Victorian Premier Daniel Andrews

Environment bodies have welcomed commitments made in the Victorian State Budget released on Tuesday, but say it lacks detail and leadership on climate change and energy policy.

The Property Council also welcomed the “multi-billion investment in transport, education and health infrastructure”, but criticised a move to tax foreign investors.

Significant environmental commitments in the budget included:

  • A $12 million “Climate Change Action package” which includes reviewing and strengthening the Climate Change Act and developing a Victorian Climate Change Action Plan
  • A $20 million “New Energy” fund to support renewable energy and energy storage projects
  • Significant spending of the Environmental Contribution Levy on water programs including: $10m for riparian (river corridor) land protection, $3m to purchase 8GL of environmental water for the Thomason River delivering a long-standing promise, $2.5m for the Gippsland Lakes, $1m for the Yarra river Protection Act, $6.8m to improve water quality and $8m to better manage the climate change threats and impacts for freshwater ecosystems
  • $10m to improve assets in National Parks and reserves
  • $11m for Parks Victoria to build and maintain visitor infrastructure in parks and reserves across the state
  • A very large investment in public transport (including $1.3b for new trains, $274m for new trams, $1.5b for the Melbourne Metro Rail Project)
  • Departmental spending on environmental protection has increased on previous years
  • $30 million to implement all the recommendations made by the Hazelwood Mine Fire Inquiry Board and improve coal mine regulation

Environment Victoria chief executive Mark Wakeham said the government delivered on its pre-election promises but that those promises were inadequate for the environmental challenges Victoria faces.

“Current processes underway to develop a climate change action plan, renewable energy and energy efficiency and biodiversity strategies, and a plan to protect river corridors have all been supported in this budget with modest funding commitments, but will need serious investment in the coming if they are to address the state’s environmental challenges,” Mr Wakeham said.

“This budget begins to spend the accumulated landfill levy and environmental contribution levy that all Victorians pay,” Mr Wakeham said.

“However there remains a very large and growing bucket of funds that have been raised for environmental programs and that are not being spent by the state government.

“For example, this year the Victorian Sustainability Fund – money raised from landfill levies which is required to be spent on environmental programs – will reach $400 million. This year we need a clear plan of action to use these funds to restore nature and address climate change.”

Wilderness Society Victorian campaigns director Amelia Young said employment, health, transport and education received a lot of attention in the budget compared to the environment.

Ms Young said the Wilderness Society was concerned about $50 million allocated to planned burning on public land and the $7 million allocated to take out large trees.

“Both these management approaches commonly involve significant environmental burdens for little gain in community safety,” she said.

Climate and Health Alliance director Fiona Armstrong said investment in public transport, not roads was an investment in a healthier Victoria.

Property Council calls budget “responsible investment”

The Property Council described the budget as a responsible investment in Victoria’s future.

“The government’s multi-billion investment in transport, education and health infrastructure is great news for Victorians and the business community,” Victorian executive director Jennifer Cunich said.

“Today’s confirmation of a $1.5 billion down payment on the Melbourne Metro Rail Project marks the beginning of new era for Victorian transport.

“The flagging of a $2.4 billion investment in level crossing removals and the creation of a new Level Crossing Removal Authority marks steady progress towards eliminating Victoria’s 50 worst level crossings.”

She also praised a billion dollar investment in new schools and hospitals, which would provide “a much needed boost to Victoria’s education and healthcare construction specialists”.

No applause for targeting foreign investors

Ms Cunich, however, warned that proposed housing taxes on foreign investors would have implications for affordability.

The new tax would be a three per cent stamp duty surcharge for non-resident buyers. Further, an absentee land tax of 0.5 per cent would be placed on those foreign nationals that do not occupy a dwelling to discourage “land banking”.

“We think it’s inherently unfair on Victorians for foreign purchasers to take the gains of owning property in Victoria through the services and infrastructure that Victorians pay over an extended period of time without contributing their fair share,” Treasurer Tim Pallas said.

Ms Cunich said the Property Council was seeking urgent clarification from the government on who the tax on housing was targeting.

She said the council wanted to know what activity the government was attempting to discourage, how double taxation issues would be managed and what definition was being used to classify “foreign business entities”.

Ms Cunich said the Property Council remained concerned about what it saw as an over-reliance on a range of property taxes.

“Stamp duty alone is forecast to grow by over $587 million between 2014-16 representing an unsustainable 13 per cent increase,” she said.

“No government can tax their community to long term prosperity.”