Future Cities—Planning for our growing population

Introduction

Good morning ladies and gentlemen. It's a great pleasure to have you all here to launch our latest Reform Series paper, Future Cities: planning for our growing population.

I would like to extend my thanks to the CEO of the Committee for Melbourne Martine Letts and the Acting CEO of the Committee for Sydney Eamon Waterford for partnering with us on this event.

I would also like to welcome our distinguished guests, the Hon. Paul Fletcher MP Minister for Urban Infrastructure and Cities, Infrastructure Victoria CEO Michel Masson and Greater Sydney Commission CEO Sarah Hill.

I'm looking forward to hearing the Minister's speech and Michel's, Eamon's, Martine's and Sarah's contributions on the panel later this morning.

I'd also like to take this opportunity to thank the contribution of the Victorian and New South Wales Governments for granting access to their state transport models that allowed us to model different growth scenarios. This report would not have been possible without their support.

There is much to celebrate about Australia this morning.

Last year marked 26 years of uninterrupted economic growth—the longest run of growth in the developed world.

Our cities frequently rank among the most liveable in the world, with this city, Melbourne, retaining the number one slot.

And on our doorstep, we have a booming urbanised middle class in Asia—a new class of consumer due to eclipse that of Europe and North American—ready to buy Australia's high-quality exports.

These successes and future prospects should, rightly, be celebrated, but they should not be taken for granted.

It is easy to imagine them extinguished if we fail to tackle what is a watershed moment facing our largest cities.

Australia's population growth is now one of the fastest in the OECD and easily outstrips the UK, Canada and the United States.

In the next 30 years, Australia will be home to 36 million people.

This rate of growth is equivalent to adding a new city, roughly the size of Canberra, each year for the next 30 years.

We know the vast majority of this growth, about 75%, will be centred in our largest cities—Sydney, Melbourne, Brisbane and Perth.

The speed and magnitude of the coming change means we now need a smarter and far more sophisticated approach to the way we plan our cities. And it presents everyday Australians, politicians and planners with some complex and hard choices.

Do we choose a future where we live on a quarter-acre block but commute hours to work? Should we embrace high-quality high-density living close to public transport and other amenities, or decentralise our growth centres and locate jobs closer to where people live?

These are some of the versions of the future that Infrastructure Australia has explored as part of our Future Cities report.

The paper models three 30-year growth scenarios—low, medium, and high-density versions of the future—for Melbourne and Sydney and assesses their performance across a range of indicators.

In each version of the future, we looked at the performance of the transport network, access to jobs, emissions from cars, access to and demand for schools and hospitals, and access to and demand for public parks and gardens.

Planning a modern global city

Each version of the future has its costs and benefits. The type of city we choose to create will have a dramatic impact on our journey to work, congestion on our roads, cost of housing and access to public transport, schools, hospitals and our public parks in the future.

The truth is we cannot have it all. It is unrealistic to expect that the family living on the quarter-acre block on the outer suburbs of Melbourne will have a metro service on their doorstep, but it is also unrealistic to think that we can have a big backyard living in the centre of the city.

This makes for some difficult decisions, with inevitable compromises. However, indecision is not an option, and neither is business as usual.

If we fail to anticipate and respond to this growth, the likely results will be declining economic productivity, increasing environmental pressures and a marked reduction in our quality of life.

Modern global cities have not simply emerged as grand centres of commerce, culture and industry through piecemeal planning.

They are the result of deep and careful thinking, of consultation and collaboration.

Our scenario analysis shows that well-planned cities, where the location of jobs, homes and their supporting infrastructure networks are coordinated to maximise accessibility and liveability, will deliver the best outcomes for Australian communities.

Making this a reality will not be easy. There is a tendency to resist hard choices and change, and a natural reaction to close the doors on growth.

But rejecting growth is not an option. If we reject growth and development, we are rejecting the greatest economic opportunity that Australia has faced in a generation.

Indeed, Australia's future prosperity is intrinsically linked to the successful development of our largest cities

Mining booms will come and go, but Melbourne and Sydney will remain the powerhouses of our national economy—contributing over 60% to our Gross Domestic Product.

