Qld Businesses Could Prop up $5.2b Project 1

Tuesday, April 12th, 2016
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Businesses in Brisbane’s CBD could be taxed more to help pay for the proposed $5.2 billion Cross River Rail project just “for the privilege of being next to it”.

Acting Premier Jackie Trad says one of the “innovative funding models” being considered to help pay for a second river rail crossing in Brisbane is “value capture”, similar to that used for London’s Crossrail, which takes advantage of increased property values in areas surrounding the infrastructure project.

“That is where areas around the particular area of the infrastructure project get to pay a contribution, because they get value uplift in terms of their properties, in terms of their businesses,” Ms Trad told ABC Radio.

“Now it’s very much in its infancy.

“We are looking at how we can actually identify those areas that will be ready for development, where businesses can be placed and flourished and how they can contribute to the actual delivery of this infrastructure project.”

But the plan already has its critics, with Graham Young, the executive director for conservative think tank Australian Institute for Progress, suggesting the idea was a “souped-up land tax”.

“I’d argue that it’s completely illegitimate, because if there’s an increase in the value of the land around the infrastructure then it ought to be reflected in the valuation of the land, so it would have come through in land tax and things like that,” Mr Young, a former Liberal Party staffer and candidate, said.

“You shouldn’t be hitting people over the head.”

Mr Young said those whose properties will be resumed for the project were lucky, because they’d be compensated.

“The unlucky ones are the people who happen to be next to it and it sounds like they’re going to get even more unlucky, because Jackie’s going to charge them for the privilege of being next to it.”

The possible funding idea comes after Ms Trad on Thursday said the project’s business case wasn’t due to be finished until mid-year.

She was also unable to say what the funding split would look like between tiers of government and wouldn’t rule out increasing state borrowings and debt to pay for the new rail line.

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  1. Jarrod Brennan

    Young's comments are short sighted and ridiculous. Done well, value capture is an innovative and equitable funding model which will help raise money for vital infrastructure investment in an environment whereby cash strapped governments do not have the ability to do all the heavy lifting. Provided catchment areas are suitably set, those businesses which operate within the catchment areas will get a legitimate uplift in value from the project. What I would ask Young is 'why should taxpayers pay to give private landowners get a scot-free uplift in the value of their property? Moreover, if private landowners do get a free uplift in the value of their property, why should they not be expected to contribute toward that? Instead of burying their head in the sand, this Australian Institute for 'Progress' should take note of the last word in its name and get out of the past and embrace innovation in infrastructure funding models.

    As for his comment about owners whose property has been resumed being lucky, what planet is he on? Ask any home owner if they want to have their property resumed and the answer will be a big fat NO. Ask any business if they want their existing premises shut down, with all the disruption to operations that will entail, and the answer is clearly NO. If this guy thinks having your existing business premises closed down, he obviously does not understand the first thing whatsoever about business.