Improving governance
11.1
Parts 1 and 2 of the report examined the sustainable development of Australia’s cities and regions at a national and regional level (Part 1) and at a city level (Part 2). Part 3 of the report (Chapters 11–13) focuses once again on policy at the national level, in particular the role of the Australian Government in the development of cities.
11.2
The need for the Australian Government to take a leading role in the development of cities was highlighted in the evidence presented to the Committee. Australian Government policy touches on many areas which relate directly to the development of cities and regions. The Australian Government is the only entity which can influence policies and outcomes at a national level.
11.3
The Commonwealth to a large degree also controls the purse strings. The development of cities is heavily reliant on Commonwealth funding and support. The evidence presented to the Committee indicates that most stakeholders believe the Australian Government should be taking an even larger role in the development of cities. Its current policy framework is centred round the Smart Cities Plan and City Deals (the City Deal program will be discussed in more detail in the next chapter).
Smart Cities Plan
11.4
The Smart Cities Plan outlines the Australian Government’s vision for cities. It contains six policy priorities:
Jobs and Skills—employment and training outcomes in our cities, including the performance of the employment market and the skill level of the workforce. The Government aims to boost employment by supporting skills and industry development, and diverse economic growth.
Infrastructure and Investment—the city’s investment environment, with a particular focus on the quality, efficiency and effectiveness of infrastructure. The Government aims to improve accessibility and productivity in cities by supporting transport solutions that efficiently connect people with jobs and services, and goods with markets. For instance, several cities are working towards the concept of a ’30 minute city’, where residents can access employment, education, services and recreational facilities within 30 minutes of home, regardless of where they live. The Government also aims to utilise innovative financing and value capture where possible, to maximise and capture the value of investment.
Liveability and Sustainability—the health and wellbeing of residents; the attractiveness and amenity of the city; and the state of the environment and the local response to climate change. The Government aims to improve our cities across all three dimensions. This includes improving safety, social cohesion and health, while reducing disadvantage in local communities. It also includes improving air quality, access to green space and the use of active transport, while acting to reduce carbon emissions.
Innovation and Digital Opportunities—city productivity; innovation and entrepreneurship; and access to public data. The Government aims to harness the productive potential of information and communications technologies and the digital economy, and to make data publicly available wherever practical.
Governance, City Planning and Regulation—land use planning and administration in cities, as well as how effectively local governance and regulation support economic, social and environmental outcomes. Long-term planning is critical for delivering the coordinated infrastructure, housing and services that shape our cities and the lives of residents. The Government aims to deliver coordinated and integrated policy, planning and investment across all levels of government.
Housing—the affordability of housing in our cities; the supply and diversity of new housing stock; and where housing is located, including how accessible it is to jobs and services. The Government aims to improve housing supply and affordability, and encourage appropriate densities and diversity of housing options.
11.5
The Department of the Prime Minister and Cabinet notes that the ‘Smart Cities Plan provides a framework to deliver on these policy priorities, including through City Deals, the Smart Cities and Suburbs Program and the establishment of the Infrastructure and Project Financing Agency’. The Smart Cities Plan is also at the heart of a range of Australian Government initiatives on cities centred around housing, migration reform, infrastructure and value capture and data and innovation reforms. The Smart Cities and Suburbs Program and Future Ready are discussed below. The City Deals initiative is discussed in the next chapter.
11.6
The National Cities Performance Framework provides ‘a snapshot of the productivity, liveability and progress of Australia’s 21 largest cities, consistent with the focus of the Smart Cities agenda’. The Interim Report includes ‘12 contextual indicators, which provide insight into a city’s demographic and economic situation, and 41 performance indicators across the six Smart Cities policy priorities’. The National Cities Performance Framework will:
help to understand the context for the performance of cities;
provide data to help users measure the performance of cities; and
support the selection, focus and evaluation of City Deals.
11.7
The Infrastructure and Project Financing Agency (IPFA) began operation on 1 July 2017 with a view to bringing ‘greater rigour to infrastructure investment decision-making, and enable the Government to make more informed decisions’. It draws upon ‘private sector expertise to expand the Commonwealth’s current in-house capability, the Agency will engage project proponents at an early stage to ensure the full range of financing options are canvassed from the start’. IPFA will:
… work across Commonwealth agencies and with state, territory and private sector proponents to look for opportunities in public infrastructure investments, where the call on the Government’s balance sheet can be mitigated, new revenue streams can be captured, or greater private sector investment can be crowded-in, making the taxpayer’s dollar go further. In particular, the Agency will investigate where private sector investment can be enabled in marginal projects that face high upfront costs and risks but provide access to long revenue streams through their life. By seeking innovative approaches to funding and financing of infrastructure projects, and reducing its traditional reliance on grant funding, the Commonwealth will support the delivery of a larger number of infrastructure projects.
Impact of Commonwealth policies on cities
11.8
The Planning Institute of Australia (PIA) noted that ‘that the Federal Government has responsibility for policies that have implications on other tiers of government’. It stated:
The Federal Government is responsible for immigration policy which influences the rate of population growth experienced in settlements that then require land use planning infrastructure planning responses by the State/Territory and Local Governments. The Federal Government is also responsible for taxation (e.g. negative gearing) and foreign investment policy which have implications on the housing market. Taxation policy also has implications on transportation (e.g. subsidies that relate to private vehicle sales and petrol). Finally, the Federal Government contributes funding towards infrastructure that is required to accommodate growth however sometimes there is a disconnect between the Federal Government and State/Territory Government about what the priorities are. It is important that there is a clearer line of sight between the types of outcomes desired for Australia’s settlements and Federal policies such as immigration, foreign investment, taxation and infrastructure priorities.
11.9
The PIA recommended that the Australian Government ‘evaluate all public policies including, its taxation, investment and immigration policies to determine the spatial effects these have on how different cities take shape and perform’. It indicated that:
A national settlement strategy would provide the context for the Commonwealth Government to appreciate the unintended implications of national taxation, public policies, investment and immigration policy on the spatial structure and performance of Australia cities and regions.
11.10
One PIA member observed that the Commonwealth’s impact is ‘“spatially blind”’.
