The Queensland Parliament passed the Sustainable Planning (Infrastructure Charges) and Other Legislation Amendment Bill 2014 (Bill) with amendments on 4 June 2014. The Bill is a key component of the State Government’s agenda to reform the infrastructure charging and planning framework in Queensland. The other component is the establishment of the local government co-investment program to fund catalyst infrastructure. The reforms are expected to commence on 1 July 2014.

HopgoodGanim’s Planning and Environment team will publish a series of Alerts offering a comprehensive analysis of the legislation affected by the Bill, the local government co-investment program, and the issues relevant to the planning and development industry.

In this Alert Partner Sarah Macoun and Solicitor Thomas Buckley outline the key points that proponents and stakeholders need to be aware of.

Key points of the reform

The State Government’s reform will be delivered through:

  • A local government co-investment program to fund the cost of development infrastructure where a local government has adopted ‘fair value infrastructure charges’ for its local government area. 
  • Amendments to the infrastructure charging and planning provisions of the Sustainable Planning Act 2009 (SPA) and the South East Queensland Water (Distribution and Retail Restructuring) Act 2009 (SEQ Water Act), introduced by the Bill.

Importantly, these reforms do not change the current state planning regulatory arrangements governing infrastructure charges. The Bill proposes a ‘capped framework’ that is materially the same as the current framework. There will be no reduction in the maximum amounts listed in the State Planning Regulatory Provision (adopted charges) 2012 (SPRP) that local governments and distributor-retailers may levy for infrastructure networks.

Local government co-investment program

Through the local government co-investment program, the State Government proposes to co-fund the cost of development infrastructure with local governments, service providers and major developers.

However, funding will only be made available where a local government has adopted ‘fair value infrastructure charges’ for its local government area. The proposed ‘fair value’ charges are approximately 10 percent (residential) and 15 percent (non-residential) less than the current infrastructure charges listed in the SPRP. Even then, funding will not be available to all infrastructure projects. Underpinning this program is a proposed ‘essential infrastructure list’, which limits the scope of infrastructure which can be subject of the charging regime.

The full details of the co-investment program are yet to be released. However, the 2014-15 State Budget identifies that $500 million has been allocated to the Local Government Co-Investment Fund. The Budget Papers specify that local governments will be able to apply to the State for co-investment to upgrade, renew, build and/or construct infrastructure that supports growth and economic development. The fund will be fully contestable and preference will be given to fund projects that assist in “building a four pillar economy”.

The key amendments

The Bill contains a number of important amendments to the infrastructure provisions in the SPA and the SEQ Water Act. The key amendments can be summarised as follows:

  • Offsets and refunds – A local government and distributor-retailer must now provide, in an infrastructure charges notice (ICN), the details of an applicable infrastructure offset or refund. A proponent may also apply to have the value of the establishment cost of an offset or refund re-calculated by reference to the method adopted under a local government charging resolution. Additionally, where an offset is available for an item of infrastructure, a local government or distributor-retailer will now be required to offset the value of the infrastructure item against the total charge levied by each of them for the development (known as cross-crediting). 
  • Infrastructure credits – Infrastructure charges may only be for ‘additional demand’ placed upon trunk infrastructure that will be generated from the development. The Bill confirms that existing lawful uses must be excluded in assessing ‘additional demand’. 
  • Conversion applications – A new process is prescribed that allows an applicant to apply to a local government or distributor-retailer to have non-trunk infrastructure which is required to be provided under an approval to be converted to trunk infrastructure (with the consequence that offsets become available). 
  • Infrastructure charges notices – ICNs will now attach to land. Additionally, an ICN must now include the reasons for the decision to give the ICN, information about the applicant’s appeal rights and details of applicable offsets or refunds. 
  • Conditions – Local governments and distributor-retailers will be able to impose conditions on approvals for the provision of trunk infrastructure if it is not identified in a local government priority infrastructure plan or distributor-retailer water netserv plan. 
  • Appeals – There are new appeal rights to the Planning and Environment Court and a Building and Development Committee for conversion applications, the calculation of additional demand for a levied charge and decisions about offsets and refunds. 
  • Infrastructure agreements – There is a new statutory obligation to negotiate the terms of a SPA infrastructure agreement and SEQ Water Act water infrastructure agreement in ‘good faith’. Additionally, local governments and distributor-retailers will be prohibited from imposing a condition on an approval requiring the applicant to enter into an infrastructure agreement.

The amendments to the SEQ Water Act complement significant reforms that were passed earlier this year which separate planning and development functions of distributor-retailers and local governments for water and wastewater services and infrastructure.[1]