Future directions for native vegetation in Victoria – Review of Victoria’s native vegetation permitted clearing regulations Consultation paper
Published by the Victorian Government
Department of Sustainability and Environment
Melbourne, September 2012.
© The State of Victoria Department of Sustainability and Environment 2012
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Cover image: DSE, Black Swamp, northeast Victoria

1. Minister’s foreword
2. Purpose of this consultation paper
3. Native vegetation and the role for government
3.1. Benefits of native vegetation
3.2. The role for government
4. Victoria’s native vegetation
4.1. Status of Victoria’s native vegetation
4.2. Challenges facing Victoria’s native vegetation
5. Victoria’s native vegetation policy framework 8
5.1. Objectives for native vegetation management
5.2. Government activities to manage native vegetation
5.3. Performance of the Victoria’s Native Vegetation Management – A Framework for Action 10
5.4. Native vegetation permitted clearing regulations 12
8
9
6. Review of the permitted clearing regulations
6.1. Background to the review of the permitted clearing regulations
6.2. Principles guiding the review of the permitted clearing regulations
6.3. Issues identified with the permitted clearing regulations
14
14
14
14
7. Reform directions for permitted clearing regulations
7.1. Reforms aim to build on the current system
7.2. Summary of proposed reforms
7.3. Priority reforms
7.4. Supporting reforms
Appendix 1 – Previous reviews of Victoria’s native vegetation policy
21
21
21
21
28
32
6
6
7
4
4
4
Glossary 34
2
3
Future directions for native vegetation in Victoria Consultation paper 1

1
Native vegetation is important for Victoria’s biodiversity.
It provides habitat for plants and animals and a range of ecosystem services essential for human wellbeing.
Managing native vegetation effectively and sustainably is important. Regulations dating back to 1989 have worked to prevent broad scale clearing of native vegetation in
Victoria, and have limited the impact of land use change on biodiversity.
There has been a succession of reviews and reports into the native vegetation arrangements during the past decade, which have highlighted a range of concerns and areas for improvement.
It is timely that the government undertakes a comprehensive examination on how we can improve the system in order to identify opportunities for better and more targeted environmental outcomes, with reduced regulatory burden and lower costs for landholders and the community.
The review examines the outcomes of earlier investigations.
For example, a 2009 Victorian Competition and Efficiency
Commission report, A Sustainable Future for Victoria:
Getting Environmental Regulation Right , sought greater clarity on the use of the ‘no net loss’ principle in the assessment process. We want to measure whether such recommendations were effectively implemented and seek community input to drive further improvements.
We are determined to improve the government’s performance as an environmental regulator, while enhancing the integrity of the permitted clearing system. This will mean less red tape, more transparent decision making and increased certainty for landholders. Most importantly, it will mean stronger environmental outcomes.
We are now seeking your feedback on ways to streamline and improve native vegetation arrangements to provide greater certainty and clarity.
To assist in providing feedback, this consultation paper sets out proposed future directions for native vegetation policy in Victoria.
I encourage you to read this consultation paper and share your thoughts and views.
The Hon Ryan Smith
Minister for Environment and Climate Change
2 Future directions for native vegetation in Victoria Consultation paper

2
Victoria’s Native Vegetation Management – A Framework for Action (NVMF) was introduced in 2002. It stands as the principal policy for managing Victoria’s native vegetation, including the removal of native vegetation.
The rules governing the removal of native vegetation in
Victoria sit within Victoria’s planning system. These rules are known as the ‘permitted clearing regulations’. The NVMF is incorporated into Victoria’s planning schemes to inform the application of the permitted clearing regulations.
Since the introduction of the NVMF in 2002, Victoria’s environment, economy and demography have changed, and science and technology have advanced. In response to these changes, and to the findings of previous reviews, the Victorian Government considered it timely to undertake a review of Victoria’s native vegetation policy.
The overarching objective of native vegetation policy, and the activities undertaken to achieve it, were considered as context for this review. However, they were not the main focus of attention. The two matters at the centre of the review were:
• the objective of the permitted clearing regulations
• the efficiency and effectiveness of the permitted clearing regulations in achieving this objective.
This consultation paper outlines:
• the benefits of native vegetation and why government intervention is required to ensure these benefits are delivered (Section 3)
• the status of native vegetation in Victoria, and current native vegetation policy objectives and settings (Section
4 and 5)
• issues identified with the design and implementation of the permitted clearing regulations (Section 6)
• proposed future directions for Victoria’s permitted clearing regulations, both in relation to their objective and the policy settings required to achieve it (Section 7).
The purpose of this consultation paper is to give stakeholders and the community an opportunity to provide feedback about:
• issues identified with the current permitted clearing regulations
• the four priority reforms, and five supporting reforms, proposed to address these issues
• issues related to implementing the proposed reforms.
Written submissions can be provided by email or post by
19 October 2012 to:
Native Vegetation Review
Department of Sustainability and Environment
PO Box 500
East Melbourne VIC 3002
Email: nativevegetation.review@dse.vic.gov.au
This feedback will form an important input to the Victorian
Government’s decision making regarding the future permitted clearing regulations. The government will consider feedback before deciding its preferred approach. Based on this preferred approach, a series of draft documents detailing the technical and implementation changes to the permitted clearing regulations will be released for public comment. These documents will include:
• proposed amendments to the Victoria Planning Provisions, including information requirements and decision guidelines
• proposed approach to measuring the biodiversity value of native vegetation
• proposed amendments to the rules for the offset market.
Future directions for native vegetation in Victoria Consultation paper 3

3
Biodiversity conservation is an essential component of responsible environmental and natural resource management. It is fundamental to quality of life and supports our economy and productivity, both now and in the future. A keystone of Victoria’s biodiversity is its native vegetation. Native vegetation comprises plants that are indigenous to Victoria, including trees, shrubs, herbs and grasses.
Native vegetation provides habitat for native animals.
It delivers a range of ecosystem services that make the land more productive and that contribute to human wellbeing. The benefits provided by native vegetation can be separated into the following categories.
Use values
Use values involve people physically using or experiencing native vegetation and the attributes it provides, and deriving value from this use. These use values comprise both direct use values and indirect use values.
• Direct use values.
These values include benefits to agricultural production, such as enriching soils, shade for animals, pollination of plants, and native vegetation as the provider of goods such as honey, timber and pasture for grazing. Other direct uses of native vegetation include recreation and cultural uses.
• Indirect use values.
These values include functional benefits derived from relying on natural ecosystems for life support functions including providing clean air, water and other resources, along with the conservation of biodiversity. Other benefits include resilience to climate change, and reduced susceptibility to disease and extreme weather events.
Non-use values
There are a range of benefits that flow from native vegetation that are enjoyed without contact with the native vegetation.
These are known as non-use values and include existence values, option values and bequest values.
• Existence values.
This means the satisfaction that the community derives simply from knowing that native vegetation and biodiversity exist.
• Option values.
These are benefits derived from retaining the option to use native vegetation in the future without necessarily planning to do so. These benefits include the value of waiting until a time in the future when better information is available to inform decisions about the use of native vegetation.
• Bequest values.
These values derive from the knowledge that maintaining native vegetation and biodiversity will benefit future generations.
Native vegetation is considered to be a public good.
This is because:
• many of the benefits of native vegetation set out in Section
3.1 – particularly indirect use and non-use values – flow to the community as a whole, rather than to particular individuals (for example, clean air).
• some benefits provided by native vegetation can be used simultaneously by many people without one person’s use impacting another’s (for example, knowing species exist).
4 Future directions for native vegetation in Victoria Consultation paper

Open access to these common benefits, or public goods, means they are produced at a lower level than the community desires. Government intervention is generally required for public goods to be provided at a level that meets community needs and expectations, that is, the socially optimal level.
Some landholders receive direct private benefit from the native vegetation on their properties, such as improved soil quality or shade for livestock. However, they are likely to weigh up the benefits of retaining and managing native vegetation against other private benefits from alternative land uses, such as agriculture or urban development. Yet, as native vegetation provides benefits to the community more broadly, decisions landholders make regarding native vegetation also affect other community members. Land use decisions made by individual landholders can result in either costs or benefits to the wider community.
Removing native vegetation comes at a cost to the community. Without government intervention, landholders who remove native vegetation will not bear the full cost of the impact their decisions have on biodiversity. Instead, these costs are borne by the community in the form of reduced environmental benefits. This is called a negative externality.
The biodiversity benefits delivered by native vegetation are central to the continued functioning of ecosystems.
For this reason, maintaining biodiversity is the key objective for government intervention in relation to native vegetation.
It is acknowledged that native vegetation provides other benefits, such as reduced salinity and recreation. These benefits may be linked indirectly to biodiversity, but ensuring their provision requires different government interventions than those focussed solely on the biodiversity value of native vegetation.
In many cases, government agencies other than DSE are responsible for delivering the non-biodiversity benefits of native vegetation. This distinction is addressed in more detail in Section 7.3.
Photo: DSE, Lamb-tails, Victorian mallee
Future directions for native vegetation in Victoria Consultation paper 5

4
Victoria has a broad range of natural habitats including alpine, tall forests, fertile plains and deserts. The state is home to a diverse array of flora and fauna. Victoria’s native vegetation is considered in relation to both its
‘quality’ and ‘extent’:
• ‘extent’ is the area of land covered by native vegetation
• ‘quality’ relates to how close native vegetation is to its pre-European natural condition.
Victoria is the most cleared state in Australia. It is estimated that today, Victoria retains 46 per cent of the original extent of native vegetation. Most clearing has occurred in accessible and relatively fertile areas. On private land, only 21 per cent of the original extent of native vegetation remains.
1 The native vegetation remaining on private land supports 30 per cent of Victoria’s threatened species populations.
2 Furthermore
60 per cent of remaining native vegetation on private land is of a threatened vegetation type.
3
Native vegetation removal has significantly affected
Victoria’s native plants and animals. Since European settlement in Victoria, 61 species of plants and animals have become extinct. A further 1,904 species are listed as rare or threatened on DSE’s Threatened Species Advisory
Lists.
4 Extinction and decline in species is due in part to loss of habitat caused by native vegetation removal.
Native vegetation removal has also affected vegetation quality in Victoria. Much of the vegetation that is protected within National Parks and reserves is in good condition, with high species diversity. However, native vegetation on private land is generally of lower quality – it is mostly in small fragmented areas and it faces ongoing decline from land use activities, weeds and pest animals.
Table 1 summarises the extent of native vegetation in Victoria.
Figure 1 shows the extent of native vegetation that remains on public and private land.
Table 1: Victoria’s land area and native vegetation extent
Total area (ha)
Area of native vegetation (ha)
Public land
Private land
Total land
8,634,665
14,063,955
22,698,620
7,578,690
2,901,659
10,480,349
Source: VEAC, Remnant Native Vegetation Investigation: Discussion Paper, May 2010, p. 33 and p. 45.
Percentage of original extent of native vegetation remaining
88 %
21 %
46 %
1 VEAC,
May 2010, p. 33 and p.45.
2 Department of Sustainability and Environment, Native Vegetation:
Sustaining a Living Landscape , 2006, p.4.
3 Department of Sustainability and Environment, Mapping of Ecological
Vegetation Classes, 2005.
6 Future directions for native vegetation in Victoria Consultation paper
4 Department of Sustainability and Environment, Advisory List of Threatened
Vertebrate Fauna in Victoria – 2007 , p.6; Department of Sustainability and
Environment, Advisory List of Threatened Invertebrate Fauna in Victoria –
2009 , p.6; Department of Sustainability and Environment, Advisory List of
Rare or Threatened Plants in Victoria – 2005 , p.5.

