Federal Responsibilities for Cities

Speech

Transcript - Housing Industry Association Conference, Sydney - 29 August 2002

Check Against Delivery

Globalisation is having a profound impact on the shape of our cities and the structure of the housing market. Whereas governments traditionally pursued urban renewal strategies in the inner-city, private residential investment is now performing this task. The housing redevelopment agenda has shifted to middle ring suburbs, including a large number of broadacre public housing estates.

On the urban fringe, economic prosperity and government development levies have substantially increased the price of land. New master-planned estates in the outer suburbs of Sydney and Melbourne are beyond the reach of average income earners. This has contributed to the nation's housing affordability crisis.

Renting is becoming a permanent form of housing tenure for a growing number of Australian families. For the poorest 15 percent of households, it is no longer possible to purchase a three-bedroom home in any part of metropolitan Australia. In Sydney, home ownership is moving beyond the reach of a generation of income earners – nurses, firemen, public servants and other semi-professionals.

The rental market is just as severe. The Affordable Housing Consortium has estimated that the number of Australian families experiencing housing stress has increased from 90,000 to 250,000 over the past 15 years. If government policies do not change, this number is likely to rise to one million by 2020. Housing reform has become a pressing national issue.

With the winding back of the first homeowners grant, the Howard Government is without a housing affordability strategy. In Canberra, I shadow a phantom – there is no Minister for Housing and Urban Development. In fact, Australia is the only country in the Western world without a national strategy for housing and urban planning. Even the Republicans in the United States talk about cities.

This is the big difference in Australian politics. The Howard Government's electoral strategy is based on division – using issues like refugees and reconciliation to divide suburban Australia against the so-called inner-city elites. Far from causing problems, Labor wants to solve them – to develop a new agenda for suburban solutions.

We believe in Federal responsibilities for cities. We want to solve the housing affordability crisis. We want to make our cities more liveable and environmentally sustainable. We want the national government to be involved in community safety and community building. Just as much, we believe the Australian people want this approach – solutions, not division.

The office worker in Western Sydney caught in traffic jams from Monday to Friday is as likely to be concerned with congestion and sprawl as the most committed environmentalist. Young professionals facing higher rents in the inner-city are no less concerned with housing affordability than families looking for a block of land on the urban fringe. Just as quality of life issues often transcend class lines, they also bridge the gulf between the city centre and the suburbs.

Affordable Cities

Labor's starting point is to address the housing crisis. When families with good jobs and decent incomes can't afford to buy the home they have worked and saved for, the great Australian dream is lost. When important members of the community – like nurses, teachers and firemen – can't afford to live in our suburbs, we all lose. When young people are forced to move away from their families and friends to find affordable housing, we lose again.

This is one of the biggest issues facing the nation. Last month I outlined Labor's policy work for the development of new home ownership schemes:

• Nest-Egg Accounts – a savings program for Australian families, giving young adults early access to a home deposit.

• Matched Savings Accounts – savings incentives for poor families, including support for home ownership.

Today I want to talk about the importance of affordable rental housing. Australia's rental shortfall is both a product of market failure and government neglect. The private investment market is like a cottage industry, with a large number of small players. It lacks the large-scale institutional money that would substantially increase supply and ease the housing crisis.

In the public sector, the Federal Government has cut $1billion from the Commonwealth State Housing Agreement, running down stock and increasing waiting lists. The States and Territories have been forced to rationalise their housing assets through the sale of renovated homes and the adoption of leaseback strategies. Australia needs a new vision and program for public housing – one that increases supply, improves affordability and tackles the entrenched problems of welfare dependency.

In short, governments need to develop a supply-side response to the housing crisis. This is particularly important at a Federal level. Without an increase in housing stock, the Commonwealth's $1.7billion investment in rent assistance will be absorbed by higher rents, rather than enhanced affordability. It is public policy madness to position housing as a form of income support, while running down the Commonwealth's commitment to public housing construction. Yet this is the approach the Howard Government has adopted in renegotiating the CSHA this year.

