Sweeping changes proposed for South Australia’s planning system

HOMEOWNERS in new developments could be charged an extra tax to pay for essential infrastructure as part of sweeping reforms to the state’s planning system.

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HOMEOWNERS in new developments could be charged an extra tax to pay for essential infrastructure as part of sweeping reforms to the state’s planning system.

Deputy Premier John Rau will introduce laws in State Parliament today which also include plans to legislate a growth boundary around Adelaide to stop new developments on the metropolitan fringe.

Mr Rau said the complete rewrite of the planning system was the biggest reform to the sector in more than 25 years.

He said the legislation was the “architecture” of the new system and that detailed policy work would be required over the next two years to cut down complexity in the system, making it quicker and easier for homeowners and businesses to obtain planning approvals.

More: The seven key proposed changes

The most controversial aspect of the plan will likely be the Infrastructure Delivery Scheme, which would effectively impose a tax on each household in a new development for the cost building local roads, pipes, sewerage, power lines and other essentials.

The relevant minister or developer could apply to spread the infrastructure costs among the households within a new development and would have to create a plan detailing the location and timing of the promised infrastructure.

The cost to each household is unclear and would differ for each development, as would the length of time the levy would remain in place, but if the property is sold, the new owner would have to pay.

Deputy Premier and Planning Minister John Rau

“Now what they (developers) do is they work out what their contribution to the infrastructure is, they divide it by the number of blocks and they pass it straight on to the first consumer ... who pay it on day one as part of the purchase price of their property,” Mr Rau said.

“What we (the Government) are saying is there is an alternative to that which is to say if the cost of putting the infrastructure here is, for example, $10 million we’re going to put a levy over this land which will bring in, over 10 years, $10 million.

“That means all of those people who are going to benefit from this infrastructure over time will make a contribution ... instead of the first purchaser having to pay for the whole lot, or the State Government having to pick up the bill.

“It’s actually a positive thing from a housing affordability perspective because it means we can actually substantially drop the cost payable by the first buyer.”

The tax would also take into account, particularly for large developments, the impact on surrounding infrastructure such as connections to, and widening of, main roads, building new train stations or other public transport and expanding or building nearby schools.

In the past, the cost of these projects has often been borne by the taxpayer, years down the track.

Mr Rau said the new infrastructure scheme was unlikely to be used for all new developments and was more suited to those built on broadacre land.

The new legislation would also expand the state’s environment and food protection area, continuing the State Government’s focus on infill, where new housing developments are built in existing suburbs.

In effect, this would legislate a boundary on urban growth, stopping suburbs spilling further out of the already built-up area.

The line on the map has not been finalised but would stretch to the McLaren Vale protection zone in the south, the Hills face in the East and the Barossa Valley protection zone in the northeast. The line from the Barossa to the coast in the north is the most controversial and Mr Rau said it would likely follow the Gawler River.

For any new land outside of that boundary to be rezoned, the minister would have to make the case in Parliament and it be agreed to by both Houses.

“We (greater Adelaide) have already got a very big footprint. If we’re trying to get decent services, people living near where they work, people not spending a fortune on transport ... we need to consolidate our existing footprint and not keep pushing it out,” Mr Rau said.

He said it was also a public integrity measure because many major political scandals have involved rezoning and preferential treatment of developers.

“The minister can change the value of a field full of potatoes to the tune of millions of dollars just by signing a piece of paper. It’s the easiest way to make someone a gazillionaire overnight,” he said.

Mr Rau said development of the urban fringe was also a “huge burden” to taxpayers on an ongoing basis through future infrastructure costs.

He referred to Government modelling which shows that taxpayers have to fork out up to $89 million for infrastructure to service every 1000 houses built on greenfields sites on the urban fringe.

The cost is much less for major infill, which costs up to $45 million per 1000 houses because roads, public transport and other infrastructure already service the area.

The development industry is likely to rally against a legislated growth boundary, having previously warned it would stifle the economy and increase house prices.

Mr Rau will have to gain support from either the Opposition or the majority of the crossbench in the Upper House to pass the reforms.

SA State Opposition leader Steven Marshall said the Liberals were broadly supportive of reforming our planning system.

“There is no doubt we need to create a simpler planning system that encourages economic growth and makes it easier for people to break into the housing market,” he said.

“However, we are not going to be passing legislation that includes a tax on construction when the government has not even told anyone what the tax rate will be.

“We will careful consider this piece of legislation and ensure that South Australians wanting to buy their own home are not disadvantaged by the proposed changes.”

The Local Government Association said it welcomed the opportunity to shape South Australia’s planning system through the release of the new planning reforms.

“Improving the planning system is a significant step on the path to improving the prosperity of South Australian communities,” said LGA president Mayor Dave Burgess.

“Local Government recognises that a good planning system will facilitate badly needed jobs and economic growth in South Australia.

“The LGA on behalf of Council members and their communities has long advocated for a planning system that makes good development easier.

“Constituents have for many years told us they want a planning system that is easy to understand, easy to participate in and delivers the outcomes that benefit the communities they live in.

“A future planning system needs to be accessible, integrated, accountable and embrace local involvement.”

Mayor Burgess said the LGA had not yet seen the Bill but any planning reforms must recognise local communities and the role they play.

“For reform to be successful it must be inclusive of local communities as well as Governmentand the private sector.”

Mayor Burgess said based on government briefings the LGA would welcome the Bill’s inclusion of changes that would benefit communities, including:

MORE flexibility for councils and State Government to work on planning and decision making at a regional level

STRONGER tools solve enforcement problems, giving the community more confidence and the system credibility

DESKTOP review options for Environment Resources and Development Court matters which would save time and money.

Mr Burgess said the LGA wold be seeking clarification from the Government and input from its members about some parts of the legislation, such as the resourcing of the e-planning system, development assessment panel structures and the design code.

“We will hold comprehensive briefings and consultation sessions across SA that will also involve state government planning and legal representation,” he said.

“Our priority is to comprehensively consult and reflect the views of member Councils and their communities to enable the LGA to respond to the Bill in the best interests of all South Australians.”

Property Council executive director Daniel Gannon said the tax on households appeared to be stamp duty by stealth.

“The cost to households is unclear,” he said.

“There’s no point in abolishing stamp duty and at the same time slapping on a development levy.”

Supporting the metropolitan area growth limit, Mr Gannon said South Australia should be looking at high density, vertical living similar to cities on the eastern states

“SA needs a shift to vertical living,” he said.

“The question is, can we grow both infill and greenfill,”

Master Builders SA deputy chief executive Ian Markos said the legislation could kickstart investment “by simplifying a system that has become over-complicated and, in some areas, a road block”.

“There are hundreds of jobs that might be sparked so there is understandably a lot of interest in the Bill but the real benefits will flow when there is a viable e-planning system to take development planning mobile, and when local governments convert existing plans into those consistent with the new scheme as proposed in this Bill,” he said.

“That may take years: we would hope the Government looks to incentives and penalties to convince local governments it is in their interest to adopt change sooner rather than ignore the need for change.

“But we support the Deputy Premier’s reforms - he has heard of the need and, more importantly, acted. We look forward to working through the details.”