PM to announce new approach to fund costly infrastructure projects

Prime Minister Malcolm Turnbull will today announce a plan to change investment for major infrastructure through partnering with private investors, beginning with a $50 million allocation for facilitating these deals.

Detailed in the federal budget, the ‘Smart Cities’ project will push for private investment by leveraging its balance sheet to reduce Commonwealth grants for train lines, roads and other infrastructure. Conditional requirements would mean state and local authorities would need to prove economic benefits.

The plan would encompass major projects such as Sydney’s Badgerys Creek airport and may include the controversial Melbourne Metro rail project, which the Victorian government announced only days ago would be funded solely by the state budget.

“We cannot afford to fund every project of merit from our budget,” the policy document reads.

Recipients for the funding would need to show they could return it to the Commonwealth through faster economic growth and tax revenue, as well as “value capture” where the value added to impacted areas is collected to recoup costs. 

The initiative will come with an innovation financing unit to strike deals with the private sector.

The Federal Government hopes it will improve access to jobs and housing affordability, as well as reduce traffic congestion. This is in response to its goal of a ’30-minute city’ where no matter where one lives, they will have access to key facilities within half an hour.

“To secure our future prosperity and global competitiveness, all levels of government need to work in partnership to support our cities big and small,” the document states.

It also focuses on long term investment in regional cities which may be struck by low growth as manufacturing and mining sectors decline.

“While new job opportunities are being created… not every regional city is experiencing new opportunities,” the policy states.

With AAP.