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Part 1: Introduction

Part 1 of this report sets its recommendationsand actions out across 5 separate programs to reduce delays and costs, grouped together for coordinated delivery.

Victoria’s planning and building system provides the legislative and regulatory framework for the appropriate use and development of buildings and land. The system protects the amenity and safety of the community and supports the efficient implementation of government land use planning, building and infrastructure policies.

Over time, planning approvals processes have become more complex with many decision-makers and decision points, some of them repetitive or no longer necessary. This has resulted in concerns about delays and the quality of decisions. Building approvals processes have similarly become more complex and require updating to meet community expectations. Improvement is clearly needed in both these areas. For applicants, (individuals, families or developers) time is money. The harder it is to navigate the system, the more costs are incurred at the expense of efficiency and the system’s overall effectiveness.

Balancing the demands of growth, employment, sustainability, climate change, housing affordability and liveability for our community is a huge, ongoing challenge.

Consultation undertaken as part of this Review demonstrates there is scope for immediate improvement in how we assess and approve land use and development proposals and scope for more fundamental improvements in the medium term.

Currently there is too much fragmentation, inconsistency and complexity in the voluminous documents that underpin the planning and building rules that apply in Victoria. This leads to uncertainty for applicants, repeat work needed by council and referral authority staff and much wasted time and effort. Almost half of all applications result in a formal “request for further information” (RFI) and around a quarter are referred to other agencies for advice.

Processes should be fit for purpose, requirements should relate directly to the purpose of the assessment, policies should be clear about their expected outcomes, the business processes of assessment should be efficient and decisions should be made at the most effective organisational level.

Electronic process management should promote complete and accurate applications that are decision-ready, access to all necessary information for the applicant, the community and the decisionmaker and automatically track progress and generate appropriate performance reporting data.

The assessment should deliver the intended policy, amenity and safety outcomes. The level of assessment should align with the nature of the risk and statutory and business processes should recognise the costs and impacts on all stakeholders and the community.

Guidance material should ensure that applicants are clear about all the information they need to prepare a decision-ready application. The community should be able to access appropriate information about a proposal and decision-makers should have the training and support they need, as well as an appropriate authorising environment in which to make good decisions.

It is clear from our work in this Review that it is not sensible to consider separately information requirements for planning permits, the submission of applications or ways to deal with the need for additional information. Although each of these is the focus of separate sets of recommendations, this Report emphasises the need to integrate these.

The benefits of improving the planning and building system

Improving the efficiency of the planning and building system will benefit Victoria in a range of ways.

The cost to the economy of delays in the $33 billion planning and building industry has been estimated by SGS to be as large as $400 million to $600 million a year (based on estimated value of additional rental yields that would be realised sooner if approvals were granted faster). This is a burden that can be significantly reduced. These avoidable costs are better re-channelled into productive outcomes such as more affordable housing, rather than just being lost to the economy as they are now.

Promoting better and faster approvals processes will not only bring forward residential, commercial and industrial construction but also dwelling occupation, delivering economic benefits associated with household expenditure for goods and services and increased employment. For example, according to the Performance of Construction Index , September 2019 was the thirteenth consecutive month of contraction for Australia’s construction industry. Forecasts by Charter Keck Cramer suggest the residential construction industry across the eastern States is entering a 12 to 18 month period of decline. While these forecasts have now improved slightly, bringing forward construction activity will provide the needed stimulus to the Victorian construction industry.

Following the release of the Discussion Paper, SGS was reviewed the proposed improvements and estimated the likely economic and revenue benefits of implementing them. SGS considered that a one-month reduction in the average time taken in approvals processes as a result of proposed improvements was readily attainable.

SGS has estimated the benefits of the reforms based on this improved capacity in the planning and building system bringing forward an additional 4,800 units of dwelling construction worth $1.8 billion. These benefits over five years (from 2022 to 2026) are estimated to be:

  • an increase in gross state product of around $775 million over five years;
  • an increase in State revenue of up to $330m over five years; and
  • the creation of around 550 jobs per year, on average, over five years, with a peak impact of around 1,200 jobs in the construction sector alone in 2024.

