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15 March, 2022

Bio-fail; legislation is “killing development” in regions

“It’s the right thing to do, environmentally [protecting biodiversity loss],” agree local government leaders in western NSW.

By Lucie Peart

The site on the Newell Highway that Gilgandra Shire Council is developing into a new industrial estate.

However, the 2016 Biodiversity Conservation Act is costing regional councils and developers millions, leading to stalled projects, tied up in green tape, and some abandoned all together.

The 2016 act and the required biodiversity offsetting, through bio-banking or stewardship, is stifling regional development.

There are also questions whether the scheme and the state government run Biodiversity Conservation Trust (BCT) is even effective at protecting biodiversity, as intended.

Land clearing is now 13 times higher than the pre-reform period average (Natural Resources Commission review), which will also affect the state government’s commitment to net zero car- bon emissions by 2050.

Habitat protection also has repercussions politically. The unforgettable 2020 stoush between then Nationals leader John Barilaro and the planning minster Rob Stokes over koala pol- icy, and recent natural disasters such as the black summer fires and floods, have put the protection of plants and animals firmly on the political agenda.

Big business and local governments, through grant funding, are quickly becoming the only developers that can afford to break ground on projects, because the planning and biodiversity costs are too high for small-or first-time developers.

“Essentially, rural and regional NSW has become the biodiversity offset for developments in the Sydney basin,” said Gilgandra Shire Council (GSC) mayor Doug Batten. According to a 2020 University of Technology Sydney research paper, 47 per cent of bio-banking agreements made between 2010-19, came from the greater Sydney metropolitan area.

He said the western councils are taking up the issue at this week’s local government conference, as it affects developments across the region.

GSC has been working on the release of a new industrial estate for nearly five years. In 2019, the council secured a $3.9 million state government grant with GSC to commit $900,000. The project was announced as ‘shovel ready’ by then deputy premier Mr Barilaro, however, council is yet to submit the development application. They have spent the last three years working to get the project back to financial viability. Originally council wanted to develop 25 hectares, securing land with Newell Highway frontage from GrainCorp. Now they have had to downsize the project to 15 hectares. Council has had two consultancy firms working on the project, with around $100,000 in costs, including a preliminary assessment of available council land to establish a biodiversity stewardship site local- ly, instead of buying credits outside the shire.

Estimates for the reduced site size are still around half a million dollars in biodiversity credit liability and consultancy costs. Council acknowledges that replacing like-for-like biodiversity removed as part of land clearing associated with the development is important environ- mentally.

Biodiversity offsets consider flora and fauna, and even flight paths. GSC were previously advised they would have to allow $200,000 for the ‘flight path of the Asian eagle’. Biodiversity offsetting also comes before any cultural or Indigenous heritage considerations are investigated.

At these costs, one hectare will accrue over $33,000 in biodiversity offset. The planned industrial site itself is already vastly cleared of trees, was previously used as a sawmill and currently is a cultivation paddock. So, how can it cost so much to offset?

Private landowners can develop biodiversity stewardship sites, which they can then sell for credits to developers. This process is costly to set up, at over $100,000. Even within your own shire area (roughly 100 kilometres), flora and fauna credits may not match up for developers to purchase. Local governments also aren’t flushed with available council land to lock up for biodiversity offset.

Mayor Batten said local governments are looking to develop to provide benefit to communities, but the costs of doing so are become untenable.

Land values have also doubled since GSC developed the industrial land off Hargraves Lane. Council will sell plots in the new industrial estate at cost, with 25 cents in the dollar going to biodiversity offset.

GSC are not only looking to provide more industrial land for local business, but they are also hoping to capitalise on the upcoming construction of the inland rail. Mayor Batten feels any development at Curban, where the current rail-line will intersect with the inland rail will be stymied by the offset scheme, which in turn will reduce any benefits residents can take from the new rail line’s intersection of primary-producing land.

Local governments may only be able to afford to pay a high price for biodiversity offset through grants. Councils that don’t have access to millions in grant funding and private develop- ers are finding it increasingly hard to see the financial benefit. Regional councils are also working with smaller rate-payer bases than their metro counterparts, and a record-low rate peg of 0.7 per cent.

All the while, the regions have had a huge surge in popularity during the COVID years. City people are now looking for the space and opportunities that regional areas can offer. In most western NSW towns, real estate agents only have a couple of listings for sale and there is a huge shortage in available rentals.

Narromine mayor Craig Davies agrees that the laws are “killing investment in the bush”.

“It has unfortunately become nothing more than a tax on developments, job creation and investment across the state. It’s affects are felt more severely across rural and regional areas,” said mayor Davies.

Recently through another state government grant the Regional Job Creation Fund, Narromine enticed a large corporation, Simmons Group, to move their headquarters to the western NSW town.

This development will bring 250 jobs to the region; but other job creation projects could be in jeopardy if the costs to develop land both industrial and residential are too high.

Mayor Davies said while laws to ensure native species and environmental assets were protected are a “very honourable and necessary action”, he is critical of the plan’s effect on developers and even its success at protecting bio- diversity. He is also critical of the National Party’s role in approving such legislation in 2016. “Examples are abounded of this ‘tax’ being imposed at unprecedented levels that bear no resemblance to the supposed damage done,” said mayor Davies.

