Development contributions in Australia: Unresolved issues

Up until the last 15 years, state and local governments in Australia tended to provide most off-site infrastructure to new housing developments free of direct charge, while developers financed the provision of on-site infrastructure. Recently, however, because of intense fiscal pressure, state and local governments have begun to withdraw from their traditional infrastructure role, and increasingly are seeking new, off-budget ways of financing infrastructure provision. The levying of development contributions on estate developers has proven to be more and more popular in this regard. While not without merit, development contributions are by no means unproblematic, a point which seems not to have been fully appreciated by governments seeking hastily to resolve pressing budgetary difficulties. This paper draws attention to some of these difficulties by reviewing some of the key theoretical and empirical issues at stake.