On 27 November 2024, the Consumer and Planning Legislation Amendment (Housing Statement Reform) Bill 2024 (Bill) was introduced into parliament. In addition to rental and real estate agent reforms, the Bill proposes a suite of changes to the Planning and Environment Act 1987 (PE Act) and Victorian Civil and Administrative Tribunal Act 1998 (VCAT Act) which affect the planning scheme amendment process, permit application process, metropolitan planning levy, VCAT review and Planning Panel procedure, and planning compensation.

The Bill forms part of the State Government’s significant reform agenda intended to implement Victoria’s Housing Statement: The decade ahead 2024-2034 and the recommendations of the Red Tape Commissioner following the ‘Turning best practice into common practice’ review of the State and local government processes for building, planning approvals, and early building works infrastructure approvals.

A summary of the key changes proposed by the Bill and its implications for the planning system is set out below.

Proposed changes to planning scheme amendments

Changes are proposed to the planning scheme amendment process under the PE Act.

A process for proponent led planning scheme amendments

A process for proponent led planning scheme amendments (sections 16A to 16E) is proposed to provide a formal pathway for a person to request a council to prepare a planning scheme amendment. There is no timeline for a council to make a decision on a person’s request, but the Minister may direct the council to make a decision within a specified time (not being less than six weeks). The councils will be required to provide written notice of its decision on whether or not to prepare an amendment and must give reasons if it decides to refuse the request.

A formal process for seeking authorisation to prepare planning scheme amendments

Currently, a council is required to obtain authorisation from the Minister to prepare a planning scheme amendment, but the process for seeking authorisation is not articulated. The proposed new sections 16F to 16L set out a formal process for councils and others to request authorisation from the Minister to prepare an amendment, including provisions for the Minister to seek further information. A council may commence preparing an amendment without authorisation after 10 business days from making the request if the Minister has not notified council of the Minister's decision. Amendments within a Suburban Rail Loop planning area declaration cannot be authorised without the SRL Minister’s consent.

A pathway for 'low-impact amendments’

A new pathway for ‘low-impact amendments’ is established through a new section 23A. This pathway will exempt ‘low-impact amendments’ from the requirement to refer submissions to a Planning Panel (Panel), instead giving a planning authority the power to make a decision to adopt, change or abandon an amendment after considering submissions. What constitutes a ‘low-impact amendment’ will be prescribed by the regulations, or determined by the Minister. We presume this pathway is intended to enable a council to prepare ‘correction’ type amendments through a streamlined process.

New sections 28A to s 28D will enable the Minister to continue an amendment that has been abandoned by a planning authority. The Minister will have 30 business days to decide whether to continue an amendment that has been abandoned.

Proposed changes to Planning Panels

The Bill seeks greater efficiencies in how Panel hearings are conducted through provisions relating to ‘like’ submissions and expert conferences.

‘Frivolous, vexatious or wholly irrelevant’ submissions

Planning authorities will have an obligation not to refer submissions to a Panel which they consider frivolous, vexatious or wholly irrelevant to the planning scheme amendment.

‘Like’ submissions and their treatment

Under new sections 158C to 158G, a Panel (and Advisory Committee) may treat ‘like’ submissions as one submission if the Panel is satisfied that they are ‘the same or substantially the same’. There is a process for nominating one submitter as a ‘lead submitter’ for the purposes of the hearing. Decisions about ‘like’ submissions will be made at a ‘directions panel’.

The introduction of ‘conferences of experts’

Additional direction is to be provided under a new section 159A in relation to expert evidence, enabling a Panel (and Advisory Committee) to direct experts to hold a ‘conference of experts’ or prepare a ‘joint experts report'. In addition to the experts, the Panel can direct the person who engaged the expert, submitters, legal representatives and an independent facilitator to attend the conference.

Proposed changes to permit applications

Changes to the planning permit application process are proposed under Part 8 of the Bill.

Giving notice of incomplete permit applications

New sections 48A to 48D will clarify how a responsible authority is to give notice where it considers the permit applications to be 'incomplete'. Notably, an application will be void and of no effect if a notice is not complied with by the specified date in the notice. Applicants will be entitled to seek a refund for void applications.

These new notice provisions will not affect the requirements that an application for a permit comply with section 47(1)(b), (c), (d) or (e) of the PE Act. Neither will it prevent a responsible authority from requiring an applicant to provide more information under s 54.

Increased default expiry dates for permits

There are proposed amendments to section 68 to increase the default expiry dates for permits that do not specify when they expire, so that the default expire dates are as follows:

• three years after the issuing of the permit if the development has not commenced (there is currently no ‘commencement’ default expiry date for such permits);
• five years after the issuing of the permit if the development is not completed (up from two years); and
• three years after the development is completed if the use has not commenced or if the use is discontinued for a period of three years (up from two years in both circumstances).

Assessing ‘material detriment’ and ‘a person materially affected’

A proposed new section 52A will empower the Minister to make guidelines about assessing ‘material detriment’ for the purposes of giving notice of a permit application and applications to amend a permit under sections 52(1)(a) and (d), 57B(2) and 96C(1)(f) and/or whether a person may be materially affected by an amendment or an application for the purposes of s 96C(1)(b).

Submissions under Minister’s ‘call in’ power

Under s 97E(1) the Minister must refer any objections or submissions received in respect of any permit application that has been ‘called in’ by the Minister under sections 97B or 97C, to a Panel appointed under Part 8. The Bill amends this to a discretion to refer objections and submissions. The intended effect of the amendments is to enable the Minister to more efficiently intervene in permit applications that are experiencing unreasonable delays in circumstances where the Minister is satisfied that there is no need to obtain further independent review and advice from a panel.

