Northern metro councils call out Victorian Government plans to ditch paying rates on social housing

NCA Statement

The Northern Councils Alliance (NCA) is calling on the Victorian Government to formally defer its plans to stop paying rates on social housing, an outcome that would create a $540 million shortfall in much-needed funding for councils over 10 years.
The NCA includes the Mayors and Chief Executive Officers of Banyule, Darebin, Hume, Mitchell, Moreland, Nillumbik and Whittlesea Councils and represents over one million people.

A decision to stop paying rates on 70,000 social housing dwellings in metro Melbourne and regional cities would come as a hit to our communities, and divert funds from everyday services like waste management, maternal and child health and parks. It would also profoundly impact Melbourne’s north, which is home to some of the highest proportions of social housing and most
socio-economically disadvantaged communities in Victoria.

The NCA is extremely concerned the government’s current proposal will lead to northern Melbourne communities being unfairly burdened with increased rates bills and less services – all to subsidise new social housing developments in other parts of Victoria with lower social housing stock.

Flow on effects would also amount to an estimated $1.6 billion hit to Victorian local governments over 10 years, impacting the level of services and infrastructure delivery for residents – according to recent research by the Municipal Association of Victoria and FinPro.

The NCA welcomes and continues to support the government’s focus on improving social and affordable housing through its Big Housing Build program. However, existing social housing in the north must be prioritised for immediate upgrades and modernisation in a fair an equal way, following decades of underinvestment and neglect by successive state governments.

While reports suggest engagement and discussion has occurred with the property and development sector on these reforms, the NCA is asking the Victorian Government to also consult directly with all affected councils as a priority on the new policy, clarify where this $54 million per year deficit will be spent, and explain how our communities will be supported.

The NCA is also seeking clarity on the government’s position on the proposed Social and Affordable Housing Contribution (SAHC), initially announced to come into effect from July 2024.

The SAHC – reportedly developed in consultation with the development sector – may see the Victorian Government receive on average an additional $800 million per year.

With Melbourne’s north forecasted to remain one of Australia’s fastest growing regions, it is likely that new developments in the region will be required to contribute a significant portion to the SAHC if it is introduced. The NCA would welcome assurances that any new revenue generated through the proposed levy will be directly invested into the communities from which it came.