The Victorian Greens have welcomed reports that the state government will introduce a land rezoning tax in next week’s Budget, after the Greens proposed it at the last state election.
Our current planning system is too vulnerable to corruption because of windfall gains.
As recent IBAC investigations have made clear, the system sees developers jump into the pockets of government, and secure huge windfalls when land rezoning results in a massive increase in the value of land.
This tax could disincentivise developers from making dodgy deals by ensuring they no longer make massive unearned profits.
The Greens believe these windfall gains should instead be shared with the community, with additional revenue invested in public transport, schools and other infrastructure.
Leader of the Victorian Greens, Samantha Ratnam, said that this simple mechanism would go to the heart of the corruption IBAC is investigating.
She added it was high-time developers stopped jumping into the pockets of the government through donations and lobbying for favourable rezoning decisions, and that this tax would help remove the incentive for corruption.
In the lead up to the 2018 state election, the Greens proposed a Windfall Rezoning Tax that would have been levied at 75% of the difference between the officially assessed land value before the rezoning compared to the land value afterwards.
According to the Parliamentary Budget Office the Greens policy would have made the government approximately $1.5 billion dollars over the forward estimates.
As stated by Leader of the Victorian Greens, Samantha Ratnam MLC:
“When land rezoning results in a massive increase in the value of land, developers pocket huge windfalls and Victorians miss out.
“It’s time for the government to stop rigging the economy to benefit large scale landowners and property developers with connections, and instead capture the value from rezoning so it works for the interests of all Victorians.
“This tax is an important first step. By taking away the incentive of windfall gains, let’s hope it helps stop the flow of corrupting donations and stops developers trying to game the system in their favour.
“The Greens have been calling for a tax like this for years, and we’re glad the government has finally listened.”