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«December 2011 Victorian Planning System Ministerial Advisory Committee Initial Report. Geoff Underwood, Chair. Catherine Heggen, Member. David ...»

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Translation of relevant State Policy, by either Government or Planning Authorities, into planning schemes.

Removal of the State Planning Policy Framework from planning schemes as it will no longer be needed in the assessment of planning permit decisions.

Streaming of planning scheme amendments according to complexity.

Planning authorities are responsible for the translation of State Policy objectives into planning schemes, guided as necessary by specific directions and/or instructions The State Planning Policy Framework (SPPF) be removed from planning schemes and act as a separate compendium of spatially resolved maps and instructions for planning authorities That State Policy be reviewed every four years, prior to the councils’ statutory scheme review, to ensure it is updated and relevant for planning authorities Planning scheme amendments are ‘triaged’ by DPCD into streams with different process steps dependent on complexity and level of strategic resolution Responsible authorities need only consider the local translation of State Policy in their decisions not State Policy”.

The arrangement is represented in the following diagram.

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FIGURE 1 MAV’s Proposed Planning System Operational Framework Source: Page 15, MAV Submission No. 299 The Housing Industry Association (HIA) (Submission No. 196) suggests ways to reform the planning system to reduce the number of planning permit

applications and reduce the burden on the system. It states:

“In Victoria, delays and uncertainty in the planning system have been a key concern for the residential building industry for some time. An increase in the number of proposals requiring planning approval, a lack of experienced planning staff, high turnover rates in councils, lengthy referral processes that often add little value to built outcomes and the capacity for ‘objections’ all serve to stifle timely decision making.

A substantial expansion in the scope and the stringency of planning scheme requirements has meant more planning permits for less significant works which is placing unnecessary burden on local government planning resources and slowing down the system.

Layers of complexity have been added to planning schemes, frustrating applicants and generating very significant cost increases to HIA members and home buyers.

A review of the Victorian Planning System should focus on the increased need for improvements in the efficiency and effectiveness of

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the planning system. It should look at freeing up planning resources so that planners can focus on more complex matters.” Numerous submissions address the complexity of planning documents. One

individual (Submission No. 263) writes:

“You'd have to be a masochist to read through all the relevant planning documents that theoretically need to be considered as part of a planning application. They're verbose, sloppy, repetitive, and have key information widely dispersed. Its time for talented editors and graphic designers to give at least Planning Schemes a makeover.” As with any system, the central expectation should be about making it work to achieve what it is intended to achieve. For the Victorian Planning System, the central expectation is of a system that can perform efficiently and effectively.

Notwithstanding the strident expressions in some of the submissions and the extreme solutions being advocated by others, the Committee believes the implication in all these presentations is that major change is required.

5.3 Benchmarking the Planning System Any good system should be constantly monitored and assessed to ensure it functions properly.

Over the past decade, reviews of the planning system have made improvements and changes for efficiency gains. As part of the Victorian Competition and Efficiency Commission Inquiry into Victoria’s Tourism Industry in March 2011, the Commission examined planning regulation as an inhibitor on the industry and the Auditor General occasionally conducts studies into aspects of the system to ensure efficacy and efficiency.

Over the same period, a number of external reviews have also looked at the planning system either as a stand alone system or as part of a broader national analysis. For example, the national Development Assessment Forum and the Commonwealth Productivity Commission examined and reported on the Victorian Planning System compared to other States and Territories.

Also of value is a report commissioned by the Local Government and Planning Minister’s Council in 2008 entitled First National Report on Development Assessment Performance (South Australian Government, 2010). This report was prepared for the Council of Australian Governments (COAG) as an examination of regulatory reform, including development assessment.

The reports of COAG and the Productivity Commission contained useful data to compare the various systems operating in the States and Territories. While a direct comparison is not possible because of variations across the systems,

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there are sufficient benchmarks on which to base reasonable conclusions about how successfully those systems operate.

The COAG review groups its work into three main themes: process, system and outcome performance.

The report states:

“It is expected that reporting against these Measures over time will allow jurisdictions to demonstrate the effect of reforms on their systems, and also to identify potential areas of new reform. It is recognised that development assessment systems, like many other regulatory systems, benefit from consistent monitoring and continuous improvement.” The Productivity Commission review entitled Performance Benchmarking of Australian Regulation: Planning, Zoning and Development Assessment 2011, (the Productivity Commission Report) was intended to:

“identify among all governments in Australia those planning policies and practices that have proven particularly successful; indicate areas where further reform could be most beneficial; and provide a 2009 10 baseline for any future assessment of the performance of planning systems”.

The Productivity Commission Report states:

“The state and territory planning systems have also been subject to rolling reforms which are often not fully implemented or evaluated before being replaced with further reforms. City planning systems are characterised by ‘objectives overload’ including unresolved conflicting objectives, long time lags and difficult to correct planning mistakes.

There is a significant risk that the systems’ capacity to deliver on the objectives will deteriorate.” The Productivity Commission Report showed that compared with other states and territories Victoria’s planning system performed comparatively well with respect to the gap between the underlying demand and supply of dwellings;

planning for major infrastructure; the cost of infrastructure charges and the flexibility of business zones.

