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Urban Futures: The challenge of the low tax state to sustainable urban and regional planning

Denis Bright considers the implications of Prime Minister Abbott’s proposed lower tax regime for the future of urban and regional planning within a broader commitment to environmental sustainability in Australian public policy.

Introducing the challenge posed by the low tax state to essential urban and regional planning

With the national population tracking towards 50 million by 2060, this article considers the negative implications of a lower and more regressive federal taxation regime for the future outreach of urban and regional planning as an essential part of a wider commitment to environmental sustainability in Australian public policy.

Prime Minister Abbott’s longer-term plans to cap the federal revenue take at 23.9 per cent of GDP, as foreshadowed in the Re:think Tax Discussion Paper, will impose enormous financial challenges to urban and regional planning.

This lower taxation regime will also rely more heavily on GST revenue.

As the burden of direct regressive taxation increases, normally progressive sections of the electorate will have a vested interest in joining with pro-development elites to contain commitment to planning and environmental sustainability in public policy.

In the current federal budget, Joe Hockey has eased up on last year’s austerity in a pre-election budget that has increased the size of the federal budget expenditure to 25.9 per cent of GDP.

Even this politically opportunistic increase in the size of the Australian public sector will be curtailed in the future should the LNP be re-elected.

The more detailed budget papers show negative real growth in most portfolio allocations for the triennium between 2015-16 and 2018-19.

Total real growth in portfolio allocations 2015-16 to 2018-19
Budget Paper 1: 2015

Budget Paper 1: 2015

The short-falls are greatest in overall federal commitments to transport and communication despite the hype associated with road funding for Northern Australia.

Financial support to assist the states and territories to improve overall commitments has certainly increased by 6.8 per cent in the current financial year. This merely compensates for last year’s austerity cut-backs and does not target specific urban and regional planning priorities.

Longer-term funding increases to the states and territories increases are dependent on negotiations between the federal government and the states and territories for the future implementation of the Re:think Tax Discussion Paper.

Assistance from the federal government to local governments is already permanently capped at $2.3 billion or 0.53 per cent of federal expenditure.

This makes improvisation in the vital areas of urban and regional planning a permanent agenda for future LNP federal governments.

Urban and regional planning requires more sustainable financial commitments

From the Coral Sea Coast in Queensland to South Australia, urban areas near scenic coastal, rural and mountain localities are facing renewed commercial pressures.

Reaching out to the rural hinterlands?
Image from skyscrapercity.com

Image from skyscrapercity.com

City and regional plans in every state and territory strive to hold the line against random urbanization.

Inadequate funding for future urban and regional planning is also reinforced by current negotiations for the Trans Pacific Partnership (TPP).

Multinational corporations will be able to take action through Investor-State Dispute Settlement (ISDS) against government initiatives which are currently imposed in the public interest to maintain financial stability, community development, health and environmental commitments.

The effects of existing funding restraints

Federal funding cut-backs to the states and territories encourage local authorities back to self-funding of new essential infrastructure.

The current property boom offers some compensation in the form of increased rate revenues to local authorities to maintain planning commitments within city plans. With this additional revenue base, pro-development lobbies can indeed facilitate more intensive development in emergent mega-cities with a positive spin off for rate revenues of local authorities.

Brisbane on the move and more reliant on city plan controls

brisbane As the mining sector falters in a weaker global economy, the property boom is one of Australia’s key fall-back sectors.

The Market agenda: From mining boom to property bubble
Property Observer from Google Image

Property Observer from Google Image

The financial burdens of higher housing prices and rents are an immense social cost and contribute to a widening wealth divide in Australia.

This situation has been repeated in most societies which have followed the corporate development path.

The return of the wealth divide
Oxfam 2012. Left Behind by the G20?

Oxfam 2012. Left Behind by the G20?

Homelessness Australia estimates that 2.55 million people or 14 per cent of the entire population survives below the poverty line. Over 105,000 people also experience involuntary homelessness at some time each year.

Despite the federal LNP’s criticisms of so-called over-generous industrial awards for lower paid workers, housing prices and rent increases outstripped the growth in real wage growth to March 2015.

