The Property Council of Australia has welcomed Minister Guy’s announcement at the Property Council’s Division Lunch today that the Victorian Government will work toward implementing a reformed development contribution system in Victoria by the end of 2012.
The Victorian Government’s announcement follows longstanding advocacy by the Property Council to reform the current operation of development contributions and the severely negative impact they are having on housing affordability.
The Property Council’s report, Development Contributions in Melbourne’s Growth Areas – Why Contributions Are Escalating, released in April 2011, sparked the Victorian Government’s announcement to develop a new framework for Victoria’s development contributions system.
Victorian executive director, Jennifer Cunich, said today, "Development contributions, particularly in Melbourne's growth areas, are not delivering good results and they haven't for a long time."
"New communities need infrastructure, they need services and facilities, but they also need to be able to purchase their homes at an affordable price. The continued escalation of development contributions is damaging housing affordability."
Ms Cunich pointed out that, "Currently there is no certainty or transparency in the process, for industry or communities. Property Council has consistently advocated for clear justification, need and nexus, that direct link between the contribution and the infrastructure delivery, to be established as part of the development contributions system."
The Property Council congratulates the Minister and his government on taking this considered step toward establishing a better system. This is not a process that should be rushed as a lot is riding on getting the DCP's right and put Victoria ahead of the pack.
The Minister’s commitment to establish an Advisory Committee follows the Property Council’s recommendations submitted as part of its involvement in the Stakeholder Reference Group appointed to examine the development contributions system.
"The Advisory Committee will play an important role in sorting out the operation of the new framework. Serious consideration needs to be given to the detail around the scope of works and total costs to be covered by development contributions." said Ms Cunich.
"Development settings differ across the state. The infrastructure and service requirements in Victoria’s regions are different to those required in the growth areas. It’s important that we do not apply a one-size-fits-all model but that the Advisory Committee works through the issues faced by different development contexts," said Ms Cunich.
The Property Council welcomes the framework announced today Minister Guy and will continue to advocate for a framework that sees the implementation of a capped maximum charge for development contributions and items to be tied to an Infrastructure Plan.
"The development and speedy implementation of such a solution will promote greater efficiency in the use of development contributions to fund infrastructure, increase productivity and provide better outcomes for Victoria as the state grows," commented Ms Cunich.
Click here to download a copy of the research report, Development Contributions in Melbourne's Growth Areas - Why Contributions are Escalating.
Click here to learn more about the Property Council's advocacy work on reforming Development Contributions in Victoria.
