Australian Transport Summit

Speech

PFS011/2017

18 August 2017

Four Seasons Hotel Sydney

Building cities that work: The Australian Government’s vision for public transport

Introduction

It is a pleasure to join you for the Australian Transport Summit.

Today I want to address the role of public transport in shaping cities that work.

First, I want to speak about the strong linkages between public transport networks and the effective functioning of cities. Next, I will discuss why this is a major priority for the Turnbull Government. Finally, I will discuss our extensive policy agenda in this space.

Public Transport and the Effective Functioning of Cities

Let me start, then, with the question of why public transport is important to the effective functioning of cities.

To start with, there is the way that transport networks shape the physical layout of cities. When you build transport arteries and nodes, development follows.

As influential US cities theorist Edward Glaeser tells us:

“Transport technologies have always determined the urban form”.

Railway lines built in the second half of the nineteenth century have strongly influenced the development of suburbs and housing in all of our major cities.

One good example is the North Shore Line which runs through my electorate of Bradfield. It was built in the 1890's, and as soon as the railway line began operating, land around the stations started to be subdivided and sold.

In the last few years, the zoning around the stations has changed to permit apartment blocks of up to five stories, and these are steadily replacing the older single dwelling homes—not, it must be said, to the universal acclaim of my constituents.

More recently, we can look at the way Melbourne’s City Loop rail line, opened in 1981, stimulated residential construction in the Melbourne CBD—making it perhaps the leading example of dense mixed use urban development in Australia.

The same principle applies to major road development. Look at the growth of warehouses, logistics facilities and other businesses along the route of the M7.

Transport decisions do not just affect the physical shape of our cities—they also have a powerful impact on whether our cities function effectively. If people have quicker and more reliable trips to work, for example, that delivers economic benefits, productivity benefits and lifestyle benefits.

Conversely, inadequate transport links means we face significant congestion. The Bureau of Infrastructure, Transport and Regional Economics estimates that the avoidable costs of congestion for the major Australian cities total $16.5 billion for 2015–16. This comprises $6 billion in personal time costs, $8 billion in business time costs, $1.5 billion in extra vehicle operating costs and $1 billion in air pollution costs.

If its transport network is key to the overall functioning of our cities, being connected to the network is just as important to the functioning of individual parts of a city.

We see this very clearly in the way that major urban regeneration projects typically include a significant transport element.

Last month I visited two large urban regeneration projects in the US—Downtown Waterfront South in Portland, Oregon and Hudson Yards in New York City.

Waterfront South covers a large expanse of formerly industrial land along the Willamette River which runs through the centre of Portland—a city of over two million people.

It is now being regenerated into a vibrant mixed-use area including apartments, commercial buildings, shops and restaurants, and the campus of the Oregon Health Sciences University.

Hudson Yards is a former light industrial area on the lower west side of Manhattan, including a large train marshalling yard for the New York subway system. It is being redeveloped as a complex of large apartment buildings and commercial buildings, some located above a ‘roof’ built over the train yard.

Key to the success of both developments was extending public transport networks. Portland’s urban light rail network was extended to connect South Waterfront. The New York subway system was extended over two kilometres from Times Square to a new station in the centre of the Hudson Yards development, at a cost of USD 2.4 billion.

We see the same principle at work in Australia, with the light rail connection to Darling Harbour in Sydney, and the planned Sydney Metro City and Southwest station at Barangaroo.

Recently I visited Fishermen’s Bend in Melbourne, a light industrial area with great potential to be rejuvenated into a vibrant mixed use residential and commercial area. If this potential is to be best realised it will be important to have a better transport connection—either tram or heavy rail—to the Melbourne CBD.

Why this is a Priority for the Turnbull Government

Let me turn next to why the Turnbull Government has a strong interest in how we can use public transport to help make our cities work better.

