Turn of the tide in NSW planning during pandemic is a positive step for big box businesses
The NSW Large Format Retail sector is currently lagging behind more competitive States such as Victoria, South Australia, and Western Australia.
In those States, Government policy settings foster competition, jobs, and development of new sites.
The current NSW planning policy settings are holding investment back. The inflexibility of current zoning and planning laws is a major issue, making NSW the most difficult state for LFRA members to invest in.
The Large Format Retail sector faces many challenges when it comes to the supply of available land which is suitable for our members. Furthermore, like many industries, the retail sector has experienced enormous disruption in recent years.
With the current economic crisis upon us the NSW Government has recognised the urgent need to accelerate planning reform to give businesses greater flexibility and to drive economic growth.
At the NSW Government’s Summer Summit in September 2020, NSW Planning Minister Rob Stokes said, “Effectively… don’t waste a crisis. Now is the time to innovate. Now is the time to do the reform.”
The LFRA has watched with interest the planning acceleration that has taken place during the pandemic. Our timeline is as follows:
- In 2016, when Minister Stokes last held the Planning portfolio, the Retail Expert Advisory Committee (REAC) and its terms of reference were formed. This led to the creation of the REAC Report.
- On 17 October 2017, the then Planning Minister Anthony Roberts, accepted the recommendations in the REAC Independent Recommendations Report.
- On 31 August 2018, as a result of the REAC report, a definition for ‘Specialised Retail Premises’ was introduced (replacing the definition for ‘Bulky Goods Premises’).
- The Committee originally suggested an implementation plan of delivery within 12 months of Ministerial approval of the recommendations.
- After more than four years since Ministerial approval of the REAC Independent Recommendations Report, the NSW Planning Department is finalising the legal drafting of the employment zones framework. The timing for this is imminent.
Details of the three live NSW reviews are:
- Employment Zones Reform – (nsw.gov.au)
- Building Business Back Better | Planning Portal – Department of Planning and Environment (nsw.gov.au)
- Industrial Lands Policy Review | Greater Sydney Commission
LFRA’s stance and role in helping shape these reforms are explained in this article. Our policy agenda continues to strongly encourage investment and employment growth and opportunities.
Good urban planning, smart competition policy and cheaper energy underpin LFRA’s agenda.
Planning reform needs to enable, not constrain, Large Format Retail.
Greater zoning flexibility will enable the retail sector to respond to changing economic environments and customer needs. In addition, allowing Large Format Retailers to conduct business on industrial land would be a productive step for the NSW economy.
Independent research demonstrated there is demand to develop an additional 20 homemaker centres in NSW by 2025, employing an additional 43,123 jobs without a single dollar of investment from the NSW Government.
Successful implementation of planning reform will help unleash the shackles from investment and fulfill the NSW Government’s mantra of “jobs, jobs, jobs”.
It is quite clear that planning reform is required and will be beneficial to both retailers and consumers.
Employment Land Zones Reform
In NSW, the ‘Employment Land Zones Reform’ is the most significant planning reform proposed since the adoption of the definition of ‘Specialised Retail Premises’ in 2018.
The ‘Specialised Retail Premises’ definition addressed the issue of ‘what you can sell’. The ‘Employment Land Zones Reform’ seeks to address the missing piece of the puzzle i.e., ‘where you can sell it’. In essence, the reforms seek to reduce the number of zones in NSW.
This reform is a positive step towards achieving greater clarity, consistency, and certainty within NSW. It is the most ambitious rethink of employment zoning since the inception of the Standard Local Environmental Plan Instrument in 2010.
The proposed employment zone framework provides for a significant rethink of how employment zones are categorised and located.
In NSW, there are currently eight (8) different types of business zones and four (4) different types of industrial zones i.e., twelve (12) different zones in which economic activity can occur. The designation of one (1) zone over another can radically alter the types of uses that can be carried out within it.
Furthermore, the arbitrary nature of the zones can be confusing. Rather than collapsing zones or combining them, the Department of Planning is proposing five (5) new employment zones throughout NSW namely:
- E1 – Local Centre;
- E2 – Commercial Centre;
- E3 – Productivity Support;
- E4 – General Industrial; and
- E5 – Heavy Industrial.
Additionally, a MU – Mixed Use zone is proposed to be established and the existing ‘Working Foreshore’ zone will remain.
Particularly, the E3 Productivity Support and E4 General Industrial zones are of interest to the Large Format Retail sector. It is proposed that the E3 zone will essentially replace the B5 Business development, B6 Enterprise Corridor, and some B7 Business Parks zones and in some circumstances limited areas of the Light Industrial zone.
Importantly, ‘Specialised Retail Premises’ which is the predominant definition under which the majority of Large Format Retail operates in NSW will be a mandatory use in the E3 zone.
In a meeting with the NSW Department of Planning on 10 June 2021 the LFRA was advised that ‘Specialised Retail Premises’ will have a 98% increase in the volume of land where the same will be a mandated permissible use.
Building Business Back Better
I have also represented the LFRA on the NSW Government’s Planning System Stakeholder Group throughout the pandemic.
In part, emanating from the work with this group, the ‘Building Business Back Better’ review was instigated. The review considers the implementation of a series of changes that were initially adopted through the pandemic as red tape reduction and short-term assistance measures.
‘Building Business Back Better’ sets out the proposed complying development reforms that are intended to support industrial and commercial investment in existing employment land zones.
Included are steps taken to simplify the approval process for ‘Specialised Retail Premises’ by complying development, which is a form of development approval that can be issued by Council or private certifiers in as little as 20 days.
This review also proposes an increase in the range and use of complying development. Importantly for ‘Specialised Retail Premises’ complying development for a change of use will now be possible so long as ‘Specialised Premises Retail’ is permissible and irrespective of the previous use.
Furthermore, the often problematic task of establishing a building’s previous lawful use will be made simpler as there will be presumption that if the current use is permissible then a change of use can be undertaken.
Industrial Lands Policy Review
More recently, the LFRA prepared a submission to the Greater Sydney Commission’s ‘Industrial Lands Policy Review’ in August 2021.
This review responds to Recommendation 7.5 of the NSW Productivity Commission’s 2021 ‘White Paper’: “Evaluate the retain-and-manage approach to managing industrial and urban services land in Greater Sydney against alternative approaches, to identify what would maximise net benefits to the State. Adopt the approach that maximises the State’s welfare in the next update to the Greater Sydney Region Plan.”
The review of the policy will consider if there are opportunities for increasing the productivity of industrial and urban service lands as well as whether there is scope for greater flexibility in industrial zoned lands covered by the policy.
The LFRA supports the Industrial Lands Policy Review and proposes to the NSW Government that it should consider Large Format Retail to be an appropriate land use on industrial land.
The review is scheduled to be completed by the end of 2021.
Philippa Kelly, LFRA
Chief Executive Officer
