Changing work and changing demography = changing cities

How much longer will cities be powered by office workers in a central location?

The history of cities is a long one, but the urban form of a mono-centric city that houses the best knowledge workers and professional minds, serviced by unrivalled inner urban amenity and metro wide transport networks, is relatively young in historic terms. It may also be short lived.

The pre-industrial city existed for several hundred years until around the early 1700s, and was largely a trade and agriculture hub, powered by people and animals. The industrial city of the late 1700s to mid 1900s was powered by mechanisation, factories and manufacturing, with workers living close to the places of industry. Think the London of Charles Dickens. This lasted maybe 250 years. The post-industrial city, powered by growth in service industries, finance, information and research, lasted roughly from the 1960s until recently – a period of maybe just 50 or 60 years. This is what drove demand for office buildings the world over. This is our world now, but it is changing fast.

Sydney of the early 1900s may seem an eternity away but this was only just over 100 years ago. 

Two recent media stories drew attention to forces which are inevitably, irresistibly reshaping cities again. Post-Covid changes to workforce dynamics, the rapid deployment of Ai, and the unrelenting march of demography (the ageing population) place us at the start of a new era of change.

The first story was by Hari Hara Priya Kannan, Data Scientist at The Demographics Group, writing in The Australian. “The story shaping commercial property markets is not the headline increase. It is the age composition beneath it,” she wrote.

“An expanding 70-plus cohort supports sustained demand for healthcare infrastructure – general practice clinics, specialist consulting suites, diagnostic facilities, rehabilitation centres and day surgeries… Suburban medical precincts, particularly in established middle-ring suburbs, are likely to benefit…

Growth in the 55-69 and 40-54 cohorts reinforces demand for professional services, financial planning, insurance, legal practices and wellness providers. As workforce participation among mature workers remains elevated, demand may shift toward flexible and decentralised office formats. At the same time, slower relative growth in the 25-39 bracket moderates expectations of rapid youth-driven expansion in inner-city hospitality and high-density retail precincts.

Office markets face a nuanced adjustment. As the share of older workers rises, demand may tilt toward accessible, flexible and decentralised formats. Commuting intensity may shift as retirement ages extend but full-time CBD attendance moderates.

Mixed-use precincts integrating residential, healthcare and essential retail may align more closely with demographic reality than single-use CBD developments.”

The second story dealt not with demography but technology, and specifically the impact of Ai. “Morgan Stanley axes thousands of jobs as AI up-ends white-collar work” was the headline, also in The Australian.

“The “great cull” is eliminating thousands of white-collar roles at major Australian companies… While jobs are also being axed, businesses are demanding a radically new AI-fluent employee, warning those who fail to adapt will become obsolete…

The mass sackings have sparked a new industrial revolution, with some executives warning of more to come as bots and algorithms consume human roles.”

Ai’s capacity to perform administrative tasks at ease and with speed, will surely take a toll on many thousands of jobs traditionally harboured in CBDs, but elsewhere also. Some estimates suggest over 40% of Australia’s administrative and support service roles could be replaced by Ai by 2030. And the Ai revolution is only beginning, with moves into medical, education, finance, even creative industries being impacted at light speed.

Office workers of the late 1960s. A little over 50 years ago but now nearly all these occupations are gone. 

Yes, Ai will create new, previously unimagined opportunities for some. For others, who relied on administrative skills, it will be a rapid and uncomfortable readjustment. The concentration of wealth and privilege in the hands of an increasingly smaller share of the population has been underway for some time. Ai may accelerate that inequity.

Today's "office worker" doesn't even need the office. They split their time between home and the office. 

The history of the evolution of cities reflects the history of work and occupations. With Ai impacting occupations in such a profound way, it is inevitable that city-wide changes will follow. Combined with our changing demography (“demography is destiny” the saying goes) a fundamental reshaping of our cities around what type of work is done where and by whom is surely underway. Already we can witness the replacement of traditional retail tenancies in suburban shopping districts with the rapid growth of health and allied health services. GPs, dental, physio, pharmacy, blood pathology, medical imaging, personal care – these are the new retail specialties, with growth driven by demography.

And in CBDs, the impact of ‘work from home’ along with rapid technological innovation appears to be equating to fewer overall CBD workers. The best and brightest will continue to drive demand for premium office space in the most amenable parts of the CBD, but the future of older style buildings in less prized locations is uncertain. Will they remain as offices, or be converted to schools, healthcare or possibly residential?

Options for unwanted CBD office space in secondary buildings could include conversion to education, health or possibly residential uses. But will they be reborn as refurbished offices? Who would fill them? What types of occupations that cannot be done by Ai?

What does seem certain is that CBDs are going to be less about the ‘business’ and increasingly more about the amenity. Inner cities are continuing to add enhancements from both public and private capital while many suburban and regional centres watch on with envy.

New apartments targeting the wealthier members of the community are viable only in inner city markets because wealthy purchasers can afford them, and because this is where many of them want to live due to the concentration of amenity in the inner city and proximity to their high end workplaces.

