Population, cities and infrastructure - speech to National Population Summit at Casula Powerhouse

July 20, 2010

Thank you Councillor Alison McLaren for your kind introduction and insightful remarks about the development of our city. In holding this conference today, the Western Sydney Regional Organisation of Councils (WSROC) is today demonstrating the vision and leadership that it has given to Western Sydney over many years.

We have never idealised city life in Australia, and yet for most of our modern history we have been a thoroughly urban society.

 We have, instead, romanticised the bush and compared it very favourably with the city life most of us, in fact, prefer.

Consider how Banjo Patterson compares his squalid life as a city clerk with the freedom of his friend Clancy of the Overflow whose shearing mate has just advised with a thumbnail dipped in tar

 “Clancy’s gone to Queensland droving and we don’t know where he are.”

 Patterson laments:

 “I am sitting in my dingy little office, where a stingy

Ray of sunlight struggles feebly down between the houses tall,

And the foetid air and gritty of the dusty, dirty city

Through the open window floating, spreads its foulness over all.

“And in place of lowing cattle, I can hear the fiendish rattle

Of the tramways and the buses making hurry down the street,

And the language uninviting of the gutter children fighting,

Comes fitfully and faintly through the ceaseless tramp of feet.”

“And the hurrying people daunt me, and their pallid faces haunt me

 As they shoulder one another in their rush and nervous haste

 With their eager eyes and greedy, and their stunted forms and weedy

 For townsfolk have no time to grow, they have no time to waste.”

 A grim life indeed for this downtrodden city dweller, but at least he can dream…

“And I somehow rather fancy that I’d like to change with Clancy,

 Like to take turn at droving where the seasons come and go,

 While he faced the round eternal of the cashbook and the journal –

 But I doubt he’d suit the office, Clancy, of the Overflow.”

 Well so much for poetry. The fact is that most people prefer the urban “round eternal” and today nine out of ten Australians live in urban areas, and three quarters in major cities. We may dream of Clancy of the Overflow, but we are one of the most urbanised nations in the world.

 So we can hardly complain when migrants, 85% of them in fact, choose to live in cities. “When in Rome”  they might say.

 We are very fortunate in Australia not only to have some of the most beautiful landscape, both settled and wild, but also some of the most attractive, liveable cities in the world.

 And yet, not for the first time, there is growing concern about the growth in our population and the sustainability of our cities, indeed of our way of life.

 Let me say right at the outset that I rejoice in our cities, in their diversity and the energy. And may I say what a great example we have here today of the diversity of our community in the exhibition of portraits byGreg Semu of Pacific Islanders playing NRL in the “Body Pacifica” exhibition.

 I said we are an urban nation and yet our governments have neglected our cities, neglected to establish the vital infrastructure that makes our cities work, the bones, the muscles and the arteries that enable them to work and offer their inhabitants the security, the excitement and the opportunity they aspire to.

 So today, I hope to address some of these issues of population and cities and, in doing so, to correct some of the misunderstandings which abound in this debate.

 There are three factors which influence population: birth rates, death rates, and migration.

 Clearly, only decisions about migration rates can be made by the Government of the day, yet migration is just as difficult to predict as fertility and longevity.

 Our leading demographer, Professor Peter McDonald, has often complained that when demographic projections are made, most people assume that the future population numbers are independent of economic, social, or environmental trends.

 Yet quite the reverse is true. Population growth is neither independent nor exogenous from the whole economy. Fertility for example is heavily influenced by the economy. If we think the good times are here to stay, we are more likely to have more children. Life expectancy is directly related to the state of our health services.

 And as for migration, that is even more directly related to economic activity. Most people migrate in the expectation of employment. Australians who are living abroad will often return if opportunities are greater here than where they are working and those living in Australia will go abroad if foreign fields are greener, or appear to be.

 So we should remember that making long term projections about population is inherently unreliable and are much more likely to be wrong than right. In the absence of knowing what attitudes the mothers of 2050 will have to childbearing let alone what demand for employment might be, we end up simply assuming that current rates of growth will continue.

 This problem is as old as projections themselves. In 1947, Australia was expected to hold a mere 8 million people by the year 2000. What occurred was quite different. We are a nation of  22 million, and far more of us today are born in countries other than Australia, New Zealand, and the British Isles than was imagined in 1947. In other words, static assumptions do not give us a very good idea of future realities.

