19th October 2023 12:06
Victorian Legislative Council, Melbourne

David ETTERSHANK (Western Metropolitan) (12:06): (313) My question is to the Minister for Water, and it relates to planning permits for flood victims in the Maribyrnong township. Some 600 houses were inundated in the October 2022 flood, with more than half of those houses yet to be reoccupied and many residents looking to rebuild better to address future flood threats. A Maribyrnong resident, the first one as far as we are aware, who is seeking a planning permit from the council to rebuild – and rebuild better – and modify their flood-ravaged home, is being required to enter into a section 173 agreement with Melbourne Water that would indemnify Melbourne Water ‘of the risks associated with flood damage of the property and its contents’. So this is a 173 agreement into the future, for the indefinite future, on title. It would appear on the face of it that this is almost certainly going to have profound effects in terms of insurance, in terms of mortgages, in terms of the prospect of resale, so I ask the minister: does she support Melbourne Water seeking to use section 173 in this way, possibly without precedent?

Harriet SHING (Eastern Victoria – Minister for Housing, Minister for Water, Minister for Equality) (12:07): Thank you, Mr Ettershank, for that question and for covering the concerns and priorities and positions of people affected by the Maribyrnong floods. It is just over a year since this occurred, and we know that in Maribyrnong and then more broadly right around the state recovery work does continue. People are looking to rebuild and are looking to mitigate risk against future flooding events. That is often really difficult work, and it is often work that involves a lot of navigating of a system that can be very, very complex, particularly where people live in areas – as much as anything else because of population growth and the history of development around the state – which are prone to flooding, and increasingly so as a result of climate change.

Melbourne Water has a standard indemnity clause which it uses when it is providing conditions in a planning permit, so that has been standard since before the October 2022 floods. Effectively the indemnity provision is a recognition of the acceptance of the condition imposed by Melbourne Water, and Melbourne Water looks at the planning permits on their merit and applies those conditions as they are relevant to any particular individual circumstances. Councils also often have equivalent mirroring positions, so they are back-to-back conditions on planning permits and in many instances will apply the same conditions, for example, as those that are applied by Melbourne Water. I am very happy to provide you with further information about the way in which this might be applying to the person that you have referred to in your substantive question, but these planning permits are made pursuant to the Planning and Environment Act and have been used, as I said, by a range of planning authorities. So there are councils, there is also Melbourne Water or other water authorities, and it is about setting out conditions or restrictions on the use or the development of land, and that includes flood or fire risk, for example. They are not exclusively used in Maribyrnong; they are used more broadly to achieve all types of planning objectives across Victoria.

As a referral authority, Melbourne Water has included a section 173 agreement since well before those floods, as I said, because there is a proposed use of land on an area which is vulnerable to flood risk. That can be used by Melbourne Water as a condition to mitigate measures on flood risk exposure on that land. The changes which are being proposed do not affect the nature of the risk; it is about how that will occur into the future. Melbourne Water advise me that they are not aware of any insurance being denied to property owners because of the existence of a 173 agreement, but I am very happy to provide you with additional briefing and information.

David ETTERSHANK (Western Metropolitan) (12:10): Thank you, Minister, for that response. I think to put it bluntly – obviously this is not an opportunity to debate the merits of this question – there is I think a strong feeling in the community that this is Melbourne Water covering its arse, for want of a better term. By way of supplementary, I ask: does the minister have advice as to whether this use of section 173 agreements is permitted by the Planning and Environment Act, and specifically in this context is it in fact ultra vires?

The PRESIDENT: Before I call the minister, we have been subject to some fruity language this week, and I think maybe next sitting week we are not going to do that.

Harriet SHING (Eastern Victoria – Minister for Housing, Minister for Water, Minister for Equality) (12:11): Mr Ettershank, I do not propose to offer an opinion as to whether there might be any situations involving an excessive use of power or power beyond the contemplation of an act in the terms of ultra vires that you have described. The Planning and Environment Act is in fact the framework by which the section 173 agreements are able to be activated. That is the legislative framework within which that operates. As I said, this is applied by councils and it is applied by water authorities, including Melbourne Water, and it is done so to provide, again, a measure of certainty about the way in which compliance with those really important planning conditions operates, and this is about reducing risks to property owners but also to their insurers. As I indicated to you in the answer to your substantive question, I am advised that Melbourne Water is not aware of insurance being denied to property owners where properties are subject to a 173 agreement as a consequence of or for reasons that include the operation of that 173 agreement. I am very happy to provide you with additional information in a briefing.


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