The first reason is that the Turnbull Government has a clear agenda for our major cities. Announcing the appointment of a Minister for Cities in 2015, the Prime Minister had this to say:

Historically the Federal Government has had a limited engagement with cities and yet that is where most Australians live, it is where the bulk of our economic growth can be found… We have to ensure for our prosperity, for our future, for our competitiveness, that every level of Government works together, constructively and creatively to ensure that our cities progress.

The proportion of our population living in cities is now 90 per cent—making us one of the world’s most urbanised countries.

According to the Infrastructure Australia audit released in 2015, Australia’s capital cities contributed $854 billion to the economy in 2011—a very substantial proportion of our GDP.

The growing importance of cities is linked to the transformation of our economy. The services sector is ever more important—and over the last 100 years first agriculture and then manufacturing have dropped in their share of employment.

Between the 1940s and the 1970s, a key force driving our cities was the growth of manufacturing in metropolitan suburbs. At the same time rates of car ownership rose steadily, as cars became more affordable. Much of our existing road network was built between 1955 and 1975 to accommodate these dynamics.

Today, though, a key force in the Australian economy is the growth of knowledge-intensive businesses—increasingly concentrated in central business districts.

The data suggests that the economic value generated in a geographic area is correlated to the density of people working there. According to the Grattan Institute, the Sydney CBD produced $100 in value for every hour worked there in 2011-12; Parramatta, effectively the second CBD in the Sydney conurbation, produced $68 for each hour worked.

The North American academic Richard Florida has written extensively about the way that cities foster economic activity, particularly by bringing knowledge workers together in a way that demonstrably stimulates creativity and productivity. In the economic jargon, greater density fosters knowledge sharing between firms and knowledge ‘spillovers’ between sectors.

A second reason to focus on how public transport can enable our cities is the demographic change we are seeing. Infrastructure Australia has pointed out that Sydney, Melbourne, Brisbane and Perth, together with their extended metropolitan areas, are expected to make up more than two thirds of Australia’s population by 2031.

As our biggest cities grow, they are becoming, of necessity, denser. As Infrastructure Australia observed in last year’s 15 Year Australian Infrastructure Plan:

The scale of population growth expected in Australia’s four biggest cities is considerably larger than the rest of the country. Sydney, Melbourne, Brisbane and Perth will need to transform the structure of their built environments to accommodate their projected population increases.

Already we are seeing a noticeable increase in the density of our housing stock in our biggest cities. Across Australia the proportion of townhouses and semi-detached dwellings rose from 10 to 13 per cent between 2011 and 2016.

In Sydney, the overall supply of higher density housing grew by just over a third in the five years between the Census in 2011 and 2016.

Increasing density has significant implications for transport planning. As our cities get more dense, heavy rail starts to have clear advantages over other transport modes because of its capacity to move large numbers of people quickly and reliably. A train line can move 50,000 people an hour. Compare this with a freeway lane which can move 2500 people an hour.

Public transport also has a key role in linking the places people live and the places people work. As John Daley of the Grattan Institute has pointed out, most new jobs are created within 10 kilometres of our central business districts, but much of our new housing stock is being built more than 20 km away.

A third reason to look at the role of public transport in our cities is the evidence that Australians are showing an increasing appetite to use it.

As the Sydney Morning Herald reported yesterday, patronage on some Sydney rail lines has risen nearly 20 per cent in one year. Sydney University transport academic Geoffrey Clifton was quoted as saying that

The statistics showed that the public transport system was improving and giving people greater confidence to travel on it.

This trend has been visible in most of our cities for some time. In Perth, urban heavy rail patronage rose 102 per cent between 2001–02 and 2015–16. In Melbourne, it rose nearly 80 per cent in this period, in Adelaide 40 per cent, and in Sydney over 20 per cent.

One interesting case study is the strong jump in patronage on the rail service between Sydney's CBD and Kingsford Smith Airport. Rail patronage at Sydney Airport increased by 32 per cent between 2014 and 2016.

