\ Review needed for Sydney’s access to infrastructure funds – Committee For Sydney

News

Review needed for Sydney’s access to infrastructure funds

July 15, 2014

Public transport will be neglected as Sydney grows unless the federal government find new ways to back state infrastructure, Committee for Sydney chairman Lucy Turnbull said.

Speaking to The Australian Financial Review, Ms Turnbull said while federal infrastructure has traditionally targeted roads, leaving rail to the states – a point Prime Minister Tony Abbottreiterated around budget time – there was scope to review rail funding.

“That is the historic reality but there is no reason we shouldn’t revisit that,” Ms Turnbull said.

The Committee for Sydney released an issues paper Sydney: adding to the dividend, ending the divide, which called for a review into Sydney’s access to federal infrastructure funds.

The committee has called for a “new deal” on the grounds the recent federal budget highlighted the need for action and to settle the imbalance in infrastructure funding.

Sydney needs to better manage its economic geography – the location of people and jobs – through infrastructure and planning, Ms Turnbull said, if the city was to reach its potential and take advantage of the upturn in sentiment and buoyant housing market.

Recycling public assets, such as selling of electrical poles and wires was one way governments could raise the funds needed for productive infrastructure, Ms Turnbull said.

But at the same time, Sydney deserved a bigger share of federal funds for infrastructure given its contribution. Sydney generated $90 billion worth of taxation revenue in 2011-12, the committee reported. Of that, 82 per cent was collected via income tax and company tax, leaving only 18 per cent for State and local councils.

While some of that revenue subsidises other states and much is funnelled into NSW health, aged care and education services, relatively little is returned to the state to build new infrastructure.

New infrastructure was critical but the committee has also stressed the need to “sweat” existing assets to increase Sydney’s job density – that is, employment capacity relative to the time it takes for commuters to get to work.

Stacking Sydney’s effective job density next to Melbourne – which has a smaller population but is growing at a faster rate – shows how Sydney has lagged.

Sydney central business district office rents are significantly higher than Melbourne for primary and second-grade space. As Melbourne’s CBD has expanded, it has become more accessible than Sydney and more Melbournians can access the CBD in a 45-minute journey than Sydneysiders.

Both factors risk reducing Sydney’s attractiveness to businesses and are not helped by worsening housing affordability. Ms Turnbull said the desire to live closer to work and services drives Sydney’s housing market more than offshore investment, and Parramatta was a successful example of an emerging “polycentric” CBD where people were able to live close to their workplace.

The commission said Sydney needs to turn the property market’s cyclical upswing into a long-running shift with sustainable house price growth and more residential development.

Read more here.

Subscribe for the latest news