Windfall Gains Tax Good for Regional Communities
Tomorrow (16 November) the Victorian Parliament will vote on legislation to introduce a Windfall Gains Tax. This tax will ensure the public gets a 50/50 share in any rezoning windfalls so that local councils can plan to build vital infrastructure like schools and hospitals to support our growing communities.
Prosper Australia welcomes this proposed legislation, which will support regional councils to plan the housing their communities need, and is calling on the crossbench to pass the legislation.
Director of Research at Prosper Australia, Emily Sims, says:
“The Rezoning Windfall Gains Tax is a win-win-win for regional communities. With this tax, communities share in unearned profits, local government development plans are supported, and corruption is no longer incentivised.
“Local government planning departments around Victoria, such as Warrnambool, Bendigo, Hepburn and Shepparton, have shown that the regions have plenty of land already zoned for the growth they need.
“Most councils have more than 15 years-worth of land supply already approved. Warrnambool has 22 years land supply available, Shepparton doesn’t need to rezone any new land until 2038, and even Surf Coast shire, one of the State’s fastest growing regional areas, has 14-19 years supply.
“The best way to develop regional areas is to listen to the local planners because they know their communities best. Regional councils know where growth has to happen and they don’t need to be hounded by land speculators chasing a rezoning cash grab.
“This tax is on the windfalls when land is rezoned – the value sky-rockets overnight. This happens whether the tax is in place or not. Now we will all get a share in it. Over time, fewer speculators will engage in land banking, reducing pricing pressures for genuine builders. The property lobby is against this tax because it will redistribute half of their superprofits back into the communities we all live in.
“Until now, land speculators and property developers have lined their hip pockets, but growing communities need new schools, roads and parks. It makes good economic sense to use some of the unearned uplift from rezoning to pay for it.
“A 50/50 share in the windfall gains will help deter corrupt practices animated by the windfall ‘honeypot’. We have seen many politicians bend their ways to support a campaign contributor, as demonstrated in the Casey council-John Woodman land saga. Enacting the Windfall Gains Tax will deter such underhanded practices from democratic processes.
“The return to the public could also be invested back into the communities affected, helping to pay for the local infrastructure needed to support new housing.