Meanwhile, modest new dwellings in many suburban areas struggle to be viable because development costs exceed the capacity of the local market to pay. 

In a similar vein, public capital devoted to new or improved cultural, recreational, transport, education, dining, entertainment and open space assets seems invariably to gravitate to inner city locations. This is despite the declining numerical weight of CBD/inner city jobs relative to a wider region, and despite the shifting demography which is also drifting away from centres.

The Hunger Games contrasted the excessive, indulgent wealth of monocentric The Capitol with the relative poverty of The Districts. Was this an allegory for the recent evolution of cities where wealth and privelege concentrates in urban cores which were only 100 years ago centres of industry and working class housing? 

Have we now reached a point in the history of the evolution of cities where the forces of change are now far ahead of our thinking? Are we still mentally of the monocentric mindset of the post-industrial city – despite all evidence to the contrary – and doubling down on infrastructure and private capital investment on that basis? Are we reinforcing that obsolete mindset with planning and other regulatory instruments which perpetuate that model and that period in time?

Change and evolution is impossible to resist. The new era of cities – the fourth industrial revolution – is upon us. We had better get used to it: it is time to think and act differently. There is no turning back.

Suburban centres will continue to evolve, and be home to a growing services, health and education based economy. The monocentric city will become polycentric. 

Do we need Elon Musk to help fix our planning systems?

I know the mention of Elon Musk can be triggering for some. Mention of planning laws is equally triggering, but for a great many more people. You will see the connection soon.

My first formal encounter with “planning law reform” was in the mid 1990s, when as a fairly new Executive Director of the then newly named Property Council, the case for planning reform was passionately promoted by the industry. Planning laws were - it was argued - overly complex, time consuming, inconsistent and riddled with costly process. Or so we thought. Oh, to have those bad old days back again.

The Government of the day introduced a reform package in what was known as the “Planning, Environment and Development Assessment Bill” (PEDA). We joked we should call it ‘the PEDA-file.’ The name was swiftly and wisely changed, into what would later become the Integrated Planning Act (1997).

Proponents hailed IPA as something of a revolution. It introduced what was billed as an ‘Integrated Development Assessment System’ (IDAS) which promised a more coordinated approach to assessing and approving development applications. It also introduced a less prescriptive form of land use control, via a system of performance-based planning – the idea being that how a project performs against outcomes of sustainability, economic and community criteria is more important that prescribing what can and cannot be built on a particular piece of land. Environmental sustainability was also heralded as a key objective of the act.

The IPA promise of greater efficiency and transparency proved an abject fail, if the burgeoning number of planning law specialists, town planners and associated experts is anything to go by. Local governments resisted interference in their plan making and adjudication powers, while applicants were faced with a confusing labyrinth of overlapping assessment pathways under different regulations. Ambiguity led to community anger, and the government of the day played up to it by labelling all developers as ‘greedy’ for trying to do what the original act had promised.

It kept us busy at the PCA. The Bligh Government, under pressure to resolve the widespread dissent, worked up a new regulatory framework, initially under Deputy Premier and Planning Minister Paul Lucas, then Stirling Hinchliffe who took over as Planning Minister in early 2009. The new ‘Sustainable Planning Act’ was passed in late 2009. I recall Minister Hinchliffe joking to me that a core KPI of his for the new Act was that the word ‘sustainable’ must appear on every page at least once. I later learned he wasn’t really joking. While the industry continued to be blasted as “greedy developers” the Act was very much positioned for political appeal to the growing environmental movement. Planning was becoming a political plaything.

Once again, any promise of regulatory improvement was a fail. Complexity, confusion, process-led assessments which took extraordinarily long times to consider, and inconsistent outcomes flourished under the SPA. More planning lawyers, town planners, and related experts were now needed to answer the simple question: “what can I do with this piece of land?”

And so once more it was necessary revisit the regulatory framework, with the noble aims of simplicity and transparency front and centre. And with that, some years more of industry advocacy later, the Planning Act (2016) was passed.

Are we any better off now than we were back in 1997? In a paper I was commissioned to produce for the Australian Institute for Progress titled “FASTER, BETTER, MORE - Why it takes so long and costs so much to deliver the housing we need – and what we can do about it” I observed that:

The increase in complexity is illustrated by the length of many state planning regulations: for example, the Local Government (Planning and Environment) Act of 1990 was 120 pages in length. The latest incarnation – the Planning Act 2016 – is 430 pages plus 526 pages of planning regulations, plus 54 pages of Rules under the Act, 86 pages of Minister’s Guidelines and Rules and over 200 pages in State Development Assessment provisions. Further, there has been exponential growth in local government planning schemes and infrastructure agreements which can run to thousands of pages.

Lawyers I spoke with told me they didn’t really know how many pages of rules and regulations were now in force – just that it would be so many as to be impossible to count.