Corelogic in Google Image

Corelogic in Google Image

This situation is summarized in the recent Paradise Lost research brief from the Percapita Think Tank.

Synopsis of the new Australian income divide
Percapita research paper 2015 available at www.percapita.org.au

Percapita research paper 2015 available at www.percapita.org.au

Advocates of alternative approaches to the funding of essential infrastructure must challenge decades of commitment to the conventional political viewpoint that future urban dreams can be delivered without too much help from community and environmental planning.

Limitations to existing city plans

Even in better financially resourced cities like Brisbane, the market rather than sustainable planning drives the development agenda.

In Brisbane’s inner west, the gloss from a recent investment of $450 million in the Indooroopilly Shopping Centre contrasts with the drabness of adjacent streets which have not benefited so directly from the injection of new investment by the current property owner, the Commonwealth Superannuation Corporation.

How far does the new welcome mat at Indooroopilly Shopping Centre extend into the wider local community?

david

Author’s Photo

Faced with a substantial cut-back of almost $520 million or 71 per cent in revenue from subsidies and grants in the projected estimates for the 2015-16 Brisbane City Council Budget (BCC), even this normally well resourced local authority is forced to rely on the revenue generated by fast-tracking new commercial development.

The gloss of new commercial shopping centre projects contrasts with the aesthetic standards of some adjacent streetscapes which have not benefitted from essential community development, infrastructure and environmental commitments.

The aesthetic divide in Indooroopilly, Brisbane
photo

Author’s Photo

Just opposite in Westminster Road, historic Keating House is fenced off and deserted as funding is not available for its conversion into a heritage site and the market is not ready to provide some alternative commercial use with an embedded heritage component.

Fenced-off from the community: Keating House, Indooroopilly
Image from Department of Environment and Heritage 2013

Department of Environment and Heritage 2013

 

Across the railway tracks, the Commonwealth Government clings onto the largely disused Witton Army Barracks. It contains one of Brisbane’s cultural gems at Tighnabruaich mansion. This is now leased out as a family residence.

Although recommended for protection in the Indooroopilly Neighbourhood Plan, opening up a decommissioned Witton Barracks as a cultural centre carries a price tag which is beyond the financial resources of the Brisbane City Council.

Tighnabruaich mansion within Witton Barracks
National Trust of Queensland 1979

National Trust of Queensland 1979

With the amalgamation of over twenty small municipalities under the City of Brisbane Act 1924, it was assumed that an integrated local authority would always have the financial resources to maintain a balance between historic, cultural, environmental and economic development outcomes.

New councillors in the 1920s had no inkling of the need for a business first pro-development approach and proceeded to make provision for a range of new suburban amenities.

Postcard of the Indooroopilly Reach of the Brisbane River with an empathetic colour touch-up
Queenslandplaces.com.au for the Queensland Government

Queenslandplaces.com.au for the Queensland Government

 

The Great Depression brought on the need for a new round of financial improvisation.
During the recovery phase from the Great Depression in Australia, conservative leaders rejoiced in applying the user-pays principles to major infrastructure initiatives.

Self-congratulation at the opening of the Walter Taylor Toll Bridge, Brisbane in 1936
L-R Governor’s aide, Brisbane Mayor Jones, W.N. Green, Governor Sir Leslie Wilson and Bridge Architect Walter Taylor News Limited Archives in newscom.au

L-R Governor’s aide, Brisbane Mayor Jones, W.N. Green, Governor Sir Leslie Wilson and Bridge Architect Walter Taylor
News Limited Archives in newscom.au

 

The political ghosts of this financial improvisation have returned in the post-Global Financial Crisis (GFC) Era since 2007.

The Toll Ticket: a political metaphor for financial improvisation from the 1930s
Ozrevenues.com from Google Image

Ozrevenues.com from Google Image

Even within current funding arrangements, the public sector has limited capacity to fund longer-term but essential infrastructure.

Infrastructure projects such as rail transport links to Coolangatta Airport from both Brisbane and the Northern Rivers of NSW have price tags in the billions.

The Re:think Tax Discussion Paper makes such commitments permanently off-limits, at least within the government sector.

