Speech
Council of Capital City Lord Mayors
Towards a national urban policy summit.
City Strategic Planning
27 May 2010
Mr Terry Moran AO
Secretary, Department of the Prime Minister and Cabinet
Introduction
I am happy to be here. The Council of Capital City Lord Mayors is an important partner in the planning and development of our capital cities and I thank you for the invitation to speak on strategic planning of our cities.
I am also pleased to see the major cities of Newcastle, Wollongong, Geelong and the Gold Coast represented here today.
Thank you to Stephen Kennedy for his comments on housing, which is an important element of any national approach to urban planning. I will touch very briefly on this later in my speech.
This event is also timely for me as I am travelling to Shanghai on Tuesday for the IBM Smarter Cities Conference. This will be a great opportunity to hear from mayors, local governments and businesses on how they are approaching these issues internationally.
Cities have been the dominant form of social organisation in Australia since Federation - and arguably before federation - and we are all here today because we recognise the centrality of urban policy to our national well being.
There are many benefits to be gained from effective city strategic planning.
The concentration of population and wealth in cities facilitates the emergence of cultural and educational institutions and improves the efficiency of government services.
As our capital cities produce two thirds of our national income - and are home to a similar share of our population - the health of our cities is central to the prospects for the Australian economy.
Cities provide essential services for high value adding businesses and industries. They are major producers and consumers of essential goods and services, including energy, water, health and education.
More than 80 per cent of international passenger movements take place through Sydney, Melbourne or Brisbane airports and our capital cities often hold the corporate headquarters of regionally-based companies. Cities are our gateways to the global economy.
Cities are crucial for increasing access to new ideas and innovation.
The 19th century economist Alfred Marshall recognised this when he declared that for concentrated locales “the mysteries of trade become no mystery but are, as it were, in the air”.
This observation has driven much thinking on the importance of cities as clusters of innovation and drivers of economic growth and productivity.
Cities connect people to jobs and businesses to markets. More than two-thirds of new jobs are created in Australia’s capital cities. This is a critical driver of our cities’ contribution to Australia’s productivity.
Better connected cities improve people’s access to education and work opportunities. Through educational opportunity and providing the climate for the growth of innovation hubs, well connected cities help build the nation’s human capital.
There is no question that cities are important for the national wellbeing. To improve on the nation’s wellbeing, we need to improve the productivity of cities.
Challenges Facing Australian Cities
The Major Cities Unit’s State of Australian Cities report showed that Australian cities perform well in international comparisons on most measures, including political stability, safety and environment.
Yet, our cities also face significant future challenges.
According to the 2010 Intergenerational Report, we are projected to have a population of around 36 million by 2050. As our population grows, much more housing must be built, including in the capital cities.
Sydney and Melbourne are projected to grow in size to around 7 million people each by 2050, Brisbane is projected to grow to around 4 million people and Perth is projected to grow to nearly 3½ million people by 2050.
Congestion is already a major issue. But urban traffic is forecast to grow by 37 per cent between 2005 and 2020. The avoidable costs of congestion in capital cities are forecast by some to double over the decade to $20 billion in 2020.
Sustainability of resource use will be a continuing issue. For example, we have seen in recent times water restrictions introduced during drought. We must also ensure our cities support energy efficient practices.
Our city’s ports and airports are important connectors, nationally and globally. They face future capacity constraints, inefficient connections to other forms of transport and challenges in integrating with the surrounding urban environment.
Economic growth, increasing trade and a growing and ageing population will test our infrastructure capacity, our planning systems, our services and our urban environments.
Finally, the way we plan transport, services and housing has a dramatic impact on social inclusion and the everyday experiences of people – particularly those in the lower socio-economic brackets.
These are all real challenges facing governments of all levels; there is an undeniable need to provide integrated and strategic planning for future needs.
Improving the productivity of our cities also represents a significant opportunity. Cities, as a rule, have higher levels of productivity than the rest of a nation – although the extent of this depends on the overall structure of economic activity in the nation, and the performance of individual firms. In Australia, there is currently no great difference between the levels of productivity within our cities and without.
This suggests that there is room for improvement in the contribution of our cities to national productivity, which could be achieved through the right investments in the drivers of productivity.
Working together and with National Leadership
The Commonwealth Government has a vital interest in ensuring that our major cities are well designed to face strategic challenges and has significantly increased the level of its investment in cities in recent times.
The challenges of rapid population growth, an ageing population and demographic change, as laid out in the Intergenerational Report, underscore the need for national leadership in planning the future of our cities.
Leadership does not mean taking over state responsibilities for land planning or having a direct role in the day-to-day decisions of state and local governments. It means providing national coordination and support, and some sense of strategic direction.
