Developers to be slugged millions amid overhaul of state’s infrastructure contribution scheme
Developers are set to be slugged millions in new charges amid an overhaul of the state’s infrastructure contribution scheme.
Victoria
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Developers are set to be slugged millions in new charges amid an overhaul of the state’s infrastructure contribution scheme.
Plans to rework the scheme – which funds the building of essential infrastructure for new communities – have been on the table for more than a year with the property industry and government unable to agree on an appropriate model.
Now a new working group will partner the government with key property stakeholders to reform the scheme which is currently applied inconsistently across the state.
The government hopes to ultimately enforce infrastructure contributions on every development across the state, while property industry sources said they would push for an iron-clad guarantee that money raised would only ever be used for community services and never placed into consolidated revenue.
Until then, a new pilot program will be trialled from January 1, 2027, across 10 initial activity centres – Broadmeadows, Camberwell, Chadstone, Epping, Frankston, Moorabbin, Niddrie, North Essendon, Preston and Ringwood – in which new developer contributions will apply to all new builds within an 800m catchment area that surrounds the commercial core of each precinct.
The program – the third major housing announcement in three days, with more anticipated throughout the week – is expected to raise tens of millions of dollars.
“Communities that build more homes should get more funding for things they need. Everyone can contribute, including property developers. It should apply everywhere,” Jacinta Allan said.
“Developers already build homes and opportunity, and many already contribute to a system like this – now we’ll work together to make the funding fairer, so growing areas get more support for schools, parks and transport.
“Outer-suburban developer contributions helped deliver this wonderful local school. That was a system a Labor government proudly introduced – and that’s something that all communities in the inner-suburbs deserve, too.”
It is understood property stakeholders pushed back against the fast tracked introduction of a new scheme.
Instead the working group will report back to government by March with a reform proposal.
As well as existing infrastructure contributions, developers also make a growth areas infrastructure contribution (GAIC) which applies to certain types of land in Melbourne’s growth areas: Cardinia, Casey, Hume, Melton, Mitchell, Whittlesea, and Wyndham.
Revenue from the fund is expected to be $336m this financial year, but is then expected to decline by an average of 9.4 per cent per year over the forward estimates.
A coalition of development stakeholders, which form the government’s Housing Affordability Partnership, welcomed the plan for increased contributions.
“As we build more homes for Victorians, it is essential that local infrastructure and services also grow to support vibrant, liveable communities,” they said.
“The development industry supports government to deliver critical community infrastructure through a contribution system.
“The current system for collecting contributions from new housing developments is inconsistent and doesn’t provide certainty.”
The coalition of property stakeholders said the existing process was complex and often led to challenges funding critical infrastructure.
Then the government on Monday committed to a new $150m round of funding for outer-suburbs delivered through the GAIC.
Planning Minister Sonya Kilkenny said it would focus primarily on transport, like buses, services, stations, interchanges, intersections, roads, bike paths and walking paths.
“Submissions will open this year so growing communities in the outer suburbs can share in this $150m fund, which is all about making great communities even better by delivering the infrastructure they need,” she said.
Originally published as Developers to be slugged millions amid overhaul of state’s infrastructure contribution scheme
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