11.11
The Australian Local Government Association emphasised ‘the legitimate role the Commonwealth plays in our cities and regions through taxation, immigration, infrastructure investment, telecommunications, environmental regulations and energy policy, international trade, and increasingly through a range of international obligations’. It noted, too, that the Australian Government is ‘a large land owner, employer and property portfolio manager’.
11.12
The Queensland Government observed that ‘there are many areas of Australian Government responsibility that impact on city development and thus provide an opportunity for improved city sustainability’. These included, but were not limited to, ‘climate change, energy (through the market regulator), digital and telecommunications, major transport infrastructure, immigration, health, housing and education and training’.
11.13
Professor Jago Dodson, Director of the Centre for Urban Research at RMIT University, observed that:
Australia has recently signed up to some significant global agreements that have implications for urban development in the form of the United Nations sustainable development goals of which goal 11 commits national governments to strengthening national and regional development planning.
11.14
He noted that ‘Australia has signed the new urban agenda in 2016 which has a number of elements concerning the role of national governments in the management of urbanisation and urban development’, which included article 89, ‘which expects signatories to enhance the ability of governments to effectively implement national urban policies’. He stated:
It is clear that in a world of rapid urbanisation nation states certainly have a role in managing the development of the cities within their national borders and the UN Habitat program has been establishing a framework for understanding how national governments can develop urban policy and principles and objectives that they can work to under those policies.
Immigration
11.15
The pressures around immigration in particular were highlighted in the evidence presented to the Committee. Compass Housing stated:
There is no question that immigration produces significant benefits for our country. However, given the existing pressure on infrastructure, particularly in our capital cities, it is incumbent on policy makers to ensure the rate of intake does not exceed the capacity of the country to provide the level of infrastructure, including social infrastructure, necessary to avoid placing additional pressure on the living standards of the existing population, particularly those displaced from the housing market.
11.16
The City of Sydney noted that ‘the discussion of immigration is highly contentious’, but that ‘the lack of infrastructure and services planning to support increased population is coming increasingly into focus’. Engineers Australia highlighted the disconnect between infrastructure planning, land use and population policy, stating:
Australia’s national population policy is in effect its comparatively high immigration intake which is renewed each annual budget. The inadequacy of this approach was reflected in recommendation 2.2 in Infrastructure Australia’s national plan. Population policy is not simply about the overall size and rate of growth of the population, but also its distribution and how alternative distributions could be achieved. The Government’s reluctance to adopt Infrastructure Australia’s recommendation demonstrates a reluctance to seriously address the issue of population distribution.
11.17
Master Builders Australia urged a more liberal immigration intake, recommending:
Setting the permanent migration intake at between 200,000 and 240,000 per year, with a focus on skilled migration
Review the ‘highly skilled’ threshold within employer -nominated visa classes to reduce ongoing skills shortage in ‘middle and semi-skilled’ occupations and resulting project bottlenecks
The ‘457 visa’ program should remain uncapped and responsive to the nation’s skills needs with the migration program filled by people who have previously held a temporary visa in Australia. Labour market testing should also be removed.
11.18
Master Builders Australia argued:
A well-managed and -targeted immigration program is an important policy lever which brings a range of social and economic benefits to Australia. It adds to the supply of skilled labour, increases accumulated savings and contributes to domestic investment and expanded domestic consumption. Immigration also brings indirect benefits by increasing innovation and connectedness with the rest of the world, and by promoting a vibrant, cosmopolitan and outward-looking Australian culture that is better equipped to meet the challenges of the future.
11.19
Compass Housing noted that ‘the Productivity Commission has previously raised serious questions about the ability of the states and territories to provide sufficient infrastructure to service the current rate of population growth’—1.6% in the year to June 2017—which was ‘significantly above both the OECD average and Australia’s own long-term average’. Compass Housing observed that:
At an annual growth rate of 1.6%, Australia’s population will double by 2063. Maintaining existing living standards will necessarily require a doubling of existing infrastructure. Considering it took 230 years for Australia to produce the infrastructure it has in place right now, it seems optimistic to suggest we could double it in the next 45 years.
11.20
On the other hand, Sustainable Population Australia (SPA) observed that Australia’s population growth was high by world standards, driven by immigration, and disproportionately focused on the capital cities. It argued that ‘it is difficult to meet town planning objectives with this rate of population growth’, and that ‘this population growth is not inevitable’. SPA stated that ‘Australia could maintain a broadly stable population and maintain humanitarian obligations without any changes to the current birth rate or the humanitarian program’.
11.21
Financial-Architects.Asia challenged this proposition, suggesting that a focus on low immigration and population growth went against ‘Australia’s post-English settlement history, and our recent decades of experience of multi-culturalism’. It suggested that low immigration ‘also somewhat defies accepted economic theory and observations on the impact of migration from poorer countries to wealthier countries’. It argued:
World growth in population, and especially the growth of China and India (which will in coming decades overtake China in total numbers) means that we cannot, for too long, have low immigration. There were approx. 43 million babies born in just those two countries last year and each of them needs to create over 10 million jobs next year to meet their economic objectives. The pressures will build for us to share our land and resources, whether we can resist it for select periods, or not. Australia cannot be King Canute on immigration for very long at all, given the sheer weight of these numbers and their respective paces of modernisation and economic growth. As demographer Bernard Salt says we must have policies of ‘inclusivity’.
11.22
Looking more broadly, Urbis argued that ‘the absence of cities in federal policy-making to date is staggering’. It observed that ‘Australian cities are managed by complex interrelationships across all levels of government, with the Federal Government having massive influence through macro-policy in areas such as immigration, tax and infrastructure’. It noted that ‘direct Federal Government involvement in cities has been pursued in the past with some great results’, but that ‘unfortunately most initiatives have failed to endure changing political cycles’. Urbis argued that the role of the Australian Government is ‘about vision, leadership and influence’:
The Federal Government is ideally placed to promote overarching national perspectives focussed on addressing the bigger, longer term issues affecting all cities. It is about fostering collaborative actions across States and Territories, creating more unified commitment to addressing the biggest challenges. It’s time for them to step into the breach to foster cross-portfolio policy coordination, focussed on better place based outcomes. Implementation is left to state and local government, avoiding adding additional layers to already over regulated processes.
