Councils not claiming millions from developers

Developers should be contributing millions to deliver parks, roads and other infrastructure as conditions of their lucrative projects — but too many aren’t doing it, and it’s all due to bureaucratic red tape.

Councils and communities are potentially losing out on millions of dollars from developers, due to a flawed and complex infrastructure funding scheme.

Development Contribution Plans (DCP) allow councils to obtain money from developers to deliver community and transport infrastructure as part of their lucrative planning applications.

But only 25 of Victoria’s 79 councils took advantage of DCPs between 2016-18 citing issues such as costs, delays and financial risks, a report by the Victorian Auditor-General’s Office (VAGO) revealed.

Ratepayers Victoria president Dean Hurlston said councils – and communities – were potentially missing out on millions for parks and open spaces.

“The contributions scheme should be simplified and a mandatory attachment to planning applications – so even if residents have to lose out to the development they are able to get something in return,” he said.

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“Particularly now councils are under such severe budget pressure.”

Casey Council collected more than $180,000,000 through the plans over the two-year period, followed by other growth areas Wyndham ($109,898,034), Hume ($88,628,303), Cardinia ($63,941,973) and Melton ($59,781,253).

The VAGO report revealed Whitehorse did not have a DCP, and estimated the council could have raised about $4.16 million from projects in Box Hill alone.

In a statement to VAGO, Whitehorse chief executive Simon McMillan said the complexity, cost and time frame of applying a DCP in an urban context were challenges for the council.

Boroondara city planning director Shiran Wickramasinghe told Leader the system was ineffective – particularly for established areas – because councils couldn’t fully recover infrastructure costs.

“Council has in the past advocated for a simplified system with a broader range of infrastructure funding measures to allow councils in developed areas to best capture the full cost of infrastructure upgrades,” he said.

The VAGO report said a DCP could have financial risks for councils, locking them in to delivering infrastructure projects even if the development didn’t proceed and they weren’t able to collect the levy.

It concluded while the Department of Environment, Land, Water and Planning (DELWP) had a clear understanding of the scheme’s structural issues, it had no plan to address them.

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A DELWP spokesman said the State Government was taking action to better co-ordinate developer contributions to support growing suburbs.

“That’s why a dedicated group is being established to provide policy co-ordination and a monitoring framework for all developer contributions,” he said.

“With Melbourne’s population set to double by 2050, it’s vital we build crucial infrastructure where it’s needed most – and development contributions are one of the best mechanisms for delivering that.”