Figure 1: Native vegetation on public and private land
Native vegetation on private land
Native vegetation on public land
0 15 30 60 90 120 km
Source: NV2005_extent
Competition for land use continues to put pressure on
Victoria’s native vegetation. Over the last ten years, both the extent and quality of native vegetation have been reduced.
Extent and quality will continue to be affected by:
• population growth and expansion of cities and towns, including growth of peri-urban and rural living. Victoria’s population increased significantly between 2002 and
2011, at an average annual rate of 1.6 per cent.
5 During this period, Melbourne’s population grew on average by
68,165 people, or 1.8 per cent per year – 57 per cent of this growth occurred at the city’s edge.
6
• changes in agricultural practices and intensification of agriculture, including using larger machinery and converting land use from grazing to cropping. For example, between
2001 and 2010 land used for cropping in Victoria increased by 945,000 hectares – this means that the proportion of farming land used for cropping increased from 23 per cent to 31 per cent.
7
• uses of native vegetation for primary production, such as grazing native grasses.
• the need to manage bushfire risk to life and property.
To reduce the risk of bushfires, new rules have increased the area of native vegetation that can be cleared around existing dwellings without a permit.
8
• other human and environmental factors including invasion by weeds and pest animals, pollution, climate change and extreme natural events.
5 Australian Bureau of Statistics, Regional Population Growth, Australia,
2010-11 ,Table 2: estimated resident population, statistical local areas,
Victoria’, data cube: Excel spreadsheet, cat no. 3218.0.
6 Australian Bureau of Statistics, Regional Population Growth, Australia,
2010-11 ,Table 2: estimated resident population, statistical local areas,
Victoria’, data cube: Excel spreadsheet, cat no. 3218.0.
7 Australian Bureau of Statistics, Agricultural Commodities, Australia, 2009-10 ,
‘Table 1: agricultural commodities, national and state – 2009-10’, data cube: Excel spreadsheet, cat no. 7121.0: 2012; Australian Bureau of
Statistics, Agricultural Commodities, Australia, 2000-01 , cat. no. 7121.0.
8 Department of Sustainability and Environment, Fire Operation Plans –
Approved, 2012, <http://www.dse.vic.gov.au/fire-and-other-emergencies/ planned-burning-an-introduction/fire-operations-plans-approved>, viewed
July 2012.
Future directions for native vegetation in Victoria Consultation paper 7

5
The current policy settings for Victoria’s native vegetation are set out in Victoria’s Native Vegetation Management –
A Framework for Action (NVMF). The NVMF was adopted in
2002 as Victoria’s principal policy document for managing native vegetation.
The objectives set out in the Framework rely on the concepts of ‘gains’ and ‘losses’ in the quality and extent of native vegetation. A loss occurs when extent is lost through clearing or when the condition of an area of vegetation declines in quality. A gain occurs when the quality of an area of existing native vegetation is improved, or when a degraded site is revegetated.
The NVMF sets out the overarching objective (the ‘net gain’ objective) of Victoria’s native vegetation policy:
9
The NVMF states that the objective of ‘net gain’ can be achieved when:
• overall gains in native vegetation are greater than overall losses
• individual losses are avoided where possible.
10
The objective for the permitted clearing regulations sits beneath the overarching objective for native vegetation management. The objective for the permitted clearing regulations is:
11
The application of the permitted clearing regulations is intended to have a neutral impact on native vegetation. This means that permitted clearing is not expected to contribute either gains or losses towards the ‘net gain’ objective.
The ‘net gain’ objective recognises the importance of both the quality and extent of native vegetation. Together, quality and extent are used as a measure of the benefits that native vegetation can provide. Changes to the quality and extent of native vegetation produce gains and losses. To meet the
‘net gain’ objective, government and the community must create gains in native vegetation that exceed the losses.
This ensures that while individual landholders are required to compensate for their impacts, the community as a whole bears the cost of achieving ‘net gains’.
Photo: DSE, Blue devil, Victorian Volcanic Plains grassland
8 Future directions for native vegetation in Victoria Consultation paper
9 Department of Natural Resources and Environment, Victoria’s Native
Vegetation Management: A Framework for Action, 2002 , p. 5.
10 Department of Natural Resources and Environment, Victoria’s Native
Vegetation Management: A Framework for Action , 2002, p. 5
11 Native Vegetation Policy and Planning Fact Sheet 2010 , DSE

Figure 2: Components that need to sum to greater than zero to achieve net gain in native vegetation
Required offsets
Permitted clearing
Natural recovery
Duty of care to manage weeds and threats
Natural disturbance
Human-induced disturbance causing spread of weeds and threats
Investment and volunteer activities
Exemptions from permitted clearing regulations and allowed use
Illegal clearing
‘Net gain’ takes account of the following:
• gains from improvements in the quality, extent and/or security of native vegetation achieved through government investment and voluntary measures
• no net loss of native vegetation from permitted clearing and other neutral activities (such as activities that mimic natural processes)
• losses in the quality and extent of native vegetation arising from entitled uses, from unmanaged threats, from illegal clearing, or from native vegetation removal that does not require a permit.
Figure 2 shows the components of gains and losses that need to add up to greater than zero to achieve ‘net gain.’
To measure amounts and changes in native vegetation DSE developed a metric called Habitat Hectares. This metric multiplies the quality and extent of native vegetation to give a measure of its value. Habitat Hectares enables the relative importance of quality and extent to be assessed. The Habitat
Hectares metric also allows different combinations of native vegetation quality and extent to be compared to each other.
Government undertakes a range of interventions designed to improve or control the loss of the quality and extent of native vegetation. These interventions contribute to the ‘net gain’ objective for native vegetation. Government interventions implemented over the last decade are summarised in Table 2.
Future directions for native vegetation in Victoria Consultation paper 9

Table 2: Summary of policies and programs related to native vegetation
Types of policies and programs
Investing in biodiversity outcomes on private land
Licensing and regulation of uses of native vegetation
Duty of care requirements
Native vegetation permitted clearing regulations
Parks and reserves
Coordinating and facilitating community programs
Providing information
Research
Managing native vegetation for public safety
Description
Government promotes improvements in biodiversity through various investment programs. This includes tender programs that use market-based approaches to procure activities that improve native vegetation.
Government protects against the decline of Victoria’s biodiversity by licensing and regulating the use of native vegetation and activities that impact on biodiversity assets. Such activities include sustainable timber harvesting and licensing grazing on public land.
These regulations oblige landholders to avoid causing or contributing to land degradation which may damage the land of another landholder. This includes managing weeds and pests, and protecting soil and water quality.
By applying the permitted clearing regulations, government regulates native vegetation removal through the planning system.
Government adds to and manages the parks and reserves system as part of the national approach to creating a Comprehensive Adequate and Representative
Reserve System (CARRS).
Government plays a coordinating and facilitating role, assisting community groups to undertake activities that protect, manage and improve Victoria’s native vegetation.
Education and information campaigns help to ensure that Victorians are aware of their rights and obligations in relation to the natural environment. Information is communicated about how to manage native vegetation for biodiversity outcomes.
Research and pilot programs allow government to find ways to achieve its environmental objectives more efficiently and effectively.
Through planned burning, the government manages the risk to life and property from bushfires. This burning aims to mimic where possible the natural regeneration processes of fire.
The Victorian Government implements the policies summarised in Table 2 recognising the need to balance a range of environmental, social and economic considerations.
There are also a number of constraints and competing forces that make it challenging to find this balance.
Native vegetation policies must be determined alongside the government’s objectives for community development, economic and employment growth, affordable housing, other environmental policies, and public safety.
There is often uncertainty about how the environment will be affected by particular actions or threats. While in these instances a highly precautionary approach may safeguard against the worst case scenario, the costs of this approach need to be considered. For an intervention to be worthwhile its benefits cannot be outweighed by the costs it imposes.
Furthermore, in certain circumstances the scope of regulation of activities on private land is limited by existing use rights.
These constraints will continue to have a bearing on
Victoria’s native vegetation policy. They are reflected in the reforms proposed in this consultation paper (see Section 7).
The focus of this review is the permitted clearing regulations.
This review has not addressed the full scope of Victoria’s native vegetation policy as set out in the NVMF. However, it is important to consider the ‘net gain’ objective as context for this review. It is the overarching guide for native vegetation policy, and is linked to the permitted clearing regulations and their objective. Work has previously been undertaken by DSE to estimate whether the ‘net gain’ objective of native vegetation policy had been met.
In 2008, DSE released the Native Vegetation Net Gain
Accounting – First Approximation Report.
The report used a combination of mapped and modelled data, imagery, and assumptions to estimate gains and losses in native vegetation quality and extent from various causes across different land tenures. The report’s findings are set out in Box 1.
10 Future directions for native vegetation in Victoria Consultation paper

Box 1: Findings of the Native Vegetation Net Gain Accounting – First Approximation Report
The report estimated that in one year a net loss of 4,090 Habitat Hectares of native vegetation (a measure of the quality and extent of native vegetation) had occurred across Victoria.
12 The components that contributed to these gains and losses are set out in Figure 3.
It should be noted that permitted clearing is not included in Figure 3. The report assumed that the permitted clearing regulations had a neutral impact on native vegetation.
Figure 3: Estimated components of gains and losses in native vegetation quality and extent (measured in
Habitat Hectares per year)
Gains
Additions to the reserve system
Recorded management in conservation reserves
No active management in conservation reserves
Breakdown of gains and losses
15000
10000
Voluntary management and increases in extent
Government incentives and new covenants
Unrecorded management in conservation reserves
5000
0
Net loss =
4090 HHa/yr
-5000
Net result
15000
10000
5000
0
-5000
-10000
Entitled land uses and exemptions
Losses
-15000
Remotely-sensed reductions in extent
+/- 20% uncertainty
-10000
-15000
Note: figures in this report are based on broad assumptions and are subject to significant uncertainty.
Source: Department of Sustainability and Environment, Native Vegetation Net Gain Accounting – First Approximation Report, 2008.
These findings indicate that significant net loss is still occurring across the landscape. Net loss is occurring despite government intervention, including regulation and investment. Net loss is particularly apparent on private land due to losses from entitled uses and exemptions from the permitted clearing regulations.
12
The Native Vegetation Net Gain Accounting – First
Approximation Report findings were based on available data and some broad assumptions, aimed at providing an estimation of gains and losses of native vegetation in a representative year. The report identified some gaps in data which prevented a more comprehensive understanding of the performance of the NVMF being assessed. Since the First Approximation Report was compiled there have been changes in the drivers of gains and losses in native vegetation in Victoria, and some new data on native vegetation and management activities is available.
Work is currently underway to enable a Second
Approximation Report to be prepared. This report will provide an update on changes in the quality and extent of native vegetation since 2008. This will enable an assessment of the extent to which the ‘net gain’ goal is being achieved and will be used by the Victorian Government to inform future biodiversity policy. The Second Approximation Report is due to be released in 2013.
12 Department of Sustainability and Environment, Native Vegetation Net
Gain Accounting: First Approximation Report , 2008.
Future directions for native vegetation in Victoria Consultation paper 11

