Matthew Guy shunned warnings of 'suboptimal' Fishermans Bend

Former planning minister Matthew Guy shunned the early warnings of his own top planning officials when he launched Australia's largest urban renewal project without a clear plan or finance for community infrastructure including transport, open space and affordable housing.

Confidential departmental briefs from early 2011 to 2013 obtained by The Sunday Age, reveal how senior bureaucrats urged Mr Guy to buy key strategic sites before allowing redevelopment of industrial Port and South Melbourne to create the Fishermans Bend precinct.

"Lack of investment in such sites is likely to result in sub-optimal market responses and development outcomes," warned department heads in one of the briefs from early 2011. "Such outcomes are difficult to revisit late for further improvement and development."

The state's most senior planning bureaucrats also told Mr Guy that he should ensure gradual development from a hub centred on public transport. The lack of a central focal point dogged the progress of the Docklands precinct for years. And they called for some existing industries to be protected from residential redevelopment.

Former planning minister Matthew Guy's handling of Fishermans Bend has been almost universally slammed by planning, architectural and property experts.Credit: Penny Stephens

But the briefs also reveal how, over 15 months, and at the behest of the minister's office, the department gradually dropped its demands for detailed government planning and intervention, including the protection of existing industries and jobs, in the end supporting his preference for ad hoc, laissez faire development of the entire area.

Among the once essential elements for success eventually abandoned were:

• Development needs to be incremental, starting with a "central place". (This is the idea that communities should grow out from a town centre. Docklands is an example of the failure to do this.)
• Health, education and other community facilities need to be planned.
• Government must invest in transport and open spaces – making an appealing public realm. Failure to do so would result in "sub-optimal" development.
• Existing industries need to be recognised for their economic importance. Some "may need to remain".
• Planning should "require" affordable housing in large-scale residential developments.

In July 2012 the now opposition leader stunned the political and property worlds when he effectively doubled the size of the Melbourne CBD by rezoning a 250-hectare area south west of the CBD.

The decision triggered a massive hike in land values and windfall paper profits to landowners. It sparked a high-rise frenzy with 46 apartment towers – some reaching more than 60 storeys – either proposed or approved in the precinct since January 2014.

Illustration: Matt Golding

At the time there was no binding master plan or height limits. Nor was there a mechanism to capture any of the hundreds of millions of dollars in immediate uplift in land value in the area, money that could have helped pay upfront for the infrastructure and services needed for a residential community that could be large as the City of Ballarat.

Last week The Sunday Age revealed how senior Liberal party members and donors including the party's honorary federal treasurer Andrew Burnes, were among those to reap huge paper profits from one stroke of Matthew Guy's pen.

The ministerial briefs from early 2011 were an attempt to provide some planning thought to Mr Guy's February 2011 announcement of a vague vision for an unspecified area he described as Fishermans Bend.

At that point no planning work had been done by his department for the precinct. Nor had boundaries been drawn.

The ministerial briefs show advice about the need for government to buy sites and provide services, dropping away over the subsequent 17 months in the lead up to the July 2012 rezoning.

Still, on 22 June 2012, just days before the surprise move, planning officers continued to call for affordable housing to be "required" from developers in the area.

Then, a final brief on 27 June 2012, department heads note changes to their advice in keeping with discussions with the minister's office in the preceding days. Affordable housing had been deleted altogether. Public servants tend to note such discussions with ministers' offices as a coded record that their advice had been directed by ministers or their minders.

Mr Guy's handling of Fishermans Bend has been almost universally slammed by planning, architectural and property experts and even real estate agents.

Senior planners remain bemused as to why the large-scale rezoning at Fishermans Bend occurred when government-sponsored Docklands next door remained unfinished, and planning had already started for publicly owned sites in North Melbourne and E Gate in West Melbourne.

The Andrews government is now seeking to buy strategic sites in the precinct at massively inflated prices.

In a response to a series of question on the precinct's planning advice, Mr Guy's spokesman said: "Scaling back the Fishermans Bend project will result in more overdevelopment of existing suburbs."

The former planning minister has repeatedly refused to be interviewed by Fairfax Media about his Fishermans Bend decision or to answer specific questions about his actions.

In April, Labor Planning Minister Richard Wynne said he would recast plans for Fishermans Bend – a move he said reflected the high level of government, community and property industry concern about the project.

But he now faces the difficult decision of how far to go given a string of approvals have already been granted and land values have been geared to the premium of high-rise residential development.