“Another western NSW council wanted to develop commercial blocks in an attempt to alleviate their nine-and-a-half per cent unemployment rate; much of which is Indigenous. They set aside six and 12-hectare blocks, away from a river, for investors to establish businesses. Priced at $48,000 per block, they were going to be very attractive. The biodiversity offset costs amount- ed to $480,000 per block,” said mayor Davies.

“A gravel quarry in Narromine shire was looking to expand to meet demand from inland rail. They wished to clear 5.7 hectares of light pine. Biodiversity offset costs were going to be $1.3 million, so the project was stopped.

“The result of this outrageous imposition is that potentially millions of tonnes of gravel will now be carted through Narromine’s streets from other quarries to fill this now unmet demand. The damage to the environment will be ines- timable. The logic unfathomable. The imposition on residents exposed to the heavy vehicle traffic is totally unreasonable. The level of care from Environmental Protection Agency (EPA) and politicians. NIL,” said mayor Davies.

“A mine in central NSW wishing to relocate a major road to mine under existing corridor charged $1 million for every hectare of gilgai country disturbed. The shire abounds in gilgai country. The cost is out of proportion to the dam- age done and is simply a tax on regional development. The mine will employ 200 people.”

Both mayors said they had heard anecdotal evidence from a major regional centre, suggest- ing that as many as 14 projects are no longer going ahead due to this ‘tax’.

“How does this help those areas outside of Sydney that have been developed over the past two hundred years without this impost. Regional NSW is carrying the cost burden for the city,” said mayor Davies.

“How do these laws show any level of common sense, objectivity or due consideration to jobs and the environment in regional NSW? questions mayor Davies.

The scheme is also plagued by double standards, as some developments and activities such as ‘pasture thinning for expansion purposes’ or ‘unexplained clearing’ require no offsets.

“Stories of other outrageous and ill-considered examples of this tax are across all regional NSW. Why have the National Party done nothing to alleviate this tax. Why have they allowed it to destroy so many wonderful initiatives that large- ly affect the bush which operates on a different cost structure to city projects that can absorb those costs. When there are so many initiatives planned for regional and rural areas it will never be forgotten should this discriminatory tax not be removed. It should be the only focus of the National Party until it happens. They promote themselves as the party of the bush. They need to show us they are,” said mayor Davies.

For local governments along with crippling development processes, the lack of staff with the experience to negotiate the complexities of the legislation is leading to high consultancy and legal costs.

Last year an inquiry was begun into the off- sets scheme. Over 100 submissions were received. The committee is chaired by Greens MLC Cate Faehrmann. The committee will examine the use of offsets to compensate for bio- diversity losses from major projects. "Large areas of threatened species habitat is being cleared on the basis that it can be 'offset' by purchasing land elsewhere," said Ms Faehrmann.

"Concerns around offsetting practices have recently materialised whereby land-based offsets in western Sydney have been sold to the govern- ment for prices much higher than what the land was privately bought for. It is also unclear whether there is any conflict of interest in the way land used for offsets was recommended to the government.

"The scheme potentially lacks some of the protections you would expect from a trading scheme valued at hundreds of millions of dollars annually,” she said.

The inquiry is also examining the role of the BCT (revenue of $ 125.1 million 2021/22) in administering the scheme, including its trans- parency and oversight. Offsetting costs and the ability for private landowners to engage in the scheme will also be looked at.

Along with the submission process, three hearings were held in 2021. The committee was due to provide a report this week however, a fur- ther hearing is now scheduled for early-April.

Evidence presented in submissions to the inquiry have pointed to a range of problems with the legislation.

One submission [via hearing] by the Ecological Consultants Association of NSW’s Belinda Pellow said the scheme had been inadequately trialled and the association believed that there is a loss of biodiversity.

Effectiveness of maintaining ‘like-for-like’ biodiversity loss has also been pulled into question. In October 2021, the then NSW energy and environment minister Matt Kean told parliamentary budget estimates he thinks “it is clear that there needs to be root-and-branch reform of the [biodiversity offset] scheme both from a policy level and an integrity level”, and that the state government will be doing both.

The government’s own State of the Environment Report (2021) states “there is a net loss of vegetation because these [local and regional restoration/revegetation] programs’ lev- els are not restoring native vegetation at the rate of permanent clearing”.

This week the COVID-delayed 2021 NSW Local Government conference will be held in Sydney. Gilgandra, along with Narromine shire, will not be represented in person at this conference. However, GSC has put a motion to the conference about the challenges presented by the offset scheme. Council’s main submission questions the methodology used to calculate the off- sets as it is applied state-wide and doesn’t take regional land values into account – pitting them on level with western Sydney. The motion cites problems the open market credit trading scheme such as availability of credits, and the over inflation of prices.

“The final problem with the scheme is that it is encouraging landholders to create stewardship sites, but landholders are looking to create stewardship sites on land that is already remnant vegetation and highly unlikely to ever be developed due to the natural constraints that exist in the land, eg. flooding, topography etc.

“So, the intent of the scheme is not achieving the results of regenerating previous disturbed land or creating increased biodiversity values,” states the motion.

Council feels the scheme prohibits development in regional and rural NSW, forcing developers to look at other states. “Councils are not seeking to disregard legislation and in fact see ourselves as good environmental citizens of the state of NSW, but the basic fundamentals of the scheme are failing regional and rural NSW, and must be amended,” finishes the motion.

Local Government NSW (LGNSW) states the GSC’s motion is consistent with its [LGNSW] ongoing actions and its own submission to the upper house inquiry. 

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