Local government infrastructure includes water supply and reticulation, sewage treatment, local roads, stormwater management and parks.
The department reviewed the existing framework in 2013 and 2014 to introduce reforms that enhance the clarity, equity and consistency of the system.
As part of this review, the public were invited to have their say on the proposed changes. The department received more than 80 submissions from interested stakeholders on how the local government infrastructure charges framework could best support a growing, sustainable and prosperous Queensland.
Infrastructure planning and charging framework
Following the review, the department has produced an 'Infrastructure planning and charging framework' that strikes a balance between local government financial sustainability and property development feasibility.
The new framework:
Fact sheets are available to provide advice about specific elements of the infrastructure planning and charging framework.
Amendments to the SPA and SEQ Water Act
Amendments to the Sustainable Planning Act 2009 and the South East Queensland Water (Distribution and Retail Restructuring) Act 2009, were required to support the implementation of the reformed infrastructure framework. These amendments have been progressed through the Sustainable Planning (Infrastructure Charges) and Other Legislation Amendment Bill 2014 which was passed by parliament to commence on 4 June 2014. These explanation notes provide more information about the Bill.
Some of the key amendments to the SPA and the SEQ Water Act include:
- The requirement to recognise the existing use of land and reduce charges to take account of that use. This is commonly known as a 'credit'.
- The requirement to be more transparent about why an infrastructure condition is imposed.
- Introduction of a process for an applicant to apply to convert non-trunk infrastructure to trunk infrastructure. This new process also impacts whether a developer is entitled to an offset or refund against their infrastructure charge.
- Clarification that payment of infrastructure charges cannot occur before plan sealing for a development approval or before time of connection for a water approval, unless agreed to by the local authority and applicant.
- Clarification about the types of infrastructure appeals that can be lodged and the introduction of new appeal rights for the above mentioned conversion process and crediting.
Fair value infrastructure charges schedule
As part of the infrastructure planning and charges framework review, a study was undertaken to analyse the relationship between demand and the cost to provide development with essential infrastructure to support it.
This work resulted in the development of the fair value infrastructure charges schedule ( 345 KB).
Compared to the maximum charges determined in 2011 and set by the state under the State Planning Regulatory Provision (adopted charges) 2012 ( 134 KB), the fair value infrastructure charges schedule includes a 10 per cent cost reduction for charges for residential development and 15 per cent reduction for non-residential development.
In addition, the proposed schedule has:
- an expanded and more differentiated list of land use categories
- additional charge categories to align charges and demand for infrastructure.
While the State Planning Regulatory Provision (adopted charges) identifies the prescribed maximum infrastructure charges set by the state, local governments are encouraged to adopt the lower and more refined infrastructure charges proposed under the non-mandatory fair value infrastructure charges schedule.
Frequently asked questions
The long-term infrastructure charging framework addresses the challenging issue of infrastructure charges and provides a way forward that will encourage development. It also ensures local governments have the funds necessary to build infrastructure such as roads and water and sewerage treatment plants.
The reforms will deliver an infrastructure charges framework that is certain, equitable, supports the financial sustainability of local governments and water distributor-retailers, and provides confidence to the development industry when planning and delivering projects.
Since the start of the reform process in 2013, there has been a strong commitment to genuine and robust stakeholder consultation and engagement.
Between February 2013 and April 2014 the department held 13 workshops with representatives from local authorities and development industry stakeholders to identify framework issues and test options for reform. Stakeholder opinions and advice have informed decision-making about the reforms needed.
Additionally, the discussion paper Infrastructure planning and charging framework review ( 612 KB) was released for public consultation on 1 July 2013 proposing options for the reform of key elements of the framework.
More than 80 submissions were received from a range of stakeholders. In general, the submissions demonstrated support for the introduction of a more equitable and certain long-term infrastructure framework.
Key issues identified during consultation included the need to:
- increase the certainty and transparency of conditions, offsets and refunds
- specify credits for existing use rights
- improve dispute resolution and infrastructure agreement processes
- direct that the payment of infrastructure charges cannot occur before plan sealing for a development application or time of connection for a water approval, unless agreed to by the local authority and applicant
- review the maximum charges and respective charge categories.
Feedback from local authorities, the development industry and other stakeholders indicated general support for the proposed infrastructure framework reforms and the certainty, transparency and simplicity the reforms will deliver.
Under the Sustainable Planning Act 2009 (SPA) all local governments were required to include a Priority Infrastructure Plan (PIP) in their planning schemes. Councils are now required to include a Local Government Infrastructure Plan (LGIP) instead of a PIP.
