Understanding Infrastructure Investment Shortfalls

Right now in Brisbane, investment in local infrastructure and services like pedestrian crossings, drainage and public transport isn’t keeping pace with population growth. One reason for this is that BCC spends too much money on flashy big-ticket projects that attract media coverage but don’t necessarily improve residents’ lives. But the shortfall in local infrastructure investment is also due to a revenue problem.

Currently, for each new apartment that a developer builds, the council collects a charge to cover the cost of local infrastructure. Part of the problem in Brisbane’s inner-city is that these infrastructure charges go into council’s general revenue, which means the money isn’t necessarily spent in the areas that are most directly impacted by rapid densification. Many developers are resistant to paying infrastructure charges, because they feel they don’t get sufficient bang for their buck in the local area.

More importantly, the State Government has set a strict cap on infrastructure charges, which means that no matter how much an apartment sells for, a developer only has to pay a maximum of $20 000 for a 1 or 2-bedroom dwelling and $28 000 for a dwelling with 3 or more bedrooms. Due to high land values, these State Government-imposed maximums aren’t high enough to raise the money to buy land for green space or new public transport infrastructure. So we need the State Government to increase infrastructure charges to reflect inner-city land values, and we need Brisbane City Council to spend the money in the areas where development is occurring, rather than putting it back into general revenue.