CRITICS have ravaged a state government housing policy that would impose a new tax and suck other funds from council budgets.
The plan has been attacked by groups from each side of the political spectrum, though it has won support from the state's peak public housing tenants' group.
Both the Australian Services Union and state opposition have decried the announcement to raise hundreds of millions of dollars for social housing in a slew of council areas including the City of Greater Bendigo.
One idea would see the government raise $800 a year by requiring anyone building three or more homes to pay 1.75 per cent of the final price of a property.
Shadow treasurer David Davis said Bendigo residents would hit young couples and families hard.
"Those buying new homes are going to pay through the nose ... [because] these taxes are going to be passed straight through to those purchasing properties," he said.
The Urban Development Institute of Australia condemned the government's idea as "yet another tax that will add tens of thousands of dollars to the cost of a new home".
Meanwhile, the ASU has blasted a separate idea to exempt social housing properties from paying rates, saying critically important help for those in need could not come at the expense of other services they need
"This pulls funds out of essential council services to pay for repairs the government should have started years ago," Victorian branch secretary Lisa Darmanin said.
"The poorest Victorians, including social housing residents, will suffer from this."
Councils have already spent more than five years tightening belts after the state government capped yearly rate rises to inflation rates, which the ASU says is compromising the future of essential services and damaging the economy.
It says Greater Bendigo has missed out on 133 jobs since rate caps were introduced, 30 per cent of which were in the private sector and the rest at the council.
Under the government's new proposal, Bendigo's council would have to decide how to accommodate the proposed hit to its rate base.
So would its counterparts in Ballarat, Geelong and Melbourne.
The ASU fears that affected councils would have to cut jobs and services and the opposition wonders whether other ratepayers might see their bills increase.
The government has said it wants to reinvest $54 million currently spent on public housing rates back into the homes' maintenance and upgrades.
It would use money raised through the tax on new social housing and tradie training.
Housing minister Richard Wynne said the ideas were designed to provide ongoing funding for social and affordable housing.
He said it would build on the government's previous $5.3 billion Big Housing Build funds brought in to deal with public housing shortfalls and help the construction industry rebuild from the pandemic.
"Our landmark Big Housing Build is changing lives, putting a roof over the head of people in need and creating jobs - but we'll need to continue building more homes beyond 2024 and these reforms deliver exactly that," he said.
Mr Wynne said the new tax would apply to less than 30 per cent of all residential planning permits.
The Victorian Public Tenants Association welcomed the tax proposal, saying it would provide 1700 "sorely needed" public housing developments a year.
"There's a lot to like in today's announcement," chief executive Katelyn Butterss said.
"Much of our public housing stock in Victoria is old, and in desperate need of modification, energy efficiency upgrades, and key improvements - such as the addition of air conditioning.
"By making these additional funds available, these works will be able to be completed more quickly."
The tenants association also welcomed possible rates exemptions for properties in Bendigo and other parts of the state.
It said the reform would free up millions of dollars urgently needed for refurbishments.
The reform would be phased in from July 2023, while the new tax would arrive in July 2024.
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