To deal with this level of complexity, the Planning Institute of Australia is now calling for more town planners. True, the complexity is such that what could once be performed by a trained administrative officer now requires a team of university-trained Town Planners. But rather than asking for more town planners, could it make more sense to call for less planning red tape? After all, the idea of a university educated Town Planner with a HECs debt now devoting their mind to what are often mindless administrative processes seems a terrible waste of human intelligence.

According to Jonathan O’Brien - founding editor-in-chief of Inflection Points - this increasing complexity has eroded the productivity of planners over time:

So, where to next? I cannot find a single person in the industry – either within government or private sector – who considers our current framework to be efficient, productive and clearly understood by industry and the community. Not a single one. Most will say it’s inferior to what we had 30 years ago. Little wonder supply of even the simplest thing you can do (build a house) is so choked.

Enter Elon Musk. The guy is frankly quite weird, but you can’t deny his achievements. An outstanding example of that is how he has driven simplification of rocket engines used for his Space X rockets. The original Raptor 1 engine from 2019 resembles a NASA style tangle of pipes and process that produced 185 metric tonnes of thrust. The latest version is lighter, simpler and will produce over 300 tonnes of thrust. This evolution took just 6 years.

NASA to some extent reminds me of an organisation that resembles our planning laws – they changed little over time, resisted innovation and meaningful reform, created a burgeoning bureaucracy with their own inter-generational career paths, and cost increasingly more to operate.  Along comes Elon Musk, who rethinks every process and challenges every article of rocket science faith, and whose Space X is now leading NASA in many respects. The Raptor engines are a visual symbol of how that looks in real life.

 

Which means it (planning law reform) is possible. But it will not happen by applying the ‘business as usual’ thought processes, or by inviting ‘the usual suspects’ to the reform table. The processes and people that created the problems we have today are not the people to reform them.

Musk's 5 Step Algorithm to Cut Internal Bureaucracy (from Corporate Rebels.com)

1. Question every requirement

Before changing anything in your processes, the first step of Musk's algorithm is to create clarity about every requirement that exists today.

That clarity can be made by attaching a person—and a name—to every requirement. That is, each requirement should come with the name of the person who made that requirement.

Musk: "You should never accept that a requirement came from a department, such as from 'the legal department' or 'the safety department.' You need to know the name of the real person who made that requirement."

Once that clarity is achieved—that is, when every requirement has the person's name attached—then you can start questioning whether these requirements make sense. No matter how smart or how 'powerful' that person is.

Musk: "Requirements from smart people are the most dangerous because people are less likely to question them. Always do so, even if the requirement came from me. Then make the requirements less dumb."

2. Delete any part of the process you can

The second step of Musk's algorithm is all about subtraction—a widely undervalued habit in management. In this case, it is all about deleting any part of the process you can.

In fact, it is all about deleting just a bit more than you feel comfortable with.

Musk: "You may have to add [parts or processes] back later. In fact, if you do not end up adding back at least 10% of them, then you didn't delete enough."

3. Simplify and optimize

Only when you have walked through steps one and two can you start by simplifying and optimizing (parts of) your processes.

This particular order of steps protects you from doing unnecessary work—it keeps you from improving (parts of processes) that you do not need in the end.

Musk: "A common mistake is to simplify and optimize a part or a process that should not exist."

4. Accelerate cycle time

The fourth step of Musk's algorithm is all about speed. It is about finding ways to speed up your bureaucratic processes.

"Every process can be speeded up," says Musk. "But only do this after you have followed the first three steps. In the Tesla factory, I mistakenly spent a lot of time accelerating processes that I later realized should have been deleted."

5. Automate

The fifth and last step of Musk's algorithm involves automation. Now that you have clarity about your processes and have deleted any unnecessary parts to speed up your bureaucratic processes, it is time to start looking for what you can potentially automate.

Musk: "[Automate] comes last. The big mistake in [my factories] was that I began by trying to automate every step. We should have waited until all the requirements had been questioned, parts and processes deleted, and the bugs were shaken out."

 

The other side of the road toll statistics

In addition to celebrating the end of each year and the start of a new one, we also at this time of year sadly reflect on the number of lives lost on our roads. The road toll climbs higher almost every year. Are we getting worse as drivers? Are we speeding more, or are we more distracted? Authorities have used these as reason to impose increasingly heavy fines for even minor transgressions.

There’s another side to the statistics that’s worth thinking about. Now, before anyone channels their inner Greta Thunberg with a “how dare you!” for raising this, I’ve lost two good friends due to road fatalities – one of whom was my best mate. I was first to find him, and with another mate we did our best with CPR and mouth to mouth. Unsuccessfully as it turned out, to my eternal regret. I hope others never have to experience that. So by looking at the data I am acutely aware that the numbers represent the lives of people and the hurt of those left behind.

But the facts matter and so does context.

One reason the road toll is increasing is simply that there are so many more of us on the roads. We added another million people to the national population in just 2.5 years. The only way for the road toll to fall in those circumstances would be to envisage that not one single additional person will fall victim to a road fatality. Mathematically hugely improbable.

