A BITTERLY disappointed Victorian treasurer Tim Pallas has dumped a showcase policy on social housing after more than a week of criticisms from those who would have had to pay for it.
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It means the City of Greater Bendigo will now not have to find millions of dollars in savings for its share, and snuffs out any risk it would have to raise charges on other ratepayers.
Victorian treasurer Tim Pallas said plans for councils and the property industry were being completely revoked.
"It's a really disappointing result," he said.
Bendigo's council would have lost a portion of its rates income under the scrapped proposals.
The government would have stopped paying $54 million in rates on social housing in council areas including Greater Bendigo's. The money would have instead gone into housing upgrades.
Social housing agencies would have also stopped paying $11 million in rates to councils. The money could also have been used for upgrades and services.
Bendigo's council came out against the reform two weekends ago, with chief executive Craig Niemann sharing a blunt assessment.
"I think they just see us as a fairly soft target, to tell you the truth," he said at the time.
"They make the acts of parliament [which] apply to local government. Whether they consult or not, or whether they really research the impact it's going to have - that doesn't always happen to the extent that it should."
Mr Niemann stressed that the council supported pushes to fix ageing social housing, just not the method that had been proposed.
The state government had hoped to bring social housing in line with schools and hospitals, which also do not pay rates.
Mr Pallas said ratepayers did not get much in the way of services from rates that would have instead gone to social housing under the plan.
"It just seems, in many cases, to be a revenue stream for them [councils]," he said, without naming specific local governments.
The government has framed the death of the public housing funding as a betrayal by the property industry, which it insists launched a disinformation campaign.
The industry would have had to pay $800 million a year under a new property tax covering developments of three or more homes under the reforms.
Government leaders had said the tradeoff for companies would have been larger profits that developers had been calling for, including in a statement to media circulating on Tuesday.
"The government always made one thing clear: for these reforms to proceed, there would need to be returns to the Victorian community by supporting a stronger and more sustainable social and affordable housing sector," the statement said.
Some industry groups had argued they had been taken by surprise by key details, others said they were not consulted. They had also warned that the tax could be passed on to home buyers.
Now, all reforms are off the table forever, Mr Pallas told reporters on Tuesday.
"There will be many people in this industry who will see that they have lost a great opportunity," he said.
The government has not backed down on a completely separate $5.3 billion plan to build new social housing across the state.
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