Lachlan Macquarie Lecture

March 11, 2016


Well thank you very much Chris and the Western Sydney Futures Dialogue. I acknowledge the Chancellor Peter Shergold, Vice Chancellor Barney Glover, the Honourable Nick Greiner, my parliamentary colleagues, Angus Taylor and Louise Markus and of course the Member for Parramatta in the State Parliament, Geoff Lee.

Now we acknowledge the Darug people, upon whose lands we meet and we honour their elders past and present.

And we especially honour the courageous resistance of the Bidjigal man, Pemulwuy, originally from Botany Bay district, who led the resistance against British settlers right across the Sydney Basin, especially here in what we now call Western Sydney.

And I’m also delighted to be here today to deliver this, the inaugural Lachlan Macquarie Lecture and as I’ve just done, to present the Pemulwuy Prize to some poets, so that’s good too.

In October Western Sydney University hosted an innovation round table at its new centre in Werrington, to discuss and contribute to what was to become our Government’s $1.1 billion National Science and Innovation Agenda.

Now just as innovation and investment is the key to Australia’s prosperity in the 21st century so it is to Western Sydney’s. And right in the forefront of that innovation, of that Ideas Boom, has been Western Sydney University and I want to acknowledge that and thank you all for your contribution to that very important set of policy initiatives we announced last year.

Now Governor Lachlan Macquarie was a builder. He built schools, hospitals, the colony’s first bank, the Bank of New South Wales. My forebear, John Turnbull, was a customer of the Bank of New South Wales in 1817 he borrowed £100 to buy some land. They don’t have a record of the mortgage and I was always worried that maybe he hadn’t paid it back but I’m sure he did, I’m sure the bank would not have forgotten that.

But it was a long association and Macquarie of course built so many courthouses and churches.

He built the roads to Parramatta and the Blue Mountains and he was a planner, he planned the towns of Richmond, Liverpool, Windsor and Campbelltown and more besides.

But perhaps the greatest lesson we can take from Macquarie was his unswerving belief in human capital.

As the Greek poet Alcaeus said “Not houses finely roofed or the stones of wall well builded, nay nor canals and dockyards make the city but the people able to use their opportunity.”

In what may have been the first skills audit, Macquarie looked at the background of the convicts transported here, ‘emancipists’ as they would become when they were free, to see how he could use their skills once their sentence was served.

Francis Greenway, an architect, had been transported to New South Wales after pleading guilty to forging a bill of exchange.  Macquarie quickly picked him out and Greenway went on to build Macquarie’s Georgian Sydney, the Hyde Park Barracks, St James’ Church in Sydney, the court houses in Sydney and Windsor and of course St Matthew’s in Windsor to name just a few.

Western Sydney’s rivers and mountains define its landscape but its people define its character and give it life, from the original inhabitants, millennia, from time out of mind and Pemulwuy to a family that moved in last week.

Our greatest asset is our human capital.

Today Western Sydney is one of the fastest growing regions in Australia with the greatest potential for even more growth.

It is our third largest urban economy, producing 31 per cent of Sydney’s GDP and 8 per cent of Australia’s.

It makes up almost half of Sydney’s total population and estimates are that 3 million will be living here by 2031.

It is young, it is culturally diverse. More than one in ten Australian children are growing up in Western Sydney.

Now these are Western Sydney’s generation of promise. We must educate and stimulate those young minds, enable them to realise their dreams, unleash their imagination and so continue to build their and our prosperity.

Employment levels for young people in Western Sydney are lower, however, than the national average.

And the net number of people who have to leave Western Sydney each day for work is about 200,000. Unless we act that figure is forecast to grow to 340,000 by 2041.

So because both the promise and the problems faced by Western Sydney are so complex, the solutions we provide must be coordinated across all layers of government and indeed the private sector.

Rapid growth is a challenge because of the demand it puts on housing and transport, the problems of congestion and mobility, the concentration of high value jobs in only a few places or the lack of local jobs.

Our cities policy will address this by focusing on investment in transport and urban renewal, increasing the supply of housing and by improving amenity, making cities wonderful places to live.

We must do this as we embark on the next phase in our economy.

