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Levy increase on land in Melbourne strategic assessment area

November 06, 2019

On the 16th of October, the Victorian Government introduced the Melbourne Strategic Assessment (Environment Mitigation Levy) Bill 2019 (the Bill) to the Victorian Parliament. HIA was only made aware of the Bill just prior to it being introduced into Parliament in mid-October 2019. Since the Bill has been brought to our attention, HIA has met with DELWP’s senior officers and the Minister’s office on a number of occasions to further discuss the matter and provide initial feedback. 

HIA’s early view is that the Victorian Government has been too quiet in terms of industry consultation and have raised concerns surrounding the levy system – including the amount of the levy – particularly in the first 5 years. The first five years incudes an additional indexation to account for prices not increasing since 2013, following that 5 period only CPI and wage price index apply. HIA also has concerns about the indexation proposed over time and the rights of review to VCAT.

The Bill underpins the existing Melbourne Strategic Assessment Program in acknowledgement of the long time scale of the program and to codify and improve a number of the processes currently in place. The Bill gives effect to the implementation of agreements between the Victorian and Federal Governments, as set out in the Melbourne Strategic Assessment (MSA) Report and associated approval conditions, in accordance with the Environment Protection and Biodiversity Conservation Act (EPBC Act). A number of key components proposed within the Bill include:

  • Only relevant for land to which the MSA and Biodiversity Conservation Strategy (BCS) apply;
  • The environment mitigation levy will replace the BSC Habitat Compensation fee; 
  • The environment mitigation levy will be indexed annually; 
  • Indexation is calculated according to weighted balance of consumer price index and wage price index; 
  • The average adjustment in the five years to 2019 has been 1.7%; and
  • The first five years incudes an additional indexation to account for prices not increasing since 2013, following that 5 period only CPI and wage price index apply
  • To establish the Melbourne Strategic Assessment Fund and specifies the purposes for which the fund may be used.
  • Requires a 5 yearly review of the cost base of the program and that the review be a public process with an opportunity for industry to provide information of make submissions 
  • Includes a biannual audit of the progress of the Program against the existing agreed outcomes to be completed by the Commissioner for Environmental Sustainability
  • Annual reporting requirements including availability of information on the DELWP website 

The Bill is yet to be passed through the upper house of the Victorian Parliament, however this may occur either within the two sitting weeks left for this year or when parliament commences sitting in the new year. HIA will watch with interest as the Bill progresses and will provide updates accordingly

For further information, please contact Teresa Davis or call 03 9280 8230.