with the Australian Government confirming it is joining the party with another $10 Billion commitment.
(Yes, back to my normal programming)
The Federal government has announced it will contribute $1B a year for a decade towards constructing the SRL. This brings the total Federal commitment to around $12B, or 1/3 of the (fake) pricetag.
This leaves Victorian taxpayers on the hook for the balance through a combination of direct funding and value capture.
Let's be clear: this project will not be built for the $34.5 Billion promised by the Victorian Government. It lives in a fantasy world where the cost stays the same as long as they avoid asking the question.
The "value capture" component is to comprise the following. ➕Let's do some quick math✖️: • Land Tax ($5.75B) – This isn't "value capture". It's a cynical redirection of existing State Taxes, robbing funding from other things • 70,000 dwellings + contributions ($2.9B) – quick math shows this is an average of $41,428/dwelling?
#mathaintmathin At the new Activity Centre $11,500 rate = $805 million, growing to ~$34,000 from 2035. Developers can't make projects #feasible now, let alone with additional cost imposts. Don't forget the actual the uplift is only 25,000 dwellings over status quo.
• Windfall Gains Tax ($450M) – will be astounded if it delivers this much across the precincts based on current valuations and exemptions • Carpark Levy ($800M) – talk about disincentivising commercial investment in these areas. For context, the current Melbourne CBD levy raises around $110m p.a., so what fraction of that would SRL precincts do? $10%?
• State Development ($1.6B) – Made up number, basically assuming government land has zero value as-is. I'd be amazed if $1.6B was even the completed value of developments, which is not remotely the same as creating $1.6B of (increased) value.
There is no conceivable way these value capture mechanisms will get close to delivering $11.5 billion of new value, especially once the double counting on land tax is removed (robbing Peter to pay Paul…).
Plus tax, upon tax, upon tax, yet somehow developers and investors alike will throw their capital into these 6 precincts? Ludicrous.
🤔 Worse when you consider the true cost of this project will be much higher than the 2020 figure. This is a fiscal travesty, and Victorians will be paying for this for centuries.