4
Public land regulation
4.1
Introduction
From a tourism industry perspective, Victoria’s national parks, coastal crown
land and other types of public land are major attractions for international and
domestic visitors to Victoria. Many tourism businesses also consider particular
attractions such as the Great Ocean Road, the Grampians, Wilson’s Promontory,
Mornington Peninsula and the Victorian Alps can become even more significant
contributors to nature-based tourism. Some participants argued, however, the
regulation and management of access to public land is holding back the naturebased tourism industry in Victoria. This chapter examines the basis for such
concerns, and the need to change the regulation and management of public land.
The way in which public land is managed and regulated for tourism is important
not just for the industry but also for the Victorian community and future
generations. Recent reports1 highlighted worrying trends in public land
environments such as the loss of native vegetation and biodiversity, and
continuing threats from climate change, drought, bushfires, weeds and pests.
These reports highlighted government investment in landscape maintenance and
repair is insufficient to address these continuing threats, and that, as a result,
Victoria is running down its natural capital. This trend is leading governments in
Victoria and around the world to explore how they can better harness private
sector entrepreneurship and resources to restore environmental assets and
meeting the threats to future environmental sustainability. Nature-based tourism
has emerged as a potential solution.
Before examining these issues, the next section provides an overview of
Victoria’s public land assets and their significance to tourism.
4.2
Public land in Victoria
4.2.1
What is public land?
Broadly, public land is all State-owned land, including parks, land reserved for
roads, hospitals, schools and other public purposes and land vested in public
authorities. The term can also apply to land owned by municipal councils and the
Commonwealth Government. In total, public land covers around 40 per cent of
the state (DSE 2010a).
For example, the Land and Biodiversity White Paper (DSE 2011) and the State of the environment report
(Commissioner for Environmental Sustainability 2008).
1
PUBLIC LAND REGULATION
83
In this inquiry, the Commission focuses on public land that relates to tourism
activity — namely, land reserved under:
(1) the Crown Land (Reserves) Act 1978 (Vic), as alpine resorts, coastal reserves,
state forest reserves, metropolitan parks or wildlife reserves
(2) the National Parks Act 1975 (Vic), covering national parks, state parks,
wilderness parks, marine national parks and marine sanctuaries.2
Most public land is in national parks and state forest reserves. The main types of
public land and their extent are:
national parks covering 3.6 million hectares or 46 per cent of public land
state forest reserves covering 3.5 million hectares or 43 per cent of public
land
alpine resorts covering 105 000 hectares or 1.3 per cent of public land
coastal reserves covering 65 000 hectares or less than one per cent of public
land
metropolitan parks, such as the Royal Botanical Gardens, covering 5000
hectares, or less than 0.1 per cent of public land (Department of Natural
Resources and Environment 2002, p. 2).





These different types of public land range from highly natural environments to
areas that have been highly modified (figure 4.1). The environmental, heritage
and other impacts of tourism-related activities on public land can vary, therefore,
depending on the condition of the public land and the type of tourism activity.
Figure 4.1
Types of public land for recreation and tourism
Source: Department of Natural Resources and Environment 2002, p. 1.
2
Collectively referred to as ‘national parks’ in this chapter.
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UNLOCKING VICTORIAN TOURISM
4.2.2
Importance of public land to Victoria’s tourism
industry
Visitors to Victoria’s public land estate have diverse needs, ranging from very
low requirements for accompanying services (self-sufficient visitors) through to
the demand for a range of educational, accommodation and other facilities.
Victoria’s Nature-based Tourism Strategy (NBTS) acknowledges this diversity by
stating public land managers need to take ‘a holistic landscape approach [that]
balances the provision of access, activities, amenities and accommodation for a
range of tourism, education and recreational visitors against natural and cultural
conservation outcomes’ Tourism Victoria, DSE, and Parks Victoria 2008,p. 30).
An estimated 89 million visits were made in 2008–09 to public land managed by
Parks Victoria, including 33 million visits to national and state parks, 40 million
visits to piers and jetties, and 16 million visits to metropolitan parks. In addition,
around 18 million on-water recreation visits were made to the bays (Parks
Victoria 2010a). The most visited national parks were Port Campbell (on the
Great Ocean Road), the Yarra Valley and Dandenong Ranges and the
Mornington Peninsula (figure 4.2). While Victorians account for many of these
visits, visiting public land is also a popular activity for international visitors, with
around 20 per cent visiting a national park during their stay in Victoria.
Figure 4.2
Visitation to major national parks in Victoria
(million)
3.3
3.0
2.5
1.8
1.1
1.0
0.6
Port Campbell
(2002)
Yarra
Valley/Dandenong
Ranges (2009)
Mornington
Phillip Island (2009)
Peninsula (2009)
Great Otw ay
(2006)
Grampians (2009)
Alpine (2007)
Source: Provided by Parks Victoria.
PUBLIC LAND REGULATION
85
Much of public land’s contribution to the tourism industry is in the form of
nature-based tourism, which uses natural resources to offer tourism products
while meeting conservation objectives. The NBTS reported the following
estimates of the economic value of key parts of the public land estate:




Wilsons Promontory, Port Campbell and the Grampians ($481 million per
year)
state forests (between $12.8 and $39.9 million per year)
Victoria’s alpine resorts ($505 million per year)
visits to beaches and coastline ($734 million per year) (Tourism Victoria,
DSE, and Parks Victoria 2008, p. 11).
Despite the significant economic value generated by visits to public land, there
may be scope to significantly increase this value. According to the Tourism and
Transport Forum (TTF), international visitor surveys show the number of
visitors to natural attractions has grown faster in Victoria than in New South
Wales (NSW) and Queensland. However, the TTF argued the number of
domestic overnight visitors to national parks fell in Victoria between 2004–05
and 2009–10, compared with a 20 per cent increase in NSW (sub. 44, pp. 42–3).
The NBTS also states:
… tourism is a major economic driver for the State, [but] growth is not being
realised equally for all tourism sectors. Consumers perceive Victoria to be the
leading destination in Australia for regional food and wine, touring and events;
however, the perception of Victoria as having world-class natural attractions is
low. (Tourism Victoria, DSE, and Parks Victoria 2008, p. 10)
Nevertheless, the NBTS forecasts international nature-based tourism visitors will
increase by almost 45 per cent by 2016. In addition, international nature-based
tourism visitor nights are expected to account for two-thirds of the nature-based
tourism market in Victoria (Tourism Victoria, DSE, and Parks Victoria 2008, p.
23). While these forecasts provide a goal for the future, realising this projected
growth depends on addressing the issues identified in the NBTS (Tourism
Victoria, DSE, and Parks Victoria 2008, p. 23). The main issue identified is a
‘failure of Victoria’s national parks to capture yield, despite high visitor numbers’
(Tourism Victoria, DSE, and Parks Victoria 2008, p. 5). The importance of
capturing yield is highlighted by the Phillip Island Nature Park (box 4.1).
Within this context the Commission has considered whether the framework
governing public land in Victoria creates an enabling environment for further
investment in tourist facilities on public land.
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UNLOCKING VICTORIAN TOURISM
Box 4.1
Yield in Phillip Island Nature Parks
Phillip Island Nature Park is an important nature-based tourism attraction for
Victoria, particularly for Asian markets (including China). Overall visitation to the
park has fallen but visitor yield has increased.
By offering premium penguin viewing products, for example, the park has
concurrently expanded its appeal to European visitor markets and increased yield.
The addition of a photography unit has also increased yield through the in-house
production of postcards, key rings, magnets and visitor photographs with a penguin.
Visitors can purchase a photograph with a digitally imposed penguin. The park is also
committed to having a high standard of product, by certifying all of its products to
Advanced Ecotourism — the highest level of ecotourism certification available from
Ecotourism Australia.
Phillip Island as a destination has had limited opportunities to extract higher yield
from most of the 688 621 visitors, because many park visitors do not stay on the
island overnight.
Source: Tourism Victoria, DSE, and Parks Victoria 2008, p. 55.
4.3
The regulatory framework for public land
The regulatory framework for managing public land in Victoria was mostly
developed in the 1970s. It has evolved into a complex and interrelated body of
legislation, regulation, policy statements and guidance material. Aspects of this
regulatory framework are relevant to understanding the issues raised by
participants about the management and regulation of public land for tourism.
This section summarises the following features of the regulatory framework:
(1) the broad structure of public land regulation, which impacts on the ability of
those managing it and operating within it to understand the system (section
4.3.1).
(2) the relevant legislative and policy requirements facing businesses wishing to
develop and operate tourism facilities on public land (section 4.3.2).
(3) the process for licensing businesses that wish to conduct tours and other
activities for tourists on public land (section 4.3.3).
4.3.1
The broad structure of public land regulation
The proponent of a tourism development on public land, such as nature-based
accommodation, must consider the requirements of different pieces of state and
federal legislation and interact with multiple bodies, depending on the nature of
the proposal, the location and the type of public land. The Acts of most
relevance to nature-based tourism are the Crown Land (Reserves) Act and the
National Parks Act. These acts provide the framework for reserving national
PUBLIC LAND REGULATION
87
parks, alpine resorts and state forest reserves, and for regulating the management
and use of public land (figure 4.3).
As well as public land legislation, a proponent must obtain a planning permit
under the provisions of the Planning and Environment Act 1987 (Vic), so will need
to consider controls outlined in a municipal planning scheme (chapter 3).
Further, proposed developments in environmentally sensitive locations may be
required to undergo an environmental impact assessment under either the
Environmental Effects Act 1978 (Vic) or the Environmental Protection and Biodiversity
Conservation Act 1999 (Cth).
Figure 4.3
The structure of public land legislation
Public Land
Crown and freehold land owned by
Victorian public authorities (excludes
local government owned freehold and
Commonweatlh land)
National Parks
National Parks Act
1975
National
Parks
State Parks
Wilderness
Parks
Remote and
Natural Areas
Marine
Sanctuaries
Other Parks
Crown Land
Crown Land
(Reserves) Act 1978
Freehold Land
Owned by Victorian
public authorities
Marine
National
Parks
Unreserved
Reserved Crown
Crown Land
Land
May be sold or
Crown Land
reserved for public occupied Land Act
purposes
1958
Alpine Resorts
Alpine Resorts Act 1983
Alpine Resorts
(Management) Act 1997
Coastal Reserves
Coastal Management
Act 1995
Wildlife Reserves
Wildlife Act 1975
State Forest Reserves
Forests Act 1958
Other Crown Land
Reserves
Includes metropolitan
parks and other land
reserved for public
purposes
Source: VCEC.
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UNLOCKING VICTORIAN TOURISM
Table 4.1
Public land management bodies
Category of public land
National parks
Alpine resorts
Coastal reserves
State forest reserves
Wildlife reserves
Other Crown land reserves
Managing body/bodies
Parks Victoria
Alpine Resort Management Boards
Victorian Coastal Council
Department of Sustainability and Environment
Committees of Management
Parks Victoria, Committees of Management, councils
and other agencies
Source: VCEC.
A number of groups administer public land regulation and assess and approve
proposals to develop or undertake tourism-related activities on public land
(table 4.1):




