The Planning and Environment Amendment (Infrastructure
Contributions) Bill 2015 (Vic) (Bill) introduces a new standardised
infrastructure contributions system for levying development
contributions towards the provision of infrastructure in growth and
strategic development areas across Victoria.
The Bill is based on the 2012 recommendations of the Standard
Development Contributions Advisory Committee and follows a similar
proposal of the previous government which lapsed as a result of the
2014 Victorian election.
HOW DOES THE NEW SYSTEM WORK?
The new system (to be called the 'infrastructure
contributions system') is based on an infrastructure levy that
is made up of a standard levy and a supplementary levy.
The standard levies are pre-set levy rates for funding local
infrastructure. The proposal is to introduce standard rates for
residential, retail and commercial/industrial development for both
metropolitan and non-metropolitan locations.
The supplementary levy is an optional levy for use when the
standard levy cannot adequately fund the required local
infrastructure or where additional infrastructure is required to
unlock the growth capacity of the area. The supplementary levy may
also be used to fund state infrastructure in growth areas where the
Growth Areas Infrastructure Contributions Scheme does not
Under the new system, the standard and supplementary levies may
only be used to fund infrastructure items selected from a pre-set
list of 'allowable items', such as transport, community and
recreation works, services, facilities and land.The mechanism for
applying the infrastructure levy is the infrastructure
contributions plan. This plan must form part of the planning scheme
to become operational.
These reforms are intended to give developers and councils
certainty about the level of contributions required, clarity around
the types of infrastructure the contributions will fund and reduce
costly delays for both developers and homebuyers.
WHERE WILL THE NEW SYSTEM APPLY?
The Bill enables the new system to be used anywhere in Victoria,
however initially the new system will only apply to greenfield
growth areas and strategic development areas where there are no
existing development contributions plans.
DOES THE NEW SYSTEM REPLACE EXISTING DEVELOPMENT CONTRIBUTION
PLANS, THE GROWTH AREAS INFRASTRUCTURE CHARGE (GAIC) OR PUBLIC OPEN
The new system will not replace existing development
contributions plans incorporated into planning schemes. These will
continue to have effect, unless they are at any stage reviewed or
The new system will also not replace the GAIC and the new
infrastructure contributions plans will not be allowed to cover
state infrastructure in growth areas which is funded by the
However, there is scope for the new system to replace public
open space contributions which would otherwise be required via the
Subdivision Act, so that where appropriate, all public open space
contributions are able to be levied via an infrastructure
contribution plan (with no separate requirement under the
WHAT WILL THE LEVY RATES BE?
At this stage, the levy rates, indexation mechanisms and
application criteria have not been released.
The Department has stated an intention to work with an
Implementation Reference Group representing peak industry groups
and councils to finalise the details of the new system, once the
Bill has been passed.
WHEN WILL THE NEW SYSTEM COMMENCE?
The new system is expected to be introduced in early to
mid-2016, subject to the Bill being passed by Parliament.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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