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Urbecon is published by SGS Economics & Planning Pty Ltd. Material included in Urbecon is compiled from project work and research undertaken by SGS. Occasional guest writers may also be published in the newsletter, with separate acknowledgement of authorship. Urbecon is edited by Marketing Communications. If you would like more information about any of the articles in Urbecon, or to send any comment, please email us on [email protected]. Recent back issues of Urbecon can be found on the SGS Website at www.sgsep.com.au.

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Page 4 Improving the Development EquationPage 5 The Spatiality of the Global Economic CrisisPage 8 SGS News

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Volume 2 2009SGS in the Media

Outer Suburbs Buck Unemployment

The Age Newspaper’s Ben Schneider has reported on SGS analysis showing that “Melbourne’s more affluent inner suburbs, not its outer suburban mortgage belt, have been responsible for the rise in unemployment at the end of last year with professional jobs being shed in high numbers...” Using Department of Education, Employment and Workplace Relations data, SGS’s analysis found that increases in unemployment had occurred almost exclusively in inner Melbourne.

The full article in The Age can be accessed from the SGS website:

http://www.sgsep.com.au/news-outer-suburbs-buck-unemployment

Public Land @ 5 Million – Governance and Fiscal Reform

Careful management and investment in public land and the public domain are critical to successful consolidation in Australia’s metropolitan cities. In a presentation to the conference Public Land@5 million, SGS Director Marcus Spiller argued that to achieve the desired levels of densification in Melbourne, a significant proportion of the metropolitan area will need to overturn the traditional British anti-urbanism embedded in our suburban city structure, and embrace public space as the central rather than residual element. He said different governance/institutional arrangements, reconsideration of the commercialisation, corporatisation and privatisation models for managing urban infrastructure, and reform of the ways of raising the funds for investment in an enriched public domain were also needed.

The full article in The Age and the conference paper can be accessed from the SGS website:

http://www.sgsep.com.au/news-public-land-5-million

SGS Team Update

SGS Associate Director Praveen K Thakur, (MCom (Econ), Grad Dip (Econ), BSc (Hons) (Economics & Management)) SGS Associate Director, has relocated to Perth. Praveen, who has been with SGS since 2003, is an economist specialising in macroeconomic modelling, economic development, social cost benefit analysis and feasibility analysis.

Rejoining SGS, and also in the Perth team, is James Mathews. James’ is qualified in Economics and Business Management, and has a particular interest in economic development and policy work. James rejoins SGS after a year working as a director for AIESEC Australia (a youth leadership and international exchange organisation).

Mark Dutfield (B Resource Econ (Hons), M Econ (Econometrics)) has joined the Melbourne office. Mark is an economist with experience in policy and market analysis and environmental economics.

Yuan Deng (B Com (Actuarial Studies and Accounting)) has joined the Sydney office. Yuan specialises in statistical analysis and modelling. He is currently completing a M. Actuarial Studies at UNSW.

Marcus Spiller, a founding Director of SGS, has been awarded a PhD in the School of Global Studies, Social Science and Planning at RMIT University in Melbourne. Marcus’s thesis investigated “How Advanced Business Services drive the creation and adoption of new ideas in contemporary economies. The power of these Services to catalyse innovation was shown to depend on trust based relationships and social interaction. Advanced Business Services therefore work best with proximate clients. These findings point to the potential for a ‘core and periphery’ pattern of economic development to emerge across Australia, caused by the growing concentration of knowledge based services into Sydney and Melbourne”.

SGS News

Many of the urban policy agendas for our cities and towns focus on improving infrastructure, adapting to climate change, ensuring housing affordability and creating jobs. Just as important (and often overlooked) is the influence that the design of our cities and towns has on the health of its residents, especially in addressing the range of diseases exacerbated by physical inactivity.

Whilst many third world countries grapple with health problems from overcrowding, contaminated water and poor sanitation, one of Australia’s biggest health challenges (like many other western countries), is trying to get its citizens out of cars, off the couch and engaging in more physical activity. We are now so conditioned to using our cars for trips outside our homes that around 10% of our car trips could be substituted for a 10 minute walk (BITRE 2002).

The prevalence of overweight and obesity in Australia has been steadily increasing over the past 30 years and if the current trend continues unabated over the next 20 years, it is estimated that nearly three-quarters of the Australian population will be overweight or obese by 2025 (National Preventative Taskforce 2008).

