Victoria

Vic Govt announces GAIC agreement

THE INTRODUCTION of the controversial Growth Areas Infrastructure Contribution (GAIC) appears likely, with the Victorian Government announcing that the Dispute Resolution Committee of Parliament has negotiated a "bipartisan way forward for funding vital infrastructure in an expanded urban growth boundary."

Mr Madden said the Dispute Resolution tabled in Parliament provides for the Growth Areas Infrastructure Contribution (GAIC) legislation to be passed with amendments agreed between the Government and the Opposition.

The GAIC Bill was rejected by the Victorian Upper House in February, with the Opposition claiming that, while they supported the GAIC in principle, they were not prepared to support it without changes. These changes included the payment of the GAIC levy at the end of the planning process, not when land was purchased.

The GAIC has been proposed by the Government as a way to fund future infrastructure and services in growth areas, and is expected to contribute approximately 15 per cent or $2 billion towards the cost of such infrastructure and services. It is proposed to apply to land brought into the UGB from 2005 and zoned for urban development. The proposed GAIC rates were $80,000 per hectare for land brought into the UGB in 2005 and 2006, and $95,000 per hectare for land brought into the UGB in or after 2009.

"It is vital for Melbourne's future housing affordability that the Urban Growth Boundary be extended and revenue secured to build infrastructure and facilities for new communities," Mr Madden said.

The Government has proposed an expansion of Melbourne's growth areas but insisted no change would be made without the implementation of the GAIC. "This is a critical issue for the future of Melbourne and the Government has been willing to make considerable concessions in order to reach this agreement," Mr Madden said.

As part of the changes to the GAIC, the Victorian Government has said it will spend 50 per cent of GAIC revenue on providing public transport infrastructure in the growth areas through a 'Growth Areas Public Transport Fund'. Mr Madden said this will provide $1.2 billion worth of extensions to the public transport network.

In addition, a further $1.2 billion will be available to councils and other bodies to allow for the development of community infrastructure, such as health services, libraries and sports grounds.

The amendments to the Bill implement the contents of the Memorandum of Understanding signed in March by the Brumby Government, the Property Council of Australia and the Urban Development Institute of Australia, which spelt out how the GAIC could be restructured to make it acceptable to the development industry.

Major changes to the legislation include:

  • Developers will pay 30 per cent of the GAIC liability when they purchase land, with the remaining 70 per cent to be deferred and paid in stages as the land is subdivided;
  • The outstanding balance will be indexed at the Consumer Price Index up to the point that a Precinct Structure Plan is gazetted. Following this, any deferred amount deferred will accrue interest at the Treasury Corporation of Victoria 10 year bond rate;
  • Properties between 0.41 hectares and 5 hectares will now be exempt from GAIC on the sale of land unless it is being subdivided or developed; and
  • GAIC is not payable on lots of 10 hectares or less (up from 2.03ha) where there is a habitable dwelling until subdivision or development.

Mr Madden said exempting smaller properties will protect the interests of hobby farmers and lifestyle property owners and ensure the GAIC is targeted at developers or people intending to develop or subdivide land.

The Bill will now go back to both houses of Parliament for the proposed amendments to be agreed and the legislation passed.

If the Bill is passed, the Government will re-introduce an amendment to expand Melbourne's Urban Growth Boundary, and has said it will put in place Public Acquisition Overlays for the proposed 15,000 hectare native grasslands reserve, the Regional Rail Link and the Outer Metropolitan Ring / E6 Transport Corridor.

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