Executive Summary

This report is about the future of our cities and the regions around them. Our major cities and our regions have one future—they will depend on each other for their prosperity, sustainability and liveability—and planning for this future needs to be done in an integrated and holistic way.
Our cities need to be better planned, better connected, more compact, more diverse and more sustainable. They will need to engage with, and hopefully lead, global best practice in technology, urban form, accessibility and sustainability. They will need to connect to regions which are also well planned, well connected, more sustainable and better integrated. This requires vision and leadership from government at all levels, and the development of systems of urban and regional governance well-adapted to the challenges of the future.
Part 1 of the report (Chapters 2–4) addresses the high level issues of population growth and the distribution of population, employment and services; the sustainability of current trends; and the solutions needed to ensure that our cities and regions remain sustainable, accessible and liveable. It addresses the need for a national plan of settlement to ensure that people and resources are directed to outcomes that maximise sustainability, liveability and accessibility. It also specifically addresses the need for the integrated holistic planning of our cities. It identifies the symbiotic relationship between cities and regions and the need to progress their development in conjunction with each other
Part 2 of the report (Chapters 5–10) takes the focus down from national and regional level to city level, addressing particular issues vital to the sustainable development of cities. It examines issues of urban sustainability; the vital issue of urban connectivity; the sustainability of the built environment; housing accessibility and affordability; the importance of technology to the development of smart cities; and the importance of pursuing global best practice.
Part 3 of the report (Chapters 11–13) focuses once again on policy at the national level, in particular the role of the Australian Government in the development of cities. It addresses the impact of the Australian Government on the development of cities, through its various policy responsibilities, and stresses the importance of Commonwealth leadership; looks at a range of government programs which have or could contribute to the development of sustainable cities; and the issue of infrastructure procurement within the context of urban and regional development. It concludes with an examination of financing and funding innovation—especially the importance of value capture.

Developing a National Settlement Strategy

The evidence presented to the Committee indicates that Australia’s current population growth and changing demographics are placing increasing stress upon our cities and regions. Urbanisation, the ageing of the population and the transformation of the economy towards service and knowledge based industries are causing profound changes in the urban and regional landscape. The outcome of these changes will depend on how they are managed.
There is widespread acceptance that change on a national scale requires a national vision—a national plan of settlement—covering:
growth and change in population
growth and change in employment
the economically, socially and environmentally sustainable development of cities and regions
the relationship between cities and regions on a national, regional and local scale
connectivity within and between regions, and between residence and employment.
The national plan of settlement must set out a vision of what our cities could and should look like over the next fifty years and provide a pathway to achieving that vision.
Australia’s cities and regions also require a high level of integrated planning. Plans must link vertically across different levels of government, and horizontally, providing infrastructure, housing, employment and services within a coherent integrated framework. Plans must link the provision of infrastructure with land use to maximise the value of both. This is not achievable without the coherent vision which comes from master planning.

Integrating cities

Cities are complex systems—‘systems of systems’. The evidence presented to the Committee demonstrates that the creation of liveable, accessible and sustainable cities requires holistic vision and integrated development. To achieve successful development, we must envisage cities that perform for their citizens. The evidence highlights some of the essential ingredients of urban design and spatial planning, including:
the need for integrated urban planning which provides for accessibility, liveability, and economic social and environmental sustainability
the impact of agglomeration and the need to address the spatial distribution of population, employment and services through densification and connectivity, particularly mass transit
the need for diversity in housing types and the need to fully integrate housing into the planning of space, infrastructure, employment and services
the need for polycentricity.
There is also a need for greater sophistication in the way we plan cities. Access and use of a wide range of data is essential to effective planning. Targets need to be set, monitored and reviewed to ensure positive outcomes. Modelling and scenario testing is available at increasing levels of complexity and granularity. It is essential that urban planning take advantage of this.

Integrating regions

The evidence presented to the Committee highlighted the links between cities and regions, and the need to coordinate their development through a national plan of settlement. Regional development needs to be seen as part of a broader pattern of national development. The ‘hub-and-spoke’ model of development offers the opportunity to achieve integration at a local, regional and national level.
It is also important that regions be able to differentiate themselves from each other and from major urban centres in the planning process, playing to their strengths rather than copying urban planning norms. Connectivity to metropolitan centres is important to the development of regional centres, but they also need to be ‘balanced communities’ in their own right.
Government has an important role to play in promoting regional development. It can promote economic development by direct investment in regional areas, facilitate local government investment and directly promote regional development with overseas investors. Government investment in post-secondary education is of particular significance—regional universities are central to the development of regional economies.
Decentralisation of government services is also seen as a potential catalyst for growth, but it needs to be done in a sustained and coordinated way.
The Committee has also highlighted the importance of connectivity to regional development and recommended the development of transport networks which allow for fast transit between cities and regions, and within cities and regions, and the development of a high speed rail network connecting the principal urban centres along the east coast of Australia as a matter of priority.
An important catalyst for regional development is highlighting the economic and lifestyle advantages of regional communities. The Committee believes it would be useful to produce an effective cost of living index, including housing, at the scale of local communities, which would highlight the economic and lifestyle advantages of living in regional communities.

