HOTEL REALM, CANBERRA
Ladies and Gentlemen,
Former US President Abraham Lincoln once made a very important observation about the burden of leadership.
That’s not a bad rule for people who offer themselves up for national leadership.
If you see a problem, act now or stand idle and watch the problem get worse.
Don’t look the other way or claim it is someone else’s problem.
Right now, Australia is suffering a genuine problem that is crying out for national leadership.
And if we are smart, we won’t look the other way or try to make it someone else’s problem.
I’m talking about the immense pressure on our major cities.
More than 80 percent of Australians live in cities and our cities produce 80 per cent of the total value of the nation’s goods and services.
Yet urban Australia faces real challenges.
- Traffic congestion that is a hand brake on productivity growth.
- A mismatch between areas of population growth (in outer suburbs) and jobs growth (in inner suburbs).
- In some places, crippling housing costs, particularly for first-home buyers.
- Inadequate public transport, which worsens congestion.
Together, these and other problems are holding back economic growth in this country.
They prevent our cities from being the very best they can be
And if our cities are not at their best, our economy is not at its best
Neither is our standard of living
We need our economy to be at its most productive if we are to maintain and improve our standard of living and if we are to provide job opportunities for young people.
On top of this, we need to protect our quality of life.
I am particularly concerned about the rise of drive-in/drive-out suburbs in outer suburban areas caused by the mismatch of the locations of jobs growth and population growth.
Too many Australians live in areas where they can afford to buy a home, but where there are no jobs.
They spend too much time commuting and not enough time enjoying their lives.
My greatest fear is that the trend will entrench disadvantage, by denying young people in the outer suburbs access to work – a prospect that opens up the possibility of social dysfunction.
I don’t want to live in an Australia where a person’s income is immediately recognisable from their postcode.So for economic and social reasons, I believe any responsible political party seeking to run this nation needs to have a plan for our cities.
In the 21st century, the economics of the issue make it a no brainer.
I would go so far as to say that any non-rural government in this country not involved in urban policy is not doing its job.
I can’t think of many issues on the federal political scene where there is a clearer distinction between the major parties than on urban policy.
While my side of politics sees a significant role for the commonwealth in urban policy, the current government regards cities as a policy no-go area – the province of councils and states.
This policy divide has manifested itself throughout our recent political history.
The first major commonwealth policy effort in urban policy came under the Whitlam Government.
It came to power concerned about inadequate services, particularly in the outer suburbs of Australian cities.
Gough Whitlam and his minister for Urban and Regional Development, Tom Uren, unrolled a comprehensive policy approach to cities and set to work investing heavily in urban Australia.
They invested in sewerage in outer suburbs as well as parks and open space and in public transport.
Money was invested on a needs basis.
The argument was simple: Governments are elected to serve citizens.
Direct investment in cities allows genuine material improvements in people’s lives.
Whitlam and Uren created the capacity for the commonwealth to provide policy leadership to other levels of government by recruiting some of the best young minds in the country to the Department of Urban and Regional Development.
It oversaw the first attempts at decentralisation through, for example, the Albury-Wodonga project.
It worked with councils to deliver Financial Assistance grants so they could improve community facilities based on their understanding of local needs.
The conservative government that followed Whitlam’s withdrew from the urban policy space.
The Hawke and Keating Governments picked up the mantle and forged deeper partnerships with councils, protecting inner-city heritage areas and ensuring that ongoing urban development did not destroy environmental assets like the Sydney Harbour foreshore.
The subsequent Howard Government again withdrew from urban policy.
By the 2006-07 period, the Howard Government had squandered the fruits of the long-running mining boom, using it for pre-election bribes when it could have been used to upgrade the nation’s infrastructure.
Arguments about inadequate infrastructure, particularly with regard to ports and roads, routinely degenerated into an inter-government blame game as the commonwealth and the various states sought to avoid responsibility.
I’m proud to say that Labor Government that followed the Howard era delivered record infrastructure investment.
We built or rebuilt 7,500 km of road.
We built or rebuilt 4,000 km of railway line.
We created the Major Cities Unit to drive the policy development process and ensure that our efforts were co-ordinated with those of states and councils.