The Department of Sustainability and Environment (DSE) has the
overarching management responsibility for Victoria’s public land estate. It
develops policy and advises the Minister, and oversees the management of
national and state parks, coastal land, state forest reserves and other Crown
land reserves. This responsibility includes assessing and approving proposals
to undertake tourism-related activities on public land. In practice, DSE
delegates much of its responsibility for land management to other bodies
such as Parks Victoria.
Parks Victoria’s primary role is to manage Victoria’s national parks estate,
which represents nearly half of all public land in Victoria (Parks Victoria
2010b). Parks Victoria also licenses tourism operators (under delegation
from DSE), and operates and maintains park facilities, including camping
grounds and roofed accommodation (Parks Victoria 2010c).
Committees of Management (CoMs), appointed under the Crown Land
(Reserves) Act, perform similar roles to Parks Victoria but on reserved
Crown land such as foreshore reserves, historic buildings on public land and
some parks. The several thousand CoMs in Victoria are made up of
individuals, community groups, councils and statutory bodies (DSE 2010b).
Six Alpine Resort Management Boards manage individual resorts in the
Victorian Alps. The Alpine Resorts Co-ordinating Council coordinates these
boards (Alpine Resorts Co-ordinating Council 2010).
In addition, other bodies may influence how public land is managed and
regulated. The Victorian Coastal Council, for example, is responsible for strategic
planning and for advising the Environment Minister on the development and use
of Victoria’s coast (Victorian Coastal Council 2009, p. 78).
PUBLIC LAND REGULATION
89
4.3.2
Regulatory requirements for new tourism
developments
Businesses need to consider many legislative and policy requirements when
preparing proposals for new tourist facilities on public land. These requirements
dictate where facilities built and operated by the tourism industry can and cannot
be developed, the terms and conditions (including the duration of leases), and
the approval and assessment processes to be followed (figure 4.4).
Figure 4.4
Potential approvals needed to develop
infrastructure on public land
Pre-approval of proposal
DSE/Parks Victoria/CoMs
Planning permit
Minister for Planning/
Council
Aboriginal heritage
permits
Aboriginal Affairs Victoria
Commonwealth
environmental legislation
approvals
Commonwealth
Environment Minister
State environmental
approvals
DSE
Flora and fauna approvals
DSE
Coastal Management Act
approvals
DSE
Native title approvals
DSE
Heritage approvals
Heritage Victoria
Building permit approvals
Council/Private-building
surveyor
EPA approvals
Council/EPA Victoria
Public Health and
Wellbeing Act 2008
approvals
Council
Assessment
based on criteria
in table 4.2
Land-use planning
approvals
Public land use
approval
Crown land leasing
approval
DSE/Parks Victoria
Local government
approvals
Council
Operational
approvals
Liquor licensing approvals
Liquor Licensing
Commission
Source: VCEC.
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UNLOCKING VICTORIAN TOURISM
The development process
The process of obtaining approval to develop new tourist facilities or to operate
an existing facility involves multiple steps; including demonstrating the proposed
development meets the requirements of land-use planning regulation and other
relevant approvals. The steps include the following:




A land manger (potentially DSE, Parks Victoria or a CoM) must provide
pre-approval that the proposal is consistent with the objectives of legislation
and relevant policy requirements (table 4.2).
The land manager or the proponent must then apply to the Environment
Minister for approval-in-principle (AiP) of a lease proposal. The application
must address leasing principles set out in the leasing policy statement 3 (DSE
2010c) (see below).
If the Minister provides an AiP, then the land manager and the proponent
can negotiate the terms and conditions of a lease. The lessee must also meet
any requirements of the AiP.
Before the Minister approves the lease, the proponent must obtain all
relevant approvals under land-use planning, heritage, building and other
regulations. The proponent may need to deal with a number of other
approval processes and agencies to obtain the relevant permits and consents,
including those listed in figure 4.4.
This policy does not apply to national parks (as private ownership or investment is prohibited, hence leases
to operate facilities are considered on a case by case basis) or alpine resorts (which are governed through
separate policy — the Alpine Resorts Leasing Policy (Victorian Government 2002)).
3
PUBLIC LAND REGULATION
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Table 4.2
Criteria for assessing proposed tourism
developments on public landa
Development proposals must:
Be consistent with Victoria Planning Provisions
Be consistent with legislative objectives of public land category
Be consistent with park/forest management plans
Be consistent with Crown land leasing policy
Be consistent with National Competition Policy principles
Demonstrate need to be sited on public land or national park
Demonstrate no restrictions to community access
Demonstrate a net community benefit (short and long term)
Be owned and developed by governmentb
Demonstrate stakeholder and community supportb
a The criteria apply to new tourism infrastructure developments only, not to redevelopments of existing
infrastructure or redevelopments of sites already covered by leases or where leases are specified in
legislation (for example, Mount Buffalo Chalet, Point Nepean National Park). These criteria also apply to
any new non-tourism development proposals on Crown Land.
b Applies to only development in national parks.
Source: Department of Natural Resources and Environment 2002, summarised by DSE.
Pre-approval requirements
The Commission understands the criteria for assessing a proposal for a tourist
facility on public land (table 4.2), are being reviewed and updated, but they
illustrate how a proponent must consider a wide range of legislation, policy and
guidance material. From a policy perspective, relevant features of these criteria
are that they:




92
require consideration of the benefits and the environmental and other costs
of a proposal to determine whether leasing public land has a net community
benefit
do not consider privately owned and operated development in national parks
that could deliver net community benefits (only the government can develop
such facilities)
require stakeholder and community support for development in a national
park but not for development on other types of public land
provide broad discretion about whether a lease will be considered and
approved.
UNLOCKING VICTORIAN TOURISM
To examine the issues raised by participants, and the opportunities for
improvement, the Commission considered aspects of policy, legislation and
guidance that underpin the criteria listed in table 4.2, including:




the legislative objectives of public land
requirements set out in the Sustainable Recreation and Tourism on Victoria’s Public
Land policy (Department of Natural Resources and Environment 2002)
leasing requirements set out in legislation and the Leasing Policy for Crown Land
in Victoria (DSE 2010d)
other guidelines, such as the Draft Design Guidelines for Nature-Based Tourism
(DSE 2009).
Legislative objectives for public land
Generally, the objectives of public land legislation emphasise the importance of
protecting and preserving the environmental, heritage and conservation values of
public land as well as encouraging its use for recreation (or tourism):