Even though the recommended guidelines suggest 30 minutes of physical activity is required every day (Department of Health and Ageing 2005), around 9 million Australians do not do enough physical activity on a daily basis. This level of inactivity doubles the risk of cardiovascular disease, Type 2 diabetes and obesity, and increases the risk of breast and bowel cancer, depression and anxiety (Medibank Private 2007).

There is a high price for Australians to pay for this inactive lifestyle. Physical inactivity costs the healthcare system around $1.5 billion a year (Medibank Private 2007).

Addressing obesity and health issues resulting from physical inactivity is a complex issue and requires multiple responses including from the food industry, medical profession, marketing and education campaigns (Figure 1). However, research now shows that this problem can also be tackled by improving the way that cities and towns are designed.

Figure 1. Range of interventions required to address obesity

Source: Professor Louise Baur, Discipline of Paediatrics and Child Health, University of Sydney

Role of the Built Environment

In 2007, the Federal Government established a high level taskforce to provide recommendations for how the nation can alleviate significant health problems and thereby reduce the health budget.

The National Preventative Health Taskforce in presenting its initial findings acknowledged the role urban planning plays in addressing obesity and has highlighted the need to:

Reshape urban environments towards healthy options through consistent town planning and building design that encourage greater levels of physical activity and through appropriate infrastructure investments (for example, for walking, cycling, food supply, sport and recreation).

Enabling Active Lifestyles Through Urban Planning

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Australian and international research has also demonstrated that urban form influences physical activity and mental health (Gebel et al 2005) by a range of measures including:

• Encouraging walking through networks of pathways connecting destinations within neighbourhoods

• Providing public transport to support walking to and from stops

• Getting school children walking to school by providing a safe and convenient routes to schools

• Supporting cyclists with bikeways, lockers, showers and signage

• Supporting social connections by having safe and well designed public places for use by all ages of people

• Having mixed use areas with shorter travel distances between places of interest and activities to encourage walking

• Having appropriate recreation and community facilities for use by the community

Many of these ideas for urban form and supporting facilities are good planning principles that have been around for a long time but are now being looked at as a health imperative. These issues bring a new set of players into the urban planning sphere including health workers, medical practitioners and recreation planners, who increasingly want to understand the role of urban planning and how to influence good health outcomes.

When these health outcomes are considered in planning decisions, there are other benefits to the community and environment such as the reduction of greenhouse gas emissions from reduced car use; increased social connectivity by encouraging walking; and better use of public facilities such as pathways and parks.

Current Initiatives

There are now many examples showcasing the greater awareness of the link between health and the built environment as well as professions and organisations working together to encourage physical activity through urban planning initiatives. Urban planners’ knowledge of their role in addressing health issues needs improving, though planners who have been in the profession the longest have the best understanding of these issues (PIA 2002). The following are examples of Australian initiatives promoting active lifestyles through urban planning.

Advocacy and Collaboration

A unique partnership between the Australian Local Government Association, National Heart Foundation and the Planning Institute of Australia with funding from the Federal Department of Health and Ageing will deliver ‘Healthy Spaces and Places’ a national guide for planners to encourage physical activity. This is the first time that a national initiative around this issue has been undertaken and it will provide a solid national policy framework.

Some State and Territory Governments have established high level committees that can coordinate effective responses to active living across a range of agencies such as health, local government, transport, planning, infrastructure and housing. The NSW Premiers Council for Active Living is a good example of an effective state level coordinating committee.

Research

A significant project known as the RESIDE (RESIDential Environments) study is being led by the School of Population Health, University of Western Australia. Approximately 5,000 people who are building new homes are participating in the study and surveyed as their new homes are being built, one year after they move into their homes, and two years after that. Geographical Information Systems are being used to examine people’s access to public open space, shops, public transport, footpaths, street layout and other aspects of the built environment.

Participants are surveyed before they move into their new homes to distinguish whether people select neighbourhoods that cater for their lifestyle and health behaviours, or whether lifestyle and health behaviours are shaped by the environment in which people live.

Early results show that people walked more for recreation than transport and a large number of people walked outside their immediate neighbourhood. The final results of the study will be available for local and state government policy makers, planners and developers.

