Mornington Peninsula Shire mayor Cr Steve Holland says that Premier Dan Andrews’ plan to introduce a 7.5 per cent short stay accommodation tax will do “nothing” to fix the housing crisis.
Holland said last Monday’s (20 September) announcement was a “huge disappointment” and would severely impact the “struggling tourism and hospitality sectors”.
He said the levy would override the shire’s short stay rental local law and fail to solve the housing and rental affordability problem. The 7.5 per cent levy could add an estimated $42 a night for stays on the peninsula.
“That’s $42 a night not contributing to our local economy and this may become a disincentive for people to visit our region, particularly with the current cost of living pressures,” Holland said.
The mayor’s concerns echoed those of Nepean MP and shadow minister for tourism Sam Groth, who last week said the tax would “punish Victorian holiday makers and regions” (“Tax proposed for short-term stays” The News 19/9/23).
The state government levy will effectively nullify the shire’s own short stay rental accommodation local law, brought in five years ago and amended in 2022, which Holland said provided “clear guidelines on the required standards for the operation of this type of accommodation and places the responsibility for occupant behaviour on the owner of the property”.
The local law was introduced to manage an increase in noise, poor behaviour and rubbish complaints, and includes a $335 registration fee to cover the costs of managing the additional compliance.
Holland said the shire would have to cover the $870,000 a year income derived from the local law.
“Estimates suggest the state government could expect the new levy to raise more than $10 million from the Mornington Peninsula alone, and we are concerned we won’t see a cent of this tax reinvested in our region,” he said.
“Our shire has received less than 0.2 per cent of the government’s $5.3 billion big build project to date and we fear this trend will continue with the short stay rental revenue.
“We are frustrated at the lack of consultation prior to this announcement. The state government has a big budget problem and wants our struggling tourism and hospitality sectors to fix it.
“The new tax will do absolutely nothing for housing affordability. It won’t help a single young person buy a home; it won’t help a single renter who is struggling to pay their bills. It won’t fix any of the planning and amenity issues faced by our residents.
“How does a new tax solve noise, parking or rubbish complaints? How does a new tax fix the problem of half of the properties in a small, quiet residential street being turned into full-time, commercial short-term accommodation places?”
Holland said the council was best placed to set laws around short stay accommodation but would instead have to “foot the bill” to fix the state’s budget deficit and “get nothing in return”.
The peninsula has an estimated 1000 homeless people, 4000 on the public housing waiting list, and a growing rental crisis and housing affordability issue.
Holland said the council wanted the government to guarantee that as a major contributor to this new tax, the peninsula would receive significant investment in social, crisis and affordable housing.