NSW has proposed a new planning policy to help councils and other authorities assess natural hazards and make decisions based on acceptable risk levels.

The state government says climate change and natural hazard requirements in planning decisions are currently scattered across various legislative and regulatory frameworks.

The State Environmental Planning Policy would bring these together and ensure a consistent approach on bushfires, floods, coastal erosion and urban heat.

Alongside the policy, the government has released “build back better” guiding principles for post-disaster recovery and a tolerable risk guideline for planning assistance.

Planning and Public Spaces Minister Paul Scully says the policy will help future-proof NSW.

“We’ve seen the devastation caused by bushfires and flooding across our communities, and the impacts to families and local businesses cannot be ignored,” he said.

“We need to build homes and infrastructure in the right locations, so communities are resilient to future risks and natural hazards.”  

The Insurance Council of Australia has welcomed the reform.

“For too long, fragmented planning rules have made it harder to properly assess natural hazard risk – leading to homes being built in locations that now face unacceptable exposure and higher insurance costs,” it said on LinkedIn. 

ICA wants changes that end development in high-risk areas, strengthen building codes and resilience infrastructure in moderate-risk zones, and prioritise development in low-risk areas.

Suncorp CEO Steve Johnston says the proposed policy is a significant step in building resilience to extreme weather across NSW and sets a national benchmark for climate-responsive planning. 

“When thousands of homes are built in high-risk areas, higher insurance premiums and greater financial exposure for households and the government are the inevitable result,” he said. 

“This is why it is essential to factor climate and natural hazard risk into new housing approvals.” 

Policy documents will be exhibited for feedback until March 16. They are available here.