When developers undergo projects in NSW they must contribute some funds to the local council, which are set aside to be used on local infrastructure like parks, drains and roads.

Under the new Environmental Planning and Assessment Amendment Bill 2021, which applies only to Greater Sydney, Central Coast, Hunter, Illawarra and Shoalhaven, the NSW Government would have access to these funds.

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NSW Planning Department deputy secretary Marcus Ray said this does not mean funds will be ripped from councils.

"No council will be worse off under the proposal," Mr Ray said. "The reforms make sure councils get the money they need from development to deliver the infrastructure communities require, without needing to raise rates to do it."

Linda Scott, president of Local Government NSW, disregarded these assurances and said the bill would hurt councils as details of how the contributions will be collected and allocated would be controlled by the state government.

"The NSW Government Bill allows for regulations that provide for regional infrastructure contributions from local communities, to be collected and held by NSW Treasury, to be spent anywhere within a wider region, or the state," Cr Scott said.

"That means the State Government could spend developer contributions however they like, wherever they like, and whenever they like."

Wagga mayor Greg Conkey echoed this sentiment and said he was surprised by the claim no local governments would be negatively affected.

"I'm still very concerned with this legislation and I agree with Linda Scott that it is being rushed through because I haven't seen any consultation at all with local government," he said.

"At the moment it only applies to major metropolitan areas but it would be just a flick of a pen for it to apply out here as well and that is a big concern for me."

Wagga developer Peter Fitzpatrick regularly pays infrastructure contributions and said he would not like to see the control of these funds taken away from the local council.

"I've never felt bad about paying contributions because it's a city-wide benefit and developers get input into where the money is directed," Mr Fitzpatrick said.

"If that was done at a state level it would not be as impactful because state bureaucrats do not have the same level of insight as our local representatives."

Daniel Donebus is also a local developer and said he'd like to see the funds from the developer contributions used as effectively as possible in the area where they were collected.

"It would be very obvious to all locals that our infrastructure, including roads and stormwater, are very much in need of proper investment and maintenance," Mr Donebus said.

"This is clearly an area we need to do better and I think we should be able to see what the benefits are in the model that is being proposed to see if it is better or worse."

"There needs to be a clear plan and if the state government is proposing this then the only way the local council can address that is to set out why they are the best placed to use those funds."

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