Ministers for the Department of Infrastructure, Regional Development and Cities The Hon Michael McCormack MP Deputy Prime MinisterMinister for Infrastructure, Transport and Regional Development Senator the Hon Bridget McKenzie Minister for Regional ServicesMinister for SportMinister for Local Government and Decentralisation The Hon Alan Tudge MP Minister for Cities, Urban Infrastructure and Population The Hon Sussan Ley MP Assistant Minister for Regional Development and Territories The Hon Andrew Broad MP Former Assistant Minister to the Deputy Prime Minister The Hon Scott Buchholz MP Assistant Minister for Roads and Transport The Hon Barnaby Joyce MPFormer Deputy Prime MinisterFormer Minister for Infrastructure and Transport The Hon Dr John McVeigh MPFormer Minister for Regional Development, Territories and Local Government The Hon Keith Pitt MPFormer Assistant Minister to the Deputy Prime Minister The Hon Damian Drum MPFormer Assistant Minister to the Deputy Prime Minister Senator the Hon Fiona Nash Former Minister for Regional DevelopmentFormer Minister for Local Government and Territories The Hon Darren Chester MP Former Minister for Infrastructure and TransportFormer A/g Minister for Regional DevelopmentFormer A/g Minister for Local Government and Territories The Hon Warren Truss MP Former Deputy Prime Minister Former Minister for Infrastructure and Regional Development The Hon Paul Fletcher MP Former Minister for Urban Infrastructure and Cities The Hon Jamie Briggs MP Former Assistant Minister for Infrastructure and Regional Development

Relieving Cities' Growing Pains Panel Discussion

Speech

ATS002/2018

12 October 2018

University of Melbourne

Carolyn Weitzman: Thank you very much for coming. I'm going to be very professorial for the next few minutes. My name's Carolyn Weitzman, I'm a professor of urban planning at the University of Melbourne and it's my pleasure and privilege to moderate this session today on relieving cities' growing pains. I'd like to begin by acknowledging the owners of the land on which we meet, the Kulin nation- the Wurundjeri people of the Kulin nation, pay my respect to their elders, past, present and emergent and remind ourselves that 97 per cent of Australians are migrants and descendants of migrants to this land.

The emphasis yesterday and the opening plenary from Ian Harper was on big cities and immigrations as motors of both economic productivity and equity. We're here today to continue that conversation. The House of Representatives Standing Committee on Infrastructure, Transport and Cities has just released a report called Building Up and Moving out: An Inquiry into the Australian Government's Role in the Development of Cities, which I'm sure you've all read in preparation for this session. And the report recommends better coordination of transport and land use planning within and between all three levels of government, greater connectivity within the sprawling city regions of Australia, and stronger use of value capture—and I think there's at least one person in the audience who will be very happy to hear that—to ensure infrastructure funding as cities grow and intensify.

There are of course growing public concerns about increasing spatial inequalities, the decreasing ability of young people, older people, and poor people to access suitable housing and to get between work and home in our cities, and even to obtain local services like schools, child care, and health care. And we heard in the last session how child care and health care are two of the fastest growing sectors of the economy.

Today we have to be Honourable Alan Tudge, the Commonwealth Minister for Cities; the Honourable Anthony Albanese, the Shadow Minister for Infrastructure, Transport and Cities; and Sally Capp, the Lord Mayor of Melbourne to speak about priorities in addressing these urban infrastructure issues and regional infrastructure issues. I'd like to thank the Made Possible by Melbourne campaign as the session sponsor and I'd like to mention the conference social media hashtag. Join the conversation on Twitter using, what is that, #OutlookConf18. The way the session is going to run is that each speaker has been asked to make some opening remarks for 10 minutes. There will be a time-keeper frantically waving signs, and then we'll be facilitating I hope as good a discussion period as we had in the last plenary session. And again I'd like to thank- I don't think that we could have three better speakers to address these issues. And, oh yes, I also have to please ask delegates as a courtesy to turn their mobile phones to silent.

And with that I'm going to hand the podium to the Honorable Alan Tudge, the Minister for Cities, Infrastructure, Population Growth and one or two other things.

Alan Tudge: Oh well, thank you so much Carolyn. And it's great to be up here on a panel with Anthony Albanese and also with Sally, our brand new Lord Mayor here in Melbourne.

As you know our cities are changing rapidly. I am a Melbourne boy born and bred, and actually grew up on the very outskirts of the city in a place called Pakenham, which I'm sure you've heard of. When I was growing up there, it was just a few thousand people. And in fact I was born in the Pakenham Bush Nursing Hospital. That's what the hospital was called.

Today that town is 46,000 people and there are suburbs from here to Pakenham and beyond, 55 kilometres out. That's how Melbourne has changed. Now, Melbourne like all of our other big cities is now bigger. It's brighter. It's cosmopolitan. They're vibrant, they're economic powerhouses, and they are magnificent. You know, having said that, our challenge is to maintain the great liveability which our cities are known to have.

And as you probably know, each year The Economist puts out the liveability reports on our big cities, and typically and remarkably we often have four out of the top ten most liveable cities in the world from our nation here in the southern hemisphere. Quite incredible. Our challenge is to maintain that liveability.