As someone who regularly uses this service myself, it is not hard to see why more and more people are choosing the train.  In the last few years, as the airport has become busier, travelling there by road has involved a more variable, and frequently longer, journey time than in the past. By contrast, the train trip is both quick and reliable, and has remained so as passenger numbers have risen. 

Another recent example is the strong patronage on Gold Coast Light Rail since it opened in 2014. Already it used by an average of 665,000 passengers a month.

There is also a strong feedback loop between the growing appetite for rail and the increasing urban density which I mentioned earlier. Much of the new, higher density residential development is occuring close to rail corridors.

In Sydney, around 46 per cent of new dwelling growth between 2001 and 2016 occurred within one kilometre of a train station.

Rail corridors are not just key to housing; they are key to employment. Work commissioned by my Department shows that employment growth is forecast to be higher on the rail network than the areas outside the rail catchment, indicating that the rail network is supporting employment densification..

That work also projects that the current rail construction boom in Sydney will give many more people better access to jobs. By 2036, approximately 912,000 more people than in 2016 will be able to get to strategic employment centres on public transport in less than 45 minutes.

Our Extensive Policy Agenda

So it is clear that public transport has an important role to play in the functioning of our cities. Let me turn in the final part of my remarks to the Turnbull Government’s policy agenda in this space. I want to speak first about rail networks and secondly about Western Sydney Airport.

When it comes to rail, the Commonwealth Government and state governments have complementary roles. The states are the operators of the rail and other public transport networks in our big cities; but the Commonwealth Government has a significant policy interest in supporting major rail projects.

I want to acknowledge that several of our state governments have substantial agendas to improve the rail networks in their capital cities.

The New South Wales Government is rolling out a significant rail program with projects like Sydney Metro, which will deliver 31 metro stations and more than 66 kilometres of new metro rail. In Victoria, the Government is committed to Melbourne Metro; in Western Australia, the Government plans new rail lines under its METRONET program; and the Queensland Government wants to deliver Cross River Rail.

As for the Turnbull Government, we have a strong existing pipeline of investment around Australia. This includes $95 million for Gold Coast Light Rail Stage 2 in Queensland, $490 million for the Forrestfield Airport Link in Perth, $42.8 million for Flinders Link in Adelaide, $1.7 billion for Sydney Metro City and Southwest, $78.3 million for Parramatta Light Rail and $67.1 million for Capital Metro in Canberra.

At the same time, we are working with state governments to develop urban rail plans for Australia’s five largest cities (including their surrounding regional areas.) We announced this in November 2016, in response to Infrastructure Australia’s 15 year Plan.

These plans are intended to take stock of the existing network and possible future expansion, and they will inform future Commonwealth investment decisions.

A third element of our agenda is to fund planning and business case work on major urban rail projects at various stages of early development. This includes $10 million to progress planning for Cross River Rail in Queensland and a Joint Scoping Study with the NSW Government on the rail needs of Western Sydney and Western Sydney Airport.

In the recent Budget we committed $30 million for work to plan a rail link between the Melbourne CBD and Tullamarine Airport. We also allocated $20 million to support business case development on proposals for faster rail connections between our major capital cities and surrounding regional areas.

Fourthly, there are major funding commitments from the Turnbull Government for specific rail projects. We have committed $792 million to progress urban rail projects in Western Australia, including extensions to the Thornlie and Yanchep lines, subject to positive business cases being provided to Infrastructure Australia.

We have committed $1.45 billion for regional rail projects in Victoria, including upgrades to lines running from Melbourne into regional areas.

Finally, in the 2017 budget we made a major commitment to long term investment in urban passenger rail: the Turnbull Government will invest $10 billion over a ten year period for the National Rail Program. This Program will fund investments in major passenger rail projects in our big cities and investments to improve passenger rail connections between our big cities and their surrounding regional areas.

Funding starts to flow from 2019-20, and the ten year commitment has been developed to allow for the long lead times typical of major rail investments. Significant planning work is required before construction can commence.

