The Federal Government – back in the business of urban public transport?
Last night’s announcement of $4.62 billion in funding for urban public transport projects in the 2009-10 Federal Budget is certainly a welcome thing.
If nothing else, it signifies a Federal Government that is back in the business of at least attempting some intervention in shaping the form of Australia’s cities beyond purely fiscal (taxation and transfer payments) measures.
The urban PT measures form 54% of the transport spending component of the Building Australia fund, and 21% of the total $22 billion spend on infrastructure. The key ‘hard’ PT projects that were funded by the Federal Government include:
• Regional Rail Express (Vic) $3.2bn
• Gold Coast light rail (Qld) $365m
• Gawler rail line modernisation (SA) $294m
• Noarlunga to Seaford rail (SA) $291m
• Northbridge rail link (the Hub) (WA) $236m
• O-Bahn track extension (SA) $61m
While a number of ’soft’ PT projects (mostly feasibility and planning studies) were also funded, including:
• West Metro Sydney (NSW) $91m
• East-West Rail Tunnel (Vic) $40m
• Brisbane rail feasibility study (Qld) $20m
Of course, in the scheme of things, it’s only a drop in the bucket compared with the billions that have been spent over the last 40 years on the nation’s road and highway networks and there will have to be a lot more done to redress the imbalance of funding between roads and urban PT.
But rather than labour readers with a polemic of what most of us already know, I will now run down a quick history of Federal intervention in urban PT since Federation to provide a background to yesterday’s Budget announcement.
At Federation in 1901, railways and tramways became the responsibility of the States. During the 20th Century, public transport benefitted only marginally from Federal investment in land transport as it mainly involved projects outside urban areas such as rail gauge standardisation and roadworks on interstate routes.
Apart from the Federal Government’s role in operating urban public transport in the Northern Territory and ACT as a function of their role of governing the territories, Federal interest in public transport coincided with their interest in Australian cities as a whole. There were three distinct periods where Federal Governments actively intervened in urban public transport during the 20th Century, namely:
• World War II (1939-1945)
• The ‘Whitlam-Fraser’ era (1972-1983)
• ‘Building Better Cities’ (1991-1996)
World War II
World War II saw the Federal Government fund minor tram and bus network improvements in Australian cities, serving munitions plants, airfields and Defence facilities. In Melbourne’s West and North for example, parts of today’s Route 82 tram line around Highpoint Shopping Centre were built to service the Commonwealth’s Ordnance and Ammunition Factories at West Maribyrnong; while today’s Route 59 tram line was extended from North Essendon to serve the military facilities at Essendon Airport. These interventions were designed to increase defence production of weapons and equipment at a time when Australia was increasingly cut off from overseas supplies of military equipment by facilitating the 24-hour access of the workforce to these defence sites from the main suburban rail network.
However, once the danger of invasion and the privations of war passed and the Chifley government lost power in 1949 Australian urban policy moved during the years of the Menzies epoch toward a more individualist one based on widespread home ownership for the masses, indirect Federal government funding of State’s public housing for the rest through the Federal-State Housing Agreement and Federal aid to State road-building programs, underpinned by the ‘long boom’ from the 1950s to the early 1970s.
The Whitlam-Fraser era
Once Gough Whitlam took over the leadership of the ALP from Arthur Calwell in 1967, he campaigned extensively on urban matters and public transport, particularly in the ’swinging electorates’ in the outer suburbs of Australian cities something he continued after the narrow loss in the 1969 Federal Election. After winning power in 1972, the Whitlam Government passed legislation in 1974 (STATES GRANTS (URBAN PUBLIC TRANSPORT) ACT 1974) allocating $188.3 million ($925.3 million in 2008 dollars) in grants over five years to State Governments to improve urban public transport.
The urban PT funding was part of a package of infrastructure improvements to the quality of life in Australian cities that greatly impacted upon people who lived there. Transport was a key component, along with regulation of urban land supply, provision of essential services (particularly sewerage and drainage) and the strengthening of district centres (particularly in Sydney and Melbourne) as alternatives to the strong-centred, CBD-centric city. It was also an attempt by the Federal Government to try to plan rationally and allocate efficiently the resources of the Federal (and State and Local) Governments in Australian cities.
Until last night’s announcement, the Whitlam-era funding was the largest single Federal investment in urban public transport since Federation.
After the Whitlam Government’s dismissal in 1975, the Fraser Government continued state grants for urban public transport. In 1978, up to $60 million a year ($251 million in 2008 dollars) over five years was authorised for further projects. Then, as now, the continued funding was seen as an economic stimulus in troubled economic times. Although scheduled to run through to 1983, the special purpose grants end in 1981 with only $125 million ($435.79 million) expended and the urban PT grants rolled into Federal Grant funding to the States.
