VicWater Planning and Building Approvals Submission

22 November 2019

Commissioner for Better Regulation
Better Regulation Victoria
Level 37, 2 Lonsdale Street
Melbourne Victoria 3000
Via email contact@betterreg.vic.gov.au

Dear Commissioner

Re: Planning and Building Approvals Process Review – Discussion Paper

Thank you for the opportunity to respond to the Planning and Building Approvals Process Review Discussion Paper. VicWater is the peak body of the Victorian water industry with its membership comprising Victoria’s 19 statutory water corporations. They are responsible for the provision of urban water and wastewater services, rural water supply including irrigation and related drainage services.

Water corporations take their referral activities very seriously. Effective participation in the planning process is essential to the efficient delivery of water and wastewater services, as well as broader government objectives such as the delivery of integrated water management (IWM) outcomes. Water corporation referral activities are not a main target for reform. Nevertheless, water corporations are likely to be impacted by a number of the proposed changes.

VicWater supports the intent of the review and acknowledges the need to limit costly delays for building approvals. However, a desire to limit delays must be balanced against the need to maintain the integrity of the planning scheme and deliver the best community outcome. The risks associated with poor planning scheme integrity include a permanent legacy of poor land use decisions, reputational damage for public authorities and avoidable VCAT action.

At a broader level, VicWater cautions the attempt to reduce costs and procedural requirements placed on the development industry without consideration to the broader community benefits accrued from its regulation. The recent and devastating results of poorly managed pipeline trenching on urban development sites is a clear example where limited regulation of this industry has failed the community.

VicWater was informed by the Better Regulation Victoria team that Melbourne Water was the only water corporation directly contacted in relation to the review. Ten water corporations have contributed to the below comments at very short notice, indicating a significant interest in this review. VicWater is happy to assist as a first point of call in the future and recommends against a selective approach to consultation with the water industry.

Referrals

• VicWater supports the objective for greater proportionality in referrals with a focus of assessment effort on more complex matters (or at the most relevant point for the given authority) (p74).
• Standard permit conditions for the provision of sewerage and water supply facilities have potential to offer benefits, but the implementation of the recommended changes is unclear, i.e.:
  • What is the scope and content of the standard permit conditions that are being considered?
    • Increasing the two-lot subdivision threshold could reduce the administrative burden on water corporations and applicants, but with the increased risk that a subdivision is approved with the applicant unknowingly liable for costly system augmentations that enable property servicing. If such a change is considered, VicWater strongly recommends additional safeguards to ensure applicants are aware of these risks and have the opportunity to discuss servicing options with the water corporation early in the process.
  • What would fall into the post-permit approval process, and how are risks managed? For example, what is the process to signal significant development constraints?
  • How would standard permit conditions incorporate the Government’s IWM policy objectives, or mitigate costs and risks associated with non-sequential development?
    • Preferred IWM solutions are often derived on a case-by-case basis. They require enhanced collaboration between parties to conduct thorough options analysis, consultation and design, and decide on funding mechanisms.
    • IWM policy objectives are mostly applicable to larger subdivisions, but may also complicate small lot referrals, such as in the case of Wannon Water’s Roof Water Harvesting initiative.
  • How would standard permit conditions address the often-unique challenges of development in potable water supply catchments?
• A potential remedy to some of the challenges raised above is to set standard conditions at a local level, rather than state-wide, such as via an MoU between the Council and Referral Authority.
• What would be the scope and content of matters to be addressed by a “design code issued by a referral authority in place of referrals” (p76)? VicWater questions the benefit of this approach for water-related referral matters.

Potential performance reporting of referral authorities

• Water corporations are equally pressured in their delivery of referral functions (p75).
• Given the paper notes no systematic or significant connection issues relating to water, it would be inappropriate for water corporations to face increased reporting requirements. These would not be consistent with the Review’s objectives to reduce red tape and streamlining processes.

Flood mapping

• VicWater supports efforts to better-coordinate flood mapping. The Port Phillip Bay and Westernport Flood Management Strategy exemplifies this intent.

Policy principles and the purpose of the planning and building approval framework

• It is important to balance the regulatory burden on applicants against policy objectives for the Government and councils, and a totality of the social, environmental and economic risks which the planning and building approvals process is intended to manage. The discussion paper includes extensive coverage of the costs incurred by the construction sector due to planning approval delays. The ongoing cladding crisis serves as a reminder that an over-emphasis on approval speed at the expense of rigour, can equally impose significant costs on individuals and the economy when policy objectives are not met and risks not mitigated.

Red tape and cost shifting to water corporations

• A priority for VicWater during this review is to prevent costs and risks shifting to water corporations as a result of reforms intended to reduce costs for applicants.
• VicWater has concerns about the requirement for water corporations to actively anticipate upcoming referrals via their use of SPEAR (p74). All relevant planning applications should be referred to referral authorities within the statutory timeframe.
• There may be opportunities to improve the SPEAR systems such as by pre-populating data in the formal response to the planning referral. This would reduce the administrative burden on referral authorities.
• Early notice from councils to the referral authority is desirable. However, there is a risk of concurrent approvals resulting in increased traffic for referral authorities because an application will reach the referral authority which could previously have been rejected at an earlier stage. Potential efficiencies may be outweighed by increased double-handling, mixed messages and confusion for applicants.

VicWater and water corporations welcome further involvement in this review to develop detailed policy implementation proposals. Please contact James Cleaver (James.Cleaver@vicwater.org.au) should you have any questions, or if you would like to discuss any of the issues raised herein in greater detail.

Yours sincerely
Peter Morison
Chief Executive Officer