Jul 11, 2018

Speech to The Sydney Institute – ‘Partnering with Our Cities’ – Wednesday, 11 July 2018

There’s a reason why people say that all politics is local.

That’s because it is.

The condition of local roads, the evenness of footpaths…

Availability at the local childcare centre or school…

If there is a corner store or shopping strip close to home…

Whether the bus comes on time and if there is somewhere to play sport…

These local issues determine the quality of life for our citizens.

Importantly they also feed into our nation’s larger economic narrative, determining whether our cities and towns function well and if they are places of opportunity where people can live out their aspirations.

These aspirations extend beyond individual needs to family, community, environment and indeed, to encompass a fair nation.

Because the quality of life for every individual cannot be isolated from the wellbeing of the community in which that individual resides.

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.

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.

Often these areas don’t have the necessary infrastructure and services in place to support population growth.

We also know that the end of the resources boom has left a number of regional cities and surrounding 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.

Our nation is undergoing a period of significant change.

And this change can be hard for people who must adjust to the upheaval it brings.

Author Mary Shelley wrote that, ‘nothing is so painful to the human mind as a great and sudden change.’

This is true.

It is also true that within change lies opportunity and it is the responsibility of government to seek this out.

Managing this change will not be easy.

But one thing is certain: a failure to plan and build the infrastructure that will be needed will leave many people and communities socially isolated and economically disadvantaged.

American economist and urbanist Edward Glaeser worded it best when he said, ‘people, not structures, really determine a city’s success.’

Successful cities are inclusive cities, with diverse, vibrant communities – not disconnected enclaves of privilege and disadvantage.

Collaboration across all levels of government is critical if we are to overcome spatial inequality, which is already being felt in parts of our cities.

Someone’s postcode should not determine their income.

This principle has been at the centre of the dispute just a couple of kilometres from here about whether public housing should be maintained at Millers Point and The Rocks.

The expulsion of people from their homes has not only had a devastating impact on them, but I would also argue the surrounding local community is all the poorer for it.

A few weeks ago the Australian Local Government Association held its annual conference in Canberra.

Colloquially this week is referred to as a Mayor-a-Minute.

With almost 300 local councils and 800 delegates in town, to tell you the truth, it’s impossible to meet everyone.

Of those I did meet, including the Shire of Murray from WA, the City of Melbourne, Lake Macquarie and other Hunter Valley Councils, it is clear to me that many local councils are thinking comprehensively about what they can do to positively shape the economic future of their region.

They are thinking strategically about how innovation can be used to advantage the people they represent through job creation.

And they are thinking about how they can work with neighbouring councils, engage the private sector and bring together all levels of government to achieve positive structural change that empowers a broader geographical area – not just their own.

This truly is nation building, from the bottom up.

The national government can and should do more to support these ambitions.

I commend the current Government for their participation in urban policy, particularly in contrast with the former Abbott regime.

The reality is, however, that their City Deals Program is a poor imitation of the UK model it seeks to replicate, with funding commitments that are determined from the top down and tied to the electoral cycle.

That’s why tonight I’m announcing that a Shorten Labor Government will overhaul and replace the Coalition Government’s City Deals program with a new, more rigorous program called City Partnerships.

This is consistent with Labor’s approach to depoliticise infrastructure by making generational evidence-based decisions.

Labor will work with local government in a way that is genuine, in a way that supports their expertise and in a way that brings people together, to build a strategic vision underpinned by real investment for our cities.

So that we can ensure their ongoing productivity, sustainability and liveability.

Australia is not the only country grappling with urban population growth.

However, the reality is that we are one of the fastest urbanising OECD countries.

Almost 90 per cent of all Australians live in urban areas.

What’s more, projections from Infrastructure Australia indicate that by 2031 the populations of our four largest capitals – Sydney, Melbourne, Brisbane and Perth – will have increased by 46 per cent.

Adelaide, Canberra, Hobart and Darwin will grow by nearly 30 per cent.

Regional cities are also growing rapidly, with an extra one million people expected to call these cities home by 2020.