Victoria’s population growth means there will be around 55,000 new households each year on average. To accommodate this growth requires over 65,000 dwelling approvals a year, after accounting for replacement homes and demolished buildings.

Dwelling approvals peaked at 75,000 in 2017 but dropped to 59,000 in 2018 as the market adjusted. The planning and building systems need to be streamlined and capable of supporting the necessary capacity to assess and approve projects as they are put forward, if projected growth is to be facilitated. Recent experience shows that when there is a shortage of supply, house prices can increase sharply. A strong supply of available properties, in the places that people want to live, delivers competitive prices.

Streamlined approval processes and greater system efficiency will lead to increased investment and underpin the supply of new homes. This will result in economic benefits such as increased employment in construction and building supplies and increased commercial and industrial development to create jobs.

Victoria is often regarded as having the best fundamental framework for planning nationally. This is a significant competitive advantage that we must strive to maintain. A better planning and building system is crucial to meeting the community’s infrastructure needs. The recommendations in this report will help meet these needs through improvements that reduce delays and costs for all types of projects. In terms of new precincts and strategic sites, this report makes several recommendations which will enable greater clarity about the timing and delivery of infrastructure such as roads, schools, public transport and community facilities. Examples of the latter include improving the sequencing of infrastructure delivery in new communities, prioritising and expediting planning for sites of strategic importance and simplifying the processes for payment of infrastructure contributions.

The positive engagement by the range of stakeholders involved in this Review demonstrates a commitment by all parties to implement more efficient processes and realise the potential economic and community benefits of the reforms in this report.

The people who operate or interact with the system – including those in government agencies, councils, the community, business and the planning and building industry peak bodies and individuals who have made significant contributions to this Review – are the key to achieving more effective and efficient planning and building approvals. Investing in the people administering the system, including providing training and additional resources to address workloads and system needs, will deliver better planning and building outcomes for the community and industry.

Five proposed programs to reduce unnecessary delays and costs

The programs of recommendations proposed in this report, and shown in Figure 1 below, aim to lift the performance of the system by locking in permanent and sustainable improvements while also setting a solid foundation for further improvements over time.

Figure 1: Programs to delivery this report's recommendations

The recommendations in this report will be most effective if delivered together in a coordinated way. There are several ways of configuring these recommendations within the different programs, and Figure 2 below shows an indicative grouping of how the recommendations could be allocated to these programs. However, most of these recommendations contain several elements some of which are short term and others medium term and involve several agencies working together on implementation. A summary of each proposed program is set out below the table.

Figure 2: Indivative grouping of recommendations by program, lead agency and timeframe
Program Short-term Medium-term

Better planning rules


B2: Ensure applications are decision-ready

B8: Reduce response times for external referrals

B10: Provide guidance on delegations

C4: Simplify payment of infrastructure contributions

A1: Simplify planning schemes

A2: Streamline the planning scheme amendment process

Better planning rules


A3: Streamline the PSP process (complete PSP 2.0)

A4: Expedite planning for precincts and strategic sites

Better planning processes

Councils and DELWP

B1: Improve pre-application processes

B5: Modernise public advertising of proposals

B6: Stream applications according to risk

B7: Reduce requests for further information

C1: Improve the use of post-permit conditions

B3: Move to online permit tracking and processing

D2: Improve access to building records

D5: Improve consistency of asset protection requirements

C2: Streamline variations to the terms of a permit

Better reporting

DELWP and Councils

B9: Improve transparency for decision timeframes

B3: Move to online permit tracking and processing

C3: Reduce timelines for electricity connections

Better capabilities

DELWP and Councils

B4: Improve planning resources for councils

C5: Engage earlier with other authorities

C6: Improve coordination of internal referrals

Better building approvals

DELWP / VBA / Councils

D1: Expand the building certification workforce

D3: Streamline building permits for low-risk work

D4: Standardise construction management plans

D6: Distinguish building "consultants" from surveyors

D7: Clarify processes for enforcement