"The real purpose of high speed rail is to be able to develop regional areas," said Mr Alexander, who chairs the standing committee on infrastructure, transport and cities. While Sydney and Melbourne were straining to accommodate their growing populations, regional centres were "dying" with very cheap real estate, he said. The federal government's infrastructure advisory agency says high speed trains could be running between Canberra and Sydney within 15 years. "It would appear there's a perfect storm of opportunity to liberate those cities through high speed rail," he said. New train stations would sit near but outside existing townships, including the Southern Highlands, Goulburn and Shepparton, with the areas around those stations rezoned for higher-density development. Mr Alexander suggested property in Goulburn now worth $200,000 could be worth $600,000 if it were just a 30 minute train ride from the Sydney CBD. Meanwhile, the newly-connected regional growth centres would act as a "pressure release valve" on property prices in Sydney and Melbourne. Under conservative estimates, 50,000 people could move into towns along the rail line each year, Mr Alexander said.

"You will push up prices enormously around Goulburn, people will be delighted," he said. John Alexander during a Coalition partyroom meeting in Canberra. Credit:Glen McCurtayne GPM Mr Alexander denied the government would face stiff opposition from local councils, but he acknowledged they did not necessarily want a fast rail line to pass directly through their towns. "They don't want their amenities spoiled," he said. "Goulburn will still be Goulburn and it will have this new part that it eventually grows into." While the government is a long way from committing to any such plan, the idea of high speed rail - and in particular, the use of land value capture to finance it - does appear to have found favour with Prime Minister Malcolm Turnbull.

Previous efforts under Labor to investigate the cost of a high speed rail link between Melbourne and Brisbane found the bill to taxpayers could be as high as $114 billion. Mr Alexander suggested property in Goulburn now worth $200,000 could be worth $600,000 if it were just a 30 minute train ride from the Sydney CBD But using value capture, the project is recast as a giant real estate development, largely or fully funded by the increased land values arising from the new infrastructure. The model is frequently used in the United States and major cities such as Hong Kong. Mr Alexander said the standing committee has heard from private companies who believe they could fund the entire project using value capture. That claim is disputed, however. Professor of Urban Policy at the University of Sydney, Ed Blakely, told Fairfax Media value capture was an important tool but would not fund the entire cost of such a large project. "Value capture is not for operating costs, nor for long haul capital costs," he said.

And Infrastructure Australia, the independent statutory body charged with advising governments on major projects, views value capture only as a "potentially useful" source of funding "alongside conventional user charges and taxpayer allocations". The committee is due to report in June but has already relayed key evidence to Cities Minister Angus Taylor and Major Projects Minister Paul Fletcher. High speed rail has been on various drawing boards since it was first proposed by CSIRO researchers in 1984, and voters have understandably grown wary about rail-related promises - especially in the lead-up to an election. But Mr Alexander said things were different this time, with the idea gaining traction "enormously" within the government.

"It's being looked at differently," he said, suggesting it could be a reality within a decade. He also conceded the issue was a key point of differentiation between Mr Turnbull and his predecessor Tony Abbott. Loading "Tony had a preference for roads, Malcolm probably has a preference for rail," he said. "That's the difference between growing up in the eastern suburbs and growing up on the northern beaches." Follow us on Twitter