29 May 2014

Quanta costa? Reforms to Queensland’s infrastructure charging framework

by Kathryn Pacey, Ian Motti

Queensland's new infrastructure charges framework provides greater clarity for all stakeholders while retaining fundamental concepts.

Details of Queensland's new infrastructure charging framework were released on 8 May with the introduction into Parliament of the Sustainable Planning (Infrastructure Charges) and Other Legislation Amendment Bill 2014.

The Bill follows the State Government’s comprehensive review of Queensland’s infrastructure charging framework and, if passed, will create an amended regime to apply from 1 July 2014.

Some new concepts, some familiar ones: Replacement of Chapter 8 (Infrastructure)

The Bill proposes to replace Chapter 8 of the Sustainable Planning Act 2009, which deals with infrastructure charging, entirely. The Government states these changes are aimed at simplifying, streamlining and clarifying infrastructure charges.

This new Chapter 8 removes superseded and redundant provisions, including those regulating distributor-retailer infrastructure charging which, from 1 July, would be regulated under the amended South East Queensland Water (Distribution and Retail Restructuring) Act 2009.

While the new Chapter 8 introduces a number of changes, core concepts such as trunk, non-trunk and development infrastructure, capped charges under the State Planning Regulatory Provision and a local government’s ability to adopt and levy charges for trunk infrastructure and impose conditions relating to infrastructure on development approvals, remain largely the same.

The Bill does however clarify existing credit rights, the calculation and provision of offsets and refunds and expressly provides that infrastructure agreements are voluntary instruments, which an assessment manager cannot require as a condition of a development approval.

Identifying trunk infrastructure

From 1 July 2016, each local government will be required to prepare a Local Government Infrastructure Plan (LGIP) as part of its planning scheme, to identify its trunk infrastructure. Until that date, an existing Priority Infrastructure Plan (PIP) in force for a local government authority will, on commencement, be taken to be an LGIP.

For those local government authorities that do not currently have a PIP, their trunk infrastructure is identified through its Adopted Infrastructure Charges Resolution. On commencement, that resolution will be taken to continue.

Under the Bill, a resolution is required to include a method for working out the costs of infrastructure the subject of an offset or refund. If the resolution does not include one, then the method set out in a guideline (to be made by the Minister) prescribed by regulation will be taken to be included in that resolution.

Infrastructure charges and notices

Under the proposed reforms, an infrastructure charge may only be levied if a development approval has been granted, and an adopted infrastructure charge applies for the trunk infrastructure for the development. The charge is imposed under an infrastructure charges notice. This is no different to the current situation.

Existing lawful use credits

The Bill introduces mandatory credits to recognise the existing lawful use of a site, or the existing right to develop a site, through a discounted infrastructure charge. This gives stakeholders greater certainty about when and how a credit may be applied.

Power to impose conditions for trunk and non-trunk infrastructure

Under the Bill, in addition to infrastructure charges, a local government may impose the following with respect to trunk infrastructure:

  • A condition on a development approval requiring either the provision of trunk infrastructure, or different trunk infrastructure to the same desired standard identified in its LGIP.
  • If the LGIP does not identify adequate trunk infrastructure, a condition that requires trunk infrastructure necessary to service the premises.
  • A condition requiring payment of additional trunk infrastructure costs if the development will generate infrastructure demand greater than that required to service the type or scale of future development assumed in the LGIP, or at a time earlier than identified in the LGIP or for premises partly or wholly outside the priority infrastructure area.

For non-trunk infrastructure, a local government may only impose a condition requiring the provision of that infrastructure.

Converting non-trunk infrastructure to trunk

Where a condition of a development approval requires the provision of non-trunk infrastructure, the Bill introduces an ability for the applicant to apply to have the non-trunk infrastructure converted to trunk infrastructure. This is known as a “conversion application”.

It is not clear what criteria a local government will use to determine the application, but they may be prescribed under regulation.

If the local government refuses the application, or does not decide it within the prescribed timeframe, the applicant may appeal to the Planning & Environment Court against that decision.

Transitional provisions

The Bill includes a number of transitional arrangements. Relevantly, from commencement:

  • existing infrastructure charges, regulated or adopted infrastructures charges and their respective notices (including negotiated notices) will continue as if the Bill had not commenced;
  • the existing State Planning Regulatory Provisions (adopted charges), which sets the maximum for charges that can be adopted by local governments, will continue in force as the SPRP (adopted charges);
  • existing PIPs will become LGIPs (until 30 June 2016);
  • existing development applications made but not decided on commencement will be determined under the amended Sustainable Planning Act;
  • existing infrastructure agreements on foot at commencement will continue as an agreement under the amended Sustainable Planning Act; and
  • existing appeals which were started but not decided on commencement continue as if the Bill had not commenced.

Fair value schedule

Although not contained in the Bill, the State has released a fair value schedule of infrastructure charges to encourage local governments to reduce their infrastructure charges by offering access to State funding for co-investment in "Priority Development Infrastructure".

The mechanisms for how this funding will be determined and implemented is the subject of further consultation, and many of the details for this mechanism are still to be released. The Department of State Development, Infrastructure and Planning aims to have these arrangements in place for the new financial year.

Next steps

The Bill has been referred to the State Development, Infrastructure and Industry Committee which must report back to Parliament by 29 May 2014. If passed, the new framework is expected to commence 1 July 2014.

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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.