Turnbull takes us back to the future

It is nearly 25 years since the last Federal Minister had a transformative impact on Newcastle. In 1991, Deputy Prime Minister Brian Howe was the minister responsible for the Hawke Government’s Building Better Cities program, whose legacy is still visible at Honeysuckle today.

In that same year of 1991, unemployment in Newcastle hit 19%. The city was economically depressed and social dislocation was rampant.

Howe believes it was the Commonwealth’s Building Better Cities (BBC) program which allowed the city to reimagine its future after a trifecta of disasters: the 1989 earthquake, the recession of the early 1990s and closure of the steelworks.

In 1992, $71 million was allocated under Howe’s BBC program to begin the process of remediating and restoring redundant, harbour side rail lands to attract private sector investment in the rejuvenation of Newcastle. The economics of development in Newcastle, indeed regional Australia, simply could not have supported these costs and attracted suitable investors. It needed Federal intervention.

Ultimately, $100 million in Federal funding and a dedicated Minister paid a huge social and economic dividend to the city. 7,500 jobs were created and private investment worth $2 billion poured into the area.

A Federal Minister with a modest budget, whose focus was city building, had been Newcastle’s saviour.

By the time the Howard government cancelled the program, the demonstration effect had done its work. Private investment, along with some state contributions, was enough to maintain the development momentum.

If it worked before, can it work again?

The newly minted Malcolm Turnbull PM, perhaps our most urbanist Prime Minister yet, certainly believes so.

Days after being sworn in, he lost no time in placing cities squarely on the federal agenda by appointing Jamie Briggs as Australia's first federal Minister for Cities and the Built Environment.

Make no mistake, this should be seen as a key economic appointment.

The biggest wake-up call delivered at last month's National Reform Summit came from Productivity Commission Chair Peter Harris. The message was simple: unless Australia is able to lift our sluggish productivity levels, our living standards will go backwards.

In the most urbanised country in the world, several delegates made the point that Australia's productivity challenges are going to need to be met in our cities.

Former treasury secretary Martin Parkinson, the Grattan Institute, the Property Council and community housing groups were all on a unity ticket that cities were a critical key in unlocking Australia's productivity puzzle.

But our cities are not standing still. Australia has the second-fastest rate of population growth in the OECD and the Hunter has NSW’s fastest growing population outside the Sydney basin.

With more than 80 per cent of Australia's GDP generated in our cities, productivity clearly has a big urban dimension.

Indeed, our biggest national productivity threat may well be that our growing cities become less productive, dragged down by a grinding increase in congestion, declining liveability and reduced connectivity in our cities.

So what should be the agenda for this new ministry?

First, the federal government must invest in the infrastructure cities need regardless of mode, not limited to roads.

Turnbull has already signalled this change, saying infrastructure should be assessed objectively and rationally on its merits. The shift is a sensible one and follows stinging critiques from Labor's Anthony Albanese.

Cities of course need a mix of roads, freight and public transport and it makes sense for the Commonwealth to be a co-funder in all three.

The Prime Minister's welcome rhetoric will need to be backed up by real dollars and the placement of the ministry in the environment portfolio instead of infrastructure (surely a National Party workaround) seems curious.

Second, the federal government must absolutely use the federation to address housing affordability.

Report after report has identified the lack of housing supply – including targeted affordable housing – as the key culprit in our globally high housing prices.

It is time to pick up a recommendation from the Harper Competition Review and reintroduce the 1990s national competition policy framework of reform incentives to drive difficult change.

Applying this model to housing affordability would provide a powerful incentive for the states and territories to reform their planning systems, build new housing supply close to jobs and innovate to get affordable housing on the ground.

Finally, there is also an opportunity to encourage "resurgent cities" in a range of policy areas.

If cities are to be the crucible of human talent fostering the new economy the Prime Minister desires, then there are much broader implications for the federal agenda.

"Liveable, vibrant cities are absolutely critical to our prosperity" declared the Prime Minister while announcing "a 21st century government and a ministry for the future".

And that's exactly what our cities are counting on for this new team to deliver.