Can we solve Australia’s city problem? (Part two)

 

In the previous article I observed that some 70% of Australians live in our 8 largest cities. By comparison, in the USA their 10 largest cities account for just 26% of their total population. This concentration of population (and especially of growth) in such a small number of cities is reflected in daily media reports of housing shortages and housing affordability (which is some of the worst in the developed world). We also read of rising congestion, hospital shortages, school waiting lists and other features of increasingly crowded cities which just don’t have the infrastructure to keep up with the frantic pace of growth – driven entirely by Federal immigration policy.

Can anything be done to reduce this pressure on our major capitals? After all, this is a big country and – notwithstanding the inhospitable nature of much of the landmass – there are very nice places other than our eight largest cities. Why aren’t more people moving there?

‘Decentralisation’ as an idea in Australia has been around since Federation. Writing in “The Next Australian City” by Suburban Futures, author George Wilkinson III pointed out that efforts to sway state votes in favour of Federation were heavily tinged with promises of decentralisation should Federation be supported. And so began our tradition of doing the opposite of what’s promised?  

In 1901, Australia was home to around 3.8 million people. Melbourne was the biggest with 495,000 people, followed by Sydney (487,000), Adelaide (162,000), Brisbane (121,000), Perth (45,000), and Hobart (36,000). Back then, our top 10 cities accounted for just 37% of the national population. That ratio is now reversed.

Rural and regional industries from mining to agriculture and manufacturing were more labour intensive back then, and the ‘tyranny of distance’ meant more emphasis on providing locally for local community needs. Food supplies for example were more likely to be locally produced, and available only when in season. So much has changed over time and much of that change has been to the detriment of vibrant regional towns and cities.

But ironically, the increasing congestion and collateral impacts of rapid growth in the big cities may once again turn the focus back to some of the regional centres. Which ones are likely to be best positioned, and what could we do to enhance that opportunity?

One thing we should have learned that does not work is the government enforced mandate to relocate entire swathes of unwilling public servants to regional towns they have no interest in. History repeats, and this trope is still sadly favoured by many wanting to promise instant fix solutions.

Instead, here are some suggestions for a more enduring approach to encourage growth outside the major capitals:

Pick candidates. Start with a list of regional towns and cities which offer a good basis for growth. They should have a certain critical mass and reasonable, sustainable economies. The top 20 non-capital city regional areas are a starting point (I am indebted to the good people at Urban Economics for this table):

Housing Affordability is a significant motivation to explore a regional centre as opposed to a capital. Hence the inclusion of median house prices in this table, which compare very favourably with the big capitals where the same house can cost you double or more, for less land and for an inferior dwelling too.

Connectivity is also important. Being able to access a nearby major centre without major difficulty means a local airport with regular services, or a rail connection, is a valuable asset. Armidale for example, which doesn’t make the top 20 list above because of its smaller population (25,000), does have an airport with multiple daily flights to Sydney. Ballarat, which does make the top 20 list above, doesn’t have regular flights to Melbourne but the train service is a 1.5-hour journey. That’s about the time many city dwellers complain about for their daily commute.

Employment is obviously critical. Many regional centres offer jobs which pay even more than the same occupation in a major capital. Many also have more vacancies than people to fill them. The Regional Australia Institute has done some excellent work highlighting occupations which pay a premium over the big capitals. This is little known and, as the Institute recommends, is something governments could do better at in educating new arrivals and Australian residents.

Education is also highly significant. A choice of schools – government and independent – as well as possibly tertiary education are essential to many considering a move to a regional centre. Armidale, despite its smaller population, is for example home to the University of New England and has several schools with excellent reputations. The same applies to many centres in the top 20.

Health care. Hospitals, medical centres, a range of general practitioners and other professionals are vital to any healthy community. Some regional centres are endowed with quality legacy health care, while others need more investment in this. Even attracting medical workers to regional centres can be problematic, despite in some instance very high incomes being offered. The reason? Amenity. See next point.

Amenity. “Why would we want to live THERE!” This is one of the biggest hurdles faced in attracting talent, capital and enterprise to a regional centre. Often, it’s the impression of amenity (or the absence of it) which kills the deal. Families and partners are more influential than economics when it comes to decisions like this. Ironically, amenity can be a low hanging fruit. Quality parks and recreation, community facilities, vibrant main streets – these are not overly expensive in the scheme of things. I’ve often made the point that a $100m investment in urban amenity in an outer suburb or regional centre makes a very big splash. In a capital city, it will go unnoticed (and with no gratitude either!)

Environment. Too hot, too cold, too dry or too wet. Not much can be done about our climate preferences. It’s a factor for sure, but hard to fathom our fussy attitudes when you consider the economic and lifestyle miracle of somewhere like Singapore – which swelters more or less year round. Having said that, many of the top 20 non-capital city centres offer amenable environments which avoid weather extremes.

Tax. The great irony of our tax systems in Australia is that they generally treat outer suburban or regional centres the same as if they were privileged inner city areas. Why for example, is payroll tax pretty much the same for a business employing 100 people in an inner-city office building as it would be should those jobs be in a regional centre? The same applies to other noxious taxes like stamp duty, land taxes, fuel excises – all of which are typically agnostic when it comes to location. The Federal Government – which is entirely culpable for the rapid rates of population growth – shows no interest in offering major income tax or company tax concessions to people and businesses in outer suburban or regional centres. If we want to seriously turn on the ‘open for business’ sign in a regional centre, why isn’t this also on the menu?

This is not an exhaustive list, but maybe it’s the start of one? I’ve long maintained that in the same way we saw a national program devoted to inner city revival (the ‘Better Cities’ program of the late 1980s had enormous impact) we need a new approach to outer suburban and regional renewal. That will require all levels of government acting together with specific place-based outcomes in mind. It’s a nice thought anyway. I am ever hopeful. What is certain is that the current ‘business as usual’ approach to population and settlement is broken. We cannot turn to BAU to fix the very things BAU broke in the first place.