Australia must change how we plan our cities and towns if we are to accommodate a population of nearly 40 million over the next forty years, a webinar has heard.

Hosted by SGS Economics and Planning, the webinar examined challenges that Australia will face in accommodating long-term population growth.

The session was moderated by SGS Senior Associate Ben Taylor. Speakers include Dr Marcus Spiller, Principal and Partner at SGS; Kirstie Allen, Non-Executive Director and PhD candidate; and Rob Stokes, former New South Wales Minister for Infrastructure, Cities, and Active Transport.

The session comes as Australia’s population is projected to increase from its current level of 27 million to almost 40 million (37.9 million) by 2064.

Must improve population projections and strategic planning

According to Allen, Australia needs to change the way it undertakes population projections upon which decisions relating to housing, land-use and infrastructure are based.

These projections are based on historical assumptions about natural increase and migration levels. In practice, however, actual population results are influenced by factors such as migration policies along with events such as pandemics, environmental conditions and economic conditions.

In the past, projections have missed the mark.

The Intergenerational Reports of 2002 and 2007, for example, suggested that Australia’s population would reach 25.2 million in 2042 (2002 report) and 27 million by 2037 (2007 report).

As things stand, however, our population has already reached that 27 million mark.

In addition, the projections are based on static, linear, straight lines. As a result, they do not enable us to adapt to the risk of change or uneven growth patterns.

Finally, the basis upon which some housing targets are set is not clear.

Published in 2022, the Hunter Regional Plan 2041 establishes a 20-year housing requirement for Newcastle of 17,850 dwellings.

However, Newcastle’s share of the five-year housing target derived from the NSW share of the national housing target (1.2 million homes over the five years from 1 July 2024) would equate to 11,100 homes for just five years. This represents about 62 percent of what the regional plan indicates is needed for 20 years.

Going forward, Allen would like new approaches in several areas.

These include:

• Evidence based objectives and outcomes which are able to be measured and monitored to promote transparency and accountability.
• Risk-based planning scenarios which enable planning for both high and low growth according to factors which affect supply and demand for particular locations. This would make plans dynamic and would enable plans to accommodate differing growth patterns and common risk scenarios. This type of approach is commonly used in planning for disasters, logistics and transport. However, it is rarely used for land-use planning.
• Converting strategic plans into adaptive plans which are agile and involve different actions at various stages to respond to risks and changes in demand. This is common in strategic water plans whereby costed actions are implemented at different times or in combination based upon the severity of a drought.
• Use of transparent, data-driven triggers to enable planning and funding decisions from these adaptive plans to be activated to promote housing, employment and infrastructure supply where warranted.

Allen says that current practices need to change.

“What I’m saying is that our strategic planning must transform,” Allen said.

“It should be underpinned by future scenarios that are used across sectors to support comparable strategic planning.

“It should be adaptive and data driven to respond to unpredictable growth and change within five-year timeframes.

“And it should be capable of sending transparent signals to the operational part of the planning system and the infrastructure planning system to assist better and more timely housing and infrastructure supply.”

(According to the Hunter Regional Plan, the City of Newcastle needs only 17,859 new homes over the next 20 years in order to accommodate population growth. According to the NSW share of the national housing target, however, the city would need 11,100 new homes over the next five years alone.)

Urban Sprawl is reaching its limit

Turning to an economic and productivity viewpoint, Spiller stressed the ongoing importance of major cities and metropolitan areas.

Large cities and metropolitan areas are critical in fostering innovation and accommodating the advanced business services upon which many sectors of the economy depend and which serve as a significant driver of business and employment opportunities.

This is particularly the case with inner areas of Sydney and Melbourne, where clusters of service firms are able to access deep pools of labour.

In the past, Spiller says that the model of incremental metropolitan development that involves adding new housing and suburbs in greenfield areas on urban fringes has worked well. For service firms, this has provided a dynamic pool of labour. For households, it has delivered access to business/employment opportunities as well as low density living with suburban backyards.

Now, this is reaching its limit.

Back in 1996, residents moving into the then outer-urban fringe suburb of Lynbrook in Melbourne’s south-eastern growth corridor could access more than 370,000 jobs within half an hour drive in the morning peak. This represented almost a quarter of all employment opportunities that were available across metropolitan Melbourne.

Now, residents moving into the new growth area of Pakenham East have access to only 170,000 jobs within that same 30-minute peak hour drive. This represents only five percent of jobs available in metropolitan Melbourne.

