Greg Hunt

Federal Member for Flinders | Minister for Industry, Innovation & Science

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Long-term planning and cities for the next century - Sydney Business Chamber

Tuesday, 19 January 2016

Long-term planning and cities for the next century - Sydney Business Chamber

1. Introduction

Thank you for the introduction and many thanks to the Sydney Business Chamber for the opportunity to address you at the start of what will be a very exciting year for Australia’s cities.

Early this year, the Turnbull Government will release a position paper that sets out issues and trends which affect Australia’s cities, and the opportunities and challenges they pose.

This is an opportunity for the Australian community to engage in a collaborative discussion about what we want our cities to look like in twenty, fifty, and a hundred years’ time.

As part of that discussion, we will host a national Cities Policy Forum to bring together leaders and key stakeholders to help shape a collaborative vision for our future cities.

Today, I’d like to have that conversation with the people in this room – to set out thoughts and directions to keep our great cities productive and liveable in the future.

1.1 Opportunities and challenges

Cities are at the core of the Turnbull Government’s agenda because of both the opportunities and challenges they pose.

Let me begin with some of the opportunities.

Standing in the heart of the beautiful city of Sydney, it is not hard to see why our cities are amongst the most liveable in the world.

This is a fact borne out by numerous indicators. Each year, our cities appear near the very top of international rankings – with Melbourne topping the Economist’s liveability ranking as the world’s most liveable city for a fifth consecutive year.

With their idyllic beaches and rivers, their clean air and water, our cities are located in some of the most beautiful natural settings available.

Australian cities are not only a great place to live – they are crucial to our strong, productive economy and cohesive, prosperous society.

Around three quarters of Australia’s total economic activity is produced in our major cities.

Despite the strong position of our cities, they are facing a number of challenges that we must respond to if they are to remain highly liveable, accessible and productive places.

All of our Australian cities are forecasting significant growth over the next 50 years. That is a demographic fact.

The emergence of new technologies and industries to supplement, and in some cases replace, the industries of the past, requires new thinking.

How can our cities be best positioned to take full advantage of the exciting opportunities for innovation?

What is the best way to ensure that new technologies flourish and drive a prosperous Australian economy?

1.2 Future directions

Against that background, today I would like to set out three fundamental directions.

First, effective long term planning is critical to shaping our cities so that they deliver the economic growth needed to maintain our quality of life. We need to ensure our infrastructure meets our long term needs and improves the productivity of our cities and supports jobs.
The best cities comprise a series of connected communities. No one can invent this sense of community. It is fortunately already deep within the imprinted sense of who we are. Our natural sense of community needs little interference from government.

Where government does have a role is in ensuring there is a broadly agreed long-term vision for the basic shape and structure of the city and to create a broadly agreed roadmap to reach that vision.

Secondly, we need cities that support the needs of those who live, work and visit them. Smart and successful cities are underpinned by world class digital and physical infrastructure.

Thirdly, we need sustainable, green cities with improved amenity for a more liveable environment.

The liveability of our cities today is thanks to the vision and long-term planning of our forebears.

Life is better for millions because of the parks, gardens and trees they imagined into being – from Fawkner and Batman who planned Melbourne’s tree-lined boulevards, to those who laid out Centennial Park and the Botanic Gardens in Sydney, and Colonel Light with his plan for Adelaide’s ring of parks.

So as our cities inevitably expand, we owe it to our descendants to make the same provision for their recreation as our ancestors made for ours.

2. Long-term planning

In 2014, reflecting on my father Alan Hunt’s legacy as Victorian Planning Minister, I said that we were at a moment in history where each Australian city could bring together Federal, State and local authorities to lay out an overarching physical roadmap for the next thirty and fifty years, through something like an Integrated Planning Commission.

2.1 Integrating planning processes

Since then, I have been delighted to see the emergence of a Greater Sydney Commission which may provide a model of Federal, State and local governments working together to plan for how our cities will grow and provide for their residents in the future.

The Commonwealth’s interest in cities recognises the fundamental responsibilities of States and territories and local government.

The Commonwealth will work with other levels of government, the private sector and the Australian community to develop a cohesive and collaborative long-term vision for our cities. This includes developing bilateral principle-based agreements to improve urban areas with states and territories.

