By Jemma Green, Curtin University
8 January 2014 — Sustainability Salon: In November, the World Economic Forum published its global competitiveness index. Out of the 148 countries assessed, Australia ranked 128th poorest for bureaucracy. We are up there with the likes of the third world countries. Western Australia needs urgent reform to address this, or we will be crippled by ourselves.
There are structural issues in Perth and Australia’s economy. Our productivity is going down. On November 26th, the deputy governor general for the Reserve Bank of Australia, Philip Lowe, explained decisively that Australia’s productivity has been seemingly rising in the past two decades but it has actually had little to do with Australia being more productive. Rather it is because the value of our mining exports rose greater than the value of our imports. Lowe finds that this situation won’t remain. Australia’s productivity and our standard of living is now on the decline and, left unaddressed, will continue downward.
One of theses inefficiencies is the challenge of getting across town. Countries that have grasped this have improved their competitive standing. Some have invested heavily in transport infrastructure. Others have put in place congestion charges. Either way, both result in greater efficiency.
We may not have money for one, or the will for the other. But one or both needs to be done if we want to remain competitive domestically and on the global stage.
Perth is the fastest growing city in Australia. In late November the Australian Bureau of Statistics published data that showed Perth’s population will outgrow Brisbane’s by 2028 when it will reach three million people.
The Western Australian government has infill plans to increase the population density of Perth. Direction 2031 & Beyond is a planning strategy intended to achieve this. While it does promote infill, it doesn’t decisively constrain the city limits. Perth’s sprawl is already double the size of Tokyo and triple the size of Los Angeles, stretching 120 kilometres long and covering more than 5300 square kilometres.
The way Perth is currently being planned is setting the scene for lower and lower productivity.
Housing, jobs and transport are intimately connected
In November, The Committee for Perth released the findings from a study called The Rising Cost of Living in Perth. Since the millennium Perth has another dubious title of being the most expensive place in Australia to live and do business in, and the 11th most expensive city in the world.
Often affordability is thought about through the narrow lens of the cost of a house. But this study looks at an important aspect of the operating costs of households and businesses: transport costs.
One might think that everyone in Perth is equally impacted by these costs. But that’s not the case from a social equality point of view. Those on a lower income are doubly impacted. This is because they earn less and tend to live further out, so they need more cars and use more petrol to get around.
You might think also that these people would instead use public transport, but these suburbs typically have the least amount of access to good quality transport. Therefore, these households need to own more cars, creating more congestion on Perth’s roads. Fifty three per cent of the survey respondents who use a car said they do so because of a lack of public transport alternatives.
Household energy bills have also been skyrocketing. Gas has risen 88 per cent in the last five years and electricity prices have risen 72 per cent. The current average price of $963 is set to more than double to $1998 by 2016.
Household energy data is critical to reducing energy consumption and pricing housing accurately.
The ACT now requires energy efficiency ratings on houses so would-be-buyers really know the total cost of buying into a house. It’s a long established system in other parts of the world such as Germany, which is allowing house prices to better reflect the life cost of the house.
But its not the social point of view that I would like to argue here. It’s the argument by nobel laureate Paul Krugman and Michael Porter: that the resilience of a city is determined by how efficiently goods and people are moved around. Employment and housing sprawl create greater overheads for households and businesses, making them less efficient, less competitive and therefore less resilient.
In October, the RAC and Chamber of Commerce and Industry published their annual congestion survey. Almost all respondents (97.3 per cent) reported traffic congestion had increased the time their workers spent on the roads, up from 90 per cent in 2012. Businesses are facing higher fuel costs, lower productivity and the inability to take on more work.
The Economic Regulation Authority has called for a “mature discussion” on congestion charging in Perth. In other parts of the world, such as London, congestion charges have all been used to improve public transport. I believe that this is essential to meet the needs of Perth’s growing city and keep us competitive.
What does this all mean for Perth?
Clearly the bureaucracy inefficiencies need to be urgently addressed. City limits need to be put in place and we need to plan for higher density. A three mode transport plan developed by Curtin University outlines how to cope with growth and turn it into an advantage by connecting heavy rail, light rail and bus with urban development.
This and building energy efficiency ratings will also trigger innovation in the way houses are built in Perth – away from mainly double brick and embracing alternative building materials and techniques that allow for faster construction and better thermal performance, meaning lower energy bills.
Productivity overhaul required
If we are going to truly compete in a global economy, Perth needs to cut the time it takes for someone to deliver a package from one side of town to the other. We need to focus on prioritising efficiencies, and in doing so, actually improve our competitiveness and the resilience of our economy, delivering a more equitable situation for all.
See a recent article by Jemma Green in The Conversation, Federals faff with carbon, Western Australian emissions skyrocket.
This article was originally published in The Sustainability Salon for Perth and WA ebook