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
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?
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
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
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
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.
This situation is summarized in the recent Paradise Lost research brief from the Percapita Think Tank.
Synopsis of the new Australian income divide
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?
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
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
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
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
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
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
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
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
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
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
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
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
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
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.