What’s the big deal about city deals?
The days of the Commonwealth just “writing a cheque” for infrastructure are over, says the Prime Minister Malcolm Turnbull, as he signals the start of a new era for Australia’s cities.
The Prime Minister joined a select group of industry leaders on the 41st floor of Lendlease’s International Towers 2 building at Barangaroo to kick off the Green Cities 2016 conference last week.
Turnbull shared his government’s vision for Australia’s cities – one which he said represented a “big step change” from the approach of previous federal governments.
“Historically, federal governments have basically been givers of grants for urban infrastructure – they’ve been ATMs in effect. And they have asked very little in return. They have not been partners in the development of our cities. Now that has to change. Our approach has been very different,” he said.
The Prime Minister promised that, in the future, when federal governments make a “substantial investment” they would partner with the state and city government on a ‘City Deal’ type arrangement.
Turnbull says while Canberra will not tell cities how to operate, “what we can do is be at the table to agree on what we want to achieve”.
The following day, Assistant Minister for Cities Angus Taylor reiterated the Prime Minister’s comment, saying that the government did not want to be an “automatic teller machine for states and local governments.”
Instead, “we want to be investors,” Taylor said – and the vehicle to do this would be the UK-tested ‘City Deals’ model.
A City Deal is a contract between a region and the federal government to deliver infrastructure and to tie incentive payments to economic benchmarks.
The Property Council’s chief executive Ken Morrison remains cautiously optimistic about the Turnbull Government’s approach.
“City Deals are a real innovation in policy. They break down the barriers between different levels of government and make all of them partners in economic growth,” Morrison explains.
“City Deals need to be about ‘value creation’, policies that unlock our cities, not new ways to tax them more.”
The approach is also finding favour in Queensland where the State Government has committed to partner with the Property Council and the South East Queensland Council of Mayors to fund a study into next generation models of infrastructure funding.
The research project, to be undertaken by KPMG, will investigate how the UK City Deals model could work in one of Australia’s fastest growing regions.
Chris Mountford, the Property Council’s executive director in Queensland, says the first stage will develop a strategic business case for City Deals in a local context, as well as a definitive ‘proof of concept’.
“The investigation and delivery of innovative funding models will be the only way forward if Queensland is going to deliver the infrastructure the state needs, not just what we can currently afford,” Mountford says.
Caption: Prime Minister Malcolm Turnbull at the Green Cities conference with Steve McCann of Lendlease, Romilly Madew of GBCA and Ken Morrison.