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

On behalf of the Standing Committee on Infrastructure, Transport and Cities, I present the committee's report, entitled Fairer funding and financing of faster rail: inquiry into options for financing faster rail, together with the minutes of proceedings.

Report made a parliamentary paper in accordance with standing order 39(e).

by leave—Cast your mind to the future and consider where Australia could be in 2050 or in 100 years time if we had unlimited access to the infrastructure we need to grow. Imagine high-speed rail linking our major metropolises and connecting new, vibrant regional cities in commutable times. Imagine replacing the world's busiest air corridors with low-emission electric-powered trains with travel times from doorstep to doorstep in less time than is currently achieved by air. Imagine relieving our major cities of the burden of overcrowding while increasing our capacity for growth through a strategic plan of decentralisation, and the infrastructure required to deliver this dream. Imagine generating affordable housing for generations to come, a modern iteration of a Commonwealth of Australia with homeownership a foundation of a fair distribution of wealth through fair market mechanisms, wage earner competing with wage earner to secure a home.

It sounds far-fetched, but this could be possible with sustainably funded infrastructure. Finding that silver bullet was the purpose of this inquiry. Our inquiry considered evidence that documented the awesome power unleashed on property values when impacted by infrastructure and rezoning. When new infrastructure like rail is announced, the land prices always rise dramatically. Currently, this dramatic price rise provided by taxpayer funded infrastructure is pocketed by the lucky landowner. Harnessing this growth is essential to equitably fund infrastructure by requiring those who profit from taxpayer funded infrastructure contributing a fair share.

The pivotal question must be one of fairness. Is it fair for the taxpayer to fund infrastructure that creates great wealth for landowners, speculators and developers? Should the taxpayer receive a fair return when their money is invested? Is it fair that we leave future generations to pay for our spending today? Evidence provided to this inquiry documented that land in Western Sydney that was zoned as agriculture was valued at under $2,000 per acre 20 years ago. That land has increased in value through the announcement of the Badgerys Creek airport. Its associated infrastructure and rezoning has raised the value of land close to proposed metro stations to over $10 million per acre, an increase of an astounding 500,000 per cent. The trend we have witnessed will therefore result in greater wealth for some at the expense of taxpayers. Properly levied, these phenomenal uplifts would have funded the very infrastructure that created the uplift in their property values.

Professor Andrew McNaughton noted that uplift within 500 metres of a metro rail station is significant; however, the uplift around faster or high-speed rail can extend over much greater areas and be far more dramatic. Professor McNaughton was the technical director of High Speed 2 in Britain, and more recently has consulted for the New South Wales government on faster rail. He advised most strongly that before making any more announcements of future infrastructure projects, governments must secure the current value of lands on which they wish to make a charge because after the announcement it is too late. If this compounding trend continues, the proposed $100 billion infrastructure investment will result in a great debt burden for future generations while creating unimaginable wealth for some. This would result in a compounding of the negligence by governments for over 100 years in failing to represent the people of Australia by not gaining a fair share of wealth created when investing Australian taxpayers' moneys.

When we started this inquiry, at the very end of 2019, we wanted to find a way to better fund critical infrastructure. As we conclude it, at the end of 2020, we need to find a way. In 2020 we have seen Australia's first recession in nearly three decades. In response, the Australian government has committed to billions of dollars worth of infrastructure as stimulus, resulting in debt that will last for generations. I would like to extend my thanks to everybody involved in this inquiry, from the people and organisations who took time to share their expertise, to my colleagues on the committee, my able deputy chair and friend, the member for Solomon, Luke Gosling, and the secretariat, Stephen Boyd, Casey Mazzarella, Stephanie Woodbridge and especially Samantha Mannette. Like everything else in 2020, COVID-19 played havoc with this inquiry, by cancelling hearings and even postponing the inquiry for a few months. It is to the credit of the secretariat that this report exists at all.

This committee has previously recommended that a value-capture model be designed and utilised in Australia, which has either been ignored or received token acknowledgement. Before it was an opportunity. Now it is an imperative. We find ourselves at a crossroads. On one road is more debt, ad-hoc infrastructure and a limping recovery. On the other is dynamic growth, sustainable infrastructure and opportunity. It should not be hard to see that business as usual will not serve our citizens fairly. The conclusion is obvious, that the Australian government working with state, territory and local governments should secure land values before announcements and develop an infrastructure levy mechanism that is just, equitable and fair to sustainably fund infrastructure and provide relief for taxpayers now and in the future—a master funding plan for a master plan of infrastructure, settlement and recovery. In the words of Professor Andrew McNaughton, 'We must act now'. I commend the report to the House.

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