Major rail infrastructure links: Off-limits without federal government funding
Queensland Department of Transport and Main Roads 2015

Queensland Department of Transport and Main Roads 2015

Only sustained public opposition forced the former Queensland state government to break ranks with the Gold Coast City Council and a development consortium from proceeding with the construction of a cruise terminal and casino complex at the Southport Spit.

The discredited pro-development agenda: Transforming the Southport Spit
Image from ABC News

Image from ABC News

Further south in Northern NSW, the electorate also wanted alternatives to the suburbanization of the Ballina Electorate in the 2015 state election.

The Greens certainly won the seat of Ballina on a local protest vote but Premier Mike Baird still has effective control of both houses of the NSW parliament.

Comfortable Green victory in the Ballina Electorate
www.tamarasmith.com.au from Google Image

www.tamarasmith.com.au from Google Image

Small victories do not substantially change the wider pro-development agenda.

Best practice within existing city plans can still also achieve some splendid outcomes through carefully targeted commercial investment projects.

At Central Park on the Broadway in Sydney South, medium and high-rise apartments blend well with familiar supermarkets, specialty stores and commercial services.

Positive outcomes of integrated development at Central Park, Sydney
sydney

Author’s Photo from November 2014

Urban redevelopment projects like Central Park in Sydney are the product of a traditional social democratic planning model which strikes a good balance between commercial gain and improved surroundings.

In less well-resourced outer suburban and regional communities, substantial funding is required from both state and federal governments to achieve such quality outcomes.

At Springfield in Ipswich, a corporate new town required full co-operation between commercial investors and a progressive local authority.

However, the consolidation of Springfield and the extension of sustainable urbanization into the Ripley Valley closer to the Ipswich CBD would not have been possible without the injection of public sector funding for roadway extensions, public transport and other community infrastructure that are essential for new town development products.

The Springfield corporate new town in Ipswich City
www.greaterspringfield.com.au from Google Image

www.greaterspringfield.com.au from Google Image

Cut-backs in federal grants to the states and territories as proposed in the Re:think Tax Discussion Paper will hinder an optimum continuation of this balanced style of development on the fringes of Australian metropolitan areas.

Projections for Ripley Central in Ipswich City
Queensland Times 16 March 2015

Queensland Times 16 March 2015

Such trends are well-established in the more market-oriented business culture of the United States.

The Potomac Mills Shopping Centre near Woodridge, Virginia is one of that state’s major tourist destinations near Interstate 95, south of Washington D.C.

The Potomac Mills Mall near Interstate 95 in Virginia, United States
Retail Property for Lease from Google Image 2015

Retail Property for Lease from Google Image 2015

 

Potomac Mills Mall offers almost 150 000 square metres of retail floor space in a semi-rural setting. Its sprawling car-park confronts every reasonable urban planning convention.

Owned by the Simon Property Group with retail assets across three continents, this style of urban sprawl might be protected by the Trans Pacific Partnership (TPP) with a capacity to override legislation which restricts market freedom.

In Australia, tighter city planning laws prevent a repeat of the worst excesses of this style of development. This situation may change after the TPP is finalized.

The Way Forward through political consensus

Alternative approaches should not be left to minority parties as it is in the interest of the mainstream to expose the links between the pro-development agenda and the LNP’s current Re:think Tax Discussion Agenda.

This case for an optimum level of regional planning can conclude on a positive note.

Commitment to a higher standard of planning is absolutely necessary for Australia’s emergent mega-cities and their adjacent regions.

Models of more effective local, regional and national planning do exist in the most successful economies of the Scandinavian countries.

With the federal LNP captured by a totally corporate development agenda, the next election can be won by a progressive generation of policy shakers.

Progressive leaders must take political risks to offer more daring policy agendas that address the financial barriers to proactive urban and regional planning. The best practice of Scandinavian countries must be applied to the particular environmental and planning needs of contemporary Australia.

Sustainable urban futures are not part of Prime Minister Abbott’s opportunistic political vision. The current focus on surviving the next election has no commitment to support for the states and territories to deliver urban and regional planning agendas.

Denis Bright is a registered teacher and a member of the Media, Entertainment and Arts Alliance (MEAA). He has recent postgraduate qualifications in journalism, public policy and international relations.

