Australia needs to look to the UK’s “City Deals” infrastructure funding model to lift economic productivity, according to the Property Council of Australia.
The council has today (Wednesday) released research conducted with KPMG on how UK City Deals, a formal agreement between the UK central government and a region aimed at boosting economic growth and productivity through a shared infrastructure deal, can be used in the Australian context.
“In Australia boosting national productivity means boosting productivity in our cities, and the UK City Deals approach provides a useful model,” Property Council chief executive Ken Morrison said.
“The UK has presented us with a recipe for best practice where different tiers of governments have varied roles in driving economic growth.
“Under UK City Deals, infrastructure needs are assessed and funded region-by-region, leveraging local expertise and other funding mechanisms, with clear rewards for success.”
Funding under the model is directly linked to the economic growth the infrastructure will unlock – moving away from cost–benefit analyses, which are easily gamed, to a Gross Value Added measure – a sort of local GDP. The intention is to direct government spending on cities strategically to projects that will deliver the most impact on productivity, employment and economic growth, with cities exceeding set benchmarks getting financial rewards.
As KPMG partner Paul Low said at the Built Environment Meets Parliament conference in July, the model could work to align economic, social and environmental outcomes for cities.
“Australia has the governance architecture to support a City Deal approach – but it would take a step change in collaboration by all levels of government,” Mr Morrison said.
See the full report.