And that is the transition from an economy driven by mining investment, a few years ago nearly 8 per cent of GDP, to one more diverse, more innovative, more technologically sophisticated.

The next boom is the Ideas Boom and unlike any other it can last forever, because it is bounded only by the limits of our imagination and our enterprise, our ability to dream and our determination to work.

Strong, well connected, liveable cities and regions are vital to support the high-tech, knowledge-intensive sectors of the new economy, like the medical research happening at the Westmead Institute, a state-of-the-art facility made possible through the joint support from the New South Wales Government and the Commonwealth.

Now in the great book Triumph of the City, the urban economist Ed Glaeser celebrates the role that cities play in fostering human achievement.

Glaeser calls cities ‘our species’ greatest invention’ because they put people in close proximity to each other and proximity makes people more inventive and more productive.

When the Internet arrived many thought it would mean that people would stop working in one place, they would telecommute, the periphery would benefit from the centre.

And yet in the knowledge economy physical proximity and connectivity is more important than ever. We are after all social animals, we are inspired, energised, indeed fascinated by each other, so cities have become more important than ever.

Glaeser writes that the central goal for governments in planning and building cities is to retain and enhance this basic function of cities, improving lives and creating opportunities for people.

I agree with him. Cities are for people, not machines. Cities must have a human form because serving humanity is their function.

All of our policies must ensure that cities continue to provide this critical role in human progress, especially as we face the transition from the old economy to the new.

Technology and infrastructure can smooth and enable that transition. Both can unlock potential and in the history of Western Sydney this has always been true.

In 1880 for example, construction began on the Upper Nepean Water Supply Scheme, a wonderful blend of old and new technology. It used both the simplest and most advanced technology of the day, gravity and advanced understanding of fluid dynamics, to push water up and down hills without pumping.

The project provided water and as we all know, water is the source of life. It opened up Western Sydney to people and to all the possibilities of the day.

In the same way, the Federal Government’s investments in infrastructure will open Western Sydney of today to growth and jobs and opportunity.

We are committed to the Western Sydney Airport, it is critical to capitalise on the opportunities that both the new economy and Western Sydney offer.

Throughout the construction phase more than 11,000 jobs are expected to be generated.

The airport is expected to commence operations in the mid-2020s and cater for an estimated 10 million passengers a year by 2030, creating nearly 9,000 additional direct jobs in the region by 2031.

That will increase to over 60,000 jobs by the 2060s, when 82 million passengers are expected to use the airport annually.

In the longer term there is no question that for the Western Sydney Airport to be successful and world class, as it must be, it will need transport connections to the rest of the city and the region.

Under the $3.6 billion Western Sydney Infrastructure Plan, towards which the Commonwealth is committing $2.9 billion and the State Government the balance, it will be well connected by roads.

But roads are not enough. World class airports share a common ingredient, fast and convenient public transport links.

Just last week, Qatar Airways CEO Akbar Al Baker said the airline would not use the new airport because it would lack high speed public transport links.

Now we’ve been advised that current traffic forecasts for the airport would not by themselves justify a dedicated rail link until the 2040s.

But we know that a rail link won’t just service airport passengers, the people of all of Western Sydney would benefit. Transport infrastructure, especially rail, adds enormous value and amenity.

Neither the Australian nor the NSW Government can commit today to completing a rail connection by 2026, there is too little known about the route, the cost, the value created and the sources of funding.

But instead of resigning ourselves to a two-decade delay, let’s lift our ambitions and ask, what would it take for rail to be operational at the airport when it opens? And if not then, how soon afterwards?

How do we use a rail link to improve supply and hence affordability and accessibility of residential and business premises? How do we use rail to give people better access to quality jobs? How do we increase the rail catchment through changing land use?

A lot of value will be created. Is there enough to enable a rail link to be delivered sooner than the traffic at the airport alone would warrant?

Now the Australian and New South Wales Governments’ Joint Study into Western Sydney’s long-term rail will give us costed options on how soon a rail link can be developed, how much additional value will be created and how that can be tapped to accelerate such a transformative piece of infrastructure for Western Sydney.

