News

The PM’s Big Australia vision, with high levels of immigration, requires a greater urban density than Australians are accustomed to. It also means serious infrastructure shortfalls in our cities cannot be ignored. By Mike Seccombe.

Big Australia’s date with density

When Malcolm Turnbull gave his first speech in federal parliament, to an audience including 150 supporters who had come to Canberra by bus, he did not restrict himself to the usual platitudes and parish pump matters.

Turnbull ranged widely across the big political issues: the economy, environment, climate change, family values, his desire for Australia to become a republic. But the biggest part of the speech was devoted to a subject seldom canvassed in Canberra: population.

“Demography is indeed destiny,” said the new member for Wentworth, painting an alarming word picture of the “dying” of Western civilisation.

Among the advanced nations, Turnbull said, “only the United States has a total fertility or birth rate at replacement level of 2.1. Ours is 1.7. In Japan and most of Europe it is 1.3 or lower ... Societies such as those in Italy, Spain, Greece, Russia and many others in Europe with birth rates of 1.3 or lower are not ageing, they are dying. A population with a birth rate of 1.3 will … shrink by 75 per cent over 100 years.”

Low fertility nations would either “dwindle into an insignificant fraction of their current numbers or be swamped by larger and larger waves of immigration”. He went on to warn of dire economic consequences for Australia of a low-growth, ageing society.

When Turnbull gave that speech in November 2004, Australia’s population was about 20 million. It is now close to 24 million.

So the good news from his point of view is that Australia is not dwindling. On the other hand, that growth is overwhelmingly due to a huge wave of immigration.

And that has brought its own set of problems. Where to put all those people? How to move them around? Educate them? Integrate them into the economy?

Turnbull, in sharp contrast to his predecessor, at least shows he recognises the problem. A month into his leadership, when Opposition Leader Bill Shorten asked him to identify one policy that had changed since he took over the leadership from Tony Abbott, Turnbull nominated his support for federal funding of public transport infrastructure.

It was a generally welcome change. But behind Turnbull’s embrace of public transport and his rather endearing habit of tweeting his travels by bus and train lies a mindset likely to be far less popular when people see it reflected in policy.

Turnbull is a “Big Australia” guy.

That first speech made it quite clear. The future economic success of Australia, he said, rested on growing “the three Ps”: productivity, participation and population.

He fleshed out his vision just a few days after taking the prime ministership, in a speech in Western Sydney, which he entitled “Why smart cities need to be more like people and less like cars”.

“Members of parliament, mayors and councillors receive a lot of complaints from the public about ‘over-development’. But at their core, most of those complaints are really about the congestion and diminished urban amenity which result if planning fails to keep up with population growth,” he said.

But the solution he offered was not to slow population growth – nowhere did he offer any suggestion of what a reasonable, sustainable population for Australia might be – but to pack people in more tightly.

“Density is the solution, not the problem,” he said, although he allowed that “it must be density coupled with amenity.”

Turnbull went on to laud “thought leaders on urban issues such as the Committee for Sydney (ably chaired by my wife Lucy) and the Grattan Institute [who] are as one in emphasising the importance of urban agglomeration and the benefits of large-scale mass transit.”

The best way to “deepen the employment market … and improve the city’s amenity”, he said, was to increase the density of established areas and improve transport.

His speech referred to Sydney, but those “thought leaders” who share his vision would apply it equally to other Australian cities. The vision, put bluntly, is this: they’re coming for our backyards.

'Middle rings'

There is a certain logic to it, if one accepts the basic premise that rapid population growth is desirable. So let us go to John Daley, CEO of the Grattan Institute, who is clearly one of the major shapers of the prime minister’s infrastructure vision. Lucy Turnbull sits on his board. When the new prime minister held his “economic summit” a few weeks back, Daley was there representing his think tank. (No representative of Tony Abbott’s favourite think tank, the Institute of Public Affairs, was invited.)

“We have had a big shift in the Australian economy to services and to the centres of the big cities,” Daley says.

“When you compare the figures in the 2006 census and the 2011 census, you see ... more than half the additional jobs created were in the CBDs or 10 kilometres around them. But more than half of the net increase in accommodation was more than 20 kilometres from the CBD.”

So the jobs are moving in, and the people are moving out.

There are, he says, “basically three choices” for resolving the mismatch between where the jobs are and where the people are.

“You can bump up the densities of the centres of the cities, which we are doing and may even be getting a bit ahead of itself,” says Daley.

“Option two is to build much better transport from the edges of the cities, but that is extremely expensive. And option three is to increase the density of the middle ring of suburbs, three or four kilometres distant from the city centre.”

