Image © DAVID ILIFF
Local councils in Sydney are sitting on almost $500 million in unspent development levies, according to the Property Council of Australia (PCA).
The figures are revealed in the PCA’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,” PCA NSW acting executive director, Glenn Byres, said.
“They are collected on the promise they will be spent on essential infrastructure and community facilities — which is exactly what councils should do.
Levies are usually built into the cost of purchasing a new house, which means that homebuyers could feel short-changed when they see money being stashed away.
A total of $499,555 million remains unspent across Sydney’s metropolitan councils and almost $120 million in section 94 contributions were collected during 2008-09.
While councils continuing to stockpile levies the NSW government needs to resist “widespread claims” for exemption from the $20,000 cap, Byres said.
“[This research] illustrates our consistent call for greater accountability in the collection and use of levies, and broader reform to local government.”
The PCA has suggested disincentives for levy stockpiling, including a ‘use it or lose it’ provision where unspent monies which exceed a set benchmark are seized by the Local Government Grants Commission for reallocation, better enforcement of the promise to cap section 94 contributions at $20,000 per dwelling or lot, and structural reform of local government to reduce the number of councils across Sydney to 12, and abolish rate pegging.
