Aug 7, 2009

Address to Partnerships 09 – Infrastructure and Investment Conference

BUILDING 21st CENTURY CITIES

Address to Partnerships 09 – Infrastructure and Investment Conference

Infrastructure Partnerships Australia

Sydney

7 August 2009

The Hon Anthony Albanese MP

The Minister for Infrastructure, Transport,

Regional Development and Local Government

Leader of the House

Member for Grayndler

Introduction

My theme today is urban policy – a topic that dared not speak its name for most of this decade

The need to pay attention to the state of our cities is more urgent than ever.

By 2056 Australia’s population is expected to reach 35.5 million and the number of people living in cities is projected to increase from 13 million to 23 million.

Brisbane and Perth’s population will grow by 120 per cent. Sydney and Melbourne will each have 7 million people.

The race is on to determine which element will win: quantity or quality. This is a race where we simply cannot afford anything other than a victory for quality.

Our cost of living… our egalitarian culture… our economic productivity… as commuters, our sanity… our very way of life in fact… all of these are at stake.

The quality of life in our cities is an issue we as a nation have confronted before.

In the 1970s, issues including the lack of sewerage infrastructure in the outer suburbs was tackled by the Department of Urban and Regional Development and the quality of urban life improved.

In the 1990s the regeneration of inner cities was enhanced under the Better Cities Program.

Now we must confront the challenge of ensuring we develop sustainable cities for the future.

An important step will be the development of a comprehensive National Urban Policy.

Australia needs a policy framework that will assist the Commonwealth, the states and territories and local governments create productive, liveable and sustainable cities.

These are the objectives of the Major Cities Unit.

Building new understandings

Success in advancing these objectives will involve overcoming reluctance to accept Commonwealth involvement. To some extent, we must overcome parochialism.

In some ways we shouldn’t really be surprised that urban policy has often been absent nationally.

Cities have always been jealous of their autonomy from the centralised state – something that goes back to the era of the city state and the city corporations in medieval times.

In return for loyalty and taxes, cities were granted independence.

Not a bad deal.

But in the modern age, cities and national governments have to reach new understandings.

The issue is not autonomy – it should be taken as a given.

Let me assure you, no Commonwealth minister wants responsibility for deciding where to lay sewerage pipes or for local development applications.

I certainly don’t.

The real issue is ensuring sustainable development and proper planning and strategic investment in social and physical infrastructure.

Importantly, a renewed commitment to our cities should complement an ongoing commitment to the economic development of our regions

That is why the Rudd Government is providing record support and investment in regional Australia.

Implementation of the Regional Development Australia network will empower regional communities and ensure that the benefits of economic growth are shared across our vast nation.

Indeed, the former government’s aversion to investing in our cities ensured regrettable outcomes for both our cities and our regions.

The consequences of the former government’s AusLink program funding road and rail only to the outskirts of cities, but not to our ports, were negative for regional Australia’s economy, added to urban congestion, and restricted productivity.

The Rudd Labor Government is taking an integrated approach to urban and regional development.

The urban challenges

Let’s consider some of the big urban challenges to be overcome.

Maintaining our egalitarian way of life

The first is the potential damage that bad urban policy can do to the egalitarianism of our cities.

Suburbs will always be socially diverse.

There’s no getting around that. But as our cities expand, this problem may get worse.

We must ensure that a child growing up on the outer fringes of Sydney realistically has the same life chances as one growing up in an inner suburb.

This is an important objective given that today one in eight Australian children are growing up in the fast expanding region of Western Sydney. That’s more than all the children in South Australia and Tasmania combined.

To some extent we have always been separated by postcodes.

But postcodes in themselves are just numbers on a page. They are not physical barriers in the way a 50-kilometre stretch of freeway is.

We have to design our cities in a way that ensures distance does not exclude people from full social and economic participation in our society.

Beating the problem of traffic congestion

The second problem is beating traffic congestion.

Low-density urban development is placing a heavy reliance on private vehicle use – something made worse by a corresponding under-investment in public transport.

Urban car use has grown thirty-fold since 1950 when it began to replace rail as the main mode of passenger transportation.

That’s right – thirty times!

The Bureau of Infrastructure, Transport and Regional Economics estimates that the social cost of aggregate congestion in 2005 was $9.4 billion.

It forecasts that without action there will be an 87 per cent increase in (metropolitan average) per capita congestion costs by 2020.

These facts make cutting congestion not just a quality of life issue but also something of huge relevance to national productivity.

City affordability

The third challenge is the affordability of our cities.

All of us here – governments, professionals and developers alike – are sensitive to the cost of constructing and owning a home.

But, increasingly, the dollar amount for the land, bricks and mortar, is only part of the price we pay.

The extra costs entailed in the running of two or more cars, heating and cooling badly designed housing, and watering gardens, are pushing up the cost of living.

And they are potentially burdening many Australian families with inefficient assets that may decline in value.

Housing design

This leads to a fourth challenge – the obvious unsustainability of the types of housing we are constructing.

Despite a trend towards smaller households, in some states and territories up to 80 per cent of new dwellings are single detached housing, largely on greenfield sites.

The average number of people per household declined from 3.1 in 1976 to 2.6 in 2006 but the average number of bedrooms per dwelling rose from 2.7 to 3.0.

The proportion of dwellings with 4+ bedrooms increased from 17 percent to 28 percent.

In addition, housing and other building stock, whilst being built or upgraded to a higher level of environmental standard than in the past, comes nowhere close to the environmental performance of development in many other OECD countries.

Nor is it suitable for an ageing population.

This mismatch between demographic trends and housing stock is unsustainable.

If you doubt me, just consider the latest generation of housing construction and renovation programs on TV, such as Grand Designs on the ABC.

