Where the previous chapter examined the role of the Commonwealth in developing a policy framework, this chapter looks at a range of Commonwealth government programs which have or could contribute to the development of sustainable cities. The chapter begins with a brief overview of the Building Better Cities Program, widely regarded as a great success and a template for future action, before exploring the potential of the current City Deals program to promote the coordinated planning and development of cities and regions. The chapter will then explore the issue of metropolitan governance—creating a governance mechanism that operates at a whole-of-city level, before exploring the use of tax incentives and grants to promote sustainable development.
Building Better Cities
The Building Better Cities program of the late 1980s/early 1990s was cited as an example of effective Commonwealth intervention in urban planning and development. Mr Warren Rowe, Planner in Residence at the University of Queensland, observed that:
It was the Hawke-Keating government. It was probably the last time that the federal government took a very active and direct interest in the development of cities. It was a federal program that had a sum of money that was allocated to projects around Australia. It was distributed quite broadly. Queensland’s share of the pie was about $180 million. I think we had about six or seven projects, but two of the major projects were the re-establishment of the Gold Coast railway line. So what you see there is the direct result of that program.
The other, I think, successful sort of intervention was the reconstruction of a very large sewer main that runs from central Brisbane out to the major treatment plant at the mouth of the Brisbane River. In effect, what that did was open up the inner north-eastern suburbs, the urban renewable area, which I think is arguably one of the most successful urban renewal projects done in Australia. So you had two very significant projects, but I think it was actually the way in which the program operated.
Mr Rowe noted that the projects were not entirely federally funded—the Commonwealth provided seed funding and other partners contributed, including the private sector, with the participants involved in joint planning exercises to meet agreed outcomes. Mr Rowe thought it ‘quite a successful program’:
As I said, the proof of the Commonwealth’s involvement in something like that is: we may have got the railway line but we may not have got it in the time frame that was actually provided. I couldn't imagine that corridor existing now without that railway line.
Ms Jen Williams, Deputy Queensland Executive Director for the Property Council of Australia, tabled a report done by the Property Council tracing the legacy of two projects done under the Building Better Cities program. She explained:
It’s a case study of the Brisbane-Teneriffe renewal as well as Honeysuckle in New South Wales. As Mr Rowe was saying, that was a $90 million project that the feds put about $30 million into. The key piece of infrastructure was a $22 million sewer line, which is a very unsexy piece of infrastructure but actually managed to unlock, at our last count, $5.3 billion in private-sector investment.
Dr Marcus Spiller, Principal and Partner with, SGS Economics & Planning Pty Ltd, worked on the Building Better Cities program in the early 1990s. He observed that ‘Building Better Cities was very well received in most quarters:
There are a couple of reasons for that. One is it was an outcomes-focused and respectful program of the states in the sense that it was based on the states proposing an area strategy with certain outcomes to be achieved that could be measured and then the Commonwealth came across in a similar way to a productivity dividend saying, ‘We’ll tip in a certain amount of money’, but in an untied fashion. I think this was very well received by the states because they were accountable for the outcomes but were not being told directly by the Commonwealth what things to build, what things to put where and what infrastructure was needed. So, in the subsidiarity sense, it respected a very important principle that the Commonwealth is entitled to use its resources, as I have mentioned, to nudge other jurisdictions towards achieving national objectives but it has recognised that the states in that case—and I would now say a metropolitan government would have done the job better—could be put in a better position to identify how to get best value out of those resources and make things happen on the ground. It was flexible and respectful in that sense. They were the pros of it.
Dr Spiller observed, however, that the program also had its shortcomings—chiefly that it was too small:
The cons of it were that it was not really part of that government’s base load agenda. That government’s base load agenda was microeconomic reform, deregulation and freeing up markets. The Building Better Cities program was, in a sense, a little hobby program on the side. It is perhaps a bit harsh to say that but it was not big enough, which I suppose is what I am saying. It was not embraced as a base load program to transform the nation like those other microeconomic reform programs were, which changed the nation as well. So, if there is a criticism to be made, it should have been bigger and could have been bigger.
Dr Spiller highlighted the success of the Program in the case of the Ultimo-Pyrmont development in inner Sydney:
Another example that I like to quote in other forums on a different issue is Ultimo-Pyrmont in Sydney, which again was a monte for regeneration but could have been regenerated in a less desirable way than it has been. One of the great achievements of Ultimo-Pyrmont is that affordable housing is hardwired into the regeneration process, so when the Building Better Cities program for that area was negotiated the Commonwealth insisted on having a certain percentage of affordable housing embedded in it and negotiated.
City Deals/Regional Deals
City Deals are a key part of the Australian Government’s Smart City policy framework. A City Deal involves ‘shared vision across the three levels of government centred on unlocking economic potential in a city’. Governments must ‘work together to customise their approach to the unique opportunities of the city, drawing on innovative financing and funding arrangements to provide transformative investment’. Institutional reforms and investments ‘may also be needed to create the whole-of-city capacity and governance arrangements necessary to sustain and build on the improvements under the City Deal’.
The success of City Deals depends on three conditions:
all jurisdictions must be willing and able to negotiate and deliver an ambitious City Deal;
there must be real opportunities to unlock economic potential and transform the city; and
City Deals should leverage government investment in the pursuit of the six Smart Cities Policy Priorities.
