Development Contributions Misunderstood

Media Release

14 November 2013

Development Contributions Misunderstood

Property Council is puzzled with Public Libraries of New Zealand’s concerns about the Local Government Act 2002 Amendment Bill (No 3) - specifically that it will result in communities not having public libraries and other such services.

In this respect, it appears that the purpose of development contributions has been misconstrued and they are being viewed as the appropriate funds for generally improving communities.

In actual fact, facilities such as libraries should be funded through rates - as the purpose of development contributions, as defined in statute and upheld in several High Court cases, is to fund the infrastructure necessary to support the growth which stems from a particular development.

Currently, around the country, there is no uniform method of charging development contributions. This results in councils charging developers inappropriately and often illegally.

There is little transparency in where and how the development contribution funds collected by councils are spent, and the charges often do not reflect the impact of the development in question on the surrounding environment and need for infrastructure. This is a major setback to the business community, not to mention completely unfair.

Property Council absolutely supports the growth of communities but does not condone illegal, unfair charges being imposed on the very projects which will ultimately encourage economic prosperity to their respective areas.

To suggest development contributions should fund inappropriate community projects indicates that the legislative purpose of development contributions has not been understood.

Property Council supports businesses paying for the appropriate infrastructure costs but charges must be equitable, transparent and legitimate.

ENDS

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