A number of urban public transport projects were part Federally-funded in this period of the mid-to late 1970s. Some Victorian examples included:
• Quadruplication South Kensington – Footscray
• Duplication Sunshine – Deer Park West
• Duplication Werribee – Corio
• 132 new single-deck suburban trains
• 39 new trams
• 30 new buses
Building Better Cities
The Keating Government’s Building Better Cities (BBC) program resulted from a special Premier’s Conference in July 1991. BBC was funded to distribute up to $816 million ($1.26 billion in 2008 dollars) to the States over five years. BBC aimed to provide urban infrastructure in growth corridors of major cities before development began and to facilitate urban renewal in de-industrialising areas.
Some examples of major Victorian PT projects part-funded under BBC included:
• Rail electrification Dandenong-Cranbourne
• Modal interchanges (Dandenong) and station upgrades (Officer, Pakenham) on Pakenham rail corridor
• Plenty Road tram extension to Bundoora (Settlement Road-McKimmies Road)
• City Circle tram loop
A major aspect of the BBC funding was the prescriptive nature of Commonwealth funding. The Commonwealth was able to use its financial power to direct where and in what manner the BBC funds were to be spent to meet its vision of how Australian cities should look. Two transport examples of this were the Cranbourne electrification in Melbourne and the Merrylands-Harris Park ‘Y-Link’ in Sydney. The Met and Victorian Department of Transport saw the electrification from Dandenong to Cranbourne and the south-east corridor more generally as low on the priority for rail electrification. Their preferences were to electrify to Craigieburn and Sydenham (in that order). Similarly in Sydney, the planners in CityRail and the Department did not see the ‘Y-Link’ and the cross suburban journeys they enabled as an important part of the rail network. But in both cases, they took the money and built the infrastructure, but the extent of the use that was made of that Federally-funded infrastructure (especially the Y-Link) is open to question.
The BBC project was a much more piecemeal approach from the then Federal Government that was trying to respond to a variety of problems affecting Australian cities such as environmental problems, land supply and housing affordability and renewal of public housing areas in inner- and outer-suburban locations in an increasingly corporatist system of government and market-led economy where the Federal Government’s role was to act as an enabler and promoter of growth through targeted spending.
The Federal, State and Territory governments were beginning the negotiations and project prioritisation studies for BBCII in 1996 when the Keating Government fell, and with the return of the coalition, Federal interest in cities declined and urban public transport once more became a state or territory issue.
Infrastructure Australia
In 2008, Infrastructure Australia (IA) was formed to advise the Federal Government on current and future infrastructure needs and investment priorities across the areas of transport, water, telecommunications, energy and housing. An initial $20 billion was allocated to the ‘Building Australia’ fund in the 2008 Federal budget.
Infrastructure Australia (IA) reported to the Council of Australian Governments (COAG) in 2008 with a list of infrastructure projects submitted by State and Territory Governments. As we now know a large number of the urban PT projects recommended to COAG have been successful and more significantly, many of the more high-profile road projects (like the ‘missing link’ to Melbourne’s metropolitan ring road, and the F3-M2 link in Sydney) did not get approved.
It’s a good start and hopefully the harbinger of more to come. And also I think it’s a good win for the model of transport funding that Infrastructure Australia are championing – make the states put up good proposals, justify them, then put them through a competitive process and pick the best ones. It would seem that under these conditions, urban public transport rises to the top of the pile in many cases. While the other good thing about IA’s process is that as it’s at arm’s length from the political process, there’s less (but by no means totally eliminated) the opportunity for pork-barrelling major transport projects to key electorates.
Good overview LS – and welcome contribution to the discussion. The main shame is that the fed’s are back in the game, but projects now have 9 zeros in them when 6 or 7 used to be enough.
I agree an independent arbitor is an improvement – albeit Sir ROd and his Western Rail link etc.
I think the lack of a permanent federal presence in urban transport has meant that those times when generally ALP government do intervene, you end up with projects that don’t fit the whole very well. And those cities didn’t have comprehensive transport plans from which to select projects, so the states ‘grab what money they can and run’.
Terrible that WA selected the NOrthbridge undergrounding, which isn’t even a rail project, as a highest priority. That said, the libs say they will build the Northern suburbs extension and the Ellenbrook line themselves.
And Cranbourne? Mucks up the Pakenham line – but hard to imagine it with no electric rail service now, compared with Craigieburn and Sydenham which at least had VLine.
Ricc, Thanks for the kind words. A point worth raising re: cost escalations then and now. During the Whitlam era of PT funding, costs escalated beyond even the joint abilities of State/Federal funding, thus megaprojects like the ESR and City Loop were excised from the Federal offer. The cabinet papers of the time show costs escalating by 2-300% over the original estimates. How much of this was poor ‘back of the envelope’ planning and costing by state rail authorities (especially in Victoria and NSW) is a matter for history to resolve.
LS
Interesting reading. Agree with Riccardo that would be hard to imagine Cranbourne with no electric service. Q – did it have any passenger service between Leongatha finishing and EMU services commencing.
Noted according to aus.rail that it cost just $28mil at the time, and only $5.6mil for the new Dandy Station!
