The federal government wants to increase the number of people who make short trips by foot or bicycle after a report card on the performance of Australia's cities found rapid changes in the labour market would pose big challenges to transport infrastructure.

The economy benefits by more than $21 every time a person cycles 20 minutes to work and back and $8.50 each time a person walks 20 minutes to and from work, according to a policy statement released by Deputy Prime Minister Anthony Albanese on Tuesday.

Cyclist ride into Sydney in the morning rush, using the bike lane in King Street. Credit:Peter Rae

Mr Albanese said the construction of walking and riding paths was relatively cheap compared with other modes of transport. A bicycle path costs only about $1.5 million a kilometre to plan and build.

The government has agreed that, where practical, all future urban road projects must include a safe, separated cycle way.