Local councils in Sydney are sitting on almost $500 million in unspent development levies, according to the Property Council of Australia.
The figures are revealed in the Property Council’s regular audit of section 94 development levies – based on local government financial statements for 2008-09.
“There is no good excuse for stockpiling $500 million in development levies,” NSW Acting Executive Director Glenn Byres said today.
“They are collected on the promise they will be spent on essential infrastructure and community facilities – which is exactly what councils should do.
“Given levies are built into the cost of purchasing a new house, homebuyers will feel short-changed when they see so much money being stashed away.”
Mr Byres said a total of $499,555 million remains unspent across Sydney’s metropolitan councils.
Almost $120 million in section 94 contributions were collected during 2008-09.
“Some councils are clearly doing the right thing, as we saw an average 14.4 percent decrease in unspent levies from the previous year,” Mr Byres said.
“However, when councils continuing to stockpile levies the NSW Government needs to resist widespread claims for exemption from the $20,000 cap it promised.
“It illustrates our consistent call for greater accountability in the collection and use of levies, and broader reform to local government.”
Mr Byres said the Property Council has promoted solutions including:
· Introducing a ‘use it or lose it’ provision where unspent monies which exceed a set benchmark are siezed by the Local Government Grants Commission for reallocation as it sees fit
· Better enforcement of the promise to cap section 94 contributions at $20,000 per dwelling or lot, with too many councils having failed to meet a deadline to review and reduce their levies by December 2009
· More encouragement for councils accessing the $200 Local Infrastructure Fund established by the NSW Government to make co-contributions from unspent development levies
· Structural reform of local government - reducing the number of councils across Sydney to 12, and abolishing rate pegging for these larger councils subject to adherence to a Fiscal Responsibility Framework.
Media contact: Glenn Byres, NSW Acting Executive Director, 0419 695 435.