With inflation it still seems cheap by todays standards; although I know the works were basic and def not gold plated – which brings my question. Could we have ended up with more realistic costings if this model was used again rather than the states going to the feds with “heres what we want, it costs X, fund it pretty please”.
This does generally seem a good initiative from the Rudd Government and is a good stimulator of the economy (construction jobs, etc), moreso than $900 handouts to people overseas are.
LS, lovely post. But a word on two on pork barreling. Australia doesn’t really do pork barreling. It tries, in the sense that the government announces funding for numerous local area initiatives, but the money is invariably transferred through the states, which in doing so, makes it subject to horizontal fiscal equalization.
HFE means, in a roundabout way, that none of these projects are really “federally funded”, or rather, that all projects are actually federally funded, because most state government revenue is derived from the feds. Let me explain in detail, apologies for the length.
Basics first, under the COAG agreement, the GST funds are paid back to the States, but are subject to equalization for fairness by the Commonwealth Grants Commission. To quote from the budget:
This impacts on yesterday’s announcements in two ways. Firstly, payments made by the Federal government to states are treated as revenue, for the purpose of calculating a state’s ability to pay. Victoria, having received 3+ billion more than NSW for urban transport, is now considered 3+ billion better off, for the purposes of its taxation base.
Put simply, what the Feds give with one hand they take back with the other, by reducing Victoria’s share of the GST pool in proportion to their largesse. The only advantage to Victoria, is that the debt is on the federal books, even though it has the same impact on the overall revenue.
Secondly, on the payments side, State governments are supposed to be able to provide equivalent services. Urban transit, being a state government problem has always been part of this calculation (the 2008 figures are here). Thus, the CGC calculates the expected cost of urban transit, based on other states expenditure and local conditions (population, etc.), and uses that to adjust the change in outgoing GST payments.
Unlike tied grants, states aren’t required to spend the money on what the CGC decides (obviously so, with respect to Victoria and urban transit). But, money being fungible, the existence of a tied grant reduces the need to spend in that area from the state coffers.
It isn’t clear therefore, that we’ve actually gained anything, by having the federal government spend money on p/t. Certainly Victoria has gained little on the revenue side, and may even be losing a little, because, being at a comparative disadvantage for urban transit, the greater the expenditure on urban transit in the State budget, the larger the outgoing payments will be. We, meaning the public, are probably losing out badly though, because the State government now has an ongoing excuse to use for not spending money – that they need Federal support – when in reality it makes little difference.
In answer to Somebody’s question, no – there was no service by train from the 1993 Leongatha pax closure to the electrification of the line to Cranbourne station.
Interesting to have heard the NFF complaining that “all that money [on rail] is being wasted on cities” or something to that effect. Think it was on NewsRadio AM this week.
I think NFF took what the Australian wrote as gospel.
ie the Inland Rail Melb-Bris. But the NFF want it via Shepparton-Narrandera also.
Thanks to all
Re Somebody’s point – I wonder if they were putting in a bid for Cranbourne now, would it be compulsory double track (like S Morang), no level crossings (also like S Morang) with palatial stations with all the overline paraphenalia (Roxborough Park and Watergardens) and have big stabling yards at the end from the outset (like it has now, or Cragieburn has)
By the time you load up all that stuff, it does cost a lot.
Now of course, some of that stuff I would argue is the minimum a suburban rail service should have – to meet an acceptable service standard.
But then I question whether some of these locales actually need or deserve a suburban rail service. A more intercity or interurban service might survive on single track (Melton) diesel (Melton) and longer, higher capacity trains (GO Transit Toronto) in peak times and little shuttles or buses outside those times.
Richmond, NSW started out with standard overhead wiring but only enough juice to support a two-car double deck shuttle to Riverstone (where the current was strong enough to power a full size train). Essentially the service replaced a 620/720 diesel shuttle on much the same frequencies etc
However it did do two things. First, enabled the older 620s to be got rid of. Second, it did give some confidence that better services would come, rather than be closed as had been rumoured for some time.
This sort of incrementalism was seen as satisfactory (but not ideal) because the area was not really suburban at that point. In fact, if it had slightly more juice in the wire, a 4 car V set might have done the run on an interurban timetable and not looked out of place among runs from Central to places like Thirroul, Wyong or the mountains.
Again this is not so ludicrous as it sounds as the 620 and its steam hauled predecessors had run trips into and out of Sydney Terminal platforms. If anything, electrification forced the service to be suburban when it could have remained interurban style. Shades of the Sunbury and Melton question.
re Whitlam, Hawke etc, interesting to note some of the projects such as Adelaide electrification and the Seaford extension actually feel Whitlamesque to me. Put on your platform shoes and flares. All we need is Don Dunstan in a pink T-shirt and an Arts Festival and we’ll be set!
