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NSW planning reforms: infrastructure

NSW planning reforms: infrastructure

Advice on legislation or legal policy issues contained in this paper is provided for use in parliamentary debate and for related parliamentary purposes. This paper is not professional legal opinion.
Briefing Paper No 08/2013 by Jack Finegan


This is the second of four briefing papers the Parliamentary Research Service intends to publish on the proposed reform of the planning system in NSW. Appendix 1 presents an overview of the proposed system as set out in the Planning White Paper and the relevant Exposure Bills.

In April 2013 the NSW Government entered a new stage of its ongoing reforms to the planning system with the release of A New Planning System for NSW: White Paper and two associated Exposure Bills. These documents set out in detail the proposed changes to the planning system. Infrastructure is the focus of a number of major changes, and the reforms are intended to bring about more coordinated and efficient infrastructure planning. This paper considers several aspects of infrastructure planning and delivery under the proposed planning system, and the response from a number of key stakeholders.

The key points of difference between infrastructure planning under the current system and that proposed in the White Paper according to the NSW Government are set out in Table 1 below. A summary of each reform is provided subsequently.

Table 1 – Summary of changes to infrastructure planning

Current system
White Paper proposals

Strategic integration of plans
    · Infrastructure planning independent of land use planning
    · Different kinds of infrastructure planned on an individual agency basis
    · No requirement for coordination of infrastructure provision in greenfield areas
    · Most infrastructure not shown in local planning instruments (LEPs)
    · No requirement for different planning documents to be coordinated
    · Infrastructure and land use planning to occur in concert with each other
    · Infrastructure to be planned, prioritised and staged according to housing and employment growth
    · Planning to occur on spatial basis, with all infrastructure needs for an area determined concurrently
    · Infrastructure planning to be co-ordinated and consistent across strategic plans (NSW Planning Policies, Regional Growth Plans, Subregional Delivery Plans, and Local Plans), and infrastructure plans (Growth Infrastructure Plans and Local Infrastructure Plans)
    · Growth Infrastructure Plans to prioritise and identify funding for infrastructure in growth areas
    · Local Infrastructure Plans to identify proposed local infrastructure required to support growth and act as basis for local infrastructure contributions

Contestable infrastructure
    · Limited opportunities for private sector involvement in some infrastructure provision, primarily in the delivery and operational phases
    · Rigid development approvals process for major infrastructure restricts innovation in design and delivery
    · Greater opportunity for involvement of the private sector in all phases
    · All Growth Infrastructure Plans to include contestability assessment, which will consider opportunities for private sector involvement at all stages including design, construction and operation
    · Less restrictive infrastructure approvals will allow for greater private sector innovation after consent has been granted

Public Priority Infrastructure
    · Existing major infrastructure works approved as State Significant Infrastructure (SSI), or critical State Significant Infrastructure
    · SSI and critical SSI approved by Minister after community consultation and detailed environmental assessment
    · Two forms of infrastructure approval, State Infrastructure Development (modified SSI) and a new form of approval, Public Priority Infrastructure (PPI)

    · Declared PPI up front by Minister when identifying infrastructure project

    · Approval not required once declared PPI

    · Subsequent PPI assessment focussed on identifying, avoiding and mitigating impacts

Regional infrastructure funding
    · Regional infrastructure funded by combination of general revenue, and Special Infrastructure Contribution on greenfield development
    · No regional infrastructure contributions paid by development in infill areas
    · Regional infrastructure funded by combination of general revenue, and regional infrastructure contributions
    · Regional infrastructure to be specified in Growth Infrastructure Plans, and levied for under provisions in Local Plans
    · Both greenfield and infill development to contribute towards regional infrastructure
    · Contributions to be levied on regional or subregional basis (larger than LGA)
    · Two funds to be established for each region, one for general works and one for land acquisition for open space and drainage

Local infrastructure funding
    · Collected by local governments under s. 94 plans
    · Limited by $20,000 cap
    · Works identified and costed by local councils
    · No restrictions on spending timeframe
    · Minimal role for IPART (monitoring small number of plans that exceed cap)
    · Collected by local government under Local Plans
    · No cap imposed
    · Works identified by Council, costed according to set of benchmark costs calculated by IPART
    · Funds to be spent within three years, with annual auditing requirements
    · IPART to have greater role in assessing reasonableness of contributions, including review of all plans

Planning agreements
    · Consent authorities allowed wide discretion in negotiating voluntary planning agreements with developers for the provision of infrastructure
    · Planning agreements will be used only in “exceptional circumstances”, and be restricted to works that are identified in an existing infrastructure plan
Growth Infrastructure Plans

Growth Infrastructure Plans will stand outside the formal strategic planning hierarchy. Their precise relationship with strategic plans is unclear, but the White Paper states that GIPs will be prepared concurrently gith Subregional Delivery Plans. As outlined in the Planning Bill, GIPs will be prepared by the Director-General (the White Paper comments that they will be “prepared by the NSW Government including UrbanGrowth NSW”), and made by the Minister.

Growth Infrastructure Plans will form the basis of spatial infrastructure planning, a process in which the infrastructure needs of an area are considered as a totality and incorporating a number of infrastructure agencies. They will prioritise infrastructure works in an area, and require the concurrence of the Treasurer or Secretary of the Treasury. As specified in the Planning Bill, Growth Infrastructure Plans must also “identify the regional infrastructure for which a regional infrastructure contribution may be imposed,” as well as contain a contestability assessment. [3.0]

Contestable infrastructure

Contestability assessments are a new element of the infrastructure planning process proposed under the planning reforms. These assessments will consider opportunities for the private sector to design, deliver and operate regional and local infrastructure solutions for new greenfield developments or urban renewal precincts. [4.0] Growth Infrastructure Plans will contain contestability assessments for infrastructure, and in some instances local governments will also conduct these assessments.

Much of the detail regarding contestability assessments has not yet been made public. However the White Paper comments that Infrastructure NSW will lead the assessments, and that they are expected to lead to greater efficiency and better value for money in the procurement and operation of infrastructure. [4.0]

Public Priority Infrastructure

The White Paper identifies two streams of major infrastructure development. Projects identified as Public Priority Infrastructure will be those considered essential to the State’s economic, environmental or social well-being. Public Priority Infrastructure will not require approval after it has been declared as such by the Minister, and will have a streamlined assessment process; assessment will focus on identifying, avoiding and minimising impacts arising from the project. [5.0]

The second stream is called State Infrastructure Development. This is little changed from the current State Significant Infrastructure and, for that reason, is not considered in detail in this paper.

Infrastructure contributions

Under both the current and proposed planning system, developers can be asked to make monetary contributions or provide works-in-kind for infrastructure to meet a need generated by new development.

The White Paper proposes reforms to the way that contributions towards infrastructure to service new development will be collected and spent. This will include the collection of contributions for regional infrastructure at a regional level, and modifications to the way that local infrastructure is costed.

Contributions towards regional infrastructure are to be collected under the provisions of a Growth Infrastructure Plan, while local infrastructure contributions will come under Local Infrastructure Plans (which will be part of local plans). [6.0]