Hundreds of millions of dollars in developer contributions which are supposed to fund parks and roads for growing communities are instead being wasted because of pork-barrelling politicians and public sector incompetence according to the Victorian Auditor-General.
It’s not often that developers actually put money INTO a local community, so I, for one, would have thought MPs and public servants would make sure the money is collected fast and spent wisely, so they could trumpet their successes.
Not according to the Auditor-General’s report to Parliament ‘Managing Development Contributions’ which has been quietly tabled under the cover of Covid-19.
The Auditor-General, Andrew Greaves is very polite in his wording.
For example he doesn’t say politicians are using the Developer Contributions Fund to buy votes or pork-barrell. Instead, the report says...
'State Budget decisions made up 61 per cent of GAIC allocations during 2018–19 and 2019–20 ($276.3 million). …..Although DELWP is the policy owner and financial manager of GAIC, it has no direct influence over allocations made through the state budget process.' p9
He notes the budget handouts means the money being held in trust for future needs, is in danger of running out.
Another reason the money may run out is that developers avoid paying what they owe.
‘Between 2011–12 and 2015–16, developers incurred $500 million in GAIC liabilities, but paid only $146 million to the state. It took until 2016–17 before the state had built a sufficient level of funds in the trust to make significant project commitments.’ p41.
And the public servants administering the various schemes are inept in their responsibilities.
The Department of Environment, Land, Water and Planning (DWELP which also covers Local Government) and the Victorian Planning Office (VPA) both have a hand in managing the three different systems that local councils can use to get funds from local developers to provide more green space or improve local facilities.
Yes, not one system - but three. And they are typical public service shambles. And expensive. Councils often pay for lawyers and consultants simply because they can't get straightforward advice from DWELP and VPA.
The three different systems are: the GAIC which is for fast-growing areas, the DCP which is sort of the ‘standard’ plan and then there are VA/s173s, which are voluntary agreements Councils can make with specific developers for specific projects.
For the sake of brevity, I’ll use dot-points to highlight the low points of state government bureaucracy:
Only 24 of 79 councils have set up a DCP.
In the two years to the end of June 2018, 41 Councils with population growth received $0 (none, nothing, zip, zero) in DCP funds.
Only 11 per cent of councils agreed they’d received useful information from state departments to help them decide whether to take part in the DCP.
The average cost of drawing up a DCP was more than $500,00 excluding council staff costs.
4 of 13 DCPs reviewed in detail by VAGO cost more than $1m
70% of Councils surveyed said the costs of drawing up a DCP were unreasonable
Neither Councils nor the State Government collect any data on the voluntary VA/s173s
63 per cent of councils reported using VA/s173s to obtain development contributions to support infrastructure delivery
77 per cent of councils that have either a DCP or (the very new) ICP are using VA/s173s to support their implementation.
And that's not all.
Neither DWELP nor VPA has ever measured the success or otherwise of a DCP. Not surprising perhaps, except that it would be very easy to do. DWELP’s failure to use tools already available leads the Auditor-General to question the honesty of the Department’s public promises.
‘The Victorian Government’s outcomes architecture provides a suitable foundation for establishing a development contributions evaluation framework.
..... prevent DELWP from understanding the impact of the programs and bring into question its commitment to improving performance.’
The Auditor-General's report proves ratepayers’ suspicions that the Development Contributions Plan is no more than political propaganda.
Ratepayers and Councillors should demand that politicians pay the price for their ignorance and mismanagement over the past eight years by voting out all those responsible:
On October 24, 2020 at local government elections and on November 26 2022 at state government elections.
Unless of course, the Ministers responsible can get developers to cough up the money they owe, make the Departments responsible work properly, and stop pork-barrelling the funds in the next three state budgets.
And pigs fly.