Thursday, 1 August 2024

Suburban Rail Loop

Richard WELCH (North-Eastern Metropolitan) (18:58): (1032) My adjournment matter is for the Minister for the Suburban Rail Loop. The state government’s $30 billion SRL funding model is equally split between the Victorian government, the Commonwealth government and the so-called ‘value capture’ schemes. Despite construction being underway and contracts having been signed, the SRL already has a staggering $20 billion funding shortfall. This is because, first, the federal government has made it clear it will not be providing its $10 billion share. That money is not coming. Secondly, there are basic market realities that make the value capture proposition equally dubious. The obvious point of speculating on property values is to capture value before development and tax the hell out of any increase in value of the newly developable sites released to market. However, seven skyscrapers proposed by Vicinity Centres have already been approved for construction on Whitehorse Road in my electorate. These towers represent the most intensive density developments out of all SRL projects in the state.

Basic economics would predict that they must form the lion’s share of government’s anticipated $10 billion in value capture – or will they? Because if this development has already been approved, if the works and finances are already locked in and the government does not yet have a formula for value capture, where does the government property speculation tax kick in? Does it kick in now, does it kick in in 10 years or does it never kick in? To put it another way, if the single biggest development in the SRL precinct will not form a meaningful part of the $10 billion property speculation component, then how can the smaller remainder possibly hope to raise the massive sums required? And of the remaining undeveloped properties within the precincts, won’t they, by dint of basic market forces, already have their potential rezoning value already priced in, meaning any further capital value capture will by definition be marginal?

The action I seek from the minister is to outline what value capture revenue has been forecast against the Vicinity development and on what basis, confirm what portion of the Suburban Rail Loop’s value capture funding will come from the rest of the SRL precinct property speculation in Box Hill, confirm in what financial year or years these value capture elements will be received and available to fund the SRL and confirm by what means the SRL project will be funded up until either the federal funding or the value capture revenue is received. I look forward to the minister’s response.