Parliament of Victoria | Legislative Council | Adjournment
23 September 2026
David ETTERSHANK (Western Metropolitan Region):
The data centre investment boom is straining the finances of working Victorians, fuelling construction costs, diverting much-needed construction workers and tradespeople away from housing, stoking inflation and putting upward pressure on interest rates. Gaps in regulation have also seen ordinary residents charged literally millions through their power bills to pay off tax liabilities incurred by data centre developers.
Happily, the Australian Energy Regulator closed that particular loophole in its Jemena electricity distribution determination, but it illustrates the need for robust regulation if we are to prevent huge multinational corporations steamrolling communities and then asking them to foot the bill. We have been calling for safeguards around the data centre sector since the government announced that it would be ruthlessly attracting investment by cutting regulation.
The government has now released the $5.5 million Sustainable Data Centre Action Plan, introducing sensible guidelines to assuage our concerns. Data centres will be required to power themselves, pay for their own infrastructure, use non-potable water and meet consultation, safety and planning requirements. Data centre developments cannot come at the expense of Victorian consumers we are told. Unfortunately, I fear it is little more than window dressing – remarkably insubstantial.
Despite the plan mandating consultation, there appears to have been no community consultation in drafting the actual plan. It largely leaves oversight of energy demand, grid readiness, water security and environmental impacts to existing planning and regulatory frameworks, which are already chronically under-resourced. And these modest measures will not even apply to the 19 applications currently under assessment – projects which will potentially consume roughly 4 per cent of Melbourne’s water use and the equivalent electricity consumption of 4 million to 6 million households. These projects simply get a free pass.
The Liberal Party and One Nation have chosen to watch and wait rather than commit to any action. But whichever party forms government after the next election, they will have to reckon with this. Data centres are not your average infrastructure project. They need strong regulation. We have to get this right, and if we lose some investors along the way because we are prioritising the safety and wellbeing of Victorian communities, so be it.
The action I seek is that the Premier impose a moratorium on new data centre developments until we have a framework that genuinely puts in necessary guardrails and shares the economic benefits with local residents.
[Awaiting response]