We are already setting aside space for rail including station boxes and approaches at the airport during construction so that the rail link can be established whether at the time the airport opens, which would be preferable, or later.

But this is not an airport project in isolation; this is about building a stronger and more diverse economy in Western Sydney, ensuring more business and more jobs here.

Road and rail access is important because airports don’t just connect one place to another.

Better access to the airport allows businesses to get their goods to market quicker; it breaks down barriers between employers and employees.

In the resource economy we built infrastructure to get coal and gas to market. In the knowledge economy it is vital that we help connect workers with business, and with each other.

And the airport will help us do that.

My Government’s $1.1 billion National Innovation and Science Agenda , which, as I said earlier, was in large part, contributed to and assisted by that roundtable conference we had at Western Sydney University’s tech campus at Werrington. That Innovation and Science Agenda will also address the imbalance between Western Sydney’s growing population and the number of jobs it offers.

This will help Western Sydney harness its human capital by making it easier for start-ups and innovative small businesses, a number of which, Barney Glover and I were talking about on the way here that are doing very well in Werrington, very well in terms of their business and attracting capital.

We want more people to invest in start-ups through tax offsets and Capital Gains Tax relief, so we will have generous tax breaks – 20 per cent tax offsets - for early stage investment in start-ups and venture capital.

When you create business opportunities, this attracts people and it builds momentum.

Western Sydney is uniquely placed to capitalise on this momentum because it has a great anchor tenant coming – the Western Sydney Airport – in addition to the superb anchor tenant already here in the West in WSU.

Throughout its own innovative operations, WSU draws the best brains and top talent in any field – academics, scientists, researchers, and of course, above all, brilliant students.

We are a people of innovation and ingenuity but we have not done well at commercialising our research and making money and jobs from all those brilliant research ideas.

Depending on which measure you look at, we’re either last or second last in the OECD for academic – business collaboration. That is nothing to be proud of. That is one of the things that the Innovation Agenda is designed to address.

And so we’re going to make it easier for businesses and brains to collaborate. I’m not suggesting that to our exclusive, by any means.

Under the Innovation Connections Program we are investing $18m to bring businesses, universities and the research sector together to solve problems and make money from their solutions.

And we are, of course establishing as a criterion for access to Federal Research Grants, collaboration with industry. It is very important and it is a major failing in Australia. When you think of how similar our academic and business cultures are to those of North America and Europe that we are so poor at this collaboration and connection.

But, we have, I might say, an outstanding new Chief Scientist, Alan Finkel who is obviously leading the charge in this regard and has been an enormous source of assistance. The former Chancellor of Monash University, a great scientist and engineer, in the academic world who took some of his developments, commercialise them and build a very very successful business. We want to see more of that because that drives more jobs, more growth, a better future for our children and grandchildren.

Now, of course, part of the knowledge economy is the continued rollout of the NBN. It was available to just one in fifty Australians in September 2013, by June 30 this year it will be available to one in four and two years later, three in four and it will be finished construction within two years of that.

The NBN is one of the very rare cases where a bad project does not get worse - in fact, it has got a lot better.

So we are making it easier to bring investment to Western Sydney. And with capital comes great jobs.

But in our desire to attract capital to a region, we cannot forget that jobs and business and commerce and infrastructure are a means to an end.

What makes a city liveable? That’s the goal, a liveable city, greater amenity.

In any change of Prime Minister there is continuity and policy change.

My Government’s policy on cities is different from my predecessors.

The Federal Government will no longer be a passive ATM doling out grants for infrastructure, without being especially involved or concerned about the consequences of that infrastructure.

We will invest more in cities and we will do so as partners.  We do not seek to run them, but rather to be a supportive collaborator engaging in the development of city and regional plans and ensuring that everything we do meets the objectives of improving liveability and amenity.

We no longer, as a government, discriminate between transport modes - we will support rail as well as road, and have already done so with the Gold Coast Light Rail extension.

Above all, we see transport infrastructure not just as a piece of road or rail to get people from A to B, but rather as an integrated investment that creates amenity, value, liveability, affordability and economic growth.

