3
Land-use planning regulation
Chapter 2 highlighted the diverse nature of the tourism industry and the
industry’s challenges from intensifying competition and the changing preferences
of domestic and international travellers. To meet these challenges, tourism
businesses will need to adapt, take risks and innovate by offering new products
and services. In turn, regulation and its administration should enable such
adaptation, risk-taking and innovation, while protecting the public interest.
This chapter examines:



the relevance of land-use planning regulation (and its administration) to the
tourism industry (section 3.1)
participants’ views on the impact of such regulation and its administration
on industry adaptation, risk-taking and innovation (section 3.2)
opportunities to improve land-use planning and its administration to enable
adaptation, risk-taking and innovation by tourism businesses, without
undermining the public interest (section 3.3).
The next section provides an overview of Victoria’s planning system, focusing on
provisions related to the tourism industry.
3.1
Victoria’s land-use planning system
Land-use planning regulation comprises the complex rules controlling the use
and development of land. The Planning and Environment Act 1987 (Vic) lays out
the objectives of land-use planning regulation, the regulatory tools and
accountability for administration. Other Victorian regulations such as the
Subdivision Act 1988 (Vic), the Heritage Act 1995 (Vic) and the Planning and
Environment (Fees) Regulations 2000 (Vic) provide complementary controls and
provisions.
Land-use planning regulation is a general type of regulation that applies to a
variety of industries and activities, not just the tourism industry. Reflecting the
diverse nature of the tourism industry, land-use planning regulation may affect
tourism activities such as accommodation, food service, retail, recreational
activities and facilities, and other activities catering to both local residents and
visitors.
The relevant objectives of the Planning and Environment Act, referring to
visitors to Victoria, include:

to provide for the fair, orderly, economic and sustainable use, and
development of land
LAND-USE PLANNING REGULATION
45




to provide for the protection of natural and man-made resources and the
maintenance of ecological processes and genetic diversity
to secure a pleasant, efficient and safe working, living and recreational
environment for all Victorians and visitors to Victoria
to conserve and enhance those buildings, areas or other places which are of
scientific, aesthetic, architectural or historical interest, or otherwise of special
cultural value
to balance the present and future interests of all Victorians.
To understand how planning regulation affects land use, consider the process of
applying for a planning permit from the perspective of a tourism business
(figure 3.1). A planning permit is a legal document that gives permission for a use
or development on a particular piece of land. To obtain a permit, the party must
apply to the council. If the council agrees with the proposal, it will grant a
planning permit.
The first step in applying for a planning permit is to examine the local planning
scheme. Each municipality in Victoria must have a planning scheme containing
maps that show the zones and overlays that apply to land covered by the scheme.
The purpose of a zone is to outline uses of the land that are permitted without a
permit (‘as-of-right’), or permitted with a permit, or prohibited. The planning
scheme map may also show that a piece of land has one or more overlays
affecting it. Overlays usually apply to land with special features such as heritage
buildings, significant vegetation or flood risks.
The planning scheme also details state and local planning policies that guide
decision making, as well as the requirements of the different types of zone and
overlay. Each of these components of a planning scheme is discussed in turn.
3.1.1
State and local policies relevant to tourism
Policies identify matters that applicants, councils, objectors and the Victorian
Civil and Administrative Tribunal (VCAT) must consider in applying for a
permit, considering objections, making decisions or hearing appeals. The two
broad policy categories in planning schemes are:
(1) state-wide policies contained in the State Planning Policy Framework (SPPF)
(2) local policies outlined in the Local Planning Policy Framework (LPPF).
46
UNLOCKING VICTORIAN TOURISM
Figure 3.1
The planning permit process
Pre-application stage
Review planning scheme
Talk to council
Talk to neighbours
Prepare and submit application
Pay application fee
Council checks the applications
Request for further information
Referral to external agencies and internal departments of the council
Application is advertised if required
For at least 14 days
Usually by letter to neighbours and a sign on-site
Anybody may object
Council assesses the applications
Consider objections
Mediation if needed
Consider referral comments
Review the application against planning scheme requirements
Negotiates with permit applicant
Prepare advice/report to council
Council decides the application
Permit with conditions
Notice of decision with
conditions
Refusal
Review by VCAT
Permit applicant can seek review of conditions or refusal (or a failure to make a decision)
Objectors can seek review of a notice of decision
Source: DPCD 2008, p. 7.
LAND-USE PLANNING REGULATION
47
The SPPF lays out state government planning objectives, policies and principles,
and is identical in each planning scheme. For tourism activities, relevant
objectives in the SPPF include:



to encourage tourism development to maximise the employment and
long-term economic, social and cultural benefits of developing the State as a
competitive domestic and international tourist destination
to encourage development of well designed and sited tourist facilities,
including integrated resorts, motel accommodation and smaller scale
operations (such as retail, host farms, and B&Bs)
to maintain and build on the central business district’s role as Victoria’s
tourist centre, and encourage development of the Yarra River precinct for
tourism activities.
The LPPF contains locally applicable planning objectives (set out in the LPPF’s
Municipal Strategic Statement), and specific policies and requirements. It aims to
apply the SPPF to local circumstances. In theory, it should be consistent with
state objectives and policies, and should guide applicants and council staff on
how to assess competing objectives in a local context. Section 7(4) of the
Planning and Environment Act states the Victorian Planning Provisions prevail
over local planning provisions when the two are inconsistent.
3.1.2
Zones affecting tourism activities
Zones set out the land uses that are exempt from the planning permit
requirement, allowable with a permit, or prohibited; they also set out conditions
and decision guidelines. The state-wide suite of zones covers residential, rural,
industrial, business and other special purposes. Councils can apply relevant zones
from the suite to areas of land within their municipalities.
For a business considering a tourism investment, a number of specific zones may
be relevant, depending on the location. Each zone has specific purposes and
requirements:

48
Within the City of Melbourne, relevant zones include the Capital City Zone
and the Docklands Zone, which both provide flexibility for the development
of hotels, motels, hostels and other commercial accommodation, theatres,
galleries, museums and similar attractions. Outside the Central Business
District, relevant zones include residential and business zones. These
provide for the construction of dwellings and other commercial buildings.
Tourism activities such as restaurants and short-term accommodation
require a planning permit in residential zones and some business zones. A
B&B that can accommodate up to six people does not require a planning
permit in the residential zones. A restaurant does not need a permit in the
Business 1 Zone.
UNLOCKING VICTORIAN TOURISM





On Melbourne’s fringe, the Green Wedge zones apply across large areas,
including the Yarra Valley and the Mornington Peninsula. The purposes of
the Green Wedge zones include: to recognise, protect and conserve green
wedge land for its agricultural, environmental, historic, landscape,
recreational and tourism opportunities; and to protect, conserve and
enhance the cultural heritage significance and the character of open rural and
scenic non-urban landscapes.
In much of regional Victoria, land outside towns is mainly covered by the
Farming Zone and the Rural Conservation Zone. The purposes of the
Farming Zone include: to encourage the retention of productive agricultural
land; and to ensure non-agricultural uses (particularly dwellings) do not
adversely affect the use of land for agriculture. The purposes of the Rural
Conservation Zone include: to protect the natural environment and the
biodiversity of the area; to provide for agricultural use consistent with the
conservation of environmental and landscape values; and to conserve the
cultural significance and character of rural landscapes. Some areas are
covered by the Rural Activity Zone, which is a more flexible and amenable
zone for tourism uses.
Reflecting their differing purposes, the Green Wedge, Farming and Rural
Conservation zones vary in the degree to which they allow tourism
attractions such as hotels, motels, B&B accommodation, exhibition and
function centres, restaurants and retail premises (table 3.1). Essentially, these
zones indicate the types of activity for which a permit is not required (such
as a B&B accommodating fewer than six people), the types of activity
requiring a permit (such as group accommodation that is ‘in conjunction
with’ agriculture, rural industry or a winery) and prohibited activities (such as
a retail shop and any other activity that is not specifically referenced).
The Green Wedge, Farming and Rural Conservation zones also specify the
minimum size of subdivisions allowed and restrictions on subleasing. For
example, the minimum sub-division in these zones is 40 hectares (or
8 hectares for Green Wedge Zone A) unless otherwise stated.
The Green Wedge and Rural Conservation zones also specify that a permit is
required to lease (or license) a portion of a lot for use as accommodation for
a period of more than ten years.
LAND-USE PLANNING REGULATION
49
Table 3.1
Permit requirements in the green wedge and rural zones
Tourism activity
Green wedge zone (GWZ)
Rural conservation zone (RCZ)
Farming zone (FZ)
Bed & breakfast
No permit required (max. 6 guests)
No permit required (max. 6 guests)
No permit required (max. 6 guests)
Camping & caravan
Permit required
Prohibited
Prohibited
Host farm
Permit required
Permit required
Permit required
Group
accommodation
Permit required, ‘in conjunction with’
other activities (max. 40 dwellings)
Permit required, ‘in conjunction with’
other activities (max. 6 dwellings)
Permit required, ‘in conjunction with’
other activities (max. 6 dwellings)
Residential building
(e.g. backpackers’
hostel)
Permit required, ‘in conjunction with’
other activities
Prohibited
Prohibited
Residential hotel
(includes motel)
Permit required, ‘in conjunction with’
other activities (max. 80 bedrooms)
Permit required, ‘in conjunction with’
other activities (max. 80 bedrooms)
Permit required, ‘in conjunction with’
other activities
Restaurant
Permit required, ‘in conjunction with’
other activities (max. 150 patrons)
Permit required, ‘in conjunction with’
other activities (max. 150 patrons)
Permit required, ‘in conjunction with’
other activities
Outdoor recreation
facility
Permit required
Prohibited
Permit required
Exhibition centre
(e.g. art gallery)
Permit required
Prohibited
Permit required (must not be used for
more than 10 days in a calendar year)
Function centre
Permit required, ‘in conjunction with’
other activities (max. 150 patrons)
Prohibited
Permit required (must not be used for
more than 10 days in a calendar year)
Source: Victoria Planning Provisions, clauses 35.04, 35.06 and 35.07.
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UNLOCKING VICTORIAN TOURISM
3.1.3
The permit application process
Having reviewed the local planning scheme, a business thinking of investing in a
tourism enterprise may need to apply for a planning permit. Figure 3.1 shows the
required steps and possible outcomes of this process. In some cases, the business
may find its proposed use is prohibited under the applicable zone; it could then
apply to the council to amend the planning scheme to allow the proposed use. If,
for example, the council supports a proposed large-scale accommodation and
conference centre on land zoned Farming Zone, it could amend the scheme to
apply a more appropriate zone to the land, such as the Rural Activity Zone or a
Special Use Zone.
Councils may also review their planning schemes occasionally to finetune or add
to their local policies, or to alter the application of zones and overlays. This
chapter distinguishes between statutory and strategic planning. Statutory
planning refers to the processes of assessing permit applications and amending
planning schemes. Strategic planning refers to the process of reviewing and
formulating changes to planning schemes. These processes are closely linked—
for example, if strategic planning work is not done well or not done at all, then
councils may add unclear or misguided local policies to planning schemes, or fail
to adapt local policies to changing land-use patterns or community expectations.
In turn, councils may then apply the wrong zones and overlays to land, thereby
creating problems in the administration of planning regulation (statutory
planning).
Also important to the planning system are the ‘call in’ powers of the Minister for
Planning. The Minister has broad powers to call in a permit application before
VCAT, or one being considered by a council. The Minister may call in an
application that:



3.2
raises major policy issues and might have a substantial effect on the
achievement of planning objectives
has been unreasonably delayed to the disadvantage of the applicant
would be facilitated by its referral to the Minister (for example, when the
development must also be considered by the Minister under another Act or
regulation).
Issues raised by participants
Some participants considered that land-use planning regulation and its
administration are impeding the development of Victoria’s tourism industry.
Their concerns fall into two broad groups:
LAND-USE PLANNING REGULATION
51
(1) Provisions in some council planning schemes, and their implementation by
some councils, unnecessarily restrict worthwhile tourism activities in regional
areas and on Melbourne’s urban fringe.
(2) Many councils’ administration of planning regulation is unnecessarily
uncertain, time consuming and administratively costly, with a
disproportionate effect on the tourism industry.
This section examines the nature and extent of these concerns.
3.2.1
Regulatory barriers to the development of tourism in
Victoria’s land-use planning regulations
Submissions, as well as recent reports on the tourism sector, identified several
barriers to investment in tourism and related activities on Melbourne’s fringe and
in regional Victoria, including:



restrictive zonings and overlays on private land suitable for tourism
developments
local opposition (or a lack of support for) tourism developments
other regulations that apply to land use and development, such as the
Victorian Coastal Strategy.
Participants identified several examples where adaptation, risk-taking and
innovation in the development of tourism activities had been impeded by
features of Victoria’s planning system and its administration, both by councils
and the State Government (box 3.1). The Commission did not challenge the
validity of each of these examples but the number and nature of them, along
with the findings of other studies, such as the review of rural planning by the
Rural Planning Group (2009) demonstrate how elements of Victoria’s land-use
planning system and its administration can impede the development of the
tourism industry in parts of regional Victoria and in Green Wedge Zone areas.
Restrictive land-use zones
As illustrated above, during the inquiry the Commission heard of a number of
examples where land-use zones impeded investment in new or existing tourism
activities. In particular, some participants argued land-use zones such as the
Green Wedge Zone, the Farming Zone and the Rural Conservation Zone are
excessively restrictive and have been applied too widely in areas that are
prospective for tourism. According to the (Rural Planning Group 2009, p. 17),
the Farming Zone is the most widely applied zone in Victoria’s regional
municipalities.
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Box 3.1
Examples of problems with the planning system
raised in submissions
Approval to use a rural produce store as a cafe on a Woori Yallock orchard was
refused because the property is less than 40 hectares. Council indicated that an
application for a site-specific planning scheme amendment would be opposed.
However, it stated that the serving of light meals may be permissible—subject to
significant restrictions—as an ancillary use to existing Farm Educational Tours
(VTIC, sub. 40).
An international hotel group experienced uncertainty, delays and high costs in
seeking approval for development of a major hotel and convention centre in the
Mornington Peninsula Green Wedge Zone. Faced with local opposition and the
prospects of an uncertain, costly and protracted planning process, the company
decided to develop a similar complex in another state (personal communication).
Different interpretations of the planning requirements of the Green Wedge Zone
have led to uncertainty for the owners of Noel's Gallery, a restaurant on the
Mornington Peninsula (Roger Stuart-Andrews sub. 7).
The process of obtaining approval for a small café in Beech Forest took ten months,
holding up settlement on the property (The Ridge Café, sub. 39).
A accommodation and hiking business on a site near the Great Ocean Road needed
to prove 15 years of continuous use of pre-existing commercial buildings on the site
in order to override the zoning prohibition on commercial buildings that do not meet
‘in conjunction with’ criteria (VTIC, sub. 40).
Restrictions on farm gate sales in the Green Wedge Zone hinder the Bunyip Food
Belt Project. The Project involves using recycled water for agricultural purposes in
the Cardinia, Casey and Mornington Peninsula regions (Cardinia Shire Council,
sub. 1).
A lengthy and costly process of obtaining planning approval caused uncertainty,
delays and costs for the developer of a major resort adjacent to the Wilson’s
Promontory National Park (Tom Tootell, sub. DR76).
Restrictive planning controls have inhibited Johanna Seaside Cottages’ ability to
develop and expand tourist accommodation on the Great Ocean Road (Johanna
Seaside Cottages, sub. DR86).
Efforts to develop a sculpture park on a small rural property in the Rural
Conservation Zone are impeded by zoning controls (Elizabeth & Ken
Jacka, sub. DR93).
A proposal to expand the T’Gallant winery in the Mornington Green Wedge Zone,
was scaled-back due to the ‘in conjunction with’ requirement, the minimum
subdivision requirement (Foster’s Group, sub. DR97).
(continued next page)
LAND-USE PLANNING REGULATION
53
Box 3.1
Examples of problems with the planning system
raised in submissions (continued)
The developer of a tree top recreational facility on an existing site experienced a
lengthy and costly approvals process that involved multiple referral bodies, large
costs for consultancies and lost revenue as a result of delays (personal
communication).
The RACV reported a number of problems in the administration of land-use
planning regulations that affected work on new and existing resorts, including those
at Inverloch, Healesville, Cobram, Torquay and Cape Schanck (in progress). The
problems included significant costs due to delays in council assessing applications,
lack of community understanding of the economic value of tourism developments,
the length and costs of the planning scheme amendment process, blanket application
of planning controls and overlays without sufficient consideration of the
implications, Green Wedge Zone requirements and restraints on development, and
planning appeals processes (sub. 52).
Source: VCEC consultations and submissions.
A number of councils and tourism development bodies argued that restrictive
zoning provisions have impeded the development and growth of tourism. Colac
Otway Shire, for example, stated:
A typical Colac Otway Shire scenario is a landowner of a bush block or property
that is no longer being used for agricultural purposes. Often this is due to the
failing viability of agricultural pursuits in some areas of our Shire. Subsequently
the farmer determines that he or she could supplement their farm income with
small scale tourism in the form of group accommodation (i.e. self contained
cabins for persons away from their normal place of residence). Due to the
restrictive provisions of the state standard Farming and Rural Conservation
Zones this use is effectively prohibited given the requirements that such uses are
‘in conjunction with’ a limited range of uses including agricultural. There is also
no opportunity to consider an application for a bed and breakfast beyond the
limited scale use (i.e. no more than 6 persons accommodated) that is ‘as-of-right’
and does not require a planning permit. This is a particular issue in sensitive
coastal properties such as those in the vicinity of the Great Ocean Walk, where
property owners may be more interested in land conservation and revegetation
along with small scale tourism than persisting with full time agriculture.
(sub. 45, p. 2)
Likewise, East Gippsland Shire stated:
Tourism developments such as accommodation, resorts etc. are generally not
allowed in Farm Zone 1 or Rural Conservation Zone. For example, on the
Banksia Peninsula in East Gippsland there are a number of tourist
accommodation/developments. The zones are usually Farming or Rural
Conservation Zone. Council has been able to allow some minor
54
UNLOCKING VICTORIAN TOURISM
upgrades/expansion as the uses enjoy existing use rights, however these zones
limit the existing developments from substantially expanding. (sub. 11, pp. 1–2)
A recent report for the South Gippsland Shire stated:
The Farming Zone places significant limitations on tourism use and this is the
predominant rural zone in South Gippsland Shire. [And] These limitations make
it difficult to address the key tourism infrastructure gaps identified for South
Gippsland Shire, including the need for more large scale, quality accommodation
establishments and backpacker/caravan parks. (Urban Enterprises 2010, p. 2)
Tourism businesses also identified restrictive land-use zones as an impediment to
tourism investment in Victoria. Lorne Bush House Cottages submitted:
… we recently made application to the Surf Coast Shire to erect a large free fly
aviary on our property and associated wildlife education, as a tourism attraction
for both local and international visitors to our area. The concept had the support
of the councillors, the Surf Coast tourism board, the Surf Coast economic
development committee and our local visitor information centre yet the Surf
Coast Shire planning office refused the application as it was not an allowable use
in a rural conservation zone. (sub. 35, pp. 3–4)
Fosters Group submitted that the provisions of the Green Wedge Zone,
specifically the limits on restaurant seating (150 patrons) and minimum
subdivision requirements had impeded its ability to expand the operations of a
winery in the Mornington Peninsula (sub. DR97, p. 2).
Several previous reports on aspects of Victoria’s land-use planning system have
identified similar concerns about the provisions and application of the Farming,
Rural Conservation and Green Wedge zones.
A recent review of the impact of the planning system on rural land use also
identified concerns about inflexible land-use zones. The 2009 report of the Rural
Planning Group was commissioned under the Future Farming Strategy, to
examine rural land-use planning in the context of long-term trends in agriculture.
The Group reported the results of a confidential study for the Department of
Industry, Innovation and Regional Development (now the Department of
Business and Innovation), which concluded the implementation of the rural
zones had unnecessarily impeded tourism investment. That study found the
issues impacting on tourism included:



the structure and strategic adoption and implementation of the rural zones
and uses associated with natural systems
inflexibility and limited discretion particularly related to primary produce
sales, places of assembly and interpretation centres, and the status of
innominate uses
ancillary tourism uses that require a nexus with the Farming Zone (the ‘in
conjunction with’ clause). For example, tourism uses in conjunction with
LAND-USE PLANNING REGULATION
55

agriculture, a winery or other rural industry can require forced linkages,
which are open to significant interpretation and challenge.
thresholds for uses in zones which can limit commercial viability of
proposed uses such as restaurants and accommodation. Minimum lot sizes
and buffers can also have an impact. (Rural Planning Group 2009, p. 28)
The Commission also heard from participants that the provisions of the Green
Wedge and rural zones have prevented the growth and diversification of existing
tourism businesses. These zones limit the scale of activities, such as the limits on
bedroom numbers and restaurant patrons in the Green Wedge Zone. Further, a
planning permit is required for a change of use, such as for expanding a
restaurant into a functions centre. At the Commission’s roundtable meetings
with regional businesses, several established businesses advised they had been
refused permission to expand their businesses or had experienced difficulties
obtaining permission.
Several submissions also indicated the restrictive provisions of the Farming and
Rural Conservation zones and the Green Wedge Zone impede diversification
and adaptation in the agricultural sector. According to the Cardinia Shire
Council:
Current restrictive legislation on farm gate sales in the Green Wedge hinders the
success of Bunyip Food Belt project. It limits opportunities for development of
produce/food co-operatives, business clusters, local produce branding, regional
produce showcasing and major event centred around local produce production.
This would create destination tourism opportunities and more business
development in culinary and agri-tourism. (sub. 41, p. 7)
Likewise, the Interface Councils—a body representing the nine councils on the
outer edge of metropolitan Melbourne—submitted that:
[The] Green Wedge zones restrict the ability of farmers to diversify (as noted on
page 64 of the [draft] report) and Interface Councils agree that this is the case.
For example, the sale of value-added products in the Green Wedge Zone may
be prohibited.
With the exception of wineries, agricultural producers may not be permitted to
sell value-added products on site. Interface Councils understand there is a large
and growing market for fresh produce and associated homemade products that
growers are unable to capitalise on. (sub. DR111, p. 5)
The report of the Rural Planning Group also found the rural zones restrict
agriculture-related activities:
The zones that apply to rural land are generally too restrictive to allow the range
of uses that are increasingly associated with farming and agriculture. For
example, in the Farming (FZ), Rural Activity (RAZ) and Rural Conservation
Zones (RCZ), any use that is defined as ‘industry’ and cannot be defined as ‘rural
56
UNLOCKING VICTORIAN TOURISM
industry’ … is prohibited. Primary produce sales in rural zones are restricted to
unprocessed products sourced from the same property or adjacent land. (Rural
Planning Group 2009, p. 27)
Concerns about the restrictive nature of the Farm and Rural Conservation zones
appear to stem from the development and introduction of new rural zones in
2004. The Rural and Regional Committee of Parliament report on rural and
regional tourism found:
A ‘blanket’ translation of the ‘rural land’ category into the new ‘Farming Zone’
has failed to account for the changing needs of tourism businesses operating
from properties now zoned as farms. As a matter of urgency, the Committee
recommends that the State Government investigate the impact of the new
Farming Zone regime and its implementation, with a view to facilitating and
speeding up the process of review and rezoning of Rural Activity zones.
(Victoria Parliament Rural and Regional Committee 2008, p. 121)
Similarly, Victoria’s Nature-Based Tourism Strategy 2008–2012 stated:
The transition to the new zones has presented a barrier to private investment
into nature-based tourism experiences on land adjacent to national parks, as
most private land around Victoria’s key nature-based tourism attractions is
primarily Farming Zone, providing mostly for farming and conservation of
natural values. (Tourism Victoria 2008a, p. 39)
Since the introduction of the new zones, some councils have reviewed their
planning schemes to better tailor the zones (section 3.3.1). These reviews may
not have helped reduce the barriers to tourism activities, however, Geelong
Otways Tourism stated:
The Rural Activity Zone is very flexible and has the capacity to support all
manner of activities including developments that are not related to agricultural
land use. We would encourage the allocation of this zone in areas around coastal
townships and areas of other tourist activity. It should be noted that the City of
Greater Geelong has no Rural Activity Zones (RAZ) as part of its Rural Land
Use Strategy, which is currently in draft stage. This means that for any tourism
development of size to be considered, it will require the cumbersome task of
having parcels of land rezoned from either RFZ or RCZ. I believe that this also
identifies that there is no clear vision for where the City would prefer to direct
tourism growth in the future and that the strategy of non declaration of any
RAZ’s means that the City will be reactive and not take a leadership role.
(sub. 9, p. 4)
While some participant concerns arose because the new rural zones were applied
in a broad way, other concerns appear to reflect either council reluctance or
inertia in applying more flexible zones to a wider area of land suitable for tourism
activities. The reluctance to apply more flexible zonings (such as the Rural
Activity Zone) may reflect several factors:
LAND-USE PLANNING REGULATION
57




an assumption that potential conflicts between agricultural land and nonagricultural land uses are best managed by prohibiting non-agricultural
developments in areas where agriculture is the primary or traditional landuse
concerns that approving tourism developments in rural areas could set an
undesirable precedent for landholders who would like to subdivide
agricultural land for residential purposes
views that new tourism developments should be located within existing town
centres to minimise potential land-use conflicts and make best use of
existing community infrastructure
concerns that allowing further tourism developments would degrade the
‘character’ of small towns and rural areas, particularly in areas popular with
visitors.
The Victorian Farmers Federation (VFF) considered that that pattern of current
land-use zoning may reflect the specific preferences of local communities:
The Rural Activity Zone does provide greater flexibility over use of land for
other purposes in conjunction with agriculture. It does however appear that
there has been a reasonably clear message sent from municipal councils that they
do not wish this level of flexibility within their Shires otherwise uptake of this
zone would have been greater than what it currently is. (sub. DR105, p. 12)
Some councils also do not have the financial capacity or staff to review and
amend their planning schemes so more appropriate zones apply to areas of
private land suitable for tourism developments. To assist councils, the previous
government developed a rural land-use planning program:
The Government has funded the Rural Land-Use Planning Program so that
councils can advance necessary strategic planning work to better apply the new
rural zones, and hence facilitate nature-based tourism developments. (Tourism
Victoria 2008a, p. 39)
Despite the widespread use of restrictive land-use zones, applicants for a tourism
related development could seek permission to rezone land. Rezoning would
require an amendment to the local planning scheme, which is extremely costly
and time consuming for applicants and councils, and thus only a realistic option
for a few large-scale tourism developments. The Corangamite Shire noted a study
for the Shire on tourism opportunities indicated the private sector was unwilling
to go through the planning scheme amendment process to rezone land. The
study thus sought to identify strategic sites that could be rezoned to facilitate
tourism (sub. 50, p. 2).
The costs to business of seeking to amend a planning scheme were highlighted in
a study for the Commission’s inquiry into local government regulation. The Allen
Consulting Group estimated the administrative costs to applicants of seeking
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UNLOCKING VICTORIAN TOURISM
approval to amend a planning scheme could average between $100 000 and
$320 000, depending on the complexity of the issues (Allen Consulting Group
2010, p. 15). Some of these costs were due to the lengthy delays in the approval
of an amendment, with some reports indicating the average elapsed time for an
amendment is two to three years.
Local policies and tourism
Many participants identified the provisions of the Green Wedge, Farming and
Rural Conservation zones as the major regulatory barrier to the development of
the tourism industry. However, participants also identified local policies that
guide council implementation of municipal planning schemes as a potential
barrier. Local policies exist to benefit local communities and visitors—such as by
protecting amenity and views in scenic or rural locations—and in doing so may
constrain the scale or nature of activities needed to achieve these objectives.
They may thus end up discouraging tourism developments.
The Victorian Caravan Parks Association submitted some local policies impede
the development of new tourism infrastructure. It gave the example of a
proposed planning scheme amendment in the Mornington Shire that would set
restrictive conditions on the development of new caravan parks in the Green
Wedge Zone:
... [the] proposed Mornington Planning amendment C133 … seeks to redefine
what should be the nature of a caravan park situated in the Green Wedge Zone.
It proposes limits on the number of sites (100); the number of ‘built form’
(cabins, annuals & residents) to 15; maximum cabin size of 60 m2; minimum
land size of 40 hectares; distance from urban boundary of at least 2 km.
(sub. 26, p. 4)
To look at the possible impact of local policies, the Commission reviewed a
number of council planning schemes to identify relevant planning objectives and
controls (box 3.2). This review identified that objectives relevant to tourism
range from encouraging tourism development, to discouraging non-agricultural
activities such as tourism in the rural zones. The sample of local policies
highlights how tourism developments in an area depend not only on how the
land is zoned, but also on the local policies that guide councils in assessing
permit applications.
LAND-USE PLANNING REGULATION
59
Box 3.2
Local planning policies affecting tourism
activities
Some local policy requirements may impact directly or indirectly on tourism activities
in regional areas, as in the following examples from planning schemes covering
Corangamite, Mornington Peninsula, Casey and Greater Geelong.
Corangamite Shire
The Shire’s Economic Development policy (cl. 22.03-1) states ‘Agricultural land will
be protected as an economic and environmentally valuable resource. Conversion of
land to non-soil based use and development will be strongly discouraged unless there
is no other suitable site for the proposed use and development and overwhelming
public benefit is demonstrated.’ This policy applies to all land in the rural zones.
The Shire also has a Tourist Use and Development policy (cl. 22.03-4), with the
following objectives:



to support quality tourist development in association with the landscape and the
heritage values of rural and urban areas
to promote coastal related use and development to be focused in the towns of
Port Campbell and Princetown
to encourage tourism development related to agricultural and other rural based
industries.
Mornington Peninsula Shire
The LPPF states that key objectives of planning in the Shire are to:



protect and conserve the rural landscape and character of the Peninsula as a
major recreational resource for both the local and wider metropolitan
community
supporting the continued agricultural use of land by avoiding the establishment
of uses that may exclude or limit legitimate rural activities and farm management
practice
promote the growth of major and township activity centres and avoid
inappropriate out-of-centre commercial developments (cl. 22.07-1).
To give effect to these objectives, the local planning policy states ‘applicants for
commercial development [in the Green Wedge or Farming Zones] must demonstrate
that their proposal addresses a need or gap in the tourist industry and is not
dependent on the development of other residential or commercial activities on the
site or in the locality,’ and ‘Restaurant facilities in rural areas should generally avoid
night time operation due to the potential impact on rural amenity from additional
traffic, noise and light’ (cl. 22.07-3).
(continued next page)
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UNLOCKING VICTORIAN TOURISM
Box 3.2
Local planning policies affecting tourism
activities (continued)
City of Casey
The Non-Agricultural Uses in Green Wedge Areas policy (cl. 22.21) applies to all
land in a Green Wedge, Green Wedge A and Rural Conservation zones, where a
permit is required to establish a non-agricultural use. It is policy that:


Green Wedge areas be used predominantly for sustainable agricultural
production and related purposes
non-agricultural uses, except those uses that operate in conjunction with related
agricultural activities on the land, be located adjacent or close to urban or
township areas, to reduce car dependency and maximise accessibility to public
transport (clause 22.21-3).
City of Greater Geelong
The Tourism Development in Rural Areas policy (clause 22.06) applies to all land
zoned Farming, Rural Activity and Rural Conservation, and states:
Council recognises that there are opportunities to enhance the tourism industry in the
region through the provision of a small number of rural based, larger scale, high
quality tourism developments that are ancillary to or associated with the farming or
rural use of the land. These developments can be facilitated by the strategic
application of an appropriate zone.
Source: Various planning schemes.
Other regulations applying to land use and development
While this chapter focuses on land-use planning controls that may restrict
tourism development on private land, a number of submissions identified
potential barriers to investment on Crown land. Several submissions identified
policy and regulation as a major barrier to private investment in national parks
(chapter 4).
In addition, some submissions identified the State Government’s Coastal
Strategy as a potential impediment to development on, or adjacent to, Crown
coastal foreshore land. The Colac Otway Shire considered the Victorian Coastal
Strategy’s principles for deciding on the use of coastal Crown land could be
interpreted quite strictly to block developments that benefit local communities
and the State economy (sub. 45, pp. 3-4).
LAND-USE PLANNING REGULATION
61
3.2.2
Complexity and costs of land-use planning regulation
Several participants considered planning regulation generally is excessively
complex and uncertain, and councils’ administration of the regulations has
imposed unnecessary delays and unreasonable cost burdens on business. These
more general concerns about the land-use planning system have been raised in
previous Commission inquiries. The recent inquiry into local government
regulation, for example, examined councils’ administration of land-use planning
regulation. Commissioned research for the inquiry found:


paperwork for preparing planning permit applications costs Victorian
businesses $179 million per year, along with a further $183 million per year
in costs arising from unexpected delays in planning processes
over half of all businesses that had dealt with local government on land-use
planning issues reported their most recent dealing had a negative impact on
their business (VCEC 2010a).
The inquiry examined ways to tackle business concerns about the uncertainty,
time and costs resulting from the administration of the land-use planning system.
At the time this report was finalised, the Government had not released the
Commission’s final report or responded to the recommendations. In the draft
report into local government regulation, the Commission considered improving:




strategic planning to clarify state and local government objectives for landuse and development, resolve tensions between the objectives of these two
levels of government, and simplify the SPPF
councils’ processes by means such as allowing private assessors to decide on
simple planning permits, and improving internal processes (for example,
using more pre-application and pre-lodgement certification)
councils’ incentives to administer planning more efficiently, by introducing
more comprehensive performance reporting and evaluation of the system’s
performance
resources and skills, by easing restrictions on fee setting and supporting
training (VCEC 2010a).
Tackling the generic issues of uncertainty, time delays and costs through systemic
changes to the planning system can benefit all users of the planning system,
including those relating to tourism. Some submissions, however, also advocated
targeted measures to reduce uncertainty, time and costs for tourism
developments. Examples included creating tourism-specific zones and state-led
project facilitation (section 3.3.2). Submissions noted such a targeted approach
may be justified because permit applications for tourism developments such as
accommodation are often more complex than other types of application. The
Tourism and Transport Forum (TTF) (sub. 44, pp. 22–3) submitted proposed
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UNLOCKING VICTORIAN TOURISM
tourism investments often raise complex policy and technical issues. These
complexities may arise from the proposed location (along coastlines or in
environmentally sensitive areas), the size and complexity of the proposed
development (which may involve a mix of uses catering to tourists as well as
permanent residents), or local fears about the loss of local amenity from
increases in visitor numbers.
To test the view that tourism permit applications differ from other types of
applications, the Commission examined recent data on the administration of
planning regulation. The Department of Planning and Community Development
(DPCD) collects statistics for all planning permit applications lodged in Victoria.
The statistics include:








a description of the proposed development
the estimated value of the project
the complexity of the application (simple, average or complex), based on a
planning officer assessment of the amount of time required to assess the
proposal
information on various process steps, such as whether the responsible
authority requested further information, referred the application to one or
more referral authorities, or required public notification of the proposal
whether there were objections to the proposal
whether the appeals tribunal (VCAT) considered the application
the outcome of the assessment (such as whether the application was
approved or rejected)
the number of elapsed days between lodgement of the application and a final
decision.
The Commission obtained this information for 248 recent planning permit
applications with a project value greater than $5 million and with a tourismrelated component. These applications contained one of a number of tourismrelated terms in the description of the permit application.1 While the
Commission could not identify applications with complete confidence, it
compared the assessment process and outcomes for these tourism-related
projects with all large ($5 million or more) developments.
A comparison of the characteristics of high-value permit applications for
tourism-related projects and all high-value projects somewhat supports the view
that tourism-related projects tend to be more complex than other types of
applications (figure 3.2). The evidence indicates tourism-related planning
The terms used were: Tourist accommodation, Short-term accommodation, Residential hotel, Group
accommodation, Serviced apartments, Bed & breakfast, Host farm, Camping and caravan park, Exhibition
centre, Function centre, Hall, Recreation facility, Market, Restaurant, Café and Retail premises.
1
LAND-USE PLANNING REGULATION
63
applications, compared with all high-value applications, are perceived by council
planners as being more complex and are more likely to:
require referral to one or more regulatory bodies
require the provision of further information
be notified to the public and to attract objections
to end up at appeal to VCAT.




Figure 3.2
Characteristics of tourism-related planning
applications
100%
Tourism-related applications
90%
All applications
80%
70%
60%
50%
40%
30%
20%
10%
0%
Complex
application
Referrals
Further
information
Public notice
VCAT appeal
Objections
a This figure compares the characteristics and process steps for planning permit applications that
involved an estimated cost of work of $5 million or above. ‘All applications’ cover all planning permit
application decided in 2008-09; ‘Tourism-related applications’ include all applications identified in a
keyword search of the description of the application. The sample of tourism-related applications covers
those decided since 1 July 2008, not just those decided in 2008-09.
Source: Commission analysis of planning permit activity data collected by the DPCD.
The median timeframe for determining high-value tourism-related projects
(229 days or 32 weeks) is greater than the median timeframe for all high-value
applications (189 days or 27 weeks). However, a comparison of the average
timeframes suggests the timeframes for tourism-related applications are more
variable, averaging 305 days compared with an average 239 days for all highvalue projects.
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UNLOCKING VICTORIAN TOURISM
These results and the findings are subject to important qualifications:



It was difficult to identify applications that were predominantly tourismrelated. A large number of the applications were for multi-purpose
developments comprising a mix of residential apartments, serviced
apartments, and space for retailing and restaurants. In most cases, the
Commission could not assess whether the development was designed for
short-term or residential accommodation.
Different time periods were used in the comparison, with details available
for all applications decided in 2008-09. The tourism-related applications
covered a longer period (all those lodged since 1 July 2008).
It was difficult to determine the reasons for differing average levels of
complexity, notification and so on—better data and more detailed analysis
would be required to determine whether the differences shown in figure 3.2
are statistically significant.
3.2.3
The Commission’s view
The submissions, other recent reports and the Commission’s discussions and
research indicate elements of Victoria’s land-use planning system are impeding
the development of the tourism industry in parts of regional Victoria and in
Green Wedge Zone areas. The feedback and evidence also suggest the
administration of land-use planning regulation is imposing unnecessary
uncertainty, time delays and costs on Victorian tourism businesses.
The Farming and Rural Conservation zones effectively prohibit a variety of
tourism activities in areas that could attract additional tourism investment, such
as South and East Gippsland and areas along the Great Ocean Road. The impact
of these zones on tourism investment is exacerbated by the broad way in which
they have been applied across the State. The option of applying for a planning
scheme amendment to rezone land is a slow, costly and uncertain process for
businesses.
Closer to Melbourne, the Green Wedge Zone, while allowing a wider range of
tourism activities, also restricts the nature and scale of tourism activities. It limits
the capacity of existing tourism businesses to expand, and discourages new
investment in tourist facilities such as accommodation and recreational facilities.
Further, a noted purpose of the Green Wedge and Rural Conservation zones is
to protect agriculture, but the zones restrict the ability of farmers to diversify. In
the rural zones, farmers are currently restricted to selling produce, in the form of
unprocessed products, sourced from their property or adjacent land (Rural
Planning Group 2009, p. 27).
LAND-USE PLANNING REGULATION
65
The local policies of some councils may also impede tourism investment. Some
council policies discourage tourism developments outside town centres, or place
stringent conditions on the size of buildings and other matters that affect the
viability and cost of such developments.
The extent of the impact of land-use planning regulation and its administration
on the tourism industry is difficult to quantify, mainly because it is hard to
identify investment that did not occur because land-use controls, local policies
and/or the administration of land-use planning regulation prevented it. The
Commission also acknowledges the zones and local policies are intended to
benefit local communities, such as by maintaining the amenity and
environmental and heritage values that are important to residents and visitors
alike. In this context, the challenge is to reduce barriers to tourism activities
without undermining the values that contribute to the ‘attractiveness’ of
locations.
3.3
Opportunities for improvement
Participants suggested ways to remove the investment barriers created by landuse planning regulation and its administration, and to reduce the uncertainty,
time and costs to tourism businesses in navigating the planning system. The
suggested improvements can be grouped into four main categories:
(1) improving
strategic planning to provide clearer guidance on the
opportunities and constraints facing tourism-related land uses (section 3.3.1)
(2) removing specific barriers to worthwhile tourism activities in the planning
regulations, especially in key land-use zones (section 3.3.2)
(3) improving processes for assessing permit applications for tourism-related
activities (section 3.3.3)
(4) reducing the complexity of planning regulation more generally (section 3.3.4).
The Commission identified criteria for assessing the advantages and
disadvantages of these options (table 3.2).
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UNLOCKING VICTORIAN TOURISM
Table 3.2
Criteria for evaluating improvements to land-use
planning regulations
Criteria
Comment
Allows higher valued
use of land
Options should not prevent a higher valued use of land if there
are alternative ways to deal with infrastructure constraints and
spillover impacts of land uses.
Is simple
The change should reduce the complexity of the land-use
planning system rather than adding to an already extremely
complex set of objectives and requirements.
Increases certainty
Reflecting the value to business of an early ‘no’, the process
should progressively reduce uncertainty to business.
Is capable of council
implementation using
existing resources
Options ideally would simplify councils’ tasks. Previous studies,
including some by the Commission, found gaps in councils’
incentives and resources (staff and funding) to efficiently and
effectively administer planning regulation.
A key criterion for assessing options is whether the approach facilitates land-use
change to higher valued uses. An important caveat is that the private and social
values of land-use may differ, given spillovers from particular uses (such as
odours and noise from farming activities, or the loss of environmentally
significant native vegetation). These values may also differ as a result of the way
basic infrastructure and other services are provided to residents and businesses.
For equity reasons, some infrastructure services (for example, roads, emergency
services, healthcare and schools) are funded predominantly through rates and
taxes, as opposed to use charges. This approach weakens incentives to locate
housing and businesses close to existing infrastructure, resulting in greater
dispersal than is socially desirable.
Restrictions on activities such as rural subdivision and the development of more
intensive forms of land use (such as tourism accommodation) are one method of
dealing with the spillover effects of farming activities and incentives for dispersal.
However, such restrictions may prevent or slow the conversion of land from a
low-valued use (for example, farming in an area with poor soils or lack of water)
to a higher valued use (such as tourism accommodation or recreation facilities).
In evaluating options, the Commission thus considered whether incentives for
dispersal and spillover effects can be managed in other ways, to allow land uses
to shift to higher valued uses. It considered, for example, whether issues such as
noise or odours can be managed through existing industry codes (such as those
applying to intensive animal industries) or conditions on a council permit (such
as buffers to separate conflicting uses, or the installation of double-glazed
windows). Likewise, the Commission considered whether incentives for
LAND-USE PLANNING REGULATION
67
dispersal, especially of housing, can be managed through both the planning
permit process and pricing mechanisms such as development contributions.
The Commission also assessed whether the options enhance or reduce certainty
for investment. Previous work by the Commission highlighted the value that
business attaches to receiving a clear ‘no’ or ‘go’ in the early stages of
development approval processes. An early ‘no’ helps the business avoid spending
unnecessary time and effort on proposals unlikely to be permitted under any
circumstances; likewise, an early ‘go’ gives business the confidence to plan based
on an understanding that council will support a project subject to specific
conditions. The prohibition on certain tourism activities in some rural zones is
consistent with council providing an early ‘no’, but it assumes existing
agricultural land uses and tourism-related land uses are necessarily incompatible,
and spillover effects and dispersal cannot be managed in other ways. This
assumption leads to a waste of opportunities.
Consistent with this approach, the Commission also assessed whether options
provide increased certainty to business by better clarifying the policy outcomes
and objectives that state and local governments want to achieve. Such clarity
benefits applicants (including those in the tourism sector) by assisting the early
identification of development constraints, encouraging better targeting of council
and applicant resources at managing the impacts of a proposed development,
and facilitating fast-track assessment of relatively simple matters.
3.3.1
Improving strategic planning
Several participants suggested addressing the impediments to tourism investment
by improving the strategic framework that guides the administration of land-use
planning controls. The TTF (sub. 44) advocated strengthening strategic planning
by:



developing forecasts for visitor night growth and short-term accommodation
supply needs
encouraging councils to make more use of the more flexible Rural Activity
Zone
encouraging councils to improve their strategies for directing future growth
in their tourism industries (but in a way that does not limit development to
existing townships).
Similarly, VTIC (sub. 40) advocated:


68
developing a state-wide tourism development master plan that identifies key
areas predisposed to tourism infrastructure development
identifying ‘as-of-right’ use provisions for tourism developments in locations
predisposed to tourism infrastructure development.
UNLOCKING VICTORIAN TOURISM
The strategic framework currently involves a number of elements, including the
SPPF and public strategies such as:




10 Year Tourism and Events Industry Strategy (DIIRD 2006)
Concept Proposals for Tourism Development in Victoria (Tourism Victoria 2005)
Victoria’s Nature-based Tourism Strategy 2008–2012 (Tourism Victoria 2008a)
Regional Tourism Action Plan 2009–2012 (Tourism Victoria 2008b).
These strategies identified broad actions and priority projects in each major
region, as well as actions to address the barriers to development of the identified
projects. In particular, the Regional Tourism Action Plan identified priority private
and public sector projects for each tourism campaign region (table 3.3) and
performance targets (covering indicators such as visitation to each region and
visitor spend).
Table 3.3
Priority tourism infrastructure projects in regional
Victoria
Campaign region
Priority projects
Daylesford and
Macedon
Ranges
Accommodation based on spa, food, wine and wellbeing products.
Gippsland
Boating infrastructure and accommodation, including nature-based
tourism product linked to the walks on public land.
Goldfields
Hotel accommodation, conference and golf facilities, boutique
accommodation associated with heritage, culture, arts, and food and
wine product, and accommodation to support the Goldfields Track.
Grampians
Accommodation to support the proposed Grampians Peak Trail,
accommodation associated with food and wine product, and climbing
(Mount Arapiles).
Great Ocean
Road
Investment in a range of products, including high-end, large-scale and
boutique accommodation at key locations along the Great Ocean Road
to induce overnight visitation and capitalise on the natural assets of the
region; accommodation to support the Great Otway National Park and
Great Ocean Walk; development at existing harbours (for example,
Apollo Bay, Portarlington and Geelong Waterfront); convention
facilities; dive site attractions; and interpretative centres.
Mornington
Boat harbours and facilities, large-scale accommodation and conference
facility, Stony Point Passenger Car Ferry project and accommodation,
conferencing and marine infrastructure at Point Nepean.
(continued next page)
LAND-USE PLANNING REGULATION
69
Table 3.3
Priority tourism infrastructure projects in regional
Victoria (continued)
Campaign region
Priority projects
Murray
Large-scale accommodation and conference facility (Mildura, Wodonga
and Yarrawonga), nature-based visitor accommodation and a river trail,
and accommodation and other facilities at Port of Echuca, Swan Hill
Pioneer Settlement, Mildura and the Bonegilla Migrant Centre.
Phillip Island
Accommodation linked to golf and racetrack facilities and the Cowes to
Stony Point passenger–car ferry.
High Country
Redevelopment of the Mount Buffalo Chalet, nature-based
accommodation linked to the alpine trail, accommodation in the resorts
and surrounds, a High Altitude Training Centre at Falls Creek, and
tourism projects along rail trails.
Yarra Valley
and
Dandenongs
Accommodation and regional conference facility, development of the
Puffing Billy Railway, tourism projects along the Lilydale – Healesville
Rail Corridor, nature-based and adventure tourism and product,
accommodation associated with nature-based attractions and food and
wine products.
Source: Tourism Victoria 2008c.
Despite a number of state and regional tourism strategies being developed, the
outcomes desired by the State Government are not well connected to the local
policies and planning controls in local planning schemes. For example, the
Regional Tourism Action Plan does not appear to be referenced in local planning
schemes. As a result, councils are not obliged to consider the strategy’s objectives
when applying land-use controls such as zones or in assessing applications for
tourism investment.
The Commission’s view
Strategic planning is important for managing the development of tourism
attractions. It provides an avenue to clarify state and local government objectives
for the tourism industry, and resolve any major tensions between state and local
objectives, so these tensions are not left to applicants and councils to resolve
through the process of developing investment proposals and applying for
planning permission. Strategic planning also provides for reviewing land-use
controls such as zones and overlays, to ensure they reflect state and local
objectives but also impose the minimum control necessary to achieve these
objectives.
The draft report of the Commission’s inquiry into local government regulation
argued many of the perceived problems of land-use planning arose because state
70
UNLOCKING VICTORIAN TOURISM
government and council objectives for land-use and development often
fundamentally diverge (VCEC 2010a). The key divergence is the relative priority
accorded to protecting neighbourhood character and encouraging more intensive
residential development in Melbourne and the regions. In the current inquiry, a
similar divergence exists between the State Government and some councils:


One objective of the SPPF is ‘To encourage tourism development to
maximise the employment and long-term economic, social and cultural
benefits of developing the state as a competitive domestic and international
tourist destination’.
Some councils give higher priority to preserving the landscape and natural
values of peri-urban and coastal areas than to encouraging some types of
tourism development. Some local policies thus concentrate new
developments in existing towns, require applicants to demonstrate a tourism
need or gap in the market, and limit the scale of activities (such as caravan
parks).
The local government regulation inquiry found a failure of strategic planning (at
the State, regional and local levels) to resolve these tensions adequately results in
conflicting objectives being resolved case-by-case through the land-use planning
permit process, which can lead to uncertainty, inconsistency, lengthy delays and
high costs to both applicants and councils (VCEC 2010a, p. xxxii).
To address some of these issues, the State Government recently initiated
development of state-wide and regional strategic plans. The intent is to develop a
state-wide blueprint and corresponding regional land-use plans for managing
future population growth in regional Victoria. Regional groups, with
representation from Commonwealth, state and local governments, are to develop
regional land-use plans. The early focus is on the major regional centres
(Geelong, Ballarat and Bendigo) and coastal areas and it is expected that one of
the outcomes of this process will be to identify sites that are suitable for rezoning
to the more permissive Rural Activity Zone. The process of developing regional
strategic land-use plans should help to address the regulatory barriers to tourism
investment in regional areas if state and local objectives for tourism are better
aligned and significant areas of land are rezoned to more flexible zones such as
the Rural Activity Zone.
In its draft report, the Commission stated that the development of regional
strategic land-use plans could assist in addressing some barriers to tourism
development along side other important land-use issues. Focusing on tourism,
the Commission indicated that the process of developing regional strategic landuse plans should involve:

reviewing and clarifying state and local government objectives and desired
outcomes for tourism, such as facilitating tourism investment in particular
LAND-USE PLANNING REGULATION
71



areas and/or particular types of product (such as nature-based tourism)
subject to the project meeting environmental, social and other objectives
obtaining direct input from the tourism industry to identify suitable locations
for tourism investments and how to improve regulatory controls and permit
assessment processes (by, for example, using more flexible zones such as the
Rural Activity Zone)
identifying opportunities to simplify approval processes (for example, the
development of appropriate zones that provide ‘as-of-right’ development
rights for uses such as accommodation and restaurants, and standard
conditions for fast-tracking assessment (through a process such as the code
assess track as discussed below)
ensuring councils have the skills and resources to develop land-use plans,
review local policies, and identify and apply appropriate controls such as
zones and overlays.
A number of participants supported improved strategic planning as a means for
identifying and addressing specific barriers to tourism development in regional
Victoria. Some also noted that some councils have already commenced the
process of revising their planning schemes to update local policies and identify
opportunities to rezone land to allow tourism-related uses. For example,
Corangamite Shire Council recently undertook a tourism opportunities study and
has proposed a planning scheme amendment that would rezone 20 sites to
facilitate the development or expansion of a variety of tourism developments
(Corangamite Shire nd).
The VTIC supported revision of the State Government’s objectives for tourism,
and indicated that this should involve a review of existing plans, and an
assessment of the status of their implementation. This review would cover the
10-Year Tourism and Events Strategy, regional tourism strategies and the report on
Concept Proposals for Tourism Development in Victoria (sub. DR98, p. 2).
Colac Otway Shire stated:
As a member of the G21 Region Alliance Colac Otway Shire is represented on
the Steering Group for the development of the Regional Land Use Plan. This
will be an appropriate forum to explore the restrictive nature of land use
planning zones in relation to the development of the Tourism Industry as all
participating Shires [Colac Otway, and Surf Coast Shires, Borough of
Queenscliffe and City of Greater Geelong]. These are all areas where the
restrictive nature of the current State Planning Scheme holds back the
development of tourism investment that would provide direct and indirect
income and/or employment for local people. (sub. DR66, p. 3)
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UNLOCKING VICTORIAN TOURISM
The Victorian National Parks Association (VNPA) also supported a more
strategic approach as a means for addressing impediments to the development of
tourism facilities on private land adjacent to national parks. It stated:
VNPA supports the need for clarity within the State Planning Policy Framework
to facilitate tourism uses on private land. However, this needs to be done with
care as there may be perverse outcomes if one use is favoured over the other
without good reason - e.g. farming vs tourism.
We are aware of a number of examples whereby significant tourism
development adjacent to national parks has failed due to impediments in the
planning process.
A classic Victorian example is a proposed private development immediately
outside the entrance to Wilsons Promontory National Park. Despite years of
planning for the Wilsons Promontory Nature Retreat, and considerable private
investment in rehabilitating coastal wetlands on the property concerned,
planning regulations have stymied construction of the proposed tourist
accommodation. (sub. DR110, p. 9)
Some participants believe existing strategic frameworks are adequate for
addressing the challenges facing the Victorian tourism industry or cautioned
against providing preferential treatment for the tourism industry over other
forms of land use, such as agriculture. The Mornington Peninsula Shire, for
example, stated:
The VCEC [draft] report recommends a regional land-use planning approach in
Victoria, however for the Mornington Peninsula, at least, this already exists
through the current mechanisms (i.e. the State Planning Policy Framework
(SPPF) with reference to the Metropolitan Strategy, Melbourne 2030 and other
regional plans such as Coastal Action Plans, Regional Catchment Strategies and
the Planning Scheme itself which is required to undergo a four yearly review.
The strategic planning issues identified in initially identified in the 1970s,
particularly the demand pressures from increasing population growth in the
Melbourne region and the need to recognise the special long term values of the
Peninsula, are still highly relevant and the VCEC report presents no new
evidence that would justify a change in the current strategic planning approach
to tilt the balance towards modifying current planning provisions to allow
additional scope for tourist related investments “at any cost”. (sub. DR61, p. 6)
Notwithstanding this view, the conclusion that existing strategic frameworks are
failing to adequately address the challenges facing the Victorian tourism industry
is supported by several types of evidence. The evidence includes the lack of clear
connection between state objectives for tourism as set out in the SPPF and the
various tourism strategies, the findings of the review of rural planning (Rural
Planning Group 2009), the commencement of work on regional strategic
land-use plans, and submissions to this inquiry.
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73
Improving strategic planning is an important step in better aligning state and
local objectives for the development of the tourism industry, providing greater
certainty for business, and simplifying approval processes. Strategic planning can
also support the effective implementation of other reforms to land-use planning
arrangements. The Commission therefore considers that the Victorian
Government should review its objectives for tourism, as set out in state planning
policy and various tourism strategies, and incorporate its revised objectives and
strategies in planning provisions. A possible avenue for reviewing the State’s
objectives for tourism is through the review of Victoria’s planning provisions
flagged in the Victorian Liberal Nationals Coalition Plan for Planning. The policy
proposed a full review of Victoria’s planning zones to ensure they are
functioning correctly and their schedules are still relevant (Liberal National
Coalition 2010, p. 14).
A number of implementation issues will need to be addressed to deliver a more
effective strategic framework for tourism development in regional Victoria. Once
the State has clarified its objectives for the tourism industry, it will be necessary
to also review local planning policy objectives and planning schemes to ensure
they are consistent with the State objectives. While the State Government is
responsible for ensuring its objectives for the industry are clearly specified, local
councils have a responsibility to ensure that their planning schemes are capable
of delivering the desired outcomes. To deal with potential conflicts between state
and local objectives for tourism, the State Government will need to be clear
about the processes for intervening to ensure its objectives are reflected in
regional land-use plans.
Regional land-use plans also provide an opportunity to address barriers to
tourism developments in the planning system, such as inappropriate application
of rural zones, the permit requirements in the Farm, Rural Conservation, Rural
Activity and Green Wedge zones. To ensure that commercial considerations are
reflected in the application of zones, the process of developing regional land-use
plans should consult extensively with the tourism industry.
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Recommendation 3.1
That the Victorian Government revise its objectives for tourism
development and incorporate them in the State Planning Policy
Framework. The Victorian Government’s role is to clearly indicate the
outcomes it expects from the administration of land-use planning
regulation for the tourism industry, such as the facilitation of tourism
investment in particular areas of the State and/or particular types of
product (such as nature-based tourism). Local government is accountable
for ensuring that their planning schemes are capable of delivering the
State’s objectives for tourism through approaches that have regard to the
objectives of the communities they represent.
Recommendation 3.2
That the Victorian Government implement a strategic approach to land-use
planning for tourism, so as to:





address tourism issues in developing regional land-use plans
engage the tourism industry in the development of regional strategic
land-use plans
ensure local planning objectives are clarified and consistent with the
State’s objectives
revise the application of land-use controls and approval processes to
identify opportunities to proactively rezone land
indicate the circumstances and processes whereby the State will
intervene to ensure that local councils’ planning schemes are capable
of delivering the State’s objectives.
Improved strategic planning would assist in addressing some of the barriers to
adaptation, risk-taking and innovation by the tourism industry but by itself, it is
not likely to be sufficient to address these barriers.
The processes of reviewing and clarifying state planning objectives for tourism
and developing and applying regional land-use plans would take a considerable
period of time. Even then, such plans would need to be reviewed periodically to
ensure they remain current. The Commission has previously expressed the view
that many councils lack the financial resources and skilled staff to undertake
strategic planning. Reflecting these issues, the next section examines
complementary reforms of land-use planning regulation, which may allow for
improved outcomes in a shorter period than needed to improve strategic
planning.
LAND-USE PLANNING REGULATION
75
3.3.2
Removing regulatory barriers to tourism investment
As discussed, participants representing the State Government, councils and the
tourism industry consider changing land-use zones could address the major
planning impediments to investment in tourism activities. Two broad approaches
were suggested:
(1) Provide more flexibility for tourism activities in current zonings and local
policies.
(2) Create tourism-specific zonings and apply these to land considered to be
attractive to tourism investors.
More flexible land-use controls
As discussed, the provisions of the Farming, Rural Conservation and Green
Wedge zones, and the administration of land-use planning regulation more
generally, have impeded adaptation, risk-taking and innovation by the Victorian
tourism industry. Participants suggested that changes to the zones and to
planning processes for tourism activities are needed to address these barriers.
A number of specific changes could be made to the Farming, Rural Conservation
and Green Wedge zones:




76
Remove or raise the limits on the scale of tourism activities, such as the
limits on patron and guest numbers in restaurants, function centres and
residential accommodation. This could involve allowing B&Bs
accommodating more than six guests to be built without a permit, reducing
the minimum lot size requirements for various retail and accommodation
uses below the current minimum of 40 hectares, increasing the maximum
numbers of restaurant patrons and number of bedrooms/dwellings for
residential hotels/group accommodation.
Remove from the Farming, Rural Conservation and Green Wedge zones the
requirements to undertake tourism activities ‘in conjunction with’ specific
activities such as agriculture, rural industry, an outdoor recreation facility, or
a winery.
Allowing a wider range of tourism activities such as tourist accommodation,
function centres, recreation facilities and restaurants. This could include
allowing camping and caravan parks, hostels and backpackers’ lodges in
the Rural Conservation and Farming zones, as well as retail activities that
are associated with tourism developments.
Amending the Green Wedge and Rural Conservation Zones to remove or
modify the requirement that a permit be obtained to lease or licence a
portion of a lot for more than 10 years, for accommodation purposes.
UNLOCKING VICTORIAN TOURISM
In essence, these changes would provide more flexibility to landholders and
more discretion to councils about the scale and type of facilities permitted in
existing zones. The appropriate form of changes to existing zones would require
careful design and consideration of alternative ways of dealing with the specific
issues that some of the existing provisions are intended to address, such as urban
encroachment and land-use conflicts.
Participants argued a more flexible approach to Rural and Green Wedge zones
could provide the following benefits:




Barriers to tourism activities would be removed, allowing land to move into
higher valued uses, while ensuring spillovers and infrastructure issues are
addressed case-by-case through the planning approvals process.
New investment could occur in activities such as nature-based tourism and
in the redevelopment and expansion of existing tourism businesses in areas
adjacent to national parks, on coastal and rural land, and in low-density areas
close to Melbourne (such as the Yarra Valley and Mornington Peninsula).
The planning process would be streamlined, no longer requiring a
demonstrated nexus between primary production (such as agriculture) and
the proposed tourism activities.
Councils and applicants would avoid the expense and time of attempting to
rezone land as more flexible zones such as the Rural Activity Zone.
Introducing more flexibility into the Farming, Rural Conservation and Green
Wedge zones would raise issues, however, including the following:




Some councils may need to review their local policies to ensure they
complement the modified zones by removing requirements, such as that
tourism proposals demonstrate a need, or that new development occur in
town centres.
The changes may affect the ability of local communities to achieve objectives
such as ‘protecting’ agricultural land and ‘preserving landscape and
environmental values’, although tourism development can also help achieve
these objectives when, for example, it involves work to repair or enhance the
quality of local environmental assets.
Councils and applicants would need greater guidance on how proposals
should seek to achieve the purposes of the revised zones, including how to
deal with proposals that could lead to residential encroachment or major
commercial and industrial activities.
The number of permit applications and the workload of councils could
increase (to the extent that the current provisions have deterred investors
from trying to obtain approvals).
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77
Introducing more flexibility in the rural zones could have wider benefits,
particularly for the agricultural sector. A recent report on rural land use identified
impediments to farm diversification or vertical integration into the processing
and retailing of primary produce. According to the report:
At Clause 17.05–2 [of the SPPF], it is stated that ‘Planning should support
effective agricultural production and processing infrastructure’, however beyond
that there is no reference to processing: the definition of ‘Agriculture’ does not
refer to associated processing of goods.
The zones that apply to rural land are generally too restrictive to allow the range
of uses that are increasingly associated with farming and agriculture. For
example, in the Farming (FZ), Rural Activity (RAZ) and Rural Conservation
Zones (RCZ), any use that is defined as ‘industry’ and cannot be defined as ‘rural
industry’ (according to the VPP land use definitions) is prohibited. Primary
produce sales in rural zones are restricted to unprocessed products sourced from
the same property or adjacent land. (Rural Planning Group 2009, p. 27)
More flexibility in the zones could, however, also have adverse consequences,
such as increased potential for conflict between agricultural and tourism land
uses. The (Rural Planning Group 2009) report on improving rural planning
noted the risk that land use conflicts pose to an increasingly capital-intensive
agricultural sector. The report noted:
In order to protect significant investment in agriculture, planning needs to
provide some certainty that the policy intention is for the land to be used for
agriculture in the long term. (Rural Planning Group 2009, p. 26)
It is possible to address these risks to agriculture by a combination of strategic
planning and council discretion in assessing applications to develop tourism
facilities in rural zones. The development of regional strategic land-use plans
provides an opportunity to better target how strict controls on non-agricultural
land use are applied to those areas where investment in large-scale agricultural
activities is occurring. In addition, many issues with tourism development in
agricultural areas—such as noise and odours from farming activities, the risks of
housing dispersal, and infrastructure constraints—can be addressed through the
normal planning process.
Dedicated tourism zones
To deal with some disadvantages of changing current land-use zones, some
participants advocated introducing special zones for tourism. The State
Government could introduce a new zone for tourism activities in the Victorian
Planning Provisions, or councils could rezone land to a more flexible zone such
as the Rural Activity Zone or a Special Use Zone. The main argument for this
approach is that tourism-related activities are somehow different from other
forms of economic activity. Participants argued tourism developments raise more
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planning issues than do many other types of proposed development. While data
on planning approvals tend to support this view, it can be hard to identify
developments that are predominantly tourism related and thus to apply standard
definitions of tourism activities (such as those advocated by the TTF,
sub. 44, p. 24). Applicants and councils would face uncertainty about whether a
proposed activity fits the purposes of a tourism zone.
Further disadvantages are that this approach may:





prevent changes in the use of land to higher valued uses, which are not
tourism-related
add to the complexity of planning by increasing the number of zones and
definitions
increase council time and costs in undertaking the strategic work necessary
to identify locations where the new zone should apply
require councils to judge the commercial viability of particular sites when
they are not well placed to do so
result in little or no reduction in the regulatory barriers to tourism
investment, if councils are unwilling to identify and apply the new zones.
The Commission’s view
In the draft report, the Commission indicated that it supported more flexibility in
the Farming, Rural Conservation and Green Wedge zones to allow a wider
variety of larger scale tourism activities. It therefore proposed that the Victorian
Government provide more flexibility for tourism investment in the Farming
Zone, the Rural Conservation Zone and the Green Wedge Zones by:



clarifying the purpose of the zones
removing the requirement that tourism activities are undertaken ‘in
conjunction with’ agricultural activities
allowing a wider range and scale of activities in the zone.
The Commission argued that such changes to the zones would increase
opportunities for tourism investment, enable existing tourism and agricultural
businesses to expand and diversify, and allows business to avoid the costs of
applying to rezone land.
Participants’ responses to these proposals were mixed. Broadly, the tourism
industry supported the proposed changes. The VTIC, for instance, submitted:
[the] recommendation to remove the requirement that tourism activities are
undertaken ‘in conjunction with’ agricultural activities is strongly endorsed by
VTIC as a relatively straightforward reform which will have a broad and
immediate application, particularly amongst small and medium tourism
enterprises. (sub. DR98, p. 4)
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Likewise, Fosters Group submitted:
… it is recognised that to support existing and potential tourist ventures in the
Green Wedge Zones, greater flexibility is required and we support this. This
should include a stronger recognition that the Green Wedge Zone is in fact a
multi-purpose zone, and not just an agriculture based zone which in current
practice is how it is being treated. (sub. DR97, p. 2)
Some councils supported increased flexibility in the Farming and Rural
Conservation Zones. For example, Colac Otway Shire stated it:
… supports these recommendations because we believe that the current
provisions of Farming Zone and the Rural Conservation Zone in particular, are
overly restrictive in limiting tourist related ventures that would not have a
significant impact on agricultural activities. (sub. DR66, p. 3)
Mansfield Shire Council also broadly supported the draft recommendations to
increase flexibility in planning zones but noted that while removing the
requirement that tourism-related activities are undertaken ‘in conjunction with
agricultural activities’ would provide more flexibility for tourism development,
there also needs to be surety for established agricultural activities or development
of appropriate agricultural activities (sub. DR92, p. 3).
Councils in Green Wedge areas expressed concerns that changes to existing landuse zones would lead to adverse impacts including over-development of sensitive
locations (some with an already high level of tourism activities), increased risks of
residential development in the guise of tourism development, and increased
complaints about and restrictions on farming practices.
The Interface Councils indicated it supports ‘the current State Planning
Framework regarding what is allowed in the Green Wedge zones.’ It argued that
the major issue with planning for tourism is instead the:
… excessive procedures and involvement of multiple departments [which] has
made the timeframes and costs associated with processing the applications of
some tourist facilities too lengthy and complex, making it a deterrent for some
organisations to undertake expansion or development opportunities.
(sub. DR111, p. 5)
The Mornington Peninsula Shire opposed changes to the relevant zones,
particularly the Green Wedge Zone:
The land-use planning system in Victoria, and in particular the State and local
values of the Mornington Peninsula, would be irreversibly compromised if
changes were made as suggested by the VCEC [draft] report as they do not
balance market demand with the capacity of the natural resource base, which is
fundamental to maintaining the attraction and values of areas such as the
Mornington Peninsula. (sub. DR67, pp. 1-2)
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The Shire also argued that the changes proposed by the Commission could result
in ‘pressures to develop “tourism facilities” which are then converted to more
permanent occupancy or at best holiday home accommodation, which provides
no real tourism benefit’ (sub. DR67, p. 7).
Several other participants opposed changes to existing land use zones. The VFF,
for example, stated:
The VFF is concerned that a broad scale move to provide more flexibility within
the Farming, Rural Conservation and Green Wedge zone could have a
detrimental impact to agriculture and the natural amenity of a region. These
zones have been enacted to ensure that there is a level of protection for
agriculture among other valued qualities as listed in the Purpose of the Zone.
(sub. DR105, p. 7)
Likewise, the Green Wedge Protection Group opposed changes to the Green
Wedge Zone provisions, arguing that they already provide sufficient scope for
the development of accommodation such as B&Bs (sub. DR96, p. 2).
Given the challenges facing the Victorian tourism industry and the consequent
need to take-risks, adapt and innovative, the Commission considers the current
suite of zones goes too far in presuming stand-alone and larger tourism
developments are incompatible with local environmental concerns and existing
agricultural land-use. Local community concerns about land-use conflicts, risks
of over-development in sensitive locations and residential encroachment through
the permit process and strategic land use planning can be addressed through
statutory and strategic planning processes.
The changes to zones proposed by the Commission are intended to complement
the strategic approach to regional development being pursued through the
development of strategic land-use plans. Given the reluctance of some
communities to approve new tourism investment outside towns, regional
strategic land-use plans would need to identify areas where tourism uses are to be
facilitated or discouraged. The DPCD would thus need to work through the
detail of recasting zones, with the involvement of councils, Tourism Victoria and
representatives of the agricultural and tourism sectors.
The effect of altering the zones would be to allow a greater scale and range of
uses in the Farming, Rural Conservation and Green Wedge zones, but subject to
receiving planning permission from a council. Instead of prohibiting certain
types of development or larger scale developments outright, the changes would
enable councils to consider applications on their merits, taking into account local
issues and risks such as over-development of sensitive locations, potential for
residential conversion of tourism accommodation, and potential effects on
existing farming practices.
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On balance, the Commission considers the Farming, Rural Conservation and
Green Wedge zones should be modified to:



expand the purpose of the zones, to recognise the potential compatibility of
tourism uses with a zone’s agricultural and environmental purposes
remove the requirement that tourism activities are undertaken ‘in
conjunction with’ agricultural and other activities
allow a wider range of larger scale activities in the zones.
To facilitate the introduction of modified zones, DPCD would also need to
develop and provide guidance and other support for councils and applicants to
understand and efficiently and effectively implement the modified zones. Such
guidance would complement the strategic land-use plans discussed in the
previous section, and could cover the information required in an application, as
well as model conditions to deal with the issues of potential land-use conflicts,
risks of over-development in sensitive locations and residential encroachment.
Recommendation 3.3
That by 1 July 2012, the Victorian Government provide more flexibility for
tourism investment in the Farming Zone, the Rural Conservation Zone and
the Green Wedge Zones by:



expanding the purpose of the zones to recognise the potential
compatibility of tourism uses with a zone’s agricultural and
environmental purposes
removing the requirement that tourism activities are undertaken ‘in
conjunction with’ agricultural and other activities
allowing a wider range and scale of activities in the zone.
Recommendation 3.4
That the Department of Planning and Community Development, in giving
effect to recommendation 3.3, encourage a consistent approach to
administering the new zones, by providing guidance and other support for
councils to effectively and consistently implement the modified zones. This
guidance may include the information required in an application, as well as
model conditions.
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3.3.3
Improving the administration of land-use planning
regulation
Participants also expressed concerns that the administration of land-use planning
regulation is having a disproportionately large effect on the tourism industry. The
broad problems include: uncertainty about how councils will assess proposals,
the reluctance of some council staff to engage in pre-application discussions, the
inconsistent approaches of councils, the potential for objectors to delay and
unduly influence decisions, the costs and delays resulting from appeals to VCAT,
the time and costs of dealing with multiple referral and other agencies, and
uncertainty about when the Government will call in an application. Participants
argued these specific problems cause unnecessary uncertainty, time delays and
compliance costs for tourism businesses.
Reflecting these broader concerns, participants suggested ways to improve
planning processes (table 3.4). The following sections consider three types of
improvement to land-use planning:



state government assessment of major tourism projects
systemic improvements to planning processes
improved policy analysis in the planning system.
Table 3.4
Suggested improvements to council planning
processes
Improvement option
Streamlining the regulatory processes under which local councils assess and approve
development applications (for example, following the example of harmonisation of
hearings for planning and liquor licensing)
Making greater use of deemed-to-comply (that is, if a proposal meets the planning
requirements, then a permit should be issued immediately)
Improving processes for dealing with objections and appeals without merit
Simplifying referral processes by allowing local government to make decisions based on
strategic objectives rather than on the narrow requirements imposed by referral agencies
Improving the transparency and timeliness of applications and reducing the administration
and related business ‘search’ costs
Establishing a central authority to coordinate investment approvals (a Tourism Investment
Authority)
Amending the Minister for Planning’s call in powers to provide a $5 million investment
threshold to trigger the ‘calling in’ of tourism infrastructure development applications
Requiring local government and VCAT to provide regular progress reports to applicants on
the status of applications
Source: Various submissions.
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83
State government assessment of major projects
To address the broader concerns about the performance of the planning system,
participants proposed greater state government involvement in the assessment of
major tourism proposals. The VTIC (sub. 40) and the TTF (sub. 44), for
example, both proposed a $5 million investment threshold to trigger the ‘calling
in’ of tourism infrastructure development applications.
The need for state government involvement in land-use planning arises from the
nature of some major projects and from the local focus of councils. The
economic benefits of major projects are often felt across a wide area, which may
not coincide with council boundaries. Locally elected councillors have weak
incentives to consistently make decisions that are in the interests of the State but
locally unpopular. Such situations may need a higher level of government to
intervene in the decision-making.
In arguing for state intervention in the assessment of major tourism projects,
participants also noted:


the limited resources and capacity of councils to deal with complex
applications
the complexity of the task of assessing the benefits and impacts of some
tourism proposals, the number of referral bodies, and the high incidence of
appeals to VCAT.
Current legislation and programs have some capacity to deal with the challenges
posed by large and complex tourism developments. In the past state agencies
such as Tourism Victoria and the DPCD have played a project facilitation role,
or the Minister for Planning has called in projects (for example, the Minister has
broad powers to call in a permit application that is before a council or VCAT—
section 3.1.3). Major projects of state significance may also be assessed under the
Environmental Effects Act 1978, although assessments under this Act are only
usually undertaken for only very large and complex projects with major potential
environmental or other impacts.
The Commission’s draft report outlined options to facilitate efficient approvals
for complex tourism developments. The options considered were:


modifying the existing call-in process to encourage early intervention for
projects of state significance and improve transparency and accountability
establishing a tailored process for tourism projects (such as creating a body
such as a Development Assessment Committee2 to assess or advise the
A development assessment committee is a body (comprising an independent chair, two State Government
representatives and two local government representatives) established to consider and determine projects of
2
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Planning Minister on applications meeting certain characteristics such as a
threshold dollar value).
In the draft report, the Commission indicated that it did not support
development of a new approval process for large and complex tourism
developments. Instead, the Commission supported relying on existing processes
to deal with all types of large and complex projects, such as the use of the
existing call-in powers. The draft report noted that previous Commission
research, including in its inquiry into local government regulation, highlighted the
importance of a development’s location and scale in determining the timeframe
and complexity of planning assessment processes, rather than the type of
development (VCEC 2010a). The draft report also noted that the capacity to
facilitate tourism projects in a consistent, efficient and transparent manner
depends on the capacity to identify such projects. Yet in practice, many major
projects involve a mix of accommodation, retail and other uses that cater to local
people as well as tourists. It is difficult, therefore, to define whether many
developments are predominantly for tourism.
In response to the draft report, the VTIC argued that relying on the call-in
process is an inadequate response because Ministerial call-in usually occurs only
after problems in the permit assessment process. It argued ‘it would be better for
the call in to take place much earlier in the process, so that the applicant does not
first have to experience what are later deemed to be unreasonable or unnecessary
delays’ (sub. DR98, p. 4). The VTIC also supported forming a Ministerial
Advisory Group of tourism specialists from industry and government that could
assist the Minister in the event of a tourism project being called in
(sub. DR98, p. 5).
Notwithstanding that the Minister could call in a permit application that is before
a council, the Commission accepts the early exercise of call-in powers is unlikely
if there are no clear criteria or guidelines on early intervention. As noted, the
current call-in criteria are very broad. They state the Minister may call in an
application that:



raises major policy issues and might have a substantial effect on the
achievement of planning objectives
has been unreasonably delayed to the disadvantage of the applicant
would be facilitated by its referral to the Minister (for example, when the
development must also be considered by the Minister under another Act or
regulation).
state significance. Such committees were established to make planning decisions in Melbourne’s major activity
centres, but similar committees could be created to determine tourism-related planning applications.
LAND-USE PLANNING REGULATION
85
On balance, the Commission supports continuing a broadly applicable call in
process, but with clearer guidance on when the process will be used. The
Commission has previously commented on the administration of call in powers
in Victoria and the broad nature of the criteria for whether the Minister exercises
this power. The Commission’s report on liveability, for example, commented:
… reasons cited for calling in a decision often provide limited insight into
specific actions that local governments can implement to improve their
processes—the reasons cited are often couched in broad terms with reference to
policy statements and election commitments. The Commission … suggests that
more information is required to address this issue.
Uncertainty about the use of call in powers is best addressed by developing
more specific criteria for calling in projects. The current criteria are extremely
broad, referring to whether a project raises major policy issues or whether it
might have a substantial effect on the achievement of planning objectives.
Additional criteria could cover the scale of the project, the number of state
government referral bodies involved, and whether the relevant municipality has
implemented a best practice planning permit assessment model. (VCEC 2008, p.
149)
During the recent state election, the Coalition also indicated that it would review
the process of Ministerial intervention in planning applications to, amongst other
things, establish guidelines ‘for the use of intervention on the basis of state
significance’ (Ted Baillieu MP 2010, p. 2).
Finally, implementing the Commission’s recommendations is likely to take some
time. During the transition, Tourism Victoria, in conjunction with DPCD, could
consider giving increased priority to assisting tourism businesses experiencing
difficulty and delay in working through planning processes.
3.3.4
Systemic improvements to planning processes
Participants’ concerns about the administration of land-use planning regulation
were raised in recent reviews, including:




Cutting the Red Tape in Planning: 15 Recommended Actions for a Better Victorian
Planning System (Carbines 2006)
the review of the Planning and Environment Act (DPCD 2009)
the Commission’s inquiry into local government regulation (VCEC 2010c)
the permit process improvement project being implemented by the
(Municipal Association of Victoria 2010).
These and other reviews of the land-use planning system have identified many
improvement options, including some listed in table 3.4. The Commission’s
inquiry into local government regulation considered additional changes to land-
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use planning regulation to improve the overall efficiency and effectiveness of the
regulations. Options examined in the draft inquiry report included:







improving performance reporting by extending the current reporting regime
to cover the planning scheme amendment process and the State
Government’s role in land-use planning (such as authorising and approving
planning scheme amendments, and using the ‘call in’ process)
the State Government, in collaboration with councils, developing and
reporting on the implementation of a best practice permit assessment model
developing a regime to permit private assessors to assess relatively simple
planning permits
making better use of pre-application meetings and pre-lodgement
certification to speed up the assessment of planning permits
encouraging councils to adopt a consistent and high level of delegation of
decision-making on planning permits
encouraging more councils and applicants to use online tools for lodging
planning permits
streamlining the referral of planning applications for technical assessment by
state agencies (VCEC 2010c).
According to the local government inquiry draft report, implementing these
planning process improvements could yield large cost savings to Victorian
businesses (including the tourism industry), with additional gains possible from
adopting a more strategic approach to land-use planning at the State, regional
and local levels (VCEC 2010b).
The Government is considering the Commission’s final recommendations on
these issues. The Commission considers that the recommendations made in this
report are entirely consistent with the final recommendations of the inquiry into
local government regulation.
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