By Adam Coleman

NSW local government representatives have met with Treasury officials to present their case that development contributions should not be reduced following a NSW Government-initiated review.

The NSW mini-budget provided for a review of infrastructure levies, including Section 94 levies – a valuable source of revenue for local government – to stimulate new housing construction.

Local Government Association (LGA) President Genia McCaffrey said that local roads and footpaths, parks, playgrounds, libraries and sporting facilities could all suffer if proposals to reduce the development contributions are pushed through.
"Without this funding the alternative could be significantly less and lower quality facilities," she said.

"NSW communities realise this, as when the Government tried to cut development contributions earlier in 2008, the move was strongly opposed by communities."

Shires Association President Cr Bruce Miller said there was "no direct evidence" that a review of development contributions would make housing more affordable – the stated aim of the review.

He also said there was little way the NSW Government could prevent local government from passing on the reduction in the form of rate increases to local communities.

"Although reducing the levies will save the developers a small amount there is absolutely no way the government can guarantee that those savings will be passed on to home buyers," he said.

Both Associations contend that any restructure of the development contributions framework must protect councils from funding losses.

A NSW developers loby group, Urban Taskforce is calling for the immediate of state infrastructure levies and the forced reduction of local council levies to stimulate development in the building sector.

When the review was anounced, Urban Taskforce chief executive Aaron Gadiel questioned why a further review is even required.

“The NSW economy needs swift action – today’s mini-budget should have immediately waived state infrastructure levies and forced a reduction in local council levies.”