On 11 June 2015, the Planning and Environment Amendment (Infrastructure Contributions) Bill 2015 (Bill) was introduced into the Victorian Parliament by Planning Minister Richard Wynne.  The Bill re-enlivens the former government’s DCP reform program which lapsed with the change of government in 2014.

Like its predecessor, the Bill is based on the recommendations of the Standard Development Contributions Advisory Committee that was established in 2012 to provide advice on a new standard levy system for development contributions.

The Committee recommended that a new contributions system be established based around a clear and defined understanding of what constitutes basic and essential infrastructure in urban areas.  The Committee recommended that development contributions reform achieve the following:

  • Establish standard levies, so that developers, Councils and the state government are able to budget effectively and understand their obligations at the outset of the development process;
  • Help deliver an acceptable standard and quantum of infrastructure as a result of growth and change;
  • Provide a streamlined approval process to implement the standard levies through local planning schemes and deliver substantial savings in approval time; and
  • Ensure that non-residential development also makes an appropriate contribution to infrastructure, in proportion to the demand for infrastructure that these developments generate.

Highlights

The Bill introduces a new tool for collecting development levies, the infrastructure contributions plan (ICP).  The ICP will be prepared by a planning authority in consultation with relevant stakeholders. It will provide the strategic justification for the application and allocation of the development contributions levy to a specific precinct or site.

An ICP can impose a standard levy or, in limited circumstances a supplementary levy (relating to items such as community facilities, roads, drainage, public open space). A standard levy is the uniform monetary contribution to infrastructure that meets a local needs and is 'basic and essential' for a growing community.  Standard levies will be set for residential, retail and commercial/industrial developments in metropolitan and non-metropolitan locations.  A supplementary levy is a variable monetary contribution for an exceptional infrastructure item (such a new drainage scheme, State road or public transport infrastructure and large scale public improvement works) that cannot be funded by the standard levy or is required to unlock growth in a specific location.

The new system will apply following priority growth locations:

  • Greenfield growth areas - greenfield land on the fringe of existing metropolitan and non-metropolitan urban areas which are in, or planned to be in, the Urban Growth Zone. In regional Victoria this will include areas that are identified for growth in regional growth plans; and
  • Strategic redevelopment areas - locations within existing urban areas that are planned or become available for significant growth and change. Generally, these areas will be identified in Plan Melbourne (for example National Employment Clusters, Urban Renewal Areas) or in a regional growth plan.

Next Steps

The Department of Environment, Land, Water and Planning (Department) will work with an Implementation Reference Group representing peak industry groups and councils to finalise the details of the new system, such as the levy rates, indexation mechanisms and application criteria, before it commences in early 2016.