GAIC defeated in Victorian parliament

The Planning and Environment Amendment (Growth Areas Infrastructure Contribution) Bill was defeated in the Victorian Legislative Council yesterday, with 19 votes against and 18 for.

The defeat also means that Melbourne's Urban Growth Boundary (UGB) will not expand as proposed, as the Victorian government has consistently said that such an expansion will not proceed without support of the Growth Areas Infrastructure Contribution (GAIC).

Planning Minister Justin Madden's plea failed to win support and as expected, the GAIC was rejected by the upper house.

Prior to the failed vote, Mr Madden said: "I have referred to my experiences as a young person growing up in a suburb with very little infrastructure…[and] I know the harsh reality of growing up without that infrastructure. Without a funding mechanism it may not and sometimes never arrives. This [the GAIC] is the funding mechanism to deliver that. I feel a great sense of sadness today because if this bill is defeated, then those new arrivals who come to this country and settle in the outer suburbs, those young families who settle in the outer suburbs, those working families who toil to pay off their mortgages – all those individuals – will not have the funding for the infrastructure that they sorely deserve. I say to the opposition parties on all those fronts, 'Shame on you today'."

While the Liberals have maintained that they support the GAIC in principle, they were not prepared to accept the Bill without changes, including the timing of when the levy was payable. The Liberals wanted a levy imposed at the end of the planning process, not when land was purchased.

Opposition planning spokesman Matthew Guy had repeatedly called for the Government to negotiate the passage of the Bill with the Liberals. Yesterday Mr Guy said that "Labor refused to negotiate with the Victorian Liberal Nationals Coalition over the GAIC despite numerous offers over the last fifteen months" and called the defeat of the Bill "great news." He said the "GAIC would have burdened Victorian business with huge upfront start-up costs and added interest rates of more than 11 per cent to deferred GAIC bills."

About the GAIC

The GAIC was to apply to land brought into the UGB from 2005 and zoned for urban development, with the purchaser of the land liable for the payment of GAIC when they buy land in the growth areas. The 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.

The GAIC was expected to contribute approximately 15% or $2 billion of the cost of providing infrastructure and services in the growth areas.

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