 

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24 comments

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  1. DanDark

    Thanks Dennis for this worthwhile read……..
    The Rabbott Gov are idiots, no brains, no vision, no bloody idea frankly…..

  2. Vicki

    Are the “Rabbott Gov idiots’ responsible for the huge, ugly edifice built on the banks of Kananook Creek down here in Frankston or maybe it was the idiots of the Napthine Nasties. Whatever, this monstrosity has been built across what was public access along the creek. Yes, I know there is still space to walk but past a truly ugly building. It has also totally obliviated the view from the windows of an existing building that does/did have a pleasing aesthetic.
    Since coming to the Frankston area (prior to it being named a city) I have seen more and more of the foreshore disappearing under commercial buildings. The one good thing that has happened is the construction of a board walk that gives/gave access to most of the beach from Olivers Hill to Gould St. I include ‘gave’ because I have noticed that as part of the latest construction and behind the fenced off area that this part of the board walk has been removed. My concern now is that on completion of this project access along the beach front will disappear and will become the preserve of the new construction.

  3. DanDark

    Vicki….I lived on Kananook Creek in 1973, our back boundary fence was the creek, it was a rat infested filthy stagnate bit of something LOL……. progress ya got to luv it, leave the Creek alone it was a natural bit of junk but it was natural not like now, just was down there last year and saw the changes for myself, its when council have had to many steroids and everything has to be big, the bigger the better is the view of the man, they are their phallic symbols because they are lacking in something, so they build big stuff instead and wreck stuff to do it…..

  4. diannaart

    There is no such thing as a “budget surplus”, while people continue to live in poverty…

    …and now..

    while we continue to pollute.

    Any claims to the contrary are delusional.

  5. Phi

    Good article indeed. Not common to find critical analyses of urban and regional planning issues since Australian political discourse is obsessed with fear mongering, security responses and the next election. Whilst most Australians have been caught in this vacuous political warp, the developers have been colluding with conservative governments erecting their big ugly concrete box retail centres – the same monotonous developments repeated in every city and regional centre. I detest conservatism because conservatism detests aesthetics, whether in arts, architecture, music or life in general.

  6. Harquebus

    Sorry to put a dampener on this economic and utopian drivel.

    “At a current average global consumption growth rate of 2% annually (1995-2005), by 2025 the world will need 50% more oil (120 mbd), and the International Energy Agency (IEA) admits that Saudi will have to double oil production to achieve this, which is not feasible in even the most optimistic scenario.”
    “The world is blinding itself to the reality of its energy problems, ignoring the scale of growth in demand from developing countries and placing too much faith in renewable sources of power”.”
    The demand for oil is growing exponentially

  7. patrick

    I think the article is excellent and it should be of interest to all who are involved in policy making particularly when shortfalls in revenue do not meet the needs of good policy implementation

  8. Patricia Ryan

    As usually a very enlightening article – relevant to today’s society.

  9. MBA Student

    More funding for urban and regional planning from the federal government should be a mainstream public policy.

    Prime Minister Abbott places his own survival above everything else and is taking this middle ranking developed economy in very aberrant directions without a plan for a sustainable future.

    Looking to the Prairie States and the Deep South of the USA for political inspiration is an insult to everyone. Alas, this is where radical conservatives are taking Australia.

    The global economy has changed since the GFC and the frontier days of the new globalization are now history.

    It is time for a more considered approach to globalization.

    An Australian financial sector should not just take its priorities from Anglo-American banks. It must reach out to the adjacent financial hubs in Asia which are more mercantile in character but still working well within the current global economy.

    Australia can return to a somewhat more mercantile approach which Prime Minister Abbott chooses to use in his refugee policies but not in other mainstream areas of public policy.

    Some of the wealth generated by economic development must be recycled back into new regional and urban planning initiatives through appropriate taxation levies on both companies and individuals as well as a continuation of indirect taxes on carbon fuels as favoured by Harquebus in his/her post.

    The regional model from Singapore is worth considering for the provision of new infrastructure and appropriate urban planning within a less open market economy.