The Australian Government plans to deliver City Deals in larger cities across Australia over coming years. It has ‘committed to negotiating City Deals for all state and territory capital cities, where partner governments are willing’, noting that there ‘has been strong interest in City Deals from state and local governments across Australia’. It notes, however, that, ‘developing and implementing a City Deal is complex and resource intensive. The Commonwealth is only able to meaningfully progress a few City Deals at a time and must therefore be highly selective in choosing locations.’
At the time of writing two City Deals had been completed—for Townsville and Launceston. The key features of the Townsville City Deal were:
A Development Corporation for Townsville, to deliver urban renewal and drive further investment across the city
The North Queensland Stadium, to revitalise the waterfront and CBD, as well as create design and construction jobs
Establishment of an Industrial Development Board and acceleration of development within the State Development Area, to attract more investment, industry, freight and port-related businesses to Townsville.
The key features of the Launceston City Deal were:
support the relocation of Launceston’s university campus closer to the city centre
revitalise the historic CBD and the city’s northern suburbs, and
improve the health of the Tamar Estuary.
A City Deal for Hobart was announced in January 2018, but without funding attached.
In addition, a City Deal for Western Sydney was under negotiation. This will involve ‘collaboration between the Commonwealth, state government and 8 local councils to build on the investment of a new airport—focusing on jobs and skills for the region, planning, infrastructure investment and housing affordability.’
City Deals were widely welcomed in the evidence presented to the Committee. The Committee for Sydney noted that while the concept of the City Deal was new to Australia it had been working in the United Kingdom for a number of years. The Committee for Sydney believed that City Deals were ‘highly relevant to Australia as they encourage strategic alignment and funding commitments between the Federal and City governments and indeed local councils’. It noted that in its translation to Australia ‘the City Deal concept has kept most of its strengths and is being adapted to Australia conditions’. It suggested that ‘in the complex constitutional environment of Australian Cities … City Deals are perhaps more important as they enable collaboration between tiers on specific city objectives as never before without the need for frankly unlikely constitutional changes’. The Committee for Sydney noted that in the development of the Western Sydney City Deal ‘there are positive signs that the transport infrastructure decision-making process is different to the current one which essentially is based on siloed departmental decision-making based on highly challengeable evidence and very narrowly focussed on travel time reduction’. There were also indications that the City Deal discussions were ‘based on the GSC’s emerging Plan for Sydney and properly involve a balanced consideration of the multi-modal infrastructure needs of servicing the new airport and of better connecting the area’s communities with jobs and services’.
Mr John Wynne, National Director of Planning for Urbis Pty Ltd, thought that the City Deals framework ‘represents great hope for what we could achieve in Australia if we have a more federal, top-down approach to some of the big strategic planning issues in this country’. He noted that in western Sydney, the City Deals framework was engaging all levels of government and the private sector ‘in thinking about the future of not just this airport but what it means for Sydney and what it means for Australia. Some of the most exciting strategic work has come out around that catalyst.’ He noted that ‘there are now volumes of thinking and a great amount of data and debate going on about how this can transform the city and then how it can transform Australia’.
Mr Adam Beck, Executive Director of the Smart Cities Council Australia New Zealand, was more circumspect in his analysis, noting that ‘the ink is still a bit wet on City Deals. We’re six month into it. We’ve never done City Deals before. We’ve never really done Smart Cities before.’ He believed that City Deals were potentially ‘a backbone mechanism for accelerating so many of the other programs, plans and policies that we have’, while at the same time urging that we do not move too fast to scale and replicate early successes. He also urged engagement with the private sector through industry advisory committees:
The City Deals process, from what I understand, has no industry committee, no outside support. There are consultants and a lot of work being done but we don’t have the luxury to work this out ourselves. Working it out together, in collaboration, is the only model, I believe. … Getting non-government stakeholders together to help work through and sort out some of these challenges is a fundamental ‘must’ and I don’t believe we do enough of it.
Mr Beck was also concerned about the speed with which City Deals were being established and the lack of access to the scheme for all the potentially eligible cities and regions. Mr Beck told the Committee:
I was at a conference this morning in Brisbane—Urbanity 2017—and I’ve just come out of a panel on City Deals. A question was raised to the panel. We currently have three City Deals in Australia—Townsville, Launceston and Western Sydney—and the Prime Minister wants one in each capital city, in the near term. But the comment came that we don't have the capacity to do that. We don’t have capacity to get one in every city because the Department of the Prime Minister and Cabinet don’t have enough resources.
Professor Paul Burton, Director of the Cities Research Institute at Griffith University, observed that the City Deals model being applied in Australia was no longer the same as that being applied in the UK, in a different constitutional environment. He found it ‘quite interesting that there are staunch advocates for that model in Australia, despite the fact that it’s been, essentially, dropped and modified substantially in its country of origin’. Similarly, Mr Ben Rimmer, CEO of the City of Melbourne, observed that the concept of the City Deal being applied in Australia was different from that being applied in the UK:
We have borrowed the language from the UK about City Deals but unfortunately we have not borrowed the funding mechanism. The funding mechanism in the UK involved other partners in growth and development sharing some of the economic upside of that growth and development so that they had an incentive to invest, an incentive to align together and an incentive to work together to produce nationally significant outcomes.
He noted that ‘the Australian version of City Deals does not really involve new money and has not really involved Commonwealth Treasury countenancing the idea that some of the upside in terms of tax receipts and economic growth could be shared with people who are generating that growth’.