But we're being stretched on that dimension of liveability, and in part because very rapid population growth combined with lack of infrastructure in the past which means that our big cities—particularly Melbourne and Sydney but also southeast Queensland—are now suffering from pretty serious congestion, and our roads are getting slower as you'd know if you live here in Melbourne. Our trains are getting fuller and more congested, and I know the Grattan Institute(*) had said that at least a quarter of the Melbourne train services for example are congested to the extent that they're interrupting the timetabling. And these problems are real for everyday families, particularly those in the outer suburbs, and they do have an economic cost for the nation as well.

We estimate the cost of congestion today is about $25 billion and there are forecasts for that cost to rise to $240 billion by 2030. So congestion due to population growth and lack of infrastructure keeping up is a very serious issue for everyday families. It's a serious issue for businesses and it's a serious issue for our economies.

Having said all that and having acknowledged in some respects the big cities are always going to have some congestion, our congestion problems in Melbourne and Sydney particularly have been made worse than what they could have been for today. They should not be as bad as they are today, and in part because two things occurred in in the past which we are now just catching up upon.

And those two things were, in some respects, a lack of infrastructure expenditure and particularly in this instance in Sydney. And in Sydney you had former Premier Bob Carr who effectively said that Sydney was full, and in the process in saying that didn't plan for the future of Sydney.

So that's the Premier on one hand is largely in charge of infrastructure development, and on the other in 2007 the Rudd Government is almost overnight almost doubled the immigration intake. And so on the one hand you've got the premier of the biggest capital city saying that Sydney's full, not really planning for the infrastructure of the future.

And on the other we've doubled the population intake such that the population forecasts were- have been almost- such the population rate has almost been double what the forecasts were. And so we had a mismatch, complete and utter mismatch, between the infrastructure built even for planned population, let alone for the turbocharged population growth which we actually had. Now Melbourne was a bit the same in terms of we had very rapid population growth, well in excess of forecasts. So when you look at the ABS forecast in Melbourne, back in 2004, it predicted that by 2000 17 that our city would it would have grown by 500,000 people.

In fact it grew by 1.2 million people in that time. So, extraordinary growth above forecast expectations and we are now just catching up in terms of the infrastructure build in order to accommodate that.

I think you particularly see that in Sydney where there is infrastructure being built right across the city right now,  greatly assisted by the federal government's contribution towards it. You're starting to see that in Melbourne as well, but I think particularly in Sydney in a couple of years' time that that city will flow much, much better than what it is today.

I should say also that from the federal government's perspective trying to deal with that catch up, we have slowed the migration levels down and in fact last year permanent migration levels were 162,000 people: the lowest level in a decade and as a percentage of the population that increase was actually smaller than the last year of the Howard Government's.

We've also mentioned in terms of catching up on that even in the last five years massively increased the infrastructure spend, and- as have all governments done that and there's now major infrastructure projects right across the country in every major capital cities [sic]. That's where we are and have got to today in the rapid catch up phase if you like.

How do we then think about it going forward in terms of maintaining the liveability of our big capital cities and ensuring that we can deal with congestion as best as humanly possible, acknowledging that is always going to be some congestion in large cities? And there's four things that I think that I would like to outline and touch on that we can do and that the federal government will be doing. First thing is continued massive infrastructure expenditure from the federal perspective.

We have a $75 billion program and it's a 10 year program which means that there's long term forward projections. Second we want to very quickly- and that's largely, that $75 billion is largely for the intra-city rail and road corridors. It's the Monash Freeway here. It's the Tulla rail [sic]. It's the Melbourne Ring Road. It's the WestConnex in Sydney, NorthConnex et cetera, and replicated in the other big capital cities. That's the big infrastructure. We've got to continue to work on that.

Second is that we have to address those local congestion pinch points in the local suburbs, if you like, because often it's actually the local intersection which holds people up more than it does being stuck on the freeway. I have one in my electorate Knox which is 30 to 35 k's away from here. The Henderson Road Bridge. It's been on the books for 30 years, hasn't been built but with $6 million it will make a very significant difference to thousands of people's lives in terms of getting to work.

Third point's—and this has received most of the media attention—is to ease the population pressure of our big cities and more rapidly grow our smaller capitals and some of our regions.

Now, I say this because the primary population challenge which we have is that we've got very rapid growth in Melbourne, Sydney, and southeast Queensland.

Some of the fastest growing large cities in the world- in the developed world and on [sic] the same time we've got quite modest growth elsewhere around the country. And yet there are other parts of the country such as in South Australia, such as in the Northern Territory, such as in Western Australia, such as in Tasmania, where the leaders of those states have said that they want to grow their populations faster.

So there is an opportunity for us from a migration level to be able to support the aspirations of those chief ministers and premiers for their population growth and slightly ease the pressure off Melbourne and Sydney particularly, because nearly all the population growth in Melbourne in Sydney has been for migration.

In Melbourne last year, or(*) 65 per cent of the growth was migration. In Sydney was 83 per cent. So you only need to ease back the population- the migration growth slightly and you can make an impact in terms of easing the pressure on those big cities. It can be done. In fact, we already do it through the 489 visa. And so the critics who say that this is an impossible thing to do, I say we already do it. Second- now, that's just one lever to grow the smaller capitals and some of the regional areas.

