Leadership needed on Sydney and Melbourne’s growth, says Infrastructure Australia

A new report from Infrastructure Australia is calling for the Federal Government to take leadership in securing the global competitiveness of Australia’s two largest cities, Sydney and Melbourne.

The report recommends that the Government establish a framework of incentives to improve the productivity, liveability and affordability of our largest cities. “Australia’s cities are the powerhouses of our economy and they need to be a national priority of government,” said Infrastructure Australia CEO Philip Davies.

“Asia’s global middle class, as well as our own rapidly growing population, will unlock new economic frontiers for Australia, but we need to position our cities to take advantage of this historic opportunity. Australia needs to start setting national objectives that allow our cities to realise their full potential and remain globally competitive.

“The Australian Government is right to think that investment shouldn’t just come in the form of give and forget grants. We need to introduce more structure and accountability by tying funding for our cities to clear national performance outcomes.”

The report says that stronger national leadership will give Australia he opportunity to fund its infrastructure in a way that incentivises the delivery of nation-shaping reforms.

“That is why we are recommending that the Australian Government establish a consistent framework of incentives to drive the delivery of national benefits within our cities at the project, place and reform level.” Mr Davies said.

The recommended framework includes a hierarchy of three incentive types:

  • National Partnership and Project Agreements, which make project funding contingent on meeting specified outcomes across the project lifecycle and demonstrated economic benefit.
  • City Deals, which apply a series of locally and nationally informed objectives to a city or part of a city, and make infrastructure payments for the area contingent on meeting those objectives.
  • Infrastructure Reform Incentives, which would provide additional infrastructure funding above existing allocation in return for the delivery of policy and regulatory reform focused on improving the productivity, liveability and affordability of Australian cities.

Mr Davies said that o be successful, the design and implementation of these incentives would need to be informed by a well-evidenced national investment and reform agenda for Australian cities.

The paper models long-term growth scenarios for Melbourne and Sydney and assesses their performance across a range of indicators. These include performance of the transport network, access to jobs, environmental performance of the road network, access to and demand for social infrastructure, and access to and demand for green space.

The paper, ‘Future Cities: Planning for our growing population’, is available here.

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