Leadership, leverage and coordination
11.23
There was a range of views expressed on what role the Australian Government should take in the development of cities, but there was a high level of agreement on the Commonwealth’s central role—leadership.
11.24
Mr Ben Rimmer, CEO of the City of Melbourne, observed that ‘what happens in the centre of cities is very important to the prosperity of the country and the economic growth of the country as a whole and is really the source of the next significant shift in productivity reform in Australia and, through productivity reform, employment growth and other issues that are important to social wellbeing’. Given this, he argued, ‘you very quickly form a view that the Commonwealth government must have a central role in thinking about the future of these issues and in thinking about the future of productivity reform in the centre of our cities’. He suggested that ‘if the Commonwealth government used the levers that it has to even greater effect our cities could become even more of a source of real and enduring competitive advantage for Australia’. He argued that this leadership role had a number of facets, including ‘planning, funding and governance, but most of all the role of the Commonwealth was ‘in aligning the interests of different levels of government, different stakeholders, using incentives and advocacy and the bully pulpit, effectively, to produce a shift in the national debate on some of these issues’. He gave the example of a national initiative to improve the strategic planning of Australia's largest cities through COAG in 2009:
That initiative was a great example of the Commonwealth using its authority to encourage state governments and, frankly, local governments to improve their performance on strategic planning for the benefit of the national productivity story.
11.25
Mr Rimmer highlighted a number of areas where Australian Government action could promote the development of cities. He noted that the Commonwealth had a role in relation to ‘priority infrastructure’, stating:
If getting people to and from the centre of Australian cities is so crucial to the productivity story and the employment story, then high capacity public transport into and out of the centre of our urban areas is incredibly important to our national economic story and, therefore, is an important part of the Commonwealth’s story.
11.26
He indicated that there was a role for the Commonwealth ‘in terms of funding solutions’, and in promoting ‘inclusive growth’. He stated:
You have been talking previously around housing affordability and even around homelessness. It is frequently forgotten that the Commonwealth government’s role in acute homelessness is incredibly significant through the operation of welfare policies, Centrelink’s operation and other related matters and, of course, in the city of Melbourne and the city of Sydney, famously in recent times, we see this in very practical terms because we end up with rough sleepers on our streets and a whole range of community perspectives and real challenges for the people involved. We see that there is obviously a role for local government in managing that; there is obviously a role for the state government in homelessness programs, but there are also very important interactions with the Commonwealth through Centrelink, welfare policies and housing affordability policy that need to be part of the debate about the Commonwealth’s role in cities.
11.27
Mr Rimmer saw a Commonwealth leadership role around ‘climate adaptation, mitigation, energy efficiency and so on’, and noted that the Commonwealth had an ‘incredibly important galvanising role’ in policy areas ‘where there is joint Commonwealth-state regulatory power’. He cited the Building Code of Australia, stating that ‘the Commonwealth’s role in that can be incredibly important in leading a position through the states that can then be adopted.
11.28
Mr Jonathan Cartledge, Chair of the Cities Task Group within ASBEC, regarded the National Cities Performance Framework as ‘a really valuable step forward in having federal government leadership in measuring the performance of our cities’. Mr Cartledge thought that the ‘the National Cities Performance Framework is developing an evidence base that will deliver similar to what State of Australian Cities did in the sense of providing a source of evidence to inform decisions around urban planning and development’. He indicated that ‘we need to continue to build on that so that we have this capability at a national level to inform decision making’. He also suggested that there is ‘an opportunity for federal leadership’ in terms of ‘interoperability and standards associated with data collection’, by providing guidelines to cities ‘as they roll out these sensors so that you get those points of comparison across cities and you don’t have 20 cities collecting 100 different datasets in totally different ways’.
11.29
Mr Brian Haratsis, Chairman of MacroPlan Dimasi, emphasised the importance of the Commonwealth taking a leading role in the development and deployment of information and technology. He stated:
Basic monitoring of urban and regional outcomes should be reinitiated … There is little data appreciation of the current situation, so it is difficult to specify the objectives of transitioning. What I would say to you is that sustainability is not just to do with environment; it is social, economic and environmental. If you were to map a pathway for sustainability then you would need to set objectives and understand where things are today … we don’t know whether we are getting good results, for example, on urban fringes. We just don’t know.
11.30
He suggested that there needs to be ‘participation and collaboration, because the future of the cities is now to be understood via technology, not just by looking at community’. The role of the Commonwealth ‘in helping that transition, I think, is crucial, because none of the states individually have got their head around this or will be getting their head around this in the short run’.
11.31
Mr Brendan Nelson, President of the Planning Institute of Australia, argued that ‘there are some nationally significant issues which cannot be dealt with simply by state or territory governments, or local government jurisdictions’, and that there was ‘an active role by the Commonwealth is required in that regard’. He noted that there ‘are a large range of environmental issues, but economic growth is significant and immigration is significant, and the impact that all of those decisions have in relation to our cities is very significant’, and suggested that ‘the powers and responsibilities conferred by the Constitution are perhaps not reflective of the current areas of responsibility that we should be focusing on at all levels of government’.
11.32
Professor Carolyn Whitzman, from the University of Melbourne, saw a greater role for the Commonwealth in promoting affordable housing. She stated that ‘the role of the Commonwealth government, as a direct investor as well as a bond guarantor and investment partner with other levels of government, the private sector and non-profits, is key’. She noted that:
When the nation-building economic stimulus plan was in full swing in 2010 social housing represented over 12 per cent of total housing starts as opposed to less than two per cent in 2014. Providing housing first for very low-income households represents a sustainable investment with, as recently calculated by research in our university, a 2.7 to 1 cost benefit ratio, and the Commonwealth government needs to set social and low-income build-to-rent markets and then invest accordingly.
11.33
She also recommended that ‘the federal government needs to shift taxation relief mechanisms such as negative gearing from individual household investors to help create that asset class of build-to-rent affordable housing at specified income targets’. She suggested that ‘one fairly simple way to improve financing for affordable rental housing is to classify social housing as essential infrastructure, as Infrastructure Victoria does but Infrastructure Australia does not’.
