Canberra seeks 'value capture' feedback


Government wants to promote strategy as a fairer funding model to deliver economic benefits

Canberra seeks 'value capture' feedback
Paul Fletcher says governments must first understand why beneficiaries might be willing to pay for projects to make better use of value capture.

 

The federal government is currently seeking public and industry input on the concept of value capture to analyse productivity and efficiency factors that can help in building "high-quality" transport infrastructure.

Urban infrastructure minister Paul Fletcher and cities and digital transformation assistant minister Angus Taylor released a discussion paper, Using value capture to help deliver major land transport infrastructure, that highlights the relation between transport infrastructure, the benefits that flow from it, and the challenges and opportunities value capture presents.

The paper describes various potential value capture approaches – including tools already in use by state and local governments and also highlights a range of options for the government to use this concept in the development and delivery of infrastructure.

The government says new transport infrastructure increases the economic value of the surrounding land and property and "tapping some of that value to help fund the cost of the infrastructure" can be a win-win situation for both private and public sectors.

"Under Australia’s federal structure, all three levels of government have important roles to play in planning and funding urban development and transport infrastructure," it says.

"The Australian Government is seeking to take action to support infrastructure investment practices by promoting value capture as a complementary funding approach and a land planning tool that – where appropriate – can result in more infrastructure, better integrated planning between infrastructure and land use needs, increased economic benefits beyond transport objectives, earlier delivery of infrastructure needs and fairer funding models."

Fletcher says many states and territories already use value capture funding models to support major infrastructure upgrades.

"Similarly, developer charges are commonly used by local government authorities to help deliver utilities for new housing developments," Fletcher says.

"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."

Taylor says there is a need to find new funding models within the constrained fiscal environment and promoting public-private partnerships for road and rail corridors can benefit the economy.

"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," Taylor says.

"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 will be accepted until Friday, February 3.

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