Melbourne, Victoria, has experienced strong population growth over the last 15 years, with growth forecasted to continue. A large part of this growth has been channelled into Greenfield areas on the city’s fringe. Precinct Structure Plans together with Development Contribution Plans have been developed over the last decade as instruments seeking to integrate and organise planning processes for these new suburbs. Additionally, in 2010 the Growth Area Infrastructure Contribution (GAIC) fund was introduced to partially offset (up to 15%) the cost of new ‘essential state-funded’ infrastructure in Growth Areas. The per-hectare GAIC applies to land brought into Melbourne’s urban growth boundary and zoned for urban development since 2005, and is triggered by land sale or subdivision. Along with other development contributions including voluntary agreements and conditions on planning permits, GAIC is intended to capture increases in land values, and to be used to provide infrastructure and services commensurate with growth.

This paper examines the GAIC fund and within this, its use for public transport – towards which 50% of GAIC funds are to be directed. The paper critically analyses the ways in which GAIC has been used for transport infrastructure in new suburbs. it draws on 30 interviews with staff from state and local government, and developers; document analysis; and on comparative literature on the use of betterment taxes and infrastructure contributions.