11.34
The representatives of GoGet Car Share, saw ‘a huge opportunity for the federal government to have a big impact on congestion through incentivising people to give up their vehicles and to use car share as an alternative’. They suggested options such as making carshare usage and membership fees tax-deductible, making carshare exempt from FBT or taking the GST off carshare. They also highlighted the opportunity for governments to use shared transport, noting that:
The state government of New South Wales has trialled replacing their existing fleet with a variety of shared transport modes. They recently announced that they expect to save $1 billion through this reduction in their fleet.
11.35
Mr Chris Johnson, Chief Executive Officer of Urban Taskforce Australia, identified a number of areas where he felt Commonwealth intervention was essential. He argued that the ‘the more the federal government can help push a metropolitan rail network across the urban areas of Australia, the better’. He thought, however, that ‘in doing that there should be a requirement that around all those railway stations of those metropolitan rail networks there is greater density’. He urged a closer examination of issues around air transport, including restrictions on building heights and aircraft noise. With regard to building heights he stated:
It seems, in our reading, that federal bureaucrats can be very restrictive of allowing heights. Yet when it is challenged—and evidence based—you can actually get much greater heights. We have the fairly ludicrous situation that in Melbourne you can get reasonably close to airports, 100 storeys, but in Sydney at Parramatta, only 60 storeys, even though it is far further away from an airport than the Melbourne example. And, if you look around the world, you can see airports quite close—New York, Shanghai Pudong—areas where the tension doesn't seem to exist to the same extent.
11.36
With regard to aircraft noise he stated:
There has been a questioning of the ANEF system, which is currently the agreed system for measuring noise around airports. The federal government has been trying to bring in another approach—N70, N60—different ways of measuring noise, which would suddenly, in our opinion, sterilise a lot more land for housing around airports yet no change at all in what is actually happening, just a different measurement technique. So we are concerned about that.
11.37
Mr Johnson also highlighted the Commonwealth’s role in advocating new urban forms, especially in the face of population pressures. He stated:
A lot of good work is happening by the federal government through Angus Taylor and others in promoting a shift towards more urban living and how we relate to airports and public transport et cetera. But I think there is a tension growing, certainly in Sydney, about this shift away from a suburban model and it is becoming threatening to a lot of people. I think it is being translated back to ‘Can we stop immigration?’ or ‘Can we slow down on broader issues like this?’. The federal government is clearly involved in immigration. So I think greater leadership on advocacy about the form of cities is needed from a federal government level.
11.38
Associate Professor Matthew Burke, Principal Research Fellow with the Cities Research institute at Griffith University, suggested that the Commonwealth had a clear role to play in the development of cities; while Mr Warren Rowe, Planner in Residence at the University of Queensland, believed that ‘the federal government has a very clear role in cities and I would certainly recommend that a national cities policy be one of the outcomes of this committee’s deliberations’. Professor Paul Burton, Director of the Cities Research Institute at Griffith University, observed that ‘there are constitutional arguments that get put up that say that it’s no role for the feds. I don't think they are particularly compelling arguments.’ He noted that the Commonwealth has in the past, on occasion, intervened in cities policy. He thought that, ‘by and large, although they have been brief, very good and interesting things have happened during those periods’. He thought that what was required most was consistency, stating:
The enemy of good practice is the fact that things come and go on a three- or four-year cycle and there is no certainty in the urban policy environment. That’s the most damaging feature, in my view.
11.39
Mr John Wynne, National Director of Planning at Urbis Pty Ltd, thought the principal instrument of Commonwealth policy was funding. He stated:
I would say that the primary role … is to align funding from the federal government to a better metropolitan planning, to ensure that there’s a clear mandate around focusing on distinct urban policy issues that are agreed upon across the country and to resource state government to do that work, with good funding in return for good work, and actually supporting it being done at that level. I think it’s going to be very difficult at a federal level to get down to the level of detail that is needed to research, interpret and then plan for metropolitan plans. I think the lever that the federal government has is money. Therefore, aligning that money with commitment of effort, commitment and quality of output.
Importance of long-term bipartisan vision
11.40
An important aspect of Commonwealth leadership in the planning space is providing a long-term bipartisan vision of the future of Australia’s cities and regions. The Australian Local Government Association (ALGA) stated that the ‘absence of an agreed national long-term strategy and bipartisan commitment to funding for our cities, towns and regions will cost Australia dearly’. It observed that lack of a coherent long-term plan will result ‘in a range of expensive inefficiencies and social dysfunction, that in turn will continue to place added pressures on public budgets required to fund and support transport networks, housing, critical infrastructure, health, community services and social cohesion and capital’. The ALGA argued that ‘addressing the twin pressures of global competition and growing inequality in Australian cities, towns and regions is important and the challenge needs Commonwealth leadership’.
11.41
Ms Marianne Richards, an executive member of the Town and Country Planning Association, observed that:
A bi-partisan commitment to planning and delivering better cities; to working collaboratively with the states and territories, and with industry, to prioritise and fund the infrastructure we need for jobs, growth and a better way of life is now more urgent than ever.
11.42
The Council of Capital City Lord Mayors cited the Productivity Commission’s report Performance Benchmarking of Australian Business Regulation: Planning, Zoning and Development Assessments (April 2011), which ‘identified the importance of bipartisan political support, cooperation and participation between state and local government as important factors for successful implementation of capital city strategic and spatial planning’.
Working with state and local governments to achieve long-term objectives
11.43
Peak business body, the Australian Chamber argued for ‘a more integrated, holistic and coordinated approach to the planning and development of our cities is required’. It believed that the Australian Government had ‘a very important role to play in the development and planning of our cities’, as ‘state and local government authorities alone’ had ‘neither the remit, the integrated holistic vision, nor the resources to achieve this’.
