http://www.theage.com.au/victoria/vote-ends-plan-to-extend-city-limit-20100224-p106.html
Vote ends plan to extend city limit
SARAH-JANE COLLINS
February 24, 2010
THE state government has scrapped plans to expand Melbourne's outer limits after a tax on land sales in growth areas was defeated in the upper house last night.
Planning Minister Justin Madden told Parliament that without the tax the government was not prepared to move the boundary, which would free up more land for development.
''We've made it very clear, time and time again, it would not be responsible to move the Urban Growth Boundary without being able to fund that infrastructure,'' Mr Madden said.
He accused the Liberals, Nationals and Greens - who used their combined numbers to defeat the bill - of pushing up house prices by reducing ''the market's ability to meet housing demand''.
The Growth Areas Infrastructure Contribution Bill was touted as a way to reduce the funding burden on government when building infrastructure in new suburbs. The proposed $95,000 levy would have brought in an estimated $2 billion that would have contributed about 15 per cent of funding for future infrastructure.
In a statement issued after the vote, Mr Madden ruled out expanding Melbourne's urban limits without the tax, saying to do so would be irresponsible, and ''would leave growing communities without the infrastructure and only increase profits for developers''.
But Tony De Domenico from the Urban Development Institute said the government should have been prepared to compromise on the tax to get it through Parliament instead of digging in behind its preferred model.
''Both major political parties agreed in principle to needing a GAIC and yet they couldn't come together to negotiate something,'' he said.
''Melbourne obviously needs more land, there's no doubt about that - the way our population figures are going there will be more demand for land then there is supply and housing affordability will go out the window.''
Opposition planning spokesman Matthew Guy hit back, saying the growth areas tax would have pushed up house prices by about $15,000 and he was pleased it had been defeated.
''Labor's attempt to link the GAIC bill's passage to the Urban Growth Boundary changes and hold the development industry to ransom is further proof of its arrogance,'' Mr Guy said.
He said the Coalition had wanted a levy imposed at the end of the planning process, not when land was purchased.
''[The bill's defeat] is great news for the thousands of landholders who would have faced financial ruin if Labor's plan succeeded.''
Greens upper house MP Greg Barber said the Greens had voted it down because urban expansion simply caused big infrastructure gaps.
''It seems the faster we sprawl the bigger the infrastructure gap gets,'' Mr Barber said.
Democratic Labor Party MP Peter Kavanagh abstained.
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