Developers and real estate agents will be banned from sitting on independent panels that will determine development applications (DAs) between $5 million and $30 million.
The state government did not oppose the change, which was moved by Labor during a late-night sitting of the upper house.
Labor supported the bill, which was passed by both houses.
Opposition spokesman on Planning and Infrastructure, Michael Daley, said the government’s acceptance of the amendment begged the question why it was “happy to admit developers should not sit on local planning panels, but prepared to allow them to be councillors”.
Labor speakers also criticised the rush in debating the legislation, which was announced on Wednesday.
Minister for Planning and Housing, Anthony Roberts, said the passing of the legislation was “a fantastic outcome for ratepayers”.
IHAPs (Independent Hearing Assessment Panels) bring transparency, integrity and a high degree of probity to the DA process,” he said.
Mr Roberts said the panels would be subject to investigation by the Independent Commission Against Corruption (ICAC).
“These panels, which will consider applications valued at between $5 million and $30 million as well as a range of high-risk development types, will give communities and ratepayers greater certainty about planning decisions”.
“Most importantly, local councils will be able to focus on preparing the strategic plans and development controls that will identify the range and location of development types for their local area.”
The Bill sets a standard model for IHAPs, comprising three independent expert members and a community member.
The community member, to be selected by the council, will represent the geographical area within the LGA of the proposed development, to provide local perspective.
IHAP members, who will be chosen by councils from a pool managed by the Department of Planning and Environment, will have to be expert in one or more of the following fields: planning, architecture, heritage, the environment, urban design, economics, traffic and transport, law, engineering, tourism, or government and public administration.
The chair must also have expertise in law or government and public administration.
The panel members themselves will be subject to statutory rules such as a compulsory code of conduct and operational procedures for the panels.
Local councils will still process most applications for individual houses or alterations to existing houses.