New transport infrastructure delivers economic value – for example property prices typically jump near a new rail station. Tapping some of that value to help fund the cost of the infrastructure is an increasingly common technique.
The discussion paper examines the potential to more widely use value capture funding to supplement the billions of dollars each year already spent by all three levels of Australian governments on infrastructure.
It sets out a range of options for the Australian Government to action to stimulate the use of value capture in the development and delivery of infrastructure and describes various potential value capture approaches – including tools already in use by state and local governments.
Minister for Urban Infrastructure Paul Fletcher said the Australian Government was seeking public and industry input on the value capture concept.
“Many states and territories already use value capture funding models to support major upgrades,” Mr Fletcher said.
“Similarly, developer charges are commonly used by local government authorities to help deliver utilities for new housing developments.
“If we are to make better use of value capture, governments must first understand why beneficiaries might be willing to pay for projects; identifying who these beneficiaries are and when they might materially gain from projects funded through this method.”
Assistant Minister for Cities Angus Taylor said there was a need to find new funding models within the constrained fiscal environment.
“Government is getting smarter about linking transport investment with long term planning for affordable homes, closer to where people work and closer to services like schools and hospitals,” Mr Taylor said.
“Through City Deals, we are looking at changing the way we fund infrastructure.
“Encouraging public private partnerships to pay for road and rail corridors where land values will increase, can be a wise way to invest taxpayers’ money.”
Submissions on the discussion paper will be open until 3 February 2017.
For more information on how to provide a submission, visit https://infrastructure.gov.au/valuecapture