A grace period, starting from the commencement of the new framework and ending 30 June 2016, has been included in the legislation, during which time a local government planning scheme is not required to include a Local Government Infrastructure Plan (LGIP).
From 1 July 2016 onwards, local governments will be required to include an LGIP in their planning scheme if they intend to levy infrastructure charges or impose conditions for trunk infrastructure. In accordance with section 997 of SPA, a local government may apply to the Planning Minister for an extension of the date to a date not later than 30 June 2018, to adopt an LGIP.
Local governments that do not intend to levy infrastructure charges or impose conditions for trunk infrastructure do not need to include an LGIP in their planning schemes.
The provisions that previously allowed local governments without an adopted charges resolution to continue levying charges based on a planning scheme policy for infrastructure contributions will lapse upon commencement of the new framework. Therefore, local governments without an adopted charges resolution will not be able to levy charges from this point onwards.
Existing charges resolutions will remain valid after the commencement of the new framework and therefore local governments were able to continue to use that resolution to levy charges. However, all local governments were required to adopt a new resolution before 1 July 2015 if they want to continue to levy infrastructure charges.
The requirement for a new resolution by July 2015 assisted with the transition into the new framework and ensure the framework is being applied consistently across local governments. It also provides a level of transparency to stakeholders as local governments will be required to include additional information in their resolutions such as the charges breakup; criteria used to decide a conversions application; and the methodology for recalculation of the value of infrastructure.
It is not always possible to identify all trunk infrastructure required for all future development because of a lack of information at the time of planning. The conversion process allows for those pieces of trunk infrastructure to be identified at the time of development approval.
The conversion process is not an appeal process. As such, the local authorities make a decision on what is converted and what is not. However, an applicant can challenge a decision made by the local authority on a conversion through an appeal to Planning and Environment Court or the Building and Development Dispute Resolution Committee.
The specification of trunk infrastructure depends on the number of people who will use the infrastructure and the standard of service put in place by the local authority. As such, each local authority can set their own definition of 'trunk infrastructure' which is appropriate for their local government area or service area.
Therefore, it is practical for each local authority to set its own decision criteria and the legislation requires that local authorities have criteria in their resolution or Netserv Plan by 1 July 2015. Until this time, the state government will provide default criteria in a statutory guideline which can be used by local authorities while they are developing their individual criteria. The default criteria are intended to support local authorities in making decisions on conversions and provide them with adequate time to develop their own criteria.
There is a clear process in place for making a decision on a conversion application. A conversion application about non-trunk infrastructure can only be lodged if construction of the non-trunk infrastructure has not started. The local authority will have 30 business days to consider and decide a conversion application. This timeframe can be extended (by a minimum of 10 days) to accommodate an information request process.
Offsets and refunds are currently determined through a negotiation process which results in uncertainty. The legislation addresses this by:
- clarifying that offsets and refunds must be provided
- providing credits across an entity's networks
- enabling offsets and refunds for non-trunk infrastructure that is converted to trunk infrastructure.
Offsets are to be provided across all infrastructure networks for which the adopted charge applies, regardless of the type of infrastructure that is required to be provided in a necessary infrastructure condition. For example, a necessary infrastructure condition of a development approval requires transport infrastructure to be provided. The cost of the transport infrastructure is $500,000. Adopted charges apply to the development at a total amount of $600,000. The cost of the infrastructure under the necessary infrastructure condition ($500,000) must be offset against the total amount worked out by applying the adopted charge to the development ($600,000), rather than offsetting it only against the part of the charge relating to transport infrastructure.
Where a development application impacts on water and wastewater networks within an area that has a distributor-retailer arrangement, the local government and the distributor-retailer are only required to offset against the part of the maximum charge that they levy. Offsets cannot be transferred from a local government to a distributor-retailer or vice-versa.
Details including timing about an offset or refund are to be provided at the time an infrastructure charges notice is issued. The timing of a refund and a decision which involves an error relating to an offset or refund is appealable to the Planning and Environment Court and the Building and Development Dispute Resolution Committee.
The intent of the planned versus actual values provision is to provide a mechanism for testing the planned value of infrastructure identified within a local government infrastructure plan or Netserv Plan.
The planned value of infrastructure will continue to be the default arrangement - with actual values envisaged to be used where a local government or the recipient of a charges notice has genuine concerns regarding the value of the infrastructure in the plan.