Education and Training

Urban planning courses are starting to integrate health concepts into the teaching curriculum. For example, the University of New South Wales (Faculty of the Built Environment) teaches a Healthy City course to planning students. In this course links are forged between planning students and community health workers in the Faculty of Medicine to enable greater appreciation of the roles each profession plays in providing better health outcomes in the community.

The Planning Institute of Australia (Victoria Division) conducts workshops for practitioners on Healthy Cities and Communities. These workshops explore how cities and communities can increasingly promote health especially through different disciplines and organisations working collaboratively.

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• Corporatisation and privatisation of Government Business Enterprises

• Tariff cuts across a range of industry sectors

• Improved labour market flexibility

• Introduction of the Good & Services Tax

Figure 2. SEIFA Advantage / Disadvantage Bottom Quintile (2006)

Source: SGS Economics & Planning

On the face of it, these reforms served Australia well. Australia has returned consistently lower levels of unemployment compared to the UK over the past 3 years (Table 1). The cities exposed to the mining boom such as Brisbane and Perth had particular low unemployment rates (Table 2).

Table 1. Comparison of Unemployment Rates (Seasonally Adjusted)

AUS USA UK EUR

Jun 06 4.8 4.6 5.4 8.4

Jun 07 4.7 4.6 5.4 7.4

Jun 08 4.3 5.6 5.5 7.4

Dec 08 4.5 7.2 6.3 8.2

Jan 09 4.8 7.6 6.3 8.4

Feb 09 5.2 8.1 6.5 8.7

Mar 09 5.7 8.5 6.8 8.9

Source: Australian Bureau of Statistics, Office of National Statistics, Bureau of Labour Statistics, Trading Economics.

Over the last 18 months Australia has also clearly outperformed the US, where the economy has been shrinking at a considerable rate. When compared to the other major capital cities, Sydney has experienced a significant jump in employment since June 2008 (up from 4.2% to 6.4%). This reflects to some degree Sydney’s exposure to the international financial markets. However, the past 3 months have seen a noticeable increase in the unemployment rate across all Australian cities.


SYD MEL BRI ADE PER HOB CAN

Jun 06 4.9 4.7 4.1 4.7 3.4 5.2 2.6

Jun 07 4.4 4.9 4.3 5.3 2.9 5.1 2.7

Jun 08 4.2 4.6 3.0 4.8 2.8 3.9 2.4

Dec 08 5.4 4.4 3.5 6.1 3.1 4.1 2.8

Jan 09 5.5 4.9 3.8 6.4 3.5 4.5 2.6

Feb 09 5.8 5.4 4.1 6.3 4.1 4.5 2.1

Mar 09 6.4 5.6 4.3 7.0 5.0 5.2 3.7


One scenario for considering the impact of the global economic crisis on Australia and its communities is that this apparent resilience will continue to work in Australia’s favour, so that the Australia might resume a steady growth path in relatively short order. This view would assume that large reductions in interest rates and current stimulatory packages announced by the State and Commonwealth will be sufficient to see the nation through what might be seen as something of a ‘cyclical’ downturn.

Another scenario involves a more structural change in commence and trade which would move the economy away from debt driven household consumption. Regions will be affected in different ways, depending on their inherent capacity to participate in value chains. Scenarios involving increased government intervention in the economy, including a much stronger emphasis on developing infrastructure to drive productivity, are also being suggested by various economic commentators.

All of these possible scenarios need to be taken into account in assessing the impact of the global economic slowdown on the distribution of advantage and disadvantage across Australia’s capital cities.

References1. Baum, S 2006, ‘Socio-Economic Disadvantage in Post Fordist

Cities’, in State of Australian Cities National Conference, Brisbane, 30 November - 2 December 2005, Griffith University, Brisbane

2. Spiller, M 2003, ‘Urban Agglomeration of Advanced Business Services in Australia – Some Policy Implications’ in State of Australian Cities National Conference, Sydney, 3 - 5 December 2003, University of Western Sydney, Sydney

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Policy

The National Heart Foundation’s publication Healthy by Design is another resource; it provides information for planners on how to incorporate health into planning decisions. Whilst this is a Victorian based document it can be broadly applied to the strategic planning and development assessment area.

