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11 July 2018

Infrastructure Contributions System

On 2 July 2018, the Planning and Environment Amendment (Public Land Contributions) Act 2018 came into effect, introducing a land contribution model to the Infrastructure Contributions system. The Infrastructure Contributions Plan (ICP) system ensures the provision of infrastructure in PSP areas and that developers contribute equitably. The transfer from the Development Contributions Plan (DCP) system is to ensure typical infrastructure contributions cost consistency across all growth areas. 

A major part of the Planning and Environment Amendment (Public Land Contributions) Act 2018 is the strengthened ability for the Collecting and Development Agency (generally Council) to compulsorily acquire land as required for the timely development of key infrastructure within PSP areas. The bulked up compulsory acquisition powers remove barriers that can inhibit PSP development. This is good news for developers wishing to fast track green fields development as Council may potentially have greater willingness to assist by compulsorily acquiring land.

An ICP can include two types of levies -

1. A Monetary Levy

The monetary levy is paid in the form of a standard (typical costs) levy and/or a supplementary (atypical/PSP specific costs) levy rate on a per hectare of net developable area basis. Both the standard levy and the supplementary levy rates must be apportioned between community and recreation construction costs and transport construction costs. The appropriate levy rate is then formulated based on the class of development.  The monetary levy can only include funding for infrastructure required by the PSP area. It is not designed to fund infrastructure that is required for a need external to the PSP area.

Standard levy rates for each class of development

All employment and commercial land within town centres is designated as ‘Residential development’ (all amounts in $ per net developable hectare)

  • Community and Recreation Construction: $86,627
  • Transport Construction: $114,062
  • Total Standard Levy Rate: $200,689

Commercial and Industrial Development (all amounts in $ per net developable hectare)

  • Community and Recreation Construction: $0
  • Transport Construction: $114,062
  • Total Standard Levy Rate: $114,062

Source: Ministerial Direction on the Preparation and Content of Infrastructure Contributions Plans  

 

2. A Land Component

The land component of the contributions plan (introduced on 2 July 2018) allocates all land required for infrastructure projects identified in the PSP. This may result in an ICP partially funding the cost of a project but acquiring the area of land required for the whole project. Land owners are paid compensation for the land acquired at a valued rate that also includes a financial algorithm to calculate the credits/debits of above or below average land provision in comparison to the average provision across the ICP. The land component can also include land outside the ICP area that is required for infrastructure.
 

It is our understanding that Department guidelines for the land component of the Infrastructure Contributions system are not yet available. If you are interested in the infrastructure contributions system or wish to know more about Metropolitan Greenfields development, head to DEWLP, or contact Andrew Guthrie or Brian Minogue.

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