Exclusive National NSW Environmental protection

‘Greatest handbrake to investment’: NSW to review

biodiversity offset scheme
By Angus Thompson
Updated August 6, 2021 — 6.31pm, first published at 3.30pm

The NSW government has promised to review its biodiversity offsets scheme in the face of criticism from
Deputy Premier John Barilaro and lobbying from developers and the mining industry.

Mr Barilaro on Friday called biodiversity offsets the “greatest handbrake” to infrastructure investment in
the state and said it was wielded as a revenue-raising mechanism.

NSW Deputy Premier John Barilaro has ramped up his criticism of biodiversity offsets, labelling them a “handbrake”
against investment. NICK MOIR

In a significant ramping up of rhetoric on the issue, the Nationals leader told a webcast conference of
developers that the biodiversity offset program was impeding the government’s own delivery of critical
infrastructure and said the formula used to calculate costs was a “lucky dip”.

“I genuinely think right now the biodiversity calculator, the biodiversity offset program, is broken, and I’ll
say, I’ll cop criticism for saying that,” the Deputy Premier said.

The Biodiversity Offset Scheme was established under the Biodiversity Conservation Act 2016 as part of
land management reforms to ensure economic activity can occur while recognising the impact that
activity may have on the environment.

Mr Barilaro, whose party has been critical of the application of offsets, singled out the $815 million bid to
raise the Wyangala dam wall, 320 kilometres west of Sydney, to drought-proof the area, saying the offsets
had originally been quoted as up to $180 million, before rising to $500 million.

“Which now means the business case for the project ... is incorrect,” Mr Barilaro told the Urban
Development Institute of Australia’s NSW branch event.

Following Mr Barilaro’s attack on the environmental protection scheme, a Department of Planning,

Industry, and Environment spokesperson said: “We recognise that there have been issues with the
effectiveness of the scheme as it has been implemented, and we are working to address them.”

“We have been consulting with industry on how to improve the scheme, and will be undertaking further
detailed consultation shortly. A whole-of-government working group has also been stood-up to develop a
detailed work plan to continue to improve the scheme over time.”

It is understood the government is working towards a compromise that would allow certainty for industry,
who have complained about the level of planning to ensure there is appropriate land to be offset, while
still ensuring environmental safeguards.

In a separate statement, a DPIE spokesperson said the biodiversity offset costs for the Wyangala Dam
project, including contributions to the Biodiversity Conservation Fund, were being assessed and
considered as part of the final business case and environmental impact statement process.

Greens MLC Cate Faehrmann said she was furious at the government’s backdown over the scheme, saying
it was also supposed to be about avoiding and minimising environmental damage, however those
considerations had been left behind “a long time ago.”

“It’s another national party attack on the environment. To now come in and say the biodiversity offsets
scheme needs to be even weaker than it is, you may as well throw it out,” she said.

“I think developers are having a dummy spit and want to pay less to clear threatened species.”

The Herald previously reported a leaked cabinet document showed the project would do little to improve
water security in the Lachlan Valley, in the state’s central west.

The offset calculator predicts what a developer must pay into the government’s Biodiversity Conservation
Fund instead of buying or spending biodiversity credits.
The raising of the Wyangala Dam in central NSW has incurred a $500 million environmental compensation bill, Mr
Barilaro has said. NICK MOIR

Mr Barilaro said he believed that NSW had “gone to the extreme of it” rather than the architects of the
scheme compromising to reach a “middle ground” approach.

“The biodiversity offset approach from NSW has been the greatest handbrake to investment,” he said.

“We just continue to look at it as a revenue-raising mechanism, but not for the outcomes ... you’ve got to
revisit, ‘what is the outcome you’re trying to achieve?’”

Mr Barilaro also raised the example of a $48 million wild dog fence being constructed in northern NSW,
for which the government received a biodiversity offset $70 million bill.

“That’s more than the project itself. It’s ludicrous. And when you think about the project itself is actually
about protecting the biodiversity ... so in one way, we have problems, the calculator is problematic,” he
said.

In response, UDIA NSW chief executive Steve Mann commended the Nationals leader’s comments, saying
that, over time, the calculated payment had become even harder to predict for developers.

The Herald reported in October that the NSW government’s controversial plan to raise the Warragamba
Dam wall, which will inundate the Blue Mountains World Heritage Area and destroy Aboriginal sites,
would incur offsets exceeding $1.3 billion to compensate for the loss of flora alone.

The NSW government previously announced a parliamentary inquiry into offsets following revelations in
The Guardian that government consultants were buying land and selling it as offsets back to the state.

Ms Faehrmann, who will be chairing the upper house inquiry, has referred the allegations to the
corruption commission and likened the activity to “insider trading”.
Offsets are also a key pillar of koala habitat protection, with landowners able to receive government
funding for conserving areas that would be otherwise built upon.

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Angus Thompson

Angus Thompson is an Urban Affairs reporter for The Sydney Morning Herald.