Somebody,
I wouldn’t take anything said in Aus.rail (then or now) as authoritative. For information on the Victorian BBC projects, I put my trust in the Victorian Auditor-General’s Office report which states that the PTC originally put in a bid for a DMU shuttle service from Dandenong to Cranbourne at the end of their submission, costed at around $20 million. The Feds directed the service should be electrified, with an additional station and then kicked in $27 million. The VAGO report also shows how the projects the Feds picked were not the ones the PTC (or DHS or the Vic. Gov. in general) wanted.
Ricc,
I think you’re right about the lack of a permanent federal presence in urban transport (and urban policy in general). It does mean that when the Feds do intervene, they pick projects that don’t fit the whole very well. And occasionally you get a total surprise, like the ‘CBD extension’ for the O-Bahn. When I was in Adelaide last year, the weak point of the O-Bahn was the entry/exit from the reservation to street running in the CBD. It should help, but it was certainly a surprise to some!
Sometimes, this sort of intervention delivers a great outcome. An off-topic example from within my lifetime – as a child, I grew up in a new housing estate on the Richmond line past Blacktown. Our house was one of the million or so houses without sewers or drainage in Australia in the early 1970s, mostly in the new estates on the edges of Sydney and Melbourne. One of the things that Whitlam, Uren and DURD achieved was to fund local and state governments to provide sewerage and drainage so that by the mid-1970s, only about 200,000 houses were without this essential infrastructure. That was one of the reasons my late parents voted for Whitlam in ‘72, ‘74 and ‘75 – his government changed their quality of life measurably through its intervention in urban form.
On your other point, I remember as a child catching old CPH from Blacktown which ran direct services to Richmond (before the wires went all the way) and being allowed to sit up the front for the ride (one station admittedly) to Marayong. I also remember the 620/720s on the Riverstone-Richmond shuttles. Richmond was a very ‘country’ outpost of the PTC in the 1970s.
‘Notch,
Warren Truss is reading off the NFF prayer sheet in the House of Reps this afternoon as well.
Glad this is stirring up some comment too!
LS
Well Mr Shunter, that link makes it a little confusing. Was the $27mil for electrification *on top of* the $19 mil requested for a diesel service, or instead of?
Somebody,
You need to look a little harder. Para. 4.39 states:
This variation (from a diesel service to full electrification) to the project was approved by the Australian Government in January 1993 and incorporated an increase in the funding allocation from $19.9 million to $27.1 million. Para. 4.38 gives the reasons why.
The South-East Area strategy consisted of $27.1 million for Cranbourne electrification and $7.7 million for Dandenong station/Pakenham line station upgrades which gave an all up Federal Government contribution of $34.8 million. The Victorian Government contributed $34 million to the South-East Area to make the total funding $68.8 million. Some of the State funding included land release and development costs around Lyndhurst as well.
Riccardo,
Interesting that you mention the Whitlamesque nature of the Adelaide rail extension/electrification projects. The extension from Lonsdale to Noarlunga Centre was a program funded by Whitlam Government’s Urban PT program. The Cabinet documents show the SA Government put up a case for extension and electrification, but electrification was not supported by Canberra, being seen as the ‘thin end of the wedge’ to electrify the whole suburban network.
LS
Hence I was right in the first place, the cost of the Dandenong-Cranbourne upgrade/electrification was $27/28mil.
Oh well.
Russ,
I missed your post earlier and a good one it was too. Yes, I understand how the Federal-State financial relationship works after the introduction of the GST and that’s another thing that makes the current round of Federal PT funding so interesting.
I’m waiting for an ongoing relationship on PT to start so that there’ll be an FSA through COAG on public transport, like there already is on health, education and the other areas of service delivery where the Commonwealth has got a deep and pervading financial interest.
Of course, it now seems as though everything depends on what will happen to Supply in the Senate in the next few weeks. Thanks again.
Somebody,
Yes, you were right in the first place, but Aus.rail (or Railpage for that matter) is not the place for facts and hard numbers. That’s why there are a number of better data sources with trusted provenances out there for us to look at.
LS
Thanks LS
I do remember the criticism of the Riverstone electrification of it being done “on the cheap” (although at least it took full size trains) but the way you put it, Whitlam was thinking at least in terms of the ‘outer suburban battler’ in more genuine terms than Howard ever did
Of topic, but it reminds me how Mark Latham was at least trying to hint that it was possible for the ALP to connect with the outer suburbs, and the the Liberals were ‘false battlers’ – but the media didn’t like him and he seems to have had a poor grip on reality. But definitely in Whitlam’s day there seemed nothing unusual about trying to ameliorate the living conditions of the lower middle class by spending in the outer burbs, including half-cooked rail electrification extensions.
Also reminds me how in NSW there has been this tradition of not running proper services when lines open.
Campbelltown at first did shuttles only, Macarthur only had a few trains in peak and Holsworthy might have had 3 trains a day when it opened. Helensburgh was similar from recollection although the regular Wollongong service was still stopping there. Bondi J only ran to Central in its first year. And we’re still at it with the Epping Chatswood shuttle.