The Council of Capital City Lord Mayors suggested that ‘the City Deals process (and other programs developed by various Australian Government in the past 20 years) whilst potentially powerful in the areas they are being deployed, are far too selective and specific and possibly too cumbersome to enable the agility required to take advantage of opportunities’. The CCCLM sought a more agile and comprehensive policy framework around cities:
For example, agglomeration benefits of linked clustered development have long been recognised overseas as generating significant productivity benefits to cities, but in Australia there has been virtually no spatial innovation policy which results in reduced productivity outcomes for Federal and State/Territory governments from Australian cities. There is a clear leadership role the Australian government could take that achieves significant economic gains both locally and nationally.
Dr Spiller was also sceptical of the value of City Deals, stating that City Deals were:
… very much, in a sense, inspired by the UK City Deals which is premised on this idea of, ‘You guys hold the lead at the microeconomic productivity end of the spectrum. We hold the fiscal power. We'll share the productivity dividend, the tax dividend, from you deploying those levers in a more efficient way’, so it makes a hell of a lot of sense. I would have a few criticisms. One of them is that the City Deals, with the way that it is being rolled out today, it seems to have been focused even more narrowly than the Building Better Cities program so it becomes very focused on individual projects in places like Townsville or something like that which I think is getting perilously close to the Commonwealth picking individual project winners rather than facilitating structural change.
Other evidence presented to the Committee highlighted the desirability of linking City Deals to other policy frameworks and objectives. For example, the Australian Sustainable Built Environment Council (ASBEC) urged using City Deals to promote better sustainability outcomes, stating:
ASBEC supports the Australian Government’s Smart Cities Plan, the intergovernmental collaboration facilitated through City Deals, and the commitment to measuring performance through the National Cities Performance Framework. Ongoing consultation on the delivery of this policy with industry through the Cities Reference Group should see ongoing improvements in the identification of appropriate indicators, metrics and supporting data that provides a comprehensive view of the success of our cities. This in turn should be seen as a vital evidence base to support policy development and solutions across governments and portfolios.
ASBEC believed that it was ‘important that the connection between those indicators measuring performance of our cities through the Framework are clearly linked to the delivery of City Deals and the outcomes sought through the Smart Cities Plan’. It argued that the ‘Australian Government is in a unique position to drive better outcomes through its own investments in infrastructure projects that underpin these deals’, and that the ‘opportunities should not be lost to use City Deals to negotiate ambitious objectives and outcomes that are contingent on these infrastructure investments’. ASBEC believed that ‘these outcomes should help drive both the sustainable transition sought for our existing cities, and help grow new regional cities and towns’.
The Green Building Council of Australia (GBCA) supported explicitly linking City Deals with the National Cities Performance Framework, stating that ‘a more comprehensive framework would create an opportunity to more explicitly inform the design of City Deals, and create a direct connection between the performance of a city, and the projects and investments that help improve that performance against targeted policy priorities over time.
Other evidence focused on broadening the concept of city deals to encompass the regions. Dr Marcus Spiller, Principal and Partner at SGS Economics & Planning, suggested that you could ‘have regional deals that do a similar thing’ to City Deals; while Mr Jack Archer, Chief Executive Officer of the Regional Australia Institute, agreed ‘absolutely’ that City Deals could be regional deals. He cited the example of the Shipwreck Coast on the Great Ocean Road as an example of where coordinated governance could liberate investment in regional Australia:
The example of a regional deal at the moment is the discussion around the Great Ocean Road. Now the Shipwreck Coast plan has got a cost/benefit of six to one—enormous potential benefits there. Yes, they need some more infrastructure. But I was talking to somebody the other night, and there were 27 approvals processes that they’ve had to go through to put a development on the Great Ocean Road, because of all the different interested government agencies, and there’s also very fragmented investment in the tourism opportunity there. So I think there’s a really important deal discussion around, saying: fix the governance; there is private sector investment wanting to come in and put investment into new tourism offers.
Ms Rachael Sweeney, representing Regional Capitals Australia, argued that their 51 regional capitals ‘should be moved into the cities portfolio and be eligible for a City Deal’. She argued that
… if we had a City Deals policy where regional cities were considered to be critically important— not only from a service point of view but, as you can see throughout our submission, in relation to the growing economic importance of these regional cities as well—you could start, we hope, to develop policies where you can start to close the gap on that service and accessibility issue.
Mr Bill Mithen, Chair of the G21 Geelong Region Alliance, also advocated a regional focus for City Deals. He stated:
We do have a position on the city deal. Uniformly, we’ve advocated strongly across the region for a city deal for Geelong and the region—the G21 region—based on the visitor economy. There has been a lot of negotiation with the state government. In fact, MOUs have been signed between the state government and the City of Greater Geelong, and I believe the other local government areas that are involved in the Great Ocean Road have a number of projects already identified that would be worthwhile being in the city deal. Equally, we’ve also identified within that city deal that it needs to prosper the whole region. Going back to what I talked about before, areas of disadvantage would need to be improved. We’ve looked at a city deal very much like that: as a deal. It’s an all-encompassing deal and a strategic deal. It’s not just about trying to get our hands on lots of money; it’s about integrating it across the region, looking at where our competitive advantages are within the visitor economy and ensuring that the whole region prospers. City deals are really important to this region and this city.