These programs establish the trends that the suburbs eventually follow.

Almost every house on these shows feature energy efficiency and good use of space. All Australians should benefit from better planning and design of this type.

Public health

The fifth and last challenge is that of public health.

Urban issues of poor air quality, heat stress, lack of quality green space and physical inactivity result in obesity, respiratory, mental and other public health problems.

These are expected to be exacerbated by climate change and the growth of cities – especially car dependence and the resultant physical inactivity.

On some of the less well-designed housing estates, it’s probably not even possible these days to do anything practical like shopping or taking children to school on foot.

The price we pay for this poor planning is high. The direct and indirect cost of obesity, for instance, is estimated at around $21 billion annually, while the direct cost of physical inactivity is $377 million.

We must act on this.

The public policy problem

So what’s the problem here?

It’s not an inadequate understanding of the challenges.

We have the experts, we have the data, we can see what’s happening elsewhere.

It’s not a lack of public debate.

The heat being generated by debate over the direction of our cities is melting polar icecaps as I speak.

It’s not a lack of great policy options or necessary technologies.

In a broad sense we know what we need to do. You yourselves will have many of the answers. Best practice stares us in the face every time we travel abroad.

In fact, Australia is one of the few OECD countries that has not had a national spatial or geographically based framework within which national decisions are considered.

Germany, for instance, has a strong national framework which recognises the impact of the flows of people, goods and resources between their highly connected urban systems.

Not all solutions to traffic congestion require more lanes on roads or additional investment.

Thinking smart can improve the way our cities work.

We can use the broadband network to enable more people to work from home.

It has been reported that British Telecom’s implementation of video conferencing replaced nearly one million face to face meetings in a year, saved the company almost half a billion dollars and was the equivalent of taking 18,000 cars off the road.

In Sweden, an intelligent road system gives Stockholm’s commuters enough information to reduce traffic congestion by 25 per cent and carbon emissions by 40 per cent.

So we have the knowledge, the technology, the options, the willingness to debate them, and the means necessary to make a difference.

All we lack is the right leadership – from government and from business.

Our disparate decision-making processes are producing sub-optimal planning, land use and settlement patterns.

And they are making insufficient use of the infrastructure investment available.

Much is going on to improve planning at the Commonwealth level to make sure Australian cities remain places where people want to live, work, raise a family and do business.

The establishment of Infrastructure Australia has been critical to addressing some of the big urban problems we face, in partnership with the states, territories, local government and the private sector.

COAG is also playing a leading role.

COAG and competition policy reform are driving improvements in road, rail, port, education, health and broadband infrastructure provision.

Reform comes at a time of unprecedented investment in urban infrastructure, including an historic $4.6 billion commitment to public transport in the budget.

We mustn’t undermine this reform and investment by paying inadequate attention to urban policy.

We’re clearing the arteries of the nation with these reforms but clogging up its heart by neglecting our cities.

And some considerable advances are being made at the state and territory level.

Queensland for instance has recently released its revised South East Queensland Regional Plan, which has set a framework for development in this region to 2031.

Presently approximately 90 per cent of new homes in Sydney are being built within the existing urban footprint.

South Australia and Western Australia have both recently released policies for metropolitan growth, espousing the importance of concentrating jobs, services and high density housing in nodes or activity centres, connected by good public transport corridors.

The City of Melbourne and the Victorian Government have a number of similar planning projects underway.

The next necessity, though, is for a national policy framework that can build on and accelerate successes like these.

The big problem in essence is the lack of a consistent national policy focus.

The Commonwealth’s recent exile from the urban policy arena has ended.

A National Urban Policy

Hence our National Urban Policy – which is now in the process of formulation by the Major Cities Unit.

Targeted consultations are well under way and I expect the main content of the National Urban Policy to be completed in the coming year.

It’s early days, but we can outline the key areas that it will cover.

Our National Urban Policy will, in essence be a framework document which will articulate the challenges facing our cities.

It will highlight how a systems approach to thinking, policy decisions and allocation of resources can achieve greater benefits.

The best solutions will need to come from the whole community.

But obviously the people here in this room will have a major role to play.

And I want to say this to you: Don’t wait for the Major Cities Unit, Infrastructure Australia, COAG and the Government to finalise what we are doing before you begin to change the way you approach urban development.

Remember that first mover advantage applies here – those that are proactive rather than reactive will be better prepared and will succeed.

I want you to realise where the future lies, anticipate the changes it will bring, and get ahead of the game.

For property developers, state and local governments, the challenge is to begin maximising the development potential of our middle suburbs, not just the inner cities.

And for large infrastructure developers, the challenge is to move into the area of public transport, not just road construction, embrace the challenges of energy and water scarcity as opportunities, develop and leverage off some of the excellent research undertaken in this country, and set Australia at the forefront of responding to climate change .

Conclusion

In conclusion, let me say I’m talking about a cultural change in the way we approach our responsibilities as shapers of cities.

I’m sure many of you in the audience are making positive strides in these directions.

But much more is going to be needed in the future.

In the long-run, it serves all our interests to lead than to lag.

Because in the world that is surely coming – the carbon constrained world, higher energy prices and increasing urban populations – the cost of urban short-termism will increase.

The value of poorly-planned and unsustainable urban development will decline.

That means the value of your investments will potentially decline as well. It’s in your financial interest as well as the national interest to get ahead of the game and make Australia an urban policy leader.

This is a job for economic reformers.

But it’s also a job for innovative urban planning.

And all of this adds up to one thing: In the future – in fact already – good urban policy and smart urban development will not just enhance our democracy, and improve national productivity, they will improve your business prospects too. We all stand to gain.

Thank you.