Selwyn councillors who campaigned on “growth paying for growth” want the council to maximise revenue from the district’s rapid development ahead of looming government reforms.

Development contributions were a big election issue in Selwyn, one of the fastest growing districts in the country, after it was revealed developers had cashed in on a loophole which short-changed the council.

In the 2024/25 financial year, Selwyn received $24.3 million in development contributions, lower than the projected $38.3 million.

This was blamed on developers pre-paying at the lower rates before the new long-term plan came into effect, as noted in the annual report.

The council charges development contributions to help pay for new or upgraded infrastructure, such as wastewater pipes and roading.

The Government has now released a draft legislation to overhaul how councils fund growth-related infrastructure, replacing the development contributions regime with development levies.

The timeline for the change is for councils to start charging the new development levy from July 2028.

That’s too far out for some Selwyn councillors who are calling for a review of the development contributions policy, which was only just reviewed in 2024.

Cr Tracey Macleod said the introduction of the levies are two years away and the council can’t afford to drift while waiting for the legislation.

“Selwyn cannot afford to let two more years go by without regularly reviewing and adjusting the developer contributions.

“If development doesn’t fully fund the infrastructure it needs, the shortfall lands on existing ratepayers.

“Whatever the system is called, the principle has to stay the same, that growth pays for growth.”

During a recent council discussion on development contributions, council staff noted a review would be a short-term policy due to the impending Government’s development levy reform.

Like Macleod, Cr Denise Carrick believed that a development contributions policy review was needed “as soon as possible when you've got the legislation”.

Now the initial information is out on the levy proposal, Mayor Lydia Gliddon said that the council would hold a workshop on development contributions and the proposed changes.

“So that every gets a really good understanding of why we changed, how they work, the timing around it.

That workshop would guide whether they review the development contributions with the annual plan she said.

“It will be considering what is right for us in that interim period.”

The council overhauled its development contributions policy in 2024, including broadening the scope of what developments are charged for, beyond just roads, water, sewerage, and updating the charges that different types of developments pay.

“We have had criticism of not charging enough and criticism on the other side that now we are charging too much.”

Development contributions “are really complicated” and so too is finding the right balance, she said.

In Ashburton, a review of the development contributions policy is scheduled to coincide with the next long-term plan, which the Ashburton District Council will start working on early next year.

Ashburton council community and open spaces manager Toni Durham said by that time they will have a better understanding of the proposed development levies and will be ensuring a smooth transition to the new approach.

“We think the development levy change will have merit for our community,” Durham said.

The levy will provide a consistent approach across councils, a standardised framework for developers, fairer for ratepayers, and have growth pay for growth, she said.

Under development contributions, councils can only charge for infrastructure already specified in their plans.

The new levy system aims to allow more flexibility so infrastructure funding keeps up with actual growth.

In short, the levies allow councils to pool contributions and apply them to infrastructure needed for overall growth.

By Jonathan Leask