The requirement for a permit to remove native vegetation was first introduced to Victoria’s planning schemes in 1989. The regulations that guided implementation of this requirement became known as the ‘permitted clearing regulations.’ In 2002, Victoria’s Native Vegetation
Management – A Framework for Action (NVMF) introduced the following policy features in relation to permitted clearing:
• methods for measuring predicted losses and gains from native vegetation removal and from offsetting
• conservation significance categories that are used to classify native vegetation according to its ecological importance
• the mitigation hierarchy approach to regulating the removal of native vegetation. This approach states that native vegetation removal:
– should first be avoided
– if it cannot be avoided, it should be minimised
– if a permit is granted for the removal of native vegetation, it should be offset
• formalised, rules-based offsetting requirements designed to ensure that losses are offset with equivalent, or commensurate, gains.
In 2003, the NVMF was incorporated into Victoria’s planning system to enable the application of the permitted clearing regulations. Following the introduction of the NVMF, a market for offsets emerged. The offset market allowed for third party native vegetation offset providers to trade with those requiring offsets. In 2006, the Victorian Government introduced the BushBroker scheme – a marketplace that facilitated trade between buyers and sellers of native vegetation offsets.
In some cases permits to remove native vegetation are not obtained through the planning system. In these cases other avenues for assessment and approval of the removal of native vegetation are used. These other assessment processes apply the objectives of the NVMF through formal agreements and administrative arrangements. These include the consideration of vegetation loss for projects requiring approval under the Mineral Resources (Sustainable
Development) Act 1990 and the Environment Effects Act
1978 , and for certain impacts on public land. Similarly, the
Code of Practice for Timber Production and the Code of
Practice for Bushfire Management on Public Land have been designed with the aim that timber harvesting and bushfire management on public land have a neutral impact on biodiversity over time. In addition, the biodiversity impacts of development in Melbourne’s newest growth areas have been addressed through a process separate to, but consistent with, the permitted clearing regulations, known as the
Melbourne Strategic Assessment.
The current permitted clearing regulations in the planning system comprise a four stage process. The permitted clearing process for landholders and government is set out in Figure 4.
Figure 4: The current process for permitted clearing
Pre-application
What permit applicants do
• Clarify their
obligations
• Estimate costs
• Contact local
government
or DSE
Submitting an application
• Provide required
information on
proposed clearing
• Demonstrate
avoidance/
minimisation of
impacts
• Lodge application
and pay fee
Assessment of applications
• Submit further
information if
required
What government does • Provide
information on:
- obligations
- decision criteria
- native vegetation
value
- processes
• Check whether
all required
information has
been provided
• Request further
information if
required
Complying with conditions
• Comply with
permit conditions
• If required, secure
offset on site
or purchase
suitable offset
• Consider
applications
• Make decision to
grant or refuse
a permit
• Determine permit
conditions
• Support an
offset market
• Monitor and
enforce
obligations and
conditions
12 Future directions for native vegetation in Victoria Consultation paper

Photo: DSE, Tree ferns, Strzelecki Ranges
In recent years permits granted for native vegetation removal have ranged from clearing of one tree to clearing multiple hectares of remnant native vegetation. Generally, when clearing is permitted an offset is required. Offsets create gains in native vegetation through:
• prior management actions that have maintained or improved the quality of native vegetation since the permitted clearing regulations were introduced in 1989
• increasing the security of native vegetation so that it cannot be cleared in the future, including registering an agreement on the land title, or transferring the land to a park or reserve
• maintaining the quality of native vegetation by foregoing entitled uses and preventing the spread of environmental weeds
• improving the quality and extent of native vegetation, including reducing weeds and pest animals, or revegetating cleared areas.
Table 3 sets out for the period 2008-09 to 2010-11:
• the total area of native vegetation approved for removal
14 by DSE
• the corresponding Habitat Hectares of that area
• the gain required to offset this clearing in Habitat Hectares.
As offset requirements are measured in habitat hectares, the size of an offset will be dependant on the expected quality gain over the duration of the offset. In order to deliver the gain required to offset the loss from the clearing, generally three to six times the area of land being cleared needs to be secured as offsets.
13
Table 3: Permitted clearing of native vegetation approved by DSE (remnant patches) 14
Native vegetation clearing
(hectares)
2008-09 319
2009-10 296
2010-11 159
Native vegetation clearing
(Habitat Hectares)
163
128
76
Required gain from offsets
(Habitat Hectares)
260
203
116
Source: Department of Sustainability and Environment, Native Vegetation Tracking: Overview 2008-09 Fact Sheet, June 2010; Department of Sustainability and Environment, Native Vegetation Tracking: Overview 2009-10 Fact Sheet, June 2011; Department of Sustainability and
Environment Native Vegetation Tracking System, 2010-11.
13 This is based on Department of Sustainability and Environment estimates and the range of Habitat Hectares gain per hectare for offsets sold through BushBroker.
14 Table 3 includes only DSE referred permitted clearing data. It does not include information on permits to remove native vegetation processed by local government only. Approximately one-third of applications to remove native vegetation are referred to DSE, and local governments assess the remaining two-thirds. Permits are referred to DSE on the basis of the size
(area or number of trees) and the endangered status of the vegetation class of the proposed clearing. Table 3 also does not include information on the removal of scattered trees.
Future directions for native vegetation in Victoria Consultation paper 13

6
This review of the permitted clearing regulations is informed by policy documents and guidance material, consultation across government, data analysis, expert input, findings of previous relevant reviews, and stakeholder submissions to previous reviews. In recent years, a number of studies and public inquiries have examined the application and outcomes of the permitted clearing regulations. The key findings from these reviews are listed in Appendix 1.
Some recommendations from these reviews have been adopted, leading to some progress in improving the implementation of the permitted clearing regulations.
However, many recommendations could not be addressed without considering the underlying policy that informs the permitted clearing regulations. This review seeks to resolve outstanding issues identified in earlier reviews. The issues identified in this review of the permitted clearing regulations are generally consistent with those of the previous reviews.
To guide the review of the efficiency and effectiveness of the native vegetation permitted clearing regulations, five principles were identified as criteria against which to assess the current system’s performance. These principles are set out in Table 4. The principles are adapted from best practice approaches to regulation and environmental management.
The current permitted clearing regulations operate as an approvals-based system. The system seeks to avoid irreparable harm. When clearing does occur the system aims to deliver appropriate compensation for the environment through offsets. This conceptual approach is consistent with the review principles set out in Table 4.
In particular, the following broad features of the permitted clearing regulatory architecture are designed to enable an efficient and practical approach to regulating permitted clearing:
• the objective for permitted clearing (‘no net loss’) seeks to ensure that native vegetation removal has a neutral impact on biodiversity
• landholders are compelled to factor into their decision making the environmental value of native vegetation
• the offset rules aim to deliver gains in native vegetation that are commensurate, or equivalent, to the losses caused by permitted clearing
• the systems adopted for measuring and classifying native vegetation allow for the relative value of native vegetation to be considered.
The broad approach of the permitted clearing regulations is considered effective in addressing the negative externalities created by native vegetation removal. However, aspects of both the design and implementation of the regulations are not consistent with the review principles. These shortcomings reduce both the efficiency and effectiveness of the regulations in achieving their objective. In particular:
• the objective of the permitted clearing regulations is unclear and not well understood
• the permitted clearing regulations do not adequately focus on biodiversity outcomes
• the permitted clearing regulations have not been designed to adequately incorporate risk and proportionality
• the offset market is subject to high transaction costs, volatile prices and an inability to meet demand for some offsets
• there is opportunity for greater use of strategic planning mechanisms
• compliance and enforcement processes need to be improved.
These findings are discussed in more detail below.
14 Future directions for native vegetation in Victoria Consultation paper

Table 4: Principles for regulating permitted clearing
Principle Description
Principle 1:
Regulation should deliver long term biodiversity outcomes
Regulation should appropriately value native vegetation based on the duration over which biodiversity benefits are likely to accrue. This means biodiversity benefits can be optimised for present and future generations, as well as ensuring their security.
Irreversible harm should be avoided where possible.
Principle 2:
Information should be based on sound science, which is regularly updated, and readily available to support decision making
Principle 3:
Obligations should be proportionate to biodiversity impacts and rest with the party responsible
Information about obligations and impacts should be accurate and based on up-to-date scientific understanding. Policy should be designed to ensure that changes in scientific understanding can be incorporated as they occur. This information needs to be readily available for transparency and to support decision making.
Consistent with the concept of polluter pays, landholders who remove native vegetation should be responsible for the impacts of the removal on biodiversity. Biodiversity is a public good. Therefore, those that use biodiversity assets should be required to compensate society for any negative outcomes they cause. Regulations based on the polluter pays principle ensure the full impact of a polluter’s activities is taken into account in their decision making.
The obligations imposed should be proportionate to the impacts caused. This approach ensures that obligations imposed are efficient and equitable. The approach prevents administrative costs excessively eroding the benefits of regulation.
Principle 4:
Roles, responsibilities and obligations of regulations should be clearly defined
The objectives of government regulations should be clear and proponents should have a clear understanding of their obligations under different circumstances.
Where multiple parts of government play a role in administering a regulatory regime, the responsibilities of different government agencies and different tiers of government should be clearly specified.
Principle 5:
Processes should be efficient, transparent and predictable
Regulatory processes should be timely and consistent, and decisions should be made in a transparent manner. Permit applicants should be able to understand the basis for decisions made and have opportunities for recourse.
An efficient, transparent and predictable regulatory system promotes compliance and provides proponents with a level of certainty that supports their planning and investment decisions.
The objective of the permitted clearing regulations is unclear and not well understood
There is a lack of clarity surrounding the objectives of permitted clearing regulations among landholders, decision makers, and more broadly, the community. This lack of clarity can be summarised in three parts:
• the conflation of the overarching objective for native vegetation management (‘net gain’) and the permitted clearing objective (‘no net loss’)
• misalignment between how native vegetation is defined in the objective (by its quality and extent) and what the policy settings address (which is broader and includes diversity of types of vegetation and species)
• a lack of clarity on how biodiversity and other objectives for native vegetation management interact in the planning system.
Future directions for native vegetation in Victoria Consultation paper 15

