The federal government keeps pushing back on taking responsibility for major national infrastructure centred on cities. But there are five good reasons it needs to reassess and take a leadership position.
The Cities Minister, Alan Tudge has offered a rallying cry for states to build more infrastructure. The need is certainly real: Australia is one of the most urbanised countries in the world, with 86 per cent of the population residing in cities, even if the country’s mythology continues to celebrate the bush and the beach.
The lives of most Australians depends on the fate of its cities, with almost 60 per cent of the people living in the five largest—Sydney, Melbourne, Brisbane, Perth, and Adelaide.
By many measures, Australia’s cities are thriving. But they are also struggling – burdened by high housing costs, lacking the transport infrastructure they need, witnessing a growing divide between the haves and the have-nots.
As Australia’s population increases, cities need to be able to add infrastructure of all kinds in proportion to the population growth – trains, schools, hospitals, parks, and shops.
This requires the federal government to be a co-investor with the states in building the infrastructure for the future.
The cities of Australia need strategic and far-sighted support from the federal government in order to be successful. Co-funding infrastructure is part of that, but the minister also needs to go further.
First, expand the City Deals program in the major capitals.
The Western Sydney City Deal, the first of its kind in the country, is working. A decision-making arrangement between the three levels of government, coupled with investment from the federal government, could create new jobs and new transport infrastructure.
We should expand this program — here in Sydney, to the “central city” around Parramatta and the “eastern city” around the CBD.
Secondly, the federal government also needs to invest federal dollars in urban transport networks.
City-shaping projects like Metro West, connecting the Sydney CBD and Parramatta in less than 20 minutes, will almost certainly require federal funding, but the impact they will have will be dramatic and worthy of support.
Third, expand social and affordable housing by expanding the National Housing Finance and Investment Corporation, established under Scott Morrison during his tenure as Treasurer.
The NHFIC is essentially a source of low interest loans to community housing providers and it recently issued the largest social bond in Australia at $315 million. However, the program was oversubscribed four times over, indicating sufficient demand to warrant a substantial scaling up of the government’s program.
Fourth, fix the way Australia collects money to pay for roads.
Sooner or later, the fuel excise tax is going to go away as the vehicle fleet turns over and electric vehicles replace petrol-powered cars. This transition is happening in every country in the world, and there is simply no way that it is going to pass Australia by.
As things stand currently, electric vehicle drivers pay nothing for the upkeep of the roads. Putting in place a distance-based road user charge, where vehicles pay based on kilometres travelled, is the solution.
Finally, help spread the best ideas around the country.
Australia’s federated system provides a testing bed for ideas in the same way that Americans refer to states as the “laboratories of democracy.” The New South Wales asset recycling program, Brisbane’s unified local council structure, the ACT’s adoption of a land tax, and Melbourne’s franchising of rail and tram services are all examples.
Minister Tudge is well positioned to drive knowledge exchange and dissemination of best practices through the Council of Australian Governments and to be an advocate for scaling up what works across the country.
This would be a great start. It is highly significant that the portfolio for Australia’s Cities Minister also includes infrastructure and population. It’s a structure that should enable focused action for the benefit of all of Australia’s cities.
Gabriel Metcalf is chief executive of the Committee for Sydney.
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