26/04/2012 - 10:24

Transport funding plan to capture imagination?

26/04/2012 - 10:24


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A TRANSPORT analyst has proposed the state government consider using a ‘value capture’ funding model and increases in council rates to help pay for almost $3 billion of proposed public transport infrastructure.

A proposed light rail network and expansion of rail systems and bus priority facilities are likely to cost $2.9 billion over the next 20 years.

Several options have been put to government regarding short-term funding for new infrastructure, including public private partnerships, reallocation of funds from the state budget, car parking levies, and public transport fare structures.

But Curtin University PhD student James McIntosh, who is investigating the relationship between transport infrastructure and land value, believes the government has failed to consider how to best take advantage of the value such projects add to surrounding areas.

Mr McIntosh told WA Business News the value of residential land around rail stations could increase by up to 20 per cent because of improved accessibility, while commercial land values had risen more than 50 per cent in some cases.

Typically, council rates increase as a result of increased property values, which Mr McIntosh said could be taken advantage of as one instance of a ‘value capture’ model of funding.

The model would involve the government pooling the additional tax revenue into a fund, which could then be used to pay for future infrastructure or the debt taken on to fund the project initially. 

This model was used in Brisbane in the form of the Gold Coast Transport Levy, which was collected across the whole of the Gold Coast municipality to help fund a new light rail project.

Mr McIntosh said it would make sense for a similar approach to be taken in Perth, but the government would have to work on integrating the relationship between transport and land value.

“What you see here are very strong focuses to respond to transport issues without taking into consideration any of the effects on the surrounding land values,” he said.

One example was the proposed route for the light rail link from the Perth central business district to Mirrabooka, which ran through Fitzgerald Street and Alexander Drive.

“The route they have chosen is really like a heavy rail model focusing on the linking of origins; 60 per cent of the properties are non-rateable,” Mr McIntosh said.

“There are no positive land-use effects from running the light rail down there, it may as well be down a tunnel.”

He said the government’s wider plan had proposed establishing activity nodes throughout the city, and any light rail system should link these up to take advantage of increases to land value and passenger patronage.



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