Two years ago, Brian Howe, then Minister for Health and Housing, launched a brave new plan to get the three levels of government to co-operate in fixing Australia’s cities.
Shortly afterwards, as part of the same policy push, the Industry Commission was asked to inquire into our cities.
Australia is one of the most urbanised countries on earth. Despite our affluence, on the world scale, however, many people in the centre of our cities live in comparative squalor _ not compared to Somalia, certainly, but compared to other parts of Australia.
With the provision of a little money and some intelligent use of it, people in the cities would have a greatly improved lifestyle, Howe thought. Some European-style high density living would help, he thought.
The states agreed with alacrity. After all, they were to get the lion’s share of $800 million over five years. The program, called Building Better Cities, was to use example as the way forward. Money would be used to build pleasant (and therefore more marketable) places and the rest would follow. Ageing infrastructure would be replaced. The inner city would be renewed and the sprawl outwards stopped.
In other words, the squalor of inner Melbourne and Sydney would be turned into a decent place to live like planned Canberra. Money, brains and foresight would be put into city-building instead of allowing them to spread according to the whim of real-estate and building sharks and their mates on town councils.
Great vision. Pitiful execution.
Perhaps someone should have waited for the commission’s report before committing the money.
The commission reported last month. Without specifically analysing the Building Better Cities program, it makes it plain that the program is based upon bad premises. Low density and sprawl are not the problems. Higher densities and in-fill programs would do little to stop sprawl. It pointed out also that the biggest problem is government. Government policies and the structure of government in Australia are turning Brian Howe’s dream into a pyjama party.
More of the Industry Commission anon. But first to the ACT, which along with the other state-level governments put its hand out for whatever loot it could get.
Canberra, by anyone’s standard, is one of the world’s most beautiful, well-functioning cities. It has had extraordinary sums poured into it to make it the pride of Australia, and rightly so.
Therefore the Federal Government should have said to the ACT Government when it put out its hand: jump in Lake Burley Griffin. Since the Menzies years we have already spent oodles on building a better Canberra; we have now got the slums of Redfern and Fitzroy to contend with. Canberra, as a city, is tenth on a list of ten.
Other than perhaps bulldozing Bega flats in Civic, there is nothing here that warrants large sums of extra Federal money for renewal that would not be available anyway from the ACT Government or the private sector.
But that’s not the way governments work, especially in a federation. One in all in, is the policy. And while Labor rules federally, the ACT happily goes along with signing health agreements and transport agreements and better cities agreements all in the line of co-operative federalism whether or not the agreements have any merit.
And thus on December 22, last year, Rosemary Follett and Brian Howe put their hands to an agreement under which the ACT would get $14 million to build a better city through promotion of better planning, innovative processes, solar orientation, better urban management, reduced dependence on inappropriate institutional service provision, more use of existing infrastructure and a dozen other catchwords of modern city development.
Hang on a moment. Canberra _ pampered Canberra _ to get $14 million. Surely, building better cities means places Coburg and inner Newcastle.
And what is the ACT Government going to do with the money? Well, it is going to be a party to knocking over single-residences in Braddon that most people in inner Sydney would dream of living in and replacing them with blocks of flats _ exactly the opposite of what the program was about. Instead of replacing Melbourne squalor with Canberra pleasantness, we are replacing Canberra pleasantness with Melbourne squalor.
Half of the tenants will be from the Housing Trust.
In a small-scale way we are repeating the very mistakes of the 1950s which necessitated the Better Cities program in the 1990s, and the irony is that we are using Better Cities money to do it.
Further, the ACT will apply some money in a roundabout way to funding greenfields developments on the outskirts of Canberra, in Gungahlin and North Watson.
The two projects could be part of a Building Worse Cities program.
John Langmore, who represents the areas concerned in Federal Parliament, says, “”There is very little about the Braddon proposal which has anything to do with building better cities at all. It simply seems like a redevelopment project. Similarly, the North Watson project is principally a green fields development rather than offering any improvement in the quality of urban living.”
This is worse than siphoning off federal money for an irrelevant purpose; it is using it to do the exact opposite of the stated federal purpose.
Admittedly, the construction part of the Braddon project has been withdrawn, but only so another can be put in its place.
There may be perfectly sound reasons to go ahead with Braddon and North Watson, but they have nothing to do with the aims of building better cities; they would have been done any way if the ACT Government got its way.
The Industry Commission criticised the ACT for worrying too much about cost savings for the public sector and too little about what choices the community might want.
Other states may, of course, be using the money for its proper purpose. But one has reason for scepticism.
The Industry Commission pointed out in a report last month that there was a better way to build more efficient and therefore better cities without slinging money to the states which will only misuse it by applying it to projects would be funded anyway, therefore freeing money for other favourite (usually vote-buying) schemes.
It debunked the myth that the urban sprawl (greenfields) is less efficient than in-fill. In a city of a million, people could be packed in by a third extra (from 30 to 40 per hectare) and the radius of the city would only come down one kilometre. Because the same number of people require the same amount of schools, hospitals, parks etc, there was a diminishing return on higher densities. Packing in 50 per hectare instead of 45 resulted in the city radius being reduced a mere 200 metres.
And packed in like rats, the resulting social costs would outweigh the economic efficiency of the slightly reduced radius.
The buzz words have been in-fill and higher densities, without a great deal of thought about exactly what will be achieved.
The commission said biggest inefficiencies were taxation and charging policies.
It says stamp duty is a tax on mobility. People are fined about $3500 for moving to more appropriate housing, so they stay put in houses that are too big for them or they extend, adding to the already bloated housing stock.
Land tax is applied only to people renting (indirectly through landlords). Income tax is applied to rents, but not to those who own their own homes. The family home is a capital asset producing an income (nominal rent) that is not taxed. And it is not taxed for capital gains upon sale. These distortions result in too much investment in housing.
In all, houses get bigger with fewer people living in them.
Charging rates for services based on property values made little sense, especially if stamp duty has forced retirees to stay in their high-value homes. The commission said services should be charged according to cost; that would make cities more efficient. If you want to give “”equity” to the poor, it was better to give them cash.
The commission found also that one of the most important influences on Australian cities is the level of immigration and the choice migrants make on where to live.
Unfortunately, political realities prevent sensible tax policies. No Federal Government will give the states enough taxing power so they can be accountable and responsible for raising and spending all of their budgets. Instead, state governments will rely on Federal handouts and distorting taxes like stamp duty and neither level of government will tax the family home. And politicians will never link building better cities with immigration policy, because many of the inner-city migrant-community voters who want a better city also want high family-reunion immigration.
Instead, we will have the Federal Government creating big-picture $800 million dreams based on silly myths, while state and territory governments create inchoate finger-paintings with their share of the loot.