11.44
Ms Marianne Richards, representing the Town and Country Planning Association, highlighted ‘the need for the Commonwealth to support or facilitate some sort of collaboration between jurisdictions across all three tiers of government’. She preferred not to debate ‘whether there are too many tiers’ of government, stating: ‘We are where we are: there are three tiers, and they need to be talking to each other and coordinating, as well as non-government organisations and peak bodies’. She concluded that:
There are some nationally significant issues that really can’t be dealt with by any state or territory government or local government jurisdictions acting alone. Therefore, we need something coordinated. We actually need the Commonwealth's conversation, informing both those layers of government. There is a large number of environmental issues, and economic growth and immigration are both significant. And there is increased security, driven by terrorism.
11.45
The Planning Institute of Australia (PIA) observed that ‘the Federal Government has an opportunity to lead a process by which there is an agreement forged between Federal and State/Territory governments regarding the types of outcomes that are desired for Australia’s settlements and infrastructure funding priorities’. The PIA noted that its members had ‘identified the importance of the Council of Australian Governments (COAG) and Infrastructure Australia to drive better collaboration between the two levels of government’. It suggested that:
COAG and Infrastructure Australia could be utilised to provide more consistency across Australia where it is beneficial in areas such as planning regulation, infrastructure planning and infrastructure business case development which could lead to Federal funding being tied to strategic outcomes and transparency.
11.46
Mr Brendan Nelson, President of the PIA, expressed a desire ‘to see a national planning instrument’, stating:
I would love to see a single definition of a house in this country, and I hope, before my time as a planner is done, that we can have one definition of a house. I look at the model that operates with building in this country through the Australian Building Codes Board, who worked quite effectively to develop a National Construction Code, which gives greater clarity. It does allow for jurisdictional elements to be factored in. But we’re not talking about anything that’s so far removed from that in terms of coming together, facilitating it. It is probably not dissimilar to the ABCB to be fair. I think that at that higher level it would give greater clarity.
11.47
He noted that ‘when I’m a planner sitting down making recommendations at a state level I actually don’t know what the Commonwealth’s expectations are for me as a state planner’:
… should we be shouldering more of the load, or does the Commonwealth have a view around what it wants for the future of Australia in terms of settlement? Does it want to see more people settling in Adelaide where the infrastructure capacity can probably sustain a bit more growth and the economics of Adelaide would be probably very welcoming? Should we be looking at incentivising growth to go into those locations? I don’t have that.
11.48
He observed that it was ‘the same as leaving a local government to do the planning without state-level regional plans or district plans. Local councils by themselves can’t do it if they don’t understand the context within which they’re doing their planning.’
11.49
Professor Sue Holliday was ‘a great believer in collaborative planning rather than individual planning’. While aware that ‘there has always been the sort of tension between state and local and then the tension between commonwealth and state and local’, she thought that ‘it is something that definitely state and local should be working collaboratively on’. She saw the need for ‘a national overview of where we are going’, and that was a role for the Commonwealth. While not advocating direct land-use planning by the Commonwealth, she observed that ‘the Commonwealth has responsibility for the economy, for roads, for health, for immigration—for everything that impacts cities—and we should be working collaboratively together with the states and the territories in order to get that overview’.
Capacity building
11.50
The capacity of governments to develop and implement comprehensive, integrated planning regimes has been questioned in the evidence presented to the Committee. In particular, the concerns have been raised about the capabilities of local government, but the capabilities of the State and Federal governments have questioned too. Professor Peter Newton noted that local government was ‘in the front line in this urban change intensification, but their capacity to respond is not where it needs to be’. He referenced the vertical fiscal imbalance and the ‘lack of vertical integration between state and [local] governments’. He observed that ‘apart from your capital city municipalities and a small number of others, most really struggle to do significant strategic planning and to have methods of engaging with entire municipalities to convey ideas about where we think this municipality needs to change’. His own research term was active in promoting new ideas and building capacity at local government level, but ‘there is just not the resourcing to do that with all of the municipalities within a city. So, the question then is: is there a training program that needs to be attached to some of these projects that will allow you to roll that out in an effective way?’ then there was the question of the political reaction to urban renewal:
You always have a distribution of leaders, fast followers and those that lag. The challenge in all of these areas is to see if you can move up that curve. We have chosen to work with municipalities that kind of ‘get it’ in terms of this jump. It is an area that potentially could have something of a backlash within local government, because most councillors go to elections with words such as, ‘We will prevent overdevelopment and we will protect neighbourhood character.’ Those who like to slap down this intervention/research will say, ‘You’re attempting to provide development above the current level.’ If well designed, with renewable energy, water harvesting and all of the things that make life more liveable, if you can assemble a precinct you can begin to redirect the amount of space given over to community as distinct from cars.
11.51
Mr Allan Garcia, Chief Executive Officer of Infrastructure Tasmania, highlighted the disparity in resources between the larger and smaller State jurisdictions and the capability gaps that existed in the smaller States:
I suppose in a small jurisdiction, it’s a matter of the capacity to not only take that information but to do the analysis and do the work. While there’s a pointer at planning, I suppose it’s in the broader context of the skill base and the analytics and the capability to get all that right. You do need some scale to do that. Through my office we are moving towards an improved circumstance. This is not a plug for my area, but in general terms in Tasmania, the lack of those higher-level resources and integration probably confines us to doing things at a certain pace and level.
11.52
Ms Megan Motto, Chief Executive Officer of Consult Australia, highlighted capacity building within government as critical. She stated:
We absolutely need the capacity to be able to plan and design these cities. We have seen an unfortunate decline, for example, in people in stem areas who are able to become the engineers and planners and architects of the future and we need to reinvest in those skill sets. We need to reinvest in the training of those people, but we also need to reinvest in them being engaged in the process. For example, we used to have very informed government agencies that made some of these building and infrastructure and construction decisions. We now have seen a gutting of those agencies, as the private sector has now become the contingent workforce of the public sector in delivering public utility. What that means is that we have less informed clients who don’t, in fact, know what they’re trying to purchase. So we need to build capacity, both on the private sector delivery side but also on the client side, the government side, so that the government is an informed and model client as much as it purports to be a model litigant. We need to be making sure that we are building that capacity.
