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6th October 2016

Infrastructure Victoria Draft 30-Year Strategy, October 2016

After an extensive 6-month consultation process, Infrastructure Victoria has released its Draft Strategy for the development of Victoria’s social and physical infrastructure over the next 30 years. As part of the strategy, it identifies its ‘Top Three’ actions for government to take in the short to medium term.  A brief comment on each follows:

1. Increasing densities in established areas to make better use of existing infrastructure.

Victoria’s projected population growth will place considerable strain on Victoria’s infrastructure (health, education and transport) over the next 30 years, with the State’s population projected to reach 9.5M by 2046.  80% of this population growth is expected for Melbourne. 

The draft strategy identifies the need to manage the spatial and infrastructure implications of high population growth, with an emphasis on providing more infrastructure in areas where it is specifically needed.  Opportunity for land use planning controls that direct housing to areas that already have good access to infrastructure and services is further explored. 

A range of key “objectives” that seek to achieve increase densities in established areas are outlined.  These include: 

  • Facilitating development in established areas, specifically around train stations and along tram corridors;
  • Facilitating development in/around employment centres (i.e. identified activity centres);
  • Implementing the Fisherman’s Bend tram link designed to unlock large scale brownfield sites;
  • Innovative transport services (allowing new market players offering innovative transport options);
  • Investment in the Smart Bus network and identified road and rail projects to provide transport infrastructure that supports high growth in greenfield areas;
  • Making better use of local infrastructure in areas experiencing growth through public space utilisation, community space shared use agreements, relocatable community infrastructure and investment in existing /future community space, public libraries, schools and government services.

The strategy recommends the need to consider planning scheme changes to increase the value of land in key areas, and discusses the benefits of developer contributions and betterment levies designed to assist in funding key transport infrastructure projects.  The notion of selling or leasing air rights if further explored. 

2. Introducing a comprehensive transport pricing regime to manage demands on the network.

There is already a pricing regime in place for public transport services in Victoria.  Trains, trams and buses have all have pay-as-you-go fares, with appropriate concessions for bulk and disadvantaged users. Those fares can be set to change behaviour and manage demand as efficiently and effectively as any economist or bureaucrat could wish!

For cars and commercial vehicles however, the current pricing regime relies on fuel excise, licence fees and vehicle registration fees.  With increasingly fuel-efficient (and even hybrid and electric) vehicles, future fuel excise revenue will be challenged, while annual licence and registration fees do not provide any motivation to moderate travel demand - in fact, quite the opposite.

With the rapidly increasing availability of real-time road network congestion data, and with the proliferation of GPS vehicle tracking systems, it will soon be possible to monitor all vehicle use and to invoice vehicle owners for the economic / social / environmental cost of their road use.  This could readily account for differences between peak and off-peak times, and between congested inner and uncongested outer urban and rural roads.

As it happens, the Andrews Government has already ruled out road / congestion pricing for the foreseeable future, indicating instead [among other things] a preference for the construction of North East Link road, connecting the Melbourne Metropolitan Ring Road to the Eastern Freeway.  

3. Investing in social and affordable housing.

Rising accommodation costs have become a significant pressure point for all Victorians, but none more than economically vulnerable Victorians.  Access to affordable properties for low-income households in areas with good access to jobs and services is currently limited.  Demand is continuing to grow, with existing public housing stock decreasing.

The draft strategy estimates that between 75,000 and 100,000 vulnerable low-income households in Metropolitan Melbourne are not having their housing requirements appropriately met.  Existing provisions fail to meet current demand.

The strategy identifies a number of “interventions” that can be taken in the short and medium term to reduce the number of low-income households suffering from housing stress.  These include increasing financial assistance; better using existing public housing stock; urban planning reforms; increase supply of dedicated affordable housing; providing incentives for the private sector to contribute to affordable housing supply; affordable housing fast-track approvals

The need for Government to establish clear mechanisms to engage the private sector in affordable housing investment is explored.  This may include investigating opportunities for selling or providing development rights to deliver a combination of social and private housing, and innovative leasing arrangements. Further, the need to provide an alternative statutory approvals process for affordable housing development which would require specific amendments to the planning scheme is identified as a key consideration [i.e. inclusionary zoning for government land where government is undertaking actions that will provide uplift to private land values, and floor area ratio bonuses].

The draft strategy recognises the potential for the ‘Top Three’ actions to transform the economic and social fabric of the State over coming decades.   Next steps at the conclusion of the consultation period is for Infrastructure Victoria to transmit the final strategy and recommendations to Parliament by December 2016, with development of an initial 5 year plan to be prepared over the following 12 months.

The strategy is extensive in outlining broad “needs” and “objectives”, but light-on in detail of “how” the identified objectives will be achieved. 

Deadline for submissions is October 31, 2016. 

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