Photo: DSE, Foothill forest, West Gippsland
Confusion about the purpose and scope of the permitted clearing objective was a consistent theme of submissions to recent inquiries and reviews which have considered the permitted clearing regulations.
15 ‘Net gain’ is the overarching objective for all Victorian policy related to native vegetation.
‘Net gain’ is often conflated with the ‘no net loss’ objective for permitted clearing regulations. This confusion in part relates to Victoria’s Native Vegetation Management – A
Framework for Action (NVMF) linking clearing and offsetting with contributing to ‘net gain’, while stating ‘losses associated with clearing are mitigated by commensurate gains through appropriate offsets’.
16 Previously, the Victorian
Government has sought to clarify the objective for permitted clearing. Most recently, in 2010, the government stated that
‘net gain’ takes account of three types of contributions, one of which is ‘no net loss of native vegetation for permitted clearing’.
17 The confusion of the ‘no net loss’ objective with
‘net gain’ has led to concerns among landholders that the regulations require them to compensate for more than the vegetation they remove.
There is also misalignment between:
• how native vegetation is defined in the objective for permitted clearing regulations, and
• the policy and practices that implement the regulations.
The ‘no net loss’ objective focuses on ensuring that there is
‘no net loss’ in the quality and extent of native vegetation.
Quality and extent of native vegetation are key determinants of the value of vegetation. However, quality and extent do not comprehensively represent the components that make native vegetation valuable for biodiversity. The implementation of the permitted clearing regulations recognises this by incorporating vegetation type and species diversity into decision making. The focus on quality and extent has made it difficult for landholders to understand the biodiversity value of certain vegetation. For example, scattered trees in degraded landscapes are considered low quality compared to remnant native vegetation, but can have high importance as habitat for threatened species.
Confusion in how biodiversity and other objectives in the planning system are applied has also contributed to inconsistent decision making and reduced certainty for landholders. The biodiversity objective for permitted clearing is often considered alongside a number of other objectives in the planning system, including the implications of vegetation removal on visual amenity, cultural heritage, land protection and water quality. Furthermore some of these considerations are specific to particular local planning scheme objectives, while others are outlined in state government policy. This approach is intended to enable integrated decision making about vegetation removal. However, in practice there can be confusion about how these objectives should be considered in decision making, and when determining permit conditions.
The lack of clarity and demarcation of responsibilities for these varied native vegetation objectives has created unnecessary complexity and costs for landholders, and reduced accountability for decision makers.
15 See submissions to Victorian Competition and Efficiency Commission inquiry: VCEC, Inquiry into Environmental Regulation in Victoria , 2009.
16 Department of Natural Resources and Environment, Victoria’s Native
Vegetation Management: A Framework for Action , 2002, p. 22.
17 Department of Sustainability and Environment, Native Vegetation: Policy and Planning Fact Sheet , 2010.
16 Future directions for native vegetation in Victoria Consultation paper

These shortcomings have contributed to the objective for permitted clearing being unclear and not well understood.
Landholders, decision makers and the community are often confused about what the objective is trying to achieve, why obligations are imposed, and the basis on which decisions are made. In particular, uncertainty regarding obligations makes it difficult for landholders to make efficient land use decisions before they incur the costs associated with entering into the permit process.
The permitted clearing regulations do not adequately focus on biodiversity outcomes
The characteristics of native vegetation are highly variable, and there are limitations to our scientific understanding of how different types of vegetation contribute to the functioning of complex ecosystems. Consequently, current biodiversity regulation typically takes a precautionary approach by placing a strong focus on retaining the current balance of different vegetation types.
This balance is achieved in two ways by the current permitted clearing regulations:
• a requirement to avoid and minimise native vegetation removal on every site where clearing is proposed
• a requirement that offsets are generally of the same vegetation or habitat type, and in the same area as the clearing.
While this focus is designed to maintain the current stock and mix of vegetation types, it can come at the cost of foregoing other opportunities to provide improved biodiversity outcomes.
The requirement to avoid and minimise native vegetation removal on every site without considering the long term biodiversity value of the vegetation can lead to low value vegetation being retained at the expense of securing higher priority vegetation offsets in perpetuity. The vegetation that is retained may have low biodiversity value because it has a high risk of decline in the future. This risk of decline could be due to how the site is managed (for example, agriculture uses around trees), or due to processes outside of the landholder’s control (such as fragmentation or natural events).
In addition, there is an inherent weakness in the requirement for landholders to state how they have adjusted their plans to avoid and minimise the removal of native vegetation on their sites. In many cases it is difficult for decision makers to know what a landholder’s original plans would have been, and they must exercise their own discretion as to whether a landholder has adequately avoided and/or minimised native vegetation removal.
Both requirements and incentives to avoid and minimise native vegetation removal should target the protection of high value native vegetation that is viable in the long term.
Restricting offsets to vegetation with matching characteristics to the vegetation that is cleared, including location and vegetation or habitat type, can come at the expense of securing an offset of higher strategic priority.
Close matching of clearing and offset characteristics may be desirable in certain cases, such as when the vegetation removed provides important habitat for a threatened species.
However, in other cases this restriction means opportunities are foregone to secure offsets that are more strategically valuable or have better long term viability – such as protecting vegetation in an important habitat corridor, or in a well connected rather than fragmented location.
Resolving these trade-offs is often complex. It requires judgments about the relative importance of different native vegetation attributes and how they should be assessed in the permit process. Scientific understanding of how ecosystems function has improved since the NVMF was introduced. Advances in modelling tools, particularly in landscape scale prioritisation, support outcomes focused decision making about the relative importance of different native vegetation attributes. It is expected that science and technology will continue to progress, facilitating further improvements in outcomes focused decision making.
The permitted clearing regulations have not been designed to adequately incorporate risk and proportionality
The permitted clearing regulations can impose a range of costs on landholders. These include:
• the costs of obtaining information to support decision making, such as site assessments or species surveys
• costs incurred due to the permitted clearing and offset compliance process delaying planned activities
• opportunity costs of the foregone benefits from alternative land uses when it is required that vegetation be retained
• the costs of securing offsets which comply with the offsetting rules.
Best practice states that administrative and compliance burden should be proportionate to the objectives of the regulation.
18 Compliance costs should reflect the incentives they aim to create for landholders – that is, the value of native vegetation that is being removed. Administrative costs should be minimised.
The administrative and compliance costs of the permitted clearing regulations have been identified previously as an area for reform (see Appendix 1). More recently, the importance of incorporating risk into decision making, and focusing on outcomes, was endorsed by the Council of
Australian Governments as a guiding principle for reforming environmental regulation.
19
There is significant variation in the environmental impact of applications to remove native vegetation. Approximately two-thirds of permit applications are assessed by local government, and these are generally for lower impact clearing.
The remaining third is referred to DSE. As Figure 5 shows, in
2010-11, 10 per cent of DSE referred applications for a permit to remove native vegetation accounted for about 76 per cent of the clearing impact, measured in Habitat Hectares.
20
18 Government of Victoria, Victorian Guide to Regulation , Department of
Treasury and Finance, Melbourne, 2011, p.28.
19 Council of Australian Governments, Meeting Communiqué, Canberra,
April 13 2012.
20 Department of Sustainability and Environment Native Vegetation Tracking
System 2010-11.
Future directions for native vegetation in Victoria Consultation paper 17

Figure 5: DSE referred and approved permitted clearing permit applications, 2010-11 21
40
30
24
20
60
50
100
90
80
70
10
0
0
10 per cent of clearing applications are responsible for approximately
76 per cent of the permitted clearing in Habitat Hectares
10 20 30 40 50 60
Proportion of permit applications (%)
70 80 90 100
Source: Native Vegetation Tracking System Data, 2010-11 21
The vast majority of landholders who remove native vegetation are undertaking actions that have small impacts on native vegetation. For these landholders, the administrative costs associated with the permitting process and securing an offset can be disproportionate to the size of their impacts. This can lead to both inefficient and inequitable outcomes for landholders, and can discourage them from complying with the permit process.
Some issues arising from inadequate consideration of risk and proportionality in the current permitted clearing regulations include:
• unclear information requirements resulting in unnecessary information, which may be costly to provide, being requested from landholders
• application of the requirement to avoid and minimise removal of native vegetation in a one-size-fits-all manner, irrespective of the scale and type of clearing proposed
• limited availability of offsets in the market to meet restrictive offset requirements, and offset prices not reflecting biodiversity value (see below for further discussion).
Some actions taken to address these issues include developing guidance material to support consistent decision making, establishing over-the-counter offset schemes, and more recently, DSE developing risk-based pathways for assessing permit applications. These initiatives have gone some way to improving the operation of the permitted clearing regulations. However, many of these shortcomings are likely to persist without a greater focus on incorporating risk and proportionality in both the design and implementation of the permitted clearing regulations.
The offset market is subject to high transaction costs, volatile prices and an inability to meet demand for some offsets
Establishing a native vegetation offset market has been an important development for the application of the permitted clearing regulations. The market has connected landholders who clear native vegetation with landholders who are willing to be paid to manage and protect native vegetation on their land, and allowed them to trade.
21 Figure 5 includes only DSE referred permitted clearing data. It does not include information on permits to remove native vegetation processed by local government only. About one-third of applications to remove native vegetation are referred to DSE, and local governments assess the remaining two-thirds. Permits are referred to DSE on the basis of the size
(area or number of trees) and the endangered status of the vegetation class of the proposed clearing.
18 Future directions for native vegetation in Victoria Consultation paper