For context, a look at road fatalities per hundred thousand people tells a different story. Here, our rate of road fatalities has been falling consistently since 1970. Those fondly recalled family photos of kids piled into the family wagon with no seatbelts were also a deadly time on our roads. Drink driving in particular, but other aspects of road safety – including road design – were not conducive to surviving the drive.

Our current rate of road fatalities is around 4.8 per hundred thousand – a rate which has more or less not changed in a decade.

Source: The Department of Infrastructure, Regional Development and Cities

How does this compare internationally? We are less than half the rate of road deaths in the USA, we are lower than New Zealand, roughly the same as Canada but higher than countries like Germany or Japan. Interestingly, Germany offers very high-speed road travel on much of its federal motorway network the autobahn. Parts of it have no speed limit at all. Clearly the quality of their highways is a major factor – speed alone is not.

Source: Department of Infrastructure, Transport, Regional Development, Communication and the Arts. (2025, October 30). International comparisons. National Road Safety Data Hub.

How do we compare across Australia? The Northern Territory is statistically the worst of the states or territories, while the ACT is the best. Is the quality of roads in the ACT a factor? Queensland is higher than both NSW and Victoria but is also a more decentralised state.

Remoteness is a factor, with remote areas recording many more more fatalities per hundred thousand than major cities. In major cities, the fatality rate is half the national average.

None of this is any consolation for people who have lost loved ones in avoidable road accidents. But it helps shed some light on how we might further mitigate accidents and fatalities. 

Arguably, Australia as a whole compares favourably on an international basis. It’s also true that major cities – where the road network is more evolved and where traffic is more congested – is a very different proposition to regional and remote areas where road quality is nothing like the big cities, and where distances travelled are much greater.

If we were serious about reducing the road toll further, we are entitled to suggest that a focus on better road quality - and driver behaviour - in regional and remote areas will yield more results than a pernicious focus on minor transgressions in the big cities.

We are not getting worse as drivers nor are we taking more risks on the roads, which the simplistic focus on overall fatality numbers (rather than the rate per hundred thousand) tries to suggest.

POSTSCRIPT: 

The rate of suicides per hundred thousand people is around 11.8 - or more than double the rate of road fatalities (4.8). Males at 18.3 per hundred thousand are almost three times more likely than females (5.5) to commit suicide, and indigenous people (at nearly 34 per hundred thousand) have a record we should be ashamed of. And like road deaths, the rate of death by suicide is much higher in regional and remote areas than major cities. 

Suicide was the 16th most common cause of death in 2024 -with 3,307 total deaths (behind variuous cancers, heart disease and other health problems). That is 2.5 times as many died on our roads (1300 in 2024). If saving lives was the objective, would it make sense to invest more effort in things like suicide prevention? 

On the buses

Increasingly, I am curious why the presence of a train station on a map immediately conjures up in the minds of some urban planners images of potentially vast numbers of people transiting by rail – an opportunity too good not to capture. ‘Transit oriented development’ as a concept seems in practice almost entirely fixated on trains as THE mode of public transport to be leveraged. Even if the said station is clearly little used, it’s the potential of that station to one day carry huge numbers of commuters which will help ‘solve’ our congestion problems – at least in the eyes of some starry-eyed dreamers. 

While cities with extensive commuter rail networks – many built a hundred years ago or more – are blessed with preexisting infrastructure, it is also true they have grown up for a century around that infrastructure. Cities without it can face economic ruin by trying to introduce it later as an overlay. One look at Melbourne’s disastrous ‘suburban rail loop’ – which if ever completed will be the most expensive project ever in Australia’s history at $300billion to $400billion (from an initial estimate of $50billion) ought to be enough to scare anyone off. In Brisbane, the Cross River Rail – a 10klm underground rail extension with a price tag of nearly $20billion (original promise $5.4billion) – is a reminder closer to home that these are eye wateringly expensive undertakings. 

Ironic then that a much lower cost and immensely more popular form of public transport never seems to get as much attention. Would you be surprised to learn that across south east Queensland, buses carry more than double the number of people than trains? In the fourth quarter of 2024-25, the bus network accounted for 31 million trips. Rail accounted for just 14 million – under half. Ferries, while a very enjoyable mode of public transport, provided a paltry 1.9 million trips. Trams – essentially the Gold Coast service – accounted for nearly 3.5 million trips.

Sydney is different. There, rail carries a touch more than buses – with 279 million annual rail trips versus 240 million annual bus trips. Very broadly, that’s close to a 50:50 split. Ignoring buses would discount half of the public transport trips across the region. (The iconic Sydney ferries ferry around 15 million trips annually, while the light rail is around 40 million trips). And in Melbourne, trains rule with 40% of public transport trips, while trams account for 35% and buses a quarter of trips. 

Part of the explanation for the mode split in Brisbane is best illustrated by the routes. The rail network across Southeast Queensland is quite limited. It began life as mainly a freight network, and a fledgling one at that. Hence, the cost of retrofitting rail over an urban form that evolved mostly in the era of the convenient and affordable motor car is now prohibitively expensive. 

