I am pleased to be speaking at another Fabian Society forum about Labor’s policy for Australia’s cities.
It is particularly pertinent to speak here because, as I noted in November, the Fabian Society has pioneered work in the area of housing and urban development in this country since the 1950s.
The discussion paper I released in December last year, Australia’s Future Cities, builds on that tradition.
The purpose of the paper was to lay out a set of policy options and seek feedback to help us develop concrete policies to take to the ALP National Conference in April 2007 and then to the Federal Election.
Labor has an integrated approach to housing and urban development issues. However, tonight I am going to focus on housing and on social and infrastructure issues. I am, of course, happy to take questions on other areas.
Housing and homelessness
Our fundamental approach assumes Australia is facing an acute housing shortage and while the Government concentrates on the demand side, it has nothing to say about the supply of housing, which will become increasingly important as our demographics and social structures continue to change.
I want to start by looking at what’s happening on the streets of Melbourne tonight. At what’s happening on the streets of all our cities. And what’s happening behind closed doors.
What I’m talking about is homelessness.
What I’m talking about is 100,000 Australians who will be without a secure roof over their heads tonight. 14,000 will have no roof at all. Another 14,000 will stay in shelters and refuges. 23,000 are living in insecure boarding houses and 49,000 are basically couch-surfing – staying with friends and relatives.
Around Victoria more than 5,000 people will be crowding into our over-stretched shelters and refuges. About the same number will be turned away to fend for themselves. More than 1,800 of them will end up sleeping under the stars, including 700 in Melbourne.
But there are also 8,000 couch-surfers and 5,000 plus boarding house residents in Victoria tonight. Not seen and seldom heard, they explain why Australians, when asked, think the national homelessness figure is only around 20,000 – one fifth of its actual size.
In Melbourne, the hidden homeless bring the total to 14,000. And the story of homelessness is the same, if not worse, in our other capital cities, with around:
How does it come to this in a country as wealthy as Australia? And how does our community allow the problem continue to grow?
We know the causes of homelessness are complex. Domestic violence, for example, is the leading cause. So there will always be a need for some form of crisis accommodation for Australia’s homeless.
Such services must be properly funded and supported.
But part of the problem is that when homeless families get into crisis accommodation, they are now staying for longer – unable to move on because there simply is no housing available.
Public housing stocks around the country have been falling for the last decade – although this is less marked in Victoria, which is one of only two states in which actual stock numbers are higher than in 1995-96. Nevertheless, even here, the proportion of total stock that is accounted for by public housing has dropped.
Our housing authorities are basically broke. Our public housing stock is obsolete and is neither sufficient nor appropriate to meet demand.
What does this mean in practice? I’ll give you the example of the South Australian housing authority. Each year, it receives $67 million under the Commonwealth State Housing Agreement. And then it pays the Commonwealth $65 million in debt repayments. The average age of its stock is 44 years. More than half of this is three bedroom homes, but 58 per cent of tenants and 67 per cent of applicants are single people.
The result of all this is that the authority has been forced to reduce its stock from over 58,000 to less than 47,000 in an effort to stay afloat and to update its properties. What we are seeing is that joint venture redevelopments of estates almost always result in a net loss of public housing.
Meanwhile, vacancy rates in the private rental market have also fallen over recent years, down to 2.1 per cent in Victoria last December. Anything below 3 per cent indicates a tight rental market.
As a result, over the past five years, real rents (that is, adjusted for inflation) have increased by over 8.4 per cent in Melbourne. In regional Victoria there has been a staggering 21.4 per cent increase.
Academics say that Australia would need another 138,000 affordable properties to lift low-income private renters out of housing stress. But the rental properties that are actually being built are at the high end of the market. In this city, only 5.4 per cent of one bedroom apartments are actually affordable for someone on Newstart allowance.
I argue that the evidence is clear. The bricks and mortar issues of housing are something that we must address. And the national government must play its part.