However, issues identified with the offset market include high and volatile prices, and the inability to meet demand for certain offsets. Although not directly comparable due to different motivations for participation among providers and the specificity required when offsetting, offset prices are considerably higher than the cost of similar permanent environmental outcomes purchased through tender programs.
22 Volatility in offset prices has also been observed in the market. For example, since 2006, BushBroker offset average prices for bioregions ranged from $34,000 to
$370,000 per Habitat Hectare.
23
Low levels of supply and high prices for certain kinds of offsets are reasonable if they reflect:
• the relative scarcity of the vegetation type required
• the alternative land uses where potential offsets exist
• the costs associated with required management activities.
However current offset price variation and volatility cannot be attributed to environmental and alternative land use factors alone. Features of the offset market identified as limiting competition in the market, and affecting its ability to function efficiently, include:
• costly information requirements, such as site assessments and consultant reports, that create high barriers to entry for offset suppliers
• low levels of information flow between buyers and sellers of offsets, resulting in price uncertainty and difficulty in matching buyers to sellers
• limited flexibility for offsetting lower impact clearings, reducing availability of offsets and contributing to price volatility
• limited mechanisms for sellers to segment their offsets to meet demand for small offsets.
These limiting features of the offset market have created costs without delivering environmental benefits.
Examples include:
• offset sellers being able to charge excessively high prices due to lack of competition in the market
• buyers having to buy larger offsets than required by their permit conditions
• allowing offsets to be secured which may not provide adequate gains due to lack of available compliant offsets
• delay costs from the time taken to locate compliant offsets.
The ability to secure a reasonably priced offset should not be seen as an objective in and of itself. However, it is important that the cost, and difficulty of finding an offset, is in proportion to the environmental impact of the related clearing. There is an opportunity to redesign aspects of the offset market to address these concerns.
Photo: DSE, Grass trees, central Victoria
Strategic planning mechanisms offer opportunities for improved environmental and land use outcomes
In some circumstances, the site level permit system may not result in optimal land use or environmental outcomes for Victoria. This would apply when there is significant risk surrounding the ongoing viability of a particular species, or when areas are undergoing high levels of land use change. In these situations, a site-based approach may be inadequate for efficiently balancing environmental and competing land use objectives. Instead, a strategic approach may be more appropriate.
Strategic planning mechanisms offer an opportunity to consider some specific issues beyond the site scale.
Strategic approaches include Native Vegetation Precinct
Plans and the Melbourne Strategic Assessment.
There are opportunities for more targeted use of existing strategic planning mechanisms to enable local and state governments to work together to improve the interaction of local planning schemes and permitted clearing regulations.
Such opportunities include the use of zoning and overlays that set the intention for what activities and development can occur on land.
When publicly available information such as zoning and overlays does not reflect obligations under permitted clearing regulations, landholders face reduced certainty.
22 <http://www.dse.vic.gov.au/conservation-and-environment/biodiversity/ rural-landscapes/bushtender>, viewed July 2012.
23 Department of Sustainability and Environment, BushBroker Price History,
<www.dse.vic.gov.au/conservation-and-environment/biodiversity/rurallandscapes/bushbroker/price-history>, viewed July 2012.
Future directions for native vegetation in Victoria Consultation paper 19

Photo: DSE, Red gums, northern Victoria
Compliance and enforcement processes need to be improved
Ensuring compliance with the permitted clearing regulations is important to have confidence that environmental outcomes are being delivered and that all proponents are treated fairly. This means ensuring that:
• landholders who remove vegetation have a permit, when required
• any permit conditions, such as the requirement to secure an offset, are complied with.
The permitted clearing regulations should be designed so that they are simple to understand and straightforward to comply with. In addition, compliance and enforcement activities should be undertaken to ensure regulatory requirements are being met.
A number of administrative systems support the native vegetation regulatory system and add to the permit system’s integrity. These include the Native Vegetation Tracking
System and the Native Vegetation Credit Register. These systems are depositories for information regarding permit activity and Native Vegetation Credits, respectively.
The Australian Institute of Criminology’s report, Environmental
Crime in Australia , indicated that illegal clearing is most likely occurring in Victoria. It identified a lack of resources and information, along with challenges in distinguishing legal and illegal clearing, as factors affecting enforcement of clearing regulations. The report noted that:
• over time, as the regulations become more understood and accepted by the community, compliance should improve
• governments should take an approach of persuasion, inducement and education, along with enforcement.
24
As the permitted clearing regulations sit within the planning system, the mechanisms to monitor compliance are primarily the responsibility of local governments. Local governments have identified the complexity of the permitted clearing regulations and resource constraints as limiting compliance and enforcement activities.
25 This has resulted in compliance activities often being undertaken reactively, in response to complaints, rather than in a proactive or targeted manner.
Left unaddressed, issues with compliance and enforcement will continue to undermine the integrity and performance of the regulatory system. Simplified permitted clearing regulations, and a more coordinated approach to monitoring and enforcement, is needed to ensure that all landholders face adequate incentives to comply with the regulations. There are opportunities for the state government to play a more effective role coordinating and facilitating compliance and enforcement activities.
20 Future directions for native vegetation in Victoria Consultation paper
24 S Bricknell, Environmental Crime in Australia, Australian Institute of
Criminology, 2010.
25 Victorian Competition and Efficiency Commission, A Sustainable Future for
Victoria: Getting Environmental Regulation Right , final report, July 2009.

7
The framework that underpins the current permitted clearing regulations is designed so that native vegetation removal has a neutral impact on biodiversity while balancing the needs of the environment with other community objectives. It is proposed that this current approach is retained and that a series of reforms be undertaken to build on and strengthen this system. These reforms are designed to address the issues identified with the current system in Section 6.3, and ensure that the permitted clearing regulations are being implemented in the most efficient and effective way.
This section sets out four priority reforms that align with the principles of best practice environmental regulation set out in Table 4. In addition, a set of supporting reforms are proposed to accompany the priority reforms. These supporting reforms can be rolled out independently over time, to ensure that the priority reforms are supported by a robust and efficient regulatory system.
Feedback is sought from stakeholders and the community on the proposed reforms. The government will consider feedback before deciding its preferred approach. A series of draft documents setting out the technical and implementation details of the reforms will then be released for public comment.
The key components of the proposed reforms to the permitted clearing regulations are set out in Figure 6.
These reforms are discussed in Sections 7.3 and 7.4.
Priority reform 1: Clarify and amend the objective for permitted clearing
To clarify the objective for the permitted clearing regulation so that it is clearly distinguishable, easily communicated and appropriately focussed.
The Victorian Government proposes to clarify and amend the objective for permitted clearing of native vegetation.
Clarification will ensure that the objective:
• is clearly articulated, and readily distinguishable from the overarching objective of native vegetation management
• is equitable, with landholders not expected to compensate for more than their impact
• moves beyond a focus on only quality and extent of native vegetation, to a more comprehensive approach of managing native vegetation for biodiversity outcomes
• relates specifically to native vegetation for biodiversity in the planning system.
The proposed amended and clarified objective for permitted clearing in Victoria is set out below.
No net loss in the contribution made by native vegetation to Victoria’s biodiversity.
Future directions for native vegetation in Victoria Consultation paper 21

This objective creates the framework for permitted clearing to have a neutral impact on biodiversity. To achieve this objective the following should occur:
• native vegetation removal should generally not be permitted if it has a significant impact on Victoria’s biodiversity that cannot be satisfactorily offset
• clearing is avoided or minimised where environmental costs, as reflected in the offset costs, outweigh the value of the alternate land use
• when native vegetation removal is permitted, offset requirements will deliver a neutral outcome for Victoria’s biodiversity.
The intention is that the objective for biodiversity be distinguishable within the permitted clearing regulations. The objective of permitted clearing regulations will be clearly set out in the Victoria Planning Provisions. This will enable the biodiversity objective to be considered in integrated decision making alongside other native vegetation related objectives.
Clarify and amend the objective for permitted clearing in policy documents, and in the State Planning Policy
Framework and the relevant Particular Provisions in the
Victoria Planning Provisions.
Figure 6: Reform directions for permitted clearing regulations
Improved measurement of biodiversity value
Improved decision making
Increased focus on outcomes
• New spatial tools give better
understanding of relative and
strategic value
• Habitat Hectares assessment
method updated to better reflect
site value
• Long term biodiversity outcomes
considered in applications of mitigation
hierarchy and decision making
Incorporation of risk and proportionality
• Information requirements and
cost reflects impact of proposal
• Information on value of native
vegetation readily available
to public
• Mitigation hierarchy applied based
on risk/impact
• Obligations under the mitigation
hierarchy are proportionate to impacts
Appropriate compensation for the environment
• Strategic priorities to inform
eligible offsets
• Species based offsets required for
removal of high importance habitat
for threatened species
• Stratified offsets to better
reflect impacts
• Flexible approaches to meet offset
requirements, where appropriate
Define state and local regulatory and planning roles
Better regulatory performance
Improved offset market functionality
New approaches to compliance and enforcement
Continuous improvement program
22 Future directions for native vegetation in Victoria Consultation paper

Priority reform 2: Improve how the biodiversity value of native vegetation is defined and measured
• Reduce costs and improve accuracy in measuring the biodiversity value of native vegetation through improvements in mapping and modelling approaches, and the site assessment method.
• Reduce regulatory burden faced by landholders and government by greater use of mapped and modelled data, and reduced reliance on site assessments and consultants’ reports.
• Provide greater certainty for landowners by improved information provision upfront.
There is an opportunity to design a new system that is based on current scientific understanding and tools, and which can better distinguish the relative strategic value of native vegetation in different locations in the landscape.
Proposed improvements include:
• prioritising locations for their biodiversity value at a statewide level, using the spatial modelling approaches that inform NaturePrint (see below for details)
• moving from using point data and subjective decision criteria to define rare or threatened species habitat, to using Species Distribution Models (SDMs). These are predictive maps which show the suitability of a location for a species based on its geographic variation
• better identification of localised sites of importance for rare or threatened species, and greater understanding of the potential consequences of clearing these sites.
Improving our understanding of the value of native vegetation for biodiversity can assist in more accurate and consistent decision making, and better targeted offset obligations. In addition, providing accurate information upfront about the biodiversity value of land to landholders, assists them in making informed land-use decisions.
Improving information and its accessibly reduces the administrative burden related to information collection and uncertainty of obligations.
Value of native vegetation for biodiversity at the landscape scale
Since Victoria’s Native Vegetation Management –
A Framework for Action was introduced in 2002, there have been developments in our scientific understanding of:
• the biodiversity value of native vegetation
• the role played by native vegetation in maintaining biodiversity
• the threats facing native vegetation
• the tools and technology available to measure biodiversity value and assist decision making.
The current permitted clearing regulations use conservation significance as a measure of the value of native vegetation that is not captured by its quality and extent. Conservation significance is a broad, criteria-based categorisation of vegetation. The categorisation is informed by a combination of the rare or threatened status of the vegetation type and its quality, the presence of habitat for rare or threatened species, or other attributes.
26
Developed by DSE, NaturePrint prioritises native vegetation assets across Victoria. It is an interactive model that brings together large amounts of information collected about species presence, habitat quality and connectivity, to determine relative environmental value across the landscape. This model ranks locations for their potential to contribute to the efficient conservation of the full range of Victoria’s biodiversity.
Biodiversity value of native vegetation at the site level
In the current system, the Habitat Hectares methodology is used to measure quality and quantity of native vegetation at a site. These site-based assessments can be time consuming and subject to assessor variation. Opportunities for improving the methodology have been identified that can reduce assessor time and increase the accuracy and consistency of information the assessment provides.
Proposed improvements include:
• focussing the methodology on capturing and validating the quality of the vegetation on site, with contextual factors (such as landscape context) determined using spatial models which more accurately incorporate landscape values
• embed and better utilise technology in the assessment process to allow for integration of more complex calculations and to reduce user error
• modify the scoring approach and calculation to allow for better reflection of relative value, and for distinction between sites.
26 Department of Natural Resources and Environment, Victoria’s Native
Vegetation Management: A Framework for Action , Melbourne 2002,
Appendix 3, p. 53
Future directions for native vegetation in Victoria Consultation paper 23