A second lever is of course that you can build fast rail and try to connect to orbital cities. If you can get to Ballarat and back in 45 minutes rather than the current 75 minutes, that makes a massive difference to Ballarat's growth and takes pressure off Melbourne. Third, we can try to grow those economies more generally in terms of the regional centres and we're going to be doing this. We have almost a billion dollars on the table to support that. And fourth—and I won't dwell on this but maybe we can we can get to this—you can also try to get more jobs in the outer part of the big cities so that there's less congestion on the roads, because typically a lot of people from the outer suburbs will travel further to the work. We're doing that particularly in Western Sydney through the Western City deal.

Finally, in terms of the fourth part of the plans, I've largely talked about infrastructure for points one and two, I've talked about distribution of population growth in terms of point three. Finally, and arguably the most important elements of what we need to do going forward, is a better planning framework because at the moment at the federal level we largely dictate the population growth levels but the states and territories largely dictate the infrastructure, and we need a better match and a better planning framework where we are much more closely tied together with the states and territories and indeed municipalities to talk about growth aspirations and infrastructure matching that. And I'd be happy to expand on that in the Q and A.

I think my time is up, I saw the one minute flag so I'll leave it there and I'll hand it over to Anthony Albanese.

Anthony Albanese: Thanks very much. I begin by acknowledging traditional owners of country and pay my respect to their elders, past and present. I thank Carolyn for the introduction and for my colleagues for joining us on this panel. We were given a few topics which we wanted addressed in this panel, so I'll go through them quickly in a bit of a different order, because I think the first question that we got was how do you get that better planning which is what Alan finished his contribution on.

The great challenge of infrastructure to break the nexus between the infrastructure investment cycle, which is by definition long term, and the political cycle which is three or four years—and in reality can often be one year before we're in election cycle in between terms. The structure to do that is already in place I believe. We did that by creating Infrastructure Australia.

That's precisely why we created it, to have a body at arm's length from government making reports based upon cost benefit analysis about what projects could best boost productivity and deal with sustainability and liveability issues as well, to provide that advice to government, do it in a transparent way and then government could decide whether they invested or not. Government's still the decision-maker in terms of priority projects, and we did that I think very effectively under the chairmanship of Sir Rod Eddington. That's changed somewhat.

We now have had in more recent years a project as announced by government and then Infrastructure Australia later on propose whether they support it or not, or it goes on the list whilst it's already under construction. And projects like West Connex that are on the list that Alan mentioned in Sydney, they began tunnelling four years ago. They're still not sure where the tunnels are coming up. There still aren't all the exit points. There still is not a proper business case.

They've had difficulty in terms of the financing of that project and it's example of planning gone wrong. But also is an example, I think unfortunately, of a failure by Infrastructure Australia to properly independently assess projects on their merit and to make sure there was that rigour in terms of driving that government funding.

Secondly, we established the Major Cities Unit—an urban policy forum—to have ongoing engagement in that, including with the former Lord Mayor of Melbourne was a part of that.

The Major Cities Unit I believe should play a role in city partnerships. Our version of the city deals but- that the governments announced, but one which we believe should be bottom up. One which should genuinely be partnerships with the three levels of government that goes to the second of the questions that we had to ask, which is how do you get coordination across our federated system.

The other thing that we did was to establish a COAG committee—chaired by Brian Howe, deputy chair was Lucy Turnbull—very consciously, to try to drive that change through the COAG agenda of how city planning could be done much better. Indeed, Adelaide was the only city that came out of that process by getting a big tick if you like. Now, there is a reason for that of course. Melbourne and Sydney are particularly difficult. Part of Sydney's problems is its geography and topography that is there.

But we had that, and I think that the committee on population that has been suggested by Bill Shorten in correspondence with Scott Morrison would be a similar way to go: establish a committee with six people agreed to by all sides of politics that would lift up the political debate about population, about distribution, so that- about settlement policy, so that- neither of the major political parties I don't think wants to see the population debate reduced to what some people would like to see, i.e. stop the world, we want it all to stop or the reason why there is urban congestion is because of people who don't look like you. And that's the danger with the population debate which is out there and I think that- I hope that the government gives a bipartisan process that would be long term some serious consideration.

I think in terms of- so that's planning and also coordination across the levels. The third issue was we were asked to come up with what our three priorities would be. The first of mine is high speed rail down the East Coast. I think that if we're serious about talking about decentralization taking pressure off our capital cities, there are two things we could do.

One is a genuine fibre based broadband network that would change the economics of businesses being located outside of our capital cities from one disadvantage to one of comparative advantage because of the lower overheads that are there from businesses being located in regional centres. And if we're going to get people to move to regional centres, there must be jobs in those regional centres. So we have to work out ways in which that can be facilitated.

Similarly, high speed rail. The thing that made in the study that was done- the economics of high speed rail change wasn't just the under three hour trips from Sydney into Melbourne and Sydney to Brisbane, both of them in the world's top 10 air travel list. It is the growth in terms of regional cities along the way. And that would be a transformative project which would make, I believe, an enormous difference; and as infrastructure Australia have said, the cost of high speed rail would could be reduced by up to $3.5 billion if we get the planning, corridor acquisition, all of that done sooner rather than later.

The second is real investment, including particularly on urban public transport. We can't solve problems in our cities with just roads. Roads are important, but unless you deal with urban public transport particularly moving away from the hub and spoke approach of the way that our urban public transport systems are designed so you can go across lines—such as been suggested here in Victoria with the suburban rail loop, such as the Western Sydney rail line from the north-south through Badgerys Creek Airport—they're the sort of projects that you need to deliver.