 It is important also to understand where the migrants come from, and what is driving their arrivals. Historically – and this remains true today – immigration rates are directly correlated to the health of the economy. During the peak of the global financial crisis, as demand for labour plummeted, business visa applications fell by 50 per cent. And the recessions of the 1890s, mid-1970s, and mid-1990s tell the same story – arrival rates plummeted.

 Meanwhile, in 2007-2008 we had 221,000 net overseas arrivals. 88 per cent of these were people entering Australia on a temporary basis. That is, students, business visas, tourists, New Zealanders, and those on a working holiday.  And 108,000, nearly half, were students.

To be counted in Australia’s population, a temporary arrival must spend 12 out of a given 16 months in Australia. How did they, why did they manage to stay so long? The reasons are many – bridging visas, new jobs, new visas. The key is that they had a reason to stay, and chief among them was the availability of work.

 As Professor McDonald observes by far the most common way of “recruiting” permanent immigrants is by converting temporary visa categories into permanent residence. As long as this process is carefully calibrated to demand, in other words that there are jobs for those making the switch, this is a more reliable process than recruiting people overseas as was done in the past.

 It is also crucial to note that even if workforce participation rates rise, our economy is best served by migration levels that are sensitive to economic circumstances. If this is not done, it becomes harder to sustain growth.

 As the Coalition’s policy document states:

“The Coalition believes that addressing the skills need of businesses to sustainably grow our economy is the primary reason for a migration programme. Consequently economic conditions must be paramount in how our programme is framed and composed.”

 Professor McDonald (in a recent speech to ALGA) reminds us that:

 ”In the past decade, Australia’s labour force has grown by 1.9% per annum. In the next 20 years, without migration, the labour force would hardly grow at all even with the increases in participation assumed in the Intergenerational Report. If migration were to be 180,000 per annum as assumed in the IGR, the labour force growth in the next 20 years would be 1.3%, well below the current growth level. And, remember that the current high labour force growth has been accompanied by a fall in unemployment.”

 “In a scenario of strong labour demand, migration is part of the solution not part of the problem. Certainly a bigger population generates demand for housing and all forms of public infrastructure, but the problems generated by an over-heated labour market are much greater.”

 When Australians express concern about over population, the cause of that concern, is almost invariably the congestion caused by population growth that is unaccompanied by appropriate infrastructure.

 My electorate of Wentworth includes some of the most densely settled suburbs in Sydney. For example, Elizabeth Bay, Potts Point, Kings Cross, Darlinghurst are largely made up of apartment buildings. Yet few residents of those areas complain they are suffering from overcrowding. Indeed they are keenly sought out and increasingly by families with children.

 The inner East of Sydney is densely settled but not generally regarded as “congested” because its residents have access to reasonably reliable and frequent public transport. They are, for the most part, close to where they work. They can do much of their shopping on foot and while they don’t have big, or any, backyards there is plenty of public space within easy reach.

 But of course these, these densely settled inner city suburbs were laid out before we allowed the automobile to determine our urban form.

 As a consequence, for the most part twentieth century Sydney was spread out. By way of comparison, Montreal is home to approximately the same number of people as Sydney, but covers only 35 per cent of the area. If Sydney’s density was comparable to that of London, we would be sharing it with close to 58 million people.

As Jane Francis Kelly observes in her excellent report for the Grattan Institute “The Cities We Need” the original inspiration for the “quarter acre block” came from Governor Phillip’s prescription that households should have an allotment of 60 x 150 feet of space – enough land she notes to be reasonably self sufficient in an age when public infrastructure did not exist.

The short point is this: if we are going to increase the density of our city, by putting apartments and townhouses into streets that used to be lined with bungalows, then we have to build the infrastructure appropriate for that density.

And yet we have spent tens of billions of dollars building new roads and freeways but until relatively recently there was little or no new investment in Sydney’s mass transit.

We complain bitterly about crowded roads but do not provide enough of the only thing that can be relied upon to get people off the roads – efficient and reliable mass transit.

The population question is not to be answered, as Bob Carr sought to do, by saying “Full Up”. The real answer is to have a population strategy that ensures migration continues to contribute to the strength of our economy and an infrastructure policy, especially in our cities, which ensures that we can enjoy the benefits of a more densely settled city without the problems of congestion.