Given the demands on government budgets, it is not possible to address the housing crisis through public spending alone. A partnership agenda is required – governments using their investments in public housing to leverage in private sector funding. In the past, affordable housing has not been recognised as a desirable asset class for institutional funds.

In particular, new investment opportunities are required in the superannuation industry. The Australian Stock Exchange has said that, with the exponential growth in the super pool over the next decade, Australia is likely to run out of suitable financial products. This will either push capital offshore or drive down the domestic rate of return. Sound public policy arguments have emerged, therefore, for the creation of new investment products.

This approach also meets the growing demand for ethical or socially responsible investment. While maintaining a decent rate of financial return, it should be possible to attract superannuation capital into affordable housing (plus associated urban renewal projects, such as retail and commercial development). This would revive aspects of the Building Better Cities program abolished by the Howard Government in 1996.

One option is to create a new generation of public-private partnerships in the housing sector. This approach, of course, is somewhat contentious. The political system is engaged in a vigorous debate about the merit of PPPs. In practice, these proposals should be judged case-by-case, testing them against strong public interest criteria. PPPs need to:

• Accelerate the investment of private sector capital, rather than delay and diminish public investment.

• Minimise risk to the public sector, while increasing market competition and investment opportunities for the private sector.

• Harness private sector expertise not normally available to government.

• Provide a high level of public accountability and participation as the projects are implemented.

In September last year, the Affordable Housing Consortium developed a proposal to address Australia's rental housing shortfall. I congratulate the HIA for being involved in an outstanding piece of research and policy work.

The Consortium recommended new ways of attracting private investment capital to the housing sector. The money raised would be distributed to State housing authorities or other eligible housing providers (such as community housing associations) for the construction and management of affordable rental dwellings. It is estimated that every dollar of government investment would generate five dollars in private capital. This proposal has the potential to substantially upgrade Australia's supply of social housing.

The Consortium report found a shortfall in low-cost rental dwellings of more than 200,000, requiring $27 billion in capital funding to clear the backlog. In effect, Australia needs a 10 to 20 year program of affordable housing expansion. Labor is currently examining a range of policies to address this issue. We welcome the Consortium's work and aim to build on its research findings, developing programs for new rental housing, plus new home ownership schemes.

Green Cities

As well as being more affordable, our cities should be more liveable and environmentally sustainable. This is why the Federal Government needs to ratify the Kyoto Protocol on greenhouse emissions.

Australia should be part of a global solution to what is a global problem. Our industries are well positioned to benefit from new and growing markets for low emission technologies, goods and services. Failure to ratify the Protocol, however, locks Australian firms out of international markets for emission credits.

Greenhouse is an environmental problem with huge urban implications. Emission policies that ignore energy issues in our cities will fail. If Australia is to make serious and sustainable reductions in greenhouse emissions this will require changes in energy production and use in our cities.

Beyond Kyoto, we need to extend the environmental debate past picture-friendly issues like forestry and wilderness protection. This is not to downplay the importance of these issues. Far from it, the environment is all-important, not just in wilderness areas but the places where most Australians live – our cities.

It's time to rebalance the debate so that we examine the sustainability of urban policy. Many environmental problems are city-based problems, and many environmental solutions are city-based solutions. The environment is an urban issue.

While land clearing, for instance, is often presented as a farm management problem, it is also a big urban issue. Large amounts of preventable land clearing occur on the edge of our major cities. So too, the problems of salinity and rising water tables affect residential areas. Only now are local Councils starting to respond to this issue.

The water debate is often limited to difficult arguments about agricultural irrigation in the Murray-Darling basin and the future of thirsty crops like cotton and rice. In truth, the city is just as important. More than half of all domestic water is used to flush toilets and water gardens. Vast quantities of drinking water are also lost. If real reductions in water use are to be achieved, urban areas must be part of the solution.

Just as many environmental problems lie in the cities, so do the answers. A number of measures are needed to manage the environmental impact of our cities. In particular, I want to congratulate the HIA for your work on the GreenSmart concept, promoting new technologies and practices to improve our built environment.