Cr Samantha McIntosh, Mayor of Ballarat, made a similar point about City Deals with a regional focus. She stated:
Talking about City Deals, it is really important that we look at each of the cities individually. Obviously, we all have our own personalities and our own unique gifts to offer. Ballarat connects with the Central Highlands and up to the northern Grampians. There has recently been significant commitment to the wind farms and the nectar farm, where there is a need for jobs. That is the opposite of Ballarat; we are trying to attract big government departments to bring jobs. We need to work with those regions as much as they need to work with us. When we are looking at City Deals, the big projects that we have been focusing on as a great way forward for Ballarat actually support the regions. And I know that the work they are doing with those particular recent successful bids and the delivery we will see over the next year or so will mean they need people coming to the regions. That’s not going to happen unless Ballarat, the regional city, has the strength and connectivity to metro and to the regions. So it is a both-way connection. It’s not just rail; it’s road and it’s also air. We have spent a lot of time developing our Ballarat West employment zone, which is absolutely about strengthening the regions. It is about our ability to attract the produce—we need their food—and the business is great both ways. But it goes to the metro centres and it should be going further. So that accessibility and connectivity—whether it be road, rail or freight—is really important. Sometimes in the regional areas those facilities have absolutely been left way behind. So I think the City Deals approach is a great one—a very important one to be personalised to each of those regional cities and how they connect with their neighbouring communities, not just the metro centre but, in our case, throughout the broader region.
In its recent report, the House Select Committee on Regional Development and Decentralisation expressly recommended that ‘the Federal Government’s City Deals program should be extended to provide development and opportunity to cities, towns and regional communities.’ The Committee supports the recommendation.
The Committee is conscious that the Commonwealth’s interventions in the area of cities policy have been intermittent, without any sustained policy development or implementation. This has led to positive outcomes while programs are in place and being actively pursued, as under the Building Better Cities program. In some ways, however, the very success of such programs highlights the Commonwealth’s regular absence from cities policy.
The Australian Government’s City Deals program represents a new intervention. The City Deals program has excited much interest, but with so far limited results. The Committee has heard concerns that the Australian version of City Deals is a simplified version of the UK model, lacking the level of engagement with business and local communities to leverage private sector investment in the way the UK model purports to do. Nonetheless, City Deals has great potential to provide sustained and coordinated development once it has achieved a level of scale. The Committee is of the view that a strong bipartisan commitment to the City Deal concept, the development of more sophisticated interactions between the various levels of government and the private sector (including implementing more sophisticated funding methods such as value capture), and the extension of the City Deals concept to the regions in the form of Regional Deals, will provide a meaningful and sustainable mechanism for promoting urban and regional development across Australia. This will entail a significant and sustained increase in the resources available at the Commonwealth level for the development and implementation of City Deals. An implementation rate of only one or two per year, focussed on the funding of individual infrastructure projects, is unlikely to provide the sort of transformation required to meet the future development needs of our cities and regions.
The Committee recommends that the Australian Government, as part of the system of master planning under the national plan of settlement, provide funding and resources for a significant acceleration of the City Deals program, with a view to creating greater opportunities for cities to engage in the City Deals program, developing more sophisticated interactions between the various levels of government and the private sector—including implementing more sophisticated funding methods such as value capture—and extending the City Deals concept to the regions in the form of Regional Deals, thereby providing a meaningful and sustainable mechanism for promoting urban and regional development across Australia.
Professor Billie Giles-Corti (RMIT) observed that one of the findings of her team’s research was that there was a need for ‘metropolitan governance’. She stated:
At the moment, different cities work in different ways and our delivery of better cities needs horizontal governance, all government departments working together to achieve livable, walkable, healthy cities as well as vertical—what local government does, what state government does and what the federal government does.
Dr Marcus Spiller, Principal and Partner with SGS Economics and Planning, told the Committee that there was an urgent need for new forms of city governance. He stated that we ‘know what a good metropolitan strategy looks like … where we have a problem is taking the plans into action’:
Our problem is implementation and our submission suggests that Australia needs a fairly dramatic institutional change in the government space in order to correct this problem. We say that Australia needs metropolitan governments. You might think of the Greater London Authority when I use that expression. We need something like that working alongside Commonwealth, state and local governments if we are going to translate good plans into action.
SGS was of the view that the ‘states and the Commonwealth governments cannot do this job of effective implementation ...because, first and foremost, they do not stand for the metropolitan areas and they do not speak for the metropolitan areas’. The states and Commonwealth worked in silos, making volume delivery of services efficient, but making it ‘very difficult for them to deal with questions of metropolitan development which requires a connected up way of thinking at the level of place’. On the other hand, local government also had its limitations ‘whether they are working individually or collectively, because they stand for local communities. It is a fanciful aspiration to think that they can somehow lift their sights to the interests of the metropolitan area when they are undertaking their business.’ The solution was a system of metropolitan government:
So, metropolitan governments are necessary but we need not think of them as being a competitor to state governments. In our view they would have a relatively narrow scope of responsibilities around regional integrated planning; that is, preparing the likes of a metropolitan strategy for Sydney, or SEQ or Melbourne, regional economic development planning at that level; transport system investment and management, so that would run the public transport system and the arterial road system; regional water sustainability and maybe regional power grids; regional resource recovery; and, regional institutions and facilities like arts, culture, sporting and so on.
