Infrastructure levies sits idle

Infrastructure levies sits idleMore than $1 billion collected from levies sits unspent in the accounts of councils across Sydney – and it continues to grow as councils fail to plan, fund and build essential infrastructure.New data released by the Property Council, based on local government financial statements for 2013-2014, finds that $1.069 billion is sitting unspent in the accounts of 39 councils – a record amount.The audit found that the sum unspent rose by $116 million – or 12 per cent – in the past year. Councils also raised more than $34 million in interest on the unspent revenue.Section 94 and 94A levies permit councils to charge development companies for contributions towards improvements to local parks, roads and infrastructure.Development companies then pass the cost onto new homebuyers, adding an estimated $20,000-$30,000 to the price tag of a newly built home.”Councils collect these taxes on the promise they will be spent on better local infrastructure – but too many are failing to do so,” says the Property Council’s NSW executive director Glenn Byres.”There are too many councils in Sydney and the result is that they are too small to properly plan, fund and build essential infrastructure.”The consequence is these infrastructure taxes – that are frontloaded into the cost of new homes and businesses – are not being spent efficiently.”We need to overhaul the way councils design, fund and execute their infrastructure programs. These taxes are effectively adding to the cost of new homes and businesses and they are adding to the affordability challenge facing homebuyers,” Byres adds. Amalgamations would ensure councils had the scale to best manage this money and their capital works programs.