And although there are significant potential benefits that come from this increased urbanisation, including a greater contribution to GDP, we also know that the negative side effects are taking a toll on our cities.

Urban sprawl, growing congestion on roads and public transport, declining housing affordability and an unequal distribution of employment opportunities, particularly in outer suburbs and growth areas have an impact on people’s quality of life.

Our natural environment is suffering through increased pollution and the loss of green space when urban development is poorly planned.

And our agricultural food bowls, which play a critical role in supplying our cities, are also under pressure.

The national government has a responsibility to work with the state and local governments to address these problems.

Given that major cities are increasingly important actors in their own right within the global economy, we must ensure they are competitive.

Sub-national activities by state governments influence economic development, investment facilitation and trade outcomes as well as the local innovation system.

To improve our national economic performance we must be more strategic in the way we approach issues such as congestion, for freight as well as commuters, urban renewal and employment clusters.

And of course in doing so, we make our cities better places to live – for everyone.

But climate change complicates this policy challenge because of its significant impact on the urban environment through the Heat Island Effect, higher sustained temperatures and extreme weather events.

While cities cover less than two per cent of the earth’s surface, they are responsible for about 70 per cent of global greenhouse gas emissions.

Getting planning and infrastructure right within our cities is critical if we are to reduce Australia’s harmful carbon emissions, meet the Paris targets and move toward a zero emissions future.

Consequently, we need considered policy responses from governments, not just Band-Aid solutions.

And because the nature of Australia’s federation means that all three levels of government have both distinct and overlapping roles in urban development, collaboration and alignment are needed to maximise the effectiveness of investments and policy.

When Labor was last in Government we established the foundations for this collaboration and alignment.

We created the Major Cities Unit and Urban Policy Forum to ensure our policy was informed by expert opinion and underpinned by an evidence base, including through the annual State of Australian Cities report.

We established the Australian Council of Local Government to bring local councils into the conversation.

We also created the Centre of Excellence for Local Government at UTS to promote best practice.

Through COAG we conducted a review of capital city strategic planning systems – this was chaired for former Deputy Prime Minister Brian Howe with Lucy Turnbull as Deputy Chair.

And we released Australia’s first ever comprehensive National Urban Policy, which identified three key pillars of productivity, sustainability and liveability.

The City Partnerships program will build on this approach.

City Partnerships will engage all three levels of government through genuine collaboration, as well as with the private sector, to set out a strategic vision for our cities.

This will be linked to a renewed National Urban Policy.

I am pleased that there is bipartisanship on the need for Federal Government engagement in our cities.

However, the truth is that the current City Deals program 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.

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.

The fact is City Deals have either been in marginal electorates framed around single election commitments or are simply missing depth and detail.

This is the case for the Western Sydney City Deal, where not only was Blacktown Council excluded for no good reason but it also has a still unfunded rail project as its centrepiece.

Just this month Bill Shorten announced at the NSW ALP conference that Federal Labor would partner with the NSW Government to provide real investment for Western Sydney Rail, consistent with our determination to make public transport a defining priority for a Shorten Labor Government.

But it’s not just me providing criticism of City Deals tonight.

Stakeholders have also echoed precisely these criticisms.

For instance, Marcus Spiller, Principal and Partner at SGS, commented that the City Deals program comes ‘perilously close to the Commonwealth picking individual project winners rather than facilitating structural change.’

Romilly Madew, CEO of the Green Building Council, said that, you should meet these targets… it shouldn’t be just, ‘here’s the money’, as part of a City Deal. They should also have to meet a whole lot of requirements.’

And Adam Beck, Executive Director at the Smart Cities Council pointed out that, the City Deals process, from what I understand, has no industry committee, no outside support… Working it out together in collaboration, is the only model.’

We can, and must, do better.

City Deals originate from the UK.

They’re intended to provide a mechanism through which various levels of government can work together to develop area-based strategies that improve overall economic growth.

Part of this process involves setting targets in areas like employment, affordable housing and sustainability.

In large cities such as Melbourne or Sydney, the City Deals concept can be applied to sub-metropolitan areas, regions and precincts.

