AN OVERARCHING APPROACH
We need to acknowledge that ALL beneficiaries of the much-needed Melbourne-Canberra-Sydney-Brisbane high-speed rail (HSR) should pay towards its construction, not just the relatively few unlucky people who happen to be located near the rail line, or in any new town close to the railway.
Therefore, this should not only include people in the cities of Melbourne, Canberra, Sydney and Brisbane, but also in the whole of Victoria, the Australian Capital Territory (ACT), New South Wales and Queensland who would also be served by the new HSR as a most valuable alternative to existing airline and ‘slow’ rail travel.
There is, say, 1800 kilometres of rail @ $100,000,000 per kilometre. So, we have an estimated cost of AUD$180,000,000,000 which includes the rail line and high-speed trainsets. This is more than generous in relation to international parameters.
It should be noted that the value of existing rail and airline services are currently reflected to varying degrees in the current land values of these states and the ACT at 30 June 2024, as displayed in the national accounts (ABS Catalogue 5204, Table 61), namely: –
NSW $3758.9 billion
Vic $2468.1 billion
Qld $1723.7 billion
ACT $ 145.6 billion
Total $8096.3 billion (i.e. $8.096 trillion)
These land values will have a tendency to increase year by year in any event. However, the announcement of the HSR project will have further immediate impact on increasing property values, dependent upon each property’s location as assessed by local real estate markets.
Assuming recovery of the $180 billion cost over a period of twenty years, this notionally represents an amount of $9 billion a year.
The aforementioned land values will increase anyway–such that future rates in the dollar should decline—so the rate to be struck now would only be about 1/10th of a cent in the dollar! Actually, $0.0011 x $8,096,300,000,000 = $8.9 billion pa.
Clearly, this method of ‘value capture’ is the fairest, cheapest and most efficient approach to fund the proposed HSR. It obviously requires cooperation between Australian federal, state and local governments in connection with existing municipal valuations.
– Bryan Kavanagh