Property owners in Australia already face enough taxation hurdles and should not be leant upon for additional funding for infrastructure projects, according to one property lobby group.

In a speech to the Sydney Business Chamber this week, the Federal Minister for the Environment Greg Hunt said that current infrastructure expenditure levels have stretched all levels of governments in Australia to their limits.

“It is clear that rapid growth in major capital cities can’t be accommodated with existing public funding models. All levels of Government in Australia are facing budget constraints,” Hunt said.

“While there are a number of major infrastructure projects underway or in planning, we are unlikely to be able to sustain this rate of investment in the long-term,” he said.

This strain means there is need for new methods to fund infrastructure, with Hunt suggesting this could be done by implementing a value capture tax.

“One of the fairest ways to fund new infrastructure investment is for the beneficiaries of that infrastructure to contribute to the cost,” he said.

“Value capture is increasingly used internationally to ensure that projects go ahead, residents receive the benefits, but some of the cost is offset though the uplift in value to beneficiaries.”

But Ken Morrison, chief executive of the Property Council of Australia said property owners already carry a large enough tax burden.

“Property owners already pay stamp duty, land tax, and capital gains tax, and we are wary of Government adding a Value Capture Tax on top of them.  The danger for the Government is that it might end up with its own version of a VCT - Very Cross Taxpayers,” Morrison said.

“Property is Australia’s largest industry and the Government should be wary of new taxes that stifle investment, jobs and growth,” he said.

In his speech Hunt outlined a growing need for transport infrastructure to alleviate congestion problems as one of the main reason a value capture tax may be needed, but Morrison claims better collaboration across all levels of government should be the first step.

“All too often, federal, state and local governments have been working against each other,” he said.

“The Minister is right to say we need more housing in areas where we have high job densities and we need more jobs in residential areas. Planning laws too often accentuate congestion rather than alleviate it.”