Victoria’s latest planning bill would widen where developer-funded levies can be spent, enabling selected projects outside the immediate collection areas if they address the needs of growth‑area residents.
The draft clarifies that infrastructure funded through Infrastructure Contributions Plans and the Growth Areas Infrastructure Contribution can be delivered beyond collection or GAIC boundaries, provided the investments serve those communities’ requirements.
A notable shift that has triggered concern about dilution of growth‑suburb funding. The government frames the move as a practical fix to unlock delivery bottlenecks and speed enabling works for housing.
Scope expansion and legal tests
The Planning Amendment, before the Legislative Assembly on 29 October, would “provide clear authority” for ICP projects outside plan areas and GAIC projects outside GAIC boundaries where those works meet the needs of affected landowners and residents, and would also allow GAIC to fund roads and active travel projects from the transport fund.
The package also permits administration costs to be paid from ICP and GAIC revenues, which formalizes practices common in other jurisdictions but increases the onus on transparency. The legal threshold is nexus, not geography, so departments will need to evidence how off‑area investments benefit the communities that paid. That makes the implementation detail critical, from project selection to reporting, and invites stronger audit trails.
Implications for growth corridors
The flexibility could unlock network solutions that sit just outside growth boundaries, such as arterial upgrades or depot sites that service new suburbs. It could also, if poorly governed, shift dollars toward established areas at the expense of rapidly growing fringes where service backlogs remain acute.
The government has previously emphasised that GAIC is hypothecated to growth communities, noting it must be “spent in growth areas,” Jaclyn Symes said in estimates. The political optics are delicate. Clear corridor‑level allocation rules would reduce the risk that perception outruns policy.
Budget, rates and allocations
The State Revenue Office lists 2025–26 GAIC rates at A$118,830 per hectare and A$141,150 per hectare, indexed annually, roughly C$109,000 and C$130,000 respectively given recent averages. Those indexed rates frame cashflows for land transactions, subdivision and building‑permit triggers, and they shape the carrying cost of land banks across Melbourne’s outer growth areas.
As at 30 June 2025, the program had collected A$1.49 billion (C$1.36 billion) and funded 156 projects across its transport and community funds, including schools, health facilities and bus service start‑ups. Rate settings and cumulative collections are central to the debate, because the bill would broaden eligible uses while keeping the levy base constant. Delivery speed, not just authorising scope, will determine whether the changes improve outcomes in practice.
Governance and delivery
For investors and departments, the most material shift is the ability to match levy revenue to network assets that sit just outside boundaries but unlock capacity inside them. That could favour bus priority, road interfaces and land acquisition for community facilities where sites are scarce within tight footprints. It could also complicate accountability unless the state publishes project‑level rationales linking each off‑area spend to demonstrable benefits in the paying corridor.
“The bill will make significant reforms to the planning system to improve efficiency, provide for greater transparency, increase certainty and ensure that the act is fit for purpose,” Sonya Kilkenny told the Assembly. The measure’s success will rest on how rigorously that transparency promise is delivered.