Australia: Reviewing the SEQ Regional Plan
HG Planning and Development Paper: 27 February 2014

Introduction

The Queensland Government is currently reviewing the SEQ Regional Plan (SEQRP). A draft of the replacement plan is expected to be open for formal public submissions towards the middle of this year.

This paper discusses an important aspect of the SEQRP which ought to be considered for reform. It concerns the regulatory effect of the boundary between the Urban Footprint (UF) and the Regional Landscape and Rural Production (RLRP) areas. The issue is whether there should continue to be regulatory prohibition of development in the RLRP area or, alternatively, whether the designation should operate so as to trigger merit based assessment against the SEQRP's relevant desired regional outcomes.

Currently, most development outside the UF is effectively prohibited by the SEQRP Regulatory Provisions (Regulatory Provisions). Subject to some limited exceptions, there is an absolute prohibition of subdivision of land in the RLRP area. Making a material change of use (MCU) for urban purposes (with limited exceptions mainly relating to small commercial and tourism related projects) is subjected to a stringent "overriding need" test which will effectively preclude most development. The Regulatory Provisions are explained and analysed below.

Background

Regional planning was initiated in Queensland in the 1990s. It existed firstly as a voluntary partnership between state and local governments with non-statutory regional plans. In 2004, regional plans were given a statutory basis through amendments made to the Integrated Planning Act 1997 (IPA) by the Integrated Planning and Other Legalisation Amendment Act 2004 (IPOLAA 2004).

The regional planning provisions introduced by IPOLAA were heralded by the Beattie Government as the most significant legislative reform to planning since the introduction of IPA in 1997. It was a State led policy (and statutory) response to the perceived threat of massive population growth to the lifestyle and landscape of South East Queensland.

In her second reading speech for the IPOLAA Bill, Desley Boyle (the then Minister for Local Government, Planning and Women) noted that, while there was a need to manage growth across all levels of government, issues generated by growth could not always be resolved by consensus and, in those circumstances, it was appropriate that the State had the ultimate control.

The intent was for regional plans to manage growth by creating a regional framework for land use and infrastructure planning, as well as providing regionally-specific policy direction to local governments about state interests. Regional plans were to:

• have a spatial structure, including a land use component and the identification of key regional infrastructure;
• identify critical regional resources and the way these would be preserved, maintained or developed. In particular, the regional plans were to identify priority areas for urban development, as well as regional landscape areas to be protected from incompatible development; and
• include provisions with direct regulatory effect over development, that is, regulatory provisions.

The majority of the regional plan's outcomes were to be achieved through established planning mechanisms under the IPA. For instance, planning schemes were to be amended to reflect the statutory regional plans. Regional planning was given a role in development assessment, with the IPOLAA 2004 amendments introducing the regional plan as a prevailing consideration for assessment managers and concurrence agencies under the Integrated Development Assessment System process, unless the regional plan had been adequately reflected in the relevant planning scheme.

The regulatory provisions acted differently. While they were to provide "crucial support to these mechanisms by establishing clear boundaries and development requirements, such as for the proposed regional landscape areas"¹ they were also "an independent and direct aspect of regulation in the region, separate from other planning instruments."² However, the explanatory notes to IPOLAA 2004 indicated that the regulatory provisions were not intended to override the overall policy objectives set out in the regional plans:

Despite this policy intent, the regulatory provisions were given "teeth" in a way not repeated for the remaining elements of the regional plans. The regulatory provisions could operate in two ways: first, by modifying the effect of a planning scheme until that scheme was amended to reflect the regional plan (in a manner similar to temporary local planning instruments); and second, by having a direct regulatory effect on development by stating what development could or could not occur in given localities.

In addition, IPOLAA 2004 amended the IPA to:

• prevent development applications being made if the development the subject of the application would conflict with the regulatory provisions of the regional plan;
• require that an assessment manager could not make a decision about a development application that would be contrary to the regulatory provisions of the regional plan; and
• introduce a development offence for carrying out development contrary to the regulatory provisions of the regional plan.

At the time the IPOLA Bill was introduced into parliament, the Government recognised the potential for the regulatory provisions to greatly impact the rights of development proponents. While not forming part of the amending legislation itself, the Regulatory Provisions were subject to Parliamentary scrutiny. The new section 2.5A.18 of the IPA required the regulatory provisions to be ratified by Parliament. Parliamentary scrutiny was particularly important as regulatory provisions operated even while the SEQRP was in draft form. The intent was to prevent the outcomes of the SEQRP being compromised through "speculative development applications" made before the SEQRP came into effect.