However areas for improvement included Victoria’s relatively low targets for infill development; the longest median approval time with the corresponding lowest permit application fees and community views about the effectiveness of council planning and of consultation generally.

The issue of community engagement in planning continues to be a problematic one in Victoria. This State has the most generous public notice and third party

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review rights in Australia. However when it comes to benchmarks around community satisfaction about the performance of State and Local Government in relation to planning and the effectiveness of consultation, Victoria compares unfavourably with others that place less emphasis on third party involvement.

The underlying problem appears to be the different priorities of state and Local Governments and that of the community.

The Productivity Commission Report identifies that communities are principally focussed on issues like personal safety, public transport and congestion; while state planning policy focuses on matters such as population growth, increasing population densities and managing greenfield development.

Councils are required to straddle the policy imperatives of the State on one hand and their local communities on the other. The consequence of this mismatch in policy interest and emphasis coupled with wide public notice and third party review rights can be demonstrated in development approval statistics for planning permits.

The Victorian Government maintains and publishes an annual report on planning activity across the State. The most current available data at the time of writing this report is contained in the report Planning Permit Activity in Victoria 2009 10 (DPCD, 2010).

PPAR is produced from data submitted to the Department’s automated Planning Permit Activity Reporting System (PPARS). All Victorian councils contribute to the collection of planning data by submitting a monthly electronic transfer of data.

According to the DPCD website where PPAR data is recorded, 55,874 planning applications were lodged in Victoria for the 2009 10 financial year. These


47,273 new planning applications (84% of total applications lodged);

8,499 applications to amend an existing permit (15% of total); and 91 combined permit applications, (where there is an associated planning scheme amendment).

Compared to 2008 09, as a percentage total, there was a 2.9% increase in new applications lodged.

In the 2009 10 period a total of 49,360 planning applications were decided of which 96% were permits issued and 4% were refusals. In total, 57% of all permits issued were associated with a residential use. Of all decided


93% were made under delegated authority;

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37% had further information requests issued;

37% were subject to public notice requirements;

29% were referred to referral authorities; and 15% had objections lodged.

On a statewide basis, the average time for a decision is approximately twice the statutory 60 day time limit for a decision.1 Rural and regional Victoria make 71% of decisions within the statutory timeframe while metropolitan councils achieve only 61% within the statutory timeframe.

For the same time period the number of applications for review lodged at the Planning and Environment List of VCAT increased from 3,082 in 2008 09 to 3,326 in 2009 10. More recent data for the 2010 11 period confirms a total of 3,775 applications for review were lodged2.

The average number of weeks for all matters to be decided at VCAT has increased from 20 weeks in 2008 09 to 21 weeks in 2009 10 to 22 weeks in 2010 113.

These statistics confirm an increased administrative load on the planning system that is resulting in delay in the planning permit process. This delay results in increased levels of cost, uncertainty and frustration to all participants in the system private sector, councils and the community.

A municipality by municipality analysis provides interesting comparisons, but must be treated circumspectly. Situations between councils differ greatly in relation to resources, especially between metropolitan Melbourne councils and regional municipalities.

An analysis of the performance of each municipality is illuminating and sometimes surprising in that it discloses that certain councils perform efficiently even though they are maligned as poor performers.

Whether the perception that Victoria is performing well in comparison to other States and Territories is correct or not, the Committee thinks there is clearly room to improve the Victorian planning system.

1 122 Average processing days for metropolitan councils. 107 for rural and regional councils. Average processing days are gross and include lapsed, withdrawn and permit not required applications. The median processing days are 82 and 59 respectively.

2 VCAT annual reports 2009-08, 2009-10 and 2010-11

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6. Preliminary Findings of the Committee The Committee considers that the planning system in Victoria requires reform.

The Committee considers that in some respects, the planning system has strayed from its original purpose, intent and design and it is timely to consider whether the system remains ‘fit for purpose’.

It is apparent from the submissions and the Committee’s own experience, that the planning system is now very complex. There is a lack of ownership of the system, a lack of responsiveness to issues as they arise, a lack of alternate processes that recognise different types of applications or amendments, timelines are rarely adhered to and in other areas there are no timelines at all.

Consequently, delays cause frustration and disappointment and sometimes disillusionment. Costs are higher through delay and as a result, there is an increasing propensity for ad hoc processes and interventions in the planning system to try to compensate for the perceived lack of timeliness in decision making.

In the next chapters of this initial report, the Committee discusses each of the four key themes by outlining the key issues raised by the submissions.

The Committee poses some questions intended for discussion and to set some direction for the next part of the Committee's task; to prepare a report containing its final recommendations.

The Committee’s preliminary findings are set out below:


A Vision for Victoria (See Part 7.1)

The Committee strongly supports:

The development of a Vision for Victoria that aligns the medium to long term planning and infrastructure needs of the State;

The development of the Metropolitan Strategy and associated eight Regional Growth Plans; and An alignment of the Vision for Victoria, the Metropolitan Strategy and the eight Regional Growth Plans, and a spatial representation of their objectives.

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The Role of the Minister (See Part 7.2)

The Committee believes that:

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