Urban sustainability

Community infrastructure and utilities play an important role in fostering the long term social and environmental sustainability of communities. But Australia’s urban development has reached a critical juncture. Business as usual approaches to community infrastructure provision no longer represent best practice and are ill-equipped to deliver prosperous and liveable communities. Urban development planning is not comprehensive and does not leverage the benefits of strategic investment in community infrastructure and utilities. Furthermore, national policy guidance is needed to ensure urban development incorporates environmentally friendly design. Urban redevelopment offers a significant opportunity to improve the environmental sustainability of Australia’s urban form.

Community Infrastructure

The Committee has recommended aligning existing regional infrastructure programs to the proposed plan of national settlement to support investment in communities experiencing rapid and sustained population growth and regional centres which are strategically placed to expand with catalytic investment in community infrastructure. It has also recommended establishing nationally consistent age-inclusive standards for urban development informed by community consultation and reviews of international and Australian best practice.

Urban water management

The Committee notes that smarter urban water management has the potential to drive significant sustainability gains and improved liveability in Australian communities and urges the Australian Government to seriously consider the findings of the Productivity Commission review of National Water Reform.

Waste management

The Committee recommends the establishment of nationally consistent measurable targets to reduce waste to landfill, and the incorporation of a waste indicator into the National Cities Performance Framework. The Committee also recommends that the Australian Government provide grant funding to catalyse new innovative businesses focussed on waste recycling or utilisation.

Climate change

The Committee recommends establishing nationally consistent guidelines for urban green space and the establishment of a clear trajectory to continued carbon emissions reductions.

Urban connectivity

Transport connectivity is an essential element of the development of cities. It defines the urban form, determines accessibility to employment and services, and has significant economic, environmental, social and health implications. Creating a more sustainable urban form will involve developing more sustainable forms of connectivity. The Committee is of the view that in order for this transformation to take place, governments must:
commit to a more sustainable model of urban transport connectivity than currently exists
actively promote investment in the development of a public transport network that is capable of meeting the goal of the 30-minute city
actively plan for and promote the integration of active transport within the transport network
embrace innovation
ensure that transport infrastructure planning is consistent with planning for a more sustainable urban form and conforms to integrated planning at local, regional and city levels.

Freight

Freight connectivity is no less important than passenger connectivity. The efficient movement of freight is essential to the economy and employment. Future planning of the urban environment needs to incorporate freight connectivity in a variety of forms and levels. The critical issues around freight connectivity are urban encroachment, managing the movement of freight and CBD delivery.
The Committee recommends:
that planning at all levels include freight access as a matter of priority
the development of a national freight network, creating a strong system of multimodal integration based on dedicated freight nodes, prioritising the movement of freight by rail, separating freight and passenger movements where possible, and developing dedicated fast-rail and high-speed-rail passenger rail lines to relive the congestion of existing networks
road fleet modernisation
the development of the National Freight Performance Framework.

Sustainable buildings

Governments at all levels acknowledge the importance of transitioning Australia’s built environment to a more environmentally sustainable future. The private sector has also demonstrated its commitment to a more sustainable built environment by implementing building sustainability rating systems. However, Australia’s built environment still accounts for almost a quarter of the nation’s greenhouse gas emissions and more than half of electricity consumption.
The Committee believes that enhancing the environmental sustainability of Australia’s built environment is critical to maintaining the prosperity, liveability and resilience of settlements of all sizes. It supports continuing to enhance the environmental sustainability of Australia’s built environment.

Improving housing affordability

Adequate affordable housing with good amenity is fundamental to the sustainability of Australian communities. Evidence to the inquiry suggested that rapid population growth—decoupled from land release, housing construction and job creation—is jeopardising Australians’ access to appropriate and affordable housing. Australia’s largest two cities, Sydney and Melbourne, are now experiencing a housing crisis threatening their social sustainability. The Committee acknowledges the complexity of the housing affordability issue, examining possible solutions around:
national oversight of housing
opportunities to expand and streamline housing supply
strategies to rebalance demand for housing.
The Committee has recommended the appointment of a senior Minister with responsibility for housing to:
monitor housing affordability issues
ensure all government policies align with the provision of more affordable quality housing
coordinate all government agencies with a role in implementing housing outcomes
identify and strategically develop Commonwealth land holdings to address housing affordability and amenity issues
investigate the viability of nationalising and streamlining planning regulation similar to the Australian Building Codes Board model.

