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6 February 2018

Perth councils squirrel away $1b in infrastructure cash

THE WEST AUSTRALIAN

 

Perth councils have been accused of sitting on more than $1 billion that should have been spent on parks, libraries and street lights.

At least one metropolitan council has more than $150 million in unspent funds earmarked for public infrastructure, which earned more than $4 million in interest last year.

The money has been collected from developers to fund facilities associated with greenfield or infill developments, such as footpaths, childcare centres, sporting facilities and carparks. But it is sitting in bank accounts in part because there is no set timeframe for it to be spent.

WA’s Urban Development Institute of Australia, which represents the property development industry, is pushing for changes that would require councils to spend the money more quickly.

UDIA WA chief executive Allison Hailes said because the cost of developer contributions were built into house prices, the money was effectively coming from homebuyers.

“They deserve — and in fact have paid for — facilities and infrastructure that simply aren’t being provided in a timely manner,” she said.

“One of the main issues here is that there is no set timeframe … set out in policy that regulates when money should be spent after it has been collected.”

Just how much local governments have collected from developers is difficult to estimate because it is collected in a number of ways.

But the UDIA crunched the numbers on seven metropolitan councils, collating publicly reported financials as well as information from developers.

It estimated the cities of Wanneroo ($343m), Swan ($248m), Kwinana ($231m), Armadale ($92m), Gosnells ($93m) and Rockingham ($71m) and the Shire of Serpentine-Jarrahdale ($136m) collectively held more than $1 billion in unspent developer-contributed infrastructure funding.

The councils disputed the figures and provided their own numbers, which mostly covered formal developer contribution schemes. By their estimates, the seven councils were collectively sitting on about $300 million.

That comprised $153 million for Wanneroo, $49 million for Swan, $33 million for Armadale, $49 million for Gosnells, $4 million for Rockingham, $7.5 million for Serpentine-Jarrahdale and $28 million for Kwinana.

The councils also defended the perceived delays in spending the money, saying timing was subject to a range of factors including the availability of land, population growth and regulatory requirements.

They pointed out that unspent funds were still earmarked for projects.

Interest earned could not be used for other purposes.

Planning Minister Rita Saffioti said she had asked the State’s planning reform team to consider how to improve the schemes.