The Victorian Government has permanently binned major planning reform proposals which took three years to develop despite acknowledging that the proposals would have delivered billions of dollars’ worth of benefits and created thousands of jobs.
And the government has also binned plans for a levy on new multi-residential developments and subdivisions to raise $800 million per year for a new fund to deliver social housing.
Just than two weeks after announcing them on February 17, Victorian Treasurer Tim Pallas and Planning Minister Richard Wynn said their government has withdrawn proposed reforms to the state’s planning system.
Originally set to be introduced over a two-year period, the reforms were proposed in response to recommendations from the Commission for Better Regulation and Building Victoria’s Recovery Taskforce.
They had aimed to update and simply planning rules and processes, better support local councils, streamline decision making for priority projects, support planning of priority precincts and improve infrastructure and service delivery for new developments.
They had been the result of three years’ consultation.
But the government has now permanently withdrawn its intention to enact the changes.
In doing so, it said blamed the property industry for its failure to support another reform which would have seen a 1.7 percent charge applied to new multi-residential developments and subdivisions to establish a fund to support long-term social housing delivery.
The withdrawal of the reforms comes despite acknowledgement from the government that the proposed changes would have delivered $7 billion in benefits over ten years, created tens of thousands of jobs and delivered a stronger and more efficient planning system.
In a statement, Treasurer Tim Pallas hit out at the development sector.
He said the government had made clear that enactment of the reforms was conditional upon development sector support for the new social housing levy.
He accused the sector of wanting to create ‘super-profits’ for its members without being willing to share the benefits of these reforms with the broader community.
Pallas said the package is off the table for good and will not proceed if Labor is re-elected.
“This package would have delivered massive benefits for the development sector while ensuring a modest and reasonable contribution was returned to social and affordable housing for Victorians,” Pallas said.
“We won’t create super profits for a sector that will not share a portion of the profits with Victorians.”
But property industry groups have slammed the withdrawal of the proposed reforms.
In an alert issued to its members, the Property Council of Australia expressed dismay.
“The Property Council is incredibly disappointed by the Andrews Government’s decision this morning to withdraw its proposed planning reform and social housing package,” it said.
“We have been ardent advocates for planning reform and a better system to deliver social and affordable housing on behalf of the property industry, and the broader Victorian community.
“After three years of engagement to develop a planning reform package that has identified $7 billion worth of improvements that would create jobs, unlock investment and benefit the community by improving the way we deliver new housing and infrastructure, the Government has now confirmed it has no intention to proceed with a package now, or in a future term of the Andrews Labor Government.
“For the property industry and its people, who invested so much in driving this reform forward, this is deeply disappointing.”
Master Builders Victoria Chief Executive Officer Rebecca Casson agrees.
“MBV is disappointed that the Victorian Government has withdrawn its extensive planning reform package,” Casson said.
“MBV has been working closely with the Victorian Government for several years on a range of planning reforms to cut red tape and speed up planning processes to benefit our state’s building and construction industry and the broader Victorian community.
“MBV supports ongoing investment into social housing but applying a different tax to the building and construction industry was not the solution at this time.”
Both the Property Council and the Master Builders stress that the industry already makes a substantial contribution to the state.
This includes through generating 59 percent of the state’s revenue (including local government revenue), employing one in four working Victorians and contributing to social and affordable housing through voluntary agreements on new development activity.
The shelving of the reforms, they said, would cost tens of thousands of jobs and would negatively impact affordability and home ownership dreams by increasing the cost of new housing supply.
In addition, the Property Council hit back at the Treasurer’s claims that the reforms had been about ‘super-profits’ for the development sector.
Instead, it said the changes had been about delivering a more effective planning system along with unlocking economic benefits and affordable housing supply.
Housing Industry Association applauded welcomed the decision to dump the plan for a social housing tax on new homes.
But it added that the episode of announcing a policy and then shelving it ten days later demonstrated that the government did not have a plan for housing affordability.