UPDATED: News from the front issue 514: If there was any doubt that the pandemic is a major opportunity for Australia and its major cities, it was dispelled at an event on Monday held by the Committee for Sydney.
The biggest upheavals in history have created the biggest opportunities, the audience heard.
The GFC gave us Uber, Airbnb and the rest of the so-called “share economy”. The recession of the early 90s gave us the internet and Amazon (warts and all).
At desperate times it helps to think big, sometimes very big. Even to sideline the bean counters. Greater Sydney Commission boss Geoff Roberts said if the Harbour Bridge, built during the Great Depression of the 1930s, had paid attention to cost benefit analysis it would have had one lane each way.
“The Harbour Bridge isn’t a bridge, it’s a statement of nationhood, he said. The same big thinking saw Warragamba Dam built in the 40s for a city of 5 million, when the population was just 1 million.
Roberts promised there would be no more community focus groups to devise yet another strategic plan. Sydney was sticking to its three cities policy but it had now added spokes to those centres.
So there would be clusters of investment, at places such as Westmead, Macquarie Park and at the Central Station precinct where giant tech companies such as Atlassian were building new green headquarters. (Atlassian by the way sent its work futurist Dom Price to the summit to keep an eye on things.)
A bigger focus would be on the important equity issue of getting jobs to where people live. Though government had probably not done such a good job of that and it was something for the private sector to deliver.
Moving people through car traffic and trains too was problematic; perhaps it was easier to move electrons than people, he mused.
Equity along with climate and sustainability in fact took on a big share of the spotlight on stage. Showing how far things had shifted during Covid, the bushfires and the consistent concern from the public sentiment making clear these were priorities.
It was a time of largesse and big ambitions.
Even the NSW Treasury Secretary Michael Pratt could see this was not a time for counting pennies. He was urging his colleagues to spend, he said. At least for the next two years. It was clear stimulus was working and need to continue.
But with such unusual times and such big stakes in play it pays to have a plan, preferably a strategic plan and one not composed solely in gaining re-election. (We’re trying not to think of the people in the Blue Mountains or Central Coast who say they’ve not received a cent in bush fire relief because, they suspect, they didn’t vote correctly in the last election. And certainly, we’re trying not to think of the segments in our economy who’ve enjoyed so much stimulus from the government they’re been obliged to hand some back.)
Futurist Simon Corah from Growth Mantra said any plan needed to understand there were three big sustainability trends that would or should dominate thinking.
One was population growth and looming food shortages, next was pollution and the need to clean up the mess we’ve made, and third was how to cool a heating planet or at least slow down rising temperatures.
The lucky country
In the immediate term Australia was gifted and would likely star. It was safe, reliable, had a good health system and was relatively well run. And it’s a place where “you’re not being watched”.
It’s pretty clear he said that the 17 per cent of people emptying out of New York and London in the wake of Covid would love to land in Sydney or Melbourne.
But what exactly is Sydney’s calling card? Corah asked, if Melbourne is the moody romantic capital, Finland is the world’s happiest place and Estonia believe it or not had managed to become the best place for digital start-ups.
Earlier, the NSW Treasurer Dominic Perrottet had continued to the wade out of his safe and clearly a bit boring bean-counting hub to pursue a foray in town planning issues that gifted him so much clickbait last year. What buildings should be knocked down and which kept, for instance? And on Monday he shares his thought bubble that Sydney possibly had so much beauty it was struggling to find its soul. (Like it’s not possible to have both.)
After Corah’s elucidations let’s suggest Sydney’s calling card (and Australia) is the place where you can “have it all”.
Which brings us to the big thundering question we need to all ask: if Australia is so rich, so gifted, where’s our noblesse oblige? Where’s our sense of obligation and debt to humanity that should make us a leader on the world stage? On climate for one. And humanity and even basic evidenced-based decision making for another.
The climate question
On climate Danielle Wood, Grattan Institute chief executive, in an excellent presentation at the end of the summit said she was these days slightly optimistic.
There was now a “perfect storm of pressure” on the Morrison government that just might shift Australia’s intransigence. Things like carbon border taxes promised by Europe and the Britain, China’s commitment to net zero and the election of the Biden government in the US.
“It’s been a wicked problem for 20 or 30 year” with a “graveyard of policies and politicians”. But now could be the time.
“The business community is behind the push for policy certainty, the Business Council, BHP, Woodside, have all called for government action on climate” as had our prudential regulators, she said.
Sadly, by Thursday the PM was declaring he’d fight his conservative counterpart in the UK Boris Johnson to stop a carbon border tax; which at home or abroad is consistently nominated as the most stable and effective way to emissions reductions.
Of course, the PM’s front page fisty cuffs could just be part of the obligatory Punch and Judy show demanded by the gang of four or five who rule the roost in our parliament and must be appeased before we crab crawl to change.
On economy and our people, Wood thinks we now need to turn our attention away from the fading capital intensive economy to one focused on our human resources, our people.
Australia was now a vastly different place to its past, she said. Eight out of every 10 jobs are in services. There are more advertising account managers than there are miners.
It was no surprise that when the NSW and federal productivity commissions delved into what would be the best policies to concentrate on for the nation and state they landed on those that would invest in human capital.
Report after report and research lead to the same conclusion, she said. We get the best dividends economically and in every way to invest in our people. And that starts with education to make us the smartest people on the global block.
Her personal favourite was pre-school education.
“I’m not sure why we haven’t had a big national conversation about quality preschool education. The data is in, it’s so important for brain development, Especially for disadvantaged people.”
It circumvented all kinds of social and economic costs.
A $5 billion investment would yield benefits on a par with the company tax cuts. And longer-term benefits as well, she said.
There’s aged care and dental care, and better affordable health among others.
But instead, so much of our public conversation seems to focus on tax reform.
There’s almost nothing in this country that does not prompt a call for tax reform, she says.
The most shocking moment during the Coronavirus was that time when there were queues of people lining up outside Centrelink before JobKeeper was introduced and a financial journalist asked her what this would mean for tax reform.
“Don’t get me wrong,” she said, “I’m a fan of tax reform and I’ve spent a big part of my career on it.”
Plus, she was excited by the NSW tax reforms with stamp duty, but there was so much more that we could be looking to do and spend our energy on.
“We need to be having a bigger conversation.”
And there was an urgent need for actions that would work.
The National Covid Commission has been doing a reasonable job of working out which sectors to support, she said, but “they’re still very skewed to energy, mining and manufacturing so I’m not convinced the policies they come up with will pick up on the big opportunities in human capital reform.”
The problem is so many people are not recognising the way the economy has changed.
“In the middle of the crisis we do what we’ve always done and put it into the construction sector.
“Some of those hardest hit sectors [such as tourism, education, and the arts] did not receive a share of the stimulus.”
Recovery is not assured
Wood said we can hope to recover economically but where we will end up will be in pre-Covid times and that’s not exactly a booming place.
While the federal government tells us it will wind back support in March it’s welcome news indeed that there is some stimulus coming from NSW, she says [Other states are also rolling out their own stimulus packages].
It’s not what’s happening in the next two years that’s the problem,” said Wood, “it’s what happening in 23, 24 and 25.”
It’s a time when wages are not growing which means people are not spending.
“The RBA has nowhere to move on monetary policy.
“This is a time when the central banks have run out of puff.”
That leaves just fiscal policy and the need for the federal government to step up in a way that it’s not historically used to.
“The US gets it,” Wood said. “It’s announced a 1.9 trillion stimulus.”
UPDATED 15 February 2021: Photos and captions added