As far back as 1972, former Prime Minister Gough Whitlam noted that “practically every major national problem relates to cities."

“A national government which cuts itself off from responsibility for the nation’s cities is cutting itself off from the nation’s real life. A national government which has nothing to say about cities has nothing relevant or enduring to say about the nation or the nation’s future,” he noted.

When he promised to “place cities at the forefront” of his government’s responsibilities, Whitlam set a new path for urban development in Australia.

For the first time, cities were on the national agenda. While Whitlam didn’t use such modern buzzwords as as sustainability, efficiency and liveability, the underlying drivers were the same: an understanding that functioning cities are central to Australia’s enduring prosperity and high standard of living.

Three quarters of Australians live in cities, including Sydney

Australia is one of the most urbanised countries in the world. Three quarters of us live in cities of more than 100,000 people. Urban policy – something that has slipped down the government agenda in recent years – is essential to ensure we get connected policy that delivers sustainable, liveable and productive places.

The Grattan Institute’s Mapping Australia’s economy: cities as engines of prosperity, released in July, tells us that 80 per cent of the dollar value of all goods and services in Australia is produced on just 0.2 per cent of the nation’s land mass – nearly all of it in cities.

The combined central business districts of Sydney and Melbourne – just 7.1 square kilometres of land – generate almost 10 per cent of the value of goods and services produced in all of Australia. That’s three times the value of that produced by the agricultural sector.

The future prosperity of our cities is increasingly connected with their sustainability. Supporting sustainable growth, creating liveable communities and learning to create more value with fewer resources is our great challenge.

We can learn much from the work being undertaken in other cities of the world. In New York City, with 1.6 million people crammed onto one tiny island, planners have had to embrace sustainable thinking. The city has one of the lowest levels of per capita emissions in the country because so many people take the subway to work.

It’s a pedestrian paradise – with a phenomenally-high walk score and new parks, such as the High Line, gaining international acclaim. And its ambitious PlaNYC is cutting emissions, improving air quality and delivering greener spaces for citizens. The result is a thriving city and a thriving economy.

New York’s High Line

Portland, which heads most lists of America’s greenest cities, is already generating more than half its energy from renewable sources. The city has developed nearly 40,000 hectares of green spaces with a connected system of trails and parks ideal for walking and cycling. In fact, the city has the highest rate of cycling to work of any US city. Portland’s is also developing a reputation as a city of cultural innovation and entrepreneurship. While other small cities in America are struggling to stay afloat, Portland’s sustainability ethos has led to opportunity.

Portland, one of America’s greenest cities

In Europe, Copenhagen was selected as the 2014 European Green Capital, having one of the lowest carbon footprints per capita in the world – less than two tonnes per person. It also has the most ambitious carbon reduction plan of any major city in the world, with the government aiming for carbon neutrality by 2025. Green building standards, energy efficiency targets and impressive cycling rates (40 per cent of commuters get to work by bike) are helping the city achieve its goal. An ambitious green building agenda is seen as a “springboard to a prosperous future.”

I’m also inspired by the headway being made in London. Long considered the financial capital of Europe, London is emerging as a green centre of innovation. The congestion zone has generated additional income for the city while reducing traffic, and many of the public and historic buildings are undergoing energy efficiency upgrades. Green roofs now cover that square mile, and an innovative vegetated façade, being tested out on the famous Gherkin building, will turn it literally green.

Add to that innovative, adaptive reuse projects like NDY’s Midland Bank project, which is conveniently situated near the recently completed Leadenhall building (London’s tallest). This project demonstrates the huge carbon savings when historic buildings are restored and adapted for new uses, in this case a hotel.

Cities are at the centre of much that will make us a smarter, more sustainable planet. As the world looks for ways to optimise cities’ resources and achieve smart growth, Australia’s leaders must reconnect with cities as drivers of not only economic growth, but of long-lasting prosperity, liveability and sustainability.