The Queensland Government has announced caps for infrastructure charges by local governments on new developments as part of its push to spark a building revival in Queensland.

 

In a suite of the reforms based on proposals by the independent Infrastructure Charges Taskforce, limits will be placed on charges for trunk infrastructure, including water, sewerage, storm water, roads and parks.

 

The standard maximum residential charges will be set at $28,000 for a dwelling that has three or more bedrooms, and at $20,000 for one and two-bedroom dwellings. Under the current system these charges have been reported by industry as high as $50,000 and $30,000 respectively.

 

Standard maximum charges for non-residential development will range between $50 and $200 per square metre of gross floor area depending on the development type. A stormwater charge per square metre will also apply. Under the current system these non-residential charges have been reported as high as $524 per square metre for retail and $251 per square metre for offices.

 

The new infrastructure charges have been criticised by the Local Government Association of Queensland, which claims they are likely  to force councils to increase their debt to unsustainable levels and put further pressure on rates bills.

 

Acting CEO of LGAQ, Greg Hoffman said the Government's changes to infrastructure charges could add an average $60 to the average rates bill in southeast Queensland.

 

"This decision will push total council debt in Queensland past the $10 billion mark, an increase of 500 percent in 6 years,'' he said.

 

"At this point councils are at their borrowing limiting and will not be able to borrow to build infrastructure and development will be stifled.''

 

The Queensland Government, however, claims the charges are necessary to give industry certainty in investing.

 

Under the reforms, annual increases in local government infrastructure charges will be limited to infrastructure CPI.

 

Other measures under the reforms include:

  • A moratorium on the collection of local function charges for the use of state roads - a key stimulatory measure which will save the industry up to $30 to $40 million a year.
  • Deferred payments meaning developers can pay charges at settlement rather than at the beginning of the planning process, assisting obtaining finance for projects.

 

Deputy Premier and Minister for Local Government, Paul Lucas, said that rather than applying a blanket cap, the government was introducing maximum standard charges and retaining the ability for councils to charge less than the maximums as a way of stimulating construction and competing for development.

 

The reforms are expected to come into effect from 1 July this year.

 

Overhauling Queensland’s infrastructure charging regime was one of the key initiatives to come out of the State Government’s Growth Management Summit in March 2010.

 

The Government has also agreed to extend the current 30 June 2011 deadline for the adoption of Priority Infrastructure Plans to 31 December 2011.

 

Mr Lucas said that bringing in standard charges sets aside the need for councils to complete complicated infrastructure charges schedules as part of their PIPs.

 

The Government’s response to the Infrastructure Charges Taskforce report is available at www.dip.qld.gov.au/ict.