11.53
She also argued that ‘as technology exponentially changes the face of our cities, we need to build capacity in the way that we respond to those technological challenges’. She stated:
We need to understand and respond to those both from an implementation perspective—understanding what technologies to invest in and how to implement them in complex systems in the most useful ways—but, very importantly, from government’s perspective. We also need to understand how we might need to change regulatory systems so that we’re embracing new technologies and innovation and not being stuck in the ways of the past.
11.54
Several commentators highlighted the role of the Australian Government in increasing capabilities at the local level to support innovation. Mr Tim Williams, Chief Executive Officer of the Committee for Sydney stated:
I think one of the big roles for the federal government in the smart cities space is information sharing and best practice sharing. We have almost got to cut the gap by somebody stepping in and saying, ‘By the way, many of the things that you want to do have been done in Boston and Chicago and all we need to do is take a bit of that off the shelf’. I feel as though there is not enough sharing of best practice. Within Australia—and I am sure there are, by the way—I don’t know enough of which cities and which places are innovating. I would really like the federal cities and smart cities unit to do a bit more knowledge sharing so you lessen that knowledge gap. A few years ago I was working in Coffs Harbour with SMEs in terms of sharing knowledge about what the internet could do. I was very primitive in my own knowledge, really. I was struck by the fact that quite a lot of knowledge can go a long way. I think somebody should be providing the kind of approach of ‘here are the 20 interesting things going on out there’. It is simple and cheap and I think we should do it.
11.55
Cr Neil Meiklejohn, representing Southern Downs Regional Council, suggested that ‘more-targeted funding’ to local government ‘would be helpful’:
… because the difficulty is that the capacity in those smaller rural and regional communities, like the Southern Downs, is much more difficult, where we are funding the infrastructure and economic opportunities from a much smaller rate base. That is a significant issue.
11.56
Professor Jago Dodson, Director of the Centre for Urban Research at RMIT University, believed the Australian Government had ‘a role in enabling and improving the capacity of state and local governments to undertake city planning through to governmental collaboration’. He also highlighted the ‘vertical fiscal imbalance, which is endemic to Australia’s constitutional relationships and arrangements in the sense that the states have at least formal constitutional responsibility for spatial planning, urban planning within their roles, yet they have relatively weak taxation powers compared to the federal government’. He also noted the Australian Government’s ‘significant influence on urban development through its various instruments and responsibilities, particularly immigration, for example’. He highlighted the fact that there ‘is necessarily a tension between the responsibilities of the state governments and their capacity to meet those responsibilities certainly when it comes to fiscal issues’. Professor Dodson also advocated ‘improved research capacity building within Australia’. He noted that ‘we do not currently have any systematic nationally organised mechanism for drawing on the capability, knowledge and resources of our universities. We have a substantial capability within the universities, but that is not harnessed to respond to federal government priorities in a systematic way at the moment.’
11.57
However, Professor Dodson also highlighted the need ‘to develop institutional capacity, to develop capability within the federal government that is able to lead a national agenda for city planning’. He stated:
Under the previous Labor government some capacity was developed. That was downgraded—if that is the way to put it—under the first term of the present government. When Prime Minister Turnbull decided to elevate city planning and cities policy to a higher level within his priorities there was a big scramble within the federal public service to figure out how to develop capacity in a very short time frame to respond to that new agenda setting, and I think we are still probably not at the point where we have systematic, coherent policy development across the public service, so that is something that the federal government needs to think through.
11.58
Professor Dodson urged the development of ‘a national agenda setting program within the federal government’; and while supportive of the Smart Cities policy, thought it ‘more of a program than a systematic national policy’. He thought it ‘tends to target specific interventions rather than having a systemic view of the way our cities are developing’ and was ‘very much focused on productivity and digital transformation’. He argued for ‘cross-portfolio coordination to help develop that national planning agenda’. He suggested that this mirrors ‘challenges in the housing policy portfolio’:
I have recently produced a report for the Australian Housing and Urban Research Institute that argues that national housing stock is worth $6 trillion, yet we do not have a dedicated identified policy development capacity within our federal government to specifically focus on how we manage that huge national asset. The responsibility for housing across all the different parts of the housing system is split between Treasury and the Department of Human Services. Plus, there are other parts of housing policy that are influenced within the ATO, the Reserve Bank and so on through their responsibilities.
11.59
Current capacity building initiatives being undertaken by the Australian Government include the Smart Cities and Suburbs Program and Future Ready. The Smart Cities and Suburbs Program involves competitive grants designed to ‘unlock public and private sector co-investment and collaboration in smart technology projects that improve the liveability, productivity and sustainability of Australian cities, suburbs and towns’. The grants, ranging between $100 000 and $5 million, are designed to ‘fund up to 50 per cent of project costs, supporting small to large scale initiatives delivered in metropolitan and regional urban centres’. Future Ready is designed to complement the program, ‘delivering structured smart technology capability development opportunities nationally’. Its purpose is to ‘help local government leaders and their communities prepare for smart city transformations through co-learning and collaboration with the public, private and civil sectors’. The Department of the Prime Minister and Cabinet noted that ‘almost 550 participants from across the country had engaged in Future Ready activities’ by the end of June 2017, with events due to run until September 2017.
11.60
Mr Adam Beck, Executive Director of the Smart Cities Council Australia New Zealand, was directly involved in the delivery of Future Ready. He told the Committee:
I had the opportunity to facilitate a one-hour webinar as part of that Future Ready program. We had more than 120 people on the webinar when we were discussing the Internet of Things. So there are some very basic, tangible, federally-led, capacity-building programs where can help unlock innovation.
Another example, very tangible: last Friday, I was in Perth and I ran a half-day masterclass with 29 local authorities in Western Australia. I spent four hours with them and they left the room fundamentally understanding what the Smart Cities agenda and idea is and how it can help their cities. They have three simple steps to move forward and build a road map or a pathway. So in four hours we were able to fundamentally build the capacity of almost a third of local governments in Western Australia. So there are some very tangible, easy and very cheap ways in which we can build capacity in this area.
National direction
11.61
The need for new governance arrangement s was raised by a number of stakeholders. Professor Billie Giles-Corti, from RMIT, argued for a ‘transformation in the governance of cities’, suggesting coordination through COAG of evidence based policy. The Inner Melbourne Planning Alliance urged the creation of:
A COAG Cities & Urban Development Ministerial Council involving representation by state and territory treasurers and planning ministers, and local government.
