for Hawkesbury exercises his right of reply he might address what the Opposition, with no policy, proposes to do. It has no policy. And that is why the Government was re-elected. Housing affordability is a pressing issue right across the nation, and all levels of government must take steps to address this issue and the pressure it places on families. That is why last October the Premier announced that the Government would introduce both State and local infrastructure changes for new developments. The changes reduce the State Government infrastructure charge from $33,000 to $23,000 per lot but do not reduce its commitment to delivering new infrastructure in growth centres, because the amount directly invested by the Government will almost double to more than $4 billion.

The Government has also specified what local infrastructure councils can charge developers, including: local roads, local bus infrastructure, local parks, drainage, local community infrastructure and land for other community infrastructure. Those changes will save an average of $25,000 per lot. The motion calls on the Government to reduce the price of land. The Government is taking active steps to reduce the price of land in growth centres alone. The reduction in levies will improve housing affordability by reducing development costs and increasing the supply of land.

The member for Hawkesbury has recently, most improperly, made statements about the changes. I note that the member for Wakehurst is not in the Chamber. I have heard him and the member for Hawkesbury give astounding misinformation on the Alan Jones radio program. The Government is not stopping councils from raising money for infrastructure, it is not taking council infrastructure funds away, it is simply making sure councils apply the levies in a reasonable way. I have told Camden Council—a Liberal-dominated council whose members were independent Liberals when elected—that I have every confidence in its ability to continue to deliver the proper things. Section 94 should look at a Holden Calais, not a Rolls Royce. Let us just go for the Holden Calais version, not the Rolls Royce. We do not have to go to the base model Commodore at all but go for the best thing for the community at the Holden Calais level.

The Opposition has no plans and that is why it was not elected to government. Because of the magnitude of the growth centres, Treasury will hold local infrastructure funds in trust and interest earned will be returned to the funds. This will happen in relation to the six councils covered by the growth centres—Liverpool, Camden, Campbelltown, Baulkham Hills, Blacktown and Hawkesbury.

Mr Ray Williams: That is right, I got that— all the ones that are absorbing the growth.

Mr GEOFF CORRIGAN: That is right, and I am part of one of those councils. Councils will still use those funds to provide the agreed infrastructure. The reform to levies at both State and local levels will significantly reduce the cost of bringing new homes and land packages to the market. They will encourage building activity and industries suffering because of higher interest rates. The second part of the motion referred to losing skilled labour and the lack of activity. I was in a pub last Friday afternoon, having a quiet lemon squash with some friends. A bloke who drives a concrete truck said to me, "I don't know what I'm going to do, Geoff, I am working that hard; we have that many deliveries of concrete at the moment that the building sector is really starting to take off". That bloke is involved at the base level of the building industry. He said, "I think we are really starting to move up in the housing cycle". He, like most people, recognised that there is a building cycle, and that we were at the bottom it.

Pursuant to sessional orders business interrupted and set down as an order of the day for a future day.

[The Acting-Speaker (Mr Wayne Merton) left the chair at 1.30 p.m. The House resumed at 2.15 p.m.]