Email to Kristina Keneally then Minister for Planning from Lesli Berger

Kristina Keneally
Minister for Planning
Minister for Redfern Waterloo

Dear Minister,

I write to you in extreme frustration in regard to New South Wales’ awful planning system.

I am the General Manager of Fivex Commercial Property, a family business that has been investing and developing in commercial and retail property for over 30 years. I personally, have been dealing with Local Government for about 10 years (I was a former Councillor on Woollahra Council) and unfortunately, my experiences have been anything but complimentary. The majority of our development and refurbishment works that we undertake are less than $5 million in value.

Some of the problems with the NSW Planning System as I see them are as follows:

Unfortunately, in the past 10 years I have experienced all of the problems listed above and in one of my more recent developments, I experienced all of them in the one application. The fastest development application I have had approved in the last 10 years was for a very minor alteration to an existing building that took the Council 6 months to approve. Clearly, the system is broken and it needs to be fixed.

What do I consider to be the solutions to the above problems?

1. Council decision-making processes are far too slow:

Councils have no financial incentive to process development applications in a timely manner. Unfortunately, State Government and industry pressure on Councils can lead to perverse results. E.g. Councils process DAs more quickly but reject them rather than seek the additional information that would enable them to issue an approval.

In actual fact, from the Council Offcer’s perspective, if they process DAs too quickly, they would be afraid that they might do themselves out of a job. Further, if the Council Offcer does not consider every issue that could conceivably be raised by an objector or a Councillor, they are exposing themselves to criticism, which of course is the last thing they are interested in.

I believe the following initiatives would help speed up the decision-making processes:

(i) Allow a fast-track system where an applicant who is willing to pay an additional fee can guarantee a turn-around of their DA in a nominated time frame. If the Council does not perform, then they are not entitled to their fee and must be legally obligated to refund it;
(ii) Put in place legislation that states that if a Council takes more than a nominated time to process a development application, then the DA is deemed to be approved (I imagine this will be politically contentious, however, if you are interested in getting the NSW economy back on its feet and the NSW Labour government re-elected, playing it safe won’t work) I would suggest a time frame of 4 or 6 months depending on the scale of the development;
(iii) Limit the issues that can be assessed at the DA stage. Far too frequently I am asked to provide geotechnical information, work method statements and the like, which have no relevance to town-planning. In my view there should be a clear distinction between town-planning issues which can be assessed at the DA stage and those issues which more properly relate to construction, that should be assessed at the CC stage;
(iv) Change the culture of Council Officers in terms of their dealings with applicants. Strengthen and expedite the independence and tenure of the Land and Environment Court and put a stronger emphasis on the economic importance of development and if a development must be rejected, then outlining a clear explanation of what the applicant needs to do in order to gain an approval;
(iv) De-politicse the DA process by creating separation of powers between the elected Councillors and Council Officers and remove Councillors from the decision-making process and replace them with something like the IHAP model.

2. Council Officers are extremely unhelpful and their initial bias is to reject a development application rather than make constructive comments to assist in gaining a development approval:

Ironically, I believe Council Officers approach is largely a result of their long-term exposure to local Councillors who in recent years have had a strong bias against development. Economic development and job creation are not important political issues at the Local Government level, which probably results from the very small size of the majority of NSW’s Councils. In my view, the only ways to achieve long term cultural change is to de-politicise the decision-making process by removing Councillors from the development assessment system and in conjunction with that strengthening the independence of the Land and Environment Court and providing tenure to all Commissioners of the Court. Economic development and job creation are very important issues for the NSW Government and fixing NSW’s planning system is an important part of improving NSW’s economy.

3. The decision-making process is extremely politicised:

As per the points above, the solution is to create a proper separation of powers between the elected officials (the Councillors) and the executive (predominantly Council Officers). It is an important part of the system I envisage that something similar to the IHAP model be put in place to ensure appropriate oversight of Council Officers. My suggestion would be that the members of the IHAP work full-time and if necessary work for a number of Councils in order to avoid conflicts of interest.

4. Once an approval is issued, far too many conditions of consent are included in the approval, often with no thought as to the relevance or otherwise of the ‘standard’ conditions of consent:

I think it is important to create a financial incentive for Councils not to include inappropriate conditions of consent. Of course the potential mechanisms to achieve this are endless, however, a simple model would be that Councils cannot charge an applicant a s96 fee in circumstances where the condition of consent is inappropriate. An independent umpire would need to enforce this legislation, because Councils will not co-operate.

5. Councils use development approvals as a revenue raising activity – levying s94 contributions (often legally unjustified, but expensive to challenge) and even worse, under the Sartor reforms some Councils have started using the ‘voluntary planning agreement’ (“ VPA “) legislation as a means to extort additional revenue from development, insisting applicants enter into a VPA (in addition to the s94 contributions) prior to the Council issuing a consent.

Unfortunately, there are a lot of questionable Council activities when it comes to the levying of s94 contributions and insistence on applicants entering into “voluntary” planning agreements. In my view, all of these laws should be scrapped because they have a tendency to distort the development market from one area to another (often in close proximity to each other), create an incentive for Councils to extort additional moneys from development, often with little justification and in the present economic climate will lead to a reduction in new building activity and the associated loss of economic activity and jobs.

In my view, it would be better to replace the current system with a fixed percentage of the construction costs as development levies and for those funds to be put into a special fund that can only be spent on capital works. I would have thought an across the board development levy of 3% of construction costs would be appropriate. Politically, it would be important to remove single-dwelling houses from such a scheme for works below a critical threshold, however, that is something that could quite easily be resolved without causing unwanted negative publicity.

I am willing to meet with you or one of your policy advisors to discuss in more detail my experiences with NSW’s town planning system. I believe I can provide a unique perspective given my former role as a Councillor, the numerous times I have been an applicant and very occasionally I have objected to an inappropriate development.

Of course my email above does not address all of the problems with the current planning system, however, my experience has been that the recent Sartor reforms did not address the underlying causes of the mess more formally known as the NSW Planning system.

Yours truly,

Lesli Berger