VFF slams ill-conceived growth areas tax

The Victorian Farmers Federation (VFF) has made a submission to Victoria’s Growth Areas Authority confirming farmers’ total objection to the Growth Area Infrastructure Contribution (GAIC).

The GAIC is a $95,000 per hectare State Government tax imposed on property owners looking to sell their land within the Melbourne Urban Growth Zone. Revenue from the tax is used to fund infrastructure in new development areas.

VFF President Andrew Broad said that the GAIC was a poor policy which set a dangerous precedent.

“The concept of a Growth Areas Tax is ridiculous. This policy goes right to the heart of the principle of taxation,” Mr Broad said.

“The GAIC fails the fairness test when it comes to the principle of benefit. Those who benefit from the infrastructure should pay for it. It makes no sense for land holders selling land, and leaving the area, to be forced to pay for infrastructure they will not use.”

“If the government is serious about recouping the costs of infrastructure in new development areas, outside of general revenue, then this should be done at the point of land use change. When land is approved for development, the developer should pick up the bill, not the property owner.”

“This policy sets a dangerous precedent and leaves other rural landholders questioning the real possibility that their land might soon attract other ill-conceived taxes.”

“To put this debate into perspective, if all the land under investigation in the Melbourne Urban Growth Zone was sold, the State Government would collect nearly $5 billion in additional taxes. Spring Street currently receives around $12 billion annually from tax revenue.”

“This tax is little more than big ticket revenue raising being aimed at soft targets. The VFF will continue to fight it on behalf of our members,” Mr Broad concluded