Introduction of the Environment Mitigation Levy

On 11 February 2020 the Melbourne Strategic Assessment (Environment Mitigation Levy) Act 2020 came into effect. The Act provides for the collection of the Environment Mitigation Levy from 1 July 2020 and is in accordance with the Melbourne Strategic Assessment (MSA) Report and the Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act).

The Environment Mitigation Levy scheme replaces the current Biodiversity Conservation Strategy (BCS) Habitat Compensation Obligation fee system and will result in increases in the levies applied to relevant habitats. The accumulated funds will be held by the Victorian Government in the Melbourne Strategic Assessment Fund.

The aim of the levy is to fund measures to mitigate the impact of urban development on native vegetation and matters of National Environmental Significance in Melbourne’s growth corridors. It is relevant to land to which the BCS and the MSA apply. 

Melbourne Strategic Assessment Fund

The Melbourne Strategic Assessment Fund will hold the levy contributions to be spent on conservation and environmental mitigation actions. This can include acquisition and management of land, and activities for the conservation of:

• Natural Temperate Grassland of the Victorian Volcanic Plain
• Grassy Eucalypt Woodland of the Victorian Volcanic Plain
• Native vegetation and matters of National Environmental Significance that are protected by the EPBC Act and Victorian native vegetation controls within conservation areas.

Benefits of the Levy

With the passing of the Act, it is anticipated that a number of benefits and improvements to the assessment, payment and processes of the current fee system will occur. These include:

• DELWP is consulting with industry regarding the implementation
• Improved clarity as to who is responsible for paying the levy and by when
• More detail as to when the levy is triggered
• Improved transparency over how levies are set
• New objection and review mechanisms to improve levy assessment accountability
• Existing staged obligation agreements will continue under the new system
• Any levy increase above indexation requires an amendment to the Act
• Legislation of the Melbourne Strategic Assessment Fund
• Updates to online payments and staged payment application systems will be made with input from industry.

Application of the Levy

The levy will apply to land subject to urban expansion within Melbourne's Growth Areas. Several actions are excluded from the levy, including building works and subdivision of a minor nature and those not subject to Commonwealth approval. Excluded actions under the Growth Areas Infrastructure Contribution are also not subject to the levy under this new Bill.

Other points of note:

• Payments are triggered at Statement of Compliance
• Payments may by staged if applied for and approved
• A right of review to the levy assessment may occur through VCAT
• Land contributed for conservation purposes may reduce the levy
• Previous Habitat Compensation Obligation payments are unchanged
• Agreements made prior to legislation commencement are unaffected.

Calculating the Levy

The levy liability is based on the number of scattered trees and the area of each habitat coverage recorded in the Environment Mitigation Information System ((EMIS). This dataset will be available at www.msa.vic.gov.au.

The Environment Mitigation Information System will depict, calculate and record the amount of habitat coverage, as well as scattered tree locations across a particular land parcel. Public access to this system will be provided free of charge through the Department of Water, Environment, Land and Planning at this stage.

The value of the levy is based on the:

• Type of habitat area covering the levy land (e.g. native vegetation area, Matted Flax-lily habitat area)
• Extent of coverage of the particular habitat area
• Number of scattered tree locations with a rate applied per location.

The condition of the habitat, trees or other matters that may be present are not considered in levy assessments.

Where more than one habitat area overlaps, this is considered a ‘composite area’ and each type of habitat incurs a levy.

Applicable Habitat Areas

• Native vegetation area
• Golden Sun Moth habitat
• Growling Grass Frog habitat
• Matted Flax-lily habitat
• Southern Brown Bandicoot habitat
• Spiny Rice-flower habitat

Indicative Environment Mitigation Levy Amounts

As with the existing Habitat Compensation Obligation system, the levy is the sum of any one or more of the following amounts per hectare of habitat area. Increases over existing charges are shown in brackets and these will be indexed annually until 2024-2025.

1. Golden Sun Moth habitat area: $10 005 (+26%)

2. Growling Grass Frog habitat area: $7846 (+4%)

3. Matted Flax-lily habitat area: $11 351 (+1%)

4. Native vegetation area: $113 441 (+19%)

5. Scattered tree location: $15 768 each (+19%)

6. Southern Brown Bandicoot habitat area: $4138 (+3%)

7. Spiny Rice-flower habitat area: $8522 per hectare (+7%)

Commencement

The Environment Mitigation Levy will come into effect on 1 July 2020. 

Further Information

Ecology and Heritage Partners are available to answer questions regarding the levy and how this may or may not apply to your project.

Please contact our natural heritage team on 1300 839 325 to discuss your project and any other questions you may have.

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