Part 1: Introduction

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 DELWP	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 VPA and DJPR	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

Legislation and regulations set the requirements for the planning scheme amendment and planning permit and building permit assessment processes. Improving these processes while focusing on good outcomes will require reviewing and resetting the regulatory requirements to embed best practices. Changes to regulations will be essential to implementing several key process improvements relating to pausing the clock and only assessing complete applications.

Areas for change include defining roles and responsibilities, ‘front loading’ business processes to ensure all the required information is provided to decision-makers from the outset, establishing performance requirements and timelines and providing clarity about how notice is prepared and given.

It will also include more consistent drafting of requirements and policies, standardisation of similar provisions, improved user focus and guidance and improved proportionality of planning provisions with the expected impact of land use and development. A new program, Better Planning should be established, working in conjunction with councils to deliver the core recommendations from this report over the next 2 years. This would build on and extend the work already delivered through Smart Planning.

The current Department of Environment, Land, Water and Planning (DELWP) agenda for Smart Planning reforms should be refocused to deliver various recommendations from the Review over the next two years, working in conjunction with councils. We are suggesting revamping this program as Better Planning Rules. This program will address several areas where new practice notes, guidelines and ministerial directives need to be drafted to streamline the current requirements and simplify the steps to consider applications.
This program is focused on improving processes at councils as well as in DELWP and other government agencies. Councils will be supported in improving their processes by a State-led Better Planning Approvals program, and DELWP will lead work with a range of other State agencies to improve their processes and practices.

The Better Approvals program run by Small Business Victoria has delivered substantial improvements in how councils provide approvals to small business. This program has enabled councils to adopt concierge approaches – where an applicant is given a single point of contact with the council. It also involves enabling councils to set up systems to assess applications concurrently and develop problem-solving mind sets. The Better Approvals program also yielded useful insights into councils’ own practices in approvals for small businesses.

Better Planning Approvals will support councils’ planning and building teams in applying a ‘concierge’ model to their planning and building approvals operations, implementing concurrent assessment and improving application processes overall. This will also help them implement the best practices identified in the Discussion Paper and identify any obstacles to adopting them.

This program will include, for example, checking what stage of development a council’s process management systems and IT platforms are at and any challenges councils face in improving these, with this information supporting the upgrade of digital systems and introduction of a Better Reporting framework in Program 3. This approach will also be aimed at addressing the substantial stakeholder feedback regarding issues relating to quality of applications, access to and clarity of information and the delays caused by sequential approaches to obtaining technical and specialist comment on applications.

DELWP will work with a range of State agencies to improve their processes and practices. This will contribute to a wide range of improvements in efficiency, including faster resolution of disputes, faster approval of Precinct Structure Plans (PSPs), clearer guidelines and requirements from referral authorities and faster electricity connections to new development.

Better Planning Approvals will be complemented by several improvements in State agency activities, including the review underway of the various Victorian Civil and Administrative Tribunal (VCAT) listing options and approach of the Victorian Planning Authority (VPA) to managing staged payment arrangements for the Growth Areas Infrastructure Contribution (GAIC).

Developing a more collaborative working culture within and between councils, agencies and applicants will promote more efficient and concurrent assessment and decision processes. Harmonising policies and requirements for like matters between adjacent councils will also generate efficiencies for proponents, referral authorities and councils.
This program is based on the fundamental requirement to deliver significant improvements in data collection and reporting across the entire planning and building approval systems. The Better Reporting framework will provide accurate and comparable data on planning and building approvals performance.

The existing Planning Permit Activity Reporting System (PPARS) data provides a good starting point. However, data entry is variable and does not include specific data on some matters of particular interest such as the total time taken in specific stages of processing an application. In conjunction with upgrading councils’ digital systems, improving the quality of performance reporting data and automating how it is collected would enable real time management and assist in achieving best practice.

Key milestones and decision points in all four stages of permit approvals (strategic, statutory, post-permit and building) will be recorded to allow better identification of bottlenecks and further opportunities for improvement.

There also needs to be a stocktake of the different councils’ IT process management systems. More work is needed to define what is best practice and the pathways different councils can follow to upgrade their systems.

