November 17, 2008 - Sydney Australia

Up to 87,000 Sydney jobs could be lost over the next year if a downturn in construction continues, developers say, and the State Government says it is looking at lowering infrastructure charges and levies.

Urban Taskforce, which represents a select bloc of developers and boasts close links to the right wing of the Labor Party, called for a relaxation of developer levies to stimulate the ailing industry.

But councils said it was "utter garbage" to blame levies and the Total Environment Centre said cutting developer infrastructure fees was "short termism at its worst".

The chief executive of Urban Taskforce, Aaron Gadiel, said Australian Bureau of Statistics data showed $2.2 billion worth of developments were approved in Sydney in the three months to September - 27 per cent less than the same period 12 months ago.

A report commissioned by the taskforce last year found that each million dollars in project costs generated 27.15 jobs. Based on these figures, the lobby group estimated that the downturn would cost Sydney 87,075 jobs.

"About 30 per cent of that is direct jobs in terms of construction and tradespeople, and the balance is the flow-on effect through the economy as those people then go and spend their wages on hospitality, entertainment and other industries," said Mr Gadiel, a former chief of staff to the ALP right-wing power broker Eddie Obeid.

"As the credit crisis has hit over the last six months, the construction industry in NSW has been disproportionately hit. While the current level of development charges are in place, a vast number of projects are unviable."

Under NSW law, developers pay fees to build in greenfield and infill sites, and the money collected helps pay for new water and energy infrastructure, roads, parks and other facilities.

The Premier, Nathan Rees, said Urban Taskforce had a campaign to "heckle" governments to ease developer levies.

But the Minister for Planning, Kristina Keneally, said infrastructure charges would soon be reviewed."We can lower the infrastructure charges and levies, and that's exactly what we'll do," she said. "You'd only need to look at the difference between Victoria and NSW, in terms of new housing stats, to know that we need to make infrastructure charges and levies more affordable so that we stimulate more housing development in this state."

The president of the NSW Local Government Association, Genia McCaffery, said developer levies were a minor factor in the slowing of NSW's construction industry.

"This is utter garbage, as usual, from the Urban Taskforce. If you suddenly reduce developer levies, councils will have to increase rates dramatically to pay for infrastructure. Developers have to get off the obsession with levies and start working with councils to try to get the government to pay for some infrastructure, which would also help provide employment."

Original Story - Sydney Morning Herald