Seven councils across Melbourne’s west are mounting a coordinated push for tougher controls on data centres, warning that local communities and councils are being given too little say as some of Australia’s largest digital infrastructure projects move into the region.
Brimbank, Hobsons Bay, Maribyrnong, Melton, Moonee Valley, Wyndham and the Shire of Moorabool have made data centre development a joint advocacy priority through the Western Alliance for Greenhouse Action, or WAGA. The group is an existing partnership of western councils rather than a newly created body, but its move into the data centre debate marks a sharp escalation in local government pressure on Victoria over planning approvals.
The councils have prepared a joint submission to the federal Senate inquiry into artificial intelligence and data centres, calling for stronger controls over energy, water and environmental impacts and a greater role for local government in policy and approvals. The submission also calls for a pause on approvals for new hyperscale data centres until safeguards and policy reforms are in place.
Their concern is concentrated heavily in Melbourne’s west, where large industrial sites, electricity infrastructure and available land have attracted developers. Brimbank estimates Melbourne has about 50 to 60 data centres, with roughly 30 per cent in the west, although estimates vary depending on how facilities are classified.
WAGA says at least eight large facilities are either operating or being planned within its seven council areas to support companies including Microsoft, Amazon Web Services and Google Cloud. On the councils’ own estimate, projects already approved in the region could require more than three gigawatts of additional electricity supply. That figure is a WAGA estimate rather than an independent forecast and does not mean all proposed capacity will necessarily be built.
The dispute is increasingly about who gets to make the planning decisions. WAGA acknowledges that data centre proposals handled through Victoria’s Development Facilitation Program are referred to councils, but argues the present system does not give local government enough ability to address cumulative demands on electricity, water, land, urban heat and local amenity.
That distinction is important. Data centres are not being approved entirely without a planning process or consultation. Victoria’s Development Facilitation Program provides an expedited pathway for eligible projects and the Department of Transport and Planning says developments remain subject to assessment and consultation requirements. But the Planning Minister can become the responsible authority, leaving councils as participants rather than the final decision-maker.
A current example is NEXTDC’s proposed expansion of its M3 data centre campus in West Footscray. The application, covering several properties in the Tottenham Employment Precinct, was lodged with the state in February and publicly advertised in March under the Development Facilitation Program. The responsible authority is the Victorian government rather than Maribyrnong City Council.
Concerns surrounding that precinct have already extended beyond planning powers. Residents have raised questions over diesel generator testing and air quality, while Footscray MP Katie Hall wrote to the Planning Minister earlier this year seeking action over community concerns. NEXTDC has said its generator testing is undertaken in accordance with planning, environmental and safety requirements.
Brimbank is now proposing to go further than the collective WAGA position. Papers presented to councillors on Tuesday night recommended that the council call for a moratorium on all new data centre approvals and expansions until binding planning controls and mandatory standards are introduced. The council also proposed taking the issue to the Municipal Association of Victoria’s State Council in October in an attempt to secure statewide local government backing.
Brimbank’s proposed motion says, “Victoria’s planning rules have not kept pace. Councils need modern planning controls so data centre development can be assessed fairly, consistently and with local communities in mind.” It adds that councils should be involved early so local knowledge can shape policy and communities are not left carrying infrastructure costs.
Unconfirmed minutes of Tuesday night’s Brimbank meeting had not been published early Wednesday. The council says its unconfirmed minutes are normally posted by the Friday after a meeting, meaning the formal outcome of the recommendation was not yet available on its public register.
The seven-council campaign reflects a concern now being raised well beyond Melbourne’s west. Australian Local Government Association president Matt Burnett said last month that councils needed to be involved before decisions were settled.
“These decisions can’t be made from a distance. Councils know what works on the ground for their communities. We understand local land, water, power and liveability pressures, and we need to be involved before decisions are locked in,” Burnett said.
The Victorian government, however, is seeking to expand the sector and regards data centres as critical infrastructure needed for cloud computing, artificial intelligence and essential digital services. Its Sustainable Data Centre Action Plan, updated this month, says Victoria has a potential project pipeline worth more than $25 billion and sets out work across land and infrastructure, electricity, water, skills and government coordination.
The tension lies partly in what that plan does not do. The government itself describes it as “primarily an internal coordination framework” intended to improve how departments plan and support investment. It is not, by itself, the statutory planning regime that Brimbank and the other western councils are seeking. Brimbank’s own analysis says the state and council positions are largely aligned on attracting investment and sustainable development, but differ over binding planning controls and the role of councils.
Victoria has strong economic reasons for encouraging the industry. The government said earlier this year that more than 40 data centres were already operating across the state. CDC’s Brooklyn development and planned expansion in Melbourne’s west were expected to involve more than $4 billion of investment, thousands of construction jobs and hundreds of continuing positions.
Industry representatives also dispute suggestions that the growth of data centres will necessarily leave households paying for their electricity network requirements. Data Centres Australia points to research commissioned by Amazon Web Services which argues that existing network charging rules, capital contributions and transmission pricing largely require major new users to meet the network costs they create, limiting the amount passed through to residential customers.
The federal government has also begun imposing stronger expectations on the industry. Assistant Minister for Science, Technology and the Digital Economy Andrew Charlton said in March, “We don’t want data centres to push up power prices.” Federal expectations require operators to meet their new electricity demand from additional renewable energy sources and address water use, community impact, jobs and national capability.
A Senate inquiry launched in May is examining the effects of AI and data centre growth on communities, industries, energy, water and the environment, with submissions open until September 1 and a report due in November. The WAGA submission gives Melbourne’s western councils a direct route into that national debate.
What is emerging in Melbourne’s west is therefore not a campaign to stop digital infrastructure altogether. The WAGA councils are seeking a pause specifically on new hyperscale approvals while safeguards are developed, while Brimbank is proposing the more extensive moratorium covering new facilities and expansions.
Brimbank’s position explicitly supports data centre investment where locations and safeguards are appropriate. The argument now facing the Victorian government is whether a planning system designed to accelerate major investment can also give councils and residents an early enough role when projects can place unusually large demands on electricity, water and industrial land.
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