At the time the first draft SEQRP was released for public comment in October 2004, the Planning Institute of Australia advised the State government to adopt a performance based approach to development assessment against the SEQRP consistent with the underpinning philosophy of the IPA under which prohibition of development had been proscribed.⁴ Unfortunately that advice was not heeded. It was the correct advice then and remains correct today.

Being discreet statutory instruments, regulatory provisions have operated as independent development control mechanisms both before and after relevant regional policies were incorporated in local plans. That will continue to be the position if regulatory provisions are retained in the new SEQRP. In that sense, they will operate as a "top down" development control mechanism which local Governments, and the Planning & Environment Court, must apply regardless of whether relevant regional policies have been taken into account and incorporated, where appropriate, in local planning schemes.

The operation of the Regulatory Provisions today

The Regulatory Provisions limit subdivision and material change of use in the RLRP Area.

Subdivision in the RLRP Area

Section 3.1(1) of the Regulatory Provisions provides that subdivision of land in the RLRP area is contrary to the Regulatory Provisions and may not occur if identified in column 2 of Table 3A. Column 2 identifies all development not identified in column 1. Column 1 indentifies some limited subdivisions, for example, where the subdivision results in lot sizes of 100 hectares or greater, areas designated for rural residential purposes where the application was made before 6 December 2010, lots created for specified public infrastructure, and subdivision that is consistent with certain prior extant development approvals. Outside of those exemptions subdivision is prohibited.

Material Charge of Use within the RLRP Area

MCU in the RLRP area which does not require assessment by the referral agency against the Regulatory Provisions is limited to small scale indoor recreation, single dwellings on existing lots and small scale industrial, commercial sporting, community and tourism developments. Other MCU must comply with the following assessment criteria:

1. the locational requirements or environmental impacts of the development necessitate its location outside the UF; and
2. there is an overriding need for the development in the public interest.

Schedule 3 of the Regulatory Provisions contains a definition of overriding need which prescribes rigorous assessment criteria including the following:

These tests are stringent and make it almost impossible to undertake development within the RLRP area.

Application by the Courts

The operation of the Regulatory Provisions over the past ten years has generated a great deal of litigation and often resulted in hardship for affected land owners which has not been counter-balanced by any obvious social, environmental or economic benefits, not otherwise able to be achieved through development assessment against SEQRP as policy.

The Regulatory Provisions in force in October 2004 imposed a complete embargo on making a development application for subdivision in the RLRP area. They had the effect of immediately removing rights to subdivide without compensation. It was said of those provisions, by a Justice of the High Court of Australia:

The State government should consider these judicial comments in weighing up policy considerations relating to the possible retention of the Regulatory Provisions.

Applicants in the Planning and Environment Court went to great lengths to avoid the operation of the Regulatory Provisions for land located outside the UF. The majority of case law deals with the "properly made application" requirements under IPA, and the requirement that development could not be contrary to the regulatory provisions, or draft regulatory provisions⁶ as well as the transitional provisions and the availability of exemptions.

In the case decided by the High Court of Australia referenced above,⁷ the appellants had lodged a development application with the respondent Council on 3 December 2004, seeking to reconfigure land at Blenhiem in South East Queensland from one lot into five lots. The application post-dated the IPOLAA amendments to the IPA and the draft regulatory provisions under the draft SEQRP had come into effect. The application contradicted the draft regulatory provisions as each of the resulting lots would have an area less than the prescribed minimum area of 100ha. The Council decided it could not accept the application because the proposed development would be contrary to the draft Regulatory Provisions.

The Planning and Environment Court concluded that the local government decision was correct and that the application was not properly made. The defect could not be cured using the excusatory powers in the IPA and no compensation was available. The Court of Appeal refused the appellants' application for leave to appeal. By special leave, the appellants then appealed to the High Court. The full bench of the High Court agreed that the appeal should be dismissed, with the joint judgment of the majority (Hayne, Heydon and Crennan JJ) identifying that the IPA operated so that an application could not be properly made if it was contrary to a State regulatory provision and, in those circumstances, the assessment manager was deprived of the usual power to create a properly made application by receipt and acceptance of it. Notably, Kirby J and Callinan J agreed with the conclusion of the majority but criticised the unfairness of the drafting technique, which destroyed the appellant's potential right to compensation.

