The housing crisis, hitting young Australians in particular, is one of the cruelest consequences of economic rationalist policy making to which both our major political parties remain super-glued. Neither party has a clearly articulated, long-term solution to this ideologically generated and completely unnecessary crisis.
Australia’s two biggest cities, Sydney and Melbourne, are bursting at the seams – though this seems hardly to bother the invisible Minister for Urban Infrastructure, Paul Fletcher. Population growth in both places is creating a series of related crises. Housing (especially for young people) is prohibitively expensive, pricing many out of the market altogether. Public transport services are over-crowded and embarrassingly out-moded. Socioeconomic inequalities are fostering resentments and alienation among the many young unemployed in the poorer western suburbs – one glaring symptom of which is the angry graffiti that stains and spoils so many public spaces.
The policy debates about housing affordability have descended into ludicrous displays of political mud slinging, ideological clap trap, and sheer nonsense (for example, telling young people to choose rich parents if they want to buy a house). The lending deals offered by the four big banks are unduly complex and in danger of contributing to the growth of a housing bubble that, if it bursts, will be disastrous for the economy. The entire gamut of urban and housing policy debates has run off the rails. Housing policy makers should all be required to read Hugh Stretton’s chapter on housing in his book, Australia Fair. (Take special note Paul Fletcher.)
The mess that is contemporary housing policy is especially true of the negative gearing debate. This taxation measure, which everyone agrees advantages investors over owner-occupiers, is a particularly unethical part of the entire debate. The fact that not a few Members of Parliament are unfazed about taking full advantage (legally, of course) of negative gearing does raise a very important point about conflicts of interest when they engage in the relevant policy discussions – and voting in parliament.
Prior to the next election voters in each electorate should ask whether their local MP has any negatively geared properties and what position she or he takes on the negative gearing issue.
But negative gearing is only one element in a vastly complex problem. What is to be done about Sydney and Melbourne to stop them expanding both upwards and outwards, putting more pressure on already inadequate services – roads, gas, electricity, water, public transport, health services, schools, community resources?
The Minister for Urban Infrastructure has offered very little by way of a policy vision for these two major cities and all the other urban centres around Australia. Does he, one wonders, have any fresh policy ideas (and, for that matter, any negatively geared property)?
The over-crowding of Sydney and Melbourne is particularly serious and getting worse. Melbourne will soon outgrow Sydney as its fringe suburbs reach further out to distant, poorly planned, and poorly serviced fringe suburbs.
One astute commentator recently suggested that what Australia needs is a new city. He is right. A new city would take the population growth pressures off Melbourne and Sydney. The question is where to locate such a city.
Back in the days of the Whitlam Government, one of the most innovative public policy developments ever in this country’s history was the establishment of a federal Department of Urban and Regional Development. (Take note again Paul Fletcher!) Known by the somewhat unfortunate acronym DURD, the department’s remit was to come up with policies and plans to decentralize Australia’s existing urban centres while bringing growth and development to important regions.
One of DURD’s truly far-sighted proposals was to develop a new regional city combining the existing regional centres of Albury and Wodonga. Both of these cities are situated astride the Hume Highway opposite each other on the north and south banks of the Murray River. This is already an interlinked region on which a new city could be organically nurtured.
The old DURD plans for Albury-Wodonga should be dusted off and updated to see how a new environmentally sustainable, energy efficient city could be developed in the Albury-Wodonga area. This would mean bringing a range of scattered regional services together – health services (including aged care), educational institutions (including schools and tertiary institutions), local, state and commonwealth government agencies, and public transport facilities and services.
For example, could Charles Sturt University (or another multi-campus university) be persuaded to bring together some, or all, of its scattered campuses into the heart of the new city? This could create a truly exciting regional higher educational institution that would be have significant cost advantages over its metropolitan rivals – for local as well as international students. Could a major new regional hospital be established in the new city to serve a large regional population that presently must travel to Sydney or Melbourne for treatments? And so on.
Developing a new city based on Albury-Wodonga would also enhance the already strong case for a very fast train (VFT) link from Melbourne, through the new city, to Canberra (via the Snowy Mountains), and on into Sydney.
Developing a new city around the existing Albury-Wodonga region is clearly needed if Australian’s immigration and population levels continue to increase. And they will continue increasing. It would also contribute to growing the economy through infrastructure construction and related employment growth (“jobs and growth”), through increased business opportunities, and through local and overseas investment opportunities.
There is nothing to lose in planning a new city, except over-crowding and its negative consequences in Sydney and Melbourne. And there is much to gain.
Dr Allan Patience is a Principal Fellow in the School of Social and Political Sciences in the University of Melbourne.