John Alexander (Bennelong, Liberal Party) Share this | Hansard source

Providing landmark infrastructure and finding innovative ways to pay for this infrastructure is essential for the development and to address the imbalance of settlement between Australian cities and regions. Just over six months ago, I led an inquiry into the very subject of funding infrastructure. We heard from experts from across the country and around the world to put together an Australian best practice for financing and retrofitting the infrastructure that our cities crave. The extremely high cost of land in our cities has made the cost of resuming land prohibitive, making the retrofitting of infrastructure difficult at best and impossible at worst. It has regularly led to the decision to tunnel, but when tunnelling is too expensive often nothing happens. This challenge is exacerbated by the pressure of growth that our cities alone shoulder.

Value capture represents the most equitable method to fund infrastructure with the added benefit of relieving demands on consolidated revenues. From listening to expert advice, it became apparent that value capture works in different ways around the world, in many ways it is a catch-all term. Cross-city rail is often held up as a successful example; however, its value capture model focused on an untargeted levy across the community. Levies like this are not necessarily the most efficient though, and do not take into account the inherent land values of the areas it is affecting.

We need a bespoke version here that capitalises on our unique situation. Wherever infrastructure projects are happening in this country land values are going up. In situations of both decentralisation or renewal, the combination of infrastructure and land use optimises land values. These are the essential ingredients to maximise funding through value capture. In some cases, land values are so low that the provision of infrastructure will lead to astronomic price increases. Take for example the Inland Rail link, which will bring huge rises in properties to a number of regional towns. Parkes, at the junction between the main north-south and the main east-west lines, will see huge growth. Indeed, it has been reported that speculators are already buying up land in anticipation of this uplift in growth.

Taxpayers around the country are paying for this infrastructure but the monetary benefit will only fall to a small group of canny investors with the capacity to buy up speculative land or existing lucky land owners. Infrastructure should be funded out of the profits of these few rather than putting the burden on the taxpayer. The Badgerys Creek airport and associated developments are another opportunity that seems to be flying by. The number of businesses flocking out there is a testament to the quality of our city's deal, but we are watching the funding opportunity disappear. Our bespoke value capture model should seek to fund infrastructure out of the profit of these few rather than putting the burden on the taxpayer. Value capture needs to take an equitable proportion of the unearnt increase that the infrastructure and zoning has created. This funding when collected across all the properties which are gaining an upper left will raise billions.

Another finding of the inquiry was the urgent need to link the three levels of government. Long-term master planning and sustainable funding through value capture can only be achieved through the alignment of the three tiers of government and landowners and developers. It is imperative that the three levels of government recognise the opportunities that to sustainably fund infrastructure depends on their ability to cooperate. They must be willing to forego individual revenues to ultimately maximise total revenues. This overarching alignment of governments has been one of the largest benefits of the city deals. However, I would like to see this rolled out across the country as standard practice. I know that value capture is being investigated in certain situations. However, what is clear is that we need an overarching federal value capture policy that will operate across the country and across the three levels of government whenever new infrastructure is being built. So there is a clear need for more infrastructure and a clear, simple way that it can be funded. To this end, can the minister outline how the budget supports the Commonwealth to invest in more landmark infrastructure and how these reforms will create more opportunities for the private sector and government— (Time expired)

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