As local councils get ready for their era of prosperity in regional NSW, the state biodiversity offset scheme has become one of the greatest threats to the region’s growth. As part of the Alliance of Western Councils, a lobby for change has begun. 

The NSW biodiversity scheme was designed with a simple premise, for each development in the state to pay for the environmental costs of their project, usually through purchasing ‘credits’ that invest in conserving biodiversity. 

For local developments, the cost of offsetting the emissions of the development has been criticised as being ‘disproportionate’ to the cost of projects, forcing councils to cancel or downscale their developments. 

Narromine Shire Council Mayor Craig Davies said that the cost is having a major impact on rural and regional NSW.

“It’s been put up as an offset against the loss of biodiversity and environmental assets, but it’s simply costing jobs, investment and development right across New South Wales,” Cr Davies said.

In 2018, Bourke Shire Council was one of the first to suffer from the cost of the scheme, after proposing the development of residential blocks to assist the town’s 9.5 per cent unemployment rate. 

“Those blocks were going to be put on the market and started at $48,000. The biodiversity offset people got ahold of it and they put an extra $480,000 cost on the biodiversity offsets for each of those blocks,” Cr Davies said. 

With the new cost making the development unaffordable and inflating the price of those blocks to over 10 times their worth, the project didn’t go ahead.

Cr Davies recalled similar examples across regional NSW, including a recent Gilgandra development.

The dingo fence between NSW and QLD - with a projected cost of around $29 million and length of around 3,700 kilometres was forced to move construction onto the QLD side of the border when it was found that the cost of biodiversity offset would be around $18 million. 

“They moved it about 150 millimetres to the north so it was in Queensland and they didn’t have to pay the cost,” Cr Davies said.

With costs meaning multiple projects forfeited, the Alliance of Western Councils is concerned that the current opportunity for growth in the region could be missed. 

“Now that we’re seeing our opportunity to shine, when this is our moment in the sun and things are starting to happen in the bush…they impose this tax on us,” he said. 

While bigger city-based companies have more to spend on offsetting their projects, the scheme is unattainable for small councils. 

“What we’re finding is that city developers are building hundreds of millions of dollars worth of projects in Sydney and then offsetting that by buying rural land and locking it up. We just don’t understand how that has any benefit whatsoever,” Cr Davies said. 

The offset scheme has recently come under fire following a report from the NSW Auditor General that showed it to be an ineffective way of protecting the environment. 

Independent MP Justin Field called for a revisit to the scheme that he labelled ‘perverse’.

“The idea that you can credibly offset the loss of a critically endangered species habitat around Sydney with some land put aside on the North Coast in three years' time is total nonsense, but that’s the sort of perverse outcome this scheme can allow,” Mr Field said. 

“The way it currently works is that developers, including the state government, just try to pay their way out and the environment comes last. That has to change,” he said. 

The Alliance of Western Councils will meet with the state government later this month, pursuing a limit to offset costs for development west of the Blue Mountains.

The Alliance is seeking a cap of 10 per cent of the capital expenditure of the project.