The Tolocorp decision⁸ (which preceded the High Court's decision in Chang) related to an application to subdivide a parcel of land located between Cooroy and Tewantin. The Council refused to accept the application on the ground that it was not properly made in that it was not consistent with the Regulatory Provisions in the SEQRP. Tolocorp relied on a regulatory exception to the prohibition against subdivision, arguing that the reconfiguration was for rural residential purposes on land zoned for such purposes. Tolocorp successfully commenced proceedings for declaratory relief in the Planning and Environment Court, obtaining a declaration that its application was properly made meaning the Council could not refuse to receive it. The Council's appeal to the Court of Appeal was refused.

The case of Metricon Innisfail Pty Ltd v Cassowary Coast Regional Council⁹ concerned the interpretation of the transitional provisions in the Draft Regulatory Provisions for the Far North Queensland Regional Plan. The key transitional provision stated that the draft Regulatory Provisions did not apply to development carried out under a development approval for a development application that was made before the day the draft document took effect. The draft document took effect on 9 May 2008. The issue was that, although Metricon's application was lodged with the council on 1 April 2008, it did not become properly made until October 2008 (the deficiency being a lack of evidence of State resource entitlement amongst other things).

Metricon commenced proceedings in the Planning and Environment Court, where it unsuccessfully sought to establish that the draft Regulatory Provisions did not apply in relation to its proposed development. The decision of the Planning and Environment Court was upheld on appeal, with Fraser JA (who delivered the main judgment) holding that the exemption from the application of the draft regulatory provisions did not depend merely upon an application being delivered to the appropriate assessment manger under the IPA before the relevant day, but rather upon development being carried out under a development approval for a development application "made" before the relevant day. That required the delivery of a development application under the IPA that was capable of progressing towards a development approval.¹⁰

More recently, the Planning and Environment Court has considered the application of the SEQRP to land within the UF in the cases of Shardlow & Ors v Moretonn Bay Regional Council¹¹ and Stockland v Sunshine Coast Regional Council & Ors¹².

In Shardlow, the appellants lodged an application seeking a preliminary approval to override the Pine Rivers Planning Scheme 2006 to facilitate the development of land located within Samford Village for a residential estate. The appellants appealed Council's deemed refusal of the application.

The Court considered the SEQRP (as the Pine Rivers Planning Scheme had not been amended in response to it) and noted that the SEQRP may constitute a basis for ignoring compromise of desired environmental outcomes in the Planning Scheme.

The relevant land fell within the UF. However, the judge noted that the SEQRP does not require, or necessarily expect, that urban development (particularly residential development) would occur everywhere within the UF and that it was left to local government to establish and refine desired uses of land within the UF through their planning schemes.¹³

The Planning and Environment Court judge then analysed provisions in the SEQRP relating to Rural Communities, in particular, the principle in section 5.3 to "ensure rural communities benefit from regional growth, and participate fully in the planning and development of the region" and policy 5.2.3, which refers to accommodating the required growth of rural villages through the planning scheme revision process.

The judge considered that, if Samford was considered a "rural village", the policy may have suggested it had a part to play in accommodating population growth in South East Queensland, however, he ultimately thought that there was no sensible way to make use of the provisions in the appeal. The judge ultimately concluded that:

The more recent Stockland case involved a large site located north of the Maroochy River. The Council had refused the developer's application for a preliminary approval overriding the planning scheme, to facilitate the development of the site for urban residential purposes.

The land was located within the UF and the developer relied upon that fact to demonstrate the planning scheme had been overtaken by events (given the SEQRP prevails to the extent of any inconsistency with a planning scheme). However, the judge noted that the SEQRP did not go so far as to state that all land within the UF would be suitable for, or given over to, urban development or would be so developed within the planning horizon of the SEQRP. Instead, those matters were left to the planning scheme.

The judge noted that while the inclusion of the land in the UF in the SEQRP was a relevant consideration it did not, of itself, necessarily establish a point of inconsistency between the Planning Scheme and the SEQRP. He went on:

On balance, the noted cases demonstrate that the Regulatory Provisions have generated technical, legal disputes in relation to land located outside the UF. For land within the UF, the policies in the SEQRP, designed to accommodate further growth, have not assisted applicants in overcoming conflicts with a planning scheme (even when the planning scheme has not been updated to reflect the SEQRP). The cases emphasise the stark contrast between the negative effect of the SEQRP and Regulatory Provisions upon development outside the UF and the absence of any positive effect upon urban development within the UF.

