With pressure on local governments becoming more and more intense regarding financial constraints, this article is of particular importance to planning because it may frame the way things are done in the future.

McNeill et al seek to analyse how local governments are coming to terms with the financial restraints and the changes that are occurring due to the current trend in developer charges and levies being applied.

Background

Developer charges play quite a more significant role with the larger sized local governments. This is demonstrated by the 25% of councils within NSW with a population of 40,000 or over who "raise no less than 69 per cent of developer charges revenue" (McNeill et al, 1999). McNeill et al also focus on the limitations of data collection due to changes in local government accounting systems.

As different municipalities are at different stages and situations with developer charges there is no one system consistently collecting data. As a result the Australian Bureau of Statistics have been unable to tabulate any data which has resulted in the annual growth and contributions known as developer charges, not being able to be determined. Developer charges in NSW have become quite prominent, some even argue more so then any other state in Australia.

Developer charges in NSW

Within NSW there was little financial risk for developers in the past, the Housing Cost Enquiry (1978) showed everyone that developers were being optimistic in relation to their assessment of demand. McNeill et al illustrate how this resulted in many instances where serviced land was under-utilised for extensive periods (McNeill et al, 1999). Many changes occurred when it came to formalising arrangements for developer charges. Section 94 of the Environment Planning and Assessment Act 1979 which McNeill et al maintain "codified" the existing developer financing practice (Simpson 1989:19, cited McNeill et al, 1999). As developer charges and other types of levy"s continue to be introduced, local governments seem to be using this revenue as a way to reduce debt.

An example of this comes from the 50"s and 60"s, which saw the expansion of planning powers. Local councils introduced to notion of developers having to provide some of the services for development that local government were until now, forced to provide.

Local government borrowings have been a prominent theme in the developer charges debate. This is the case as each municipality seeks to minimise debt, the amount of developer charges going towards these payments is growing, and may continue to grow and become even more prolific over time. As discussed above, total population and geographic local are key themes in this debate. None the less, it is not only NSW that is experiencing the positive affects of this trend.

Developer charges in other states

In Queensland developer charges have been reported as a method of funding fringe development. In Victoria a two-tiered system was recommended as a result of the problems associated with the existing system. The new system sought to have up front developer charges, and a new community infrastructure levy, for social infrastructure as a result of a growing community. Both are indications that developer charges and other council levy"s have begun, and may continue to gain momentum.

Conclusion

As this article has shown us developer charges is a current trend that is beginning to gain momentum in states all over Australia. McNeill et al believe that recent reviews of infrastructure financing in Queensland, Tasmania and Victoria have shown that "these states too are poised to embrace developer charges" (McNeill et al, 1999). Furthermore with developer charges becoming more and more accepted, I believe that this trend could very well be thing that relieves local councils of their current debt, and may even provide the basis for their expansion in the future

References:

McNeill, J. Dollery, B. 1999 "A note on the use of developer charges in Australian local governments", Urban Policy and Research, v. 17 i1, p61

11. Infrastructure 18th May, 2008 21:56:39   [#] 

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