Chief Minister Andrew Barr says federal government's annual ACT infrastructure spend should at least double

And more housing could be concentrated around local shopping centres in Canberra's suburbs, while new planning laws should have a formal objective of delivering more homes and housing affordability.

"As in all things, planning, it's generally around the pace of change. And some communities and some areas of Canberra [are] up for more change more quickly than others. That's understood," Mr Barr said.

"But in the end, cities are constantly evolving. And I am very conscious, as a Ge -Xer, of the generational inequality that sits amongst those younger than me, compared to those older.

"And so, we do need to face up to that, that wealth disparity that largely is linked to property ownership."

People who might have opposed light rail before the first stage opened in 2019 should see the extension as adding value to the network, with a link into a key employment and tourist sector in the capital, he said.

"I guess fundamentally, what's at stake in all of it is a question of can Canberra sustain investment in multiple types of infrastructure? I think the answer to that has to be yes," Mr Barr said.

Mr Barr said additional light rail funding would be a focus of discussions with the Commonwealth in 2023.

"I took great heart from the Commonwealth's announcements around the national security precinct and a $1 billion investment there, 5000 jobs. I think that's going to take the number of jobs in the parliamentary triangle up towards 60,000. It's a lot of people to serve. ... You just can't keep on building high rise car parks in the national triangle," he said.

"You've got to improve the public transport offering."

The federal Infrastructure Minister, Catherine King, has previously encouraged the ACT government to come forward for more funding for light rail when it was ready.

Mr Barr said: "What we are looking for is larger Commonwealth investment in territory infrastructure.

"To put some sort of dollar figures on it, we've largely been receiving sort of $100 to $200 million a year in Commonwealth infrastructure [funding]. I think that needs to at least double to get closer to our population share. So that will be a focus for us."

The Canberra Liberals announced in December they would halt construction of the Woden light rail line if elected in 2024, instead directing what it believes is the $3 billion cost towards other infrastructure and services.

But the Chief Minister believes the opposition, which has been out of power since 2001, is playing to its base and will not find broad support for its position.

"I'm confident that Canberrans are well enough educated and savvy enough about managing city growth and the need for infrastructure investment in health, education, and transport and housing and emergency services that they understand that," Mr Barr said in an interview with The Canberra Times.

The ACT budget's bottom line should show an improvement in the mid-year review, with rising interest rates delivering higher returns on the territory's investments, Mr Barr, who is also the Treasurer, said.

"And from there, we'll consolidate our thinking around the '23 budget, to more budgets in this term. [There are] some important conversations with the Commonwealth to be had on a number of key infrastructure priorities," he said.

The light rail project is also inextricably linked to housing and development, along with significant changes to the ACT's planning system.

Mr Barr said the government was working on providing more housing that sat between 10-storey towers and detached homes, and work on planning system changes would take most of the coming year.

"Any housing and planning policy needs to cater for ageing in place, and providing opportunities for those entering into the housing market. And the only way I can see both of those objectives being achieved, is through gentle urbanism," he said.

"As people will want to move out of larger homes, they don't necessarily want to move into an apartment. And we get that and so more townhouses, more courtyard type arrangements, medium density, is clearly what the planning system needs to deliver."

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Mr Barr said it was an achievement fewer young people felt they needed to leave Canberra for opportunities after school or university, but this meant new types of housing were important for the capital.

"I think it's clear from the demographic data that that's less of a factor now than it was 20, 25 years ago. I consider that a really important accomplishment for Canberra. And one of the reasons why we are experiencing strong population growth," he said.

"The other factor is at the other end of the demographic spectrum, and that is that people used to retire and leave Canberra, go back to where they came from, or felt that once they finished working, there was not enough here for them, to keep them here.

"So I think the other factor that contributes to our population growth is that we're also retaining our retirees. And that's important. We've seen multi-generational families here now.

"I think it speaks to the city's capacity to appeal to a number of different demographics. But I think, ultimately, then housing policy needs to address the opportunity for people to downsize when when they want to, also frees up some property for for growing families."

Mr Barr said Canberrans should not be surprised when draft district plans, released as part of consultation on the new planning system, change.

"I think one thing I want to be very clear about is I have heard already that there is a view, and I agree with it, that one of the objectives of the Planning Act, should be around housing, and housing affordability - that needs to be more formally in the mix," he said.

"So I acknowledge that, and we are looking at the best way to achieve that. And that clearly aligns with the build-to-rent agenda we're pursuing [and] the zoning changes that I think, are important."

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