Daley calls this area “single-storey land”, and redeveloping it to increase density is clearly his preferred option.

“There’s a big opportunity in those middle rings, which are within reasonable commuting distance and where there is already, by and large, pretty good infrastructure.”

Although it might be necessary to increase the capacity of that infrastructure, particularly transport, he says “at least you’ve got a fighting chance” of keeping up with population growth.

Daley is not talking about high-rise, high-density housing but “medium/high density development of four to six storeys”.

“The number of people you can accommodate by medium/high density along transport routes in those areas is quite substantial,” he says.

“The other thing is straightforward suburban infill. A lot of that area is one-eighth-acre blocks, and the reason for that size was that it was the minimum size needed for natural sewerage for a family, a hundred years ago. But you can divide an eighth of an acre in four or six low/medium density homes, the equivalent of Victorian terrace houses. And you can also redevelop old industrial sites.

“You can get a very substantial increase in the carrying capacity of those middle suburbs.”

High density unpopular

No one could accuse Daley of hypocrisy. He raised his own family in an inner Melbourne house on a 300-square-metre (0.074-acre) block. The Turnbulls, in contrast, live in an expansive harbourside mansion in Sydney’s Point Piper. In 1999 they bought the adjoining property and carved 600 square metres off it so they might expand their water frontage. Which only goes to underline what Daley acknowledges as the major problem with the vision of increasing inner-suburban housing densities: people like their space. And they don’t like the idea of having medium density around them.

In fact, Daley frankly admits, they “hate it”.

It remains true that most Australians, particularly when they have families, want a detached house, among other detached houses.

And once they secure one, they don’t want to move, as was reaffirmed only this week in a report on Australia’s housing crisis produced by the Australian Population Research Institute at Monash University.

At least half the detached houses with “high amenity” within 10 kilometres of city centres are now occupied by older people whose children have left home, it noted. And that number will increase significantly over the next decade at least.

“As of 2011, the share of older households living in detached dwellings does not start to decline significantly until people reach 75 years of age,” the report noted.

This presents a big problem for the “Big Australia” advocates. The residents of the inner ring vote in council elections “and councils tend to respond to their concerns”, says Daley.

Make no mistake, a large part of the push to amalgamate councils and to impose new planning bodies that can override zoning decisions is driven by the desire to overcome this inconvenient expression of democracy.

And there is no denying it presents a problem.

Increasingly, younger people can’t afford to live anywhere but on the fringes of our big cities, with the result that, in Daley’s words, many are “trapped in quite difficult lives, with poor access to jobs, very low rates of female workforce participation, much higher rates of disaffected youth who can’t find jobs, and long commutes”.

Population growth soaring

The largely unacknowledged reality, though, is that the root of the problem is Australia’s runaway population increase, encouraged by a succession of Big Australia fetishists among our political leaders.

“We’re a developed country with a Third World rate of population growth,” says former New South Wales premier Bob Carr, one of the relative few in this country’s business/political elite who is not a spruiker for “Big Australia”.

“My government was spending on non-Olympics infrastructure at real levels two-thirds higher than the average for the 1980s, but force-fed population growth runs so strongly that no government can catch up.

“With population growth this rapid it is literally impossible to keep pace with infrastructure. You cannot possibly maintain spending at adequate levels to meet the huge challenge this represents.”

The statistics lend weight to his argument.

The year Turnbull entered parliament, net immigration was 100,000, or about two-thirds the level of natural increase. Two years later, net migration – the number of people coming in, minus the 70,000 or so Australians who emigrate every year – equalled the number being born. And population increase through immigration has vastly exceeded increase through births in every year since.

“The big population increase started about 2006,” says Glenn Capuano, demographer with the Melbourne company .id.

“That’s 300,000 plus per year. That’s something we’ve had nearly 10 years now, and every year since then has been higher than at any time for the 30 years before that. At the peak, 2008-09, population grew by 442,000. In 2012-13 it was 397,000.”

Growth has slowed a little with the end of the mining boom, but even so, says Capuano, the numbers for the first nine months of 2014-15 showed growth of 244,000.

To put those numbers in some context, that means Australia has had to house, employ, and otherwise provide for an average additional population equivalent in size to Canberra every year for a decade.

And the federal government’s enthusiasm for immigration is literally sending the states broke, as John Daley readily concedes.

“States,” he says, “have been borrowing like it was going out of fashion for the last seven or eight years. State governments have gone from a net positive position of about $30 billion to a net negative of about $70 billion of debt.”

The Howard government, under which the population boom began, largely ignored the needs of the states. It cut infrastructure spending, preferring to hand the windfall gains of the mining boom back as tax cuts and other benefits, largely to high-income earners.