I’m doing a post on the WA budget but pretty good news anyway
http://www.mediastatements.wa.gov.au/Pages/default.aspx?ItemId=131849&
thanks LS, I doubt the Senate debate will be too vigorous, the Liberals definitely don’t want an election, and the Greens and minor parties would benefit from a double dissolution. Not that I would be surprised, Whitlam and Hawke both went to election to get a better Senate outcome.
Unlike you I’d prefer no Federal involvement in urban transit. I fear it is used primarily by lobby groups to try and bypass State Government Treasuries. It works occasionally, but it can backfire badly when the reverse lobby is in power, and it encourages people to think of State government’s as Federal agencies with no control. As a counter-point, if urban transit was primarily a Federal policy, do you think WA would have built more or less rail under the Howard government?
The problem of the current system is that it is in the State’s interest to encourage higher transfers at the expense of their own taxes. Because, when they raise taxes locally, they become less competitive, relative to other States. Whereas a rise in the Federal transfer tide lifts all State boats equally. This makes the system biased towards greater Federal control, regardless of the costs.
Transport is inherently local though – more local than the State level, really – so I personally, as a matter of principle based on subsidiarity, want State governments to be more responsible, not less. If the Federal government wants to encourage sustainable transport – and they have come around to this view, a little – then they should set incentives against the general transfer money, such that an improvement of x% produces an increase in funds of y%. But of course, they want to cut ribbons and they want to make announcements, so again, the system tends towards the funding of big projects.
On the plus side though, forcing the States to lobby for money will improve their planning documents, and open them to scrutiny, so it is not all bad.
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Russ,
I’ll have to respectfully disagree about Federal involvement in PT and transport policy in general.
To create an alternative scenario, do you think that a Federal Government actively involved in planning transport infrastructure and policy at a national level would have allowed the level of place competition between Sydney, Melbourne and Brisbane (and to a lesser extent Adelaide) that led to each city’s port going in for channel deepening and berth expansion and the airports in the East Coast cities all widening their runways and terminals to accommodate the A380/Dreamliner?
In an ideal world, a Federal government interested in actively planning infrastructure investment would have picked one port (Brisbane for example) which needed minimal channel deepening and expansion works and invested dollars (from the Federal Treasury rather than the State Treasury) to upgrade the interstate rail corridors to allow the landbridging of containers from Melbourne and Sydney to Brisbane for loading at Fisherman’s Island. Port of Melbourne’s channel deepening is heading for $1.1 billion, while the expansion of Port Botany is now heading for $1 billion. That notional $2.1 billion would have bought a lot of track straightening and deviations on the Melbourne-Sydney-Brisbane rail corridor in the hands of ARTC.
In the public transport sphere, a Federal Government willing and able to actively intervene in urban policy might start to direct where and how the money it ‘gives’ to the States through the redistribution of tax revenue be spent. It already does a lot of proscriptive funding in the social sectors through the COAG National Partnership Agreements on Health, Education, etc.
In a totally ideal world, the Federation would have moved beyond the present situation, as, to echo the words of Gordon Greenwood (writing in 1946), …despite its achievements, the evidence points decisively to the conclusion that the Federal system has outlived its usefulness, that the conditions which made federation a necessary stage in the evolution of Australia’s nationhood have largely passed away, and that the retention of the system now operates only as an obstacle to effective government and to a further advance.
But sadly, we’re stuck with the Federation we’ve got for the moment, so we’re back to where we started. I’ll still respectfully disagree with you Russ, because I believe the Federal Government has an important role to play in knowing and steering the direction of our cities.
LS
Excellent summary. Thanks for this history. It’s interesting that none of these periods of Federal activism was any sort of profound step-change. If all Sydney got out of BBC was the Merrylands Y-link (which we will run trains on someday, promise!) then it’s not surprising people here feel it’s been downhill since Bradfield, i.e. since before WW2.
Jarrett,
Thanks for your comments and welcome to TT if you haven’t been here before. I think the periods of Federal intervention tried to initiate a step-change in transport and land-use planning, but as the wants and needs of the Federal Government differed from the wants and needs of the States (even when the same parties controlled both levels of government), the intervention only briefly delayed the drift toward the cities we have today.
To use your example of the BBC programs in Sydney, there were three ‘area strategies’ that were developed:
1. Western Sydney
2. Pyrmont/Ultimo
3. Eveleigh
Each of these ‘area strategies’ tried to accomplish different land-use outcomes, with a strong transport component as an enabler of change.
Of these three, the Western Sydney package was definitely an attempt to try and deflect commercial development away from the Sydney CBD, to create in Parramatta and, to a lesser extent Blacktown and Liverpool as strong commercial ‘district centres’ to become service centres and hubs for Western Sydney. The Y-Link and the associated transport interchanges at Blacktown was an important part of the area strategy as it was the first real effort to build suburban rail infrastructure that was not focused on servicing the CBD and strengthen three district centres in Western Sydney, a concept harking back to the Whitlam-era strategies of DURD. I would argue that its operational neglect by CityRail is more a reflection of a State Government that continues to strengthen Sydney’s ‘Global Arc’ rather than strengthen Sydney’s ‘Global hinterland’ in Western Sydney.
