The NSW Government will require councils to demonstrate that their planning controls provide at least 30 years of financially viable housing capacity, under a new policy announced by Premier Chris Minns.
Delivering the keynote address at CEDA’s 2026 NSW State of the State event in Sydney, Mr Minns said the measure would shift the planning system’s focus from theoretical housing capacity to land on which homes could realistically be financed and constructed.
The requirement will be incorporated into the forthcoming Sydney Plan, with the Department of Planning expected to work with councils over the next two years to update local planning controls.
From housing approvals to viable construction
Mr Minns said rezoning land or approving developments did not necessarily result in new homes being built.
A project may be legally permitted but remain commercially unviable because construction costs, financing expenses, infrastructure charges and expected sales revenue do not allow it to proceed.
Under the proposed approach, councils will need to show that their combined rezonings can realistically deliver enough homes to meet housing targets over the longer term.
The government argues this will prevent councils from nominally increasing housing capacity by rezoning sites that developers are unlikely to build on.
“If a builder looks at a project and it doesn’t stack up financially, even if it’s permitted under the zoning plans, they won’t do it,” Mr Minns told the CEDA audience.
He warned that the state could intervene where councils were unwilling to amend their planning controls.
The precise assessment methodology, implementation timetable and individual council requirements are expected to be outlined in the Sydney Plan, which the Premier said would be released in the coming weeks.
Housing remains central to government agenda
The announcement builds on a series of planning changes introduced by the NSW Government, including Transport-Oriented Development, the Low and Mid-Rise Housing Policy, state-led rezonings and the establishment of the Housing Delivery Authority.
The Low and Mid-Rise Housing Policy changed planning controls around 171 transport stations and town centres to allow more terraces, townhouses, dual occupancies and apartment buildings. The government previously estimated the policy could enable 112,000 homes over five years.
Mr Minns said development approvals in NSW had increased by 11 per cent, while the number of homes under construction was at its highest level in seven years.
He also said average council development application assessment times had fallen from 116 days when Labor entered government to 82 days.
The government’s target is to reduce average assessment times to 65 days by late 2027.
However, the Premier acknowledged that NSW remained well short of the level of housing construction required to resolve affordability and supply pressures.
Apartment developments can take several years to move from approval through financing and construction to completion, meaning recent planning changes may take time to appear in dwelling completion data.
Premier defends government’s fiscal approach
Housing was one of several long-term policy challenges addressed in the speech, alongside government debt, inflation and energy security.
Mr Minns said the government had reduced the state’s projected deficit from approximately $15 billion to $2 billion over three and a half years.
He said the lower deficit was saving around $400 million annually in interest costs and argued that restrained spending was particularly important during a period of elevated inflation and interest rates.
According to the Premier, NSW government spending had grown by an average of about 3.7 per cent, which he described as the lowest rate of expenditure growth among Australian jurisdictions.
He also renewed criticism of the distribution of GST revenue between states, saying NSW received approximately 83 cents for every dollar its taxpayers contributed, while Victoria received about $1.07.
Workers compensation reform defended
Mr Minns also defended the government’s changes to the NSW workers compensation system.
He said psychological injury claims had doubled in recent years, with workers under 25 representing the fastest-growing claimant group.
The Premier argued the scheme had become financially unsustainable, requiring approximately $6 billion in government support while employers and not-for-profit organisations faced repeated premium increases.
He said recently passed reforms were expected to save businesses about $4 billion over four years compared with projected premiums without changes.
The reforms have been politically contentious because of concerns about how tightened eligibility and assessment rules could affect workers experiencing psychological injuries.
Pragmatic energy transition
Energy policy was another major focus of the address, with the Premier defending the government’s continued reliance on coal and gas during the transition to renewable energy.
Mr Minns said the extension of operations at Eraring Power Station had been necessary to protect electricity reliability and reduce the risk of supply shortages while replacement generation and transmission infrastructure were developed.
He also defended further gas exploration in NSW, arguing that gas remained important for manufacturing and industrial users.
At the same time, he rejected calls to abandon the state’s renewable energy transition.
The Premier said coal had supplied about 90 per cent of NSW electricity seven years earlier, compared with around 60 per cent now, while renewable generation had grown to approximately 40 per cent.
He acknowledged that the transition would be expensive but argued that reversing course after significant investment would damage confidence, manufacturing and the state economy.
Economic growth and election context
The address was delivered about eight months before the next NSW election and presented the government’s policy approach as one of fiscal restraint and gradual structural reform.
Mr Minns said NSW had the fastest-growing state economy in Australia and the lowest state unemployment rate, with growth being driven primarily by private-sector demand and investment rather than government expenditure.
He argued that the government should maintain its direction on housing, energy and fiscal policy despite growing political pressure for simpler or more immediate solutions.
The proposed 30-year housing capacity rule represents the most significant new policy announcement from the address.
However, it remains a planning commitment rather than an immediate change to local environmental plans. Further details will depend on the Sydney Plan and subsequent work between the NSW Government and local councils.
The central test will be whether the policy converts additional planning capacity into developments that are commercially viable, financed and ultimately constructed—rather than simply producing a larger number of homes on paper.