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Harnessing value, delivering infrastructure: inquiry into the role of transport connectivity on stimulating development and economic activity
Improving transport connectivity, and finding innovative ways to pay for transport infrastructure, is essential to the future development of Australia’s cities and regions.
The issues of concern that lead to this inquiry were the imbalance of settlement and its consequences; the deficit of infrastructure in our major cities and the resulting congestion; the constriction on growth that these cities produce through the lack of long term planning and timely construction of infrastructure; and the decline of the regions and lack of economic opportunity. These four core challenges defined our problem, and this Committee has searched for a suite of recommendations that will commence the process of how to address them.
The enquiry heard from those with direct hands-on experience with how other countries have dealt with similar challenges and their outcomes.
Australia’s settlement and the development of our cities has unfortunately been characterised by an absence of planning for both housing and essential infrastructure. The ad hoc nature, to this point, of planning infrastructure and the lack of process for the determination of land use has produced poor outcomes in terms of cost and current needs. As we continue to grow, this will have drastic consequences. One of our first conclusions is to address this need with a plan for our settlement and our cities with long term vision. Furthermore, it is essential that this planning take place through engagement across the three levels of government.
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 also regularly led to the decision to tunnel, but when tunnelling is too expensive nothing happens. This challenge is exacerbated by the pressure of growth that our cities shoulder.
From this evidence, we have come to some inevitable conclusions as to what must occur to remedy this set of challenges. There must be put in place a plan of decentralisation to relieve our cities of the full burden of growth by providing regions with economic opportunity and prospects for settlement. This can be achieved through high speed connectivity to major urban areas. This respite will allow long term plans for the retrofitting of infrastructure attached to land use. This will allow us to rebuild our cities to world’s best practice models. In both scenarios of decentralisation or urban renewal, the combination of infrastructure and land use optimises land values—this is the essential ingredient to maximise funding through value capture. Value capture represents the most equitable method to fund infrastructure, with the added benefit of relieving demands on consolidated revenues.
Long term master planning and sustainable funding through value capture can only be achieved through the alignment of the three tiers of government, land owners and developers. It is imperative that the three levels of government recognise that the opportunity to sustainably fund infrastructure depends on their ability to co-operate. They must be willing to forego individual revenues to ultimately maximise total revenues. Vision and innovation needs to replace debilitating political argument to look at these challenges that can be converted to opportunities to rebalance our settlement, rebuild our cities and undertake the facilitating infrastructure funded by the wealth it creates. The wealth that can be liberated by growth in our regions will come through ready access to the economic powerhouses of our major cities.
This is the central purpose of High Speed Rail. Contrary to popular belief, High Speed Rail’s prime purpose is not an alternate mode of transport between capitals. Rather is it a tool to effect dynamic regional growth as land near regional stations will then compete with the most expensive land in the world, namely that of Sydney and Melbourne.
Evidence claimed that the corridor between Melbourne and Sydney represents the greatest potential for uplift of land values anywhere in the world when connected with High Speed Rail; this can therefore provide the precondition for value capture to completely fund this major infrastructure. It is essential that the government establishes an Australian model of value capture that addresses our unique opportunities. The development of our value capture model should consider the private consortia that are committed to the development of High Speed Rail funded by profits of their privately held lands. A comprehensive Federal Value Capture Model, when partnered with private consortia highly motivated to play a critical role, should be facilitated by an appropriate government body that will determine when this national transformation can proceed. This plan of urban renewal and decentralisation, facilitated by strategic planning of infrastructure, will deliver an abundant affordable housing supply for generations to come. I would like to thank all those who have contributed to this inquiry.
The Committee received a great deal of high quality evidence from people committed to the development of Australia. This report will hopefully see that commitment turned to action. I also thank my Committee colleagues and the secretariat for their hard work and enthusiasm during the inquiry and their contribution to the report. This report prescribes the solution to many of Australia’s current planning, financing and population problems. I look forward to its recommendations being accepted, and Australia returning to the fast track.