Economic growth as Peter Costello was fond of telling us is a function of the three “Ps” – population, participation and productivity. So a key objective is to ensure that increased population is coupled with improving productivity and participation. More efficient cities will help ensure this happy combination comes to pass.

Put another way density is not the problem. If it were property values in the densely settled inner suburbs would not be as high as they are. Density, if accompanied with the necessary infrastructure including public transport and public open space in fact offers great amenity. More of the places we want to go are within easy reach.

Good public transport infrastructure is critical, and has been neglected for far too long. It has, besides, an important social benefit. I am a passionate believer in mass transit and public transport because the reality is that cities that are wholly dependent on motor cars discriminate against the old, the poor and the young.

Furthermore while technology can enable us to enjoy virtual proximity to each other, it is physical proximity, the ability to move around to meet each other, to go to places of public recreation, culture and commerce, that is essential to a city and above all to it’s social equity.

 Yet I over the life of the NSW Labor Government one public transport plan after another has been announced, to great acclaim, only to be axed.

 Now I wouldn’t dare to compare Sydney with Shanghai whose metro only opened in 1995 (the same year Bob Carr became Premier) and now carries 6 million passengers a day on a 268 station network over 400 kilometres in length – by 2020 it will be 877 kilometres in length and the largest in the world.

 But even in Australia we see public transport patronage increasing in every capital city by a rate much greater than in Sydney where patronage is ponly slightly greater than it was in 1997. In Perth, Brisbane and Melbourne for example patronage has increased by around 40% thanks to increased investment in the necessary infrastructure.

 Few things are more important in cities than the ability to move around. Sydney will never be as densely settled as New York City or Hong Kong and we would not want it to be so. But recognising that distance is a temporal concept, measured in minutes, rather than a linear one, measured in kilometres, we know that with the right investment we can make our spread out city as accessible as one more densely settled.

 Julia Gillard’s slogan of  “sustainable population growth.” is almost as facile as “moving forward”.

 After all, is there anyone in favour of “unsustainable population growth”?

 The real question is whether Ms Gillard has the capacity to take the action needed to ensure our population growth is indeed sustainable, to ensure that it matches the needs of our economy but does not outpace the ability of our urban infrastructure to accommodate it.

 The Coalition, on the other hand, has unveiled a population policy that would deliver:

 -       Productivity – to keep the economy strong, and support continued growth, including in rural and regional areas

 -       Sustainability – to protect and conserve environment and resources

-       Liveability –  to preserve quality of life

-       Security – to ensure the defence of the sovereignty of our borders, assets, and values

The key tenets of the policy involve target ranges for population growth over the short, medium, and longer term – similar to the inflation target band established for the Reserve Bank. Significantly these targets will be determined for short periods, five years and ten years, which are periods for which we can reasonably, but not infallibly, make assumptions.

These bands will be informed by assessments of progress in infrastructure and services delivery, combined with the population needs of a growing economy. This policy is a direct plan of action that stands in contrast to Labor’s action void.

The Coalition would address the skills needs of businesses to sustainably grow the economy – after all, this is the primary reason for a migration program. Consequently, economic considerations must be paramount in how our programme is framed and composed.

In sustaining growth with better infrastructure we also need to make our cities more human, in the sense that they should be on a human scale so that people can get around their neighborhoods and urban centres  on foot.

 Wherever we have built suburbs and cities that are only accessible to those in motor cars we have gone too far.

 We can accommodate growth, but we must monitor its development, and invest in it. It must be coupled with conscious planning and adequate financing of critical infrastructure. It must be implemented by strong, able, economically responsible government. Not a Government that has blown $16.2 billion on the Julia Gillard Memorial School Halls program with no focus on value for money, that disenfranchised local communities.

 We need robust governance structures which are appropriate to the scale and nature of our cities and which will support the kind of ingenuity for which Australians are famous.

 I am very pleased  we will see a showcasing of some of that ingenuity at this Conference today.

The current federal Government may not have an appetite for reform. The Coalition has a policy that would put the onus back on governments to provide infrastructure and services, and monitor availability when planning for growth, with a keen eye on the needs of our economy.

 This kind of approach, coupled with sound economic credentials, is needed now more than ever.

 The Coalition welcomes an open and intelligent debate, because for successful reform we need each of you. Thank you, and congratulations again to WSROC for this great initiative.

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