The other thing is that we need to actually get real about what the investment is. Peter Costello yesterday gave a critique of the 10 year vision argument because frankly it's a nonsense. We, you know, change prime ministers a couple of times every few years. The idea that a 10 year plan can be taken seriously as opposed to real investment in the forward estimates, it is a nonsense. And the truth is that the forward estimates funding in terms of grant funding, real dollars for real projects, falls from $8 billion to $4.5 billion across the forward estimates. It falls from 0.4 to 0.2 over the 10 year cycle in terms of infrastructure investment as a share of GDP. And what's more, some of the investment- the idea that you can have value capture and off-budget investment to build public transport is a nonsense, and perpetuating this fantasy will mean that some government down the track will have to deal with it. You can get some funding from value capture.

You can't get all of it. The fare-box produces about 20 per cent. 20 cents in every dollar of just operating and maintenance costs. In order to be off-budget a project has to not only deliver operating and maintenance costs, it has to pay back the capital, which projects like inland rail won't do. Which projects like Melbourne Airport Rail won't do. And what we need is to actually get serious about that.

The last point I'll make in terms of my third priority is about liveability and sustainability of cities. We need to- we will have an ongoing political problem unless we deal with the fact that as we do go up, we need to have green space. We need to have a green and blue strategy. We need to protect our urban waterways. We need to protect our quality of life. We need to make sure that we have sustainable energy and water supplies. There are ongoing issues in Sydney and Melbourne I know whereby literally kids don't have anywhere to play, and that's before the sporting teams come up of the growth that's happened of women in AFL and soccer and cricket and other sports. 

Sally Capp: Last but not least on this panel today. Good morning everyone. On behalf of the city of Melbourne, I also acknowledge the traditional owners of the land on which we meet today and pay our respects to their elders past, present, and emerging, the people of the Kulin Nation. It's brilliant to be here engaged in this conversation and a very important topic, not least of which with the expertise of Carolyn, the experience of Anthony Albanese and Alan Tudge, but also noting that we have lots of experts here in the audience, so looking forward to some of that conversation.

I'd like to acknowledge my fellow councillor Nicholas Reece, Terry Moren and Michelle Mercon (*) in particular, as people that have been part of city building for a long time here in Australia, so it's lovely to see you.

Well Melbourne has been highly praised for its liveability over many, many years and it's a lovely accolade to have. But liveability is much more than an index. The question of liveability in our cities is tightly linked to Australia's future prosperity and that is what we need to focus on. Australia's majors- major cities are in the midst of a massive transformation.

Alliterations not that easy even in the middle of the day. Melbourne is one of the fastest growing cities in the OECD and will be central to driving our next generation and wave of productivity across the nation. As Lord Mayor of a forward looking optimistic capital city council, I say let's grab this opportunity with both hands and make the most of it. It's not a pause; it's a straight forward at a pace.

Melbourne's current transformation is not new. It started around 30 years ago in the 1980s. Back then, as many of you will recall, there was no street life at all. We had a city that catered for cars not people and after 5pm the city was grey and empty. Fast forward to 2018 and it's a very different story. Through careful urban design and deliberative policy making, Melbourne's streets, laneways and buildings are now vibrant, sophisticated; we've embraced our river, we attract nearly a million visitors every day into the heart of our city for good reason. Fewer cars, more pedestrians, more residents, more green spaces, a mind-blowing cultural calendar, a strong safety record and an evolving cycling and public transport network are all major cities that have frequently won us the world's most liveable city. And we are proudly diverse.

We are home to more than 200 different cultures speaking 230 languages and dialects. Our migrant history fascinates us and delights us. It is one of our strengths.

So to put some dollar signs around Melbourne, our city economy currently sits at about $95 billion dollars and is a powerhouse. We've transformed ourselves from a manufacturing city to a knowledge city and this will be our future. But, of course, there are lessons that we've learned over time and there's plenty still to be done and we've heard a number of those things from my colleagues on the panel this morning. There are planning lessons that we've learned over the last 30 years; we didn't get everything right. We know from South Bank and Docklands and the experience there that major urban renewal projects need to be developed holistically.

Jobs, affordable housing, transport, services and sustainability measures need to be woven into the master plan from the start and then we can capture value and look for innovative ways to fund because we have the plan right. Community engagement is another essential ingredient to get the human nuances of liveability right. Our most painful lesson is our most expensive and that is the impractical way that we have to play catch up on essential infrastructure. We're all feeling the pain as we retrofit our train network here in Melbourne and we grapple now and more than ever, with housing affordability issues.

So where to from here? How do we apply the lessons that we've learned over the last three decades as the population in greater Melbourne rises from 5 million to 8 million? How do we maintain our enviable living standard as we become more of a global player and a global city? As I said, and as we've all noted, we have the growing pains and there are things that we don't like from crowded public transport and roads through to homelessness. And all of these things increasingly drag our productivity down and we want to be able to drive our national, regional and city prosperity.

So I could identify a dozen or so of the most pressing infrastructure projects that meet the demands of our next century, but our Metropolitan planning firstly requires a complete reset. We need to set in place a coordinated, co-operative governance framework across three tiers of government, cities equal local government. And through this framework, find a bipartisan commitment to drive productivity through our cities.

Federal and State Governments need to work hand in hand with local governments to unlock investment and to coordinate fund and deliver complex projects over long timeframes. This requires deep, long term committed partnership.

