08 May 2008

NSW planning reforms - what shape is the next wave?

by Nick Thomas

The NSW Government's proposed planning reforms are intended to streamline processes, and to promote transparency and accountability in development decision-making. The draft legislation has the potential to achieve these goals, but the likely effect of the reforms is unresolved because much of the critical detail is not in the draft legislation.

The NSW Government is embarking on a new wave of planning reforms, which will affect almost every aspect of development control. The Exposure Draft of the Environmental Planning and Assessment Amendment Bill 2008 proposes significant changes to:

  • the process and time-frames for making planning instruments;
  • the allocation of responsibility for controlling development proposals, and time-frames for decision-making;
  • the way in which development contributions are planned and imposed; and
  • the certification of development,

in the existing Environmental Planning and Assessment Act 1979 ("Planning Act").

The NSW Government claims the reforms will streamline plan-making and development control decision-making processes, and promote transparency and accountability in development decision-making.

The Draft Bill offers the potential to achieve these aims, however many of the critical details for effective delivery of the reforms are not included and will (presumably) appear in regulations and Ministerial documents. This leaves the likely effect of many of the reforms unresolved.

The public comment phase for the Draft Bill has now closed, and it's anticipated that a (possibly revised) Bill will be introduced into Parliament shortly. The Draft Bill has attracted strong support from some stakeholders and strident criticism from others. This article highlights some of the key proposals for change.

Making planning instruments

The NSW planning system currently has three tiers of planning instruments, which regulate primarily what can be done on certain land and what must be addressed when considering development proposals. These instruments are State environmental planning policies ("SEPPs"), regional environmental plans ("REPs") and local environmental plans ("LEPs").

Currently, they are all made by the Governor on recommendation from the Minister for Planning, and key aspects of the LEP-making process are left largely to local councils.

The Draft Bill proposes eliminating REPs and allowing the Minister to make LEPs. It also allows the Minister to allocate responsibility for originating and progressing draft instruments to the Director-General of the Department of Planning ("DoP") or another body (which might include a development corporation) instead of a local council.

The process for making LEPs would be streamlined under the Draft Bill. The Minister would be given significant discretion to direct the path of a proposal for a planning instrument at an early stage, known as the "gateway determination". Public consultation processes could be tailored to particular types of planning instruments, and eliminated altogether in some cases. The proposal for a planning instrument will be made available during public consultation, but this may not include the actual drafting of detailed provisions. Presumably, this is intended to enable consultation earlier in the plan-making process and to reduce the number of legal challenges to new planning instruments.

A major feature of the Draft Bill is that it will allow the Minister to set time-frames for the completion of various stages in the making of a planning instrument. This should provide more certainty for stakeholders as to the overall time-frame within which a planning instrument may be made.

The reforms should be most helpful for smaller-scale plan-making, such as spot rezonings. The "gateway determination" formalises what often occurs in practice, and highlights the importance of an early, high level assessment of a proposed planning instrument.

Development assessment and approval

The Draft Bill would establish three new approval authorities – the Planning Assessment Commission ("PAC"), joint regional planning panels and individual planning arbitrators.

The PAC may determine major project applications (under Part 3A of the Planning Act) under delegation from the Minister (unless the applications relate to critical infrastructure), determine appeals from certain decisions of Regional Panels, exercise any functions of a Regional Panel or other Ministerial panel which the Minister confers on it, and review and advise the Minister on a number of other matters.

Regional Panels would act primarily as decision-makers for development applications, either as the approval authority or on appeal from a local council decision.

Planning arbitrators would determine appeals from local councils for specified kinds of development.

It's not yet clear what kinds of development proposals will be addressed by local councils or these new authorities, in either their approval authority roles or their appellate roles. DoP Fact Sheets suggest that planning arbitrators will deal only with smaller-scale development proposals worth up to $1 million. It seems, from the Explanatory Note for the Draft Bill and DoP materials, that Regional Panels may be given decision-making responsibility for some projects which are currently major projects under Part 3A. It's not clear whether those projects will remain in Part 3A. The Explanatory Note and DoP materials also indicate that the PAC will determine about 80% of major project applications under Part 3A.

The proposals that the Minister make most of the appointments to these new authorities and that they be made on a short term (ie. 3 year) basis has prompted expressions of concern for some stakeholders. The Draft Bill states that the new authorities are not subject to Ministerial control as to their decisions, however several submissions on the Draft Bill have queried whether longer term appointments would promote the independence in these authorities.

The appeal pathways in the Draft Bill have also attracted a lot of comment. Applicants would be able to appeal to the Land and Environment Court from a decision of a planning arbitrator, but not from a decision of the PAC or a Regional Panel if that body has made its decision as an appellate body. It's unclear why applicants with smaller-scale, planning arbitrator matters should have this, but not applicants with larger-scale matters. Some submissions on the Draft Bill have suggested that this will cause applicants who are dissatisfied with a Regional Panel decision to choose between the PAC and the Court if they wish to appeal, which they say is unprecedented in Australia.

It's proposed to create a new class of development for which objectors will be able to appeal an approval in addition to "designated development" (for which objectors already have appeal rights). The class of developments will be defined in regulations. Although the Explanatory Note and DoP materials suggest the class will be quite limited, the proposal has should cause concern for developers.

Although the Draft Bill does not specify this, DoP Fact Sheets state that the planning reforms will also:

  • provide more rigid time-frames for determining development applications, by reducing the scope of the "stop the clock" powers for consent authorities; and
  • provide a 10 day determination time-frame for small-scale applications which satisfy the requirements of applicable development codes, but longer determination time-frames for various other applications.

The Government released some draft codes for community consultation on 8 May 2008.

Certification of development

The Draft Bill proposes several reforms to promote transparency in private certification of development under Part 4A of the Planning Act, such as:

  • additional design and other prerequisites for the issue of a Part 4A certificate;
  • requirements for a private certifier to issue directions to a developer if the certifier becomes aware of a non-compliance with the relevant development approval;
  • additional investigatory and on-the-spot enforcement powers for local councils in relation to development which is being privately certified; and
  • power for a consent authority to include conditions of development consent which impose "performance bonds" or "compliance bonds", to ensure compliance with the conditions of the consent during construction.

So what happens now?

The Government noted last year that it expected the Bill to be passed mid-2008. That seems ambitious, given that it is already May and the Opposition has announced it wants to put the reforms to a Legislative Council Committee. However, it’s not impossible - the Part 3A reforms went through Parliament within about two weeks.

While the Bill gives us some detail, much is left to non-Parliamentary means. This gives the Government of the day more flexibility in administering the planning regime (because Regulations and orders are easier to amend than Acts), but it also gives stakeholders less certainty. Without the regulations or other documents, it's hard at this stage to assess the full impact of these changes - so watch this space.

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.