Funding the Hunter’s Future Critical Infrastructure

The Hunter is identified as a region predicted to experience high levels of both population and economic growth over the next 30 years. With increased populations and industry stimulation comes additional pressures on infrastructure and services such as roads and schools.

The Department of Planning and Environment (DP&E) is investigating the introduction of a special infrastructure contributions scheme (SIC) to assist in delivering the key infrastructure and services required to facilitate and support growth in the region.

But what exactly is a SIC and who will it affect?

A SIC is essentially a funding mechanism that leverages the economic benefit of a planning incentive, for example the granting of up-zoning over land to allow greater development yield. Typically, this is the methodology used to develop large land release estates whereby the land is up-zoned from rural uses to low-density residential.

Currently, funding for regional infrastructure is collected through individual voluntary planning agreements (VPA’s), negotiated on a case by case basis between the proponent and DP&E. Introduction of a SIC is expected to streamline the contributions process, and provide greater certainty around contribution costs, where typically VPA’s have been a lengthy and convoluted method of funding capture.

DP&E has identified that the Hunter SIC will apply to developers who intend to seek an up-zoning for greenfield sites, destined for industrial or low density residential development. Or in other words will not apply to developers seeking to intensify existing development sites or utilise existing zoned land.

In accordance with the discussion paper issued by DP&E (which was up for comment earlier this year), the SIC will specifically levy $10,664 per new residential lot created by greenfield re-zoning, and $32,838 for new industrial lots achieved in the same way in the Lower Hunter. Residential development that occurs in the Mid-Coast and Upper Hunter will be levied at a significantly lessened rate being $658 per residential lot.

The Department indicates that the levy is earmarked to provide $330 million of funding to assist in delivering key infrastructure, in conjunction with additional State funding. Specific projects in the pipeline include upgrading the intersection at the Minmi Road and Newcastle Link Road roundabout and the provision of a new ambulance station at Rutherford.

For more information on how and why the proposed SIC will be levied see: http://www.planning.nsw.gov.au/Policy-and-Legislation/Infrastructure/Infrastructure-Funding/Special-Infrastructure-Contributions-SIC/Hunter-Region-Special-Infrastructure-Contribution

To learn more about development contribution schemes, or to discuss how the Hunter SIC might impact your development site, contact EPS’s Land Economics Team.