Budgets are tight in Canberra and in the states, and so we are limited in what we can invest by way of grants that add to our already too large deficit. But where we can invest in infrastructure and keep a very long term asset on our balance sheet, then we can do much, much more.

To invest more we need to start capturing some of the value our infrastructure creates. That is not new - it’s how railways were financed in the nineteenth century and many still are today. But it requires governments and planners to think outside the square, to stop thinking just like transport engineers but as urbanists, builders of cities and communities.

The building blocks of a great city – a liveable, vibrant city – are simple but essential: affordable housing, good transport, easy access to employment and study, reliable communications, energy and water, to name just a few.

Communities need smart, well-designed, walkable density. We should aim to have more people in western Sydney living in an ever extending zone of the 30 minute city - where people do not have to travel too long to get to work, school or university.

Strong housing demand in Western Sydney, driven by its rapidly growing population, shows where the region is already riding the wave of the new economy.

My Government recognises that the family home is the most important single asset for just about every family, and it is the largest single asset class in Australia.

Housing affordability is a complex issue. 

But time and time again, we are told that the real problem is not too much demand, but too little supply. Let’s face it, every dwelling built in Australia - whoever owns it - adds to our national wealth.

Study after study tells us, as indeed Deputy Reserve Bank Governor Phil Lowe did this week, that it is restrictions on supply, planning restrictions, restricted land supply, inadequate transport infrastructure which drives up prices.

Why is housing more affordable in Brisbane than in Sydney? Well, developers tell me it is because it takes about a third of the time to get a DA.

And that is why we are tackling housing supply at many levels in our economic plan.

At the demand level, we are enforcing existing foreign investment rules to ensure foreign investment in housing is directed to create new housing stock.

We will work on the supply side with States to review planning and zoning regulations to make housing supply more responsive – through reforms as part of our response to the Harper Review into competition policy and the negotiation of bilateral agreements on urban outcomes.

We are also investing in transport projects that drive housing supply and urban renewal and in future, our investments in urban infrastructure will be contingent on good urban outcomes.

The right infrastructure creates better cities - smart infrastructure that generates and uses quality, real time data, improves services, saves our time and our money. So we have to get better at planning and delivering it.

We should approach infrastructure like the best run companies approach their business – planning, investing, delivering and operating infrastructure to get the best results for the best price.

That means being a better partner to state and local governments - working closely together in the planning stages, ensuring that project outcomes are in step with our national goals.

New South Wales and the Commonwealth share a strong history of collaboration on the airport. Planning decisions to reserve lands and to ensure compatible land use surrounding the airport have been critical in getting us to this stage.

We will now work with the Greater Sydney Commission as they prepare their plan for the metropolitan region, including district plans for the areas around the Western Sydney Airport.

We share a vision for growth for western Sydney, with the airport as a keystone, a remarkable catalyst for investment and jobs that will transform the economic geography of the city.

And that means developing a comprehensive strategy and action plan involving all levels of government.

Such an agreement will help us leverage our investments to realise the broader economic benefits of the airport and provide an exemplar for further agreements across Australia.

In the UK these have been called 'City Deals', and despite differences in context, there is, nonetheless, much we can learn from the UK experience.

The solutions for Western Sydney are in the hands of all levels of Government and the private sector, so we have to work together to achieve the best outcome for the region.

And, in that regard, Vice Chancellor, I congratulate the Western Sydney Leadership Dialogue for gathering us all here to discuss these issues of national importance.

I urge you to take the title of the conference to heart – the ‘Out There’ Summit.

Be bold in your ideas when considering what Western Sydney’s future looks like.

A second CBD? Certainly.

A Silicon Valley? Why not?

There are many areas that Western Sydney could highlight to its advantage —manufacturing; education; health precincts; open spaces; potential tourism associated with the new airport; the chance to build environmentally friendly communities from the ground up.

But, above all, you have an abundance of our most valuable resource, our greatest asset, our human capital. That is all of you, that is all of us - innovative, imaginative and determined to succeed.

And we, for our part, as your national government, as the Australian government will do everything we can to do everything to ensure you do succeed gloriously.

This has been a great conference and I am very honoured to have been invited here to deliver the first Lachlan Macquarie lecture.

Thank you very much.


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