A Federal Minister for Cities, Population and Infrastructure is fantastic, but it would be great if he was in the cabinet sitting with other ministers such as the Treasurer and the Minister for Local Government. City Deals are wonderful, but they need to be tied to infrastructure that delivers genuine productivity uplifts and in the places that have the biggest impact a la Melbourne. Cities also need a seat at the COAG table and a voice at the COAG table to ensure earlier identification of trends and issues and better integrated outcomes.

We are at the coalface of what is happening in our cities. In the meantime, we are advocating for our 21 cities to come together under the banner of a Council of Cities to strengthen the advocacy position with state and federal governments. And in Victoria, we're very much looking for that accord across the levels of government to help us define a common vision and speak with a united voice on projects and priorities. That united voice would help galvanise our efforts across those projects that can really make a difference.

Two thirds of the jobs in Melbourne's city centre are knowledge economy jobs, which contribute 60 billion to our gross local product. We have 100- sorry, 1100 start ups. We've got our universities working together with our international students to create something that is very vibrant. But we need to keep building on our world class R&D and biomedical research precincts to create what are the jobs and the industries of the future.

Melbourne has two major urban renewal projects that deserve our focus and our coordinated efforts. Our commitment to infrastructure has to be at the centre of unlocking the value of those urban renewal precincts. On the one hand, Arden Macaulay is sitting right there on our Melbourne Metro One project, on the other the largest urban renewal project in Australia—Fisherman's Bend has no currently committed public transport solutions and that's something we need to change quickly. 80,000 residents 80,000 jobs; we need public transport at the core.

So, we must not forget another key element of infrastructure is homes. Housing should be considered as an essential economic infrastructure platform for our productivity and for our success into the future, and it is often underrepresented and under invested. Recent history would suggest that the great hope of bipartisan support for long term nation building across all three tiers of government is a thin hope indeed in Australia.

However, I am optimistic. We've done it before; we built the Snowy Hydro scheme over 25 years. We built the Great Ocean Road over 20 years and not so long ago, we built Melbourne's rail loop over nine. Right now, we're building Melbourne Metro one. We should be planning Melbourne Metro two. We don't lack the space or intellect here in Australia to tackle the challenges facing our nation. We just lack the collaborative policy and governance frameworks to make it happen. This is our big opportunity to create a prosperous future for all. Thank you very much.

[Applause]

Carolyn Weitzman: I would like to thank all three speakers for comments that were not only informed and thoughtful, but delightfully terse. They've left plenty of time for a question period with, as Sally Capp just said, some very bright people in this room. But I am—Tom is here with a roving mic—just as while you wait to put your hands up, I'm going to take the moderators privilege and ask the first question.

There's been a very frightening report—international report this week about climate change and I have to say that climate change hasn't had a huge amount of discussion in the conference thus far, and we know that the UN sustainable development goals focus very much on the role of cities in the environmental future of the globe. How are your infrastructure priorities affected by the reality of climate change and perhaps I'll just move my way down the panel if that's possible?

You can start.

Anthony Albanese: The first is that good policy on cities has to take into account climate change, it has to be-  climate change policy can't be something that's just sort of debated in terms of energy. Transport, for example, is our fastest growing area of emissions. So we need to look towards new technology; what the impact of that would be. We also need to look at the design of our cities.

The concept of the 30 minute city—one of the benefits that we had from the- having the Major Cities Unit producing reports, the state of Australian cities. In the last one that they did, they identified the drive-in drive-out suburbs as a real issue. As Sally said, spoke about the transition of cities like Melbourne; the problem with the knowledge economy is that not everyone's in it.

So what you have in places like Sydney and Melbourne, with the decline of manufacturing, is that a whole lot of people are living suburbs where they can afford to buy a house, but there aren't jobs there. So they're commuting, spending more time going to and from work than they are at home with their kids.

Part of what we need to do and one of the benefits of something like Badgerys Creek Airport, is that that's about trying to turn around Sydney, so everything doesn't look in, some things look out as well. And you can do that. So, I think that needs to be incorporated in the design of cities as well. The urban design protocol that we  produced in government, took very much the focus of urban design can make an enormous difference. That means not just the nature of buildings with water recycling, renewables; it means the spaces between buildings as well.

The idea of the heat island effect, when you have these big developments with just concrete,  just as a disaster for the impact of heat on our cities. So we can have a cooling impact as well, and the work that the Greater Sydney Commission has done, I think is really important—that whole blue and green city idea is very worthwhile. I know that Melbourne City Council has been a leader in this, in terms of local government.

Sally Capp: We have. Thank you. Thank you for that acknowledgement. And I agree. I think climate change and sustainability policy is needs to be integrated across everything that we're doing, so that it's not seen as something that's separate and to the side. Having said that, we are at the moment finalising our own climate change and sustainability policy and it really does that; how do we embed these considerations into everything that we're doing?

I'd really like to, I guess, call out one big acknowledgement of what's happening with the way that we live going forward, and that is that the great Australian dream is moving from serenity to amenity. And I think that's a terrific thing because as we really come together and appreciate density and the ways in which we can live in a in a very comfortable and fulfilling way, but in a denser way, also drives a lot of opportunity for us to manage climate change.

We do need to increase green spaces, which is what we're doing here in the city of Melbourne. We haven't added to our park land since the 1850s in any significant way. Over the next 12 months, there'll be two new parks of over two hectares each, another one coming online the year after that. And if I can get my Highline Park going, that'll be almost three hectares running right through the centre of the city.