If we want to continue to compete with our counterparts in Asia and Europe then, we need to be far smarter about how  we grow these productive centres and stop having straw man debates about how much  we grow.

Growth alone though is not the only challenge faced by Australia's cities.

Shifts in our aging population, rapid technological transformation, the nature and location of work, and the impacts of climate change cannot be ignored in the broader discussion about population growth.

If want to create a vibrant, diverse and prosperous society for the benefit of all Australians, it's imperative that we manage these fundamental shifts to the operation and structure of our largest cities.

Actions for State governments

What do we need to do then?

The Future Cities paper we are launching today outlines a comprehensive suite of recommendations for all levels of government.

Let me first turn to the states and territories. While state and territory governments are doing a lot of good work in planning their cities, more needs to be done:

  1. Australian governments need to increase investment in timetable-free mass passenger transport to reduce congestion and increase access between where people live and where people work.

    Melbourne metro and Sydney metro are great examples of this, but we need more investment in metro services to really make our cities thrive.

  2. We also need a greater focus on well-planned employment centres.

    Well-planned employment centres connected by public transport will enhance the economic performance of our cities and allow every Australian to reap the benefits of this growth.

    State and territory governments should take a more active role in developing employment centres by making better use of infrastructure investment, business incentives and government land.

  3. As our cities grow, the public realm will also play an increasingly important role in maintaining liveability.

    State and territory governments should prioritise investment in new parks, gardens and civic spaces, and make better use of existing open spaces to maintain liveability for our local communities.

  4. Finally, our cities need metropolitan level governance.

    This might take a different shape for each city, but it should prioritise coordinating how we grow, while giving the community a voice in the process.

Actions for federal government

We also need more active leadership from the Australian Government.

If we accept the proposition that our cities are a national priority—and we should—we need the Federal Government to prepare our cities for the historic opportunity in front of us.

The Australian Government is right to think that investment shouldn't just come in the form of give and forget grants.

But if the Government is serious about squeezing every drop of value from our investments, then it should introduce more structure and accountability to its grants by tying funding for our cities to national performance objectives.

That is why we are recommending that the Australian Government establish a consistent framework of incentives to drive the delivery of national benefits within our cities at the project, place and reform level.

The new framework could include a hierarchy of three incentive types:

  • National Partnership and Project Agreements, which make project funding contingent on meeting specified outcomes across the project lifecycle and demonstrated economic benefit.
  • City Deals which should be evolved apply a series of locally and nationally informed objectives to a city or part of a city, and make infrastructure payments for the area contingent on meeting those objectives, and
  • Infrastructure Reform Incentives, which would provide additional infrastructure funding above existing allocation in return for the delivery of policy and regulatory reform focused on improving the productivity, liveability and affordability of Australian cities.

To be successful, the design and implementation of these incentives would need to be informed by a well-evidenced national investment and reform agenda for Australian cities.

National population plan

One of the other levers the Australian Government has on hand to influence population growth is the establishment of a whole-of government population plan.

Many of the anxieties brought about by rapid population growth could be solved by identifying the best population pathway over the next 30 years.

A nationally focused plan of this kind would create a broader economic vision for growth and allow state governments to better plan for the delivery of infrastructure, housing, education.

It would focus on how we grow, not how much we grow, and it would allow us to plan beyond political and budgetary cycles.

We can't just expect to force these decisions onto the community. The impact of our choices today are multi-generational in nature.

That is why it is incumbent on political leaders, industry and the business community right across the country to talk to the Australian public about the relative trade-offs of different versions of the future, and the potential pathways open to governments to manage what are inevitable changes to the shape and form of our largest cities.

Conclusion

To ensure our cities remain the engines of our prosperity in the face of change, it is not enough to rethink how we plan and fund them.

We need to evolve the way we engage our communities and co-design our cities for all who live in them. We often lose sight of the fact that our cities are for our communities, not for our planners or engineers, or even our politicians.

I hope that the release of the Future Cities Paper today provokes a discussion and acknowledgment of this fact, and goes some way to helping us plan for a future in which we can all benefit and prosper.

Thank you very much.