Melbourne's Docklands: subsidies for private pockets


In the midst of a deep financial mess, the Kirner Labor government of Victoria is promoting public subsidisation of major developments by the private sector. It has floated several multimillion-dollar proposals for Melbourne's Docklands area, including a multi function polis, an Olympic village, an international garden festival, and a casino. Three other major projects are also being "pump primed" — at the public expense — to attract private investors: the Rapid Transit Link, the Western Bypass and the Domain Tunnel. The Docklands, as the centre of the web, has become a battleground in the politics of planning. In the first of two articles, ANDREA SHARAM, an activist with the Justice in the City Project, examines the Docklands proposals.

Comprehensive planning schemes for Melbourne are relatively recent. Most comprehensive schemes have developed in the last three decades. This kind of planning has sought to ensure proper provision of infrastructure, protection of heritage areas, conservation of bushlands and, most problematically, to make decisions regarding land use and zoning.

It relies on a framework of legislation which in many cases is the public's only protection against developers whose only concern is profit. However, even this small degree of protection is being undermined in the Victorian government's attempts to rush through several major development projects.

Key players are:

* The Major Projects Unit of the state government. Under minister Jim Kennan, this was set up to fast-track large projects. The MPU is empowered to override existing legislation on matters like height controls and financial regulation.

* The Docklands Authority, which was created late in the night of May 7, 1990, the legislation having been brought forward from the spring session. It has been strongly criticised by the Melbourne City Council, the Inner Melbourne Regional Association and even the government's own Docklands Consultation Committee. The Docklands Authority was created even though no public decision on the nature of land use and development had been made.

The authority has unprecedented powers. It is both the agency for planning and approvals and the agency for development — a fundamental conflict of interest. It has the power, with ministerial approval, to carry out its functions outside the designated Docklands area and is not bound by the views of the relevant local government or the Port of Melbourne Authority. With the approval of the governor in council, the authority may make by-laws.

The Docklands act was amended to allow development in the Docklands to be "underwritten" through exemptions and discounts for rates and taxes.

* The Committee for Melbourne which is a private group of business people representing private sector interests. Essentially it is a highly influential lobby group. It occupies part of the (state-owned) Treasury Building, receives a grant of at least $200,000 a year from the government and has public servants seconded to it. It is said that this committee has greater access to cabinet than have most parliamentarians. Seven of the nine persons appointed as members of the Docklands Authority are either direct members, or their company is a corporate member of the Committee for Melbourne.

All these projects envisage attracting private investment by offering tax concessions. A recent Victorian Treasury report "compiled in consultation with the Committee for Melbourne" proposes extensive and open-ended tax changes to encourage private investment in public infrastructure.

The specific tax changes being promoted are:

* Changes in the tax treatment of losses during the initial start-up periods of infrastructure projects.

* Increases in depreciation rates and a broader definition of depreciable items for particular infrastructure projects.

* Removal of restrictions on deductions for commercial costs in joint public-private ventures.

The Docklands project is a westward extension of the Central Business District into the area currently described as the Port of Melbourne. Design proposals feature an emphasis on the Yarra river and waterside living and recreation — just as the London Docklands used the river's edge as a selling point for what is essentially a collection of reflective glass boxes beyond the Thames. Both projects sell the idea of a high-tech city based on microcomputers, biomedicine and servicing.

The promoters claim that these new industries are attracted to areas especially designed for them, although this is contrary to experience in other cities. Most industries, excepting heavy manufacturing, are able to house themselves exactly the same way everyone else does. That tends to be the cheapest way possible.

The Docklands Authority has announced its preferred site for one of the world's largest casinos, with 150 tables and 2000 gaming machines. The Kirner government is being wooed by several large casino operators from Las Vegas. Given that there are another six casinos being planned for Australia and that Australians already gamble $27 billion a year, the need for another is questionable.

Other objections to the Docklands project include:

* New office space would simply add to an oversupply, and the Docklands development would compete with the CBD.

* The government would supply much of the infrastructure at the expense of the public, who would not get any returns. Estimates are already in the hundreds of millions of dollars.

* The development directly opposes the needs of the Port of Melbourne Authority.

* A revolution in building construction has homogenised building design in a way that could be described as the death of architecture. The Docklands development would probably promote such design.

* Public tenants would be ghettoised.

* Some sites in the Docklands are heavily contaminated by chemicals. The costs and practicality of a clean-up and who would pay are concerns.

* There is a lack of accountability to the public in the legislation governing the Docklands and little room for planning controls or public consultation.

* The private sector does not pay for state land but then captures the land value.

* The project is too close to Coode Island (hazardous chemical storage).

* It relies on other major infrastructure changes: the Rapid Transit Link, Western Bypass and Domain Tunnel.

* It could cause a dramatic increase in vehicular traffic. n

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