The bus network by comparison looks more like the circulatory system of the human body – with arteries and veins all across the city. 

Convenience wins every time. The bus network also caters for suburb-to-suburb trips in a way that trains cannot. Further, the bus routes can be changed as the city evolves, at relatively minor cost because they chiefly use the pre-existing road network. Now enter the Brisbane Metro – Jimmy Rees’ hilarious nomenclature aside. The limited initial Metro network is already proving popular – fast, electric, quiet and turning up every 5 minutes. Future network extension for the Metro is readily possible because it can turn corners and use the road space available (trains can do neither). The Metro has, in my view, a huge future in the region. 

So why is it then that we tend to overlook the role of buses or the metro in our region, and continue with a preoccupation with rail? When we do this, we ignore roughly two thirds of the public transport network, in favour of the one third. Where’s the sense in that?

Instead, why aren’t we talking more often about transit-oriented development opportunities that work in with the bus network, bus stations and interchanges? Why not envision a future of electric, autonomous buses shuttling people around the city from suburban hub to suburban hub? And the major interchanges of that network are the future transit oriented centres of activity where development is concentrated with jobs, health care and education all catered for? 

Is the train obsession just some legacy fantasy view tinged with images of Euro/UK stations, of puffing steam engines and Harry Potter vibes? I just don’t get it. 

Oh and a post-script. The advent of 50c fares for public transport may have been heralded as a ‘congestion busting’ move but the reality is more benign. Our overall public transport use is back to where it was pre-covid, despite the addition of several hundred thousand more people in that time. 

The increase for August 2025 compared with the previous year is perceptible, but only just. Keep in mind that the addition of all these public transport modes represents only around 8% of trips in southeast Queensland. 

That subsidy now means that 95% of the cost of each and every trip is subsidised by the taxpayer. The 50c doesn’t even cover the costs of running the tap on and off infrastructure. The taxpayer subsidy is currently averaging around $19 per person per one way trip across all modes of public transport.  For rail, it’s much higher at around $30 per person per one way trip. For buses it’s much less: around $6. 

Another good reason to give buses a lot more attention. 

If “business as usual” is so utterly broken, why do we keep doing it?

 

“Business as usual is broken” I’ll say to someone. Their head nods in furious agreement. Whether that head belongs to a property industry professional, a government minister, a senior bureaucrat or a tradie doesn’t seem to matter. The realisation that business as usual is broken is now universally accepted by all except the most ardent lovers of regulatory overreach.

The question then becomes, if it is so broken, why do we keep applying business as usual techniques to solve the problem? Why don’t we discard the things we know are not working, especially the things that are working against us, and adopt a different strategy?

The signs of a broken system are everywhere. Our housing market is the most widely reported failing: median prices in capital cities are now 10 times median household incomes – and still rising. That places us as among the most expensive housing markets in the developed world. Sydney – at 14 times incomes – is second place in the world. Not a prize you want. Even Adelaide – yes Adelaide – at 10.9 times incomes, is in the top 10 least affordable cities in the world, relative to incomes. Most Australian capitals are in the top 10 or 15 globally – ahead of cities like greater metro London, Singapore or a host of US cities with bigger economies and populations.

Bringing new supply into a market at a speed which is remotely close to meeting demand is now a task that is beyond us, using business as usual techniques. Our performance could only be described as miserable and – with the exception of national politicians who keep talking targets as if they will somehow magically be delivered – no well informed person seems remotely hopeful that our supply side mechanisms are up to the task. To use the fad phrase, they are “not fit for purpose.”

One proposed ‘solution’ has been a call for more planners to cope with the increasing complexity of land use regulation and development assessment. But so far, the rate of growth in complexity is outpacing the growth of planners. Jonathan O'Brien of Inflection Points wrote an interesting piece relating the number of planners to the delivery of housing stock.

His graphs highlight the extent to which regulatory inefficiency is now baked into land use planning and development assessment. In fairness, the data seems to include planners involved in all aspects of planning outside housing – from utilities to renewables to tourism and all non-residential land uses, so a comparison with only housing is unfair. But as evidence of regulatory and process complexity it’s hard to argue against. Rather than interpreting this as a need for more planners to deal with more complexity (the BAU response) why not reduce the pointless regulatory aspects which have intelligent, university trained planners ticking menial boxes on application and assessment forms, and instead free them up to do what they trained for?

Another example of a broken system is in the costs of simply readying a block of land for a house. Colliers Engineering recently released a report which shows the average cost of civil engineering for a single block of land is now around $180,000. That does not include the cost of the land itself – just the various reports and professional fees, the earthworks, drainage, internal roads (and often external ones too), water and waste water, energy connections, project administration and so no.  

That’s a frightening number. Add to that the infrastructure charges to government, plus the land cost itself, and other fees and charges, and the land ready for a house can’t be supplied for less than around $250,000 or $300,000. Then you get to build the house – with all the regulatory grief that now involves. In the post war period (1950s and 1960s), around one third of new homes were owner built, such was the minimal intrusion of policy regulation and compliance. The National Construction Code which governs building today, is said to number 3,000 pages.

