|UDIA NSW welcomes today’s announcement that the NSW Government will invest in addressing the shortcomings of the current biodiversity offsetting scheme, which is making housing more expensive, even as it falls short on meeting its biodiversity conservation aims.The NSW Government announced it will create a Biodiversity Credits Supply Fund with $106.7 million over three years as part of the upcoming NSW Budget.
The Fund will provide a guaranteed government purchaser for biodiversity credits from landholders who choose to conserve their land, and a central source for private and public proponents to find offset credits. The Fund is intended to encourage more biodiversity protection while also supporting new housing supply by making it easier to offset any necessary biodiversity impacts from development.
UDIA has been advocating for investment in the biodiversity offset system for many years and our Pre-Budget Submission to the NSW Treasurer called for the establishment of just such a Biodiversity Credits Supply Fund.
UDIA estimated that an investment of $100 million could cover the short-term needs of the urban development sector alone, noting we have estimated that more than $3 billion in biodiversity offsets are going to be required for housing and employment land development in the years ahead across NSW.
“The offset credit trading market has never functioned properly since it was set up five years ago under the Biodiversity Conservation Act,” said UDIA NSW CEO Steve Mann. “We have a chronic under-supply of offset credits in the market, which is contributing to our ongoing under-supply of housing and rising house prices. The new Biodiversity Credits Supply Fund is a significant step forward to provide a much-needed intervention to kickstart the biodiversity offset credit trading market and support more housing supply.”
UDIA sees the Biodiversity Credits Supply Fund as a positive first step to improve environmental outcomes and support housing supply. However, we are concerned that the size of the initial investment of $106.7 million over 3 years, may be insufficient to cover new housing as well as job-generating projects and government infrastructure projects.
In the longer term, a more strategic approach to biodiversity conservation is needed particularly for areas like the Lower Hunter/Greater Newcastle and Central Coast. Projects in these high growth areas in the east coast Sydney Megaregion are finding it very difficult, uncertain, lengthy, and costly to navigate the NSW Biodiversity Conservation Act 2016.
“The NSW Government should also invest in accelerated strategic conservation planning in the Hunter and Central Coast,” said Mr Mann. “A regional biocertification project was started for the Central Coast but it has stalled due to lack of funding. Government should complete that regional biocertification project for the Central Coast and start the process in the Hunter as a high priority to protect and enhance the environment, while also enabling sustainable development.”
UDIA NSW worked with EMM to produce an “Issues paper on the NSW Biodiversity Offsets Scheme” (September 2021) which provides a detailed analysis on how to improve the biodiversity offsets scheme. The report can be found at this link.