Spatial models offer the opportunity to reduce the cost and improve the accuracy of information used to support decision making. For low impact clearing spatial models can replace complex site-based assessments. However, when the impact of a proposal is considered high, or the site is identified as providing high strategic value, site assessments will be required to augment or validate modelled information
(see priority reform 3).
Providing information on value
Comprehensive information about the value of native vegetation on their land should be readily available to landholders interacting with the regulatory system. Providing access to biodiversity information helps landholders to understand their potential permitted clearing regulatory obligations upfront. This allows for more informed planning and investment decisions, and assists landholders to develop plans that avoid and minimise native vegetation removal.
The government is best placed to efficiently provide systems to define and measure value, drawing on economies of scale and specialisation, and ensuring consistency and independence. It is proposed that improved spatial information about the value of native vegetation be made readily available to the community.
Develop a purpose built information system that measures biodiversity value and prioritises locations across the state for conservation. This system can inform application assessment pathways, decision making guidelines and offset requirements.
Map locations in the landscape for their importance as habitat for rare or threatened species.
Update the Habitat Hectares methodology so that it incorporates current technology and scientific understandings of biodiversity.
Improve publicly available information on the biodiversity values of locations.
Priority reform 3: Improve decision making
Risk and proportionality in decision making
• Protect high value biodiversity assets through targeting the mitigation hierarchy to situations where the impact of native vegetation removal is highest.
• Reduce regulatory burden for the majority of landowners by simplifying the permit process for low impact clearing, which accounts for the largest proportion of permit applications.
• Reduce administrative costs for government and better protect native vegetation of high biodiversity value by targeting resources where the impacts of clearing are highest.
To enable the permitted clearing regulations to provide both efficient and equitable outcomes, it is proposed that risk and proportionality are more firmly embedded in the regulatory system. Incorporating risk and proportionality into the permit application process and decision making ensures that obligations and costs faced by landholders better reflect the biodiversity impact of their clearing proposal.
The characteristics of native vegetation that define its importance for maintaining biodiversity are highly varied.
Therefore, it is not effective or efficient to impose a one-sizefits-all approach to regulating native vegetation removal.
The value of native vegetation on a particular site is determined by its quality and extent, and also its importance for the persistence of species of flora and fauna. Species persistence is the continued existence and diversity of a species into the future. The importance of native vegetation for species persistence could relate to the rarity of its type, whether it is habitat for a threatened species, or if its location is strategically important in the landscape. Figure 7 shows the different characteristics of native vegetation that drive its importance for biodiversity, and therefore the level of impact that removing it could have.
It is proposed that applications to remove native vegetation be processed according to the biodiversity impact of the proposed native vegetation removal, and that this approach is formalised in the planning system.
It is further proposed that risk-based pathways determine what information is required to assess permit applications.
With improved mapped data and prioritising tools available to inform decisions, the need for site assessments can be better targeted. For low risk applications, decisions can be based on mapped and modelled information without requiring a site assessment. This would reduce costs for a large portion of permit applications that are low risk (see
Figure 5).
24 Future directions for native vegetation in Victoria Consultation paper

Figure 7: Characteristics of native vegetation that determine its biodiversity value
High importance for species persistence
• Typically degraded/highly modified
landscapes
• Important habitat for rare or
threatened species
Example: Scattered trees that provide important habitat for rare or threatened species
Highest impact clearing
• Large and/or intact landscapes
• Important habitat for rare or
threatened species
Example: Intact remnant vegetation that provides important habitat or connective links for rare or threatened species
Low quality and extent
High quality and extent
IMP
ACT
• Low quality and/or impact clearing
• Vegetation does not play a
significant role in providing for
species persistence
Example: Low quality isolated patch
Lowest impact clearing
Low importance for species persistence
• Large and/or intact landscapes
• Generally relatively abundant
vegetation type
• Vegetation does not play a
significant role in providing for
species persistence
Example: Isolated remnant patch without significant connective attributes
Risk-based pathways for application processing can ensure that regulator resources are focussed on the small number of applications that have the bulk of the environmental impact.
It is also proposed that the risk-based pathways determine how the mitigation hierarchy is applied. This would involve a shift of focus in applying the mitigation hierarchy:
• away from the input-based approach, where all applicants are required to demonstrate that clearing has been avoided and minimised
• towards an output-based measure that considers the effect of the clearing on biodiversity.
The mitigation hierarchy should be applied in a manner that considers:
• the type and impact of the clearing proposal
• the costs and benefits of retaining native vegetation within the context of its surrounding landscape, and its long term viability.
A permit for native vegetation removal should generally not be granted when removal is considered to have a significant impact on a biodiversity asset, and it is unlikely that offsets are available or can provide acceptable compensation for the loss of native vegetation.
When native vegetation removal can be satisfactorily offset, the cost of offsets provides an incentive for proponents to develop plans which minimise impacts on native vegetation.
This would be supported by more accurate information on the value of the native vegetation being provided to permit applicants, along with assistance in understanding their potential impacts on native vegetation and how these can be minimised. Improved functioning of the offset market, including better information on price and offset availability
(discussed in Section 7.4), also assists permit applicants to make informed decisions that minimise native vegetation removal, and reduce their offset requirements and costs.
For low risk applications, it is proposed that demonstrating avoidance and minimisation would not be required, and a permit would be granted provided a compliant offset is obtained. It is envisaged that this change would simplify and streamline low risk permit application processes and reduce costs.
As the majority of applications are for low impact clearing, a formalised risk-based pathways approach is expected to significantly reduce the regulatory burden faced by both landholders and government. In these cases landholders will be able to undertake a simplified and expedited permit approval process.
Future directions for native vegetation in Victoria Consultation paper 25

In response to the 2009 VCEC report A Sustainable
Future for Victoria: Getting Environmental Regulation
Right , the Victorian Government committed to the introduction of a risk-based approach for assessing native vegetation permits. This approach aligns the complexity and cost of the permit application process to the biodiversity impact of the proposed removal of native vegetation.
To deliver on this commitment, DSE has developed an approach to streamlining permit applications to remove native vegetation on the basis of their expected risk and impact. This has included developing low, moderate and high risk application categories based on the extent of native vegetation that is proposed to be cleared, and the presence of ‘highly localised assets’.
Highly localised assets are areas of high environmental significance where modest levels of vegetation removal may have significant impacts.
For low risk permits, the assessment relies on existing mapped and modelled data, coupled with non-specialist information provided by the applicant. This has reduced the need for complex and costly consultants’ reports.
In addition, demonstrating strict compliance with the mitigation hierarchy is not required, in recognition of the low risk nature of the proposed clearing.
To date the application of the risk-based pathways has been limited to DSE referred permit applications and this approach is not formalised in the planning system.
Embed in the planning system a tiered, risk-based approach to processing applications for permits to remove native vegetation, including what information is required to be provided.
Update the permitted clearing decision making guidelines to better facilitate consistent outcomes and risk-based decision making. Updates should include:
• applying the mitigation hierarchy based on the risk and impact of the proposal to remove native vegetation
• considering the relative costs and benefits of retaining, or removing and offsetting native vegetation over time.
Develop separate decision making guidelines for considering native vegetation removal in relation to biodiversity outcomes, and for other outcomes.
Priority reform 4: Ensure offsets provide appropriate compensation for the environment
Focussing on biodiversity outcomes in decision making
The proposed amended objective of the permitted clearing regulations focuses the purpose of the regulations on the biodiversity outcomes delivered by native vegetation. To deliver this biodiversity objective, the decisions made and obligations imposed under the regulations should clearly consider the biodiversity aspects of native vegetation. Other benefits that native vegetation provides, such as land and water protection, can continue to be considered as part of the application process for a permit to remove native vegetation. However, it is proposed that this consideration be clearly distinguished through separate fit-for-purpose decision guidelines, and not be informed by the biodiversity related rules and guidance material.
It is proposed that the native vegetation for biodiversity decision guidelines and offsetting requirements be amended so they focus on protecting and maintaining
Victoria’s biodiversity.
A clearer distinction between considering native vegetation for biodiversity, and for other purposes, would also improve the functionality of the regulations. This includes providing clarity about the basis on which decisions are made, and ensuring that conditions placed on a permit are focused on the outcomes desired.
• Provide protection for native vegetation of high biodiversity value by ensuring that offsets are appropriately tailored to mitigate impacts of native vegetation removal.
• Direct offsets towards areas that are likely to have higher strategic biodiversity value in the long term by creating incentives for landowners to offset in areas that are more strategically valuable.
• Reduce costs to landowners by providing simplified and more flexible offset arrangements for low impact clearing, which makes up the majority of permit applications.
To meet the ‘no net loss’ from permitted clearing objective, when clearing is permitted to occur it is required that offsets are secured that deliver gains in native vegetation that are equivalent to the losses that have occurred. It is proposed that new stratified offsetting rules be developed that:
• provide compensation for the environment that better reflects the value of the native vegetation removed
• impose obligations and costs that are proportionate to the value of the native vegetation that is proposed to be removed.
26 Future directions for native vegetation in Victoria Consultation paper

Figure 8: Biodiversity value of native vegetation and corresponding offset requirements
• Offsets required to provide
direct link to species/
biodiversity impacted
High importance for species persistence
• Offsets required to provide
direct link to species/
biodiversity impacted
• Highest offset requirements
Highest impact clearing
Low quality and extent
Offset requirements increase in proportion to impacts
Incentives to secure offsets in high value locations
High quality and extent
• Offset obligations based on
securing strategic biodiversity
priorities across the landscape
• Lowest offset requirements
Lowest impact clearing
• Offset obligations based on
securing strategic biodiversity
priorities across the landscape
Low importance for species persistence
These proposed offsetting rules would be informed by the improved tools for measuring biodiversity value, discussed in priority reform 2. The rules would have regard to the quality and extent of native vegetation and indicators of its importance for species persistence. These outcomes would be achieved through the following approaches:
• when the vegetation being removed provides important habitat for rare or threatened species, the corresponding offset requirement would provide targeted outcomes for those species
• when the native vegetation is not important for the persistence of rare or threatened species, offsets would be based on the strategic importance of the vegetation being cleared. This would create the opportunity to focus offsetting in areas that are most strategically important for maintaining Victoria’s biodiversity. This approach would be likely to result in improved and longer lasting biodiversity outcomes than the current approach which focuses on maintaining the status quo through either in situ conservation, or replication elsewhere
• for native vegetation removal with low impacts, offsetting requirements would be more flexible and be met through simplified processes. For example increasing options to offset on site or pooling multiple small offsets at larger sites through over-the-counter offset schemes.
Figure 8 illustrates the characteristics of native vegetation that determine its importance for biodiversity and the proposed corresponding offset requirements.
Develop new risk-based offsetting rules that are organised around the strategic priority of locations in the landscape. These rules include:
• requiring the offsets to closely match the type of vegetation cleared where rare or threatened species habitat is affected
• for permits to remove native vegetation that have low biodiversity impacts, providing flexible offsetting options, that still deliver targeted environmental outcomes
• where matching of clearing and offset is not required, creating incentives that direct offsets to areas of high strategic biodiversity value for the state.
Future directions for native vegetation in Victoria Consultation paper 27