Rather than pile on more regulation, why not look to reduce the compliance burden? The answer there seems to be a reluctance to ‘wind back the clock’ to a time of less onerous compliance. Utility companies, operating as quasi monopolies, pursue increasingly high standards of engineering compliance to guard against one in a hundred-year events, or even to safeguard against climate scenarios for a largely unpredictable future. Some adopt ‘zero complaint’ benchmarks as their performance KPIs, which leads to over-design (“gold plating”). Local governments can adopt increasingly high-performance standards which are referenced to third party professional bodies (such as the engineers) to shift responsibility. Those professional bodies, not wanting to support moderate standards where there is an element of risk, respond with highest standards as minimums, to mitigate risk. All this comes at a cost.  

Alternatives – such as large scale off-grid utilities around water and wastewater – are resisted because they don’t fit the BAU model – even if they could substantially reduce costs and timeframes (which itself could also expose the inefficiency of the BAU model, so another reason to say no). And we are still rolling out NBN cable to new estates, even though an uplink to a satellite is both wireless, cheaper and faster.

Alternatives to the financing and operation of infrastructure for housing are also generally resisted. The upfront per-lot infrastructure charge approach has become entrenched as the BAU model, despite adding to the upfront costs faced by young buyers. To date there has been minimal interest in exploring alternatives such as Municipal Utility Districts (MUDs) which in the USA are widely used to fund and operate essential development infrastructure, off the balance sheets of government. They work by raising a bond to fund the delivery and operation of local water, wastewater and other utilities (even including social infrastructure such as schools or health care sometimes) which is paid off by the residents over time. It’s in effect a line on their rates bill, paid off after 10 or 15 years (maybe longer), rather than an upfront hit of an additional $30,000 or $50,000 in headworks PLUS the inefficiencies built into the $180,000 worth of civils per lot. Imagine the idea of allowing a developer to bring market efficiency to the planning and delivery of utilities infrastructure, saving costs and time for homebuyers, rather than some bloated semi government monopoly!

Even where things like prefab housing (modern methods of construction) are a proven delivery model around the world, we are resisting their deployment here - with the exception of mining camps or emergency shelters. Our mandated standards (for electricity, plumbing, energy efficiency, disability access, water efficiency and more) can prove difficult for foreign manufactured providers to meet. Even when they are designed overseas to Australian standards, we find local compliance or inspection agencies disputing that the standards have been met because our habit of wanting to ‘tick off’ compliance at every stage of the build is unrealistic (and defeats the point of efficient manufactured housing). Once it’s built, you can’t pull it apart so a plumbing inspector can say he’s happy with the internal connections.

So it seems we keep applying business as usual approaches to the same problems that business as usual has created in the first place. There is no logical explanation for this. “We’ve always done it this way” is the usual response, and it’s not good enough.

I’m reminded of that scene in Fawlty Towers, where Basil – who insists on driving a highly unreliable mini as his mode of transport – finally loses it one wet English day when it chooses the worst possible time to break down. Says Basil: “Well, don't say I haven’t warned you. I've laid it on the line to you time and time again. I'm going to give you a damn good trashing.”

Which he does. Only to appear in subsequent episodes, still driving the same car.

How many hospitals will an extra 1 million people need?

A million people generate a lot of demand for things. Hospitals included. In Australia, we need on average 1 hospital bed for every 270 people, so that’s 3,703 beds for 1 million people. Based on a large hospital of say 500 beds, that’s roughly 7.5 hospitals for 1 million people.

Why is this of interest? Because we are about to add another million people to cities like Brisbane (by 2045), Sydney (by 2040) and Melbourne (by 2038). So, just to tread water, we should have the equivalent of around 7.5 new hospitals planned for each, otherwise we go backwards.

For some more context, an average new hospital bed in Australia costs around $1.5 million to $2 million. So those 3,703 extra beds for each major city are going to need something like $5.5 billion to $7.5 billion in new capital invested. That’s at today’s dollars.

We could ask the same for schools: roughly how many do we have for every 1 million people? The answer is somewhere between around 360 (250 of which are government schools and 110 non government). If we are to maintain schooling with the same range of choice and sized schools, and to maintain class sizes as they broadly are now, that’s a lot of schools.

At Suburban Futures, we recently modelled a number of options for new school designs in urban infill locations (even including a repurposed Bunnings style shed). The cost for a full p-12 school of 1,000 students was in all cases over $100 million. Not all schools are full P-12 formats with 1000 students, but even on conservative guesstimating, we are looking at maybe $5+ billion for 50 x P-12 size schools, plus just as much again for the remaining 300 schools of smaller size. Combined that’s another $10 billion, per city region, by 2040. A lot of money, let alone the challenge of finding the sites for them.

