How to make Australian cities the next resources bonanza

By Garry Bowditch, CEO, SMART Infrastructure.

Australia must prepare now for a world in the Asian century that is nothing like what we have experienced in the past.

The engine of growth for the world economy will be driven by consequences of migration from agricultural to urban living across the Asia Pacific. Hyper dense cities exceeding 10 million people will be the norm for countries throughout Asia. The sheer intensity of these metropolises will see by 2050 over 75% of humanity living in cities but occupying only a fraction, about 4 per cent in fact, of the earth’s surface.

There is an urgency to ensure our major cities grow and prosper for everyone’s benefit. If we succeed, we will underwrite the next economic super cycle reflecting a surge in productivity and exports of high value Australian goods and services throughout Asia and the Pacific.

Australia’s experience with a metropolis will be limited most likely to only Sydney and Melbourne in the next 100 years, although the Brisbane-Gold Coast and Perth-Fremantle conurbations may surprise supported by the growth in the mining services sector. So it is absolutely vital for Australia’s continued economic prosperity that our largest urban centres operate efficiently and provide world-class amenity because of their potential to be the economic growth equivalent of current resources boom. If we fully utilise our global cities as incubators for innovation, productivity growth and public policy entrepreneurism this will help underwrite our institutions and talent pool to be relevant and well positioned for a very different future and capture opportunities driven by an international urbanism on steroids.

We are not there yet, nor are we even close, and without radical change, talented people and capital will go offshore to better opportunities and urban amenity. Australia’s 18 major cities (over 100,000 residents) account for over 80 per cent of GDP yet we have no strategy or even rudimentary understanding of what and how they function individually or together as mega economic regions. Our level of knowledge on Australian cities is unacceptable, although some recent work by the Federal Government’s Major Cities Unit is an important albeit modest first step in this direction.

Australia has been highly innovative with converting public policy reform like competition policy, financial services regulation and infrastructure public private partnerships into an art form. This has taken Australian institutions and their talented staff to the four corners of the globe generating income, intellectual property and new industries.

We can do the same with urban design and smart city management based on data and analytics that inform citizens and policy makers alike of what is happening and what it means for them in real time. The world will judge our ability to be unique, competitive and compelling provided our cities can be a showcase of efficiency and amenity that can be transplanted around the world. This can be a win-win microeconomic reform agenda that sows the seeds of the next economic super cycle should we focus on our own engine room called Australian cities.

Benchmarking the performance of cities, and ensuring we have the data and performance criteria in place to drive our cities in the right direction and at the right pace is imperative. There is deep institutional scepticism, if not outright opposition, to benchmarking of cities, but, as any senior executive knows, organisational performance cannot be achieved any other way. The recently released draft NSW Long Term Transport Master Plan must also go the next step and benchmark future performance of Sydney’s transport system against the world’s great cities. Once these goals are set, it will then be easier to decide where best to prioritise scarce taxpayer funds to expand the network and where to target greater efficiency (rather than increase investment) on the existing network. Without performance benchmarks no government agency or Minister is ever effectively held to account for declining public transport service quality and increased congestion on our roads – more promises are made and the day of reckoning is postponed.

The case for radical engineering solutions to account for people’s and institutional behaviour must be front and centre to the future, informed by a governance framework that allows the community to shape its cities in conjunction with its civic leadership. Connecting long term planning with the hopes and aspirations of citizens on the practical things in people’s lives is key; like liveability, where childcare and jobs are no more than 10 minutes from home.

Australia’s institutional structures are generally anti-urban and their sophistication does not in any way match the importance that cities and regional centres contribute to the economy. The machinery of government needs to be recalibrated to be city-focussed and shaping mega-regional areas to ensure the right policy effort, reform programs are put in place that are not hobbled by traditional boundaries.

That means changing the way we understand cities, and opening up the potential for crowd sourcing and social media as a game changer for city governance. The key to the future of cities is the quality of interaction with communities and policymakers that benefit from feedback and knowledge that exists in the population. For example deploying data about traffic, energy, waste and public safety to solve problems and create visualisations about future scenarios will better inform and build confidence with rigour, credibility and integrity about planning processes. That also means being honest and transparent about trade-offs that have to be managed along with acknowledging the winners and losers in the process of growing our major cities.

Constitutionally, the states are in the driving seat when it comes to cities, but the money to make change is with the Commonwealth. Sounds familiar, but the most constructive first move by the Commonwealth will be to remove anti-urban bias in the calculations of the Commonwealth Grants Commission in its distribution of GST payments. Accurately calculating disadvantage from increased population density from congestion and public service delivery in complex urban settings is very important. This will go some way to helping states with large cities gain a more reasonable share of GST payments to better plan and manage them.

Most of the above arguments come back to the need to establish performance benchmarks for Australian cities and compare them with our international peers. How are Sydney and Melbourne performing against New York, Hong Kong, Tokyo and Geneva in terms of travel times to work, public transport efficiency or green space available for recreation? We must assume, until the evidence demonstrates otherwise, that each year Australian cities gradually are becoming less productive and liveable. We need to measure cities and identify targeted and purposeful remedies for improving their overall position otherwise capital and labour will vote with their feet.

Australia’s place in the Asian century is not assured – there are just too many competitors these days; but we are innovative and competitive which is a great start. We need to borrow from past achievements in policy, business and sport and apply it to the next big opportunity – Australian cities.

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