The Victorian government today released its metropolitan planning strategy Plan Melbourne at an industry seminar in the Melbourne convention centre. It puts in place the preconditions for a city that is:

• Economically divided
• Highly livable for those with the price of entry to quality suburbs
• Home for the rest in apartments or the service-poor periphery
• Devoid of private open space

Plan Melbourne’s great flaw is not of planning – farsighted and essential work that carefully places roads, schools and sewers. It is of zoning, the parasite eating its kindly host, conferring advantage and riches on some and poverty on all others.

The document makes the existing Urban Growth Boundary permanent. This ends any prospect of competition among current landowners to provide the space for the expected 2.3 million extra people and one million new dwellings needed by 2050. They now have every incentive, every opportunity, to withhold land from use to drive prices higher.

The government has just institutionalised the private capture of the value of human activity in Melbourne.

The stated reason for this devastatingly destructive move is to protect high value peri urban agricultural land. Never mind the agricultural land is valuable and intensively cultivated because it is close to the urban area. Never mind the best and highest use for the land is residential – at a significant multiple of all and any agricultural tasks.

Apartment construction is to be encouraged around stations on existing rail corridors. This is somehow protecting the suburbs by “delivering density in defined locations”. That policy prescription raises land prices everywhere – in the protected suburbs and high density areas alike.

One speaker acknowledged the “economic disadvantage of high land prices” that now cripples Australia’s economic activity. Somehow, a convention hall full of planners could not see these zoning restrictions and proscriptions have a giant economic cost, borne by citizens of modest means who only want shelter for their families.

Melbournians are tickled pink when international surveys call it ‘the world’s most livable city’. Let’s add a furlong to the lead we enjoy by including universal prosperity as a Melbourne feature.

Australia is different. We have land aplenty. If the Victorian government really had the strategic vision it claims for itself, it would pursue as an explicit objective access to inexpensive land for all.

Australia is designed as a property-owning democracy, where all can flourish, doffing their hats for no man. Instead, we have diverted our energies to land speculation, assumed astonishing amounts of personal debt and forgotten who we are.

I am not some insipid communitarian preaching universal brotherhood. I want my country built squarely on solid foundations. Cheap land can deliver exactly that outcome.

Victoria’s new planning documents are available at Read and weep.