Spending increased again under Labor, then fell again, and was sadly misdirected, under the Abbott government. Now Turnbull, like the Labor opposition, is again talking seriously about increasing spending on infrastructure, through as-yet-undelineated plans to provide “equity” for infrastructure projects.

That’s what he calls it. Others see it as “debt”. As various people in the financial media have noted, there has been a bipartisan change at the federal level of politics: with the departure of Tony Abbott and the associated “debt and deficit” scaremongering, it’s no longer dangerous to talk about debt to fund infrastructure.

Fairfax’s Malcolm Maiden noted the change with approval last week.

He wrote: “The AAA-rated government was the lowest-cost borrower in the land and it could make sense for it to ‘have a piece’ of infrastructure investment, Turnbull said.

“For mine, having both sides talk openly about Commonwealth debt funding for infrastructure is a big step forward. Maybe we can begin talking about how much debt could be raised: even $50 billion would not endanger Australia’s AAA credit rating.”

But filling the infrastructure gap is still an impossible ask, says Carr.

“It’s inconceivable that without ambitious Whitlam-style investment in urban infrastructure that any Commonwealth assistance will offset the impact of immigration,” he says.

“I’ll give you this guarantee. In the context of pressures on the deficit and a government that’s struggling with the pressures of Gonski and long-term health funding, Turnbull will offer nothing – other than a few model projects in light rail or bus transit corridors – to offset the problem our historically high immigration burden represents.”

Even given vastly increased funding, huge practical problems remain. Foremost among them is ensuring that the massive infrastructure spending required to address the population problem does indeed improve the “utility” for the people.

In his recent speech to the mayors of Western Sydney, Turnbull cited the example of New York City, where “there is plenty of useful walking, where they don’t need to drive to do just about anything or go just about anywhere. The fittest, greenest, least energy-intensive Americans live in New York.”

But most cites are not like that, and certainly none that are growing at the rate of Australia’s big cities. Look at Seoul, South Korea, where 96.5 per cent of 19-year-old men are short-sighted, in substantial part because they grow up in apartments, never exercising their eyes on far horizons.

States must lead planning

So much depends on good planning, and the evidence is that Australian governments, at every level, do not do good planning.

Examples abound. Consider the former Victorian Liberal government’s plan for the redevelopment of the Fishermans Bend site in Melbourne. A report on the proposal released a couple of weeks ago found the decision to green light the development of the 250-hectare site was taken without making allowance for decontamination, transport, open space or affordable housing.

In Sydney this week, NSW Planning Minister Rob Stokes announced plans for the construction of 35,000 new homes south of Campbelltown, 80 kilometres from the city’s central business district, where the big jobs growth is.

It’s easy to blame the states, but not entirely fair, says emeritus professor Ian Lowe, former head of the school of science at Griffith University, and patron of Sustainable Population Australia.

“The fundamental problem for state governments is that the Commonwealth determines numbers by setting migration targets, but the states have the infrastructure burden of roads, schools, hospitals et cetera,” he says.

“Politicians are generally in favour of population growth because it means the economy as a whole grows. But from the point of view of the individual the only benefit, even by such a crass measure as GDP, is if GDP per capita increases.”

And GDP per capita has not been growing since the end of the mining boom.

Plus, says Lowe, “most people also balance against their material standard of living, the impact on their quality of life. Most people in most of our cities would say their quality of life has gone backwards in the past 20 years because the infrastructure hasn’t kept pace.”

He has an anecdote on the point.

“Back in 2008, when Kevin Rudd guilelessly said on The 7.30 Report that he favoured a big Australia, a political insider said to me – and I quote – ‘the focus groups went ballistic’.”

Lowe sees a big Australia coming. He cites Australian Bureau of Statistics projections.

“They made three projections, based on different assumptions about fertility rates and immigration numbers. The high growth projection had the population at 62 million by the end of the century, and is still increasing rapidly,” he says.

“But at recent levels, it is above even that.”

If all migration stopped today, Australia’s population, based on current fertility rates, would stabilise within 25 years, somewhere around 27 or 28 million, says Lowe.

“At any level of net migration up to about 70,000 a year, the population eventually stabilises, at a higher level. Above that, it keeps growing,” he says. “We should be having a discussion about this.”

But that is not the conversation Turnbull and co are intent on having. They are about coping with booming population, rather than containing it.

Demography is destiny, as Turnbull said all those years ago. And the destiny he has in mind for Australia’s cities appears to be, in a word, crowded.

This article was first published in the print edition of The Saturday Paper on Nov 7, 2015 as "Date with density". Subscribe here.

Mike Seccombe
is The Saturday Paper's national correspondent.