This culminated in work by the Commonwealth – in partnership with states, territories and local governments - to build a new national approach to preparing our cities for the challenges of the future – leading to the COAG national cities agenda which I will focus the rest of my comments on today.
COAG National Cities Agenda
Recognising the challenges facing our cities, COAG agreed in December 2009 that all states and territories will have in place, by 1 January 2012, best-practice long term capital city strategic planning systems that meet agreed national criteria (see Attachment A).
A successful strategic planning system will include long-term city strategic plans that are oriented to meet future challenges.
Underneath these long term plans will be consistent, near term project pipelines and mid term infrastructure and land-use plans.
Infrastructure, transport and land-use plans will all be well coordinated. We will no longer be in the situation where transport projects do not support the city strategic plan and vice versa.
Importantly, planning will also be coordinated between all three levels of government.
The strategic plans will also be publicly available and provide for effective implementation arrangements and supporting mechanisms.
These plans will, for the first time, clearly identify priorities for future investment and policy effort by governments.
They will secure better outcomes from investments of all governments and they will strengthen public confidence in planning systems.
To judge whether planning systems are consistent with the national criteria, COAG has asked the COAG Reform Council or CRC to independently review the planning systems.
To assist the CRC in this work a small expert advisory panel is being established and I expect an announcement will be made soon about the membership of the panel.
In all of this, there are four matters of particular significance that I wish to emphasise from a Commonwealth perspective.
Firstly, Commonwealth investments will become conditional on city strategic plans meeting the national criteria.
We have moved beyond the time when the Commonwealth can be called on to provide significant investments in infrastructure, but find that the infrastructure proposed is not consistent with the priorities identified by the city’s planning system.
The Commonwealth is unwilling to support investments that do not connect to effective long-term plans.
Secondly, the focus of the new arrangements is on integration – across different levels of Government, across different Government departments and agencies, and across different topic areas and disciplinary perspectives.
Urban designers need to be talking to the transport planners, who need to be talking to the housing industry. We have been too fragmented on this issue for too long.
At the Commonwealth level this will require coordination between different portfolios to achieve integrated outcomes on cities.
The Prime Minister has asked Minister Albanese, who we will be hearing from next, to coordinate the effort between the many Commonwealth Ministers who have a role in our cities – in housing, in health and education services, in community development and social services and in the management of Commonwealth lands and in funding transport links and our ports and airports.
Thirdly, the COAG national criteria have a strong focus on the messy, difficult and contested business of implementation.
The criteria and the review process COAG has agreed are designed to take those many good looking and glossy strategic plans off shelves in each of our capital cities.
The agreement is designed to make sure that the infrastructure we build, the housing sites we develop and the services we provide, next year and over the next few decades, all lead to the successful implementation of strategic urban plans which meet the big challenges our cities face, the challenges of a growing and ageing population, of climate change and of an interlinked and competitive world.
Finally, and critically for this audience, the new COAG criteria recognise the importance of local governments, and of the leadership provided by the Council of Capital City Lord Mayors in particular. Indeed the Council of Capital City Lord Mayors played an important role in the lead up to the COAG decision, providing key information and support.
Across a wide range of initiatives the Commonwealth government is strengthening its engagement with local government – for example, through the establishment of the Australian Council of Local Government - and through the roll-out of community infrastructure funding.
This initiative is no different – capital city strategic planning will only work well if there is an effective partnership, with trust and respect, between all three levels of Government involved in our major cities.
Infrastructure Planning
I would like to briefly discuss a couple of areas in a little more detail. The first is infrastructure planning.
The national criteria are aimed at ensuring that city planning systems will consider infrastructure planning issues more broadly, including by taking into account not only city infrastructure, but also the networks between capital cities and major regional centres, and other important domestic and international connections.
I am sure that you are all aware of the stories regarding the failure to reserve adequate land to support future transport corridors.
Accordingly, the criteria will require that planning systems provide for nationally-significant economic infrastructure, whether this is in new or upgraded facilities, and cover:
- transport corridors,
- international gateways,
- intermodal connections, and
- major communications and utilities infrastructure.
Infrastructure is an important element of the Government’s productivity agenda and this has clear links with the COAG cities initiative. The Government is investing $37 billion in road, rail and port infrastructure through the Nation Building Program.
This includes an investment of $4.6 billion announced in the 2009-10 Budget to improve metropolitan rail networks in six Australian cities – Sydney, Melbourne, Brisbane, Perth, Adelaide and the Gold Coast.