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


The objectives of the National Parks Act include: preserving and protecting
of the natural environment; encouraging the responsible management of the
land; and subject to conservation objectives, encouraging the use of parks
for enjoyment, recreation or education and encouraging and controlling that
use.
While the Crown Land (Reserves) Act has no specific objectives, the Act
provides for the reservation of Crown land for a range of public purposes
including conservation, recreation, community and tourism.
The Alpine Resorts (Management) Act 1997 (Vic) has a different approach, with
the objective to encourage the ‘development, promotion, management and
use of resorts on a sustainable basis’.
The objectives of the Coastal Management Act 1995 (Vic) refer to sustainable
planning and management, protecting and maintaining areas of
environmental significance, while facilitating the development of facilities for
improved recreation and tourism in appropriate areas.
While the Forests Act 1958 (Vic) has no specific objectives, the Act allows for
multiple uses including timber harvesting, conservation, water production,
public recreation and tourism.
The administration of public land regulation needs to account for the full range
of benefits and costs in determining whether a development of tourist facilities
delivers a net benefit to the community. Developing tourist facilities on public
land can provide community benefits (such as increased use and enjoyment of
public land), as well as economic benefits to businesses and local communities
created by development. These benefits need to be considered along with any
PUBLIC LAND REGULATION
93
environmental, heritage, social and other impacts of development and use of
public land.
Sustainable recreation and tourism on Victoria’s public land
The legislation governing public land emphasises the objectives of protecting
public land values while encouraging the use of land for a range of purposes,
including the development of tourism services and facilities on public land. An
important feature of the Sustainable Recreation and Tourism on Victoria’s Public Land
policy is that private development or investment of major new tourist facilities is
prohibited on land managed under the National Parks Act. This policy
committed to ‘provide and maintain appropriate recreation and tourism services
and facilities on public land to foster visitor enjoyment and education and to
ensure visitor safety’. However, policy statement 3.6 (box 4.2) restricts private
sector development of major new tourist facilities on land managed under the
National Parks Act, stating ‘any such facilities within national parks will be
owned and developed by the Government’ (Department of Natural Resources
and Environment 2002, p. 10).
Box 4.2
Private investment on land managed under the
National Parks Act
The Sustainable Recreation and Tourism on Victoria’s Public Land policy states:
The Government will establish and implement transparent processes for managing
major recreation and tourism development proposals on public land, particularly for
aspects outside the scope of the Victorian Planning Provisions such as tendering,
leasing and management arrangements. This process will be informed by the following
principles:
–
–
–
Meet the criteria for ‘appropriate recreation and tourism use’ as defined in
this policy (as outlined in table 4.2);
Be managed to protect the Crown and community interest where tenancy
rights are granted to others; and
Observe the principles underlying the National Competition Policy.
Major new tourism facilities to service visitors to national parks and other areas
managed under the National Parks Act 1975 will be sited outside the parks except
where the above principles are met and there is community and stakeholder support.
Any such facilities within national parks will be owned and developed by the
Government.
Source: Department of Natural Resources and Environment 2002, p. 10.
Leasing provisions of legislation and the Crown land leasing policy
Depending on the type of public land, the applicant for a lease needs to consider
the lease durations of the National Parks Act or the Crown Land (Reserves) Act
(table 4.3). Generally land under the Crown Land (Reserves) Act faces fewer
restrictions than does land covered by the National Parks Act.
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UNLOCKING VICTORIAN TOURISM
Table 4.3
Lease durations under public land legislation
Act
Lease lengths
National
Parks Act
Leases may be granted for up to 20 years, for an area up to 1 hectare, for a
kiosk, café, store, research or ski tow.
Leases may be granted for up to 7 years for a camping ground or building.
Leases may be granted for up to 50 years in particular parks, as specified
in the Act.
Alpine
Resorts Act
Leases may be granted for up to 99 years for Alpine Ski Infrastructure.
Other alpine developments have maximum lease durations of up to
51 years.
Coastal
Management
Acta
Leases may be granted for a specific term that is more than
21 years, but not more than 65 years if the development is of a substantial
nature and a longer lease is in the public interest.
Forests Act
Leases may be granted for a period for up to 21 years or up to 65 years if
the development is of a substantial nature and a longer lease is in the
public interest.
a Lease durations for coastal reserves are provided through the Crown Land (Reserves) Act.
Source: Relevant Victorian Acts.
The success of the application will also depend on its alignment with the
government’s leasing policy, which is based on three key principles:
(1) To provide benefits to the public through leasing. This principle requires the
proponent to show how the proposal achieves a net community benefit,
considering the social, economic and environmental impacts.
(2) To ensure consistency and transparency in leasing. This principle relates to
the competitive allocation of leases and the transparency of the process to
obtain a lease. In addition, this principle creates the terms and conditions of
a lease, which should align with the intended use of that type of public land.
(3) To manage leased Crown land in an ecologically sustainable manner. This
principle requires proponents to outline how they will demonstrate
environmentally sustainable management principles (DSE 2010c).
Other guidance
The proponent of a tourist facility on public land may also need to consider
policy and guidance material additional to the legislation, depending on the type
of public land. Relevant policy and guidance are set out in:

Draft Design Guidelines for Nature-Based Tourism (DSE 2009)
PUBLIC LAND REGULATION
95


The Alpine Planning Information Kit (DPCD 2010)
Tourism Investment Guidelines (Tourism Victoria 2008a).
4.3.3
The tour operator licensing system
A person (or organisation) wishing to operate a commercial tour on public land
must obtain a licence from the responsible public land manager. This is called a
Licensed Tour Operator (LTO) licence. Around 300 LTO licences have been
issued in Victoria for a range of operations including walking, horse riding, fourwheel driving tours, and dolphin and whale watching in marine parks. The
legislative instruments governing the need to obtain a licence to operate a tour
on public land include the:

National Parks Act

Forests Act

Crown Land (Reserves) Act

Wildlife Act 1975 (Vic) (Parks Victoria 2010d, p. 2).
A prospective tour operator must submit an application to Parks Victoria or a
CoM to obtain an LTO licence. While DSE has legislative responsibility for
managing the LTO system, it delegates responsibility to operate the system to
Parks Victoria and other land managers.
Recent changes to the licensing system are relevant to assessing the issues raised
by participants. The changes are intended to improve the efficiency of the
licensing system and align the licence requirements of Parks Victoria and
individual CoMs. The new licensing system, to commence from 1 July 2011, will:





96
set a consistent state-wide fee framework established under regulation
raise the maximum licence term from three years to 10 years
introduce an offence for conducting organised tours or recreational activities
without a licence
introduce a power to suspend or cancel licences
allow more flexibility for tour operator reporting (allowing the option of
annual reporting as well as the current quarterly reporting requirements)
(DSE 2008).
UNLOCKING VICTORIAN TOURISM
4.4
Participants’ views on Victoria’s public land
system
Segments of the tourism industry suggested Victoria’s natural assets make it an
attractive location for the development of nature-based tourism built around
different styles of accommodation, ranging from cabin accommodation up to
large nature-based tourism resorts. Notwithstanding debate about the uniqueness
of Victoria’s natural attractions compared with those in other states and overseas,
participants noted opportunities to develop a variety of nature-based tourism
facilities at locations such as; the Great Ocean Road, Victorian Alps, the Otway
Ranges, the Grampians and South and East Gippsland.
According to participants, aspects of the management and regulation of private
sector access to public land have discouraged businesses from investigating and
developing concrete proposals. Most concern was centred on the management
and regulation of national parks. When viewed alongside the industry’s concerns
about land-use planning regulations (chapter 3), these concerns create the
impression of a regulatory environment in Victoria that stifles private
investment.
Several participants acknowledged regulating the use of public assets, such as
national parks, is vital to ensuring their ongoing sustainability. Nature-based
tourism operators, for example, noted regulation of activities on public land is
needed to prevent over-consumption of resources, and to protect the Aboriginal
cultural, heritage and other values of public land. But participants considered the
following features of the regulatory framework unnecessarily impede the
development of nature-based tourism:
(1)
(2)
(3)
(4)
barriers to private investment in tourist facilities in national parks
investment uncertainty arising from complex approval processes
unviable leasing arrangements in some areas
the unclear roles and responsibilities of DSE and Parks Victoria, and
concerns about the tour operator licensing process.
4.4.1
Barriers to investment
Participants argued a major barrier to investment is the policy prohibiting private
sector development of new tourism facilities to service visitors to national parks
and other areas managed under the National Parks Act (box 4.2).4 Some argued
current policy prohibiting private investment in national parks competitively
See, for example, Colac Otway Shire (sub. 45), East Gippsland Shire Council (sub. 11), Surf Coast Shire
(sub. 23), VTIC (sub. 40), Mansfield Shire Council (sub. 47), TTF (sub. 44), Shipwreck Coast Marketing (sub.
14) and Mount Alexander Shire Council (sub. 18).
4
PUBLIC LAND REGULATION
97
disadvantages Victoria when compared to other Australian jurisdictions. The
TTF, for example, cited NSW and Tasmania (sub. 44, p. 45). Likewise, East
Gippsland Shire stated the prohibition makes ‘it hard for East Gippsland … to
compete with product in other states and internationally’ (sub. 11, p. 1).
Parks Victoria has developed several low-impact accommodation facilities in
national parks, and scope exists for the private sector to operate these facilities. It
was argued, however, the private sector would be unwilling to commit significant
resources to such developments unless it has more input into site selection and
the scale, design and operation of the facilities.
4.4.2
Uncertainty for investment
Participants argued a key reason for limited investment in nature-based tourism
facilities in Victoria is the uncertainty arising from complex and unclear approval
processes (described above) for building on public land. Some argued the
administration of this process is overly complex and assumes private investment
in tourist facilities on public land can only diminish the environmental, heritage
and conservation values of the land. They considered the potential benefits of
private investment in tourist facilities on public land are not fully appreciated.
According to some participants, the culture of both DSE and Parks Victoria
emphasises environmental protection and views the development of tourist
facilities as contrary to this primary goal. At the Wangaratta roundtable meeting,
participants argued this culture leads to a limited focus on the economic
contribution of tourism to the management of public land and on assessing such
contributions against potential social and environmental costs. They argued DSE
focuses on identifying and managing risks to the environment rather than
appreciating potential benefits from proposals.
4.4.3
Restrictive lease terms
Some participants argued maximum lease durations and lease terms and
conditions continue to be a major barrier to investment in the tourism industry
despite recent increases in the maximum lease durations for reserved Crown
land.5 They submitted the maximum lease durations in legislation are too short.
A number of tourism businesses indicated the maximum lease durations
provided in the National Parks Act make investment in tourist facilities largely
unviable. The TTF argued lease durations for public land in Victoria are
uncompetitive compared with those in other states, and:
See, for example, submissions by Surf Coast Shire (sub. 23), Shipwreck Coast Marketing (sub. 14), Mount
Alexander Shire (sub. 18), TTF (sub. 44) and Geelong Otways Tourism (sub. 9).
5
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Restricted leasing terms present a substantial business risk to potential investors
and operators in park infrastructure and accommodation. As possession reverts
back to the Crown as landowner at the end of a lease term, the cost of finance
and loss of capital and capital gain with short lease terms are considerable
barriers to private investment in national parks in Victoria. Short term leases also
encourage a lesser focus on environmentally sustainable management. (TTF sub.
44, p. 47)
Participants also suggested short leases reduce the incentives for private
businesses operating on public land to maintain facilities and surrounding
environmental assets. Apart from the maximum duration of leases, concerns
were raised about other commercial aspects of public land leases and
inconsistent administration by land managers. Participants suggested lease terms
and conditions provide flexibility for the State but thus produce uncertainty
about the security of tenure for business.6 Issues raised included a lack of options
to renew, the ability of the Crown to terminate a lease at short notice and
without adequate reasons, and a general concern about the lack of commercial
understanding of business requirements and timeframes for lease renewal. The
Victorian Tourism Industry Council (VTIC) also submitted the administration of
leasing arrangements can vary:
… whilst the approach [to leasing] may be uniform, the reality of the
implementation and operation of the lease, and the experience of the lessee,
varies considerably. (sub. 40, p. 42)
Box 4.3 contains a submission from a small business operating on a national park
lease which is typical of businesses’ concerns about current leasing practices.
The Australian Ski Areas Association submitted ‘lease conditions are heavily weighted in favour of the
Crown … most leases have no genuine option to renew (although current leaseholders may be granted the
first right to renegotiate), and in fact most leases require the occupier to vacate the land and clear off all
improvements at the end of the lease. While the land manager may countenance a renewal of the lease, often
this is on vastly different terms and conditions from the original lease and generally always requires a
substantial investment in new assets and facilities, whether affordable or not’ (sub. 46, p. 5).
6
PUBLIC LAND REGULATION
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Box 4.3
Case study: Pippies by the Bay
Pippies by the Bay (Pippies) operates with a lease designed for national parks. The
lease is structured in two terms, six years plus seven years, with the seventh year of
the second term being the period of open tender to find the next tenant. Pippies
argued its lease is not a standard commercial lease designed for small business; the
lease creates problems because there is no single landlord in the traditional sense,
being the person who owns the building and makes decisions about the building.
These problems include:






inability to make decisions within a commercial timeframe
inability to cut through red tape
inability to fast track ideas and initiatives
inability to extend a lease
discouragement of financial investment
inability to commit to commercial partnership within a commercial timeframe.
Pippies aims to develop a business that has longevity, has a good reputation, is
readily maintainable, maximises profits, minimises costs and is saleable. The lease has
affected how Pippies operates because the business faces:







diminishing owner investment
minimal to zero refinancing opportunities
heightened financial risk without finance sector support
no expansion or redevelopment opportunity
lack of owner commitment or focus
diminishing maintenance investment
a lack of confidence and passion from owner and staff.
Without a guaranteed future, Pippies is considering shutting down to pursue business
interests elsewhere. Even with greater certainty on the lease duration, Pippies argued
other restrictions will inevitably lead to a drop in standards and product quality,
leading to the potential loss of key long-term staff and market position.
Source: Pippies by the Bay, sub. 37, pp. 1–2.
4.4.4
Unclear roles and responsibilities
Several participants noted confusion about the roles and responsibilities of some
organisations involved in managing public land. This is leading to increased
uncertainty for investment and additional costs to businesses seeking approval
from multiple bodies for tourist developments. Three issues were raised by
participants:
(1) DSE is responsible for developing and advising on policy and for the
administration of that policy. Participants had concerns about a possible
conflict between these two roles.
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UNLOCKING VICTORIAN TOURISM
(2) No organisation is clearly charged with encouraging commercial tourism
development on public land, within the organisational architecture for public
land policy and management.
(3) DSE, Parks Victoria and CoMs are inconsistent in their administration of
leasing requirements and licensing of tour operators.
The role of DSE
Participants suggested concerns about the management and regulation of public
land reflect features of the institutional architecture. The TTF acknowledged the
importance of the institutional framework governing public land, but indicated
‘lack of certainty over parks management can be a barrier to investment’. The
TTF stated this inquiry provides an opportunity to enable reforms that ‘will aid
[the] formation of constructive natural tourism partnerships’ (sub. 44, p. 7).
The Commission’s previous inquiries acknowledged the importance of
institutional arrangements to how regulation is developed and administered. The
inquiry into environmental regulation, for example, commented on the role of
regulatory bodies in developing policy (VCEC 2009, pp. 292-295). It argued the
practice of combining policy-making and regulatory functions can lead to risks
that include the following:




Regulatory creep will occur when the regulator has institutional interest to
maintain and expand its role, by adding new regulation and a bias towards
regulatory over non-regulatory options (for example, expenditure programs).
This can also lead to increasingly complex regulation.
Incentives for regulators to set clear objectives against which their
performance can be assessed will be weakened, reducing accountability.
Regulators may be ‘captured’ by particular interest groups.
Regulators will be drawn into political debates about policy issues,
compromising their actual or perceived independence (VCEC 2009, p. 293).
Participants indicated some of these risks may exist in relation to public land
management and regulation. The TTF observed:
… investors in nature-based tourism development in Victoria must navigate
complex approval and assessment matrixes and balance multiple objectives and
community expectations … this process has created considerable investor
uncertainty and limited tourism investment…. (sub. 44, pp. 47–48)
Advocacy for tourism
Several participants argued the prohibition on private investment in tourist
facilities in national parks, combined with the absence of a body charged with
advocating the interests of the tourism industry in public land policy and
management has forced Parks Victoria to assume this role. According to
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101
participants, Parks Victoria has taken on this role by advocating for, and
developing a range of, commercial activities on public land (such as nature-based
tourist accommodation).
Some submissions contained a strong view that the private sector would better
provide the commercial activities of Parks Victoria and that those activities
detract from Parks Victoria’s primary responsibilities of managing parks. The
VTIC stated:
[Parks Victoria]…actively promotes visitation to Victoria’s parks … in both a
recreational and tourism context … [which] could also be perceived to be in
conflict with Parks Victoria’s stated purpose of protecting the environment and
the nature and heritage values of the state’s public lands … (sub. 40, p. 33)
The VTIC called for Parks Victoria to be restructured to ‘become an agency
[which is] primarily focused on the facilitation of activity, either recreation or
tourism-related, within all public lands’ and for its ‘reporting line within
government … be realigned from within the Department of Sustainability and
Environment to the Department of Business and Innovation’ (sub. 40, p. 34).
The TTF considered:
… [responsibility for] management of tourism on state public land should
remain under the auspices of a single organisation like Parks Victoria that has a
proven track record working in partnership with industry, government and the
community to facilitate appropriate and sustainable tourism development.
(sub. 44, p. 44)
Administration of tour operator licences
While most submissions focused on the barriers to investment in tourist facilities
on public land, some expressed concerns about the administration of the tour
operator licensing system. While pending changes to the licensing system may
address some of these concerns, those highlighted in submissions related to:


enforcement of the licensing system
burdens imposed by the administrative processes.
As noted, tour operators on public land must obtain a licence setting out the
conditions under which they are permitted to operate. Several participants were
concerned licensing requirements are insufficiently enforced. Shipwreck Coast
Marketing commented on a ‘lack of monitoring of visitors/tour operators to
national parks’, which can lead to ‘loss of revenue’ for licensed operators (sub.
14, p. 2). The VTIC also commented that LTOs:
… have long been frustrated by the presence of unlicensed tour operators, who
operate on, and profit from, the use of public land, without paying their dues or
adhering to the numerous requirements and conditions of a Licensed Tour
Operator Permit (LTO licence). (sub. 40, p. 38)
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The VTIC argued ‘there has been only a slight increase in compliance activity’
since the release of a new LTO policy in 2010, which aimed to improve
compliance, among other things (sub. 40, p. 38).
In addition, some participants argued the licensing system imposes unnecessary
reporting requirements and costs on operators. They also suggested DSE’s
delegation of land management to multiple agencies creates complexities in
obtaining LTO licences. According to the VTIC, it is not uncommon for three
or four different land management agencies to have coinciding borders in a
relatively small area (sub. 40, p. 35). To address this issue, the VTIC proposed a
system whereby an operator could obtain a single LTO licence, enabling them to
operate in multiple locations, subject to meeting any predetermined requirements
for particular activities or areas of land (sub. 40, p. 40).
An attendee at the Mornington roundtable meeting raised similar concerns, and
commented little use appears to be made of the information that regulators
demand of business. The VTIC stated that meeting current reporting
requirements ‘… can be [a] time-consuming and labour-intensive process’ and
that the sector does not receive any direct benefits from providing use data
including LTOs, councils or potential tourism investors, and that ‘the LTO
sector effectively provides Parks Victoria with primary research data’ (sub. 40, p. 41).
The VTIC called for the development of an online system (similar to that used in
the Plumbing Industry Commission), which would allow operators to submit
applications and relevant compliance information online (sub. 40, p. 41).
In considering the issues raised, the Commission noted the following:

Pending changes to the LTO licensing system are intended to deliver greater
enforcement and somewhat reduce the compliance burden of reporting.