7.4
Alongside the four priority reform areas discussed in Section
7.3, the review of the permitted clearing regulations also identified five further areas for improvement. These five areas can be pursued independently, over the medium to long term (see Figure 6).
Some of these additional areas for improvement extend beyond the native vegetation permitting process and are applicable to broader native vegetation policy.
Supporting reform 1: Define state and local government regulatory and planning roles
Local governments have primary responsibility for land use planning in their areas, including responsibility for zoning and overlays, which should accurately identify areas for environmental protection and areas for development. This planning plays an important role in the functioning of the permitted clearing regulations. There are opportunities for
DSE to work with local government to improve the application of these tools, to ensure that they are accurate, reflect natural values and allowed uses of land, and are complementary with statewide legislation. Improved spatial information about natural values should facilitate this process.
The role of DSE in the development and designation of overlays, and as a referral authority, could also benefit from reassessment and clarification. Local policy frameworks should clearly differentiate local policy for protecting native vegetation to achieve local objectives
(for example, amenity, or local environmental concerns) from the Victorian Government’s native vegetation policy.
Where decisions about retaining native vegetation or about offset requirements are based on local policy objectives, these decisions should be clearly attributed to the local government’s objectives. Developing guidance material about the roles and responsibilities of state and local government will improve clarity in both native vegetation policy development and implementation. Clearer demarcation of policy purposes and responsibilities should enable landholders to better understand the basis on which native vegetation planning decisions are made. This improves accountability and ensures that clear paths of recourse for decisions are available under both Victorian
Government policy and local government policy.
Strategic planning mechanisms also offer an opportunity to consider some specific issues at a larger scale in a more coordinated manner. The complexity of some biodiversity assets, and the threats facing rare and threatened species may mean that, in certain circumstances, the site-level permit system is inadequate for facilitating optimal land use or environmental outcomes. In these cases a coordinated approach, tailored to the specific problem, may achieve improved environmental outcomes.
A coordinated approach may also be beneficial where there are environmentally sensitive areas, or areas with high levels of land use change. There is an opportunity to build on experience gleaned from the Melbourne Strategic
Assessment, and to investigate the use of strategic approaches in appropriate areas.
Work with local government to:
• ensure the interoperability of local planning policies and the Victorian Government’s permitted clearing regulations, including the use of overlays
• develop guidance material defining the roles, responsibilities and accountabilities of different parts and levels of government in relation to native vegetation policies.
Continue to investigate opportunities for using strategic planning mechanisms to deliver biodiversity outcomes from native vegetation management efficiently and effectively.
Supporting reform 2: Better regulatory performance
There are opportunities to improve the regulatory performance of both DSE and local government. The native vegetation regulatory system would benefit from improvements to the following areas of monitoring and reporting:
• enhance the use and useability of the Native Vegetation
Tracking system to improve data quality and accountability
• consolidate and improve consistency of guidance material
• improve reporting of native vegetation removal and offsetting
• improve and broaden regulatory performance indicators so that they reflect quality, proportionality and robustness of permit assessment processes.
28 Future directions for native vegetation in Victoria Consultation paper

Improve public reporting of native vegetation removal and offsetting, and improve and broaden performance indicators.
Enhance the use and useability of data systems, standard forms and guidance material.
Develop and implement more comprehensive internal quality assurance processes.
Supporting reform 3: Improve offset market functionality
There are opportunities to improve the functioning of the offset market, both for over-the-counter offsets and for the standard offset market.
Over-the-counter offsets
Over-the-counter offsets are established and registered on the Native Vegetation Credit Register. They are larger offset sites split into smaller units and sold at fixed prices. These offsets are often used to offset smaller, low impact clearing, but can be used for any scale of clearing as long as they meet the offset requirements. Over-the-counter offsets provide a mechanism for landholders to fulfil their offset obligations with reduced transaction and delay costs and predictable prices. As over-the-counter offsets pool small offsets at larger sites, they can also provide better environmental outcomes compared to multiple smaller offset sites.
Currently, however, opportunities to purchase over-thecounter offsets are limited to specific locations in Victoria, and mostly provide offsets for trees. Over-the-counter offset options, for different types of clearing and offset requirements, should be readily available across Victoria. It is proposed that DSE work with local governments to establish over-the-counter offset programs and to develop standards for their functionality and integrity.
Facilitating the use of Property Vegetation Plans
Property Vegetation Plans were introduced to assist farmers to comply with their obligations under the permitted clearing regulations. The Plans identify areas of vegetation for removal and protection on a landholder’s property, and allow flexibility to implement the plan over time. A number of constraints, such as high upfront information costs and the need to meet prescriptive vegetation type requirements, have prevented Property Vegetation Plans being widely used. This paper outlines proposed changes to the permitted clearing regulations including the provision of improved biodiversity information, risk-based decision making and more flexible offsetting options. These changes should enable a greater set of options for many farmers to identify areas for on-farm offsetting at significantly lower cost. It is proposed that DSE work with landholders to facilitate the development and preparation of Property Vegetation Plans in line with the requirements of the new system.
Improve functionality of the offset market
Parts of the standard offset market have a low supply of offsets. Due to a lack of competition, some offset providers have been able to charge excessively high prices. Proposed measures to improve competition in the offset market include:
• reduce transaction costs (see Section 7.3) in order to decrease barriers to market entry and improve market participation
• increase information availability and improve matching of buyers and sellers
• increase offsetting options through less restrictive offset requirements that are more outcomes focused.
However, as native vegetation is highly diverse and some types are relatively scarce, in some instances it is unlikely that a well functioning market with adequate competition is achievable. For example, there may be low availability of offsets that fulfil specific species habitat requirements. In these cases, there is an opportunity for government to act as a market facilitator and to work as a conduit between buyers and sellers of offsets, enabling offset requirements to be met more efficiently.
Public land considerations
Whether vegetation is on land of public or private tenure should not be important when considering its biodiversity value. Nonetheless, there are a number of constraints that have limited the feasibility of taking a tenure blind approach to offsetting native vegetation removal.
To date the use of public land for offsets has been limited to offsetting some small areas of clearing on public land.
There is potential for a more integrated system of offsetting on public and private land, particularly where actions undertaken on public land may deliver high strategic benefits for rare or threatened species. For offsets to be established in a credible manner on public land, where and how gains in native vegetation can be achieved needs to be identified, and mechanisms are required to prevent cost shifting from occurring. It is proposed that development of an integrity framework for offsetting on public land be developed.
Future directions for native vegetation in Victoria Consultation paper 29

Work with local governments to develop over-thecounter offset provision, and expand the kinds of offsets available through these mechanisms.
Improve participation and increase efficiency in the offset market by:
• reducing transaction costs
• increasing information available
• improving visibility for buyers and sellers in the offset market.
Identify scenarios where it is beneficial for government to play a facilitator role in the offset market.
Investigate the development of an integrity framework to guide offsetting on public land.
To strengthen the system further, it is proposed that DSE work with local government to more closely monitor offset delivery, and more rigorously enforce the application of the regulations. Options for encouraging compliance include the use of technology for monitoring changes in native vegetation extent, targeting areas where compliance is low and impacts are material, and increasing information provision to raise awareness of the regulations and the importance of compliance. A new compliance and enforcement strategy will provide the community with greater assurance that native vegetation obligations are being met.
Work with local governments to develop a costbenefit based compliance and enforcement strategy that ensures the obligations of the permitted clearing regulations are being met.
Supporting reform 4: New approaches to compliance and enforcement
The integrity and effectiveness of the permitted clearing regulations relies on the level of compliance with these regulations.
Clarifying policy and improvements in processes will go some way towards putting in place the right incentives for landholders and offset providers to comply with the regulations.
This would include:
• improving proponents’ understanding of their obligations to comply with the regulations
• making the permit application process simpler, more streamlined and less costly
• increasing options and availability of offsets through new offsetting rules and offset market reform.
It is envisaged that these changes will encourage compliance with permitted clearing regulations by reducing the cost of complying with the permit system.
Supporting reform 5: Continuous improvement program
Over the ten years since adoption of Victoria’s Native
Vegetation Management – A Framework for Action,
DSE and local governments have undertaken a continuing program of reforms to improve the Framework’s functionality.
Continuous improvements include ongoing efforts to address stakeholder concerns as they arise, addressing unintended outcomes and improving efficiencies in processes. It is important to continue to take opportunities to improve outcomes as they become available. Some areas identified as requiring a particular focus in future continuous improvement activities are set out below.
Interactions between state and
Commonwealth regulations
The Victorian Government proposes to continue to work with the Commonwealth Government to streamline the application of state and Commonwealth biodiversity regulations. This includes seeking Commonwealth accreditation of Victoria’s assessment and approvals process, with the aim of reducing duplication and unnecessary red tape.
Exemptions
In 2006, a detailed assessment was undertaken of the exemptions from requiring a permit to remove native vegetation under the permitted clearing regulations.
The proposed risk-based approach to decision making in the permitted clearing regulations will allow for greater differentiation in how clearing proposals are treated.
Therefore, the requirement to have broad exemptions within the Victoria Planning Provisions may no longer be necessary in all cases. There may also be a need to amend the existing exemptions to improve certainty, clarity and operability.
Following implementation of the proposed reforms to the permitted clearing regulations, DSE will undertake a review of the exemptions.
30 Future directions for native vegetation in Victoria Consultation paper

Updating scientific information and tools
Models will be constructed so that new and improved information can be incorporated periodically. This will include new information on species habitat, threatened status of species, and threats to biodiversity. The impact of the removal of native vegetation that is occurring, both within and outside the permitted clearing regulations, will also be monitored and incorporated into the policy settings.
Refine gain scoring
Gain scoring relates to the expected improvements in native vegetation through management activities. As empirical studies that measure the impact of management activities on native vegetation progress, gain scoring calculations should be updated to reflect the most up-to-date understanding of these outcomes.
Monitoring of reform implementation
After the reforms identified have been adopted and bedded down, their implementation will be monitored to ensure they are operating as planned and to address any unintended outcomes, or issues identified from stakeholder feedback.
Adopt a process of continuous improvement for the permitted clearing regulations, including the following actions:
• work with the Commonwealth Government to ensure the interoperability of state and Commonwealth regulation, and to reduce regulatory burden
• periodically assess exemptions
• identify areas for investigation to improve the quality and comprehensiveness of the data that underpins the models, and update models accordingly
• refine gain scoring as new information on the impact of management activities becomes available
• assess system changes after implementation and address any emerging issues.
Future directions for native vegetation in Victoria Consultation paper 31