  10. Janet Butler

    Good article Denis. Just a few observations. Its depressing for me to see so many homeless people here in Australia. A blight on our society, Whether its the mentally ill, drug abuse victims, young people forced out of homes by violence. Now its the working poor, that live out of their cars, or stay with friends and family. Also, now we have more women/children that are homeless, forced to leave their violent perpetrators or risk being killed ( 37 so far this year have). For many women, on a single mother’s pension, they are unable to pay the high rents and there are too few refuges for them. Not to mention the waiting time for community housing. I think urban and regional planers of the future for all cities in Australia should put in place low rental accommodation. Perhaps on a high rise scale like some European countries. These apartments should be close to public transport, not in a no-mans land, with inadequate transport facilities. Queensland had the most decentralised railway system in Australia. Now of course, the railway system is dismal. For example, if the single gauge line to Esk and beyond hadn’t been ripped up, but was improved and went to double standard gauge, people could have commuted to Ipswich and beyond. In closing, we have to face the fact, the good Australian dream of everybody owning one’s home is going, but in place we need to accommodate people that will rent for most of their lives, this should be done by careful/good planing for future needs of the population well into the future.

  11. Pablo

    Thanks Denis for the interesting read. Careful urban and regional planning is essential as the population continues to grow. Failing to plan carefully will lead to hardship and significant negative financial implications down the track. The local, State and the Federal Government are the custodians of the Australian environment (both urban and natural) and must take this responsibility seriously. Some regions do this better than others. People living in areas that are in need of carefully planning and strategic direction should lobby their local and state members to push the right agenda. In the long run, everyone benefits from better planning.

  12. Harquebus

    Careful urban and regional planning as the population continues to grow: Pray for rain, ignore peak oil.

  13. Maria

    Great article Denis. There is at times an unforgiveable gap between the stated aims of planning, the laudable goal of serving the community and the eventual outcome.

  14. Catherine Madden

    Planning is about building community and ensuring that places like the Potomac Mills Mall on Interstate 95 don’t represent the new public space because local authorities are too broke to provide alternatives to rampant commercialism.

  15. Lalnama

    A comprehensive global view of our current development program,combined with a historical approach to assist with understanding the situation . Excellent article which allows us to broaden our vision of how our nation could work together for the greater good of all in our society. If we can have genuine big picture infrastructure projects, improving transport , eg fast speed train tracks , it would be a huge spurt in allowing the economy to grow and thus improving the outcomes for all Australians.
    A thoroughly researched and thought provoking article Denis, keep,up the good work

  16. Abri

    Great article Denis! It shows many of the issues we are facing with current urban development. Sustainable urban development are essential to the success of both our economy and society in many aspect of life. I enjoyed reading the article.

  17. Maree

    I walk past the Central Park on the Broadway in Sydney most days on the way to University of Sydney.

    This Central Park Development shows best practice in commercial development within city plans. It has revitalized an old industrial area with vibrant shops, services and housing to serve the adjacent student community at UTS and the wider community in inner Sydney.

    But city plans alone will not revitalise Australia from the excesses of this federal LNP.

    Further down the Broadway, I pass Tanya Plibersek’s Sydney electorate office.

    I know she has the courage and style to work with the factional hard-hats at Labor Conference in July to humanise Labor’s alternative vision for Australia.

    This includes implementation of this article’s timely commitment to sustainable regional and urban planning.

    Such policy changes are no real threat to capitalism itself .

    In the words of our Kevin Rudd, Labor is here to moderate greed and volatility in global capitalism but establishing a more stable and inclusive democratic social market.

    In countries like France this consensus-building approach was once shared by all sides of politics but recently the solidarity of the social market has been fractured by the rules of the new globalization.

    Just in this morning’s news, leading global financial institutions were caught manipulating currency and interest markets. This system is erratic and unstable.

    The system is too rough to leave all the decision-making our urban futures to the LNP.

    Like the Australian conservatives of old, the LNP wants Australians to submit to power elites at work, in universities and in the wider society.

    Let’s have some real alternatives before mainstream politics bores everyone into non-participation. Wouldn’t the LNP like that extra power in a nation of zombies!

