Infrastructure charges reform good for developers, bad for ratepayers

The Queensland Government will set maximum standard charges (e.g. $28,000 for a 3+ bedroom house) that Councils can levy on developers for the provision of infrastructure to new developments. This is good for developers and new homebuyers, but potentially bad for the existing ratepayers, who will wear the risk of cost blowouts in the provision of new infrastructure:

Developers costs to be slashed

The infrastructure charges cap gives the impression that the Government is doing something about a lack of affordable housing, but may have perverse consequences as ratepayers may be forced to pay for the cost of expensive new infrastructure.

Also it may discourage some development, if councils don’t approve developments where infrastructure costs would be very high, and they would usually have to charge more than the infrastructure charges cap.

Hence this is probably misguided policy and it’s a shame the Government didn’t provide a detailed justification for its decision in its response to the Infrastructure Charges Taskforce report from last month.

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