A new federal government agency will focus on drawing private capital into infrastructure and urban development projects, potentially including the city's planned new airport at Badgerys Creek.

The Assistant Minister for Cities, Angus Taylor, said the new Infrastructure and Projects Financing Agency would immediately start recruiting staff who could help connect the government with more funds for transport, housing, and other projects.

"Its primary role is to put in place the skills that I think we think are missing if we are to get more private sector finance, and public sector in some cases, into our big infrastructure projects," said Mr Taylor.

The minister said the federal government typically contributes $5 billion to $7 billion a year in grant funding towards transport infrastructure, but there was an opportunity to "significantly increase" that amount through increased private sector financing.