The current environment

In recently adopting the new generation of regional plans for other regions, the State Government has not considered it necessary to replicate or introduce new regulatory provisions. It can be surmised that the State's decision in that regard was influenced by its desire to eschew broad scale "top down" development control and to return planning responsibility to local Governments, while ensuring that relevant State interests are properly considered and implemented. Whether this approach will be adopted for South-East Queensland remains unclear.

The table below summarises the current status of the various regional plans throughout Queensland, and the associated regulatory provisions:¹⁵

Are the Regulatory Restrictions Necessary?

Can regional policies be effectively implemented through development assessment or is prohibition required to achieve the SEQRP's purpose? With the move to performance based planning under the IPA in 1997 the prohibition of development under planning schemes was proscribed and today it remains strictly controlled under the Sustainable Planning Act 2009 (SPA). Only development identified in the Queensland Planning Provisions may be prohibited by a planning scheme. What elements or principles of regional planning create the need for prohibition of development?

Local Government areas have become larger and more regional in themselves since the wide scale amalgamations of local governments in 2008. Intuitively, if fine grained local planning cannot utilise prohibition to achieve its planning objectives it seems less likely to be required at the broader regional scale.

The policies behind the introduction of the SEQRP's regulatory provisions were centred around preventing "urban sprawl,"¹⁶ protecting agricultural land and inter-urban open spaces, strengthening existing communities and making more efficient use of infrastructure. These are all worthy objectives if applied in a balanced and moderate way. Problems arise however when each objective becomes an end in itself, disconnected from the others.

As Steve Reynolds and Matthew Schneider point out in their paper "The Sustainable Planning Bill 2009: An introduction to Queensland's new planning legislation"¹⁷ although prohibition was sought principally by local government during the reform process, too often, prohibition is a coarse tool that is outside the control of local governments.

Implementation of regional planning policies through an absolute or hard regulatory boundary has the following disadvantages:

• it is a broad scale and indiscriminate mechanism;
• it involves no, or very limited, site specific assessment;
• it contains inherent bias against development rather than objective balancing of relevant factors;
• it is inconsistent with a performance based approach to achieving ecological sustainability which involves balancing ecological, social and economic factors;
• it precludes the application of locally appropriate solutions; and
• it is inconsistent with the philosophy that State interests have to be considered in both regional and local contexts and balanced and applied appropriately.

Conversely, moving to performance based merits assessment is preferable because:

• it recognises that regional planning involves high level and necessarily broad scale strategic objectives that are to be implemented over long timeframes during which there will be social demographic and economic changes;
• it allows for the fact that strategic policies will need to change over time to adapt to a range of factors;
• it permits adaption and tailoring of the policies to local circumstances;
• it allows potential economic, social and environmental opportunities to be properly considered rather than not considered at all;
• it is consistent with modern notions of performance/solutions based development assessment;
• it assists in promoting innovation over slavish conformance; and
• it achieves all of these things while at the same time allowing the relevant regional planning policies to be given weight, possibly decisive weight, in deciding development applications.

Development applications can be assessed against clearly expressed regional planning policies in the same way as they would be assessed against local planning policies. However, regional policies that are clearly applicable ought to attract greater weight to the extent that they have not yet been incorporated into the relevant local plan.¹⁸

Consider the following scenario. Assume that urban development, say a specialised industrial facility, is proposed outside the UF and that the development and its surroundings have the following attributes:

• the development adjoins and is mostly surrounded by land that is in the UF;
• the development achieves efficient use of existing public infrastructure, for example major roads;
• the development does not involve fragmentation of good quality agricultural land;
• the development does not involve clearing any vegetation;
• the land is mapped as part of an inter-urban break but does not exhibit features of any particular regional scenic significence;
• the proposed development is not intrusive in terms of any view shed of regional importance;
• the design of the development manages and imporves the quality of water discharging into local waterways; and
• the proposed facility satisfies strong economic demand and community need in terms of employment generated and the supply of specialized products, but there is not an overriding need, as defined in the Regulatory Provisions, for the development.

MCU for this hypothetical development would not be approved unless the public would suffer adverse economic, environmental or social consequences without the development and the development could not be located within the UF. Even if, on the basis of a standard economic demand and community need assessments, the community would be better off with the proposed development than without it, the Regulatory Provisions, by reversing the test, impose a significantly higher threshold that probably could not be satisfied in the hypothetical scenario.

Plainly rejection of the development would be without any regional planning policy justification. The non-compliance is with Regulatory Provision rather than the SEQRP's plocies.

