Overhaul of planning legislation in NSW: At what cost?
The NSW State Government is undertaking the most significant overhaul of the Environmental Planning and Assessment Act (NSW) since its introduction in 1979, in particular, with respect to major projects.
The objectives of the repeal of Part 3A are to return decision-making powers back to local councils and to provide a framework for assessing genuinely “State significant” development that offers certainty for investment and the efficiency needed to get NSW moving again. This is the first step in what is proposed to be a comprehensive review of the NSW planning system.
The key issues arising from the repeal of Part 3A and the new framework for assessing State significant development include:
- the return of powers to local councils;
- a general reduction in the nature and type of projects that will now be classified as “State significant”;
- the retention of a call-in power for the Minister for Planning and Infrastructure; and
- the implications of the proposed amendments for rezoning proposals; particularly for sites that are potentially State significant.
Councils regain powers
The Part 3A regime was introduced into the EPA Act in 2005. The regime’s aim was to cut red tape by reducing time, cost and complexity in the assessment of major projects and provide the regulatory conditions to support investment growth in the State. The Achilles heel of the Part 3A system was the public concern about the unfettered discretion of the Minister and a perceived lack of transparency and public participation.
Despite these issues, the Part 3A system was effective in streamlining the assessment of major projects, primarily because the Minister and the Department of Planning and Infrastructure were better resourced than local councils to assess major projects. It also served as a vehicle for State-wide strategic planning by enabling the Minister and his delegates to determine strategic sites or projects of State significance.
The O’Farrell Government’s commitment to return a broad range of powers back to local councils raises concerns about the ability of councils to deal with the assessment of major projects in a timely manner in order to deliver vital investment in the State. Retention, for the meantime, of Joint Regional Planning Panels may assist in partly depoliticising assessment of development, but without additional resourcing, Panels could be said to add to the existing workloads of stretched local councils.
State significant development
The new assessment framework reduces the classes of development that are to be considered “State significant” by removing certain residential, retail, commercial, coastal subdivision and marina developments from their former classification as “State significant”. It also substantially increases the capital investment threshold for a number of development classes that continue to be classified as State significant. For instance, the capital investment value for warehouses and distribution centres must now be more than $50 million (up from $30 million) and $30 million for manufacturing (up from $20 million) to be considered “State significant”. These changes are expected to result in a 50 per cent reduction in the number of projects processed by the State, meaning that local councils will be responsible for assessing substantially more major projects than under the current framework.
With the burden of assessment shifting back to local government, it remains to be seen if local councils have the expertise and resources to be effective in assessing major projects.
Given its aim of cutting red tape and speeding up the investment approval process, a key question is whether the State Government will provide local councils with additional resources and support to manage the additional application flow.
Under the new framework, the Minister may “call-in” a development as being State significant after receiving advice from the Planning Assessment Commission regarding the State or regional significance of the proposal.
It will be interesting to see if, how and when the Minister’s call-in powers will be exercised, particularly in relation to commercial, retail and residential projects that are of State significance. Developers need guidance as to when these powers may be exercised and what criteria will be adopted by the commission in advising the Minister when to “call-in” projects.
Under the former framework, proponents were able to apply for a spot rezoning of land for State significant development through the process of assessment as a State significant site or through a concept plan. Otherwise a rezoning could only be achieved by a request to the relevant local council and, if refused, there is no right of appeal or review.
It is presently unclear whether the Government proposes to repeal or otherwise amend the State significant site assessment process. However, if so, given the repeal of concept plan applications, this could potentially significantly increase the difficulties of obtaining a rezoning of land in NSW.
While the Government’s formal review of the EPA Act is yet to commence, careful consideration needs to be given to the impact of these proposed reforms on the assessment of major projects, in particular residential, retail and commercial development. In order to achieve its objectives of “certainty for investment” and to get “NSW moving again”, the Government must move to simplify the assessment and approval process in NSW, including supporting local councils in managing increased application and assessment flows.