Traditionally, it has been the Commonwealth that has provided the bulk of funding for public housing. But this mob have passed the buck – cutting CSHA funding by 30 per cent in real terms and pushing states and territories into targeting policies that have turned out to be both financially and socially disastrous.
We must reverse this trend and get more affordable housing stock on the ground – through public housing and also through innovative partnership arrangements with the community and private sectors.
Instead, the Coalition is content to sit back and let the market – which is plagued with failures in this area – simply take its course.
Tackling urban sustainability
Labor’s approach also emphasises the need for a dramatic expansion in the Commonwealth’s role in the management of Australian cities: in planning for the future. We argue that this is desperately needed for three reasons: (1) economic efficiency; (2) social equity; and (3) environmental prudence.
Almost 80 per cent of Australians live in our cities and towns. In 25 years, 20 million of the projected 25 million of us will live in urbanised areas of over 100,000 population. More will live on the coast than ever before, but some inland regional centres will also grow.
The liveability of our cities and towns a major contributor to our quality of life. It is also one of Australia’s great advantages in competing for skills and investment in a global economy.
Yet the Coalition Government has no Minister for urban development and no plan for the future of our cities.
Even after its own backbenchers signed off last year on a report into Sustainable Cities, which recommended significant investment in urban development, Australia’s cities were completely ignored in last week’s Budget.
Despite a massive surplus, the Coalition chose not to invest a single dollar in urban public transport in our outer suburbs or in urban water management.
And they chose not to put a single cent into addressing concentrations of poverty in our cities.
I beg to differ about this approach. Labor believes that national leadership is needed if we are to ensure the liveability of our cities into the future.
Challenging poverty in our suburbs
As I’ve already indicated, Labor’s central concern is urban sustainability, but it is a definition of sustainability that looks not just at environmental issues but also the social and economic health of the cities.
As part of this, we must address the concentrations of poverty that plague our major cities and regional towns.
As a nation that believes in a fair go and opportunity for all, we simply cannot have a situation where poor people are confined to suburbs defined by poor services.
We all know that four walls and a roof do not make a home. We cannot be just in the business of building houses – we must also be about building sustainable, healthy communities.
This is not the view of some soft social reformers. Both the Planning Institute and the Property Council have identified social exclusion as a significant national issue that requires Commonwealth action.
Some local and state governments are already pursuing urban revitalisation projects to tackle the problems of concentrated disadvantage – including here Victoria.
But, to date, Commonwealth Government involvement in these strategies and projects has been extremely limited.
I am proposing that we turn this around – that the national government establish a program to revitalise Australia’s most disadvantaged communities in collaboration with states, territories, local governments, the business and not for profit sectors and local communities.
I envisage a program that would work with clearly disadvantaged neighbourhoods to address their priority needs – whether it is crime prevention, adult education and training, job creation or community capacity building.
In some states, it might be a case of the Commonwealth simply getting engaged in existing State Government initiatives – such as Victoria’s Neighbourhood Renewal projects.
In other areas, the Commonwealth might have to take a more proactive role in developing a new partnership approach.
Which brings me to Commonwealth’s role in addressing the looming crisis in our cities’ infrastructure.
According to a Business Council of Australia report released in March, the absence of a national approach to Australia’s infrastructure needs is costing the country’s economy $10 billion annually.
The BCA cites traffic congestion, long-term water shortages and energy blackouts as examples of the poor infrastructure outcomes that directly affect quality of life for Australians.
They also create major uncertainty and direct costs for business and the economy.
As the BCA has noted, the key is proper planning and coordination. Labor’s Infrastructure and Investment plan would bring all levels of government to the party, committing to meaningful action in a co‑operative way.
Labor is also conducting a public inquiry into the Financing and Provision of Australian Infrastructure.
I hope that as we get down to the National Conference next April we can have an open discussion about the financing of infrastructure in Australia that considers the evidence and looks carefully at all funding options.
Better planning and funding for local infrastructure
While the focus to date has been on major infrastructure, I believe it is critical – if we are going to address Australia’s housing affordability crisis and the sustainability challenges facing our cities – that the national government also take some responsibility for improving the provision of local infrastructure.
