Planning shock as Minister sidelines Macaulay panel for state-led committee

The state government has stunned councillors and residents by scrapping a long-awaited independent planning panel for Macaulay and instead appointing a state-led advisory committee to rewrite the precinct’s future planning controls.

On December 22, Planning Minister Sonya Kilkenny formally established the Macaulay Structure Plan Advisory Committee under section 151 of the Planning and Environment Act, instructing the Department of Transport and Planning (DTP) to prepare new draft controls to replace Amendment C417.

The move effectively halts the City of Melbourne’s request, made on December 2, to refer its amendment to an independent panel after receiving 63 submissions. Instead, the Minister has directed a different pathway, with hearings beginning in February and April and a final report due by May 29.

For many locals, the change came out of nowhere.

We received information this week from Planning Panels Victoria that the proposed planning panel hearings for the Macaulay Planning Scheme Amendment have been cancelled and that the amendment is now on hold. What???” one resident told North West City News in January.

“After so many years of work, why is the state government overriding the council? Where does this leave residents?”

The Macaulay Structure Plan 2021 covers a 90-hectare renewal area in Kensington and North Melbourne, expected to accommodate around 10,000 residents and 9500 workers by 2051. Amendment C417 was designed to lock in new built-form controls, open space contributions and affordable housing settings to guide that growth.

Under the Minister's referral, however, the advisory committee’s scope is narrower than a conventional panel. The terms of reference explicitly exclude advice on whether affordable housing provisions should be mandatory, whether floor area uplift should be allowed, and whether the new zones and overlays now being drafted by the Victorian Government to replace the council’s proposals are the appropriate choice of tools.

That has sparked anger among some in the community.

Another Kensington resident described the decision as “a slap in the face” and “planning paralysis", claiming the new process appeared to rule out mandatory affordable housing and uplift schemes before evidence was tested.

In a formal submission to the council, Kensington Association chair Dr Kate Kennedy said she was “alarmed” by the decision and did “not support this course of action”.

The association, which has been involved in Macaulay planning processes since 2011, said it had supported Amendment C417 “on balance” because its density-based controls would create greater certainty for developers and residents and help fund “desperately needed public open space”.

It warned the new pathway risked procedural unfairness if rewritten planning controls were not publicly exhibited.

“If the rewritten planning controls are materially different in effect to the council’s exhibited planning controls, and if we will be barred from making submissions about the rewritten planning controls, that would be egregiously unfair,” the association wrote.

The group also pointed to what it described as shifting ministerial directions over time, noting that earlier advice from the previous planning minister had called for stronger affordable housing mechanisms and clearer floor area ratio controls, matters now ruled out of scope by the new advisory committee.

“How is the council meant to undertake precinct planning with any confidence, and keep the community informed about that process, if the Minister keeps moving the goalposts?” Dr Kennedy asked.

At the City of Melbourne’s February 3 Future Melbourne Committee meeting, councillors were told the new pathway represented a “material change of circumstances”.

The municipality's city strategy director Jo Cannington said the advisory committee would replace the panel process and that the council had been asked to pause Amendment C417 while the state-led process unfolds.

She acknowledged key differences, including that mandatory affordable housing would not form part of the committee’s scope, although broader affordable housing considerations could still be discussed.

Deputy Lord Mayor Roshena Campbell moved an amended motion supporting the pause but also calling for transparency and the opportunity for third parties to be heard. She thanked Dr Kennedy for raising concerns about whether residents might be shut out of the revised process.

“We acknowledge that the changes initiated by the Minister midway through what has been a very, very long planning scheme amendment process may cause some concern within the community,” Cr Campbell said.

The council ultimately resolved to pause C417 and participate in the advisory committee, while maintaining its advocacy for the Macaulay Structure Plan 2021 and the version of C417 endorsed in December.

The Minister’s letter argues the new process will support the “timely resolution of new planning controls” and help align Macaulay with other activity centres and new housing targets.

But critics fear the intervention could dilute hard-won provisions on open space and affordable housing or at least delay certainty yet again in a precinct that has already endured years of interim controls and stalled negotiations over Moonee Ponds Creek land.

With hearings set for April and a report due by late May, the final say still rests with the minister.

For Kensington residents who have spent more than a decade advocating for parks, infrastructure and liveability to match rapid apartment growth, the question now is whether this “faster” pathway delivers clarity – or simply adds another layer to the “complexitron”.

In response to questions to the Minister for Planning from North West City News, a Victorian Government spokesperson said, “the best way to make homes more affordable is to build more of them and Victoria continues to build more homes than any other state.”

“We know we need to do more, which is why we're working closely with the City of Melbourne and the City of Yarra to deliver more homes in these well-connected areas,” the spokesperson added.

As part of its Train and Tram Zone Activity Centre program, the government said it was working collaboratively with councils as part of two “city-wide” centres in Inner City (Yarra) and Inner City (City of Melbourne) to deliver them, and that “this includes in Macaulay”.

The government indicated that this work would involve detailed identification and mapping, with the aim of considering upzoning strategic sites, using newly developed planning controls, and fast-tracking specific site developments. It stated that this was “just one pathway we're using to build more homes”.

On affordable housing, it said it had already delivered more than 20 per cent affordable housing under the Development Facilitation Program’s mandate of at least 10 per cent affordable housing.

It said it planned to work with industry, councils and planning experts to implement the head of power for affordable housing through the new Planning and Environment Act to provide certainty for the community and developers around how more affordable homes are delivered across Victoria.

The government also touched on Arden in its response, stating that the neighbouring precinct would set a new benchmark for urban renewal and “help shape a future city that is not only the world’s most liveable but also one of the most forward‑looking”.

It has pledged that Arden will be “transformed into a vibrant, mixed‑use neighbourhood with a sustainable, high‑density community and quality, affordable housing to support residents and key workers”.

The government’s Housing Statement commits that a minimum of 10 per cent of the housing on government land will be affordable housing, including the Arden Central sub-precinct. •