Administration and effectiveness of the Environmental Contribution Levy

25 Jun 2014

This audit finds deficiencies in the Department of Environment and Primary Industries’ management of the Environmental Contribution Levy.


Since 2004–05, Victorians have been paying for the costs of sustainable water-related initiatives through their water bills. This has been in the form of the Environmental Contribution Levy (ECL), which is linked to the revenue of water businesses. By 2015–16 it is expected that almost $1 billion will have been collected through the ECL. The Department of Environment and Primary Industries (DEPI) is responsible for administering the ECL and the initiatives it funds.

While DEPI’s administration of individual ECL projects has generally been sound, there are deficiencies in the department’s management of the levy. In particular, there have been weaknesses in the processes for selecting and prioritising proposed projects across the three tranches of the levy.

While the ECL revenue collected has increased substantially over time, DEPI has not clearly articulated the strategic priorities for the levy, nor undertaken an analysis of the level of investment needed to address them. 

DEPI has not assessed the fund's overall performance against its objectives nor established an evaluation framework. DEPI has provided only limited public information about the levy—consequently, there is a lack of transparency about how the levy is used.

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