There are two aspects to this – understanding what infrastructure is needed and funding it.
The discussion paper proposes the development of a national settlement strategy to bring together the evidence about Australia’s settlement trends and to enable all levels of government to plan for the future.
The settlement strategy envisaged in the paper would examine trends in settlement, taking account of expected changes in industry structure, employment demand and demographics.
This would inform decisions about Commonwealth support for urban development, particularly in regions of rapid growth or demographic change.
This is not pie in the sky. We have world-class researchers in Australia already looking into how we can ensure that our cities and towns develop sustainably.
I recently visited two Divisions of the CSIRO that are working in related areas: one Division looking at how we can reduce the natural resource consumption of our buildings; and the other looking at sustainable urban environments – and particularly how we can make the transition from the current model of unsustainable development to sustainability.
I believe the national Government should be supporting this research with a clearly defined budget. Among other things, we should be looking at a Co-operative Research Centre with an urban sustainability focus.
Australians know we have to reduce the environmental impact of our cities and we are all concerned about urban concentrations of poverty; about the economic and social costs of congestion; and about unhealthy living environments that lead to asthma and obesity.
A key question is how we move from the current situation to one of improved sustainability and liveability without compromising the lifestyles we already enjoy.
The national Government has a responsibility not only to support research into this critical question, but also to help put the theory into practice.
One way to do this is through demonstration projects. We cannot always rely on the market to put good theory into practice. The market fails us when there is not enough information or when an innovative development has a public good aspect that means a private sector developer cannot capture the full benefit.
But it is not just innovative developments that have a public good aspect. A lot of local infrastructure has this feature.
This is why so much of it used to be paid for over time through general taxes and council rates. Everyone benefits and everyone pays.
But over recent years there has been an increasing trend toward the use of developer charges on new housing developments to pay for significant local infrastructure. My concern about the use of large developer charges in this way is two-fold.
First, there is an issue of intergenerational equity.
Second, private funding potentially leads to the privatisation of local infrastructure in new estates and a serious diminution of the public realm.
Labor in government would work with State and local governments to find better ways of financing local infrastructure as well as national projects.
Bringing it all together
Labor is proposing that we give focus to our commitment to housing and urban development by establishing a Commonwealth Minister and Department with specific responsibility for housing, urban development, local government and related issues.
The discussion paper also proposes that the national Government establish a network of Commonwealth Urban Development Offices in key areas – for example, areas of rapid growth or severe disadvantage.
These offices would have two main purposes:
Let me emphasise – we are not talking about a hulking new bureaucracy, but about ensuring that representatives of the national government can be on the ground, eyeballing their counterparts in state and local government and making sure that the things the Commonwealth is responsible for actually get done.
The Commonwealth should also develop, with the states, territories and local government, a national sustainability charter, setting national targets in areas which impact on Australia’s environmental, social and economic sustainability.
If is to be effective, however, it must be monitored.
Labor is looking at establishing a National Sustainability Council to monitor Australia’s sustainability performance.
The proposals for a sustainability charter and council arise in part from the recommendations of the Sustainable Cities report and the submissions made to that inquiry.
The ideas appear to have broad support in relation to assessing Australia’s environmental performance. Indeed, the House of Representatives Committee is now conducting a second inquiry into the terms of a sustainability charter, which has a distinctly environmental focus.
Already two out of the three submissions the Committee has received have noted that sustainability is generally understood to include social and economic aspects, and have suggested either a change of name for the charter or broadening the areas being considered.
I believe we need to do some further quick but careful thinking about how social and economic sustainability targets are set and monitored, in addition to environmental targets, and what structures and incentives are most appropriate.
In conclusion, I want to return to the core values that Labor brings to the national debate on the future wellbeing and prosperity of our cities.
Labor sees housing and urban development policies as being fundamentally about the values that are important to Australians – fairness; family and community; and a secure future.
Labor is committed to developing, with the help of people like yourselves, a proactive and forward-looking set of policies on cities.