Practice

Some of the larger developers have a good track record in ensuring that master planned communities support walking, cycling, public transport and social interaction. Larger scale developments are able to take a more holistic approach to health issues. Smaller, piecemeal or infill development proposals can benefit from having a strong public sector planning framework to ensure success in creating healthy environments.

Places that demonstrate good practice have usually been the result of effective collaboration between governments and the private sector as well as involving a range of professions (such as transport planners, urban designers, social planners and engineers).

Where to Now?

Urban planning is only one of the areas that can be used to support an increase in physical activity in the population — but an area that requires more understanding and policy emphasis. This will also require urban planners to form new partnerships and understandings away from the more traditional areas of urban planning.

If the early recommendations of the National Preventative Health Task Force are to be taken seriously, there will need to be a greater emphasis on health outcomes in a range of urban planning initiatives including funding, education, policies and legislation.

For example one of Infrastructure Australia’s criteria for assessing suitable national infrastructure projects is the ‘expectation of long term public benefits, taking into account economic, environmental and social aspects of the project.’ This criterion could be translated to other program funding requirements and could go further to specifically seek health outcomes.

A more concerted response to address health issues through urban planning will require multiple strategies:

• New partnerships — collaboration across sectors and breaking down traditional silos

• Increased awareness of health issues by policy makers in the urban planning field

• Greater policy and legislative support for initiatives

• Requiring health outcomes to be achieved such as for eligibility for infrastructure funding

• Greater understanding of success measures and cost/benefits

• Promotion of success stories

The importance of the built environment in providing facilities and places that encourage physical activities is well established. The next stage is to ensure health is firmly on the agenda of urban planners in their planning practice and policy work.

References

1. Baur, L 2007, ‘Obesity: Understanding the “Millennium Disease”’ in 2007 ACHSE National Congress: Health Innovation Reforms or Raffles?, Melbourne, 1-3 August 2007, Australian College of Health Service Executives

2. Bureau of Transport and Regional Economics 2002, Greenhouse Policy Options for Transport (2002), Department of Infrastructure, Transport, Regional Development and Local Government, Canberra, viewed 23 March, 2009, http://www.bitre.gov.au/info.aspx?ResourceId=92&NodeId=22

3. Department of Health and Ageing 2005, An Active Way to Better Health: National Physical Activity Guidelines for Adults, Department of Health and Ageing, Canberra, viewed 25 March, 2009, http://www.health.gov.au/internet/main/publishing.nsf/Content/BC3101B1FF200CA4CA256F9700154958/$File/adults_phys.pdf

4. Gebel, K, King, L, Bauman, A, Vita, P, Gill, T, Rigby, A and Capon, A, 2005, Creating healthy environments: A review of links between the physical environment, physical activity and obesity, Sydney: NSW Health Department and NSW Centre for Overweight and Obesity, Sydney, viewed 23 March, 2009, http://www.coo.health.usyd.edu.au/pdf/2005_creating_healthy_environments.pdf

5. Infrastructure Australia 2008, Priority List – Minimum Information Requirements, Infrastructure Australia, Canberra, viewed 23 March, 2009, http://www.infrastructureaustralia.gov.au/index.aspx

6. Medibank Private 2007, The cost of physical inactivity: What is the lack of participation in physical activity costing Australia, Medibank Private, Melbourne, viewed on 23 March, 2009, http://www.medibank.com.au/Client/Documents/Pdfs/pyhsical_inactivity.pdf

7. National Heart Foundation 2004, Healthy by Design, National Heart Foundation, 2004, viewed 24 March, 2009, Melbourne, http://www.heartfoundation.org.au/Professional_Information/Lifestyle_risk/Physical_Activity/Active_by_Design/Pages/default.aspx

8. National Preventative Health Taskforce 2008, Australia: The Healthiest Country by 2020, Attorney-General’s Department, Canberra, viewed 23 March, 2009, http://www.preventativehealth.org.au/internet/preventativehealth/publishing.nsf/Content/A06C2FCF439ECDA1CA2574DD0081E40C/$File/discussion-28oct.pdf

9. Planning Institute of Australia 2002, Planning for Health Benchmark Survey: An Evaluation of Planner Awareness of Health Issues, Planning Institute of Australia, Melbourne, viewed 23 March, 2009, http://planning.org.au/vic/health/benchmark.pdf

10. Planning Institute of Australia 2009, Healthy Places and Spaces, viewed 24 March, 2009, http://www.planning.org.au/index.php?option=content&task=view&id=668

11. School of Population and Health 2009, University of Western Australia, Perth, viewed 25 March, 2009, http://www.sph.uwa.edu.au/research/cbeh/projects/reside

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geography of advantage and disadvantage, intensified during the years of strong employment growth from 2001 to early 2008.

