9 August 2023

Operation Sandon: Reforms to local government and town planning in Victoria

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Discusses some of IBAC's key recommendations in regard to reform of the Victorian planning system.
Australia Government, Public Sector
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On 27 July 2023, the Victorian Independent Broad Based Anti-Corruption Commission (IBAC) released its special report titled "Operation Sandon", which has received significant media attention.

In broad terms, the focus of Operation Sandon was on the alleged impropriety at a local council between certain councillors (that is, elected local government politicians, in contrast with professional council bureaucrats) and certain persons of interest. Readers interested in the facts of the investigation can read the IBAC's report, which contains a useful summary of the findings. This article will instead focus on some of IBAC's key recommendations in regard to reform of the Victorian planning system.

Key recommendations from IBAC

IBAC relevantly recommended that the Minister for Planning develops and introduces to Parliament amendments to the Planning and Environment Act 1987 (Vic) to:

  • remove statutory planning responsibilities from councillors
  • introduced determinative planning panels for statutory planning matters, where a local council is currently the responsible authority.

The Victorian Government has also previously flagged a change in planning laws to remove the powers of local councils to enable targets for greater development in established areas to be met and fast-tracked. The Victorian Government is set to announce planning reforms in line with these objectives later this year.

The Victorian Planning Minister recently stated that:

"Application of the 70-30 [target] requires 1 million new dwellings to be delivered in established areas by 2050 to accommodate Melbourne's projected population growth. We're not tracking well . My priority this year will be on refocusing our efforts to guide and support development into established areas of Melbourne and regional Victoria and inserting a real sense of urgency into this."

The impetus for change also appears to come from the Federal Government, who in 2022 released the National Housing Accord including an "aspirational" target of one million new homes in the next five years from 2024. A further 10-year housing plan is being developed by the Federal Government, in conjunction with state and local governments, as part of a suite of reforms to increase the supply of safe and affordable housing nationally. In addition, the Federal Government's $10 billion Housing Australia Future Fund will purportedly build 30,000 new social and affordable housing properties in the first five years. This is presently the subject of debate and a reported potential double dissolution election in connection with its Housing Australia Future Fund Bill 2023.

Within hours following the publication of IBAC's Operation Sandon Report, the Victorian Government endorsed its recommendations to remove councillors from statutory planning responsibilities.

The contest between conservation of neighbourhood character and development is central to almost all town planning disputes in middle ring suburbs.

Despite stated objectives to the contrary, in practice, most state governments have preferred to direct development to outer suburbs including through extension of the urban growth boundary, encouraging comparatively high-density development in certain pockets of well serviced inner city and middle ring suburbs, and development along transport corridors.

Readers may recall the residential zone reforms previously undertaken in the early 2010s which were part of a stated effort to provide greater housing supply. However, what came to pass in practice through the implementation phase of residential zone reform was that the application of the zoning was left to the local councils, some of whom used the opportunity to achieve the opposite of the original goals. This resulted in some councils imposing more restrictive controls to "lock up" suburbs from development.

Current housing strategy seems to now depart significantly from that more recent paradigm, with a clear focus on housing delivery in middle ring well serviced suburbs, and the removal of councillor involvement to help achieve that goal.

With an increase in the centralisation of town planning decision-making power in the State, the likelihood of delivering housing supply is enhanced given a previous common forum for community opposition being taken away.

The removal of councillor involvement in the planning process is a major reform. Whilst urban planning is a technical process, it is fair to also describe it as a political one - after all, how our cities and towns are developed affects the community. The Victorian town planning system has by and large operated with the involvement of local councillors, for at least all of recent living memory. The reforms now propose a major shift to a principally technocratic, centralised model, whereas previously councillors played a central role in planning decision making. That role is now proposed by IBAC to be replaced with determinative planning panels comprised of experts.

In support of its recommendation, IBAC states in its Operation Sandon report that:

"In fact, moving decision-making functions to a more independent body may ease the pressure on councillors to make statutory planning decisions in line with community expectations, and give councils more time to focus on their role as planning authority for the municipality. This is consistent with the experience of New South Wales councillors. Moreover, including a community member on the panel would make sure that community voices are not only heard in submissions but also form part of the decision-making process."

The important task of implementation falls to a proposed Implementation Inter-departmental Taskforce. IBAC has required the Premier to report on the implementation of the task force and related recommendations by 27 January 2025.

This publication does not deal with every important topic or change in law and is not intended to be relied upon as a substitute for legal or other advice that may be relevant to the reader's specific circumstances. If you have found this publication of interest and would like to know more or wish to obtain legal advice relevant to your circumstances please contact one of the named individuals listed.

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