Table 5: Summary of native vegetation policy related reviews findings
Review
Australian
Productivity
Commission (2004)
Impacts of Native
Vegetation and
Biodiversity
Regulation
Key findings relating to the permitted clearing regulation
• Suggested that high cost/low environmental gain outcomes be treated with more flexibility.
• Recognised the inefficiencies associated with the application of ‘net gain’ in vegetation at a property level.
• Recognised the benefits of the BushTender scheme in providing incentives to landholders to manage retained native vegetation, and offering opportunities for attaining environmental outcomes more efficiently.
• Raised concerns that native vegetation regulations that place more value on vegetation of a higher quality discourage landholders from maintaining the quality of vegetation on their land, and may even encourage active degradation of native vegetation.
Victorian
Competition and Efficiency
Commission (2005)
Regulation and
Regional Victoria:
Challenges and
Opportunities
Review of
Exemptions in
Native Vegetation
Provisions by
Planning Advisory
Committee (2006)
• Found that ‘the complexity of regulation and its implementation posed unnecessary uncertainty on landholders’.
• Reported concerns regarding inconsistent interpretation and application of the native vegetation regulation by local governments and DSE. In particular relating to the ‘avoid, minimise, offset’ hierarchy, exemptions, monitoring and enforcement.
• Recommended simplifying and clarifying the existing regulatory framework.
• Identified the role of native vegetation regulations in the reduction of broadscale clearing.
• Raised concerns that in some cases the loss of native vegetation through exemptions may be unnecessary, and that the cumulative effect of exemptions adds to the risks for significant vegetation.
• Noted the importance of clear information and an integrated and consistent approach to administration of the regulations.
Department of
Sustainability and
Environment (2008)
Native Vegetation
Net Gain
Accounting First
Approximation
Report
• Acknowledged the role of the clearing regulations in reducing clearing, such that the clearing of native vegetation is no longer the largest source of native vegetation change in Victoria.
• Noted that entitled uses of vegetation were leading to reduced levels of native vegetation quality.
• Supported improvement of datasets, research and reporting on native vegetation.
32 Future directions for native vegetation in Victoria Consultation paper

Review
Victorian
Competition and Efficiency
Commission (2009)
A Sustainable
Future for
Victoria: Getting
Environmental
Regulation Right
Victorian Bushfires
Royal Commission
(2009)
Victorian
Environmental
Assessment
Council (2011)
Remnant Native
Vegetation
Investigation –
Final Report
Victorian
Competition and Efficiency
Commission (2011)
Inquiry into a
State-based reform agenda – Draft
Key findings relating to the permitted clearing regulation
• Identified confusion regarding the NVMF’s ‘net gain’ objective and the role of permitted clearing regulations compared to government investment in achieving the objective.
• Reported concerns regarding inconsistent interpretation and application of regulation for the removal of native vegetation by local governments and DSE.
• Noted that the native vegetation permit application process is costly and time consuming.
• Highlighted the benefits of market-based instruments in offering significant cost savings to achieve environmental outcomes.
• Noted that trading rules may mean that there are few (or no) eligible offsets for a proposed clearing, increasing compliance costs to developers.
• Identified that the ability to remove vegetation for fire protection should be more closely aligned with the risk bushfires pose to life and property.
• Recognised the importance of accounting for the losses in native vegetation due to bushfire risk management.
• Recommended that government continue to support and expand existing programs that encourage and assist private landholders to contribute to biodiversity enhancement on private land and adjacent public land.
• Acknowledged Victoria’s comprehensive mapping databases and recommended continuing and expanding the collection and analysis of data on native vegetation.
• Suggested that a case-by-case approach to native vegetation regulation is complex and costly for local governments, DSE and landholders.
• Recommended a separation of responsibility for advising on native vegetation policy and for administering the controls.
• Reiterated concerns about how inconsistent administration of state and Commonwealth environmental regulations has contributed to uncertainty for investment.
• Questioned the effectiveness of the current regulatory arrangements.
Future directions for native vegetation in Victoria Consultation paper 33

Biodiversity – The variety of all life forms, the different plants, animals and microorganisms, the genes they contain, and the ecosystems of which they form a part.
BushBroker – A program coordinated by DSE to match parties that require native vegetation offsets with third party suppliers of native vegetation offsets.
BushTender – An auction-based incentive scheme to deliver native vegetation protection, habitat protection, management and improvement on private land.
Clearing regulations – All regulation pertaining to clearing of native vegetation through the planning system, including permitted clearing regulation and exemptions.
Delay costs – Costs incurred from delay in commencing an activity. This may include foregone income from delaying increases in productivity, or lost interest if payments are delayed.
Environmental weeds – A plant species that has invaded (or has the potential to invade) natural ecosystems and threaten environmental and/or conservation assets.
Environmental weeds may include some Australian native plants not indigenous to a given area. Some weeds declared as noxious weeds (under schedules in the
Catchment and Land Protection (CaLP) Act 1994) are also environmental weeds.
Existing use rights – Landholders’ rights to continue using land in a manner that is consistent with activities that the land has been used for in the past, as set out in section 6(3) of the Planning and Environment Act 1987.
Gain in native vegetation – Protection and improvement in native vegetation/habitat, as measured by a sitebased measure of quality and extent, achieved by active management, and/or increased security.
Habitat Hectares – Combined measure of quality and extent of native vegetation. This measure is obtained by multiplying the site quality score (measured between 0 and 1) with the size of the site (in hectares).
Habitat Hectares Assessment (Vegetation Quality
Assessment) – A site-based measure of quality of native vegetation that is assessed in the context of the relevant native vegetation type, compared to its pre-1750 condition.
Incorporated document – A document that is included in the list of incorporated documents in a planning scheme. These documents effect the operation of the planning scheme.
Landholder – An owner, occupier, proprietor or holder of land.
Landscape context – Measure of the viability and functionality of a patch of native vegetation in relation both to its size and position in the landscape, and to surrounding vegetation.
Local planning scheme – Policies and provisions for use, development, and protection of land in a local government area.
Loss in native vegetation – Decreases in native vegetation, as measured by a site-based measure of quality and extent.
Melbourne Strategic Assessment – Agreement between the Victorian and Commonwealth Governments that defines areas where clearing can occur within Melbourne’s Urban
Growth Boundary 2010. It includes the corresponding conservation measures that must be undertaken to meet
Victorian and Commonwealth laws.
Negative externality – Occurs when a party undertaking an action does not have to pay the full cost of their actions.
The additional cost is borne by other parties.
Native vegetation – The Victoria Planning Provisions defines native vegetation as plants that are indigenous to
Victoria, including trees, shrubs, herbs and grasses. The permitted clearing regulations consider native vegetation as vegetation that is indigenous to a site.
Native vegetation credits – Gains in the quality and/ or extent of native vegetation that are subject to a secure and ongoing agreement registered on the land title, or by transferring land to a more secure tenure type .
Native Vegetation Credit Register – A DSE administered statewide register of native vegetation credits that meet minimum standards for security and management of sites.
It records those that can be traded, and those that have been used to meet a specific offset requirement.
Native vegetation extent – Area of land covered by native vegetation.
Native Vegetation Particular Provision – Clause 52.17 in the Victoria Planning Provisions that relates to the removal, destruction or lopping of native vegetation.
Native vegetation policy – All Victorian policy relating to native vegetation including permitted clearing, exemptions, regulation of uses, government investment and management of public land.
Native vegetation quality – A site-based measure of vegetation condition that is assessed in the context of the relevant native vegetation type, compared to its pre-1750 condition, as determined by a Habitat Hectare assessment.
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Native vegetation regulation – All Victorian regulations related to native vegetation including permitted clearing, exemptions and duty of care.
Native Vegetation Tracking System – A web-based information system used by DSE for recording details of planning permits assessed by the Department, including the location and amount of native vegetation clearing and offset requirements.
Offset – Measurable native vegetation conservation outcomes resulting from any works, or other actions to make reparation for the loss of native vegetation arising from the removal or destruction of native vegetation.
Offset market – A system which facilitates trade between parties requiring offsets and third party suppliers of offsets.
Opportunity cost – The cost of any activity measured in terms of the value of the next best alternative forgone
(that is not chosen).
Option value – The value from preserving an environmental attribute on the basis that it may have potential use, or provide benefits in the future that are not fully understood now.
Particular Provisions – Provisions in the Victoria Planning
Provisions that relate to specific activities (for example, native vegetation removal has a Particular Provision).
Permit – A planning permit to remove native vegetation.
Permitted clearing – Clearing that a permit to remove native vegetation has been granted for.
Permitted clearing regulations – The rules in the planning system that regulate permits for the removal of native vegetation.
Peri urban – Areas of land fringing urban areas that are not fully urban or rural.
Planning provisions – See Victoria Planning Provisions.
Planning scheme amendment – Change to a planning scheme. There is an official process that must be followed to amend a planning scheme.
Private land – Land that is privately owned. For the purposes of this document this does not include freehold land that is owned by government departments or authorities.
Public good – A good that no-one can be excluded from using, where one party’s use does not diminish the benefit that other parties obtain from using the good.
Public land – For the purposes of this document, public land refers to land that is held by government departments or authorities for the benefit of the people of Victoria. This includes State forest, national parks, Crown land and other reserves, such as roadsides.
Rare or threatened species – A species that is listed in:
• DSE’s Advisory List of Rare or Threatened Plants in Victoria as ‘endangered’, ‘vulnerable’, or ‘rare’
• DSE’s Advisory List of Threatened Vertebrate
Fauna in Victoria as ‘critically endangered’,
‘endangered’ or ‘vulnerable’
• DSE’s Advisory List of Threatened Invertebrate Fauna in Victoria as ‘critically endangered’, ‘endangered’ or ‘vulnerable’.
Remnant patch of native vegetation – Either:
• an area of native vegetation, with or without trees, where at least 25 per cent of the total understorey plant cover is native plants, or
• an area with trees where the tree canopy cover is at least 20 per cent.
Site – An area of land within a single parcel that contains contiguous patches of native vegetation.
Species persistence – The continued existence and diversity of a species into the future. Factors that contribute to a species’ potential to persist include population, habitat and genetic diversity within a species.
Strategic planning – A coordinated approach to planning where areas for conservation and areas which can be cleared are strategically identified.
Victoria Planning Provisions – A comprehensive list of planning provisions that provides a standard template for individual planning schemes. These provisions outline statewide obligations that are enacted through the permit process.
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