A Cities & Urban Development NGO Roundtable to ensure business and community groups have a direct voice to government on issues involving our cities.
A Commonwealth Department of Cities & Urban Development tasked with developing and co-ordinating policy which involves urban outcomes.
11.62
The Planning Institute of Australia (PIA) recommended the appointment of ‘a “National Chief Planning Officer” to be administratively placed within the Prime Minister’s portfolio—whose roles would include coordination of the policy evaluation and national settlement strategy preparation’. This would ‘strengthen the coordination and alignment of Cities policy issues’. Mr Brendan Nelson, President of the PIA, argued for the elevation of the cities minister to cabinet, for ministerial responsibility for cities to reside within the Department of the Prime Minister and Cabinet, and for the national chief planner to ‘report to this ministerial portfolio office’ and provide ‘very strong advice in relation to strategic planning and really focus in on some of the issues that we’ve raised around the importance of strategic planning for the future’. Mr Nelson saw the national chief planner supporting COAG’s Standing Council on Transport and Infrastructure (SCOTI) ‘making sure that that group was effective and that we weren’t reinventing the wheel in every state and territory’. He also saw the role having ‘responsibility in putting the strategic lens over investment decisions by the Commonwealth, particularly through large-scale infrastructure projects, and bring a level of realism to it beyond just the BCR and what the strategic imperative of this investment to the future of the country is’. He emphasised, however, that this was ‘not about taking over planning functions or powers from each of the states’:
They have very clear and delineated powers in relation to planning. But what I would say is that if anyone has sat down and had a look at all of the strategic planning that has been done around the country none of it matches up. I can’t see a place where the strategic plans actually join up at jurisdictional boundaries. I can’t see where infrastructure decisions are being aligned beyond jurisdictional boundaries. When I go to the wish list of IA, and see all of those projects in there, I don’t see enough of a strategic lens to say, ‘This is something that’s going to be in the best interests of Australia long term.’
11.63
Ms Pru Sanderson, Regional City Executive for Roads Australia, advocated for the appointment of ‘a minister for cities and urban development’, and ‘a chief city strategist’, because urban planning was ‘about long-term strategy’. ‘Long term,’ she stated, ‘ it’s about strategic mobility, climate, where population goes, autonomous vehicles, capability in urban regeneration—we’re babes in the wood on that: we have to rework our cities and we don’t know how to do that—and the smart cities program.’
11.64
Professor Jago Dodson, Director of the Centre for Urban Research at RMIT University, argued that the ‘importance of cities to our national productivity, to the national economy, to our society and to our environment is immense’, and
… of a scale now that we need dedicated portfolio capability and an advocate within ideally the cabinet who can represent the interests and questions around cities and work with colleagues in the government to both push an agenda within that specific portfolio frame but also to be a coordinator who pulls in the other portfolios across government, including areas like health, education and so on, to ensure that the federal government is getting the best value from the various forms of investment that it makes through other areas of policy.
11.65
Professor Dodson also noted that ‘we do not have an agency that is dedicated to understanding the housing system. We had a National Housing Supply Council, but that was closed down in 2013.’
11.66
Professor Carolyn Whitzman argued for the appointment of a minister for housing, stating:
It makes sense, from a governance perspective, to have a minister for housing to bring together the various arms of housing which have to do with not just social housing, which would be considered a social service, but also looking into housing as a major ground for innovation and for activities.
11.67
Mr Greg Budworth, Group Managing Director of Compass Housing Services, agreed, citing the example of Canada:
They have the same system: federated provinces and limited powers of the national government. They had no power and colleagues like us would say that we’re in the same boat: the federal government says it doesn't have the power and there is no minister of housing et cetera. Justin Trudeau got elected and was swept into power on a popular vote. He started a national conversation about affordable housing and the housing system. Six or nine months later that national conversation has turned into a housing minister, a housing department and a national plan for housing. I think that’s political will and political leadership.
11.68
The Housing Industry Association also recommended the appointment of ‘Minister for Housing within Cabinet, with specific responsibility for promoting investment in housing delivery, land supply and improving housing affordability’.
11.69
Professor Stuart White, Director of the Institute for Sustainable Futures at UTS, thought it ‘would be great to have that as the chief planner’, but suggested that the role ‘might be broader than planning, at least the way that that has traditionally been interpreted’. He suggested a national sustainability commissioner:
Planning is often interpreted by people who see it as having a much broader role—obviously it encompasses sustainability. But my sense would be that there’s a risk that it could have more of a narrower land-use planning focus, when in fact it really does need to encompass more. So perhaps a national sustainability commissioner, in the sense that some states have experimented at various times with that model and in the sense that the Commonwealth has experimented at various times with, for example, a commission for the future, but perhaps rather stronger and with more longevity.
11.70
Professor White supported creating ‘a national role which can be above the fray and, therefore, in principle, reporting to parliament … one which can look at these issues across departments and across disciplines’.
11.71
Professor Barbara Norman advocated the creation of a Sustainable Development Commission, ‘that could provide independent advice to the Parliament, take a longer term view on the needs for sustainable urban growth and provide “an arms-length” forum for discussion by all there levels of government and non-government organization on a more sustainable urban and regional future’. Professor Norman saw the commission having an ongoing role in the collection, analysis and dissemination of data around settlement planning and development. She also suggested that ‘it could be a very useful independent space for multiple parties with different interests to come together around the table to discuss issues of the future’; and that it could ‘provide good strategic advice to the parliament based on the data and those conversations for the principles and outcomes of an Australian sustainable development strategy 2030-2050’. Dr Alice Howe, Executive Manager, External Engagement, with Lake Macquarie City Council, agreed with Professor Norman; as did Mr Anthony Farrell, Director, City Strategy, with Lake Macquarie City Council, who stated:
I think the commission approach is much more sensible. It allows a variety of perspectives to be brought to the table. It facilitates potential links back into the key stakeholders, whether they be governments or industry sectors or whatever. And it is more likely to deliver a sustainable solution. I think a national chief planner or chief strategist is simply going to be either somebody who survives on the cult of personality or somebody who becomes the first one out the door every time there's a change of government.
