The Malinauskas Government will introduce legislation to State Parliament to ensure taxpayers can never again be exposed to costs incurred due to a situation created by construction company collapses, dodgy developers or enabling councils.

The Highways (Works for Residential Developments) Amendment Bill 2024 will ensure that if a similar situation occurs to the nightmare we saw unfold for O’Halloran Hill residents stung by the collapse of Felmeri, the State Government can step in to undertake prescribed works - and recover the associated costs from the relevant developer or the council that approved the residential development.

In the case of the Felmeri development, it was Marion Council that allowed building work to proceed before appropriate shared infrastructure was put in place – and the Government maintains that Marion Council should be held accountable for costs incurred as a result, not South Australian taxpayers.

The Malinauskas Government stepped in amid highly unusual circumstances to complete an access road on the O’Halloran Hill building development, to allow residents who had bought in good faith to get their homes completed.

The level of service work required on this project was significantly higher than could have been expected, given the condition the project was left in – with essential services poorly installed or not installed at all.

The council has admitted its fault in this matter – but still refuses to contribute to the costs, or even offer rates relief to impacted residents.

The costs incurred have totalled $4.2 million – far more than originally anticipated given the extent of service works required that should have been carried out by Felmeri.

The Bill – which will be introduced to State Parliament in coming weeks – gives the Highways Commissioner the power to step in and undertake prescribed works on residential developments on approval from the Minister for Infrastructure and Transport. It further allows the Commissioner to recover the costs of these works from the relevant developer or any other person that is, in the opinion of the Minister, responsible for undertaking the development, which can include any related body corporate.

Costs can also be recovered by a council if it was the relevant authority for the development under the Planning, Development and Infrastructure Act 2016 or the Development Act 1993, and provided the development on the land is for residential purposes.

Higher rates will be incurred for late payments.

The Bill also restricts the relevant council from passing on these costs to ratepayers, by restricting recovering through a rate, charge, levy, fee or other mechanism.

If passed, these laws would complement measures already put in place to guard against a situation like Felmeri reoccurring, with the State Planning Commission last year approving a Government request impose a mandatory condition that common driveways for developments where more than six community lots are created must be constructed before the Commission issues its land division certificate.

This ensures the sale of individual lots and builds can now only begin after required common road infrastructure is in place.

But the new laws outlined today give further assurance that if the State Government is again required to step in to salvage a situation created by third parties, taxpayers will be protected from any liability for the cost of the work.

Quotes

Attributable to Tom Koutsantonis

It’s incredibly pleasing to see many residents now able to move into their homes after the State Government’s intervention, and I acknowledge the advocacy of Davenport MP Erin Thompson on their behalf.

But it is simply not good enough that Marion council accepts responsibility for its role in this debacle yet is happy to let taxpayers cover the cost.

The council has admitted its fault in this matter – but still refuses to contribute... or even offer rates relief to impacted residents!
We continue to actively work through options to recoup taxpayer money spent in this endeavour, but we are also moving to ensure this situation can’t be repeated.

This Bill, if passed, will allow the State Government to step in and undertake works including roadworks, the supply of water, gas or telecommunications, and provision of stormwater, wastewater, sewerage management or other facilities required – with the security of a legal framework to recoup all costs incurred.

The Felmeri debacle was a dark chapter in SA’s building industry – it’s important we learn from it to create more robust safeguards that will protect both consumers and taxpayers.