So recognising the importance of those green spaces. But on the basis that they are more and more relevant, the more people we have using them. And just to touch on again, that more people and the economies of scale on waste is really driving a lot of the efficiencies in our innovation around waste, not least of which has been our pilot on compacting bins in alleyways in the more dense areas of the city, that residents and businesses can use as a very effective way of dealing with our waste. That pilot has been completed successfully and we will now continue to roll that out. We can only do that because we have the economies of scale to be able to support that type of investment. So I think that that amenity and density can really support climate change outcomes.

Alan Tudge: I think very briefly, you have less congestion, you have fewer emissions. It's almost as simple as that, they are completely aligned. And you can do that through a number of ways, as I was outlining: increasing public transport is certainly one way of doing that. Here in Melbourne, 81 per cent you still buy cars, only 19 per cent of people are using public transport. In Sydney, it's 67 per cent to 33 per cent. So Melbourne lags Sydney in that regard. Now, we want to get say for example, the Melbourne to Tulla rail link going, and we've put five billion on the table to make that happen. That will reduce emissions from all the cars on the Tulla Freeway.

We've got a commitment to getting Monash University the single biggest university campus in Australia, finally connected to the rail link. It is ridiculous that it's not connected to the rail link today. The bus link from Monash to Huntingdale station is the single busiest bus route in Australia. You get mass transit through there, you reduce emissions as well as take those buses and cars off the road.

Briefly, in terms of Western Sydney, the Western Sydney precinct which we are developing is another great example of that, where if you're creating the housing and the jobs and the infrastructure all out in Western Sydney -  which is what we're doing centred around the massive Western Sydney Airport developments, which we've funded and have just kicked off the first site a couple of weeks ago—then people don't need to travel as much from the outer suburbs of Western Sydney into the CBD, so that can also help.

Carolyn Weitzman: Can I just ask the people who ask questions to identify themselves and to also identify the member or members of panels, that they wish to ask questions of? I think there was a question up at the front to begin with.

Question: Sorry, I don't want a hog. Rick Morton from The Australian newspaper. I'm going to direct this to Minister Alan Tudge, but if Albo particularly wants to cut in as well, it would be nice. Just on the population stuff that we've been talking about all week; has the Federal Government done any modelling on the reduction in the permanent migration intake to 162,000 in the last year, in terms of the economic cost? Has it modelled whether we should do a pause on immigration? And are you considering a pause on immigration?

Alan Tudge: I'm asked these questions all the time about the immigration rate Rick, as you probably know. Now, last year, the immigration- the permanent migration rate was brought down to its lowest levels in a decade to 162,000 people as I said.

It's likely that the temporary migration will also come down this year for a bunch of different reasons. And we consider though, the migration settings every single year as part of the Budget context.

So I'll just leave it at that. What I've indicated this week as well though, is that we do need a more sophisticated planning framework, which broadly marries population policy at the federal level—which in large part is driven by our migration settings—with the states and local governments infrastructure and planning regimes, so that we don't have the mismatch, which we particularly saw, and I was explaining earlier when Bob Carr sort of said we're full, Kevin Rudd puts the accelerator on population. And then we wonder why Sydney became overly congested and we're rapidly catching up in terms of trying to address that.

Question: No pause?

Alan Tudge: Well we've made our settings for the next financial year. So every year we go through the planning process. So this year the cap—and caps the [indistinct] into the permanent migration as you probably know—the cap again was set from memory 190,000. But that's the cap, it's not a target. And last year, it came in at 162,000. It'll be again looked at as part of the Budget context for next year, of course, all the states and territories get consulted upon that.

Carolyn Weitzman: There was a question- sorry.

Anthony Albanese: Just- Apart from the fact Bob Carr was sort of gone when Kevin Rudd came in.

Alan Tudge: But infrastructure takes these in advance [indistinct]…

Sally Capp: Boys, boys, boy.

Anthony Albanese: In terms of, well it's just a fact. In terms of these issues, I think one of the things that I think needs more focus which is about planning, is about labour market planning. So jobs that are available, to actually check first if there are Australians available for it. And secondly, though more importantly, I think, we need to look at all governments—bypass and client—haven't done enough to deal with trades training and TAFE and looking after vocational education and training.

It is absurd that we have jobs that are created and we can't fill them with Australian labour in traditional areas. And you can do it—a range of projects that we did Northern Expressway in South Australia, had almost 20 per cent were apprentices. You can use- there are ways in which the Commonwealth can use its leverage as well to make sure that you get those training opportunities there.

But we need to be training now for what the jobs of the future will be because that will have an impact on stopping some of, or reducing—you won't ever stop it completely and you shouldn't—but we should be reducing the reliability that we have on temporary migration.

Carolyn Weitzman: Yes. That lady there.

Question: Hi, my name is Leslie Martin. I'm from the Department of Economics at the University of Melbourne and my question is actually to all three. So cities around the world are restructuring the way that the toll roads in order to target congested areas or congestion directly itself. And the idea behind this is to ration roads using prices rather than the misery of being stuck in traffic or the unpredictability associated with it.

So my question to you in this is, is this an option for Australia, for Melbourne? And if no, why not?

Sally Capp: Okay, well in our draft transport strategy, one of our papers for debate was on a congestion tax and actually this is an issue that goes beyond our municipal boundaries, but one that we think is really important given the interplay of congestion and the productivity in the city. And we had some surprisingly robust debate on that, which I think is a good thing.