11.72
Mr Chris Johnson, Chief Executive Officer of Urban Taskforce Australia, thought the idea of a national chief planner ‘an interesting concept’. As a former Government Architect in NSW, he saw merit in having an ‘advocate with a knowledge-sharing role’, but saw a risk in it not having any real power or substance. Mr Brendan Lyon, Chief Executive Officer of Infrastructure Partnerships Australia, was concerned that within the context of federation, planning was a state, territory and local government role. He suggested that ‘the Commonwealth’s role is not so much about planning cities … and I think that having a federal bureaucrat called a chief planner will only confuse those accountabilities more’. He suggested focussing the Commonwealth’s role in cities on the Productivity Commission:
It is a respected agency; it is there to take work on referral from the Commonwealth. I would ask it to come back with actual measures. What are the first principles of what the Commonwealth wants out of cities? You want them to be efficient, you want them to be able to move skills and goods, you want them to be able to play their proper role in contributing to the national economy, which is where your own revenue base comes from. So I think clarity around roles is really important. I think that the Commonwealth should specify what it needs from cities, which is congestion down, productivity up—these sorts of things—and should design individual measures that can be applied right across that are able to do it. I understand the thrust of what you’re saying. I think the more national focus and coordination on the issues that we get, the better. I think if the Commonwealth becomes interventionist in trying to tell state government planning departments where to put hospitals, where to put rail lines, where to put other things, then we’re not playing to the strengths and we're not recognising both the expertise and the practical ownership issues of infrastructure at that level.
Committee conclusions
11.73
The evidence presented to the Committee indicates that Australian Government policies already have a significant impact on the development of cities—in effect, that the Australian Government is already operating in the cities’ space whether it likes it or not. Whether it is in immigration, taxation, infrastructure, telecommunications and digital technology, or a host of other policy areas, the Commonwealth already plays a critical role in the development of cities. The Committee agrees with the view that this should be more explicitly addressed in the evaluation of Australian Government policy. In addition, the Australian Government is a signatory to important international initiatives around the development of cities—in particular the United Nation’s Sustainable Development Goals. This needs to be explicitly acknowledged and acted upon in the development of all cities related policy.
11.74
The Committee recommends that the Australian Government conduct a review of the spatial impact (distribution of population, housing, employment, industry and services) of its policies in areas of federal responsibility.
11.75
The Committee is particularly aware of the link between immigration, population growth and the development of cities. Whether immigration should be at current, higher or lower levels is not a debate the Committee will join. What is clear, however, is that infrastructure provision and urban development needs to be in line with population growth—that there must be a direct link between immigration policy and cities policy. If the two are not in alignment, any investment in urban infrastructure, broadly speaking, will simply be overwhelmed by population growth, leaving planning and infrastructure spending in a permanent state of catch-up. Infrastructure planning should align with the national plan of settlement.
11.76
The Committee recommends that the Australian Government ensure that urban and regional infrastructure is developed giving consideration to potential settlement patterns.
11.77
The Australian Government also has an important role in the development of cities by coordinating policy between different jurisdictions and tiers of government, and providing incentives for the implementation of agreed policy. The Committee has already made a number of recommendations for policy action in areas such as urban sustainability (Chapter 5); urban connectivity (Chapter 6); sustainable buildings (Chapter 7); housing (Chapter 8); digital development (Chapter 9); and the pursuit of global best practice (Chapter 10). In addition, the Committee has made a series of recommendations about the pursuit of a more visionary planning policy through the development of a national plan of settlement and establish a regime of integrated, holistic master planning of communities at all levels, from local to national (Chapter 2); the integrated planning of cities (Chapter 3); and the integrated planning of regions including the development of faster connectivity at a national and regional level (Chapter 4). These are all areas where Australian Government leadership can and should be applied.
11.78
As already discussed in Chapter 4, the planning of cities and regions cannot be separated. They have one future and must be considered as a whole. Any governance regime should ensure that they have a shared future within a shared vision of national development. It is important, therefore, that they be drawn together within a single planning and development regime. The Committee believes that the development of cities and regions requires a sustained long-term involvement by the Commonwealth in planning policy. The development of cities and regions also requires a long-term bipartisan vision, one encapsulated in a national plan of settlement. There must be collaboration between and within different levels of government. There must be the development and coordination of resources to ensure that each level of government has, or has access to, the necessary level of expertise to play its part in the planning and development of our cities and regions.
11.79
To achieve this, the Committee proposes a governance framework that brings together a range of responsibilities to create a sustained, coordinated and holistic outcome. The Committee recommends the creation of a Minister for Cities and National Settlement, with a place in Cabinet, to coordinate cities policy within government and have oversight of the development of the national plan of settlement. The Committee further recommends the creation of the statutory Office of a National Chief Planner, whose role would be to provide independent expert advice on urban and regional planning and development. This office would incorporate Infrastructure Australia and the Infrastructure and Project Financing Agency. The Committee proposes the creation of a COAG Cities & Regional Development Ministerial Council to provide coordination of policy related to the development of cities and regional development and input into the national plan of settlement. The final element of the governance framework is a Cities & Regional Development NGO Roundtable to ensure business and community groups have a direct voice to government on issues involving our cities and regions, including input into the national plan of settlement.
11.80
Within this context, current policies under the Smart Cities Plan should be continued, but within the context of the development of a comprehensive national plan of settlement.
11.81
The Committee recommends that the Australian Government, in pursuit of a sustained, coordinated, holistic vision for the development of Australia’s cities and regions, create:
A Minister for Cities and National Settlement with a place in Cabinet, with responsibility, amongst other things, for the oversight of a national plan of settlement and housing;
The statutory Office of a National Chief Planner, incorporating Infrastructure Australia and the Infrastructure and Project Financing Agency, to provide independent expert advice on urban and regional planning and development;
A COAG Cities & Regional Development Ministerial Council involving representation by state and territory treasurers, housing ministers and planning ministers, and local government; and
A Cities & Regional Development NGO Roundtable to ensure business and community groups have a direct voice to government on issues involving our cities and regions.