Wednesday, 19 March 2025

Statements on tabled papers and petitions

Department of Premier and Cabinet

Victoria’s Value Creation and Capture Guidelines

Sonja TERPSTRA (North-Eastern Metropolitan) (17:18): I rise to make a statement on the report Victoria’s Value Creation and Capture Guidelines, which was developed by the Department of Premier and Cabinet in 2021, and this was to enhance the impact of government investments across our state. Before I continue to talk about that I just want to put out there the definitions of what ‘value creation’ and ‘value capture’ are because I think it will be useful and helpful to some in this chamber to understand.

‘Value creation’ refers to actions or activities or policies that deliver enhanced public value or benefit above and beyond what would ordinarily be achieved as a direct consequence of government investment. ‘Value capture’ refers to actions, activities or policies by which government captures a portion of the incremental value created by a project. In that context we have – I know that I have –been talking about the Suburban Rail Loop as a fantastic example of how we can look at utilising value creation and value capture to realise broader public benefit as a result of a project.

But back to the guidelines. The guidelines provide a structured framework for project sponsors, delivery agencies and advisory bodies involved in public land development and capital investments. Of course with the Suburban Rail Loop what we are doing is looking at using public land, such as a public train station, to realise a broader benefit through development of housing. Again, the guidelines aim to support the stakeholders in applying the Victorian government’s value creation and capture policy, which encourages, as I said, a broader value-focused approach to project development, ensuring that environmental, social and economic benefits are maximised. To achieve this, the guidelines outline key stages that stakeholders must consider, and that includes everything from defining a project and identifying the value creation and capture opportunities right through to evaluating outcomes, and each of the stages plays a crucial role in ensuring that value is created and captured efficiently and effectively. Of course all of this means that the public have a greater benefit as a result of some of these really incredibly important infrastructure projects that we are doing.

A strong foundation for any project is the establishment of objectives. Before the value creation and capture opportunities can be explored, the vision and goals of the project will need to be defined. In the SRL business case you can see these sorts of things have been given a strong force and voice. Then, back to the guidelines, the guidelines recommend that the objectives be developed through investment management workshops and consultation and that these sorts of things are done in consultation with the public. The process also requires broader thinking to ensure that all possible avenues for additional public value are considered. The identification phase culminates in a statement of intent and a strategic plan, which then sets out the value creation and capture objectives and the expected benefits for the community. These are the things that we have been talking a lot about particularly with SRL when we talk about the broader benefits not only with public transport but also housing that people will be able to live in close to public transport, so you can see those broader benefits that are going to be realised and they are quite real and tangible.

The guidelines also provide clear direction on the delivery of projects, emphasising that coordination across government will be essential to ensuring the alignment needed to achieve the value creation and capture outcomes. Any project sponsors or agencies are responsible for implementing detailed plans and any endorsed value creation and capture mechanisms, with progress integrated into regular project status reports. Once the project is completed, it must be evaluated to determine whether those benefits have in fact been realised. The assessment should be undertaken in consultation with relevant stakeholders for capital investment projects and should align with the gateway review framework to ensure a comprehensive evaluation. As you can see, these sorts of frameworks are already well in place to make sure that for any project the government does we can realise a range of value capture opportunities in order to make sure that the community that are going to benefit from these projects can clearly see those benefits come to light.

In the 50 seconds or so that I have left on the clock, I will conclude by saying Victoria’s value creation and capture guidelines represent a significant step in ensuring that government investments deliver tangible and real benefits for our communities. By adopting a strategic, collaborative and value-focused approach, we can enhance the economic, social and environmental outcomes of public projects. That is one of the fantastic things that we can see unfolding right before our eyes, particularly with projects like SRL but also SRL East, which is in my region. I know people in my region are absolutely looking forward to not only being able to have enhanced public transport options right in their backyard but also the housing benefits that they will be able to access as well. I commend this report to the house.