Parks Victoria appears to use reported statistics by publishing general
statistics in their annual report. More targeted statistics are provided
internally and externally on request, and presented by Parks Victoria at
forums. Tour operators’ statistics are often used in discussion of
environmental and visitor impacts. The data can be used to indicate the scale
of LTO operations, enabling Parks Victoria to direct resources towards
maintenance and improvement of the areas that visitors most frequent. The
upgrade of the electronic LTO system used by Parks Victoria could provide
for better use of this information in capacity planning and impact studies.
While reducing administrative and compliance burden should be a continual
process, progress appears to be occurring in key areas raised by participants.
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4.4.5
Impact on investment
Participants had different views on how the issues raised have affected
investment in the Victorian tourism industry. In discussions, DSE argued private
development of tourist facilities is permitted on many types of public land, and
there is little commercial interest in the development of large-scale, nature-based
tourist facilities on public land in Victoria.7 It informed the Commission that it
had sought expressions of interest from the private sector to develop naturebased accommodation in state forest reserves but received no interest in any of
the sites identified.
The tourism sector argued, however, the demand for nature-based tourism in
Victoria will continue to grow, reflecting changing preferences of domestic and
international visitors. It argued there is commercial interest in developing naturebased tourist facilities at a range of sites, especially within national parks. The
industry considered the policy of prohibiting private development of tourist
facilities in national parks, along with other impediments. These include limited
lease durations and complex and uncertain approval processes, which discourage
the private sector from developing proposals or identifying potential
development sites. Tourism groups pointed to evidence of increasing consumer
demand for nature-based tourism experiences, and to forecasts for growth in
such tourism (as outlined in the NBTS and section 4.2).
In discussions with the Commission, some participants suggested project
proponents have considered Victoria is too restrictive for nature-based tourism
investment (box 4.4) and noted such development is occurring instead in other
jurisdictions.
7
Partly based on the experience of identifying suitable sites for private tourist facilities in state forests.
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Box 4.4
Potential developments in Victoria’s national
parks
Bothfeet walking
The company Bothfeet walking (based on the Great Ocean Road) was interested in
developing its world class eco-tourism product in the Alpine National Park, with a
four-day walk through national park and state forest and ‘luxury lodge’ ecoaccommodation. The close distance to Melbourne for internationals and the
domestic fly-in market, the views, terrain and natural landscape features, the existing
trail network and the area’s established branding, all fitted with the iconic experience
desired.
The company considers walk-in, walk-out accommodation is critical to the multi-day
walk experience and the market that it targets. The distances and terrain involved
mean it is neither feasible nor desirable to transport guests to and from the walk start
and finish.
The company said Parks Victoria made it clear that accommodation within the Park
would not be permitted. Combined with the lack of iconic trail awareness and
associated infrastructure, this refusal meant Bothfeet has not progressed with its
planned business development. The business has over $0.5 million turnover and
provides 1000–1500 ‘walker nights’ per year — approximately half its current
capacity. With an eight-month season in Mansfield’s High Country, Bothfeet would
expect 2000–3000 walker nights on a set four-day itinerary, with exclusivity. This
would represent 100 per cent growth for Bothfeet, and new premium product for the
region and state. Bothfeet was interested in pursuing opportunities to package ‘soft’
and ‘hard’ adventure with horse riding and helicopter operators in the area.
Watson’s Trail Rides
Watson’s Trail Rides and Adventure Victoria is a Mansfield-based horse riding
operator in the Alpine National Park. The company has been running tours in the
park since 1965. It would like to see a range of bookable wilderness accommodation
developed in the Alpine National Park, including eco-lodge accommodation and
demountable camps.
The company has four full-time and six casual staff catering to 6500 visitors per year.
Quality accommodation available in the national park would lead to a substantial
increase (an estimated 25 per cent) in yield, given increased value adding and
packaging options.
Source: Mansfield Shire Council, sub. 47, pp. 8–9.
Based on these different perspectives, and the description of the regulatory
framework in section 4.3, the Commission’s view is that the current regulatory
framework for managing public land does not encourage an innovative approach
to investment from private tourism businesses. The next section considers
possible improvements to the regulatory and institutional framework for
managing public land.
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105
4.5
Opportunities for improvement
Participants suggested improvements to the management and regulation of
public land, to create an enabling regulatory environment for tourism
investment. Improvements considered in the following sections include:
removing the prohibition on private investment in tourist facilities on land
managed under the National Parks Act (section 4.6)

removing other regulatory barriers to private investment on public land
(section 4.7)

improving the development approvals process (section 4.8)

clarifying roles and responsibilities (section 4.9).
For such changes the regulatory system would need to consider private
development can enhance public land, including national parks, as community
assets.

4.6
Removing restrictions on private development
in national parks
As noted, government policy prohibits the development of private tourist
facilities on land managed under the National Parks Act. Participants contended
the prohibition is impeding the development of the tourism industry and is not
necessary to achieving the Act’s objectives, of preserving and protecting the
natural environment. They suggested the Government should overturn this
prohibition — for example, submissions from East Gippsland Shire Council
(sub. 11), Surf Coast Shire (sub. 23), the VTIC (sub. 40), the TTF (sub. 44) and
Mansfield Shire Council (sub. 47).
Several reports have also considered policies prohibiting private development of
tourist facilities in national parks, in both Victoria and NSW:


106
The NBTS states current policy is limiting public-private partnerships within
national parks because any private investment into new tourism facilities is
essentially discouraged (Tourism Victoria, DSE, and Parks Victoria 2008, p.
39). The strategy argues Victoria’s national parks, while attracting the highest
park visitor numbers in Australia, are failing to capture yield. This is mainly
as a result of gaps in tourism product, including accommodation, activities
and amenities (Tourism Victoria, DSE, and Parks Victoria 2008, p. 34). The
NBTS suggested current policy be reviewed to better enable tourism
facilities in or adjacent to national parks (Tourism Victoria, DSE, and Parks
Victoria 2008, p. 39).
A 2001 review of the National Parks Act recommended a limited range of
commercial activities be allowed in defined areas of national parks. The
UNLOCKING VICTORIAN TOURISM

review argued some commercial activities (including the provision of
facilities and tour operations) in national parks have little or no impact on
the environmental values of national parks, Commercial activities should be
approved, if business can demonstrate the proposed activities are consistent
with the objectives of the National Parks Act (Allen Consulting Group 2001,
pp. 22-27).8
A review of tourism in NSW considered concerns about barriers to private
access to national parks. The barriers included; legislative barriers, difficulties
in identifying tourism investment opportunities, uncertain government
objectives, complex approval processes, and lease and licence tenure (O'Neill
2008, pp. 73-74). The review noted significant reforms were underway to
reduce the legislative barriers (for example, allowing commercial tour
operators in wilderness areas where such activities are compatible with
conservation values), developing tourism products and experiences, and
attracting visitors to NSW parks (O'Neill 2008, p. 75). It also recommended
the NSW Government shift focus from protecting state assets to opening
state assets (national parks, forests and lands) to tourism businesses willing
to pay to sustain and enhance the assets (O'Neill 2008, p. 118).9
In principle, allowing private investment in tourist facilities in national parks
could provide economic, environmental and social benefits to Victoria,
including:






benefits to local communities and the State from investment in nature-based
facilities in national parks
increased visitation and use of Victoria’s national parks, stimulated by the
publicity surrounding the development
an increase in resources and expertise available to manage and enhance the
natural assets of national parks
increased awareness and appreciation of the need for environmental
protection and conservation, and of the importance of maintaining the
environment for future generations
improved accessibility to national parks for people who would otherwise be
unable to experience nature-based attractions
improved ability to identify and manage threats to the long-term
sustainability of national park areas, given improved monitoring as part of a
partnership between government and the private sector.
This recommendation was rejected partly because such a move would be inconsistent with the objectives of
the National Parks Act.
8
The NSW Government indicated ‘to improve the quality of the nature based experience and adapt to
changing visitor needs it will be important to consider enhancing and developing new nature-based
experiences either adjacent to, or where appropriate, in national parks and reserves’ (State Government of
NSW 2008, p. vii).
9
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107
While allowing private investment in tourist facilities in national parks could
deliver benefits, the risks to be managed include:



the impact of construction activities on environmental and heritage assets
such as native vegetation, Aboriginal heritage such as scar trees, soil erosion,
vehicle movement and fire risks
visual and amenity impacts of the development on other park users and
adjacent landholders and whether development locks out these users
environmental and other effects of the operation of tourist facilities,
including the effect on groundwater, waste management, fire risks, car
traffic, and impacts on other park infrastructure such as roads and walking
tracks.
As noted earlier, the lack of specific proposals put forward to develop facilities in
national parks is likely to be a poor indicator of potential demand. The policy
prohibition, the existence of other regulatory barriers, and other features of the
regulatory framework, all discourage business from preparing detailed proposals.
Opposition to allowing private development in national parks includes concern
about the environmental and other impacts of tourist developments. Existing
regulatory frameworks appear to be capable of dealing with the environmental,
heritage and other risks. These regulatory frameworks include; native vegetation
clearing controls and associated offset requirements, building regulations to deal
with fire and other safety risks, Aboriginal heritage controls, design guidelines for
nature-based tourism, and water and wastewater treatment controls.
Prohibiting private investment in tourist facilities presumes such development is
fundamentally at odds with the goal of environmental protection. However, the
widely accepted principles of ecologically sustainable development provide
‘economic development can enhance the capacity for environmental protection’
(Commonwealth Government 1992). Further, the experience in other countries
demonstrates it is possible to address the environmental and other risks posed by
tourist developments in sensitive landscapes, to achieve positive outcomes for
both the economy and the environment (box 4.5).
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Box 4.5
Ultimate Hikes hut-based Milford Track walk in
New Zealand
Ultimate Hikes runs the Milford Track Walk, which is a five-day, four-night hutbased bushwalking product through Fiordland National Park in New Zealand.
Ultimate Hikes has the sole commercial licence from the Department of
Conservation to operate this walk commercially. The walk offers accommodation
and amenities at points along the walk. The accommodation is owned by a private
company that contributes significantly to the conservation of the National Park.
In 2004, Ultimate Hikes took 6 000 bushwalkers (or 45 per cent of all bushwalkers
on the Milford Track). The cost of the walk with Ultimate Hikes is around NZ$1750
per person. Based on the number of clients, this represents potential annual revenue
of around NZ$10.5 million. Ultimate Hikes must meet a number of licence
conditions, including paying five per cent of its gross revenue to the Department of
Conservation and contributing to the management costs that the Department incurs
to maintain the Milford Track.
Source: Tourism Victoria, DSE, and Parks Victoria 2008, p. 56; Ultimate Hikes 2011.
In similar examples in Australia, governments have recognised that these risks
can be managed to achieve better outcomes. In a November 2009 parliamentary
speech on lifting restrictions to private sector development in national parks, the
Queensland Premier commented ‘other states have successfully managed to find
the balance between protecting these precious environmental assets (national
parks) and providing the opportunities for visitors and ordinary Australians to
visit their own national parks’ (Queensland Parliament 2009, p. 1).
While no jurisdiction provides unconditional10 access to private sector
development in national parks, the majority of other states can ultimately allow
this type of investment under the right conditions. Other than Victoria, only the
Australian Capital Territory (ACT) has policy or legislative barriers that prohibit
this type of investment (table 4.4).
For example, most jurisdictions specify that where possible, development should be located outside of the
national park.
10
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Table 4.4
Comparison of the potential for private sector
development in national parks
Jurisdiction
Allowed?
How?
Victoria
No
Previous government policy allows only public sector
development and ownership.
NSW
Yes
Division 2 of the National Parks and Wildlife Act 1974 (NSW)
allows development on national parks in accordance with
the relevant management plans.
Queensland
Yes
The respective management plans can allow development in
national parks, with some parks being divided into zones
that each allow certain types of development in each zone.
Western
Australia
Yes
Respective management plans can allow development in
national parks.
South Australia
Yes
Respective management plans can allow development in
national parks.
Tasmania
Yes
The National Parks and Reserves Management Act 2002 (Tas)
allows development to occur through the respective
management plans upon approval by the Minister that the
building is for tourist accommodation.
Northern
Territory (NT)
Yes
Parks Australia operates NT national parks. Respective
management plans can allow development in national parks.
ACT
No
Current policy restricts private tourist development in
national parks and is enforced through management plans.
New Zealand
Yes
Under section 50 of the National Parks Act 1980 (NZ),
tourism accommodation development in national parks is
allowed on approval by the Minister, in accordance with the
relevant management plan. NZ policy also allows
accommodation in national parks.a
a Except for ‘exclusive private use’ New Zealand Conservation Authority 2005, pp. 43-45.
Source: Relevant Acts, policies or management plans.
On balance, the Commission considers there is scope to provide a more enabling
environment for private sector investment in tourist facilities in national parks.
The current policy prohibiting development of private tourist facilities was
introduced when the outlook for nature-based tourism was very different from
what it is now — that is, before the introduction of regulatory frameworks for
dealing with native vegetation clearing, Aboriginal heritage and other impacts of
development proposals, and before other Australian jurisdictions identified the
potential benefits of allowing such investment. There is now also an increased
appreciation of nature-based tourism for raising environmental awareness in the
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broader community and for attracting private sector resources to the tasks of
maintaining and enhancing national parks.
The Commission examined three options to provide a more enabling
environment for private investment in tourism facilities in national parks:
(1) removing the policy prohibition (and the other constraints on private
development discussed below)
(2) removing policy and other constraints for particular areas within the national
park estate, using a strategic approach similar to that being developed in
Queensland and Western Australia
(3) maintaining the prohibition on direct investment but allowing private
investment in partnership with the public sector.
Each option has strengths and weaknesses, and the Commission noted the
following considerations:



Investing in tourism facilities is a high-risk undertaking, with factors such as
site selection and marketing helping determine the commercial success of
any venture. The commercial risks are best managed by the private sector.
The site selection process requires a level of visionary entrepreneurship and
therefore, should involve private sector input.
The public sector should set the ground rules for development proposals,
having regard to the environmental condition of assets and community
views. Rather than prescribing environmental and other conditions that
proponents must meet, the Government could specify a broad objective,
such as the need for projects to deliver a net gain in the environmental,
heritage and conservation benefits provided by public land. Specifying
conditions in this way may present some uncertainty about potential
development constraints, but it provides the private sector with scope to
develop innovative ways of meeting the Government’s environmental and
other goals, while delivering a commercially viable project.
The Government would incur costs in assessing applications and agreeing
on operating conditions, environmental offsets and other conditions. An
application fee should reflect these costs.
Some participants supported a partnership approach that deals with community
concerns about the environmental risks associated with private development in
national parks (for example, Victoria University (sub. 51)). Others supported a
strategic (land banking) approach where government identifies sites in national
parks and offers them to the private sector through a competitive process (for
example, the TTF (sub. 44) and Mansfield Shire Council (sub, 47)). The main
disadvantage of both of these approaches is that the Government would
effectively be taking on some commercial risks, through the capital invested
under the partnership approach, or through government expenditure to identify
PUBLIC LAND REGULATION
111
suitable sites, which may be costly, lengthy and may not deliver the most
desirable locations.
On the other hand, simply removing the prohibition on development within
national parks might be insufficient to create an enabling environment because it
would place the onus and risk on the private sector, to discover sites acceptable
to the Government. To reduce uncertainty, the Government could indicate
broad areas of the state where it would be willing to consider proposals for
private tourist developments in national parks. Chapter 3 discussed the process
of developing regional land-use plans for Victoria and these plans may be a
suitable vehicle for identifying potential locations.
Under all three options, the Government would need to address potential
uncertainty about the approval process for private sector investment on national
parks. It could reduce uncertainty by developing guidelines on the approval
process and criteria, the standard terms and conditions for leases in national
parks, and public consultation processes that developers would need to follow.
These guidelines could draw on existing sources, such as the Leasing Policy for
Crown Land in Victoria and the Draft Design Guidelines for Nature-Based Tourism (see
below).
Irrespective of whether a strategic approach or a more liberal approach is
adopted, the first step is to publicly announce that businesses will be allowed to
undertake private developments in national parks, provided there is a net benefit
from the economic, environmental and social impacts of proposals.
Draft recommendation 4.1
That the Victorian Government remove regulatory obstacles to private
sector investment in tourism infrastructure in Victoria’s national parks so
that from 1 January 2012 private sector investment is permitted and
businesses are allowed to:
propose developments in national parks provided there is a net public
benefit and they complement environmental, heritage and other values
lease land within a national park for this development, provided they meet
a set of guidelines and agree to a standard operating contract (see draft
recommendation 4.3).
The Victorian Government should publicly announce this new policy
approach.
An important implementation issue is the way in which the legislative objectives
of the National Parks Act are interpreted. As noted, the objectives of the
National Parks Act include:
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


preserving and protecting the natural environment
encouraging the responsible management of the land
encouraging the use of parks for enjoyment, recreation or education and
controlling that use.
Participants involved in the tourism industry suggested these objectives can be
interpreted to limit the use of parks to those activities that do not compromise
preservation and protection. If the objective of preservation and protection is
interpreted to imply the use of parks should not result in any damage (for
example, not even the minor loss of native vegetation from constructing a new
facility), then interpretation of the Act may need revising to apply ecologically
sustainable development principles to the objectives. In this case, use of parks
could be consistent with the goal of ‘preservation and protection’, so long as
gains in the flow of environmental services offset any losses.
4.7
Removing other regulatory barriers
Participants noted several other barriers to private investment on public land
including:



legislated maximum lease durations
terms and conditions of leases
barriers within land-use planning and public land regulation.
4.7.1
Maximum lease durations
The maximum duration permissible for leases on public land and public
infrastructure such as visitor facilities is specified in legislation. Lease duration is
important for providing investment security to tourism businesses and for
creating the right incentives to maintain and improve public assets such as the
environment and infrastructure.
Several participants acknowledged recent moves to extend the maximum leases
for land under the Crown Land (Reserves) Act and for specific parks under the
National Parks Act. However, participants expressed concerns about the limited
maximum leases for areas reserved under the National Parks Act. The Act
provides a lease can be granted only for up to 20 years ‘for use as a kiosk cafe or
store or for scientific research or for a ski tow’ or up to seven years for ‘a
camping ground or building in the park’.
Compared with other jurisdictions, the maximum lease durations in the Victorian
Act are much shorter (table 4.5). The maximum lease terms in Western Australia
are closest to Victoria’s, but the Commission understands these may soon be
extended. Notwithstanding that shorter leases may be negotiated in other
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jurisdictions, Victoria’s legislated maximum leases are likely to deter proposals
for investment in tourist facilities in national parks.
Table 4.5
Maximum allowable lease durations in national
parks
Jurisdiction
Maximum lease term
Victoria
20 yearsa
New Zealand
No maximum
Parks Australia
No maximum
Tasmania
99 years
Western Australia
42 years (21+21)
South Australia
No maximum
Queensland
99 years
a Fifty-year lease durations are legislated for Point Nepean and Mount Buffalo National Parks, the
lighthouse at Wilsons Promontory and the Great Otways National Parks, and O’Shannassy Lodge at
Yarra Ranges National Park.
Source: Tourism Victoria, DSE, and Parks Victoria 2008, p. 38.
If the Government wishes to create a more enabling environment for investment
in tourist facilities in national parks, it would need to review the maximum lease
duration under the National Parks Act. With some minor exceptions (table 4.3),
the maximum lease duration of seven years for buildings does not provide
adequate security for investment, or incentives to develop and maintain tourist
facilities and the surrounding environment.
The Commission does not have a view on the appropriate length of the
maximum lease duration. But in the setting of a higher limit, the following
principles may be appropriate:



114
the need for the land manager to exercise discretion to match the lease
duration to factors such as the investment’s payback period and the asset’s
durability
the creation of a competitive environment, having regard to other
jurisdictions
consistency in providing lease holders incentives to maintain physical assets
and invest in raising the quality of public land within, and adjacent to, the
area leased to improve visitor experience.
UNLOCKING VICTORIAN TOURISM
4.7.2
Terms and conditions of leases
Extending the maximum duration of leases would help create a more enabling
environment for investment in tourism facilities in national parks. However, to
address participants’ broader concerns about the effect of other lease terms and
conditions on business certainty, it is important also to examine opportunities to
improve leasing arrangements across all types of public land. Some submissions
and discussions suggested other aspects of leasing that need improvement. These
include; the lack of consistency in lease administration, inappropriate rights to
renewal, the inability to transfer leases, the ability for government to terminate
leases without cause, and the lack of timely decision-making by land managers.
The Commission’s overall impression is that leasing practices are designed to
provide maximum flexibility for land managers. While this flexibility allows land
managers to quickly change park management arrangements, it can have adverse
impacts on the returns to the State from leasing. It can also make financing more
difficult to attract and more expensive. As with short lease terms, it can weaken
incentives to attract customers (and users of public land) and maintain facilities
and environmental assets, and to assist park managers with ongoing management
of public land.
It is not clear how current leasing arrangements manage trade-offs between
flexibility for land managers and commercial incentives for businesses. The
Commission considers there is scope to examine leasing arrangements to ensure
the appropriate balance is achieved. This examination could create a more
enabling environment for investment in tourist facilities on public land, and
better align the objectives of land managers and businesses.
4.7.3
Other regulatory barriers
An issue that submissions did not raise, but that could arise if development were
allowed in national parks, is the need to obtain a planning permit for such a
development. Most land within national parks is zoned as Public Park and
Recreation Zone (PPRZ) or Public Conservation and Resource Zone (PCRZ).
The PPRZ recognises use of public land for ‘public recreation and open space’
and ‘commercial uses where appropriate’, whereas the PCRZ does not mention
either of these objectives and focuses on minimising the degradation of natural
processes and the environment. The PCRZ restricts developments — including
forms of accommodation, retail premises, restaurants, museums, art galleries and
recreation facilities — unless they are ‘conducted by or on behalf of a public land
manager or Parks Victoria’. These requirements could be interpreted to mean a
private sector proposal to develop a tourist facility on a leased site within a
national park would be prohibited under the PCRZ. A potential investor would
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need to apply to rezone land before applying for a planning permit, incurring
additional uncertainty, time and costs. The PPRZ allows private development, if
approved by the land manager and a planning permit is obtained.
These examples suggest the Government, to enable tourist development in
national parks, may need to review land-use planning provisions to identify and
address potential barriers to private sector investment.
Draft recommendation 4.2
That the Victorian Government:
increase the maximum duration of leases on land managed under the
National Parks Act
identify and address any provisions in public land leasing requirements and
practice that undermine commercial interests without also delivering
substantial offsetting benefits to land managers
identify and address any other regulatory barriers that exist in land-use
planning and public land regulation that may be inconsistent with
private investment.
4.8
Improving the development approval process
Removing regulatory barriers to private sector investment is necessary for
creating a more enabling environment for private sector tourism investment on
public land, but may not be sufficient. Unclear or overly complex approval
processes, as well as overly stringent conditions on proposed developments, can
also discourage investment by imposing unnecessary uncertainty and costs on
tourism businesses. Participants raised concerns about the complexity and length
of the approval process and the Commission thus examined opportunities to
improve this process and develop guidance for proponents and decision-makers.
4.8.1
Simplifying the development approval process
Section 4.3 described the process of obtaining approval to develop a tourist
facility on public land. The description of the development approval process
highlighted the complexity of the process and the involvement of multiple
decision-makers. These features potentially weaken accountability for making
timely and appropriate decisions. An applicant may, for example, receive a lease
AiP from the Environment Minister for a development on public land, but then
face council opposition to the proposal at the planning permit stage. For the
applicant to obtain a planning permit, the Government would need to over-rule
the council (perhaps by calling in the proposal under planning legislation).
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The approvals process for private development on public land could be
simplified and streamlined in several ways. Options include:



establishing an integrated approvals process with a single decision-maker,
such as the Environment or Planning Minister
removing duplicative steps in the process, such as the AiP from the
Environment Minister or the relevant sections of the planning permit and
other approval processes
designating a specific agency with the task of facilitating major development
proposals through the existing process.
The Commission has not attempted to recommend specific detailed changes to
the development approval process for public land because the need for changes,
and the appropriate arrangements, will depend on how the Government
responds to the Commission’s recommendations for reforming public land
regulation. The Commission has focused on outlining the principles that should
guide the design of a more efficient development approval process. It previously
identified such principles in the draft report for its inquiry into local government
regulation (table 4.6).
Table 4.6
Design principles for approval processes
Principle
Outcome
Clear guidance about the policy outcomes
or objectives that the relevant government
wishes to achieve
Facilitates early withdrawal of unsound
proposals, and early identification by business
of potential development constraints, avoids
unnecessary costs.
Clear separation, where possible, of
accountabilities for developing policy and
for administering policy
Improves accountability and reduces
complexity, regulatory creep, regulatory
capture and compromised independence.
Clear accountability, public monitoring,
reporting and independent oversight
Provides incentives to deliver quality
outcomes.
Progressively reduced uncertainty about
the overall outcome, and sharpened focus
on key issues of uncertainty
Facilitates early withdrawal of unsound
proposals and better targeting of effort at the
key issues.
Risk-based processes matching the rigour
and extent of assessment processes to the
scale and risk of proposals
Better use of scarce resources, of both
administrators and regulated parties.
Certainty on timeframes for assessment,
with binding or negotiated limits and
public reporting against these limits
Minimise unexpected delay costs, and
discourage strategic behaviour by regulators
and proponents.
(continued next page)
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Table 4.6
Design principles for approval processes
(continued)
Principle
Outcome
A whole-of-government approach to
approvals
Achieves outcomes that meet
whole-of-government objectives.
Independent checks or steps in processes
and accountability mechanisms
Achieves more predictable and consistent
outcomes.
Sufficient number and skill of policymakers and administrators
Is necessary to achieve all of the above.
Source: VCEC 2010a, pp. 96-97.
The principles listed in table 4.6 can be related to participants’ concerns about
the administration of public land regulation:




The principles state that an approval process should progressively reduce
uncertainty about the overall outcome, and sharpen the focus on key issues
of uncertainty. The current development process potentially allows for a
project to receive approval on an issue but then be rejected on the same
issue at a latter stage.
Another principle is that the accountabilities for developing policy and
administering policy should be clearly separated where possible. As noted,
DSE has responsibility for developing policies such as the leasing policy, and
administers the development approval process (that is, it advises the Minister
whether to grant AiP).
The principles also stress the need for more certain timeframes for
assessment, with binding or negotiated limits and public reporting against
these limits. Guidance on the approval process for development on public
land does not mention timeframes and the process’s administration is not
publicly reported.
The principles stress the desirability of a whole-of-government approach to
approvals, particularly when multiple government agencies have a role.
Given the complex issues raised by development on some public land,
multiple bodies are likely to be involved in assessing and approving
proposed developments. Options for taking a whole-of-government
approach range from using a facilitation agency such as Tourism Victoria, to
establishing an integrated assessment process with a single decision-maker.
Overall, the Commission considers the Victorian Government should develop an
improved development approval process that:
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



progressively reduces uncertainty about the overall outcome, and sharpens
the focus on key issues of uncertainty
separates responsibility for developing policy and administering the approval
process
provides more certain timeframes for assessment, such as binding or
negotiated limits, and public reporting against these limits
provides a more integrated decision-making process.
The development of a streamlined approval process would ideally involve bodies
with relevant knowledge of the characteristics of the tourism industry, the landuse planning system, and the issues that arise when assessing development
applications. DSE’s development of a new approval process should involve close
consultation with the tourism industry, Parks Victoria, Tourism Victoria, local
governments and the Department of Planning and Community Development.
4.8.2
Improving decision making guidelines
A variety of guidance material is available to assist proponents of private
developments on public land. It covers issues such as leasing policy and the
design of nature-based tourism accommodation. If the Government accepts the
need to change the development approval process for public land, it will need to
produce revised guidance to explain the new process and outline criteria for
assessing proposals.
The revision of guidance material provides an opportunity to address
participants’ perceptions that the administration of the development approval
process assumes private investment in tourism facilities on public land will
necessarily diminish the environmental, heritage and conservation values of the
land. An alternative approach is to view development proposals as an
opportunity to achieve improved economic, environmental and social outcomes.
The current guidance on leasing policy acknowledges leasing can provide several
types of public benefit. It also requires lease applications to demonstrate how the
development would apply ecologically sustainable development principles
(Commonwealth Government 1992). In listing the types of benefits, the
guidelines do not explicitly recognise leasing can contribute to improved
environmental outcomes from the efforts of lease holders to maintain and
improve public land. Guideline references to the application of ecologically
sustainable development principles emphasise the need for proposals to
minimise or avoid damage to natural assets such as native vegetation. The
Guidelines do not acknowledge development may provide environmental
benefits by bringing private sector resources and skills to bear on the threats (for
example, pests, weeds, fire, and loss of biodiversity) to the natural values of
public land.
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Draft recommendation 4.3
That the Victorian Government introduce a streamlined development
approval process for public land, which:
progressively reduces uncertainty about the overall outcome, and sharpens
the focus on key issues of uncertainty
separates responsibility for developing policy and administering the
approval process
provides more certain timeframes for assessment, such as binding or
negotiated limits, and public reporting against these limits
provides a more integrated decision-making process.
Also, that the Department of Sustainability of Environment release revised
guidelines that identify:
the steps involved in any revised development approval process
the relevant contacts at each stage of the development approval process
criteria for assessing proposals.
The Department of Sustainability and Environment would develop the
approval process and associated guidance material in consultation with the
tourism industry, Parks Victoria, Tourism Victoria, local government and
the Department of Planning and Community Development.
4.9
Roles and responsibilities
If the Government wishes to create a more enabling environment for tourism
investment on public land, it may need also to re-examine the roles and
responsibilities of DSE and Parks Victoria in developing policy and
administering public land regulation. Submissions and this chapter have
highlighted two key features of the institutional framework that could inhibit
private investment:
(1) The conflicting roles of DSE in developing and administering public land
regulation, as it relates to private sector investment.
(2) The lack of a clear mandate to facilitate private investment on national parks.
This section discusses these issues and examines opportunities for improvement.
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4.9.1
Roles of DSE
As noted, DSE11 develops policies (such as the leasing and licensed tour operator
policies), and administers the development approval process (by advising the
Minister on whether to grant an AiP for leases)12. Combining these roles makes it
harder to determine whether participants’ concerns are due to the policy’s design
or administration. A further risk is that the approval processes and guidance will
provide a high degree of flexibility for the regulator but lead to lengthy
assessment processes and uncertainty for business. Separating the policy and
regulatory functions could thus help create a more enabling environment for
private investment in tourist facilities on public land.
Options for more clearly separating DSE’s policy and regulatory functions
include:
(1) Allocating the policy and regulatory functions to different areas of DSE,
with separate lines of reporting. This approach is used in the development
and administration of native vegetation clearing controls (VCEC 2009, p.
162).
(2) Retaining policy-related functions in DSE and allocating responsibility for
proposal assessment to a separate entity, such as Parks Victoria (in addition
to its existing responsibility for the LTO system).
(3) Establishing a new group with representation from DSE, Parks Victoria and
other agencies, to assess major proposed developments on public land.
Under each approach, the policy-related functions would continue to sit within
DSE. Given responsibility for the LTO system is already delegated to Parks
Victoria and CoMs, the key difference across these options relates to the
accountability for administering a revised development approvals process. On
balance, the Commission favours an approach that places this role with Parks
Victoria:


11
This approach most clearly separates DSE’s policy and regulatory functions
and avoids establishing a separate body to administer the development
approvals process.
The role also fits with Parks Victoria’s existing objectives, which are ‘to
conserve, protect, and enhance natural and cultural values, provide quality
experiences, services and information to its customers, provide excellence
and innovation in park management and contribute to the environmental,
social and economic wellbeing of Victorians’ (Parks Victoria 2010e).
The Parks and Forests Division of DSE.
Either indirectly by supporting a decision made by Parks Victoria on leases in national parks, or directly for
other public land areas.
12
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

Parks Victoria is better placed to assess the impacts of a proposed
development on a specific site and surrounding park infrastructure (such as
roads and walking tracks), identify opportunities to improve environmental,
heritage and other outcomes through private investment, and monitor the
operation of developments to ensure compliance with lease requirements.
Parks Victoria could provide a one-stop-shop for business because it can
help in the site selection process and provide links to other agencies such as
councils, DSE, CoMs and Tourism Victoria.
Allocating responsibility for the development approvals function to Parks
Victoria would, however, pose some potential problems. The main issue is that it
creates a potential conflict with Parks Victoria’s current role of providing
commercial tourist facilities such as visitor centres, accommodation and
educational tours. To address the potential for conflict between the regulatory
functions and Parks Victoria’s other roles, it will therefore be necessary to clarify
its role in providing commercial activities and facilities on public land.
Furthermore, under their Act, Parks Victoria does not represent the Crown.
Therefore, if it were to become the organisation that administers the
development approvals process, the Act would need to be amended to allow it to
perform the function to make decisions on behalf of the state.
Draft recommendation 4.4
That the Victorian Government clarify the roles and responsibilities of the
Department of Sustainability and Environment in developing and
administering public land regulation. The Department would take the lead
on:
advising the Minister on policy and regulation for private tourism
investment in facilities and operations on public land, in consultation
with other bodies such as Parks Victoria
developing processes and guidance for assessing proposals to develop
private facilities on public land (associated with recommendation 4.3)
monitoring the administration of the development approvals and licensed
tour operator systems.
Responsibility for regulating private sector investment on public land
should rest with Parks Victoria and, where relevant, with Committees of
Management.
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4.9.2
Advocate for private sector investment in tourism
A number of participants argued that the conflicting roles in public land
management create a lack of a clear ‘champion’ for private sector investment in
public land. While this void reflects the recent policy environment, if the
Government was to lift the prohibition on private investment in tourist facilities
in national parks it could lead to an existing organisation such as Parks Victoria
assuming this role. However, this may lead to conflicts between the roles of
Parks Victoria in regulating private activities on public land and the tasks of
managing park assets.
In advocating for private investment to be allowed in national parks, the VTIC
suggested that Parks Victoria be restructured to focus on facilitating recreational
and tourism-related activities on all public land. It also advocated for Parks
Victoria to report to the Department of Business and Innovation, rather than
DSE (sub. 40, p. 34). The TTF had a similar view that Parks Victoria manages
tourism on public land (sub. 44, p. 44).
The Commission considers that, with the lifting of the policy ban on private
sector development of tourist facilities in national parks, Parks Victoria’s
commercial activities would be minimised. It would focus on providing public
facilities (for example, amenities), with the private sector providing commercial
infrastructure. Parks Victoria would then assume the function of facilitating
private sector investment in tourist facilities.
Draft recommendation 4.5
That the Victorian Government clarify the roles and responsibilities of
Parks Victoria for the administration of public land regulation and private
sector access to public land. Parks Victoria should aim to become a
sophisticated landlord for the parks and take the lead on:
identifying opportunities for private investment in tourist facilities on
public land, including national parks
facilitating applications to develop private tourist facilities on public land
through the approvals process
regulating private activities on public land to ensure compliance with the
Licensed Tour Operator system and leasing policy.
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