Allens

Environment & Planning

Client Update: Federal stimulus – one year on in NSW

8 April 2010

In brief: One year after the introduction of legislation in NSW to ensure the timely delivery of Commonwealth-funded infrastructure to reduce the impact of the global financial crisis, NSW Premier Kristina Keneally has announced a review to consider extending and expanding the legislation to cover other significant infrastructure projects in NSW. Partner Paul Lalich and Law Graduate Madeleine Ellicott report.

Background

On 5 February 2009, the Commonwealth and the states of Australia entered into the National Partnership Agreement on the Nation Building and Jobs Plan (the agreement). The agreement essentially requires the states to cut planning red tape for economic stimulus projects in return for infrastructure funding. The rationale behind the measures was to enable money to be quickly pumped into the economy to reduce the impact of the global financial crisis on Australia.

The NSW Parliament subsequently enacted the Nation Building and Jobs Plan (State Infrastructure Delivery) Act 2009 [link] (the Act) containing fast-track planning provisions to implement the agreement.

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Key features of the legislation

The key features of the NSW legislation are as follows:

  • The Act applies exclusively to infrastructure projects that are funded under the Nation Building and Jobs Plan. This includes development for the purposes of maintenance and minor building works for schools, social housing, community infrastructure projects provided by councils and land transport infrastructure.
  • The Act establishes the 'Infrastructure Co-Ordinator General' who has special powers to fast-track approvals. The Premier, or any other minister with the agreement of the Co-Ordinator General, may make 'project authorisation orders' for the broad purpose of authorising the Co-Ordinator General to carry out or take over an infrastructure project to ensure the project is delivered on time.
  • The Infrastructure Co-Ordinator General has the power to declare that an infrastructure project is exempt from all or any specified 'development control legislation' or that the project must be the subject of an authorisation by the Co-Ordinator General. The Co-Ordinator General has the power to stipulate conditions of an authorisation, which includes conditions relating to environmental protection, public notification requirements, heritage conservation and various other matters.
  • The Act defines 'development control legislation' as the Environmental Planning and Assessment Act 1979 (NSW) (the EP&A Act) and all other planning and environmental legislation that require the approval of any person or body before development is carried out.
  • Further, the Act provides that, if the Co-Ordinator General makes an exemption declaration, an environmental planning instrument under the EP&A Act cannot prohibit, require development consent for, or otherwise restrict the carrying out of the infrastructure project.
  • Arguably, the effect of these provisions is to exclude any challenge under the EP&A Act or any other specified development control legislation to the exercise of the Co-Ordinator General's functions. However, as there is no express exclusion of common law rights of judicial review, it is debatable these rights are still preserved. This has not yet been tested in the courts.

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Review of the legislation

The Act contains a provision requiring the Premier to commission a review of the legislation 12 months after it is enacted.

In media releases on 8 February1 and 14 March 20102, NSW Premier Kristina Keneally announced that, as part of this review, a panel of experts will be appointed to investigate extending and expanding the special stimulus laws. Ms Keneally stated that she would like to 'evaluate the benefits of applying the principles of this legislation to other significant infrastructure projects in NSW, such as major transport projects, significant commercial, or even residential projects'. Ms Keneally stated that the stimulus works 'delivered a record 1300 projects, 4000 social housing homes, and supported 7,800 daily on-site workers in more than 11 months', injecting 'more than $1 billion into the State economy in a year'. The rationale behind extending and expanding the legislation is to allow 'NSW to continue to benefit from the jobs and local confidence created by these infrastructure and investment programs'.

The terms of reference for the review were announced on 31 March 20103 and state that:

The review is to examine and report back by July 2010 on:

  • the effectiveness of the Act in facilitating the implementation of the Nation Building economic stimulus plan in NSW;
  • the exercise by the Co-ordinator General of the functions conferred by the Act in accordance with section 30 of the Act;
  • the legal and economic benefits and consequences of applying the principles of this legislation, and the manner in which it has been implemented, to other significant projects or classes of projects in NSW; and
  • options and mechanisms for applying the principles should they be applied to such projects or classes of projects in NSW.

The panel conducting the review are calling for submissions by 14 May and they will report to the Premier by July.

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Conclusion

As the legislation currently applies only to projects that are either fully or partly funded by the Commonwealth Nation Building and Jobs Plan, extending the ambit of the legislation to other infrastructure projects would be an amendment with wide-ranging consequences.

The risks inherent in the process are that, given the expedited nature of fast-track environmental assessment and the broad discretion given to the Co-Ordinator General to impose whatever assessment requirements he or she deems necessary, full and thorough environmental assessment may not be undertaken, which may result in unforeseen environmental problems later in the project's life.

However, a review of authorisations and orders made to date by the Co-Ordinator General demonstrates that, in practice, developers are not given carte blanche to bypass environmental assessment requirements. Depending on the scale of the development, authorisations typically impose project-specific requirements requiring the proponent to (inter alia) comply with conditions of approval, obtain any necessary expert reports, obtain construction certificates and report any discovery of heritage or aboriginal relics to the Co-Ordinator General. Further, orders on the exclusion of development control legislation typically do not exclude:

  • provisions in the Protection of the Environment Operations Act 1997 (NSW) relating to offences and environment protection notices;
  • implementation and enforcement procedures in the EP&A Act in respect to orders and offences;
  • certain approvals required under the Local Government Act 1993 (NSW) and Roads Act 1993 (NSW); and
  • any Act requiring authority or approval for connection to utility services.

We will keep you informed of developments and provide a further update following the delivery of the review panel's report in July this year.

Footnotes
  1. http://premier.nsw.gov.au/sites/default/files/100208-stimulus-taskforce.pdf
  2. http://premier.nsw.gov.au/sites/default/files/100314-NSW-Stimulus-anniversary.pdf
  3. http://more.nsw.gov.au/sites/default/files/uploads/u10/NBJP%20review%20-%20Terms%20of%20Reference.pdf

For further information, please contact:

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