The Western Sydney City Deal is an example of this.

But it also provides a model through which growth corridors and regional cities can receive greater support and investment.

This is particularly important given these areas face substantially different challenges to inner cities.

Ultimately, City Deals are intended to provide a long-term vision for how structural change can be achieved.

This can encompass the built form, economy and community, depending on the needs of the area.

In turn, this enables consideration of long-term benefits such as an increase in land value and improved productivity as a consequence of greater investment.

Funding from all levels of government can be pooled and / or aligned, and in some instances also accompanied by co-investments by the private sector.

In some cases ‘earn-back’ and other innovative financing models have been used.

Most crucially, City Deals are underpinned by the idea that investment should be guided by the level of government that sits closest to the people.

They encourage a bottom up strategy that recognises local government as genuine partners well placed to lead structural change and foster local community ownership.

This innovative approach to multi-level governance is particularly applicable to Australia’s federal system of government.

Despite local government lacking constitutional recognition, it plays a critical role in shaping our cities, particularly through strategic land-use planning and development facilitation, public works and its ability to drive community engagement and ownership of projects.

State governments are also critical, with oversight of strategic land-use planning activities, the operation of transport systems and providing most of the funding for infrastructure and major facilities.

However, given the significance to the national economy, the Commonwealth must also have an active role in urban policy, using the various levers at its disposal.

Bringing all levels of government together is important.

And that requires national leadership.

The Property Council has identified critical foundations for improving Australian cities as including, ‘a national framework that actively shapes urbanisation to achieve long-term goals’, and, ‘long-lasting agreements, deals and partnerships between different levels of governments’.

But of course we know that the most important lever remains direct, targeted investment in nationally significant infrastructure.

The Commonwealth also controls other policy and regulatory levers on both a supply and demand side, which include taxation and immigration, the national coordination of housing supply through the Housing Supply Council, which Labor will re-establish, and funding to the states and territories for key services such as housing and homelessness.

In addition to this, the Commonwealth owns strategic parcels of land in major cities and plays a role in supporting important economic infrastructure such as hospitals, universities and airports.

To date, all states and territories have shown interest in the current City Deals program.

So we know there is a willingness to collaborate.

But we have to get the framework right.

Our proposed City Partnerships will strengthen this process by better engaging local government and the private sector and ambitiously structuring collaboration to achieve clearly defined outcomes and targets.

City Partnerships will also build on our proud urban policy legacy.

Since World War Two, every Labor Government has made an important contribution to Australia’s urban development and progress.

In 1945 Ben Chifley commenced post-war reconstruction with large-scale investment in public housing.

Gough Whitlam connected Western Sydney and other suburban areas to sewerage and also established the Department of Urban and Regional Development.

Bob Hawke and Paul Keating invested in the Building Better Cities Program.

And the Rudd-Gillard Government put in place a large number of policies to support the development of cities.

In recent years, however, we have seen how the short-termism of the electoral cycle sometimes functions as a handbrake on necessary national economic reform.

Big decisions can be suspended or delayed.

And, immediate political priorities can get in the way of the long-term national interest.

We need to overcome this challenge.

City Partnerships provides a model through which this can be achieved.

Our policy comes from months of consultation with local government and experts from across the sector.

We have listened to councils talk about the need for all three levels of government to work together, but in a way that is meaningful.

Where local government is treated as a genuine partner, rather than as just another stakeholder.

And where all the cards are on the table from the outset and priorities are determined in collaboration.

Around the nation, local government is already thinking about how a model such as this might work.

In the Hunter Valley – Lake Macquarie, Maitland, Newcastle, Port Stephens and Cessnock Councils have come together to advocate for completing the delivery of the Glendale Interchange.

They are after $13 million for the next stage, which will create 6000 jobs and unlock $700 million of investment, including an expansion of Stockland Glendale.

It’s more than just an infrastructure project.

It will act as a catalyst for the entire region; transforming the way people get around, attracting businesses, creating jobs and facilitating urban renewal in the Cardiff industrial area.

In Western Australia, the City of Stirling is thinking about how it will house a growing population and ensure there are jobs within its local community for residents.