This same set of planning choices by the Government could, one argue be behind the truncation of the Parramatta Rail Link to Epping-Chatswood and the continued State Government emphasis on building a CBD-centric metro system, rather than the Federal Government’s preferred option of a Parramatta metro that tries to connect the inner and middle-western suburbs to the major bio-medical (Westmead/Children’s Hospital) and educational (UWS) activity centre. Indeed, Western Sydney got the ‘consolation prizes’ of a Parramatta-centric Busway system which, like the Y-Link hasn’t really had the impact everyone thought.
The disjuncture between the rhetoric and reality of transport planning and land-use planning is at the heart of the malaise in Australian cities. State Government planning ministries bang on about strengthening suburban activity centres, all the while continuing to strengthen the CBD. To return to BBC, the other two Sydney area strategies (Ultimo-Pyrmont and Eveleigh) were about diversifying the CBD by creating more residential development, increasing the CBD population and rehabilitating post-industrial rust-belt sites, leaving the central tenet of a strong-centred city untouched.
As you can tell, analysing Federal involvement in cities is a bit of a pet project of mine.
LS
LS, there are two answers to your question: yes, probably, and it depends on what you replace federation with. Port deepening and airport expansion for larger crafts are technological problems that occurred (rightly or wrongly) for global competitiveness and efficiency. The Federal government could be extremely active in planning, but the business lobbies in cities will still insist on infrastructure improvements, because they have substantial investments to protect that are rooted in place, physically and contractually (business and labour).
A rail link to Brisbane may be much of a muchness in terms of time compared with ship, but would make being in Brisbane a bit better for any manufacturing business that moved. Given the immobility of labour, and ongoing problems in the manufacturing sector, I highly doubt the Federal government could justify not investing in Melbourne and Sydney. Politics often trumps efficiency, regardless of your government structure, much as sunk costs often trump radical change.
Having said that, structure would matter. If the federal system was replaced by a centralised state, then that state would probably promote Sydney at all costs, much as France promotes Paris, or England, London, or our states, the state capitals. If the states multiplied (which is quite easy, constitutionally) to become regional, then we’d get something else again (probably better).
As you say, we respectfully disagree. I understand your perspective, and I won’t deny that federation has its pitfalls – not least the tendency for politicians to try and pretend it doesn’t exist. In the absence of strong city government, the states are the only decentralising force Australia has, and there are numerous reasons why a little urban competition in policy, economics and living standards are advantageous. Moreover there are good reasons why a centralised bureaucracy is not advantageous.
As I said above, I don’t really mind if the federal government makes its grants incentive based; I shudder at the prospects for lobbying and pork-barelling that would accompany federal project funding. Even when federal project funding has little effect on the state balance sheets (as I noted earlier).
[...] of our recent posts been instructive in this regard – particularly the way federal-state financial relations impact the amount of funds available to [...]
I’m not sure if this represents a new era of Federal intervention, or is simply a reflection of the fact that so many state governments (except WA) have dropped the ball on PT. I personally think federal government funds are best directed at major intrastate and interstate infrastructure, particularly freight. Urban rail should remain a state priority.
I also wonder whether the intervention in 1991-1996 was similarly less about the dawning of a new era and more to do with the fact that several state governments were effectively bankrupt (Vic, SA and WA) and had to be bailed out by the Feds.
Good comment Mr Marcus
Question is: why did the state govts drop the ball? They all cry vertical fiscal imbalance yet the GST did return some autonomy in funding to them. And the last 10 years has seen mostly ALP government in power – as in the 80s – and not much done.
And every measure they’ve adopted has been abused – eg developer contributions and parking taxes have been squandered, petrol taxes have been squandered. Where’s the money Ralph?
Mr Marcus,
Good comment.
MM and Riccardo, No firm answer from me as to whether the states have ‘dropped the ball’ on funding PT. I would argue that for a variety of reasons there are pre-existing prejudices (particularly in State Treasuries) and clear fiscal signals (particularly from Federal Governments) that urban fringe and metropolitan road funding was a better proposition than urban PT due to the greater attraction of Federal funding (under either Labor or Liberal governments).
I would say that the IA funding is based on the premise that increasing productivity is the best way to improve our standard of living. Since the majority of Australia’s workforce lives in cities, increasing the productivity of the urban workforce through interventions in public goods such as transport (and other urban infrastructure) is a good investment for Federal Governments to make.
I respectfully disagree with your belief that Federal Government transport funding should be directed outside of cities. Since the early 1990s, Federal road funding (and rail funding to a more limited extent) has increasingly been directed into cities as a means of improving productivity through better transport links to ports for the goods produced by export industries (with incidental benefits for non-freight road users).
