1.2.3 Infrastructure funding and delivery

Infrastructure is presently funded through a range of mechanisms:

  • the NSW Government Budget including:
    • agency programs for education, health and transport
    • funding programs such as the Housing
  • Acceleration Fund, Metropolitan Greenspace Program and 
  • Environmental Trust
  • Australian Government funding
  • State infrastructure contributions
  • local infrastructure investment
  • local development contributions and associated programs
  • voluntary planning agreements.


In addition to these mechanisms is the concept of value capture or ‘sharing’. Value sharing uses part of the economic uplift that new infrastructure and planning generates to help fund that infrastructure. New transport infrastructure, for example, can unlock a number of ‘benefit streams’, including direct transport benefits such as reduced travel times, and wider benefits such as reduced congestion and lower fuel consumption.

When new or upgraded infrastructure is provided in an area, many of these benefits are effectively monetised because local land values increase, reflecting the market’s willingness to pay for these benefits. Value sharing enables the funder of the infrastructure – for example, the NSW Government or a local council – to participate in the market uplift and offset some of its costs.

If properly executed, value sharing can:

  • unlock new funding to make economically beneficial infrastructure more affordable
  • spread the costs of new infrastructure more equitably among its beneficiaries
  • improve projects by providing incentives for governments to plan and design infrastructure with wider land use benefits in mind.


We recognise that, like all regulation and interventions in the market, value sharing mechanisms need to be equitable while also being efficient in terms of their operation and compliance. Value sharing mechanisms also need to be effective in terms of meeting objectives in a timely manner.

Value sharing mechanisms will only succeed with clarity around the planned infrastructure and how this will be funded – whether partially or wholly by the value sharing mechanism – or what elements or areas will be funded in response to the development (for example, whether the shared funding will go towards open space and public areas, community infrastructure, roads or upgrades to utilities).

It also requires an understanding of the total amount, duration and rate of value sharing (such as dollars per square metre) that can be set while maintaining the financial feasibility of development. In some areas, this could mean that rezoning may be delayed until development is feasible, given the amount of supporting infrastructure required.

A number of NSW Government-led urban renewal areas, priority precincts and priority growth areas are addressing this through the use of infrastructure schedules.

We will continue to work across government on the amount, mechanisms and purpose of value sharing to create a more consistent approach to capturing value for public benefit, complementary with other existing mechanisms.