Proposed changes to the Metropolitan Planning Levy

The Bill will introduce exemptions to the requirement to pay the Metropolitan Planning Levy (MPL), including the ‘levy exemption certificate’ which an applicant will be able to apply for under the new section 96UA. The Minister will be able to issue a ‘levy exemption certificate’ if the applicant made a previous permit application for the development of the same land, and paid an amount of the MPL in respect of the previous application, and the estimated cost of development is not more than 10% greater than the estimated cost of development specified in the levy certificate for that previous application. The ‘levy exemption certificate’ will be valid for 180 days from the date it is granted.

There will be exemptions to the MPL which will relate to applications that are ‘made in prescribed circumstances’, which will be detailed in subsequent regulations.

Proposed changes to VCAT proceedings

Part 10 of the Bill is intended to streamline Tribunal proceedings.

Grouping objectors

A new section 83AA will allow VCAT to treat two or more objectors to a planning permit application as a group where they lodge statements that rely on similar grounds or raise similar issues (similar to the changes to the Panels process).

Additional case management powers

A new section 94A will confer additional case management powers on VCAT to promote the just, timely and efficient determination of proceedings. Any member (including a non-legal member) will have powers to:

• conduct all or part of a proceeding entirely on the basis of documents (‘on the papers’), whether or not all parties agree;
• impose time limits on the making of submissions or the examination of witnesses; and
• encourage the parties to cooperate, to settle or to use appropriate dispute resolution.

An amended Schedule 2 will give the Rules Committee additional rule-making powers to support the exercise of VCAT’s new case management powers.

Additional summary dismissal and strike out powers

Under a new section 94A(3), a Presidential or legal member will have the power to confine a proceeding to particular matters in dispute and, importantly, to summarily strike out or dismiss all or any part of a proceeding that lacks substantive or objective merit and has no real prospect of success. This power is in addition to the existing summary dismissal or strike out power in section 75 of the VCAT Act, which is based on the test of whether a proceeding is frivolous, vexatious, misconceived or lacking in substance or is otherwise an abuse of process. It remains to be seen whether the test under the new section 94A(3) will be interpreted as imposing a lower bar than section 75 of the VCAT Act. That seems to be its intention.

New provisions

The Bill will also insert related provisions into the VCAT Act, such as the new clause 56A to Schedule 1, which will allow VCAT to require a party to give notice of a hearing and obviate the need for the principal registrar to do so. A new clause 56B, will allow VCAT to give its reasons for affirming or varying a planning decision in summary form.

Expanded ability to amend applications

Finally, an amendment to clause 64(1) of Schedule 1 will expand VCAT’s ability to amend applications for permits, licences or other approvals that are the subject of a proceeding.

Proposed changes to compensation claims

Part 11 of the Bill will introduce provisions into Part 5 of the PE Act to standardise the process of making a claim for compensation arising from the reservation of land for a public purpose and to deal with the interest payable on compensation for such a claim.

A new prescribed form for claims

A new section 99A will require that claims be in the prescribed form, which will replace the existing Form 11 of the Land Acquisition and Compensation Act 1986, and will allow the Minister to publish an order specifying the evidence required to accompany a claim.

New provisions to allow both the Court and the Tribunal to award interest

As to interest, this is currently awarded under section 60 of the Supreme Court Act 1983 (SCA), which requires the Supreme Court to award interest at a rate not exceeding the rate fixed under the Penalty Interest Rates Act 1983 (currently 10%) unless there is good cause not to award the interest.

New sections 104B and 104C will remove the need, and indeed the ability, to rely on section 60 of the SCA by dealing specifically with interest payable under Part 5.

These new provisions will allow both the Court and the Tribunal to award interest. This will no doubt increase the volume of compensation proceedings that make their way to the Tribunal rather than to the Court.

The provisions do not include any scope for ‘good cause’ to be shown why interest should not be payable in a given case. This is likely to simplify compensation proceedings by avoiding argument as to whether a claimant may have engaged in conduct that disentitles them to it.

The rate of interest to reflect the opportunity cost of money

The rate of interest will no longer reflect the penalty interest rate but will be set by order of the Governor in Council on the advice of the relevant Minister, who may make a recommendation on this matter after consulting with certain ministerial colleagues. The rate must be compensatory and commensurate with a fair market rate that reflects the opportunity cost of money.

This provision will again simplify proceedings by avoiding argument as to the appropriate rate in a given case. While the precise figure remains to be seen, it will likely be lower than the penalty amount of 10% that is usually awarded. The principles of compensation and the opportunity cost of money lead one to think that the rate may sit somewhere slightly above the cash rate.

What’s next?

The Second Reading debate for the Bill was delivered on 6 February 2025. The Opposition circulated amendments to the Bill on 20 February 2025 when the Second Reading debate resumed. If the Bill passes, the relevant planning provisions in the Bill will commence on 25 November 2025 (if not proclaimed earlier).

In relation to the changes to the PE Act, the Bill forms part of the ‘rewrite’ of the PE Act which the Victorian Government has committed to in the Housing Statement. The changes appear to be the ‘low hanging fruit’ reforms to the PE Act which will see greater efficiencies in the planning pathways without resulting in significant changes to the overall framework of the planning system. We understand that more wholesale reform is being considered. We will continue to provide updates as the Victorian Government’s reform agenda continues to unfold.