Labor has accused the government of “clutching at straws” following reports it plans to finance infrastructure projects, such as a high-speed rail network along the east coast, by capturing the value of increases in property value.
The opposition leader, Bill Shorten, accused Malcolm Turnbull, of trying to “shake off the tag of being a do-nothing prime minister”, while the shadow infrastructure minister, Anthony Albanese, said value capture could not replace government investment.
According to reports, the government will announce that major infrastructure projects such as a train to Sydney’s second airport at Badgery’s Creek and between Melbourne and Shepparton should be funded by value capture financing.
Value capture is a type of financing that recovers some or all of the value that public infrastructure generates for private landowners, such as through land taxes or a levy on developers of new properties.
The train projects would be the first links in a very fast train network between Melbourne and Brisbane, variations of which have featured in public debate for decades including the last three elections.
Speaking in Karratha on Monday, Turnbull said value capture can “certainly contribute to financing a project”.
“What that means is you’ve got to look at rail ... and ask yourself how is this changing the value of land? How is it promoting opportunities for development for greater amenity, and how can we capture some of that value to finance the infrastructure so that the taxpayer gets a better deal and citizens get better infrastructure sooner?”
“That’s how railways were financed in the 19th century actually. It is not actually a radical new plan at all, it is actually a sensible old plan that’s been forgotten,” he said.
But Turnbull conceded “obviously, there will be always be a big role for the government to make grants, to make direct investments”.
On Friday Turnbull said the Melbourne metro was an exciting project that could be partly financed by capturing the value from property development although the government would also “substantially support” it in future.
Albanese said a government contribution would be needed for the rail projects. “Most importantly, you don’t build such a nation-building project by having a headline in a newspaper. You need a structure. You need an authority.”
He accused Turnbull of foreshadowing that value capture will replace actual investment by the government in infrastructure.
He called on the government to back his bill to create an advisory group and preserve a corridor for an east coast fast train.
The business case for the Melbourne metro already included a $3 billion contribution from the private sector through value uplift but still required a further $3bn from both the state and federal government, Albanese said.
“Malcolm Turnbull is relying on people having the memory of a goldfish. He comes up with ideas that are old, that have been progressed, that indeed his government and Tony Abbott’s government have wound back and stopped the advance of, and then pretends that somehow this is some new whizz-bang initiative. It’s not.”
Shorten said: “If the Liberals were so committed to high-speed rail, why did they scrap some of the funding for a high-speed rail authority which Labor previously out in place? Mr Turnbull – talk is cheap.”
The treasurer, Scott Morrison, said the issue of whether the government would commit funding for high-speed rail projects will be addressed in the 3 May budget. “We continue to work with the infrastructure minister and those state governments that are associated with these proposals,” he said.