The Commonwealth asked Infrastructure Australia to conduct an audit of the nation's infrastructure in late 2008, based on submissions from state and local governments and the private sector.
Disappointingly, the process revealed a systemic lack of long-term infrastructure planning, with major project proposals requiring significant development before they could even be assessed. There is considerable scope for improvement in this area.
Other COAG Work Relevant To Cities
To help ensure that the nation has productive, liveable and sustainable cities, COAG is also progressing a range of other vital reforms. I will now turn briefly to two of these – housing supply and planning and zoning.
Housing supply
COAG has endorsed a housing supply and affordability reform agenda focussed on decreasing the time it takes to bring housing to the market and reforming policies that act as barriers to supply.
As Dr Kennedy has already discussed the housing strategy, I will not touch on this issue much, except to note that the housing reform agenda includes planning and zoning governance reforms; considering national principles for residential development infrastructure charging; and extending government land audits and examining private holdings of large parcels of land to assess the scope for increasing competition and bringing land quickly to market.
It is important to note that while a responsive housing market is an issue with important productivity considerations for our economy, it also has equity implications.
Therefore it is undesirable when the various factors that influence housing affordability including planning systems, land release policies and other regulation place unnecessary upward pressure on housing costs.
Government institutions that influence the housing market should not themselves hinder the release of sufficient land to meet the housing needs of a growing population.
It is not unreasonable to conclude that arrangements which prevent adequate land release will not only come at the cost of productivity and efficiency, but also run counter to our aspirations for equity.
Planning and zoning
In addition to the planning and zoning governance reforms being pursued under its housing reform agenda, COAG has also agreed that the Productivity Commission examine and report on planning and zoning systems, including their impacts on the overall efficiency and effectiveness of the functioning of cities.
The Productivity Commission’s report will examine the possible flow-on effects of planning and zoning systems, such as the impact on competition.
Well intentioned planning and regulation can very easily become a barrier to entry in important markets, insulating incumbents from competition.
For example, plans that prevent the establishment of new supermarkets in an area can have implications for grocery prices, causing harm to low income consumers.
Getting this right is not without its challenges, as any planning and zoning framework has to balance competition and market considerations with other concerns, such as traffic flow and the impact of developments on surrounding residents.
Closing Remarks
The challenges facing our cities cannot be avoided, and there’s no simple panacea, but with the right strategic planning, our cities can flourish as they grow and develop.
COAG has put in place a process to begin to develop improved planning. This process will continue over the next 18 months.
We welcome the engagement of all levels of government. In particular I am pleased that there are events like this conference that continue to develop the policy views of major cities’ local governments.
Thank you and I’m happy to take any questions you may have.
Attachment A
Criteria for Future Strategic Planning of Australian Capital Cities
Capital city strategic planning systems should:
- be integrated:-
- across functions, including land-use and transport planning, economic and infrastructure development, environmental assessment and urban development, and
- across government agencies;
- provide for a consistent hierarchy of future oriented and publicly available plans, including: -
- long term (for example, 15-30 year) integrated strategic plans,
- medium term (for example, 5-15 year) prioritised infrastructure and land-use plans, and
- near term prioritised infrastructure project pipeline backed by appropriately detailed project plans;
- provide for nationally-significant economic infrastructure (both new and upgrade of existing) including: -
- transport corridors,
- international gateways,
- intermodal connections,
- major communications and utilities infrastructure, and
- reservation of appropriate lands to support future expansion;
- address nationally-significant policy issues including: -
- population growth and demographic change,
- productivity and global competitiveness,
- climate change mitigation and adaptation,
- efficient development and use of existing and new infrastructure and other public assets,
- connectivity of people to jobs and businesses to markets,
- development of major urban corridors,
- social inclusion,
- health, liveability, and community wellbeing
- housing affordability, and
- matters of national environmental significance;
- consider and strengthen the networks between capital cities and major regional centres, and other important domestic and international connections;
- provide for planned, sequenced and evidence-based land release and an appropriate balance of infill and greenfields development;
- clearly identify priorities for investment and policy effort by governments, and provide an effective framework for private sector investment and innovation;
- encourage world-class urban design and architecture; and
- provide effective implementation arrangements and supporting mechanisms, including: -
- clear accountabilities, timelines and appropriate performance measures,
- coordination between all three levels of government, with opportunities for Commonwealth and Local Government input, and linked, streamlined and efficient approval processes including under the Commonwealth Environment Protection and Biodiversity Conservation Act 1999,
- evaluation and review cycles that support the need for balance between flexibility and certainty, including trigger points that identify the need for change in policy settings, and
- appropriate consultation and engagement with external stakeholders, experts and the wider community.