03 Aug 2017
Proposed changes to infrastructure funding in NSW
By Christina Wu, Lance Bode and Nikki Robinson
Local Infrastructure Growth Scheme subsidies will be wound down.
As part of the NSW Government's affordable housing reforms announced during the recent budget, the NSW Government is proposing to change the existing infrastructure funding scheme.
The purpose of the reform is to ensure that developers make a fair contribution towards the costs of establishing infrastructure.
Currently, the Local Infrastructure Growth Scheme (LIGS) is used to cover the financial gap between the maximum contribution that councils can charge developers and the actual cost to deliver the infrastructure.
As part of the proposed reforms, the NSW Government will:
- continue to provide LIGS subsidies to certain areas for the next three years, after which the LIGS scheme will end;
- gradually reduce the subsidies and increase the cap on developer contributions by increasing the cap by $5,000 on 1 January 2018, 1 July 2018, 1 July 2019; and
- remove all caps and cease existing LIGS funding by the end of 2019/2020.
The LIGS will be closed to any new areas. In these areas, if developer contributions exceed the current cap levels (which are $20,000 for infill and $30,000 for greenfield), the contribution plan will be reviewed by the Independent Pricing and Regulatory Tribunal.
These proposed changes will have a financial impact on all developers who are considering new projects.
Please contact us if you would like any further information or would like us to represent you in engaging with the NSW Government.