Opinion pieces, speeches & transcripts

Address to the AHURI National Cities Conference

November 18, 2021

Last week The Economist observed that, while in February 2020 around 5% of hours worked by Americans were worked from home, three months later that proportion had grown to six in ten.


A similar thing happened in Australia, too - indeed, across advanced economies.


Understanding the implications of this shift, and the extent to which it will continue, presents a profound challenge to policy-makers today. 


As we begin to contemplate re-engagement with the world, we can’t neglect national urban policy.


Our cities and their suburbs are the places where the vast majority of Australians live and work, and where a similar proportion of our GDP is generated.


Before Covid, they were engines of growth in both these respects - attracting internal migration and immigration from overseas, attracting investment, growing jobs and building wealth. 


To drive a real recovery, we must recharge our cities. 


This means better appreciating the impacts of the pandemic,  and the extent to which changes are likely to be enduring.


In these remarks I want to focus in particular on changes in how work has been done over the past 18 months, how this might continue, and what this means for the shape of our cities.


There’s never been a more exciting time to be involved in urban policy.


To have the chance to think about what the pandemic has taught us about how our cities work, and how they might work better.


And then to put in place the policy levers to realise this vision, collaboratively.


Effective and enduring urban policy rests on cooperation and shared understandings - between different levels of government, and with the private sector and the community. 


How we develop arrangements to foster these relationships is a key challenge for national government.


Here, we must do better - and be clearer about what we are doing, why and how.


National Urban Policy in Australia under the Coalition 


I recognise that we have seen some progress in the state of our consideration of national urban policy - the political debate is now about what should be done, rather than whether anything should be done.


When Malcolm Turnbull replaced Tony Abbott as Prime Minister, he returned cities policy to the national stage.


Where it needs to be.


But not all of the damage done under Mr Abbott was remedied: the institutional framework he dismantled wasn’t repaired, the mechanisms driving evidence-based policies and close collaboration remained underdone.


And, more recently, we’ve witnessed what I’d describe as a slow retreat from the field, under Mr Morrison. 


City deals are withering on the vine, and other collaborative mechanisms wound down.

The National Cities Performance Framework- designed to provide an evidence base to guide investment in our cities- has been quietly dumped. 

The National Cabinet excludes local government, and its agenda discloses little interest in urban policy.


With our cities having borne the brunt of the impacts of the pandemic, this is a worry - and a major handbrake on our recovery.


In this urban century, as the rest of the world sharpens its focus on cities, Australia’s government seems to be looking the wrong way.


Earlier this week, President Biden signed his $1 trillion USD infrastructure package into law, with  massive investment in urban transit, including EV infrastructure and $5 billion for active transit infrastructure.

And COP26 has included a strong statement on transit, recognising the need for accessible and affordable zero emission vehicles, and the role active, public and shared transport has to play in a sustainable future.

New South Wales, Victoria, South Australia and the ACT are all signatories to the relevant declaration- but our Federal Government is missing in action. 

What’s missing is an overarching policy framework to secure cities that are more sustainable, more liveable and more productive - the institutions to drive that and, frankly, a national interest in and national responsibility for what’s been happening to those places in which the vast majority of Australians live and work .


How work has been changing, and how this might change our cities 


In focussing on how the pandemic has changed how we work, I don’t want to suggest that this has been all-encompassing.


Not everyone can work from home, of course.


And there’s an important debate to be had about some of the inequities that have affected essential workers.


But the shift that has occurred in where, and often how, knowledge work has been undertaken has a particular significance- with wide-ranging implications.


Understanding this, in my view, is a critical foundation for urban policy in all its dimensions: driving economic and productivity growth, fostering greater sustainability and securing more liveable cities for all citizens.


So the Productivity Commission’s recent research paper on working from home provides some instructive pointers on the impact of hybrid work on the location of economic activity, and the shape of Australian cities. 


Earlier this year, this was a focus on Anthony Albanese’s speech to the AFR Summit, in which he outlined Labor’s approach to urban policy and anticipated much of this in his articulation of an urban policy fit for present and future purposes.


The Productivity Commission found that up to 40% of Australian workers have been working from home during the pandemic, and that the level of work from home is very likely to remain much higher than pre-pandemic.


It’s important to recognise that the views of both workers and employers are broadly positive about working from home, some of the time at least.


The evidence regarding productivity is less straightforward. There are positive indicators, but also some concerns about the negative impacts for innovation when we lose proximity. 


These developments haven’t eliminated the need, nor indeed the desire, for personal interaction either. 


What is clear, however, is that working from home has had a huge impact on how, and how much, we move around and on our patterns of consumption. 


This latter point is too often passed over, I’d venture.


None of this is to suggest that the debate over the future of work is anywhere near settled - clearly, it isn’t, and won’t be for quite some time (if ever).


But the point is to recognise the key challenges and opportunities that demand policy responses.


There are a number workplace-related considerations that will drive the future of working from home, including practical issues relating to the structured management of hybrid models, wage premiums for work performed in traditional offices, perceptions of professional and career development, implications for unpaid domestic work and well-being more broadly.