More comprehensive use of a digital portal for applications that ensures they are decision-ready before they are assessed would deliver significant efficiencies.

While a State-wide system or network of compatible systems is a widely supported end goal, existing council systems are at various stages of development. Joining up the varied systems will not be easy. In the first instance the DELWP Planning portal can give access to each council’s planning permit applications, just as they currently link to local planning schemes.
A recurring theme in stakeholder feedback was the need for improved capabilities in councils and other decision-making bodies and participants in the approvals system.

This program aims to address these issues by providing the resources, support, guidance and training required by councils and users of the system. This will involve the establishment of Regional Planning Hubs to provide additional resources for councils and facilitate training and regional collaboration.

The DELWP regional office network offers an opportunity to create Regional Planning Hubs that can provide short-term resource support, address peak workloads, provide specialist support and a centre for training. These Hubs would support both the strategic and statutory functions of councils.

The nature of the support they offer will vary between regions based on their specific needs. For example, some regions may require more support for strategic planning than statutory planning. Some may require more support from heritage, native vegetation or drainage experts than others.

Based on existing best practice in some councils (see successful efforts in Gippsland and among the Wimmera councils), these would be most effective if established at a regional level. This would support the establishment of the “communities of practice”. The Regional Planning Hubs would be a logical channel through which DELWP could convene and support collaboration between councils in a region.

Improved guidance material is an important mechanism for ensuring that best practice is established across the State regarding how similar matters are managed and decided. Up to date and user-oriented documentation will promote best practice as common practice and underpin the provision of new education and training pathways.

A system can only operate efficiently when people who operate it perform at their best. Shortages of skilled people, particularly in regional areas in the planning and the building areas were consistently raised. This program aims to increase training opportunities in key areas, such as the application of permit conditions, expanding training for councillors and staff and developing programs to increase the attractiveness of the planning, engineering, building surveying and building inspection professions.
This program of work includes several actions to minimise delays by increasing the supply of skilled practitioners and streamlining and clarifying responsibilities for the building approvals process.

Stakeholder feedback has confirmed that actions to increase the supply of suitably qualified building surveyors, inspectors and fire safety engineers will support the timely issue of permits, inspection of work and certification of completed buildings. This work will include promoting these professions as career options for secondary students (with a focus on women to address the current gender bias), improving the quality and availability of training, particularly in regional and rural areas, and assisting graduates to build their experience through structured on-the-job programs such as cadetships. The Victorian Building Authority (VBA) commenced some of this work in 2019 and plans to continue to do so in partnership with the peak industry associations.

Complementary measures include the creation of a new category of building surveyor for low-rise domestic building work, and the VBA providing bridging pathways for practitioners from related occupations such as builders, architects, engineers and project managers. A new category of building surveyor for low-risk domestic building work will not only assist with the high cost of professional indemnity insurance but will free up more experienced practitioners for the quality assurance of high-risk buildings.

Building approval processes can be streamlined, for example, by removing the requirement to obtain a building permit for some decks, mobility access ramps and small sheds that have a low risk and low impact.

Expanding the scope of the Building Activity Management System (BAMS) to become the central digital registry for all building records for Victoria is also recommended. Expanding BAMS will make it easier for builders and developers to quickly find copies of the records they need to support their application and obtain a building permit, and for the VBA to access the records it needs to undertake its ongoing building inspection and audit programs.

The Victorian Government recently announced a comprehensive review of the Building Act 1993 and appointed an expert panel to lead the review. This report refers several matters to the Building Act Review for consideration to clarify the roles and responsibilities for verifying the standard and quality of building work and for administering and enforcing the building approvals process. Consistent with work Program 3, Better Reporting, the Building Act Review will also consider an ongoing role for the State Building Surveyor to monitor and report on the performance of the system.

Some short-term measures which could be implemented (while the Building Act Review is being conducted) include introducing a protocol to guide cooperation and communication between the VBA and councils, and the development of a practice guide setting out the matters to be examined when inspecting buildings.

Updated 9 November 2021