  18. Ross

    A very good article Denis. You have done a great deal of research to provide this for us to study in detail.

  19. adriko555

    I would say another masterpiece by Denis Bright. I live in Toronto, Canada but I don’t see any difference in terms of issues that Mr. Bright addresses in this article. Toronto has slowly become a full concrete platform which is expanding based on what we need today without considering if the future generations will have the ability to meet their own needs. Think of this. During our last municipal elections in Toronto, the SmartTrack (a new rail surface line) was the only main thing that all candidates debated on… Nothing else was discussed. So people voted on who provided “better” plans on the public transportation service. Well, one of the candidates (the former Mayer) was already facing some challenges on some illegal drug use… Is there any politician left that can be trusted or that has the skill to work in a team and foresee the future…?

  20. diannaart

    Adriko555

    Interesting that the major western nations like Britain, Canada, Australia et al have become political clones of each other… USA was well on its way once the religious minority gained power and should’ve been a warning to everyone. Instead we entered the Age of Stupid.

    Those of us who saw it coming were ridiculed and now those who are waking up to the fact they have been cheated are finding excuses for their idiocy rather than working together for a better way.

    Sigh.

  21. Denis Bright

    Thanks from Denis Bright for the comments.

    If any humanities teachers at senior high school, technical college and university use this site, they might encourage their students to submit articles to our editor Michael Taylor:

    Michael Taylor (Canberra) (miglo@internode.on.net)

    I spoke to some senior high school students and they liked the idea of writing to a wider audience.

    Such articles could be quite compatible with ordinary coursework activities and involve preparation of a real C/V for our editor.

    The students that I spoke to were completing a unit on spiritual journeys in their religious education class.

    How appropriate for an AIMN article!

    Teachers could also encourage the writing of fiction. Students would use manufactured place and character names for anonymity.

    The traditions of Harper Lee’ could be alive and well again.

    Many senior students are very talented and perform very well on writing tasks. The students show a high level of discretion and have a good feel for ethical considerations.

    I just become engrossed in the good stories and tend to over-mark according to some of my supervisors with a bias towards the conventional essay style from another era.

    Writing an article for AIMN would be great preparation for the real writing task for assessment purposes.

    As honorary local union secretary of a high school teachers union chapter, our branch asked student to focus on an issues of our times competition.

    Local businesses assisted with the awards.

    In this now digital age, this could include art, dance, folk songs and rap music, uploaded to videos on You Tube which could be submitted to a real community panel.

    There is still a place of all the traditional genres in both fiction and non-fiction writing, including term papers on topical issues.

  22. Nick

    Great read Denis

  23. Theresa

    Wonderful article Denis. I agree that investment in infrastructure is vital for the sustainable growth of our City’s. As housing prices continue to rise many are opting for more affordable housing options on the urban fringe. Growth within the urban fringe must be coupled with investment in high quality and efficient public transport infrastructure to ensure sustainable growth. Investment in key infrastructure projects such as the rail transport links from Coolangatta Airport to Brisbane and Ballina, as mentioned in Denis’s article, are essential for a sustainable future. Planning Scheme’s play an important role in ensuring that new growth is channeled into ares that are well-located to capitalise on existing available infrastructure. However, as our City’s continue to expand investment in new infrastructure to support growth is essential. In Brisbane, the Merivale Bridge (the only inner city rail bridge) is due to reach capacity in 5 years from now in 2020. Investment in the cross river rail project is critical before it is too late!

  24. Limerick Ryan

    Thanks Theresa for talking up more commitment to urban and regional planning. Here in Ireland, our country and its economy were almost destroyed by the GFC. Ireland became a tax haven and baton changing point for toxic loans through the global financial system. Unable to afford as much Guinness as we would like, the Irish are fighting back to restore our honour. Luckily, Ireland never joined the NATO conflicts in the Middle East like Australia and Britain but sometimes the war planes sneak into Shannon Airport with supplies for exotic destinations in Central Asia. In the wider country of Ireland, there is open challenge to the mainstream political parties with Sinn Fein and the Left parties on the rise in the larger cities. Keep up the good critical work at AIMN. Thanks for this initiative, Denis.

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