We cemented those inter-governmental links through the Council of Australian Governments, sealing deals with states on the development of Capital City Plans and national agreements for co-operation on our national freight, port and public transport strategies.
We also involved industry and interest groups in the planning process through our Urban Policy Forum.
We put in place the policy apparatus and we treated cities as major components in the national economy.
Unfortunately, since the change of government in 2013, the Abbott Government has withdrawn from the urban policy space.
It abolished the major cities unit.
It cancelled planned investments in major public transport projects, including the Melbourne Metro and Brisbane’s Cross River Rail project.
TIME FOR A CHANGE
In 2015, this is not good enough.
Cities are too important to the national economy to be left off the national agenda.
The days when this nation was a farm and quarry are long gone.
If we glibly dismiss our cities as just the places where people live, we miss the point about how critical they are to our economy, to job prospects and to our future.
Various estimates put the cost of congestion at more than $10 billion a year.
Imagine if that money was not lost to inefficiency but remained in the pockets of business to be invested in further enterprise and more jobs.
When Labor came to office in 2007, we set about improving urban passenger rail, with the projects that I mentioned earlier which have since been scrapped by the current government.
But we also invested heavily in improving the way in which goods move through our cities to our ports by untangling urban freight and passenger lines so they could operate independently.
Projects like the Southern Sydney Freight Line project mean that freight can move through the city on rail at any time of the day, whereas it was previously frozen during peak hours when passenger trains dominated the lines.
This is a perfect example of the way in which governments need to see the debate about urban policy as an economic debate.
When we talk about the level to which governments want to engage with urban policy, we are actually talking about the extent to which governments involve themselves in genuine economic policy.
I must say I was concerned last week when I heard that than man in charge of our economy, the Treasurer, had recently told Melbourne planner Rob Adams he believed cities were a no-go zone for the commonwealth.
“Not our jurisdiction,’’ Mr Adams quoted Joe Hockey as having said to him in a recent meeting.
Recounting this at a conference in Melbourne last week, Mr Adams said:
And I sat there stunned thinking, ’80 per cent of the economy is not your jurisdiction?'”
Mr Adams is spot on.
Given the centrality of the health of cities to our economy and to our standard of living, it is extraordinary that the man in charge of our economy sees no role for urban policy.
BUS INDUSTRY CONFEDERATION
I am very pleased that the Bus Industry Confederation understands the importance of cities.
People in your industry have a firsthand understanding of issues like congestion and traffic planning.
I note that your organisation today released new research promoting the 20-minute city – the idea that an individual’s work, social sporting, educational and other needs should all be within 20 minutes of home by walking, cycling or catching public transport.
Your chief executive Michael Apps noted in a statement today that:
The federal government must have a vision for our cities and get involved or we will end up with more long term strategic plans for our cities that only last as long as the term of the state governments that make them.
Michael is quite correct.
I congratulate your organisation for your advocacy in this important area.
I also thank you sincerely for your participation in the Opposition’s urban policy dialogue, which I have been using to help inform the policy formulation process for the next federal election.
I assure you Labor’s policies will be geared toward giving cities the prominence the deserve in the national policy debate.
In particular, this forum will allow the Opposition to put flesh on the bones of the ten-point plan for cities that I released last year in a major speech to the National Press Club.
- Investing in properly integrated transport systems involving public transport and roads;
- Investing in active transport solutions which connect up with public transport, education and employment hubs;
- Addressing housing affordability through the use of urban planning, land supply and use of incentives;
- Aligning greater housing density with public transport corridors;
- Promoting jobs growth in outer suburbs. This could be through direct investment such as Badgerys Creek Airport and Moorebank Intermodal project, or by giving consideration to incentives for location of business;
- Promoting jobs growth in middle rings around cities by investing in research precincts around universities and hospitals;
- Supporting connectivity and productivity through fibre-to-the-premise National Broadband Network;
- Supporting renewable energy including buildings and precincts that produce their own power in new developments;
- Enhancing sustainability and resilience of household and industrial water supply and rehabilitating our urban waterways which for too long were used for industrial waste;
- Cooperation between Governments to promote the development of second or third CBD’s to decentralize jobs growth.