The City of Stirling is planning now for the future and considering what infrastructure is required to support this growth through its Stephenson Avenue urban regeneration project, which Bill Shorten and I announced founding for in April this year to add to commitments already made by the Council and WA Government.

Stage 2 of this project will include a light rail connection from the Stirling City Centre to the iconic Scarborough Beach.

This project will provide more than 82,000 new ongoing jobs, unlock $16 billion worth of private investment and create over 30,00 new dwellings which will generate the capacity to house over 63,000 new residents.

The Council of Mayors for South-East Queensland, which encompasses ten local government areas, has put aside parochialism to give substantial consideration to the future of its region.

And in 2014, before the Coalition Government even announced its City Deals program the Council of Mayors had started work on a model for Queensland.

Possibly one of the most significant achievements from my time as the Minister for Infrastructure and Regional Development was the establishment of Infrastructure Australia in 2008.

This set an important precedent for a rigorous and transparent approach to investing in infrastructure, ensuring evidence-based decision making guided the Commonwealth’s allocation of funds.

We remain committed to this approach.

That’s why we will re-establish the Major Cities Unit within Infrastructure Australia and task the Major Cities Unit with independent oversight of this program, including recommending City Partnerships to the Minister.

The Major Cities Unit will also take responsibility for refreshing the National Urban Policy that Labor released when in government to ensure City Partnerships align with its objectives, for example, in areas like sustainability and smart technology.

We will ensure City Partnerships are underpinned by a strong evidence base and proper analysis to maximise return on investment and social outcomes.

We understand that City Partnerships must be tailored and flexible, but we expect them to set out a strategic vision that aligns with the National Urban Policy and delivers on pre-determined performance indicators.

Effective City Partnerships can only be delivered through genuine collaboration with all three levels of government and the private sector.

Hence, City Partnerships will demand bottom up strategies that recognise the role of local government as genuine partners as well as land-owners and investors so they are well placed to drive structural change.

There is also an opportunity for the Major Cities Unit to consider how City Partnerships can leverage equity investment from government financing bodies, such as the CEFC, which have policy goals that cities can play a role in meeting.

An expert panel will be established to update strategic planning guidelines for cities as well as the development of guidelines, which include benefit to the economy, for City Partnerships in consultation with the Minister.

This will ensure industry expertise is more effectively utilised and that City Partnerships align with strategic planning guidelines.

It will consider ways in which the community and stakeholders can be more effectively engaged in the development phase of City Partnerships.

It will also consider ways in which collaboration across local governments, including with Council membership organisations such as WSROC in Sydney and the Council of Mayors in South-East Queensland, as well as with the private sector can be incentivised and rewarded.

To ensure transparency, these guidelines will be publicly available and applications from any city or cities welcome.

The program will apply not just to capital cities, but also to regional cities as part of our ongoing commitment to regional development.

City Partnerships will also be required to focus on what gains can be made through productivity uplift and the additional revenue that will flow to the Federal Government as a result.

This mirrors international examples where, in developing a strategic vision for a particular area, governments were required to consider broader economic objectives including employment and other earning opportunities.

City Partnerships also provide a unique opportunity to address spatial inequality in our cities by driving and facilitating investment in outer suburbs and growth areas to enable them to become more productive, sustainable and liveable.

Renowned urbanist Jane Jacobs once declared that, ‘lively, diverse, intense cities contain the seeds of their own regeneration.’

City Partnerships aim to achieve precisely this.

We want to unlock the potential of our cities – inner urban areas, regional cities, outer suburbs and growth areas – by bringing together all levels of government, the private sector and community in a way that is meaningful so that we achieve genuine structural change.

My mentor and former Deputy Labor Leader Tom Uren previously said that with urban policy we could no longer, ‘deal with things in boxes anymore.’

If anything, cities are even more complex now, than they were then.

And with advancements in technology we will always experience change.

But getting processes right provides us with the best opportunity to deal with this head on and ensure our cities are productive, sustainable and liveable…

Not just for those that can afford it, but for everyone.

Not for some of us, but for all of us.