During this and previous periods of growth, ‘the rising tide may have lifted many boats’ but also concealed an accelerating drift towards social polarisation and greater divergence between communities in terms of economic resilience.

The structural shifts in manufacturing (which is still a mainstay of the Australian economy representing 10% of economic activity), provide a case study of how post-industrial economic transformation over the past two decades. For example, it has left different parts of metropolitan Melbourne in vastly different positions as they grapple with the current global economic crisis.

Value Chain Unbundling and Community Vulnerability

‘Value chain unbundling’, where the ‘thinking’ parts of the manufacturing process (or any other value creation process for that matter), become spatially and corporately separated from the ‘making’ parts (production and distribution) is an abiding feature of Australia’s economic transformation in recent decades (Spiller 2003).

The unbundling of value chains (and the apparently tight concentration of Advanced Business Services into inner city regions of the major Australian metropolises), has created urban economies with sharply differentiated core and suburban economies. Under this view, the familiar ‘production’ aspects of manufacturing remain anchored in the suburbs, but this aspect of the value chain is characterised by lower skill jobs and is more vulnerable to out-sourcing to low wage competitor regions.

The higher income jobs generated by the production economy have tended to concentrate in the CBD or the inner urban regions of the major cities. They are less exposed to outsourcing and technology shifts. More importantly, they have greater potential for expansion by winning services contracts with interstate and international clients. They are no longer tightly tied to the local production base as they can tap into manufacturing production chains all over the world.

This is a scenario of ‘two tone’ metropolitan economies emerging in Australia, featuring globally connected and ‘permanently’ prosperous cores, surrounded by ‘client’ suburban economies which until recently enjoyed a consumption driven prosperity of their own, but whose inherent fragility is now being exposed.

Access to Opportunity

The vulnerability of these ‘client’ suburban and regional economies stems, in part, from their constrained adaptability. Current transportation networks effectively lock them out of many opportunities and reduce their capacity to generate new businesses via agglomeration synergies.

This can be demonstrated using Melbourne as an example. In Figure 1; the central and inner eastern suburbs of Melbourne — which tend to host the ‘thinking’ part of the value chain — are privileged in terms of access to jobs, skills and services (remembering that one person’s job is another’s service). Meanwhile, many of Melbourne’s most at risk groups (as measured by the ABS’s Socio-Economic Indexes for Areas (SEIFA)), are effectively trapped in inaccessible locations (Figure 2). Although not presented here, their predicament is even worse when their access to opportunity is viewed in terms of public transport travel.

Figure 1. Percentage of Total Jobs Accessible by Car within 30 minutes (Peak Hour)


Macroeconomic Resilience

Until the advent of the crisis, many commentators saw Australia has holding a privileged or ‘lucky’ position, because the nation’s commodity exports were closely linked to the ongoing economic and city building boom of China and other developing countries. Australia was also seen to have built a relatively flexible and adaptable economy with a diversifying export base in services (e.g. education) and high value added manufacturing.

National Competition Policy, ushered in with the release of the Hilmer Report in the early 1980’s, sparked an aggressive process of micro-economic reform which delivered deregulated markets and, it is claimed, more nimble enterprise in the commercial world. Some of the major microeconomic reforms milestones over the past 25 years include:

• Campbell Inquiry into Deregulation of Australian Financial System

• Floating of the Australian dollar

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A central element of the Victorian Government’s metropolitan planning policy (Melbourne 2030 and Melbourne @ 5 Million) is to focus more housing development within the established urban footprint. This will provide more people with better access to jobs, services and transport, and make better use of existing investment in infrastructure and community services.

A major challenge in realising more housing in established areas relates to difficulties developers face in making apartment projects ‘stack up’ (i.e. financially feasible) in suburban areas.

However, this is a challenge which is not just limited to the Victorian Government. This article explores some of the challenges and selected policy initiatives that could be considered to improve the development equation.