Dr Spiller noted that ‘metropolitan governments would need to be fiscally autonomous and have a credible democratic mandate. He rejected the idea that metropolitan governments would come into competition with the states. He observed that ‘the states would still be responsible for those high volume services that I spoke of earlier—education, health, policing and kindred services—which currently account for more than a third of their outlay, so they will remain a senior and important sphere of governance. He highlighted the fact that ‘Australia has had, in the past, quasi metropolitan governments’, citing the example of the Melbourne and Metropolitan Board of Works:
It was in charge of metropolitan strategic planning. It was in charge of the metropolitan roads. It was in charge of metropolitan water. It was in charge of the metropolitan open space system. It was fiscally autonomous in the sense that it had an independent rate base. It issued infrastructure bonds. It had a democratic mandate insofar as the board of the Board of Works comprised elected members from constituent councils sent to the board via electoral colleges and the state government appointed other members, so the state government had a controlling interest but it was, nevertheless, an institution owned and accountable to the metropolitan constituency.
Professor Peter Newton was also critical of the role played by state and local governments in city governance. Looking at state governments, professor Newton noted that while the states had ‘responsibility for urban land use planning and development … under the Constitution’, and ‘uniformity in their aspirational goals’ in the strategic planning of major cities, state governments had ‘struggled … to realise these goals via their recent sequence of metropolitan strategic plans and implementation mechanisms’. He continued:
There are a number of reasons for this, prime among them being a lack of capacity to undertake urban planning that is vertically and horizontally integrated. Horizontal integration is hampered by the existence of multiple ministries, each of which have roles and responsibilities in planning parts of an urban system: industry, housing, transport, energy, water, waste, education, health etc. Vertical integration involves ensuring important connections exist between state, federal and local governments, where jurisdictional and political differences frequently interfere with a ‘joined up’ approach to city planning and development. Until recently, the Australian government had absented itself from the ‘cities’ arena, despite the fact that over 80% of both the nation’s population and GDP are concentrated there.
Professor Newton highlighted development industry pressures as another problem for state governments, and ‘another major reason why urban innovation and change is slow and disjointed’.
Local government also had its limitations:
As the third tier of government, municipalities have a limited source of revenue linked to levying rates on property—overseen (and capped) by state government. This translates into a comparatively weak capacity to respond to the multiple challenges associated with urban redevelopment in established suburbs. Prime among these is a general lack of ability as well as willingness to vertically align with state government’s strategic planning policy for municipalities within the metropolitan region. Council officers have difficulties with Development Approval (DA) submissions that attempt to push the envelope, frequently abdicating their responsibility and leaving it to the third party arbiter (in Melbourne the Victorian Civil and Administrative Tribunal) to adjudicate. New GPR [Greyfield Precinct Renewal] projects are exerting pressure on municipal planning officers in relation to their ability to develop and align their local development strategies, assess new medium density precinct proposals in relation to their performance on key sustainability dimensions (viz. determining the community cost-benefit) and engage with property owners and developers in this process. Given the general reluctance of residents to embrace neighbourhood change, elected municipal councillors tend to align with their ratepayer voters in resisting change to ‘neighbourhood character’ and ‘overdevelopment’. Often this is reflected in municipal government’s gaming of the state government’s residential zoning schemes to ensure housing is ‘locked up’ in minimal change zones; effectively indicating that more intensive infill housing should happen ‘somewhere else’.
Professor Newton observed, however, that ‘there are signs from recent decisions associated with the establishment of the Greater Sydney Commission … of the need to be more radical and transformative in city planning metropolitan governance capacity’. He added the caveat: ‘Time will tell’.
The Greater Sydney Commission (GSC) was established by the NSW Government in 2015. The GSC consists of four commissioners (Chief Commissioner, Economic Commissioner and Deputy Chief Commission, Environment Commissioner, and Social Commissioner); five District Commissioners (Western Sydney, Central City, Eastern City, North, and South); three ex-officio members (the Secretary of the NSW Treasury, Secretary of the NSW Department of Planning and Environment, and the Secretary of Transport for NSW); and the Chief Executive Officer.
The GSC’s role ‘is to coordinate and align the planning that will shape the future of Greater Sydney’, by revising the regional plan for Sydney—the Greater Sydney Region Plan:
This involves a collaborative ‘one government’ approach, so that the GSC can lead and guide planning for development, transport and housing. The overall objective of the GSC’s work is to make Greater Sydney a productive, liveable and sustainable city for all.
The GSC has proposed ‘a metropolis of three cities’, which ‘is designed to bring residents closer to knowledge-intensive jobs, make the most efficient use of infrastructure such as transport, schools and public places, and in turn, address housing affordability’.
The three cities are:
Western Parkland City—emerging around the Western Sydney Airport.
Central River City—based on Greater Parramatta and the Olympic Peninsula (GPOP).
Eastern Harbour City—based on the established Eastern harbour city.
The NSW Government stated that:
The re-direction of the existing trajectory of Greater Sydney towards the metropolis of three cities will allow land use, transport and other infrastructure to be planned around the three cities, responding to the needs to residents in all parts of Greater Sydney. This approach is consistent with a move to a ‘30 minute city’, which will allow an increasing number of residents to be able to live within 30 minutes by public transport to their nearest city and the services and jobs that they provide.