This program has been designed at a scale to allow the Australian Government to make major funding commitments to several transformational urban rail projects (including on rail connecting our big cities and their surrounding regional areas) over the next decade.

The Australian Government’s funding contributions to these projects will be provided as part of an overall package of support, alongside funding provided by the relevant state government and the direct beneficiaries of the project.

We will issue guidelines for the provision of funding under the National Rail Program in coming months.

Let me turn lastly to speak about Western Sydney Airport. This very exciting project in many ways is an opportunity to put into practice many of the principles I have been talking about today, to use a transport project to shape a city.

Since the Government’s 2014 decision to proceed with a second Sydney airport at Badgerys Creek, an enormous amount of work has been done, including vital regulatory and contractual processes. The Commonwealth Government has prepared and issued draft and final Environmental Impact Statements.

We have prepared and approved the Airport Plan—which gives formal approval under the Airports Act to build Western Sydney Airport.

There has been a lengthy programme of consultation with Sydney Airport Group under their right of first refusal to build and operate the airport, before issuing a formal contractual offer to them, known as the Notice of Intention. Earlier this year, Sydney Airport Group announced that it would decline the opportunity.

The Government subsequently confirmed that we will establish a government-owned company to build and own the airport, with an equity commitment of up to $5.3 billion announced in the 2017 budget.

This month, this company, WSA Co, has been established. Chaired by prominent businessman Paul O’Sullivan, WSA Co will recruit and procure high quality private sector talent to manage the project.

Western Sydney Airport will be operational by 2026. Its terminal will have capacity for ten million passengers and its runway will be 3700 metres long—sufficient for the Airbus A380.

As Lucy Turnbull of the Greater Sydney Commission has highlighted, the new airport can be the centrepiece of a third city for Sydney—to complement existing centres at Parramatta and the Sydney CBD.

The international evidence is clear, at airports like Incheon, Dallas Fort Worth and Schiphol. With good planning, airports can become economic hubs that drive the growth of a region. The ambition of the Turnbull Government, working with the Berejiklian Government in NSW, is to do the same in Western Sydney.

By optimising land use around the site we can drive development and help attract businesses that get value from being located close to an airport.

Already there are clear signs of investment in the region being stimulated by the planned airport.

The new Sydney Science Park is being developed nearby in Luddenham.

Plans have been announced for a new luxury hotel at the Twin Creeks Golf Club, and a new MGallery by Sofitel hotel at the Inglis Riverside Stables in Warwick Farm.

Universities are working to increase their presence and activities in the area—including Sydney University, Western Sydney University and Wollongong University.

In May, major US defence contractor Northrop Grumman announced that it plans to build a $50 million centre of excellence near Western Sydney Airport.

The Commonwealth and NSW governments are working together, including through the framework of the Western Sydney City Deal, on a coordinated approach to land use planning around the airport. This is vital so that we can attract the right kinds of businesses.

Another joint priority is having first rate ground transport connections to the airport. The two governments are jointly investing $3.6 billion in the Western Sydney Infrastructure Plan.

This will include a new M12 motorway connection linking the airport to the M7 and into the Sydney Motorway Network, and upgrading the Northern Road to at least four lanes all the way along its 35 kilometre length.

The two governments are also conducting a joint scoping study on the rail needs of Western Sydney and Western Sydney Airport.

Effective ground transport, coupled with integrated land use planning, will be key to the success of Western Sydney Airport as the centre of a new Western Sydney city.

Conclusion

Let me conclude then, by returning to my central theme: transport networks have a critical role to play in shaping the layout and functioning of our cities.

As Australia’s biggest cities grow and become more dense, the role of transport networks will only become more important. In particular, the expansion of our urban rail networks, already well underway, is going to be vital if our cities are to continue to function effectively as they grow.

The Turnbull Government has a strong plan to support urban passenger rail, which includes an existing pipeline of investment, working with state governments to develop urban rail plans, and funding planning for major urban rail projects.

These are exciting times—for urban planners, for transport planners, but most importantly for the people who live in our cities.

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