Head of the Grattan Institute John Daley rejoined the immigration debate this week, arguing in the Fairfax papers that slowing immigration would crimp economic growth, but that the federal government may have to “tap the brakes” if state governments can’t develop their cities properly.
Mr Daley is one of the best-briefed economists on immigration because his non-partisan think tank has published heavy-hitting reports on most of the key issues, especially the connected issues of housing availability and transport infrastructure.
That’s important, because the debate is constantly at risk of being swayed by populist hot-heads – Dick Smith, Mark Latham and Tony Abbott to name a few – who would prefer to drastically cut immigration rather than ask why we build such dysfunctional cities.
In the Wednesday article, Mr Daley covered off some of the main reasons: “Australian cities are sparsely populated by world standards … but people only like more density in the suburb next to theirs, and consequently their children cannot afford to buy a dwelling.”
That attitude is not only harmful to younger generations, but wilfully ignores how other cities improve their quality of life by raising population density – not only big cities like Paris or Tokyo, but hundreds of smaller cities from Zurich to Madrid, Toronto to Taipei.
“More people doesn’t necessarily mean more traffic congestion,” Mr Daley writes. “We would do better if we focused on the transport projects with the most benefits, rather than whatever takes a politician’s fancy in the lead-up to an election.”
And that really is the nub of the problem. Australian urban development, if it is not to stop dead in its tracks, has to be based around mass-transit systems, but those systems are most often funded by an uneasy mix of federal, state and private sector money.
When I spoke with Mr Daley on Wednesday, I raised the Abbott government’s decision not to fund public transport at all, and only to put money into roads.
That, he says, was “so crazy it’s hard to know where to start – it was a spectacularly stupid piece of policy”.
Although the Turnbull government has junked that policy, our cities are still being held back by federal-state politics.
A recent case in point is the train link between the Melbourne CBD and Tullamarine Airport.
While I’ll admit as a traveller I love the idea, Mr Daley soberly points out that the $5 billion stumped up by Canberra could be much better spent accelerating other cross-city public transport projects.
And though the state government is promising to match the funding and get the thing built, it reportedly heard about Canberra’s funding by reading it in the papers.
At the time, Victoria’s public transport minister Jacinta Allan said: “It’s good the Prime Minister has finally found Victoria on a map, and we’ll accept this funding given how much he short-changes our state.”
See, that’s how development proceeds.
Immigration pressures are being most felt in Melbourne and Sydney, both of which now have dedicated infrastructure authorities – Infrastructure NSW and Infrastructure Victoria.
So we have excellent lists of projects to make our cities work better, solid cost-benefit-analysis studies to back them up, and investors keen to put money into modernising our cities.
And yet all of that is hampered by slow-moving state governments and ad-hoc political pork barreling from Canberra – which both major parties are guilty of when in power.
What’s needed, perhaps, is something like the Charter of Budget Honesty created by Peter Costello, but to cover infrastructure.
“Infrastructure Australia should be the watchdog,” says Mr Daley, “but it has no teeth, no transparency in its studies, and not enough resources even to do its current job.”
A ‘Charter of Infrastructure Honesty’ – if either of the major parties dared to create it – could demand that any projects that leapfrogged up the list would have to be fully and transparently explained.
We can only hope.
As things stand, we have property developers, construction companies, architects, town planners, state governments and even some federal politicians ready to build truly world-class cities.
Yet a broken federal-state funding model is getting in the way.
Before we shoot ourselves in both feet with heavy-handed cuts to immigration, that wouldn’t be a bad place to look for a solution.