Anthony Albanese says Labor will overhaul Malcolm Turnbull’s city deals initiative with a new bottom-up program to promote urban renewal if it wins the next federal election.

The shadow cities minister used a speech to the Sydney Institute on Wednesday to flag the change in approach, pledging to work with local government on the commonwealth’s city partnerships rather than providing “funding commitments that are determined from the top down and tied to the electoral cycle”.

Albanese contends the current city deals program – one of the signature initiatives of Turnbull’s prime ministership, with the Australian program modelled on a similar initiative in the United Kingdom – “falls short of what is required to deliver real change”.

“The lack of rigour and independent oversight means city deals are subject to political whim,” Albanese said on Wednesday. “The absence of transparency and clear guidelines has left local councils unsure as to how they can best participate, and limited engagement with the private sector, and the lack of clarity around funding of projects means that all levels of government are missing out on potential value uplift.”

While he commended Turnbull for engaging with urban policy “in contrast with the former Abbott regime”, Albanese said the Turnbull program had either been rolled out in marginal electorates, framed around single election commitments, or the initiatives were “missing depth and detail”.

Albanese said a more rigorous structure was needed with the cities program, one that engaged all tiers of government and major stakeholders, because recent experience suggested “the short-termism of the electoral cycle sometimes functions as a handbrake on necessary national economic reform”.

He said overhauling the structure and design of the current program would overcome those challenges and ensure that immediate political priorities do not get in the way of the long-term national interest.

Labor will re-establish a major cities unit within Infrastructure Australia and give the bureaucrats independent oversight of the program, and the power to recommend worthy projects to the minister.

Albanese said the reboot would engage all levels of government and the private sector, and would link back to a new national urban policy.

He has also identified opportunity for the major cities unit to “leverage equity investment from government financing bodies, such as the Clean Energy Finance Corporation, which have policy goals that cities can play a role in meeting”.

The Labor frontbencher said the quality of life for individuals was connected to the wellbeing of communities.

“The productivity, sustainability and liveability of our cities depends on a range of factors, including how easy it is for people to get around, access to jobs, education and training, urban amenity and quality of life,” he said.

“But we know that the shift from a traditional manufacturing economy to a knowledge-intensive economy means that job opportunities have been increasingly concentrated in the CBDs of major cities – this has implications for housing affordability and our transport networks.

“We know that rapid urbanisation is placing immense pressure on our outer suburbs, and often these areas don’t have the necessary infrastructure and services in place to support population growth.”

He said the end of the mining boom had also created challenges for regional population centres, with towns facing increasing unemployment and declining local economies.

“And if we add to this equation, the rise in automation and shifting demographics, then we start to comprehend the challenge at hand,” he said.

Albanese said governments need to get city development right.

“A failure to plan and build the infrastructure that will be needed will leave many people and communities socially isolated and economically disadvantaged,” he said.

Albanese rejected lowering Australia’s immigration levels as a way of relieving pressure on growing cities.

“The question of immigration isn’t, I don’t think, that simple. What that [reducing immigration] ignores is that immigration also builds economic activity and provides a basis for economic growth.”

He said population growth needed to be partnered with “investment in the right infrastructure”.

“And by infrastructure I don’t just mean transport infrastructure: I mean schools, hospitals, places for kids to play. I’ve got, close to me, the Wolli Creek development, and I’m yet to see a new park for the kids to play in, I’m yet to see an investment in local schools, yet to see an expansion of the local health facilities. That is what people react to. If you don’t get it right, then you will have … more stark responses such as cutting immigration numbers.”

Albanese – who said he caught the train to the institute speech in central Sydney: “the most efficient way to get here” – said state governments had become addicted to building more tolled motorways because they generated revenue, even if they were ultimately more expensive and poorer transport options than public transport options.

“In a few years, this will be the most heavily tolled city in the world – bar none. That is a big issue.”