For policy-makers, the prospect of the geographic link between where people live and where they work changing carries wide-ranging implications in terms of how cities function as economies, labour markets and of course as places where we make our lives. 


Blended cities

The pandemic has enabled us to shift our thinking about what the boundaries of a city can, and should, look like.

Instead of relying on the physical barrier of an urban growth boundary, the leaps and bounds we have taken in digital infrastructure over the past two years allows us to consider the boundary in terms of connection to place- whether physical or virtual. 

The blended city- comprised both of the physical city that we’ve understood for hundreds of years, and the digital city, of virtual participation and labour market access without being physically present- comes with its own unique opportunities and challenges.

How to build a sense of community in a city where people are geographically dispersed and may only visit once a week, if ever?

What does this mean for workers in our cities who can’t work remotely? How does this model help them?

There’s already evidence to suggest, for example, that people tend to be willing to tackle longer commutes, if this isn’t something they must do every day.

In the first quarter of this year, just under 5,000 people moved from Melbourne to regional Victoria, and just over 5,000 from Sydney to regional NSW. 

Complexities abound in predicting the future, of course, including the uncertain impacts of immigration.


The size and nature of our migration program over the coming years will shape our cities, and our infrastructure needs. 


The unpredictable nature of the health crisis, and the associated changes to how we live and work, makes clear the need for a robust framework and a collaborative approach to meeting our infrastructure and planning challenges moving forward.


What does all this mean for city centres?


Last week, The Age reported on research conducted by the Property Council that suggested Melbourne CBD office occupancy was at 4% in October. 


In the decade leading up to the pandemic, research from the Grattan Institute showed that half of Australia’s jobs growth had been concentrated in the centres of Sydney and Melbourne.


So, the stakes are high when we think about what all this means for our economic recovery. 


This is why Labor has been calling for a plan for our CBDs - pleading for workers to return to their desks won’t cut it.


Let me be clear: I don’t think the pandemic has changed the economics of agglomeration. 


The reasons major knowledge businesses clustered in the centres of our major cities are the same heading into 2022 as they were before we’d heard of COVID-19. 


The rise of digital technologies, indeed their ubiquity, didn’t change this - far from it.


These are significant developments, which will leave their mark on our city centres.


But that’s not to say they will decline.


The Productivity Commission’s dive into hybrid work found that reports of the death of CBDs had been greatly exaggerated, with the benefits of physical proximity remaining their strongest in high density areas.


Simply because work can be done remotely, doesn’t mean it should all be done remotely.


Few workers, and fewer bosses, have expressed such a preference. 


So many tasks, and I’d venture all relationships, benefit from personal interactions - let’s conceive of the central areas of major cities as spaces for such interaction and activities, not simply as business districts.


Less traditional office occupancy presents some obvious challenges, particularly to the businesses that depend on the custom of office workers like cafes and dry cleaners.


But there are opportunities too: lower rents offer the prospect of attracting new entrants. 


Buildings might be repurposed, entertainment venues can emerge and the idea of the centre as a place - the place, perhaps - where citizens gather together for reasons unrelated to work becomes a possibility.


As workers return to their offices, we need to consider not just how many people are returning to the physical workplace- but who is returning. 


Research by Hassell has found generation and seniority divides in the desire to return to the office- with those in management positions and older workers more likely to want to return to the physical workplace. 


There’s a gender divide too- 47% of men would prefer to work primarily in the office compared to 36% of women. 


If workers are given the choice to return to the office according to their preferences, these demographic differences will impact how the places around our workspaces form- the services, transport and retail needs of a young, female junior employee and an older man in management may be vastly different. 


Instead of thinking about how to support a CBD recovery, the question for policy-makers should be: how can we re-imagine our city centres?


As we gather today, city centres around Australia are being transformed through pop-up bike lanes, reclaimed public space and countless other initiatives.


This deserves to be matched through the engagement of a national government that’s not afraid of the future, and which is keen to partner with people closer to the ground to help realise city centres that are both engines of economic and productivity growth, and exciting, safe and democratic shared spaces, accessible to all.


So, I’m excited about the future of our city centres. 


Equally, if we get the policy framework right, I can see an evolution towards more distributed Australian cities, with more opportunity and access to amenities for more of their residents. 


And for the suburbs?


The experience of working from home, and, for many Australians, geographically bounded lockdowns, highlights the critical importance of place, and place-making. 


The experience of working from home hasn’t been equal across our cities. 


Research commissioned for the National Growth Areas Alliance found outer suburbs residents had better experiences of both their work and home life while working remotely, compared to those living closer to city centres.


Working from home had positive impacts on their productivity, health and relationships- with 10% more outer suburban workers feeling that working remotely had a net positive impact on their life than those in inner suburbs. 


Yesterday’s broadband announcement by my colleague Michelle Rowland should resonate with these workers.


But prior to the pandemic, the experiences and opportunities available across our cities weren’t even either. 


In each capital city we saw the same pattern emerging. 


A number of highly liveable, but unaffordable, suburbs concentrated close to the city centre.


