Planning & Environment (Infrastructure Conbributions) Bill 2015
Mr WYNNE (Minister for Planning) — I move:
That the amendments be agreed to.
In doing so, I will make a very brief contribution by way of background on where we have got to with a set of amendments negotiated in a fruitful way between the government, the opposition and the minor parties. An agreement was also reached on a compromise amendment that achieved the main objectives of both the government and the opposition. This was to require an annual report on the amount collected by each municipal council or other collecting agency, including agencies such as the Metropolitan Planning Authority, and reporting on other funds that pass through the Consolidated Fund. Essentially the argument was about ensuring a level of transparency in the process and the ins and outs of the way that money is, firstly, collected, and then the way that money is distributed and reported on.
I thank the shadow Minister for Planning, because it was his initiative to approach us in these discussions, which we conducted in a professional way. I might add, though, that while the government is happy to accept this requirement for annual reporting, it was not something that the coalition proposed when it was in government at the time it put forward a similar, but, can I say, less comprehensive piece of legislation.
The ministerial directions provided for under the bill are reviewable by the Scrutiny of Acts and Regulations Committee, which may recommend that an instrument be disallowed or amended. There is a mechanism and scrutiny measures are available through the SARC process. Ministerial directions provided for under this bill are reviewable, as I indicated, and the directions are required to satisfy the principles articulated in the bill of a nexus between fairness and equity. This serves as a check on the use of the minister’s direction-making power.
The opposition also raised the issue of a method of indexation, and again I indicate to the house that this was not a matter that could be agreed upon by the government. The opposition moved an amendment proposing the CPI as a flat cap on the increase of rates. This is not appropriate as these agreements carry over many years, and it is crucial that essentially the buying power of the developer contribution be retained in real terms. I want to indicate to the house our rationale for this. The Standard Development Contributions Advisory Committee carefully looked at indexation and it recommended against using CPI as the appropriate tool. Firstly, it found that the use of CPI to index construction and land is inappropriate because the basket of goods for CPI is obviously measuring a different set of matters.
Mr Katos interjected.
Mr WYNNE — Here is a great irony; I look forward to the contribution from the opposition lead speaker, who might be able to balance out some of the inherent conflicts in the opposition’s position. Secondly, the advisory committee found that it was critically important to maintain the real value of the proposed standard levies over time, as I indicated earlier. Thirdly, the failure of past development contribution plans (DCPs) to properly adjust for price and value changes has led to significant funding gaps and challenges for the councils involved. The advisory committee’s final recommendation was that using the CPI is manifestly inadequate and that industry indexes are a better measure.
Whilst I do understand the broad public policy position taken by the opposition, as represented by Mr Davis, a member for Southern Metropolitan Region in the other house, for the reasons that I have articulated, indexation, as a blunt instrument, does not achieve the outcome we would all hope it would. If a developer is responsible for funding a road or kindergarten in year 1, then when this is needed in year 5 the amount of money set aside should be enough to cover the cost. That is why an index based on building cost and land values is critical to ensuring that these contributions retain their purchasing power.
In conclusion, the Planning and Environment Amendment (Infrastructure Contributions) Bill 2015 is important because it brings consistency to the approach for councils, developers and the community as to how developer contribution levies will be articulated going forward. We know that there has been an inconsistent application of DCPs over time. This bill will sort that out. We know, particularly in growth areas where we want to ensure that both the appropriate physical and social infrastructure is in place, that the bill is going to ensure that we enrich the quality of life of the communities who are going to live in our growth corridors. I commend the bill, as amended, to the house.