Article: Urban growth to cost $11bn

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From the Melbourne Age click here!

Urban growth to cost $11bn

Urban growth to cost $11bn
JASON DOWLING
September 8, 2009

VICTORIAN taxpayers will foot an $11 billion infrastructure bill for Melbourne's urban expansion, a state parliamentary committee has been told.

Planning Minister Justin Madden has said he expects the growth areas tax of up to $95,000 a hectare to raise $2 billion over the next 20 years.

However, the chief executive of Victoria's Growth Areas Authority, Peter Seamer, said this would meet only 15 per cent of the cost of providing the required infrastructure.

''In terms of the state infrastructure requirements, not including things like the regional rail link or the freeways, and not including water supplies and those sorts of things done by utilities ? we have estimated that the figures will be roughly ? around 15 per cent of the total state charges,'' he said.

''So presumably that other 85 per cent gets paid by the wider Victorian community.''

Greens MP Greg Barber slammed the funding shortfall. ''The faster the city sprawls, the broker the state budget gets,'' he said.

Mr Barber said there was a ''massive subsidy to houses on the urban fringe''.

Mr Seamer also revealed to a parliamentary committee yesterday that the Growth Areas Authority had provided advice to the Government on the impact of changing the model for the proposed growth areas tax. But he said releasing the advice from the authority, an independent statutory body, would be an ''an issue for the minister''.

Opposition planning spokesman Matthew Guy said the advice should be made public.

Legislation outlining Melbourne's new urban boundary and growth areas tax is expected to go before Parliament next week.

Mr Guy said some people faced an immediate loss of equity in their homes from the introduction of the growth areas tax.

''We are getting anecdotal advice from people who live in these areas where they can't obtain finance to put an extension on their home because banks believe they have no equity left should the GAIC (growth areas infrastructure contribution) pass,'' he said.

Emma Tyner, a spokeswoman for Mr Madden, said the infrastructure tax would ''make an important contribution towards the very substantial cost of providing vital infrastructure and services in Melbourne's newest suburbs, such as schools, public transport and arterial roads''.

She said the Government ''will continue to meet the majority of the costs of the new state infrastructure required to support Melbourne's newest communities''.

The Government has indicated there could still be changes to the proposed expansion of Melbourne's urban boundary and infrastructure tax.