Some Challenges

Improving the development equation for higher density housing projects (say 20 dwellings per hectare plus) in established urban areas requires an understanding of the various income, cost and risk considerations involved in various stages of the development process.

Based on research and experience, a number of topics appear worthy of review, as follows:

• Lack of market evidence in unproven or emerging housing market areas

• Lack of ‘large’ sites to accommodate developments of scale

• Uncertainty over obtaining development approvals and within a reasonable timeframe

• Other cost considerations, such as mandatory parking codes

These topics are explored in more detail below, along with some possible solutions.

Market Evidence

A key risk in delivering non-traditional housing products can be lack of market evidence (such as sale, rental and price data) upon which development decisions can be based. Most developers will avoid being ‘pioneers’ and rely on evidence before pursuing a development opportunity.

The absence of market evidence can in part be overcome where a pioneer initiates the early stages of development by offering off the plan pre-sales. This approach is generally used in inner city apartment markets where the purchaser is reasonably comfortable with the likely end product but is driven more by the location offered by the dwelling. Pre-sales may not be effective in suburban settings where a latent buyer market is unwilling to commit to purchase before the finished product can be inspected.

Possible strategies:

• Deliver demonstration projects to reveal market evidence

• Government land or development agencies are usually cited as being able to undertake such work but have limited resources. Another approach would be for public agencies to offer some form of subsidy to private sector developers in order to ‘kick start’ a property market

Site Availability

‘Larger’ developers generally seek development sites of scale so that projects can be master-planned, with external stakeholder involvement being minimised. A key issue in established urban areas is the relative scarcity of large development sites being available for such developers to enter the market, even in notionally ‘ripe for development’ transport corridors and centres. Site availability is also an issue for medium to low scale developers.

The effort and risk in acquiring fragmented land holdings can be significant and preclude various development concepts from progressing.


• Preserve existing sites of scale from subdivision and development unless a complying development form is achieved. This may involve compensation payments to be made to land holders

• Enable private sector developers to compulsorily acquire sites in target areas subject to meeting defined criteria

• Public sector (including their land or development agencies) to assemble and de-risk sites and offer these to the development market

Development Approvals Risk

Another key risk area for developers is in obtaining development approvals in the first instance and in the timing of obtaining the approvals. Uncertainty of these factors requires developers to add significant risk margins in their development appraisals, which can eliminate projects from consideration when alternative and potentially more stable and predictable investment opportunities are considered.

This is an issue in areas where zones are generic and do not have clear links to strategic policy objectives.


• Establish clear and unambiguous development frameworks and controls for target intensification areas

• Remove third party appeal rights for complying development forms

Improving the Development Equation

4

A Focus on Higher Density Housing Developments in Established Urban Areas

Other Cost Considerations

Various other cost considerations play a role in establishing the viability of a project. These include:

• Construction and finance costs

• Taxes and charges

• Costs associated with development regulations such as parking ratios and environmental ratings

Whilst there are many issues here, parking is often cited as an issue in many jurisdictions and is potentially one of the most readily modifiable cost elements in planning systems. Furthermore, scrutiny of parking requirements (and costs) appears reasonable in the context of facilitating higher density housing in public transport rich locations.

Delivering parking for higher density housing projects can mean that below ground and/or decked parking solutions are required. The cost of this can be considerable and contribute to projects being unviable, especially in weaker market areas.

Possible strategy:

• Reduce or perhaps eliminate parking requirements in target intensification areas. One approach could be to apply a maximum parking rate, as opposed to a minimum. This would allow developers respond to market demands when setting parking plans, as opposed to following a mandatory code

Conclusion

Various options are available to public sector stakeholders in facilitating higher density housing development in target

intensification areas. The ‘do nothing’ option is to wait and hope the demand side for the housing product in question grows faster than the cost side, thus delivering viability for more projects.

However, this review has identified some opportunities to be more proactive. Possible actions include:

• Designate target centres and transport corridors for higher density development, and establish clear and unambiguous planning systems to achieve that end

• Remove third party appeal rights for complying developments in the target zones

• Deliver or support private sector delivery of demonstration projects in the target zones, to deliver market evidence

• Prohibit subdivision or development of large scale sites in the target intensification areas unless a minimum density and built form outcome in achieved (this may require a compensation scheme for existing landholders)

• Promote site assembly in the target areas; including enactment of private sector compulsorily acquisition powers in target intensification areas, subject to meeting defined criteria

• Modify parking codes to utilise maximum parking rates, as opposed to minimum rates, in the target areas. This will enable developers to respond to market needs

Other considerations are no doubt worthy of testing. The above list provides a preliminary list of possible actions that should be subject to more detailed evaluation so that metropolitan policy implementation is accelerated.

