A radical transfer of planning power has now been formalised, with the official start of the Greater Sydney Commission on 27 January 2016.

The new Greater Sydney Commission Act — and associated amendments to the Environmental Planning and Assessment Act — have stripped the Planning Minister of key powers. These powers have now passed to the Commission, chaired by Lucy Turnbull and supported by its newly-appointed chief executive, Sarah Hill. 

We outlined the background, structure and broad powers of the new Commission in an October Gadens update. This article focuses on some of the detail of the new arrangements.

Transfer of powers

You should be aware of the shift in decision-making authority if you are pursuing a rezoning (or other changes to development controls, such as increased height/density).

Firstly, the Minister no longer has the power to ‘make’ local environmental plans (LEPs). However, this change is not as big as it may seem. This is because the Minister retains the power to introduce state environmental planning policies (SEPPs). These policies are able to amend existing LEPs. This can happen when the Minister wants to change an LEP to deal with state or regional planning matters.

When the Minister decides to amend LEPs via a SEPP, there is no statutory requirement for a ‘planning proposal’ to be prepared or for a ‘gateway determination’ to be made.

Secondly, the Minister no longer has a range of other powers associated with the making of LEPs in the Greater Sydney region. 

One key change relates to the preparation of a ‘planning proposal’. At present, the formal process of creating or amending LEPs is (normally) commenced when a ‘relevant planning authority’ prepares a planning proposal. The standard ‘default’ arrangement is that the local council is the ‘relevant planning authority’.

This means that — so long as a local council is the relevant planning authority — a council can effectively block a proposed rezoning.

Until now, the Minister has had the power to remove a local council as the ‘relevant planning authority’ and replace it with either the Secretary (of the Department of Planning and Environment) or a joint regional planning panel. However, this has not happened often. Ministerial unwillingness to remove obstinate local councils as ‘relevant planning authorities’ has meant that many proposed LEP changes have not been able to proceed. As a result, key elements of past and current metropolitan strategies remain unimplemented.

Under the new arrangements, the Minister no longer has any right to decide whether a local council should be displaced as a ‘relevant planning authority’. This decision-making power has been handed to the Greater Sydney Commission.

As before, a local council can be replaced as a ‘relevant planning authority’ because the proposed LEP change is of state or regional planning significance. This now also been extended to matters of planning significance to a district. That is, the Greater Sydney Commission can decide that a rezoning for a proposed development that meets the needs of, say, Sydney’s ‘North District’ should be progressed by the Department or a planning panel (instead of a local council), even if the development would not have any citywide significance.

The Greater Sydney Commission has also inherited existing (but under-utilised) powers to remove a local council as a ‘relevant planning authority’ when there has been a successful pre-gateway review. These powers have been extended, so that there is no statutory requirement for a pre-gateway review to be conducted by a planning panel (or the Planning Assessment Commission). It is now legally possible for the pre-gateway review to be carried out by the Secretary of the Department herself (so long as it is then reported to the Greater Sydney Commission).

Additionally existing (and similarly under-utilised) powers to remove a local council that has failed to comply with its obligations have also passed to the Greater Sydney Commission. These obligations have also been strengthened. There is now an express statutory obligation on local councils to give effect to the metropolitan strategy (ie A Plan for Growing Sydney) when preparing planning proposals. This should make it easier for local councils to be replaced when, for example, they are preparing a planning proposal that does not adequately provide for the type of development envisaged by the metropolitan strategy.

Thirdly, ‘gateway determinations’ are now ultimately the responsibility of the Greater Sydney Commission, not the Minister. (Before a planning proposal can progress to statutory public exhibition, a ‘gateway determination’ must be made.)

Fourthly, if a ‘relevant planning authority’ decides that it no longer wishes to proceed with proposed LEP changes, it must request that the Commission end the matter (rather than the Minister).

Finally, the Minister no longer has the power to direct a local council to make, amend or revoke a development control plan in connection with the finalisation of an LEP. This ministerial power has almost never been exercised in the past. As a result there is a legacy of ‘modernised’ LEPs that are ‘supported’ by out-of-date development control plans. If the Commission is more pro-active about implementing the metropolitan strategy it can use this power to ensure that development control plans are better aligned with new and amended LEPs.

The role of the Department

Traditionally, most of the powers outlined above have been ‘delegated’ by the Minister to Departmental officials. This means that the legal responsibility for making ‘ministerial’ decisions was handed to public servants ranging from Directors, Executive Directors, Deputy Secretaries and the Secretary. In practice — where matters were potentially contentious — the Minister would often still be consulted before these officials made their decisions as ‘delegates’.

A few days before the new legislation commenced the Minister renewed his ‘delegation’ to Departmental officers. Under the transitional arrangements, this delegation continues as if it were a delegation from the Greater Sydney Commission to the Department. It appears that the Minister intends for the Department to continue to make operational decisions in relation to the rezoning process (albeit, on behalf of the Commission, rather than the Minister). However, whether this practice continues in the medium term (and how it works) will be a matter for the Commission itself to decide.

‘Section 117 directions’

At present, LEP changes are governed by a series of ministerial directions that are widely known as ‘section 117 directions’. These directions pre-date modern strategic planning and — in some respects — do not sit well with the various strategies that have been approved by government since 2005.

These directions cover topics as varied as:

  • the maintenance of business, industrial, residential and environment protection zones;
  • location of intense urban uses such as retail, cinemas and offices;
  • Sydney drinking water catchments;
  • airport flight paths; and
  • acid sulphate soils, bushfire safety and flood prone land.

The new legislation requires ‘relevant planning authorities’ to give effect to district plans (and, until those plans are in place, the metropolitan strategy) when preparing planning proposals. In the ideal world, this obligation would make it unnecessary to apply the older (somewhat outdated) ‘section 117 directions’. 

However, the legislation still requires compliance with ‘section 117 directions’, with an important exception. Existing directions now have no effect when they are inconsistent with a district plan (or if there is no district plan, the metropolitan strategy).

The problem is, of course, that the Department has not identified which directions might be considered ‘inconsistent’ with the metropolitan strategy. This will raise legal arguments in some cases. Hopefully, the Department and the Minister will move to clarify the situation by formally amending outdated ‘section 117 directions’ so that they simply do not apply in Sydney. 

A step forward

The new regime for Greater Sydney is clearly a step forward. The legal machinery is now in place for the efficient and transparent implementation of metropolitan and district strategic planning. 

The real test, however, will only come when members of the new Commission are confronted with the need to make tough, contentious decisions. Merely ‘having the power’ to tackle difficult issues is not enough. Sydney’s problems can only be solved if those invested with that power are willing to exercise it.