Under the Greater Sydney Region Plan will sit District Plans—one for each of the five Districts of Greater Sydney:
The District Plans establish the opportunities, priorities and actions for each geographical area and provide the means by which the priorities and strategies outlined in the Greater Sydney Region Plan can be put into action at a local level. Draft District Plans were released for public comment at the end of 2016.
The NSW Government noted that the Greater Sydney Region Plan and the District Plans ‘play a key role in the hierarchy of plans in the Sydney Metropolitan region’, and that the plans are ‘statutory instruments, and are given weight in development and land use decisions made by planning authorities’. Local governments are ‘required to update their Local Environmental Plans (LEPs) for consistency with the District Plans’:
LEPs are an important tool for controlling the form and location of new development, including the location of new housing, along with protecting open space and environmentally sensitive areas. LEPs set out the zoning, building heights and densities allowed across the local government area, and play a critical role in determining what development is proposed and given consent in a given location.
The GSC has also ‘designed Growth Infrastructure Compacts which will bring government, business and the community together to match housing and jobs growth with timely and cost-effective delivery of infrastructure’. A key objective of these compacts ‘is to address the biggest concerns of communities, that there is a need for infrastructure to be provided in the right places at the right time’.
The Growth Infrastructure Compact approach will look at where significant residential and employment growth could occur, and then develops scenarios of what new and enhanced local and regional infrastructure will be needed to support growth in those areas. With an understanding of the different scenarios, the Growth Compact results in a ‘place-based’ plan for growth and infrastructure with community and industry input, with local and state government agency backing. The first Growth Compact is being trialled for the Greater Parramatta to Olympic Peninsula (GPOP) region over 2017 to 2018. This will be a world first in planning for growth linked to planning for infrastructure.
The Committee for Sydney enthusiastically endorsed the Greater Sydney Commission ‘which is exploring the key objectives of better land use and transport integration and of a closer fit of infrastructure planning and city planning’:
The GSC is Australia’s first cross government Metropolitan Planning authority, covering all of Greater Sydney. It was founded 18 months ago and having published its draft plans for Sydney’s 6 districts it is now working on the next iteration of the Plan for Sydney. It is also leading for NSW in the discussions with the Federal Government and the 8 councils involved in the emerging City Deal for Western Sydney. It is a serious attempt at cross government coordination of land use and transport planning and at creating an urban-planning led approach to infrastructure prioritisation and delivery. In a real departure from NSW history which is one of siloed governments departments determining their own infrastructure priorities according to their own perceptions of ‘need’, the GSC brings the relevant government departments to the table to collaborate, agree on priorities for the city, and determine what infrastructure should be preferred to deliver the objectives of the shared Plan for Sydney.
The Committee for Sydney noted that the Greater Sydney Commission had already improved the level of coordination in urban planning:
While these are early days, it seems clear to us that the collaboration between urban planning and transport planning is already hugely improved, with Transport for NSW indicating a much deeper commitment to ensuring their transport modes support the land use planning objectives of the GSC than we have ever seen in this State.
The Committee for Sydney regarded this development as ‘welcome though long overdue’, stating:
We cannot see how good infrastructure planning was ever feasible without such collaboration and coordination—and without the Urban Plan for Metropolitan Sydney being the basis of all key transport infrastructure appraisal and prioritisation decisions.
Taking the model beyond Sydney, the Committee for Sydney recommended that ‘for all Australian capital cities that key infrastructure priorities must be based in the Urban Plan for that city and aimed at delivering its land use objectives’:
We cannot continue to have the Urban Plan for our Capital cities have but a distant link to the infrastructure choices of State governments with the consequence that the urban planning objectives of building higher density more compact cities are either not delivered by the transport infrastructure preferred by State governments or are actively undermined by them. We have in a sense ‘talked’ compact cities whilst delivering sprawl. The GSC itself is an attempt to corral all of government behind the single city strategy. We shall see how effective it will be in practice.
The Committee for Sydney was optimistic about what the Greater Sydney Commission would achieve and urged the ‘Federal Government to join the State government in reviewing the success of the GSC with a view to supporting the model in other dispensations’. The Committee for Sydney also saw the Greater Sydney Commission planning model directly influencing Commonwealth Government planning and decisions:
The Federal Government should also review how outcomes have been impacted by the GSC in due course particularly as regards whether improved collaboration across government around delivering the objectives of the Metro Plan will also lead to improved and more credible bids for infrastructure spending to the federal Government via Infrastructure Australia—for projects which show with credible evidence how they will improve city outcomes rather than on poor or no evidence that such projects will reduce travel time. In the past the Federal Government has approved funding for city infrastructure projects such as major road programs on very poor evidence or on the basis of the wrong objectives. Cities are shaped and indeed misshaped by such decisions.
IA [Infrastructure Australia] itself needs to require from State bidders for infrastructure projects going forward how they conform with achieving the goals of a city’s Metropolitan Plan. IA should lead State Governments to a reformed appraisal process for infrastructure of the kind we suggest here and are developing in greater detail in our forthcoming Issues Paper.
EDOs of Australia was more cautious in its endorsement of the Greater Sydney Commission. It ‘welcomed aspects of the Greater Sydney Commission model—in particular, having three Commissioners with a focus on economics, social equity and environmental protection respectively; and a more general focus on equitable access to services’, but cautioned that ‘whether these three areas truly integrate remains to be seen’. It noted that ‘the Greater Sydney Commission’s task (and that of other urban planners in NSW and across Australia) remains hampered by’:
a risk that specific economic aims will eclipse generic environmental aims;
a lack of environmental goals, targets or data to assist decision-making;
limited community engagement or clarity on the planning bodies’ influence;
limited coordination within and between governments on environmental goals and policies to achieve ESD; and
a lack of institutional resources focused on the genuine integration of environmental assets and cumulative impacts in strategic planning.
