This summary has been prepared to provide an overview of the outcomes of the Local Government Infrastructure Planning and Charging Framework review. The summary is focused on the impact of the review on development applications and not the planning of infrastructure by Local Governments.
The following is a summary of the key components of the new infrastructure charging framework. Further details on key elements of the framework have been provided in later parts of this summary:
The maximum infrastructure charge that can be imposed has not changed and is still set by the State Planning Regulatory Provision (adopted charges) 2012.
Cross-crediting can be used to offset the value of a piece of trunk infrastructure. Cross-crediting is not allowed between local governments and water distributor retailers (local authority).
An application can be made to convert non-trunk infrastructure to trunk infrastructure to allow offsets or refunds to be obtained.
Fair Value Charges Schedule (FVCS)
A new ‘opt in’ FVCS has been introduced to encourage local authorities to reduce infrastructure charges and reduces charges between 10 and 15 percent.
PDI Co-investment Program
A Priority Development Infrastructure (PDI) co-investment program has been set up to allow for the state co-invest in certain catalyst infrastructure. Only local authorities that sign up to the FVCS will be able to access the co-investment program.
Planned vs Actual Value
An application can be made to apply actual value of a piece of trunk infrastructure stated, where an applicant disagrees with the planned value.
Existing Use Credits
Existing use credits must be taken into account when calculating infrastructure charges.
Conditions relating to the provision of infrastructure must provide details about why an infrastructure condition is imposed.
Applicants can now use a Permissible Change process to seek amendments to infrastructure charges and offsets.
Amendments to the Sustainable Planning Act 2009 (SPA) have been made to:
- Clarify that offsets and refunds must be provided;
- Provide credits across an entity’s networks; and
- Enable offsets and refunds for non-trunk infrastructure that is converted to trunk infrastructure.
Offsets are to be provided across all infrastructure networks for which the adopted charge applies, regardless of the type of infrastructure that is required to be provided.
Details including timing about an offset or refund are to be provided at the time an infrastructure charges notice is issued.
The timing of a refund and a decision which involves an error relating to an offset or refund is appealable to the Planning and Environment Court and the Building and Development Dispute Resolution Committee.
A conversion process has been introduced to allow those pieces of trunk infrastructure not identified in a LGIP to be identified at the time of development approval. While a conversion application made to a local authority, an applicant can challenge a decision made through an appeal to Planning and Environment Court or the Building and Development Dispute Resolution Committee.
The state government position is that the specification of trunk infrastructure depends on the number of people who will use the infrastructure and the standard of service put in place by the local authority. As such, each local authority will likely set their own definition of ‘trunk infrastructure’ which is appropriate for each local government area or service area. It is intended that each local authority will set its own decision criteria in the resolution or Netserv Plan by 1 July 2015. Until this time, the state government will provide default criteria in a statutory guideline.
A conversion application about non-trunk infrastructure can only be lodged if construction of the non-trunk infrastructure has not started. The local authority will have 30 business days to consider and decide a conversion application. This timeframe can be extended (by a minimum of 10 days) to accommodate an information request process.
Fair Value Charges & State Co-investment Program
The charges framework introduces a new Fair Value Charges Schedule (FVCS). Key features of the FVCS are as follows:
- The maximum infrastructure charge for residential development is 10 per cent lower than the SPRP;
- The maximum infrastructure charge for non-residential development is 15 per cent lower than the SPRP;
- The extent of trunk infrastructure is defined by an essential infrastructure list, which reduces the extent of trunk infrastructure (e.g. park embellishments removed);
- QPP definitions used for use types;
- Demand assessments used to enable better differentiation of costs between uses (e.g. significant reduction in charges for retirement facilities); and
- Additional charge categories to align charges & level of demand generated (e.g. 1 bedroom unit category added).
The PDI co-investment program is aimed at facilitating state investment in catalyst infrastructure that will unlock significant development and economic growth. The type of infrastructure targeted by the program will include major road works, water supply reticulation and major sewerage and treatment plants.
While information is limited, the following is known about the program:
- Funding can be provided to local governments, distributor retailers, developers or other state agencies;
- Funding will only be eligible in local governments areas that apply infrastructure charges at or below the new FVCS;
- Funding will be applied through Economic Development Queensland; and
- Funding will not be in the form of a grant;
The infrastructure charging framework has been setup to allow the continuation of existing priority infrastructure plans and local government resolutions. While there is unlikely to be an immediate change in these documents, the framework provides the following transitional arrangements:
- Development applications lodged prior to commencement of the new framework, but for which an approval has not been given, will be decided under the new provisions.
- Development applications decided prior to the commencement of the new framework can be amended via a permissible change process.
- Local governments without an adopted charges resolution will not be able to levy charges from this point onwards.
- Local governments are required to adopt a new resolution before 1 July 2015 to enable them to levy infrastructure charges.
- Local governments are required to include a Local Government Infrastructure Plans (LGIP) in their planning scheme by 1 July 2016 to enable them to levy infrastructure charges or impose conditions for trunk infrastructure.
- LGIPs are required to be reviewed by an independent third party on commencement and again every 5 years.