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The Spatiality of the Global Economic CrisisThe current economic crisis is having a tumultuous and far reaching impact on the global economy. However, it is taking place in tandem with a structural change which has already profoundly reshaped the landscape of advantage and disadvantage in Australia. Griffith University’s, Scott Baum, account of the extensive research literature on Post-Fordist economic adjustment highlights three drivers; transformations in the division of labour; the slow dismantling of the welfare state; and a demographic transition characterised by rapid growth in single person households (Baum 2006).

Building on these theoretical constructs, Baum’s cluster analysis of Census data relating to socio-economic change, industry characteristics, occupational characteristics, human capital, income, wealth and a range of other indicators; painted a vivid picture of the geography of advantage and disadvantage in Australia. Unfortunately, his analysis did not extend beyond the peri-urban metro regions. Nevertheless, he identified a clear typology of social stratification, which included;

• Wealth belt localities (e.g. Manly, Walkerville, Cottesloe, Pullenvale)

• Middle class suburbia (e.g. Strathfield, The Gap, Prospect, Essendon)

• Gentrifying/population change advantaged localities (e.g. Randwick, Brunswick, Toowong, Subiaco)

• Working-class-battler disadvantaged localities (e.g. Blacktown, Berwick, Tea Tree Gully, Acacia Ridge)

• Battling family/mortgage stress disadvantaged localities (e.g. Swan, Bankstown, Maribyrnong, Redcliffe)

• Old economy extremely disadvantaged localities (e.g. Broadmeadows, Caboolture, Playford, Kwinana)

• Peri-urban disadvantaged localities (e.g. Wingecarribee, Mornington Peninsula, Mandurah, Victor Harbor)

Structural Change and the Geography of Advantage and Disadvantage

Baum’s analysis related to shifts evident between the 1996 and 2001 Censuses. If anything, the structural economic adjustments which gave rise to the then observed new



Policy

The National Heart Foundation’s publication Healthy by Design is another resource; it provides information for planners on how to incorporate health into planning decisions. Whilst this is a Victorian based document it can be broadly applied to the strategic planning and development assessment area.

Practice

Some of the larger developers have a good track record in ensuring that master planned communities support walking, cycling, public transport and social interaction. Larger scale developments are able to take a more holistic approach to health issues. Smaller, piecemeal or infill development proposals can benefit from having a strong public sector planning framework to ensure success in creating healthy environments.

Places that demonstrate good practice have usually been the result of effective collaboration between governments and the private sector as well as involving a range of professions (such as transport planners, urban designers, social planners and engineers).

Where to Now?

Urban planning is only one of the areas that can be used to support an increase in physical activity in the population — but an area that requires more understanding and policy emphasis. This will also require urban planners to form new partnerships and understandings away from the more traditional areas of urban planning.

If the early recommendations of the National Preventative Health Task Force are to be taken seriously, there will need to be a greater emphasis on health outcomes in a range of urban planning initiatives including funding, education, policies and legislation.

For example one of Infrastructure Australia’s criteria for assessing suitable national infrastructure projects is the ‘expectation of long term public benefits, taking into account economic, environmental and social aspects of the project.’ This criterion could be translated to other program funding requirements and could go further to specifically seek health outcomes.

A more concerted response to address health issues through urban planning will require multiple strategies:

• New partnerships — collaboration across sectors and breaking down traditional silos

• Increased awareness of health issues by policy makers in the urban planning field

• Greater policy and legislative support for initiatives

• Requiring health outcomes to be achieved such as for eligibility for infrastructure funding

• Greater understanding of success measures and cost/benefits

• Promotion of success stories

The importance of the built environment in providing facilities and places that encourage physical activities is well established. The next stage is to ensure health is firmly on the agenda of urban planners in their planning practice and policy work.