Dr Spiller suggested that the Greater Sydney Commission ‘would be greatly improved in my opinion if, instead of having government appointed representatives of the different districts, if those districts elected one of their number’. He stated that this would change the politics and dynamics of the Commission enormously:
When there is a contest between the metropolitan interest and the local interest, when that debate is held in the commission, if you have that kind of democratic mandate the way in which that debate is conducted will be a different kind of debate than one in which you have an institution that when push comes to shove is owned by the state government. The local constituency will hold fast and tend to fight. It is about giving up power or sharing power.
Professor Pascal Perez, the Director of the SMART Infrastructure Facility at the University of Wollongong, supported the work of the Greater Sydney Commission, but identified the need for it to incorporate Newcastle and Wollongong as well. He stated:
I was very excited when I saw the new plan for the three cities from the Greater Sydney Commission last week and the new plan from Infrastructure New South Wales. This is brilliant thinking and coordinated planning for infrastructure and land use. That is great. My only problem with this very good work is the fact that there is nothing yet about the five cities. Three cities is fine. But it is an east-west corridor and the growth of Sydney cannot be on an east-west corridor only. At one stage we are going to have to come back with what I thought at the time was one of the very strong messages from the Committee for Sydney that it is not about three cities only, it is about five cities—and probably five regions. We need to bring the Hunter and the Illawarra into the planning and master planning now. I am frustrated to see a grey dotted line in all the maps going south-east and ‘we’re going to see this later’. Later will be too late.
Professor John Stanley, a consultant for the Bus Industry Confederation (BIC), thought the ‘Greater Sydney Commission model … a really good way to approach the governance element, in particular because it gives local government a much stronger role in that regional strategic process’. He noted that ‘most Australian capital cities in particular play local government out of the strategic role in terms of city forward thinking’, that ‘they are very much at the bottom end of the pile and the state governments exercise that role’. He also believed that a closer partnership between local and state governments would promote long-term bipartisan city planning. He advocated the establishment of a similar model—the ‘Metropolitan Planning Authority model’—across all of Australia’s capital cities. In its submission, the BIC stated:
Establishment of Metropolitan Planning Authorities for each of our capital cities, with responsibility for developing strategic land use, transport and related policy and planning directions, where board membership is split equally between representatives of the State government and local government, should be supportive of better planning and deliver better outcomes. The municipal representatives would generally need to be selected from sub-regions of Local government, to keep numbers manageable. A Federal government representative should also be considered … This would require the state to give up an element of its current power but is likely to deliver better community outcomes, which is what should be important. The Board Chair would speak for the capital city on land use transport (and related) matters when a regional voice is required, Some states already have entities that could be easily re-shaped to perform this role, to avoid adding a new layer of bureaucracy.
While acknowledging that this model did not necessarily require direct Commonwealth representation, the BIC supported ‘a more hands-on approach’ to Commonwealth involvement in the Metropolitan Planning Authorities, ‘which goes further than simply setting out its expectations and includes more active engagement around the best ways to use land use transport (and related) policies and programs in particular cities to meet national goals’. The BIC noted that under this approach, Commonwealth representation on MPA boards ‘would be appropriate’. The BIC noted that:
The stronger and more active level of federal involvement in this approach should facilitated more informed federal decision making and much easier processing of the outputs of the planning processes, including when it comes to funding issues. It seems likely to be a more efficient planning and decision-making process.
While the Committee does not support the creation of a fourth level of government—three is more than enough—it does support the creation of governance mechanisms that will promote city-wide integrated planning and infrastructure procurement.
The need for a permanent institutional framework to underpin coordination of the activities of all three levels of government and other stakeholders would seem to be obvious. The Greater Sydney Commission provides an example of effective city-wide planning and coordination and, while the Committee is conscious that the Greater Sydney Commission is a New South Wales Government initiative and is designed principally to promote better planning in the Greater Sydney Region, it believes the model could be usefully translated elsewhere. The BIC’s Metropolitan Planning Authority concept provides an effective model for metropolitan governance incorporating national, state and local representation.
The Committee supports the creation of city region commissions, along the lines of the Greater Sydney Commission.
The Committee recommends that the Australian Government encourage the State and Territory Governments to investigate city commissions, along the lines of the Greater Sydney Commission.
Taxation policy supporting secondary centres of economic activity
As noted by Associate Professor Burke, ‘the need for good jobs in the suburbs is also now acute’. The metropolitan strategies of all the major cities now encourage development of suburban employment centres and secondary business districts aimed at generating employment opportunities closer to where people live. However, Associate Professor Burke suggested that these strategies are ‘not supported by many meaningful policy levers at Commonwealth or state level’:
Employment decentralisation policies are mostly absent; government worker relocation plans are sporadic and often targeted more at inter-city movements.
The benefits of agglomeration were discussed in Chapter 3-Integrating Cities. Evidence to the inquiry indicated that national taxation policy could be used to help foster secondary economic agglomeration and jobs growth in the outer suburban communities of Australian cities. The Macquarie Business Park and Westmead Health Precinct in Parramatta showcase the economic activity and employment opportunities that can be generated by the right mix of government policy, investment and cooperation with the private sector.
