State of the Australian Cities points the way to Planning for Growth

Perth, Western Australia, has seen a significant increase in public transport use over the last decade

“From 1 January 2012 all of Australia’s capital cities will have in place planning systems to guide their futures, and it is these plans that will inform the Federal Government’s infrastructure funding. In this way, our essential social and economic infrastructure will all be funded in a coordinated way that best serves the needs and priorities of the nation.” With these words, Anthony Albanese, Minister for Infrastructure and Transport introduced the 2011 State of Australian Cities report. This explicit connection between the state of the cities, plans and investment in infrastructure sets a marker that other countries could learn from.

In the Scoping Study on the state of the Commonwealth’s cities, I wrote “At national level, each Commonwealth country should scope the scale and nature of the urban challenges that it faces—economic, social, environmental and in governance. This would be the basis for building and implementing a strategic response and sharing it with local governments, which are key to so many aspects of urban management.” This is precisely what Australia has done. Indeed they plan to do it annually, and this 2011 report builds on a similar one published in 2010,

Why monitor and report on the state of the cities?
So why have the Australians decided that the state of their cities is a matter of national importance? The report sets out three reasons. First, the report is intended to inform policy and investment decisions. This makes sense. Except amongst fundamentalist economists, it is now widely recognised that decisions in markets are made on imperfect information. Similarly, we know that uncertainty spooks investors. Second, the intention is “to record the trends in urban development”. Why bother? Because awareness and understanding of trends is a fundamental building block for planning and policy-making. Lastly, the report is seen as helping Australia’s citizens to understand the factors that are shaping their cities and way of life.

The urban economy
The major cities account for 80% of Australia’s economic activity. Figures like that are not unusual in highly developed and urbanised countries, but they do remind us again of why urban planning is so important. Thus the report explains why agglomeration has economic benefits: the larger the city, the higher the labour productivity. In addition there are the localisation economies gained by the ease with which firms in an urban centre can access and do business with one another.

However, the downside of agglomeration is that the concentration of activity creates its own problems. Traffic jams can be a significant part of “transaction costs”, the costs of participating in a market. In participating in the labour market by travelling to work a person is seeking to maximise salary while minimising travel costs. Once again, urban planning enters this equation through the disposition of houses, jobs and transport options.

In line with research findings elsewhere, the report notes that “agglomeration improves productivity for industries such as finance and insurance, property and business services, tertiary education, health and community services, and cultural and recreational services over others such as manufacturing and wholesale trade which are generally more attracted by the availability of large (relatively inexpensive) sites to locate their operations.”

Car-based commuting
One interesting finding is that the proportion of car use has declined slightly over the past decade, albeit from a very high starting point of over 85%. As anyone who has visited Australia will know, this is a country with high car ownership and an extensive road system. However, the state of the cities study suggests that even here there may be limits to the growth in personal travel. However, population growth and increased freight movements have still resulted in an increase in total kilometres travelled.

Public transport use has been on the rise in Australia’s major cities for 20 years now. Indeed over the past ten years public transport use in Perth increased by 67%, which is three times the rate of population growth over the same period. Across the cities, however, public transport needs to improve reliability and reduce overcrowding if it is to be an attractive mode of travel. There is also clear evidence of a growth in outward commuting, reflecting the emergence of suburban centres of employment.

Climate change challenges
At a time when governments of the countries with high CO2 emissions per capita seem to have given up on climate change, the Australian government has recently introduced a carbon tax. The cities reports points to some of the challenges that face the urban areas. It says “More than 700,000 dwellings are within three kilometres of the coast and less than six metres above existing sea level. Projected impacts of climate change show that a significant number of residential buildings may be at risk of inundation and damage from a sea level rise of 1.1 metre (high end scenario for 2100). Projections also show an increased frequency of extreme weather events with associated storm surges and coastal erosion, and an increased risk of damage to property and infrastructure from inundation and erosion.”

Not surprisingly, last (southern hemisphere) summer’s floods in Queensland are discussed. The areas affected were larger than the whole of France and Germany combined. Such events impose huge economic costs: in the case of Queensland an estimated Australian $5bn.

Overall thought here are some positive messages. On a per capita basis, Australian cities are consuming less energy and water and emitting less air pollution and waste. After 50 years of per capita consumption increases in all these areas this seems like a watershed. However, “population rises mean that cities will continue to create more environmental pressures.”

Liveability and social cohesion
The report also recognises that cities need to be “healthy, safe, harmonious, attractive and affordable.” This section of the report, like the others, sets out indicators that can be used to measure and compare the performance of cities. For example, the OECD’s Better Life index is applied at national level and aggregates indicators for housing, income, employment, education, local environment, health, safety, richness of community ties, overall satisfaction with life and work life balance.

At the city level there is the annual liveability survey by the Economist Intelligence Unit. This takes in a city’s stability, healthcare, culture and environment, education and infrastructure, but not the cost of living. Price Waterhouse cooper also do a “Cities of Opportunity” index. Such measures are complemented in the report by more detailed Australian data on topics such as housing, health and climate comfort. The connection to the planning of the built environment is made: “Where built environments do not support human health the outcomes are evident in the rates of the three major risk factors for chronic disease: physical inactivity, obesity and social isolation.”

Planning for growth
Finally, the report provides some guidance about they practice of planning. It notes the trend towards a more regional scale of working that is emerging around some Australian cities. It also makes the case for strategic planning that “provides clear guidance and set targets while allowing flexibility to adjust to changing circumstances and innovation; and ensures high alignment between State-level strategic and infrastructure plans including for government-funded infrastructure.”

In summary, this report shows how indicators can be used to monitor and report on urban trends at national level. It is the kind of work that any country that is serious about planning for growth would undertake.