How will the extra 1 million people get around? If the current ratio of private cars to people doesn’t change, each city region will have another 600,000 cars on the roads. Plus, another 200,000 or so commercial vehicles doing commercial things. Should we put them underground with more road tunnels? A good idea, which costs roughly $1billion per kilometre (depending on in-ground conditions and surface portals). OK, let’s build more commuter rail track so that we won’t notice the traffic impacts of an additional million people. That’s also now around $1 billion per kilometre but will likely move fewer people than a road tunnel, so is arguably not going to have as much impact.

Need something to drink, flush the toilet, wash the car or do the laundry? There’s another 200 million litres per day for 1 million people, or 73 gigalitres per year. For context, that’s roughly 30,000 Olympic swimming pools worth of extra water, each year, for each city.

Been naughty? That will mean another 1,600 to 2,000 prison cells per million people. A prison cell isn’t cheap either – around $700,000 per cell not including the operational costs. There’s at least another $1.2 billion to house the criminal element that another 1 million population will generate.

We will also need another 4,000 police officers, 12,000 nurses, 1,000 firefighters and the workplace buildings to accommodate them.

Sadly, another 1 million people will also mean another 48 people will die on the roads. Promises to lower the road toll mean that, mathematically,  none of the extra 1 million will die on our roads and the toll for the existing population will fall. A noble and worthy ambition, but the maths is sadly challenging.

In amongst this are our housing targets. I’ve long maintained that housing should be the easiest types of structures to deliver. But we have made even that difficult. The plethora of codes and regulatory and planning approvals now needed are reflected in our worsening ability to match demand with supply. 

It now takes longer and costs more doing the very same thing than just 20 years ago. The Federal Government’s target of building 1.2 million homes over 5 years could most kindly be described as an aspirational target. At worst a lie. Either way, even when it comes to the simplest form on construction, our supply response is clearly lagging, and slowing. 

It's going to be interesting to watch how this growth challenge pans out. Much of our national dialogue is focussed simply on population and housing. There’s quite a bit of attention also on the increasing traffic congestion experienced in our major centres. If we start to add to that obvious short falls in hospitals, schools, drinking water, corrections and any number of other things that are the direct consequence of growth, the debate could quickly go febrile.

Casino Royale? Flushed?

 

The much-hyped Queens Wharf Casino project originally promised to lure thousands of high spending Asian tourists (and gamblers) to Brisbane every week, injecting megadoses of energy (and cash) into our economy. The project, it was promised, would ‘put Brisbane on the map.’

Sadly, for many reasons, the owners are now faced with the need to radically rethink the entire rationale of the project. Gone are the promised high-end retailers. Now, it will be McDonalds and Lululemon, with low-cost cinemas and other budget-oriented offerings targeting locals instead of high-end foreign tourists. They are doing what anyone in business would – look for an alternative approach to save the business and get some return on the very considerable capital invested.

For the wider society though, the question could be asked: “when will we learn?” The cargo cult mentality seems irrevocably welded to big shiny things that promise to “put our city on the map.” This is nothing new, and almost every city in Australia seems to suffer the same affliction from time to time. That history in Australia is no better told than through our repeated fascination with casinos.

Where was the very first casino in Australia? It was Hobart, at Wrest Point in 1972. This was going to lure tourists to the Tassie capital in their droves. Hobart even got a new airport terminal because of it (1976). But the cracks soon emerged – while pokies were initially prohibited under the agreement, the license owners soon persuaded the government that a change was needed and over 600 pokies were installed. The casino owners were also fined on a number of occasions for machines that were not paying out as they should. Dishonesty and casinos? Noooooo!

Even more counter-intuitive is where the next casino in Australia opened. Any guess? It was in Launceston, also Tasmania. Opening as the ‘Country Club’ in 1982 the license was granted in order to provide competition to the owners of the Hobart license. And (let’s be honest), because Hobart got one, Launceston should have one too! And guess what? Rather than provide the promised competition, the owners of the Hobart License eventually secured the Launceston license also. Oh, and over 500 pokies were soon installed.

Neither has lived up to their ‘tourism magnet’ promise and are basically now just down market pokie dens for punters and pensioners. The term ‘casino’ is being generous.

Around the same time as Launceston opened its doors, two more casinos opened, with a similar menu of exaggerated promises. This time it was in the thriving tourism northern cities of Darwin and Alice Springs. Yes folks, the Northern Territory opened two at once. Cop that the rest of Australia!

Shortly after Darwin’s casino made absolutely no splash in the worldwide gambling  community of high rollers and big spenders, another one opened in … wait for it … Canberra! Wow, by now Australia ought to be drawing in big spenders from all over the world. Look out Vegas!

Hang on, what about the major centres in Australia, and the big tourism towns? If casinos were to draw international tourist dollars to Launceston and Canberra, surely they would be needed in places visitors actually went to?

Correct, and so the Gold Coast got Jupiter’s Casino in 1986. Townsville also got one in 1986 because… well, why not?

Adelaide wasn’t going to miss out on the action: they got their casino in 1985, while our mates out west got a Perth Casino in the same year.

