Master Builders Victoria (MBV) has questioned the need for another new tax on the building and construction industry while welcoming reforms of Victoria’s planning system designed to speed up building approvals and cut red tape.

The overhaul follows the 27 recommendations from the Commissioner for Better Regulation and Red Tape report on improving Victoria’s planning system.

Under proposed changes announced by the Victorian Government today, faster assessment of major developments is expected to cut wait times for planning permits.

Meanwhile, planning permit requirements for small projects such as decks and sheds will be removed, providing they comply with the National Construction Code (NCC).

To encourage greater investment in social housing, from July 2024, all newly built developments with three dwellings or more and three or more lot subdivisions will contribute 1.75 per cent of the as-if-complete project value to a new Social Housing Growth Fund as part of a new social and affordable housing tax (SAHC).

While supportive of more social housing, MBV Acting CEO Saeed Mirbagher said the building and construction industry already contributed heavily to the overall health of the Victorian and national economy and questioned the need for yet another new tax.

“Our industry remains Victoria's largest full-time employer and contributes over 46 per cent of the state's tax revenue, with the housing sector alone generating $3 of economic activity for every $1 invested,” he said.

“When local government tax is included, the building and construction industry accounts for more than 57 per cent of the state’s tax revenue.

“This is yet another tax on our industry at a time when many builders are still recovering from the effects of the COVID-19 pandemic and getting back on their feet.”

Mr Mirbagher welcomed the other changes to be introduced into State Parliament next week, which would deliver significant cost and time savings for Victorian builders.

“Planning approval processes have long been regarded by our members as complex and time consuming,” he said.

“Quite simply, for our members, time is money.

“The harder it is for builders and consumers to navigate the planning system, the more costs are incurred.

“This is why Master Builders Victoria has continued to advocate for improvements of the planning system and welcomes simple and long overdue planning reforms, which will improve the planning process and make it more streamlined.”

Also, under the Government’s changes, social housing will be exempt from paying council rates along with schools, hospitals, sporting clubs, and religious organisations.

The rates reform will be phased over four years from July 2023 and only apply to social housing properties.

Both initiatives will apply to all local government areas in metropolitan Melbourne and the regional cities of Greater Geelong, Ballarat, and Greater Bendigo – other regional councils will not see a change.

The Government says individual councils will determine how they accommodate the rate reform.