DECLINE OF PROCESS
Let me turn briefly to a couple of current issues closely tied to the future of cities.
The former Labor Government created Infrastructure Australia to provide the government with independent advice on the relative merits of infrastructure projects competing for commonwealth funding.
The idea was that if elected representatives had access to evidence about the economic cases for investing in one project or another, they could make decisions that would provide the maximum lift to national productivity.
We wanted to break the link between the infrastructure investment process, which is long term, and the political process, which is short-term.
Prior to the 2013 election, the Coalition committed itself to this evidence-based process, promising it would not invest any money in projects worth more than $100 million without a published cost-benefit analysis.
The Opposition is concerned the government is drifting away from this evidence-based approach.
Two examples that bear upon your business highlight this trend.
In last year’s election, the Abbott government committed $3 billion to the former Napthine Government’s proposed East-West Link toll road project.
After Labor won last year’s Victorian state election, documents emerged showing the project would return only 45 cents for every dollar invested.
Anyone in the private sector who was handed a project with such a poor a benefit-cost ratio would order it be taken back to the drawing board.
But the documents also suggested the former Napthine Government sought to conceal this research, knowing it would not stand up to Infrastructure Australia scrutiny.
So it is clear that the commonwealth was happy to fund this project without having seen a proper business case – a direct breach of its pre-election promise.
The Auditor General is examining this case to determine how such a decision could have been made.
In Sydney, the commonwealth is enthusiastically backing the proposed Westconnex project.
For as long as this project has been discussed, its object has been to take cars from Sydney’s west to the CBD and freight to Port Botany.
As it is currently proposed, Westconnex does neither.
I’m all for a solution to ease traffic congestion in Sydney.
But it’s important with such a huge project that we get it right.
Money spent on infrastructure must meet its strategic objectives.
Late last year the NSW Auditor General Grant Hehir noted serious deficiencies in planning and quality assurance processes relating to the project.
Mr Hehir’s report found that:
The preliminary business case submitted for gateway review had many deficiencies and fell well short of the standard required for such a document.
The report said there were not “clearly separate roles and responsibilities for delivery, commissioning and assurance’’ nor “robust processes and procedures to manage the conflicts’’ that arose from this lack of separation.
Another demonstration of lack of process is the government’s willingness to hand over money to states without requirements that they meet construction milestones.
On June 6 last year the Assistant Minister for Infrastructure told the Civil Contractors Federation that he would insist on milestones.
The Minister said:
… that we’re only making payments to states when they actually deliver the milestones, that they’re not getting money in their bank account prior to milestones being delivered …
Nine months later the commonwealth has handed billions of dollars of public money to the Victorian and NSW Governments for the East-West Link and Westconnex.
The money came upfront.
It is now doing exactly what the minister said he would not allow – sitting idle in bank accounts.
No milestone payments.
No cost benefit analysis.
As your organisation noted today when releasing your research on the 20-minute city, we are no longer living in the 1960s, when Australia rode on the sheep’s back.
In 2015, cities drive our economy.
For four out of five of us, they provide our jobs, our homes and our opportunities for social and sporting interaction.
But above all, our cities hold the key to our continued economic prosperity and that of our children.
They need to be efficient or their inefficiency will hold us back.
That will hold our children back.
We have heard a lot from the current government about intergenerational theft – the idea that it is wrong to expect our children to pay our debts after we are gone.
But another type of intergeneration theft is staring us in the face, caused by our failure to step up to the demands of today.
If we fail to do everything we can to energise our cities and drive their productivity, we’ll bequeath the job to our children.
And the passage of time will mean the problem will be far greater in the future than it would be if we had the courage to tackle it today.
The same argument applies when it comes to public transport.
The commonwealth’s refusal to spend a dollar on public transport on purely ideological grounds means that as long as the current government is in office, the problem will get worse.
It won’t go away.
But it will be more difficult to fund because the economic growth will have been smaller.
Let me end my address where I started – with Abraham Lincoln – a man whose simple wisdom saved a nation and has inspired generations.
Lincoln was by nature an optimist.
Confronted with difficulties, Lincoln looked forward, not back.
Lincoln once said: “The best thing about the future is that it comes one day at a time’’.
It’s not too late for this government to step up to urban policy.