The Victorian premier, Jacinta Allan, says an overhaul of the state’s infrastructure contribution scheme will ensure communities that build more homes will receive funding for key amenities like schools and parks.
With her government’s third housing policy announcement in as many days, Allan on Tuesday flagged a revamped statewide pilot infrastructure contribution program.
The trial will not be rolled out until 1 January 2027 after the next Victorian election in November 2026.
Speaking to reporters, Allan said the proposed scheme would link infrastructure funding to the building of new homes.
“Communities that build more homes should also have the opportunity to receive the funding they need for the things that make those communities great. Wonderful schools, good transport connections, the roads and footpaths and open spaces that make those communities great places to live,” she said.
“That’s only fair to take that approach.”
Allan said the principle should be “applied everywhere” and required everyone to make a funding contribution, including developers.
It will initially be limited to the first 10 designated Melbourne “activity centres” – that the government has earmarked for the fast-tracking of high-density developments – in Broadmeadows, Camberwell, Chadstone, Epping, Frankston, Moorabbin, Niddrie, North Essendon, Preston and Ringwood.
The premier said current contribution arrangements for developers were “complex, inequitable and unfair” and an “administrative nightmare” that can slow down building homes.
“There is something like 43 of the 79 local government councils across the state that collect these developer contributions,” she told reporters on Tuesday at Wollert in Melbourne’s outer north.
“But they collect them in a whole range of different ways … they can be different from one block of land to the next.”
Allan said the lack of a uniform statewide approach meant that areas where more homes were being built did not get “the opportunity to share in this funding”.
She said the development industry recognised the infrastructure contribution landscape needed reform, with a working group to report to back to government by March 2025.
The planning minister, Sonya Kilkenny, said the aim was to a create a regime to eventually be used statewide.
“What we want to see is a simplified system,” she said.
“Something that is going to be fit for purpose and that works for all communities and for all local government areas around the state.”
The opposition spokesperson for home ownership and housing affordability, Evan Mulholland, said the government’s announcement was a “tax on housing” that would increase the cost of homes.
“We’ve seen examples of growth areas not getting the infrastructure they deserve because hundreds of millions of dollars have been held up in Treasury coffers on Spring Street instead of being delivered to communities before residents move in,” he said.
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“Labor have completely botched the delivery of new growth areas. Now Jacinta Allan’s idea is to take that model and spread it across the entire state.”
Dr David Hayward, an emeritus professor of public policy at RMIT, said potential increased costs would be “would be used to pay for the infrastructure that’s needed”.
Hayward, chair of the independent social housing regulation review commissioned by the Victorian government, said there was little detail about the proposal as it will be finalised during a consultation process.
He said it was concerning the working group with the property industry, was largely made up of “people with a very vested interest in the outcome of the decision”.
“There’s no balance in that working group,” he said.
Under the current system, developers make a one-off payment toward essential state infrastructure in most of Melbourne’s greenfield suburbs under the Growth Areas Infrastructure Contribution.
Other schemes are mainly used to fund local government infrastructure.
It is estimated the Growth Areas Infrastructure Contribution pays for just 15% of the state infrastructure and services needed in growth areas.
Infrastructure Victoria has long been calling for the state government to set up a consistent and efficient infrastructure contribution system.
The opposition’s spokesperson for planning, Liberal MP James Newbury – whose electorate of Brighton is affected by the state government’s contentious move to seize planning control of some of Melbourne’s most affluent suburbs – on Tuesday published what he claimed was a leaked outline of Labor’s housing reform announcements that it plans to continue rolling out this week.
The Victorian government has been contacted for comment.