Building best-practice homes can eliminate waste in the construction process, as well as reduce water and energy consumption. We have the know-how, now the challenge is to act. I want to work with you to spread the success of GreenSmart, not just in new homes but also in retrofitting old homes. This is a win-win policy: big cost savings for households, big energy and water use gains for the environment.

The other big issue is sprawl, the over-development and congestion of our cities. This not only weakens the environment, polluting our air and wiping out bushland, it also weakens social capital. Every hour that a commuter spends in traffic is an hour they cannot spend with their families and friends. In the debate about work and family, this is a neglected issue. People need to be able to live, work and learn in the one community.

This is why telecommuting is so important. It gives people the flexibility to combine work and family life. It is also environmentally sound, reducing car use and congestion. For many people, especially in outer metropolitan areas, the greatest barrier to telecommuting is the paucity of broadband connections. This is another Federal responsibility, improving our urban environment by upgrading Australia's telecommunications network.

Local government also has a role to play. Its planning approvals need to streamline the conversion of residential housing to dual-use and home-based offices. For many people, the era of divided home and work space has ended. Our planning laws need to catch up to the new economy. This is a practical way of easing congestion and combating sprawl. It's good for families and good for the environment.

Safe Cities

Labor also recognises the huge public concern about safety in our cities. For people living in fear and uncertainty in their homes, they don't care where the solution comes from – local, State or Federal government – they just want a solution. All levels of government have a responsibility for community security.

This is why Labor will establish a series of Community Safety Zones, with more police and community policing resources to tackle specific problems like drug dealers, hand-guns and gang violence. Just as criminals target certain neighbourhoods, the Federal Government should target extra resources to fight this problem, in co-operation with the States.

Other polices are needed to prevent crime. We should be tough on crime, and even tougher on the causes of crime. Australia needs a Coastguard and effective Coastwatch to prevent the smuggling of drugs and handguns – protecting our borders to keep crime out of our suburbs and towns.

We also need to rethink the design of our neighbourhoods, learning the lessons of crime prevention research. Recently I received a briefing from Gosnells Council in Perth on its three-year study into the correlation between urban form and the incidence of crime.

The conclusions are stunning. Neighbourhoods with visibility, activity and community life on the streets are likely to have a 40 percent lower rate of crime. Streets that are within walking distance of major public facilities have less crime.

Pedestrians provide a natural form of surveillance. This is why Gosnells is spending a record amount of money on footpaths – to encourage pedestrian activity and surveillance. It is also running a People In Parks program to encourage community life and street activity.

The Gosnells SafeCity research makes perfect sense. In recent decades we have designed our suburbs to maximise privacy and minimise car and pedestrian movements. Unfortunately, privacy for the resident is also privacy for the burglar. High fences, quiet streets and isolated areas assist the criminals as they do their worst. Turning inward actually increases crime.

Cul-de-sacs with fenced laneways are 22 percent more likely to be burgled. Homes that back onto parks and other isolated places are 37 percent more likely to be broken into. The best solution to crime is community and visibility. Streets where the homes face each other – where people can see each other's front yards – have a lower rate of crime.

It is not difficult to build our new suburbs this way. SafeCity has developed the town planning principles that make this possible, cutting crime by 40 percent simply through better urban design. The Federal Government should be spreading this success to every local government area in the nation.

It should also be initiating urban renewal projects – upgrading the housing stock but also improving neighbourhood design. In Riverview near Ipswich, the Queensland Government's urban renewal program has reduced crime by more than 60 percent.

Labor is not content to leave this issue to the States and local government. We believe in a cooperative approach to community security – all governments pulling their weight, all governments ensuring that the Australian people can feel safe in their homes and safe on the streets.

Conclusion

All the great changes in our cities are being driven by Federal Government policies – economic openness, the migration program and major infrastructure decisions. Yet when it comes to the management and consequences of urban change, the Howard Government has passed the buck to the States and local government.

Whether someone is looking for affordable housing or worried about our urban environment or feeling unsafe in our cities, the current Government has nothing to say and nothing to offer. Labor, by contrast, has put these issues on the national agenda. We want to modernise Australia's housing and urban policies. We believe in Federal responsibilities for cities: affordable cities, green cities and safe cities.