But unfortunately, certainly, at a state government level we just had a no. And I think what you're saying is we definitely need to be considering it and the role that it can play in how we can better manage congestion on our roads. I've lived in cities where they have congestion pricing and it has been a very effective way of creating behaviour change and also systems that recognise equity and fairness as part of that so not to unduly burden those that can't afford it.

So we are in favour of considering congestion pricing and the way that that works on congestion in the city of greater Melbourne.

Alan Tudge: These are largely state government decisions.

Personally, I don't support them because some of our most congested roads might be a big freeway, such as the Monash Freeway which goes all the way out to the outer suburbs. And it just means it disadvantages those people in the outer suburbs who may not be able to afford to purchase a house in Malvern or somewhere further in.

So, I would not be supporting a congestion charge on the Monash; I never would. And maybe the State Government will, but that won't be something which I ever support.

Anthony Albanese: The timing of tolls can have an impact. For example, the Sydney Harbour Bridge, which has a variable toll depending upon what time people can go, can change behaviour. So, markets—prices can be a mechanism that sends signals, but certainly I agree with Alan about my concerns is one of equity. People in Western Sydney are going to be paying up to $14,000 a year in tolls to get to and from work; $14,000. If you're on $60,000, that is almost—that is an enormous percentage of your after tax income. The average salary in Australia is 57—the median sorry, the median salary.

So, my concern is that it needs to be linked with public transport so that people have options. If you want to send a price signal, they got to have somewhere else to go, and the option has to be to go on trains to try and encourage that public transport behaviour. But often, the people paying the tolls are the people who don't have the public transport options.

Sally Capp: And I agree. It can't be a lever on its own, and that's why it will also force a rethink on policy. And that policy is not just on public transport as an option—I agree that that's a powerful one -  but actually where our jobs located.

And that recent Grattan report found that actually in the last 10 years in our major cities, congestion hasn't changed, or travel times have not changed significantly. And the major finding of that was that people are choosing jobs in different places to avoid congestion. And Alan and I can argue about what it actually said later.

Carolyn Weitzman: The woman in the front, yes?

Question: Lesleyanne Hawthorne, University of Melbourne. My question is to the Minister and the Shadow Minister. Australia has had 70 years of attempting to disperse recent immigrants. There is no problem at all with carats (*), people will be highly responsive to visas such as the announcement this week. But the issue is retention; what we get constantly, in any field you can look at, is churn.

And the churn is always back into the direction of the major capital cities, which is also a global phenomenon. Can I ask you to comment on what would be different in terms of the outcome of the proposed visa changes that were announced this week? Thank you.

Alan Tudge: So, we haven't announced all of our detail yet in relation to this. But what I said is: that there is an opportunity to provide further incentives to choose smaller cities or smaller states such as South Australia. And there's an opportunity to provide conditions upon visas to remain in those locations for at least a few years.

Now, there's nothing radical about this idea. We already provide some incentives as you probably know if you're applying for the points based system and you want to apply- and you want to go a region or one of the smaller states outside the big cities, you get an additional five points. You need to get 65 points to be eligible to come into Australia.

We then placed some conditions on people's visas already through the 489 visa which says that you must stay in that particular location.

So, it's not a radical idea; we do this already. There's opportunity to expand that further, particularly for the states that want to grow faster. Now, Premier Marshall, I've spoken to him. He wants South Australia to have at least 10 to 15,000 more people each and every year. The Chief Minister of the Northern Territory, he wants to grow the Northern Territory faster. The Premier of Tasmania wants more growth- more migration into Tasmania; same in Western Australia. So, there are actual opportunities there.

We've also got some regional towns who cannot get workers presently.  Warrnambool, just down the road—not just down the road, three hours down the road. Beautiful seaside town, as you know. The Mayor came and saw me and said: we've got a thousand jobs going, begging today. So, if we can work with them and support their population growth ambitions, it also takes a bit of pressure of Melbourne and Sydney. And so it's a win-win in that regard. It's absolutely possible, and we have more to say about this later this year.

Anthony Albanese: It is a challenge, but I agree with Alan that it is possible to make a difference. He's spoken about jobs, and that's certainly the case. But I think also—it comes down to quality of life. People who've given up Sydney and moved to Newcastle and love it. People who've given up Melbourne and gone to Bendigo and Ballarat and love it. And Victoria's probably been better, frankly, than any other state at growing and prioritising those regional cities. You got to have jobs, but it's got to be sustainable long term jobs as well, because—and that's why, I think, also you need—I think it's one of the big arguments, as I said before, on high speed rail; is that it would be a game changer.

Question: Abigail Payne, Director of Melbourne Institute. So, I'm kind of struck on this conversation around congestion and traffic and stuff. I moved to Australia two years ago from Ontario, Canada. And what was going on in Ontario Canada two years ago was this provincial government, the local governments, the universities were very actively talking about how are we going to deal with roads and congestion through the use of autonomous vehicles. And one of the things that has really struck me about Australia is that we're not having that same conversation, even though we're talking about congestion and the same types of issues.

So, I don't know if you have any comments on that, but I would like to hear your feedback on why that conversation isn't happening.