Brisbane got its Treasury Casino in 1995, while Cairns was feeling left out, so they got The Reef Casino in 1996. That was sure to steal all the attention back from Townsville!

Melbourne’s Southbank Casino opened in 1997 (there was a temporary site before this) and so did Sydney’s in around the same year. Then, Brisbane got its new Queens Wharf to replace The Treasury in 2024.

Has any of this in any state or city really done anything for our international reputation? Has any of it produced plane loads of foreign tourists weighed down with cash they want to splash throughout our economy, creating jobs and opportunity in the process and adding to our standards of living? Has any of it ‘put us on the map’?

No, not in my view at least. What made us famous, as a place to visit and to dream of living here, was our natural beauty, environment and lifestyle. And still is. We are the envy of the world not because there’s a casino in every second town, but because we are (mostly) a safe, very liveable country which isn’t badly overcrowded (with some exceptions) and with a good standard of living. Access to quality healthcare and education are not (yet) the preserve of the wealthy but accessible to the vast majority.

Will we learn though? If history is any judge, not likely. It is sadly too easy to envisage another similar proposal one day for a big shiny casino being proposed for yet another place on the map. Maybe even a floating one on the barrier reef? Oh wait, we tried that one too! (In fairness, it was a floating hotel but a very flashy one with lots of sparkly lights).

As the saying goes, you can’t make this stuff up.

“Those who cannot remember the past are condemned to repeat it.” – George Santayana, The Life of Reason, 1905.

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.

 

Australia: we have a city problem! (Part one)

Australia’s large cities are facing extraordinary population growth pressure, with symptoms manifesting themselves in everything from shortages of housing to health care, education, transport and other forms of essential infrastructure. This pressure is fuelled almost entirely due to Federal Government immigration policy.  

The situation is exacerbated due to our historic reliance on a small handful of cities to accommodate our population: 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. To get to 70% of the population of the United States, you would need to include 120 of their largest cities, not 8.

Source: author research

In Australia, by the time you are outside our top 5 cities, you start to encounter cities of 500,000 people. By the time you get near #10, you are essentially at a rounding error for Melbourne or Sydney. The curve drops off sharply in Australia, while in the USA there are many cities of 1 million or more and the curve is less pronounced, especially once you exclude the global mega city region of wider New York.

The focus on our largest cities getting larger is unlikely to change without some policy interventions (more on that in part two of this). For the time being, the largest cities are perceived by locals and immigrants alike to offer the greatest opportunities for employment, education, health care and general amenity. This explains why immigrants are overwhelmingly choosing to settle there.

Ironically, as the large cities get more and more crowded these perceived benefits are increasingly compromised: housing costs are escalating, traffic is worsening, and access to social infrastructure gets harder. The impression however hasn’t changed the preference to settle in these large cities, despite the obvious drawbacks in housing – to the extent that our housing affordability now ranks as some of the worst in the developed world relative to incomes.

Why Australia isn’t developing a number of second tier cities capable of reducing the pressure on the major capitals is nothing new. As City Growth Strategist & Economic Geographer George Wilkinson III pointed out in his chapter in “The Next Australian City” by Suburban Futures, even on the eve of Federation in 1901, “it was contended that the capitals were congested cesspools with state centralisation being a regrettable outcome.” To entice reluctant regional votes over the line, it was promised that Federation would herald an era of decentralisation. It didn’t.

None of this is to deny that many regional cities are experiencing solid growth relative to their size. The average growth over ten years for the largest cities (Melbourne, Sydney, Brisbane and Perth) was 20%. Many regional centres grew just as fast or faster in that time. Places like Geelong (Vic), Busselton (WA), Ballarat (Vic) and Toowoomba (Qld) for example are just some of the regional cities which grew by significant percentages in the 10 years to 2024.

But if you exclude the actual growth numbers in places like the Gold Coast-Tweed (135,624) or Sunshine Coast (91,202) there are not many regional cities growing by significant numbers of people despite the high percentages: they are coming from a relatively small base. Busselton’s 25% growth for example only represents an additional 9,036 people. That pace of growth will still pose a challenge for the local council tasked with accommodating it, but in real numbers it’s not going to help relieve the pressure we are placing on the larger capitals. In the same period Busselton grew by 9,000 people for example, Brisbane grew by nearly half a million people.

 Table of select non-capital city regions with the highest % growth rates

Australia lacks any form of settlement strategy, something the Planning Institute of Australia has repeatedly argued for: “When it comes to planning strategy, we need a greater focus on place-based infrastructure planning and funding, common infrastructure demand and population scenarios to make a real change.” Hear hear.

As our major capitals hurtle toward an uncertain future driven by growth they have no control over and with limited resources, it is timely to ask why more isn’t being done to explore opportunities to spread the population load more equitably. Are there centres in Australia capable of accommodating many more people than they have at present? Are there opportunities to nurture a series of second tier cities of between 300,000 and 1 million, where opportunities for employment, housing, health care, education and environmental amenity are at least as good as those found in the major centres? If so, where would you start, and what levers are at our disposal?

Part two will explore some ideas.