Victoria's planning system cannot continue to operate under a 'business as usual model' if we are to accommodate the State's growing population, a CEDA forum in Melbourne has been told.

Victorian Planning Minister Matthew Guy told the half-day forum that "population in Victoria is growing at 94,000 people per annum, the fastest numerically in Australia" and that despite tougher economic conditions, growth isn't slowing.

Population growth presents the biggest challenge for the planning system and difficult and controversial planning changes are necessary because 'business as usual' is no longer an option, Mr Guy said.

"Population growth is occurring and can't be ignored. We need to be realistic about the challenges we face and realistic about how we are going to face them through good planning and implementing the policies we are putting out," he said.

Outlining changes made to planning laws, as well as the soon-to-be-released Metropolitan Planning Strategy and the Regional Growth Plans, Mr Guy said reforms are needed to build a stronger economy for Victoria, provide more affordable options for where people can live, get a job or start a business, as well as provide a clearer process for providing local infrastructure.

In particular, Melbourne's Central City Area (CCA) attracts a lot of interest in planning applications and "the government is unapologetic about trying to bring forward growth in defined areas, particularly in the CCA to take the pressure off existing suburbs," he said.

Mr Guy said that the 70 projects approved for the CCA so far represent $8 billion worth of investment in residential and commercial developments.

"We have to have a smarter, more targeted level of growth and optimisation of land use in the CCA," he said.

"It doesn't mean we sacrifice quality or streetscape or residential amenity…we have to make sure the development that is being approved is smarter and provides good quality accommodation, but we need to ensure we are optimising land space."

However, he acknowledged growth cannot be all about the inner city area and needs to also be focused in existing suburbs.

Zoning reforms will be implemented from 1 July 2013 comprising changes to residential, commercial, industrial and rural zoning, he said.

"These changes will provide for more employment, giving people the opportunity to work where they live," he said.

Regional Victoria also has huge opportunities to grow, he said.

"Geelong for example has an airport, standard gauge rail, good schools and is close to the surf coast and Bellarine peninsula," he said.

"It has massive potential grow not just as a residential dormitory to Melbourne, but to focus inwardly on itself to be a city of 300,000 in its own right."

He said the Regional Growth Plans "give a taste of where we are heading", but also highlighted the need to recognise and protect high quality agricultural land sitting in regional precincts.

The Government would have a draft proposal, including an agricultural overlay, complete by the end of this year, he said.

Through the Metropolitan Planning Strategy, the Metropolitan Planning Authority and the Regional Growth Plans, the Government is doing the work to ensure the state can grow sustainably, he said.

While planning is often controversial "Melburnians are not luddites to change and they are happy to have a rational conversation about where they want the city to go, but people want to make sure the city keeps what they love about it," he said.

"The government will do all it can to ensure the legacy we leave for future generations is one where Victoria maintains and improves its liveability not just in Melbourne, not just in regional centres but across the state as a whole."