In response, Spiller would like action in two areas.

First, he applauds recent government efforts in New South Wales and Victoria to develop ‘polynucleated cities’ and to foster clusters of housing and economic activity around major transport hubs through transit-oriented development (TOD).

However, Spiller cautions that challenges associated with TODs extend beyond planning and zoning. These include land assembly, value capture, infrastructure provision and open spaces.

To make TODs work, Spiller says that more discussion is needed on the role of state agencies such as Landcom in New South Wales or Development Victoria in Victoria.

In countries such as Singapore and Barcelona, governments have played a significant role in leading development in growth areas.

Leaving this up to the private market will not suffice, Spiller says.

Beyond this, Spiller says that Australians need to ‘hedge our bets’ in case aforementioned efforts fail to produce desired results.

On this score, he says that we need to look seriously at the high-speed rail network being considered by the Federal Government to connect Brisbane, Sydney, Canberra, Melbourne and regional communities on Australia’s east coast.

A business case for the project is expected to be presented to the Australian Government before the end of this year.

As things stand, recent studies have put the cost of this at around $200 billion.

However, Spiller says that this cost may not be prohibitive when considered in the context of the overall infrastructure budget that will be needed in order to accommodate a 40 million population.

Furthermore, he says that high speed rail could help to reshape urban development at the regional scale and to reshape the economy in the process.

(For residents in the new outer Melbourne suburb of Pakenham East, only 5 percent of Melbourne metropolitan jobs are within 30 minutes peak-hour drive.). This shows that urban sprawl is reaching its beneficial limits.)

Addressing Car Dependency and Democracy Challenges

Finally, Stokes says that Australia will need to address challenges in two further areas.

First is the nation’s ongoing dependency on private cars.

Already, 2021 Census data from the Australian Bureau of Statistics indicates that the average Australian household has 1.8 cars.

That same data indicates that only just over 10 percent of the population aged 15 or older use either public transport or active transport (walking/riding etc.) as their primary means by which to go to work (refer link).

Whilst many other countries are investing in public and active transport (bike paths etc.), Stokes says that governments around Australia are still focused on airports, roads and highways/freeways (albeit with a massive railway building program currently underway). In part, this is because road investment can be recouped through tolls, vehicle registration, licensing charges and fuel excise duty.

Much of the problem, Stokes says, is that settlement patterns are still geared around private vehicle ownership and use.

Already, costs associated with private car dependence are significant.

A 2019 audit by Infrastructure Australia found that costs associated with road congestion and public transport crowding amount to $19 billion annually.

By 2031, that same audit found that this is likely to reach $39.8 billion.

Meanwhile, as many as 1,266 Australians lost their lives in road accidents across Australia in 2023. A further 40,000 people suffer serious injuries on roads each year.

That is not counting the cardiovascular health challenges which are exacerbated by sedentary lifestyles that are encouraged by private vehicle reliance.

Should Australia increase its population to 40 million without addressing this, Stokes says that these problems will become worse.

(traffic congestion will get worse if Australia fails to reduce car dependency.)

Beyond that Australia will need to grapple with challenges associated with planning and democracy.

On this score, Stokes says that decisions need to be made in four areas.

These are:

• How democratic processes occur in terms of the type of development which is allowed. Should the public be involved upfront in strategic planning, in a reactive way through input into/objections in regard to specific development proposals, or both? As the moment, Stokes says that governments try to do both. This maximises democratic involvement but is costlier and slower.
• The level of control which is afforded to local councils in land-use planning. This poses challenges in light of the broader need to accommodate urban growth even as local councils answer to local ratepayers – many of whom may resist change within their area.
• Effective governance of strata schemes. This will become increasingly critical as more people live in strata communities. It will be important to ensure that the strata scheme is sustainable and that minority residents are not exploited.
• Conflicts between broader societal benefits of denser cities as against individual household preferences to live in detached homes on urban fringes.

Speaking about the first point, Stokes acknowledges that having two levels of public consultation as mentioned above is costly and may slow development.

But he stressed that this must be balanced against the need to enable community members to have their say.

Without this, resentment and a loss of trust in decision making may grow.

“My suspicion is that if we say, ‘let’s dispense with public participation’, ultimately, that will end up undermining confidence in our patterns of settlement which will lead to bigger democratic problems for our society as a whole,” Stokes said.

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