Funding Gungahlin Infrastructure

Infrastructure, such as the Majura Freeway, Horse Park Drive, the duplication of Gundaroo road, local schools, a Gungahlin 24 hour emergency clinic, an Epic Convention Centre and Light Rail,  all require investment funds.  Funds are obtained by the ACT government from savings, grants from the Federal Government; or from loans. Loans have compound interest charges. The loan and interest are repaid from future taxes and sales of public assets such as land.

In the past community infrastructure was often financed by governments issuing infrastructure bonds.  Government bonds could be purchased by anyone, including residents, and residents could share in the value created from infrastructure development.  The ACT government does not issue bonds and there is no other way for Canberra residents to directly invest in local infrastructure.

CrowdFunding could be an alternative funding mechanism for ACT infrastructure.  CrowdFunding is where an investment is made by consumers or beneficiaries of a product and in return the consumers get the product or benefit.  CrowdFunding, such as websites like KickStarter and Indiegogo, is a multi billion dollar industry that is doubling in size each 18 months.

The ACT government can CrowdFund ACT infrastructure with funds from taxpayers who are the future beneficiaries of infrastructure. Taxpayers would get a return on their investment by getting a discount on their future payments to the ACT government.

To CrowdFund ACT infrastructure the ACT government can sell Account Balances where the Balances can only be used to purchase leases, pay for ACT government services and pay taxes.  The Balances can earn an 8% fixed discount per year and be adjusted for inflation.  Balances can be transferred and are government backed. An 8% fixed discount is equivalent to 4% compound interest over 33 years.

To spread the value across the community, rights to take up the Balances can be issued to every resident of Canberra, including children. The rights can be sold.

With this approach all Canberrans will benefit from the increase in value that comes with infrastructure development and the ACT government will not burden taxpayers with compound interest debt.

The ACT government will be able to better manage the vagaries of Federal Funding and the uncertainty of global financial markets and the taxpayers of the ACT will benefit from the use of community infrastructure.