WSROC calls for curb on windfall profits from land rezonings

The Western
Sydney Regional Organisation of Councils has called for a review of “disproportionate”
private gains flowing from publicly funded infrastructure investment in Sydney’s
west.

 “We have already seen examples of enormous private windfalls from the land acquisition processes at Badgerys Creek [site of Sydney’s second airport],” WSROC President Barry Calvert said in a media release.

“The potential profits from land rezonings in the growth areas of western Sydney will be staggering.”

He said the federal and NSW state governments must “act to promptly facilitate taxpayer investment in key developments from funding provided via value-capture mechanisms”.

“Currently,
government policy allows re-zonings to blow out land values virtually
overnight, to the disproportionate benefit of private interests. Taxpayer money
– which funds major development, such as the aerotropolis – then becomes
private profit.

“Sloppy
policy is denying the community a respectable return on investment. We want to
see a more equitable approach, that ensures funds are invested back into the
region.”

NSW Planning
Minister Rob Stokes agreed this week that some of the uplift in land values due
to government-funded projects should go toward paying for the infrastructure
required to support the extra development.

He said the State Government is moving ahead with a plan to abolish stamp duty in favour of a broad-based land tax, but he cited “major political challenges” in setting up a levy or tax on land values that skyrocket as a direct result of infrastructure projects.

“We have
gotten very good, over time, at designing taxation over goods and services and
income but the political hot potato has always been land.”

Mr Stokes also
said that improvements in strategic planning over the years had enabled the market
to judge when rezonings were likely to happen.

“The values have already been captured before the rezoning actually occurs,” he said. “The better we get at planning, the earlier and earlier the value capture mechanism needs to be.”