The NSW government says that sweeping changes to the infrastructure contributions system could unlock up to $12 billion over the next 20 years, according to a new report from the NSW Productivity Commission.

NSW minister for Planning and Public Spaces Rob Stokes and treasurer Dominic Perrottet welcomed the report, which lays out a roadmap for the biggest shake-up to the contributions regime in three decades.

“The development industry has been telling us for years that uncertainty surrounding infrastructure contributions was driving up house prices and slowing down progress,” Stokes says.

“Those who complain about growth in Sydney often have the same gripe - too much housing, not enough infrastructure. This report recommends a complete shift in thinking, where land rezoning, infrastructure planning and funding is considered together at the start of the process.

“If the changes in this new report are implemented, these barriers will be removed and development will be coordinated with the right infrastructure.”

Productivity Commissioner Peter Achterstraat’s comprehensive review of the system makes 29 recommendations, including:

  • Changing the funding mix for more efficient infrastructure delivery;
  • Linking council rates more closely with population growth;
  • Developing a digital tool for calculating infrastructure contributions;
  • Ensuring infrastructure contributions plans are in place upfront during the rezoning process;
  • Supporting better open space provision through a system for the direct land dedication following re-zoning;

Reforming state contributions so funding goes where infrastructure is required.

Perrottet says the long-term benefits of boosting productivity was vital for NSW and the state’s recovery from the economic impacts of COVID-19.

“We need to strike the right balance between investing and growing the economy and ensuring we build the infrastructure our communities need,” he says.

The government will review the report’s recommendations and consult with industry to develop a formal Government response and roadmap for implementation by early 2021.