Why then shouldn’t investments in transport (and other infrastructure) that improves the productivity of human factors and the production of services (increasingly the basis of our economy) be a State responsibility only? If a technological and industrial dead-end like the coal export chain can get millions of dollars of State and Federal money pumped into it to improve the coal industry’s ability to extract and ship more coal, why can’t the cities which produce the majority of our GDP receive similar investment to make them better places to live?
LS
Thanks LS
insightful as always
I wonder what we are going to with all that coal-related rail infrastructure when its all over. The suburban dwellers of Branxton and so on, visiting the non-city of Newcastle will definitely find all that bi-directional, triple and quadruple track a bonus!
Hence my recent post on my blog – What a riot – about the Rothbury and Pelton Branches, and proposals to have big intermodal yards in the area (shipping what? grapes?) as it would be good to see some non coal related industry in these areas.
We’ve already seen the flotsam of previous coal technology (Weston, Neath and Kurri itself) left like rubbish on the ground, towns with no economic base once their industry disappears. What of Singleton and Muswellbrook themselves? Go back to cattle? Thoroughbreds won’t feed 20,000 people or more.
The suggestion in the Latrobe Valley is the lignite is too filthy to do anything with other than fertiliser.
Ricc,
Thanks for the kind words. In respect to coal infrastructure around Newy, I think it may well lead a renaissance of the ‘creative industries’ (sorry Richard Florida!) as Kooragang Island and Port Waratah become prized locations for gritty, realistic cop shows and crime dramas set in post-industrial locales. Newcastle (unlike other rust-belt cities) would have the great ability of being a couple of hours drive from the hub of Australia’s TV industry in Sydney’s ‘global arc’ (lower North Shore/inner East), the ability to source decent catering locally and able to drive back to Sydney at the end of a day’s work.
But I digress. The towns themselves will sink back into their torpor, producing only criminals, doleys and rugby league players (go the Cessnock Goannas!) because the wine, food and racing industries are capital, not labour intensive.
LS
Some WA examples – the North-East Corridor Extension Strategy recognises the need for housing in Perth, that the NEC has space, but that it should only be developed sometime after 2021 once there’s sufficient local employment (50% employment self-sufficiency is the target) so it doesn’t become a dormitory suburb for Perth. As it is, the developer seems to be jumping the gun and trying to build before the employment or services are available.
The Cockburn Coast plan (Chapter 2) has this:
So in WA the state planning commission does put a fair bit of thought into transport and employment. Per What is the right level of government to subsidise urban transport? this could conceivably be handled by a metropolitan agency, but the important thing is planning and transport provision are integrated. For WA the various region schemes (Perth, Mandurah, Bunbury) are administered by the state government, and the PTA has Transperth and Bunbury City Transit divisions (Mandurah being caught in the middle).
I’m less familiar with the other states, but for CityRail, its Newcastle operations should be hived off and planned in consideration with Newcastle council. The extension of the Melbourne urbran growth boundary without any indication of just what the land is going to be used for just wouldn’t fly in Perth – they’d plan out land use first and then rezone it. So maybe the problem with other states is their urban planning process, or lack thereof?
Oops, seems I accidentally deleted my post. Will re-load it (and hopefully Ricc’s reply):
To return to Mr Marcus’ point about why the states dropped the ball on PT, Gleeson and Low (2000)* refer to the turn in State (and also Federal) Governments by the 1990s to a style of Governance called ‘Corporate Liberalism’. Corporate Liberalism according to Gleeson and Low has three elements:
a. A view of the State itself as a corporation
b. The creation of the markets as the institutional matrix for the delivery of services, and;
c. Selected enhanced entrepeneurialism in which close relations are established with certain business elites
Hence, put simply the windfall profits that accrued to the State over the last 15 years have been squandered or frittered away by the corporate State corporatising, breaking up and selling off its integrated service delivery industries (electricity, water, gas, public transport) to move toward a market-based model of service delivery, while the public sector took on revenue risk for infrastructure PPPs and allowed the profits to accrue to the private sector. Moreover, the rise of the peculiarly Australian financial innovation of the investment bank (ala Macquarie) that was able to act as go-betweens with State and Corporate players and rake its percentage off the top, along with lawyers, consultants and the like.
LS
* Gleeson and Low (2000) – Australian Urban Planning – New Challenges, New Agendas, Allen and Unwin, p. 92
And I’ll re-post Ricc’s accidentally deleted comment to my deleted comment as well:
Thanks LS
It fits into my prejudice that the Australian economy has been fundamentally mismanaged – but not a partisan view as I believe they all do it.
My wife being from HK and all, I have seen at close quarters how they do it. They too survive from skimming cream from the top (some people would call it making a profit) but there is plenty of milk underneath to do it from. HK’s status is very visible, with production and consumption very much ‘in your face’. Banking and finance are the largest industries in town, but cannot sit their comfortably as they must be competitive with the best in the world, or die.
I notice the Australian finance industry depends on protected finance streams eg superannuation (too small a market globally for big overseas players based offshore to offer in the retail market place without big entry costs), government financial schemes, of which MacBank appears to have cornered the market, the big four banks, and lastly, our dollar which is more of a speculative device than a transactional one (the fourth most speculated currency, but a long way down the table as a transacted currency).