There is no public benefit in effectively prohibiting development in circumstances where it satisfies all desired regional outcomes and, on balance, meets other relevant other relevant planning criteria, just because it is on the wrong side of a line on a map.

Local and regional planning both need to be able to adapt to demographic, social and technological changes as well associety's social and economic needs. In that context, prohibition, or what is in practice akin to prohibition, is the very antithesis of ground truthing which is the essence of performance based development.

Some local governments may prefer to be able to rely upon State level prohibition to avoid having to undertake assessment of development outside the UF. That mindest is at odds with the State government's commitment to devolving planning power back to local governments while at the same time requiring those powers to be exercised responsibily in the public interest.

Assessment of development against desired regional outcomes can easily be undertaken by local government assessment managers in tandem with assessing development against the planning scheme. This will only be required where the relevant regional policies have not been incorporated in the planning scheme.¹⁹ In those circumstances, thregional policies, to the extent they are relevant, may prevail over the planning scheme and therefore be entitlafforded significant weight.²⁰ However, as the Stockland judgment²¹ amply demonstrates, regional policies that are expressed broadly and are subject to implementation by the local government having regard to relevant local circumstances, such as the existence of appropriately zoned land and the timing of future development, will not always be entitled to determinative weight. As the Court's judgment in that in that case shows, the exercise of applying regional planning policies is evaluative and requires the balancing of many factors.

Therefore, it is preferable that the SEQRP is applied as State level planning policy to which appropriate weight is given indevelopment assessment, where the regional plan has not been reflected in the planning scheme, rather than the current approach which involves an economic dis-benefit test wich is almost impossible to satisfy. Why should such a restrictive economic test be applied in circumstances where all the other relevant regional policies are, on balance, satisfied?

Conclusion

The Regulatory Provisions are a blunt regulatory instrument which will hinder the State's economic progress and are ate odds with the government's stated interest in delivering a better planning system, which the State Planning Plicy says:

Therefore, when the SEQRP is eventually replaced the Regulatory Provisions should be repealed and not replaced, thus allowing the SEQRP to operate as a regional planning policy that is entitled to appropriate weight, depending on the circumstances, until incorporated into planning schemes.

Footnotes

¹Second reading speech, page 1847
²Explanatory notes to the IPOLA Bill
³Explanatory notes to the IPOLAS Bill
⁴Submission in response to the draft SEQ Regional Plan PIA Queensland Division 28 February 2005 noted in Development Control and the SEQ Regional Plan by Emeritus Professor Alan Fogg
⁵Chang v Laidley Shire Council [2007] HCA 37 per Callinan J at [124] and [125].
⁶Custance v Gatton Shire Council [2007] QPEC 081, Cophurst Pty Ltd v Maroochy Shire Council [206] 023, Brown & Ors v Moreton Bay Regional Council [2011] QPEC 71, Metricon Innisfail Pty Ltd v Cassowary Coast Regional Council & Anor [2009] QPEC 11, [2009] QPELR 581; Barro Group Pty Ltd v Redland Shire Council and Others [2009] QPEC 9; Hartridge v Caboolture Shire Council & Anor [2009] QDC 126
⁷[2007] HCA 37
⁸Tolocorp Pty Ltd v Noosa Shire Council [2007] QCA 33
⁹[2009] QCA 400
¹⁰[2009] QCA 400 at [36]
¹¹[2012] QPEC 82
¹²[2013] QPEC 79
¹³[2013] QPEC 79 at [17]
¹⁴[2012] QPEC 82 at [19]
¹⁵There is also a regional plan for the Gulf region, however, it is not a statutory regional plan and does not contain any regulatory provisions.
¹⁶An unfortunately pejorative term which tends to deflect rational analysis of the effects of restricting land supply on the affordability of housing – see Henry Ergas "Our metropolises must evolve but let's preserve their strengths" – Weekend Australia in January 25-26 2014.
¹⁷Sustainable Planning Bill 2009, QELA Seminar, 6 July 2009, 1 at 2-3
¹⁸Because they must prevail over any inconsistent provision of a local plan – SPA section 36(2)
¹⁹SPA Section 313(2)(b) and see Zurela v Atherson SC [2008] QPEC 105; Celleoloni v Johnstone SC [2008] QPEC 104; Sibi Girgenti Holdings Pty Ltd v Atherton SC [2008] QPEC 108
²⁰SPA Section 36(4)
²¹Stockland v Sunshine Coast Regional Council [2013] QPEC 79

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