And on the outskirts, low levels of liveability-with more restrictive public transport options, less access to social infrastructure and limited public green space.


The right national urban policy framework is key to addressing the inequalities in our cities.


Get it wrong and we end up with worsening urban congestion, declining housing affordability, a bigger carbon footprint and a deteriorating sense of social cohesion. 


It’s time to think about our social compact as having a physical, or geographic, dimension: to think about the goods, services and amenities everyone should be able to readily access from their home.


To me, this is the essence of the 20 minute neighbourhood.


But reports in the Guardian this week revealed the chasm between what homeowners are promised when building in a new estate, and what is delivered. 


Train stations, schools, shopping centres- the things that make suburbs liveable- never built.


And this is an ongoing issue- last year the number of new housing lots sold in some areas tripled, without matched investment in transport or social infrastructure.


Instead of working to support growth suburbs establish themselves and thrive- the Morrison Government has left them behind. 


Nowhere is that clearer than the administration of the Commuter Car Parks Fund- where decisions were made solely on the politics- not the evidence. 


Labor’s approach 


The challenge before us now is to take action to secure more resilient Australian cities, so that their productivity, sustainability and liveability is assured.


This has to be core business of a national government concerned to deliver a more prosperous future, and to deliver its side of the social contract.


As Glaeser and Cutler, in The Survival of the City, write:


‘the vulnerability of large, dense, interconnected cities requires an effective, proactive public sector: a shared strength that serves everyone.’


It’s been long recognised that fragmented governance holds cities back, and that this is a particular problem for Australian cities.


This concern has recently been expressed by AHURI, in its report on innovation in urban transportation - a critical foundation for reshaping our cities. 


Noting the efforts of state governments to expand and reconfigure public transport networks and support active transit, the report found that, ‘The ability to properly implement this new urban agenda continues to be impeded by governance and regulatory barriers.’


Now, we simply can’t afford to ignore this, as an obligation on the part of national government.


Labor is up for this - indeed, we’re excited by the future.


After more than eight years of denial, neglect and too many missed opportunities, it’s time for a new deal for urban Australia.


There’s a framework in place, but it needs to be built on.

Firstly, by commissioning an independent review to consider the role and purpose of Infrastructure Australia in the modern infrastructure landscape.

The 2021 Australian Infrastructure Plan sets an ambitious vision for the country- recognising the importance of forming a sense of place through our investments, and prioritising the social and environmental infrastructure we need to make our cities liveable and sustainable. 

Unfortunately, IA has been continually undermined by the Morrison Government, more interested in the political benefits of infrastructure spending than making long-term, city-shaping investments.

Recognising the impacts of eight year’s neglect of urban infrastructure strategy has had on our cities, we will establish a Cities and Suburbs Unit within Infrastructure Australia. 

This new Unit will make recommendations to Government on the design of a new National Urban Policy framework, informed by expert evidence and community input. 

The Cities and Suburbs Unit will also release an annual State of the Cities report. 

To measure the progress and performance of our cities, and identify the specific initiatives of local councils and state planning authorities which are effectively working to create more productive and sustainable communities.

As we look to build back better from COVID, effective transport policy and targeted infrastructure investments can help build equity into the heart of communities across Australia.


And having strong, independent evidence and advice is fundamental to getting this investment right. 


We also need to bring people with lived experience and expertise back to the centre of our decision making, to put in place the strategic and considered national urban policy we need.


To that end, Labor has committed to bring together a renewed Urban Policy Forum to complement the Cities and Suburbs Unit. 


The Forum will bring together experts from across all levels of government as well as industry and academia, to make sure we get the long term policy-settings right.


It’s also why we will bring local government into the National Cabinet.


Local councils have been leading the way on creating sustainable, and liveable, communities- but these efforts have been constrained by a lack of engagement, a lack of recognition and a lack of interest from the Morrison Government.


And a lack of national leadership in the City Deals has left the ambitions of the program unrealised. 


AHURI’s research into the City Deals program is clear- the program has the potential to create economic opportunities and productive urban environments, but the current absence of transparent governance arrangements and lack of collaboration is holding us back. 


We need a government committed to achieving shared objectives and delivering transformative city-shaping projects- not just the ones on the Federal Government’s wish list. 

Creating vibrant cities post-COVID will require collaborative, long-term partnerships with local and state governments, as well as businesses and local communities.

This means genuine City Partnerships, built from the ground up - as City Deals always should have been.


Conclusion: it’s governance, stupid


The start of the pandemic carried with it innumerable predictions of the end of the city, linking density to the inevitable spread of disease.


This was ahistorical, and has proved far from prescient - but that’s not the same as saying that we can ignore the impact of covid on urban life and work, nor fail to respond to the changes it has been making and those things it has revealed.

We have an opportunity to do better, and be better.

We can’t continue to have a federal government drifting aimlessly through this vital period of rebuilding. 

We need a federal government that’s committed to an effective national urban policy framework and committed to listening to and collaborating with all the groups with an interest in this framework.

An Albanese Labor Government.