Page 924 - Week 03 - Thursday, 10 April 2014

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That this bill be agreed to in principle.

Today I am tabling the Planning and Development (Extension of Time) Amendment Bill 2014.

The Chief Minister recently announced a stimulus package for the ACT building and construction industry. One of the initiatives was significant changes to the extension of time, EOT, system. The extension of time fee is a fee charged on blocks that are not developed within the time frames outlined in their crown lease. This fee is a regulatory tool to encourage land to be developed in a timely manner. However, in recent times, under the previous fee structure, EOT fees have increased significantly and in some cases have inhibited a lessee’s ability to progress development. The reforms announced by the Chief Minister will relieve the burden of accrued debts, remove complex multiple fee structures, and focus on encouraging the completion of development. The bill I am introducing today will amend the Planning and Development Act 2007 and the Planning and Development Regulation 2008.

The new fee structure commences from 1 April 2014 for the calculation of EOT fees. The new, simplified fee structure will replace the current system and will provide a predictable, clear and transparent fee moving forward that is able to be easily calculated by lessees. Lessees will now have a period of four years from the completion date in the crown lease when no EOT fee will accrue. From the fifth year onwards, the EOT fee will be calculated based on one times the lessee’s general rates in each respective year. This means that a standard residential block will have up to six years to develop before any fees will accrue. For a commercial development, this would typically be eight years. The new structure will be easier to understand and will avoid the issues of large escalation of fees over time that has occurred in some cases in the past. Importantly, though, lessees will be required to pay their debt annually, so that they are aware of the fee and do not accrue significant debts over time.

New crown leases issued by the territory from 1 April 2014 will no longer have a commencement clause, meaning that lessees will not be charged EOT fees on a breach of this condition. Lessees will only need to abide by the completion dates in their crown lease. For lessees who have an existing commencement date in the crown lease, there will no longer be a fee associated with a breach of that commencement date. This change recognises that some developments may take more time to commence due to a range of factors—design, architecture and financing requirements, amongst others.

The government recognises that the current hardship provisions do not adequately provide for cases where a change in circumstance has led to the inability to complete a development within the required time frames. This bill seeks to address this issue by broadening the hardship provisions. The hardship criteria will include a medical condition that prevents employment or full employment; a disability, including mental illness, that prevents employment or full employment; unemployment; personal bankruptcy; and if a person is a dependant and endures the death of a partner or other kin who has provided for that person.

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