2.2 Long-term planning

The Government is looking into how we can use strategic assessments to increase the global competitiveness of our businesses by enabling them to more easily communicate, trade and collaborate with one another.

One option which we are already progressing is using the current powers of the Environment Protection and Biodiversity Conservation Act 1999 to undertake strategic assessments.

The strategic assessment of Melbourne’s urban growth boundary will significantly reduce the costs to local businesses over 30 years by avoiding the need for individual project approvals. The approach also secured nearly $1 billion in environmental offsets. We are also undertaking a strategic assessment for the Perth Peel region in Western Australia.

The Commonwealth's approach to delivering the Western Sydney airport reflects our commitment to integrated and long term planning for the economic and social benefit of the community as a whole.

That's why we've invested $3.5 billion with the New South Wales Government on the road infrastructure around the Western Sydney Airport.

Importantly, these investments create jobs and underpin development of Western Sydney University's knowledge precinct. Currently, there are around 20,000 Australians, largely trained by the Western Sydney University, living in Silicon Valley.

Investing in our cities, and Western Sydney in particular will assist in attracting this talent to return home, to work here, develop their skills here, pay tax here, and deliver to the nation's innovation.

The Western Sydney opportunity allows us the chance to take a strategic approach, to address the accessibility of housing and ensure that jobs are being created nearer to people's homes and communities – high paying knowledge intensive jobs that will service the growth of our economy into the future.

2.3 Housing affordability and accessibility

A big part of the long-term planning challenge is housing affordability and accessibility, and improving the connections between housing and jobs.

As our jobs have centralised, much of our new housing stock has sprawled outwards. When the only affordable housing is located an hour and a half away from work, this does not support liveability – and it is terrible for productivity.

Growth in household demand outstrips population growth, and yet housing supply remains relatively stable.

The challenge of housing affordability is greater in NSW than any other state. Within 15 years, Sydney’s population of close to six million will require up to 664,000 new homes and 689,000 new jobs. This is reflected in the NSW Government’s decision to make the availability of affordable housing a key policy priority.

There are three broad ways to improve the connections between housing and employment:

1. Increase the number of jobs in residential areas, so that residents can access employment without travelling as far. This option is perhaps best exemplified in the ’20 minute city’ model in Melbourne, where planners have proposed to change the mix of land uses in the city’s suburbs so that residents can access jobs, schools, shops and leisure facilities within 20 minutes of their home.

2. Increase the supply of housing in areas of high job density, so that more people can live close to where they work. This option has been found, through a number of academic studies, to be an effective way to increase a city’s accessibility while building on the agglomeration forces that benefit the city’s economy.

3. Improve the transport connections between areas of housing growth and areas to employment growth, so that workers can access their jobs more quickly and efficiently. This has been the primary way that Australian governments have historically sought to increase city accessibility.

The Treasurer’s taxation system review will give consideration to the effect of property taxes on Australia’s housing supply and demand. The Government also announced in early January the establishment of a working group to investigate innovative ways to improve the availability of affordable housing, and working with the States to implement the suggestions offered.

Increasing levels of housing and improving transport connections between housing and jobs requires new and improved infrastructure. That’s why infrastructure planning and funding is such a crucial element of the Turnbull Government’s cities agenda.

3. Infrastructure planning and funding

Australia’s transport systems are under increasing pressure. The Government has committed to a record $50 billion investment in transport infrastructure, which will significantly alleviate that pressure – however, we will still face congestion and delay in our cities.

3.1 Reducing congestion

Infrastructure Australia’s 2015 National Infrastructure Audit estimated that congestion costs to the Australian economy will almost quadruple to $53.3 billion a year between 2011 and 2031 if no action is taken.

Congestion already costs Sydney, Newcastle and Wollongong around $5.6 billion a year and this is expected to rise to $14.8 billion a year by 2031 if no action is taken.

And of course, congestion has a significant detrimental impact on quality of life for those affected.

3.2 Value capture

It is clear that rapid growth in major capital cities can’t be accommodated with existing public funding models. All levels of Government in Australia are facing budget constraints.

While there are a number of major infrastructure projects underway or in planning, we are unlikely to be able to sustain this rate of investment in the long-term.

If we are to provide the transport infrastructure that Australia’s cities will need in the future, we will have to find new ways of paying for its construction. Minister for Major Projects, Paul Fletcher, is looking at this issue very carefully and exploring options, including flexible financial arrangements rather than just traditional grants.