Sally Capp: Well, we're certainly—and maybe we're just not having the debates in the public enough. It's part of the draft Transport Strategy, we had a paper also on autonomous vehicles and the impact that's going to have on the city—both positive and negative—and the plans that we need to make. And it's one of the options, certainly, going forward. But I think when we talk about congestion, we are completely fixated, at the moment, by roads, and we've got to be mindful of congestion also on public transport.

We have a lot of congestion on our footpaths, and we really need to have this whole debate looking at all modes of transport to make sure that we get that balance right. Because every time we make a switch when we're looking at a mode of transport, it does actually impact the decisions we're making around planning, resource allocation and long term outcomes.

So, making sure that we're considering all of those modes as we move forward is important. But certainly, we've got discussions, interesting discussions underway on autonomous, because they bring a lot of efficiency to people moving around our city.

Carolyn Weitzman: Mr Alan Tudge and Mr Albanese?

Alan Tudge: Just very briefly, I think the conversation is going on in relation to autonomous vehicles and the use of technology generally to deal with congestion, and I think that conversation will increase. I think it was only a week or two ago, the Deputy Prime Minister announced an office of Future Transport Technologies, precisely to look and coordinate some of those ideas and plan for the future as well. Because it's not just the technology in the vehicles, but it's also the technology that you can use on the roads as well.

Melbourne, we're actually pretty good in terms of managed freeways, for example. Even those, you know, when you get on and off the—sorry, onto the freeways where you have might the traffic lights who've just slow you down and guide you on. We did that on nearly all of our freeways here in Melbourne; just starting to do that in Sydney, and there's not much of that at all in the other major capitals. But little pieces—little technology like that can make a difference. Other technology can greatly assist, I think, transport congestion in the future as well.

Anthony Albanese: Yeah look, new technology can make a difference. The Managed Motorways program, when Infrastructure Australia looked at it, some of the projects had a cost benefit analysis of $13 benefit for every dollar invested. So, often we look at new infrastructure. Often getting better use of infrastructure makes more sense.

There's a massive growth in the use of share vehicles around Australia. I think that there is a debate, but there is a debate largely amongst, I guess, academics and policy makers rather than at the grassroots level. But I think that will happen. I think we're completely underprepared for the expansion of electric vehicles which we can see happening.

The impact that that will have on fuel taxes, and therefore on paying for roads, for example. Paul Fletcher, Alan's predecessor, was very committed to trying to get a process going there, and to try and get a debate. That stalled, essentially. I think we are a country that has had that historic reliance upon people thinking that their car is an expression of their identity and their individuality, and it's hard to shift that. But over a period of time, I think it will.

Sally Capp: I thought you were going to say manhood, for a moment there.

Anthony Albanese:    Well, I was going to quote Tony Abbott on what the private motor vehicle represents.

Sally Capp: [Talks over] I'm glad we moved away from that.

[Laughter]

Carolyn Weitzman: We only have time for one more question, and definitely no time for that discussion.

Anthony Albanese: [Talks over] You could look it up for yourself.

Carolyn Weitzman: We have time for one more question, and we're actually going to take the gentleman with the polka dot socks in the front. That's you, Nicholas.

[Laughter]

Question: Thanks, Carolyn.

Anthony Albanese: [Talks over] Very impressive.

Question: Alan, congratulations for lifting the population debate to the front pages across the nation. It is a very, very important debate. I guess I want to go back and just interrogate a little further this idea of forcing new immigrants to go to the regions. You've touched upon the Warrnambool Abattoir and their thousand jobs—I think about 3,000 in regional abattoirs across Australia that are acquired, and we often hear about the Murray Val- up along the Murray: fruit pickers being needed as well.

But I put it to you that that's a drop in the ocean, compared to the 160,000+ a year new immigrants that are coming to Australia; 80 plus per cent are coming to Melbourne and Sydney because that's largely where the jobs are. So, would accept that without a sort of jobs and industry plan, and an infrastructure plan up front, that forcing people to go to places where there aren't jobs, will be an economic and social disaster.

Sally Capp: Is that a statement or a question, Nicholas?

Alan Tudge: The—what we've been talking about is not just regional areas. And there are some regional areas crying out for more people—and I just gave one example of Warrnambool because I happen to have engaged directly with the local mayor there. And indeed, it was in the front page of the local paper said: Headline: Wanted: A thousand workers. And—but that's just one example in Warrnambool. I've engaged with the State Premier of South Australia, right, at a state level rather than a small regional level. And he's talking 15,000 people per annum extra into South Australia.

Now, that's one element, and of course, you want to marry that with the economic development opportunities as well. But into South Australia, you've got massive ship building, you've got massive defence contracts. We're doing more and more public sector investment into there.

The economy is now really picking up there, as well to be able to support that growth. So, you need to plan this and you need to coordinate this. And in part, that's why I'm saying which was sort of point four of my overall four-point framework, which I outlined, which is a better planning framework collectively, so that you're engaging with the state governments and engaging more with the local councils to understand their population aspirations, and marry that then with your infrastructure and your economic development as well.

[Applause]

Carolyn Weitzman: I would like to thank—end by thanking the Melbourne Institute, the University of Melbourne and The Australian for sponsoring this very important discussion about cities in the wake of productivity and equity concerns. I'd like to thank the three excellent speakers who I think, brought a much needed level of complexity into the debate. And I would like to advise you that the next session will take place in the Mayfaie Room on Economic Outlook: The View from Business. Thank you very much for coming.

[Applause]