The NSW government will ditch a key feature of the way it bills developers for environmental damage after it under-charged projects by several million dollars in conservation payments.
The Biodiversity Conservation Trust’s offsets calculator, which Deputy Premier John Barilaro recently lashed as “broken” and “problematic”, will be removed from public use and replaced with a developer charge formulated by the trust in what has been criticised as a blow to transparency.
The offset calculator predicts what a developer must pay into the government’s Biodiversity Conservation Fund instead of buying or spending biodiversity credits.
Speaking to a property developer forum on Wednesday, the trust’s offsets program manager Justin Williams told the webcast that the lack of credits being traded affected the quality of the economic modelling underlying the calculator, which is used to determine the environmental cost of developing a site.
“Obviously then volatility creates uncertainty, and it’s likely that that uncertainty hinders credit supply, as well as playing obviously a significant amount of uncertainty for developers, it’s also uncertainty for those considering generating credits and supplying credits into the market,” he said.
His comments followed a Department of Planning, Industry and Environment discussion paper earlier this year that said the uncertainty could lead to the trust receiving payments that fell short of funding the corresponding offsets, and conversely it also wanted to ensure developers were not exposed to “unnecessarily high prices”.
“The changes to be implemented are important to avoid poor market dynamics, provide stability, and ensure that prices charged are no greater than they need to be, but also no less,” the paper says.
Offsets consultant Steven Ward told the forum, hosted by the NSW branch of the Urban Development Institute of Australia, there were certain credits within the scheme that had jumped 400 per cent in price within three months.
The scheme - a key pillar of the state’s conservation efforts, including in preserving koala habitat - has come under increasing criticism from the property industry and the Nationals for being too costly, while environmentalists have criticised it as dwindling in its initial intent of preservation.
Greens environment spokesperson Cate Faehrmann said the government’s changes would weaken the scheme’s transparency “at a time when the public’s trust in the integrity of offsets is at an all-time low.”
“These changes reduce transparency and oversight of a scheme that is already alarmingly vulnerable to corruption & mismanagement,” Ms Faehrmann said in reference to earlier revelations in The Guardian that government consultants were buying land and selling it as offsets back to the state.
The trust’s most recent annual report, from 2019-20, said it had suffered an $11.5 million shortfall in the amount it had received from developers and the amount needed to buy the necessary biodiversity credits.
Independent MLC Justin Field said the gap was, in effect, a taxpayer subsidy for developers who “have put the cost of delivering biodiversity offsets obligations onto the Biodiversity Conservation Trust.”
“We’ve got the Deputy Premier John Barilaro running a media campaign claiming biodiversity offsets are a handbrake on development, but the reality is that in some cases the payments by developers are clearly inadequate to deliver those offsets,” Mr Field said.
His comments follow Mr Barilaro’s description of the calculator as a “lucky dip” and highlighted charges to projects such as the $815 million bid to raise the Wyangala dam wall, 320 kilometres west of Sydney, saying the offsets had originally been quoted as up to $180 million, before rising to $500 million.
UDIA NSW chief executive Steve Mann said the current system was leading to fragmentation of conversation land, as well as high costs and uncertainty for developers.
Asked whether the changes to the scheme, expected to take place early next year, would have an impact on what the government would fork out for the environmental damage bill to raise the Warragamba Dam wall, a DPIE spokesman said that project was still proceeding through the planning system.
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