One of the fairest ways to fund new infrastructure investment is for the beneficiaries of that infrastructure to contribute to the cost.

Value capture is increasingly used internationally to ensure that projects go ahead, residents receive the benefits, but some of the cost is offset though the uplift in value to beneficiaries.

4. Greening our cities

We need more than housing and transport infrastructure – we need sustainable, green cities with improved amenity for a more liveable environment.

Green cities—cities with high levels of trees, foliage and green spaces—provide enormous benefits to their residents.

They can improve the quality of air in our cities by absorbing some types of airborne pollutants, reduce soil erosion, minimise water run-off and limiting the amount of particulate matter entering our waterways; and increase urban amenity.

4.1 Air quality

We have already made significant progress on improving the liveability of cities from an environmental perspective, including through the recent National Clean Air Agreement which was endorsed by State Environment Ministers in December 2015 – over six months ahead of schedule.

Urbanisation and population growth, and the associated increases in transport demand and energy consumption, will likely result in increased emissions and poorer air quality despite the current air quality management frameworks in place.

The Agreement will deliver actions to reduce air pollution and establishes a process for jurisdictions to work cooperatively to address emerging air quality issues—ensuring Australians continue to enjoy clean air into the future.

The Agreement's initial work plan for the next two years focuses on priority issues of concern, including reviewing and strengthening air quality monitoring and reporting standards, targeted measures to reduce emissions from key sources of air pollution, improving access to air quality information for communities, and fostering partnerships with industry.

Three initial actions have already been agreed to – measures to reduce air pollution from wood heaters, including the adoption of new emission and efficiency standards for new wood heaters and sharing best management practices across jurisdictions; introducing emission standards for new non-road spark ignition engines such as garden equipment and marine outboard motors; and strengthening national ambient air quality reporting standards for airborne fine particles.

I have also recently announced plans to expand the National Carbon Offset Standard to include the certification of carbon neutral cities and precincts under the Carbon Neutral Program. The Barangaroo Delivery Authority has announced its intention for Barangaroo to become carbon neutral. I look forward to working with them in this endeavour.

4.2 Greater urban canopies

Increasing urban canopy coverage decreases heat, which improves health and quality of life. People living in large cities can be especially susceptible to the effects of extreme heat.

Air temperature in cities are a number of degrees higher than in surrounding areas due to heat-absorbing properties of dark-coloured roads and other surfaces, as well as the effect of urban canyons trapping hot air.

Extreme heat place the most vulnerable people in our cities—including the very young and very old—at high risk, and contributes to a number of deaths each year.

An effective way to reduce the severity of the heat island effect is to increase the greenery in our cities. Greener cities tend to be healthier cities.

We will work with Australian cities to set decade by decade goals out to 2050 for increased overall tree coverage.

We will also look at building rooftops with green cover which improve both amenity and, as Singapore has shown, can improve value and quality of life as well as operational efficiency.

Further opportunities exist in areas such as improving urban water systems, managing storm water, addressing ocean outfall and improving energy efficiency in our cities.

We have an opportunity to make Australia’s cities strong and resilient and able to withstand economic changes, as well as changes in our climate, lifestyles, technologies and social fabric over time.

5. Conclusion

Our cities are the engine room of commerce, infrastructure, innovation, the arts, science and development. They are home to our most important economic resource – human capital.

If we want to drive economic growth and ensure Australia remains as one of the world’s most liveable places, the Commonwealth needs to target its already significant activity in cities to meet the challenges and harness the opportunities they offer.

The cities agenda must also identify and anticipate disruptive technologies, and ensure our cities are well placed to take advantage. Driverless cars, solar powered households with battery storage, and many other exciting technologies of the future will fundamentally change the way we live.

Through the cities agenda, the Government will work with industry and experts to understand the possibilities that new innovations present, what they will mean for our cities, and what policies, investments or regulatory decisions should be taken to manage their implementation and ensure the best outcome for Australians.

Transforming our cities will rely on strong collaboration across the Commonwealth, with all levels of government and with business.

This is a truly whole of government agenda. I am working closely with the Prime Minister and other Ministers to ensure the Government has a coordinated and cohesive approach for maintain our cities reputation as the best in the world.

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