Where an applicant is dissatisfied with the planned value of the infrastructure that is the subject of the offset or refund, the applicant can require an authority to use the methodology outlined in its infrastructure resolution or charges schedule to determine the value of the establishment cost. An applicant can only request that an infrastructure charge be recalculated in accordance with the methodology prior to the time stated for payment of a levied charge in the infrastructure charges notice.
Preparation for local authorities
Local authorities had until 30 June 2015 to include a recalculation methodology in their infrastructure resolutions or charges schedules.
Previously there was no certainty for applicants regarding the crediting arrangements that will apply to their development. The provision of credits for existing lawful use rights is needed to ensure a certain and consistent approach to crediting across all local authorities.
The establishment of mandatory crediting arrangements will ensure that lawful existing rights and previous infrastructure charges paid are recognised.
The provisions recognise that a credit does not need to be provided in the circumstance where there is an outstanding infrastructure charge payable or if trunk infrastructure conditions have not been complied with.
Amendments to the legislation clarify what is appealable in relation to infrastructure charges and introduce a new appeal right for the conversion process.
The amendments also strengthen the ability of the Building and Development Dispute Resolution Committees to hear appeals about infrastructure matters. These amendments are aimed at ensuring the committees are a viable low-cost and timely alternative to the court system for the purpose of hearing infrastructure charges appeals.
The legislation provides that infrastructure agreement negotiation processes must be conducted in good faith. The intention of this provision is to encourage open, timely and cost-effective negotiation of infrastructure agreements.
Essentially, the infrastructure framework for distributor-retailers is the same as the local government framework.There are some minor differences that are necessary to make the framework functional for distributor-retailers. For example, the time of payment of an infrastructure charge levied by a distributor-retailer is when the development site is connected to the water infrastructure. For local governments, payment time is at plan sealing, the time of change of use or when a building approval is issued.
The change from proportional split to charges breakup is simply a terminology change to better reflect the function of a charges breakup.
If a distributor-retailer and their local government cannot agree on the split of the maximum charge, then their proportion will be determined by the State Planning Regulatory Provision (Adopted Charges) (SPRP).
Both distributor-retailers and their local governments will be limited to charging up to their proportion of the maximum charge under the SPRP.
Resolutions and board decisions
The legislation provides for existing local government resolutions and board decisions to remain valid after the commencement of the new framework to the extent that they are consistent with the SPRP in place at the time. The legislation also provides for the SPRP to continue for local governments without a local government infrastructure plan and to identify local government's priority infrastructure areas until 1 July 2016. The Sustainable Planning Act 2009, section 977, allows local governments to apply to the Planning Minister for an extension of this date to a date not later than 30 June 2018.
Existing charges resolution and board decisions remained valid until 30 June 2015. All local governments and distributor-retailers were required to adopt a new resolution or board decision which is consistent with the new legislation before 1 July 2015 if they want to continue to levy infrastructure charges.
Development applications lodged prior to commencement of the new framework in 2014, but for which an approval has not been given, will be decided under the new provisions.
The previous framework will continue to apply to development applications decided prior to the commencement of the new framework, although these applicants will have access to the permissible change arrangements included in the legislation.
Setting infrastructure charges
The State Planning Regulatory Provision (adopted charges) 2012 (SPRP) ( 134 KB) and the Adopted Infrastructure Charges Schedule 2016 ( 392 KB) (increased amounts) sets a limit on the amount a local authority can levy a development for local infrastructure.
Local authorities still have the flexibility to set charges for their region provided the charges are below the maximum charge. This provides a level of certainty for the development industry that infrastructure charges will remain under the maximum amount while still supporting the provision of critical infrastructure by local authorities.
Local governments that levy infrastructure charges are required to set their infrastructure charge rates by making an adopted infrastructure charges resolution. For more information about your council area's adopted infrastructure charge resolution, contact your local government office. Find your local council's contact details. Local governments are required to publish their infrastructure charges resolution on their web pages.
Until 30 June 2016, or an extended date before 1 July 2018 approved by the Minister, local councils that do not have an infrastructure plan will have their priority infrastructure area (PIA) map identified in the SPRP. A PIA map identifies the areas that a local government will give priority in providing infrastructure services to accommodate future growth. View the current local government PIA maps. These maps will be superseded once a local government adopts its infrastructure plan.
South-East Queensland local councils set infrastructure charges for:
Water supply and waste water infrastructure charges are set by water distributor-retailers (Queensland Urban Utilities and Unity Water). The local government and distributor-retailers total infrastructure charge is limited to the maximum infrastructure charge.