BOOST FOR DEVELOPERS ON THE WAY
6 June 2014, Written by Nick Nichols
GOLD Coast developers and homebuyers are in line for a major boost as the state government paves the way for further cuts in infrastructure charges to bolster the construction industry.
But according to David Ransom (pictured), the president of the Gold Coast-Logan branch of the UDIA, the changes may not take effect until next year.
Ransom has welcomed the move by the government which will see a cut of about $3000 in charges levied against a single home which is currently capped at $28,000.
The Gold Coast development industry was briefed on the changes this week as part of a state-wide roadshow of the plan by the government.
Under the proposal, the government has allocated $500 million to fund the changes which will be accessed by those regional councils that come on board with the scheme.
“With the ball firmly in their court, we’re now urging the City of Gold Coast to take action to deliver fairer infrastructure charges and make home ownership more affordable for the region,” says Ransom.
Gold Coast mayor Tom Tate was not immediately available for comment.
Prior to 2011, the Gold Coast was hit hard by the government’s Priority Infrastructure Plan (PIP) charges which were adopted fully by the previous city council administration.
After bowing to industry pressure, the Bligh Government capped PIP charges in 2011, giving the development industry some reprieve following a slump in construction activity, particularly on the Gold Coast.
The Newman government is now planning to cut capped charges further, but it has to convince local councils that they will be adequately compensated.
“It’s positive that the State Government is taking charge of this issue,” Ransom says. “In previous years, the state has devolved this to local government.
“Local government will be encouraged to reduce their charges to what is called a fair value charge.”
Ransom says that under the PIP regime development on the Gold Coast was a “disaster”, creating a massive disincentive for developers to do business on the tourism stip.
“They were really bad infrastructure charges,” he says.
“The capped charges were far better and this is an improvement again.”
However, Ransom says the charges are just “one piece of the puzzle” for the development industry on the Gold Coast and that other factors, such as the speed of council assessing applications, also come into play.
He says the Gold Coast is emerging from a trough that was “deeper than it needed to be” following the old PIP regime, and the industry will always want more to be done.
“But it’s a tricky task balancing the demands of local government and the development industry,” he says.
The government says the new scheme is aimed at developing a framework that is “fair, clear and simple, striking a balance between local authority sustainability and development feasibility”.
It says it wants to create a Priority Development Infrastructure program “that will see the state co-invest in development and economic growth in local communities”.
Author: Nick Nichols