Smart cities

Smart cities are those which apply innovative technologies to enhance urban services, reduce costs and resource consumption, and to engage more effectively with citizens. Smart cities, which leverage technology to improve the efficiency of services, enhance liveability, and improve environmental and social sustainability, are critical to the ongoing prosperity of Australia and the well-being of Australians. Evidence to the inquiry indicated that conditions and infrastructure required to generate ‘smarter cities’ in the Australian context include:
connection to fast and reliable internet
the proliferation of internet of things (IoT) technologies
establishing mechanisms to safeguard the interoperability of IoT technologies
a move to ‘open data’.
The Committee has made a number of recommendations designed to promote technological innovation in the urban landscape and create smarter cities.

Global best practice

It is clear that a successful transition to best practice urban development will create vibrant, sustainable and prosperous Australian cities. It will also deliver a number of international benefits, including:
enhancing Australia’s reputation as a responsible global citizen
safeguarding Australia’s competiveness in the knowledge economy
positioning Australia to export expertise and innovative new products.
The Committee believes that the Australian Government must lead this reorientation to global best practice by:
applying international best practice approaches to urban development, to the development of national settlement plans, the design of policies and programs; and the providing funding to support Australian cities and regional centres
facilitating access to international expertise in infrastructure provision and urban development
maintaining the CRC research agenda’s previous focus on urban issues
establishing a national institute for cities research, on the model of the UKCRIC
tasking the new institute for cities research with identifying how international best practice approaches to urban development can best be applied in Australian cities
re-endorsing Creating Places for People: An Urban Design Protocol for Australian Cities and providing financial support to maintain and promote these design principles
supporting the broader application of rating systems, such as the Green Building Council of Australia’s Green Star program, to urban regeneration.

Role of the Commonwealth—improving governance

The need for the Australian Government to take a leading role in the development of cities was highlighted in the evidence presented to the Committee. Australian Government policy touches on many areas which relate directly to the development of cities and regions. Whether it is in immigration, taxation, infrastructure, telecommunications and digital technology, or a host of other policy areas, the Commonwealth already plays a critical role in the development of cities. The Australian Government is the only entity which can influence policies and outcomes at a national level.
The Commonwealth to a large degree also controls the purse strings. The development of cities is heavily reliant on Commonwealth funding and support. The evidence presented to the Committee indicates that most stakeholders believe the Australian Government should be taking an even larger role in the development of cities.
The Committee has recommended that the Australian Government conduct a review of the spatial impact (distribution of population, housing, employment, industry and services) of its policies and ensure that urban and regional infrastructure is developed giving consideration to potential settlement patterns.
In pursuit of a sustained, coordinated, holistic vision for the development of Australia’s cities and regions, it has also recommended a substantial change to the governance arrangements at a national level coordinating urban and regional development, including creating a Minister and Department for Cities and National Settlement and the Office of National Chief Planner. These would have responsibility for and oversight of the national plan of settlement.

Role of the Commonwealth—government programs

Over the years the Commonwealth has engaged in a number of programs which have or could contribute to the development of sustainable cities. The former Building Better Cities Program is widely regarded as a great success and a template for future action. Currently, the City Deals program seeks to promote the coordinated planning and development of cities and regions.
The City Deals program has excited much interest, but with so far limited results. 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.
The Committee is also of the view that creating a governance mechanism that operates at a whole-of-city level has much to recommend it. It supports the creation of city region commissions along the lines of the Greater Sydney Commission.
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. 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. It also proposes providing 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.

Infrastructure procurement

Infrastructure procurement is a key element in the development of Australia’s cities and regions. Without effective procurement processes, the provision of infrastructure is less likely to meet the economic, social and environmental needs of the Australian people, or provide for the successful integration of the nation’s cities and regions. The evidence presented to the Committee highlighted the need to refine infrastructure procurement methods and bring them more closely into line with planning mechanisms. In particular, there was an identified need to align procurement with innovation, creating innovative outcomes underpinned by innovation in financing and funding methods.
The Committee endorses adopting a ‘whole-of-life’ approach to procurement. It also supports an approach to infrastructure procurement that, where appropriate, utilises independent development corporations to manage the procurement and development of infrastructure projects, promotes technical innovation, and supports and engages with Tier 2 & 3 contractors.
The Committee has recommended establishing a procurement training program to develop and promote good procurement skills and practice at all levels of government.
The Committee believes that innovation in project appraisal is essential to successful urban development, and that individual infrastructure projects should be assessed not only in terms of the cost-benefit ratio, but also in terms of how well it integrates with long-term planning requirements. It has recommended an approach to infrastructure project appraisal that includes assessment of wider economic, social and environmental benefits; costs and returns over the life of the infrastructure; and cost of the project using a discount rate of 4 per cent.
The Committee is also conscious that there are significant opportunities to apply value capture to the development of infrastructure. Value capture should be part of the conception of any infrastructure project. The Committee has recommended that the Australian Government develop a system of value capture as an organising principle of infrastructure planning and procurement, and progress the reform of the taxation system to match the requirements of value capture, in conjunction with State and Territory Governments, to provide a single, seamless, transparent system of taxes, charges and contributions, which allows for the costs of infrastructure development, where appropriate, to be met on the beneficiary-pays principle.

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