New name, new look for latest national urban policy, but same old problem

Globally, interest in national urban policy peaked in the late 1970s and declined sharply thereafter. The trend held true for Australia, peaking under the Whitlam government.

The decades after the Whitlam government produced a variety of federal housing and other urban policies. None had the scope of a national urban policy.

Not until 2011, with Labor’s Our Cities, Our Future, was a national urban policy launched. This did not mirror a similar resurgent interest in Western countries. These countries promote intergovernmental decentralisation, while Australia has increased centralisation.

Australian exceptionalism – both its “unique model of metropolitan governance” and its extreme vertical fiscal imbalance (VFI) – provides the setting for federal policy that assumes the prerogatives of state and metropolitan urban policy.

Commonwealth role rarely challenged

Urban academics and professional organisations such as the Planning Institute of Australia celebrated Our Cities, Our Future – perhaps due to the increased prominence accorded urban affairs.

Few questioned the rationale for federal engagement in matters such as metropolitan strategic planning, infrastructure investment and housing. No significant urban outcomes can be attributed to Our Cities, Our Future.

Yet the policy environment at the time did have a legacy, following the creation in 2008 of Infrastructure Australia. In a context of VFI, then-prime minister Kevin Rudd sought to rationalise federal infrastructure funding based on the “business case” for projects. He tasked the COAG Reform Council with preparing guidelines for capital city strategic planning systems that would provide an “evidence base” for federal decision-making.

In 2014, the remit of Infrastructure Australia was expanded. It was to undertake an Australian Infrastructure Audit and prepare an Australian Infrastructure Plan. The plan, finalised in 2016, holds that:

The Australian government should drive change in the planning and operation of Australia’s cities through the use of Infrastructure Reform Incentives.

This approach would:

… tie the provision of additional funding for infrastructure to the delivery of a range of city-based reforms, focused on improving the quality of planning, development and infrastructure across Australia’s cities.

This is an extraordinary assertion of power over planning for, and infrastructure investment in, cities. It has no constitutional foundation. VFI, however, frees the pens of the drafters of urban policy and the presumptions of their political masters.

Lest we forget, at the time the plan was being finalised, for 99 days there was a minister for cities and the built environment. Again, responding to the attention given to urban affairs, urban academics and professionals feted the creation of this position. No significant urban outcomes can be attributed to the ministry.

Following Jamie Briggs’ misadventure and the appointment of Angus Taylor as assistant minister for cities and digital transformation, the Smart Cities Plan was launched. Its potential significance is huge. Its ambition is to “rethink the way our cities are planned, built and managed”, with the Commonwealth to lead the rethinking.

So what’s in the latest plan?

The plan contains much that is interesting, but little that is substantial. It has the appearance more of a think-piece than a substantive policy document. Some prominent ideas are plugged in, then ignored.

An example is the “30-minute city”. It gets headlines, but it is difficult to identify what this adds to the urban agenda once the actual commitment to public transport is considered.

What the 30-minute city concept does do is reveal the extent of federal presumption about city planning. Can one really argue that this is the job of federal government?

Together, the Australian Infrastructure Plan and the Smart Cities Plan amount to a new national urban policy based on metropolitan strategic planning, infrastructure funding and City Deals.

While acknowledging the states' constitutional prerogatives to undertake metropolitan strategic and infrastructure planning and to implement projects, VFI makes federal presumptions possible. The views of a metropolitan community of interests are not a consideration.

The federal commitment is to:

• A$50 million for infrastructure planning;

• establish an infrastructure financing unit; and

• invite state and territory governments to partner the Commonwealth on City Deals.

Any federal discussion about financing infrastructure in Australia’s cities is interesting and the Smart Cities Plan does appear to presage innovative public and private financing opportunities.

As for City Deals, these are to be based on federal and state/territory partnerships to “drive national priorities tailored to local needs”. So, at the local level, national priorities prevail. The federal government knows best.

In the UK, City Deals are premised on “devolution” and the creation of metropolitan governments. Deals are negotiated with local and metropolitan governments and business leaders, with reference to civil society as well. Metropolitan governments are seen as desirable because it is believed the economic growth of cities is best promoted by city leadership.

However, neither Labor nor Coalition conceptions of national urban policy envisage city leadership serving a metropolitan constituency. Representative, revenue-generating metropolitan government, which can enter the infrastructure finance market, would threaten federal and state power and influence.

How can federal policy make a difference?

There are two preconditions for effective federal engagement in urban policy.

The first is a policy that survives the next election. Because the Labor and Coalition approaches incorporate urban issues from local to federal, they are essentially political treatises. Long-lived policies are unlikely.

The second precondition is to recognise that most policies are urban in a country that is 90% urban. The unintended urban consequences of federal policies have outweighed those of policies having urban intent. Examples include negative gearing, immigration and climate-change policies. The criterion of urban consequences should be integral to federal policy formation.

A federal concern with urban policy requires locating responsibility and funding for policies to the level of government where they are most effectively addressed. Often this will be at a metro scale. It is then best undertaken by metropolitan government.

Rather than tied infrastructure and social grants, untied fiscal decentralisation is desirable. Australia should welcome policy and expenditure differences, experimentation and mutual learning among metros.

The way forward is to consider what level of government is best placed to resolve contested urban issues, in partnership with the private sector and civil society.

A federal urban policy should be limited to issues that explicitly require federal intervention. The determination of these issues will be subject to debate. But the operating assumption should be federal policy modesty in relation to states and cities, devolution of responsibilities, and fiscal decentralisation.