Reforming Infrastructure Contributions
June 2015
Reform improves the delivery
of infrastructure for growing
communities
Infrastructure contributions help fund essential
works and services for new communities including
roads, parks, local sports and community facilities.
With Victoria’s population projected to grow rapidly
over the coming years, reform is needed to ensure the
planning and delivery of infrastructure is equitable,
efficient and cost effective.
The Planning and Environment Amendment
(Infrastructure Contributions) Bill 2015 introduces a
new system for levying infrastructure contributions.
Reforms introduced through the Bill will give
developers and councils certainty about the level of
contributions required, clarity around the types of
infrastructure the contributions will fund, and reduce
costly delays for both developers and homebuyers.
Central to the operation of the new system is an
infrastructure contributions plan. These plans enable
the collection of an infrastructure levy and provide the
justification and basis for collecting that levy.
The infrastructure levy comprises two parts:
1. a standard levy, and
2. a supplementary levy (where appropriate)
Setting standard levies and providing clarity on the
types of infrastructure the levies can fund will reduce
delays in development application approvals and make
it easier for regional growth areas to prepare
infrastructure contributions plans.
History of the review into contributions system
2011
May 2011
Sept 2012
Jan 2013
May 2013
June 2015
Stakeholder Reference Group established
to develop options for reform
Position paper, A New Victorian
Development Contributions System – A
Preferred Way Forward released
Standard Development Contributions
Advisory Committee (SDCAC) established
SDCAC Report 1 released
SDCAC Report 2 released
Planning and Environment Amendment
(Infrastructure Contributions) Bill 2015
introduced
THE WAY FORWARD
The details of the new system, including levy rates,
indexation mechanisms, and criteria for where the new
rates apply, will be finalised in consultation with
stakeholders including developers and councils.
Reforming infrastructure contributions
The Department of Environment, Land, Water &
Planning will work with an Implementation Reference
Group to finalise details of the new system before it is
implemented.
The new system is proposed to be introduced in early
2016 for greenfield growth areas and strategic
development areas.
FREQUENTLY ASKED QUESTIONS
What are infrastructure contributions?
When land is developed for urban purposes new or
upgraded infrastructure is needed. Infrastructure
contributions are payments or works-in-kind provided
by developers towards the provision of new or
upgraded infrastructure.
Why do we need a new system?
Local government and the development industry have
expressed concern that the existing system has
become too onerous, costly and difficult to administer.
In 2012, the Standard Development Contributions
Advisory Committee was appointed to review the
system. The Committee recommended major reforms
to the existing system which have formed the basis for
the new legislation.
What kind of infrastructure will be funded
through contributions?
Infrastructure contributions fund local infrastructure
that new and growing communities need, such as local
roads, community centres, kindergartens, maternal
and child health facilities, local parks and local sporting
facilities. In some instances, infrastructure
contributions can also fund state infrastructure such as
public transport improvements.
How does the new system work?
It is based on an infrastructure levy that is made up of
a standard levy and a supplementary levy.
The standard levies are preset levy rates for funding
local infrastructure. The proposal is to introduce
standard rates for residential, retail and
commercial/industrial development for both
metropolitan and non-metropolitan locations.
The supplementary levy is an optional levy for use
when the standard levy cannot adequately fund the
required local infrastructure or where additional
infrastructure is required to unlock the growth capacity
of the area. The supplementary levy may also be used
to fund state infrastructure in growth areas where the
Growth Areas Infrastructure Contributions Scheme
does not apply.
The mechanism for applying the infrastructure levy is
the infrastructure contributions plan. This plan must
form part of the planning scheme to become
operational.
What are the benefits of the new system?
The new system will provide certainty around the levy
amounts payable, enabling developers and local
government to budget and carry out infrastructure
planning. It will reduce the cost of preparing and
approving an infrastructure contributions plan, save
time with a more simple and streamlined process, and
new reporting requirements will ensure funds
collected and expended through an infrastructure
contributions plan are subject to greater
accountability.
Where will the new system apply?
The new system will apply to greenfield growth areas
and strategic development areas where there are no
existing development contributions plans.
Greenfield growth areas refers to greenfield land on
the fringe of existing metropolitan and nonmetropolitan urban areas which are in, or planned to
be in, the Urban Growth Zone. In regional Victoria this
will include areas that are identified for growth in
regional growth plans.
Strategic development areas refers to locations within
existing urban areas that are planned or become
available for significant growth and change. Generally,
these areas will be identified in Plan Melbourne (for
example National Employment Clusters, Urban
Renewal Areas) or in a regional growth plan.
FURTHER INFORMATION
For further information please contact the Victorian
Government Contact Centre on 1300 366 356.