Local government bodies in Melbourne’s west and north have told a Senate inquiry they want a moratorium on new AI data centre approvals, saying the state government’s planning system is letting developers bypass councils altogether.
Melton, Brimbank, Hume and Maribyrnong city councils each called for a pause on approvals in evidence to the Senate Environment and Communications References Committee’s inquiry into artificial intelligence and data centres.
The Western Alliance for Greenhouse Action, representing seven councils across Melbourne’s west, backed the same call.
Hume Mayor Carly Moore said her council’s moratorium motion passed unanimously in August.
“I’ve never seen our community come out so strongly,” she said, describing the issue as one of the few to unite residents “across party divides.”
Moore said she had received no formal reply to her written request for a moratorium, though the state planning minister visited Hume to meet residents the week before the hearing.
A recurring theme in the councils’ evidence was that data centre applications are increasingly bypassing council assessment altogether.
Developers can choose between two approval pathways in Victoria—through the local council, or through the state government’s Development Facilitation Program—which witnesses said reduces councils’ role to that of a “referral agency.”
State Giving Fast-Track Approvals
Victoria has increasingly used state-level planning mechanisms to accelerate major developments, reducing the role of local councils in some cases.
The approach has been particularly contentious in housing, where the state government has threatened to take planning powers away from councils that fail to meet housing targets and has established mechanisms allowing some projects to proceed with less local scrutiny.
The data-centre dispute is therefore occurring against a broader debate over how much control Victorian councils should retain over major developments in their communities.
Melton’s director of city futures, Samantha Romaszko, said every data centre application in her municipality had gone through the state pathway.
“We have not, as a council ... made any determination on these applications,” she said.
Kelvin Walsh, who holds the same position at Brimbank council, said the state was increasingly taking on the assessment role regardless of the scale of the project.
Greens Senator Steph Hodgins-May described the use of a fast-tracking process meant for housing as “a bit of a con job, if I’m honest.”
Councils also said they had been given no evidence to support developers’ claims about the number of permanent jobs their facilities would create.
Moore said Hume had discussed construction and post-construction employment with proponents but had received “no evidence to back those claims up either.”
Committee Chair Sarah Hanson-Young raised a separate concern, drawing on evidence given the previous day by a Sydney deputy mayor: a data centre in Ultimo, in inner Sydney, had drawn 60 to 120 megawatts from a local substation on a “first in, best served” basis, leaving less capacity for a planned housing development in the same area.
“It seems crazy to me that at the moment it seems there’s no hierarchy that puts housing ahead of a mega data centre,” she said
Victoria’s government announced a new data centre policy the day before the hearing, on Sept. 22, introducing a 150-metre residential buffer and other conditions. However, none of the five councils said the measures went far enough.
Walsh said the announcement fell short “in relation to stronger council involvement” and confirmed the government’s plan “did not call for a moratorium on the assessment and approvals,” as councils had been seeking.
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