According to Mr Greg Dyer, Chief Executive Officer and General Management of the City of Parramatta Council, Westmead is now ‘the Southern Hemisphere's largest health precinct’ and with further government support could deliver significant employment growth:
It has the capacity to produce up to 50,000 jobs over the next 20 to 25 years with just a little more co-investment from federal and state governments. It's already slated to grow quite substantially. Today, it creates roughly 18,000 jobs, but we see that it can successfully transform into a globally renowned innovation district. It can be a precinct which could deliver 50,000 knowledge jobs—the right jobs, the smart jobs. We already have more PhDs per square kilometre here in Parramatta LGA than anywhere else in Australia and we want to continue to create that environment, that hub for high-level learning and high-level jobs.
Mr Dyer noted that growing the precinct will require ‘a concerted effort between state and federal governments’. Councillor Andrew Wilson, Lord Mayor of the City of Parramatta suggested that the Australian Government could use tax incentives to generate further economic activity and jobs growth:
There are many places in Australia where the federal government has effectively given tax incentives, put in someone to build submarines or whatever. Every job you put into Parramatta, I would argue, gives you a far better return on tax, other employment and the whole way that the city works than just about anywhere else you could put it. If we are really serious than we've got to get this city working.
Professor Billie Giles-Corti, Director of the Healthy, Liveable Cities Group at RMIT University also noted the potential of national taxation policy as a driver of economic development in secondary city locations. She acknowledged that research in this area is insufficient, but suggested that things like payroll tax, lower land taxes or lower tax rates may be deployable to attract businesses out of the CBD:
How do we redistribute employment across the city, and what would the mechanisms be for doing it? …I do think that that's a major issue, on which at this stage I wouldn't regard myself as an expert, but certainly it's something where we’ve been discussing how we do that, because there's a lot of discussion amongst policymakers in the city about how we do that to be able to produce a better result.
RMIT subsequently recommended that the Australian Government ‘explore mechanisms (e.g., tax) for redistributing employment across cities’.
NGAA also urged the Australian Government to use all of the levers at their disposal expand employment options in outer suburban communities, including ‘tax incentives’.
Evidence to the inquiry also indicated that targeted federal investment in outer suburban economies, where the bulk of population growth is occurring, is needed to generate employment opportunities closer to where Australians live. The Council of Mayors SE Qld argued that the Australian Government should take ‘a lead role in employment generation, and mitigating misalignment between labour demand and labour supply’ because ‘giving new residents the opportunity to work locally would be a fundamental objective for the creation of sustainable cities’. It suggested that it should fund ‘key enabling infrastructure’ or relocate federal public agencies.
NGAA suggested that the Australian Government should facilitate the establishment of ‘innovation districts in in the fast growing outer suburbs – tailored to each area’s unique opportunities and industries’. Innovation districts co-locate research, industry and education facilities, such as TAFEs to generate employment and provide a ‘more robust school-to-work pipeline’. NGAA argued that ‘innovation districts would provide the mutual benefit of connecting these students with real-world training and connections to potential future employers – with a reduction on transport infrastructure and congestion, as jobs and education would be more local’.
NGAA noted that the Australian Government’s 2011, Suburban Jobs Program provided $45 million of grants and successfully supported a number of new employment opportunities in the outer suburbs of Melbourne and Sydney. It described the program as a ‘watershed [moment] for fast growing outer suburbs’ in terms of the employment opportunities generated and advocated for the reintroduction of a similar initiative, ‘focussed on the jobs of the future, innovation, partnerships with research institutions and support for small to medium enterprises’. Lead West agreed that fast-growing outer suburbs should be viewed as investment sites for economic hubs’.
It is the Committee’s view that addressing the impacts of economic agglomeration, changing demographics and climate change will also require a national policy to coordinate the initiatives of all levels of government and different government agencies.
Inquiry stakeholders have suggested that this should include national taxation policy aimed at facilitating secondary CBDs in Australia’s major cities. Although the Committee appreciates the need to bring jobs closer to where people live, it is conscious that agglomeration provides businesses with a number of benefits and is absolutely critical as Australia transitions to a knowledge and services focussed economy. It believes that further investigation is needed to ensure any such policy facilitates the clustering of mutually supportive businesses in strategic locations and avoids scattergun decentralisation with the potential to negative impact economic growth.
The Committee recommends that the Australian Government investigate the provision of spatially and industry targeted tax incentives to drive strategic secondary economic agglomeration in major cities.
Throughout the inquiry, a number of outer suburban stakeholders advocated for the reinstatement of grants programs to support projects aimed at generating employment growth outside of the CBD, for example the Suburban Jobs Program. Given the success of this program and the importance of improving Australians access to employment, the Committee believes a similar initiative is needed.
There was also general consensus amongst submitters and witnesses that targeted Commonwealth investment in outer suburban economies can catalyse employment growth, particularly in relation to transport infrastructure or research, innovation and education precincts. The Australian Government’s role in transport infrastructure investment is considered further in Chapter 6, Urban connectivity.
The Committee recommends that the Australian Government, as part of the system of master planning under the national plan of settlement, provide financial support, in the form of grants, to projects with demonstrated potential to generate significant employment growth in the rapidly expanding, outer suburban communities of Australian cities.