Property development is also a big show in HK town, but per person I would guess the amount of capital sunk into property in HK is small compared with here. Australians seem to have an overwhelming predeliction for property, compared with say shares which is what floats HK people’s boats. Maybe that is a good thing – you can live in property, you can’t live in a share. However, property is lumpy, not easily tradible, and heavily taxed for transaction but lightly taxed for holding, meaning it is a very poor investment for adjusting the economy on a fractional basis. Property also supports a whole coterie of hangers on, from physical work in building and maintaining, to army of clerks and spivs who manage the sector or speculate on its turnover.
Conclusion, I don’t think Australian economy has much depth, nor much real work to support generations of tertiary educated white collar middle class who expect to work in such an economy. Salaries are poor by international standards FOR THIS GROUP and the cost of living high, especially after tax is taken out.
What’s this got to do with transport? I’m still puzzled by how Australia has been underfunded for both rail and road, yet a territory like HK, where only a minority have a car, has an excellent freeway system, but you wouldn’t call HK a hostage to a road lobby. People say “you can’t compare” but hang it, I will. HK’s density is high but much of this relates to protection of half its area inside national parks, and the sensitivity about the border area and the desire to protect the separate identify. If my contention is right, and the economy in Australia lacks depth, the government is hesitant to spend money yet it is this preparedness to spend both private and public money that could transform Australia in the longer term.
Efficiency is efficiency and the current capital allocation efficiency is poor. Most money tied up in a few big share market players, mainly banks, superfunds with lazy portfolios, governments who will not play their role in asset development, and finally, too much skimming of not just cream but much of the milk as well. I should do a post on labour market efficiency and transport.
I suspect that government could massively improve labour market efficiency by good urban planning and transport, for example, by further promoting the Parramatta CBD and others as a way of ensuring full participation of the potential middle class in the economy (by cutting up to 1 hour off the commute of those who are sensitive to it) as well reducing the capital holdings in the Sydney CBD (which will doubtless not suffer in any event). The aim would be to create two regional economies, one in Sydney and one in Parramatta, the latter able to generate wealth and prosperity from a lower base: lower asset costs, lower labour costs, lower land costs.
Sorry James, are we talking about Chittering or Yanchep? The latter is well planned and the rail line is being extended ‘in that direction’. Still sprawl I suppose, but better to manage it with transport and employment together.
Chittering is a worry. Isn’t it on the old alignment to Northam?
I’m worried about the Libs carrying out an Ellenbrook line. It will probably end up as buses.
This developer gaming appears to be what has happened in Melbourne – developers at Beveridge and Rockbank basically gaming the boundary to the point where it is meaningless.
I didn’t realise – Chittering is north even of Muchea. Far too far out from Perth for any credible sattelite city.
Worse, I read the brochure – will it all end with a glass of Kool-Aid all round? A private company like a body corporate controling the town. As for transport – thinking of maybe contributing to the coupla buses a day to that area. So much for sustainability. And they want to encourage the FIFO crowd to live there ie drive down to Perth at least twice a week.
FIFO from Gingin airport was just barely plausible, since some mines had flights from Bunbury, but now the boom’s ended that won’t happen. The 2003 idea seemed OK, they were expecting the employment to be industry driven out from inner Perth, and weren’t going to build until it could be guaranteed.
Also my comment is stuck in moderation so only admins can see it at the moment.
James, it seems to be approved. Nothing awaiting moderation.
The plan as written appears to be just another country town – as if you’d build a new one.
Agriculture does not support urban-based employement to anywhere near the extent that justifies townships – and agricultural producers tend to be able to build housing on agricultural properties at low cost and suiting the lifestyle. So to say that you would build a town to support this is ridiculous, and what’s wrong with the existing towns?
In terms of rail transport – the township appears to be 4-5km from the railway which is not fatal, nor would it be too expensive to build a branch railway if a real township was built. However, this would be overkill and unlikely to happen as Transperth have a sensible policy that passenger rail is fully segregated from freight. Which would mean at the minimum a parallel rail line from Midland or from the Ellenbrook line, past Muchea and to this area.
All for one developer’s speculation.
I agree that agriculture isn’t enough – the town only makes sense with a local employment node for 8,000 people, beyond a predicted 5,500 from a local industrial estate and 10,000 retail/services jobs required to serve the local population of 30,000 and Ellenbrook. In this respect it’s trying to establish a large attractor for the area, which will enable it to be a mostly self-sufficient town.
However this is all planning for 15-20 years in the future. I just found this press release that states
so in this case the developer really is trying to make a quick buck and should be slapped down hard.
Rail – the as-yes ungazetted Perth-Darwin Hwy provisionally passes right by the west side of the site, which is also the route any extension of the Ellenbrook line will take. Of course, given the Ellenbrook line isn’t even built yet, that’s another 20+ year plan.
Ah it is approved, LS’ repost confused me.
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