References

1. Baur, L 2007, ‘Obesity: Understanding the “Millennium Disease”’ in 2007 ACHSE National Congress: Health Innovation Reforms or Raffles?, Melbourne, 1-3 August 2007, Australian College of Health Service Executives

2. Bureau of Transport and Regional Economics 2002, Greenhouse Policy Options for Transport (2002), Department of Infrastructure, Transport, Regional Development and Local Government, Canberra, viewed 23 March, 2009, http://www.bitre.gov.au/info.aspx?ResourceId=92&NodeId=22

3. Department of Health and Ageing 2005, An Active Way to Better Health: National Physical Activity Guidelines for Adults, Department of Health and Ageing, Canberra, viewed 25 March, 2009, http://www.health.gov.au/internet/main/publishing.nsf/Content/BC3101B1FF200CA4CA256F9700154958/$File/adults_phys.pdf

4. Gebel, K, King, L, Bauman, A, Vita, P, Gill, T, Rigby, A and Capon, A, 2005, Creating healthy environments: A review of links between the physical environment, physical activity and obesity, Sydney: NSW Health Department and NSW Centre for Overweight and Obesity, Sydney, viewed 23 March, 2009, http://www.coo.health.usyd.edu.au/pdf/2005_creating_healthy_environments.pdf

5. Infrastructure Australia 2008, Priority List – Minimum Information Requirements, Infrastructure Australia, Canberra, viewed 23 March, 2009, http://www.infrastructureaustralia.gov.au/index.aspx

6. Medibank Private 2007, The cost of physical inactivity: What is the lack of participation in physical activity costing Australia, Medibank Private, Melbourne, viewed on 23 March, 2009, http://www.medibank.com.au/Client/Documents/Pdfs/pyhsical_inactivity.pdf

7. National Heart Foundation 2004, Healthy by Design, National Heart Foundation, 2004, viewed 24 March, 2009, Melbourne, http://www.heartfoundation.org.au/Professional_Information/Lifestyle_risk/Physical_Activity/Active_by_Design/Pages/default.aspx

8. National Preventative Health Taskforce 2008, Australia: The Healthiest Country by 2020, Attorney-General’s Department, Canberra, viewed 23 March, 2009, http://www.preventativehealth.org.au/internet/preventativehealth/publishing.nsf/Content/A06C2FCF439ECDA1CA2574DD0081E40C/$File/discussion-28oct.pdf

9. Planning Institute of Australia 2002, Planning for Health Benchmark Survey: An Evaluation of Planner Awareness of Health Issues, Planning Institute of Australia, Melbourne, viewed 23 March, 2009, http://planning.org.au/vic/health/benchmark.pdf

10. Planning Institute of Australia 2009, Healthy Places and Spaces, viewed 24 March, 2009, http://www.planning.org.au/index.php?option=content&task=view&id=668

11. School of Population and Health 2009, University of Western Australia, Perth, viewed 25 March, 2009, http://www.sph.uwa.edu.au/research/cbeh/projects/reside

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geography of advantage and disadvantage, intensified during the years of strong employment growth from 2001 to early 2008.

During this and previous periods of growth, ‘the rising tide may have lifted many boats’ but also concealed an accelerating drift towards social polarisation and greater divergence between communities in terms of economic resilience.

The structural shifts in manufacturing (which is still a mainstay of the Australian economy representing 10% of economic activity), provide a case study of how post-industrial economic transformation over the past two decades. For example, it has left different parts of metropolitan Melbourne in vastly different positions as they grapple with the current global economic crisis.

Value Chain Unbundling and Community Vulnerability

‘Value chain unbundling’, where the ‘thinking’ parts of the manufacturing process (or any other value creation process for that matter), become spatially and corporately separated from the ‘making’ parts (production and distribution) is an abiding feature of Australia’s economic transformation in recent decades (Spiller 2003).

The unbundling of value chains (and the apparently tight concentration of Advanced Business Services into inner city regions of the major Australian metropolises), has created urban economies with sharply differentiated core and suburban economies. Under this view, the familiar ‘production’ aspects of manufacturing remain anchored in the suburbs, but this aspect of the value chain is characterised by lower skill jobs and is more vulnerable to out-sourcing to low wage competitor regions.

The higher income jobs generated by the production economy have tended to concentrate in the CBD or the inner urban regions of the major cities. They are less exposed to outsourcing and technology shifts. More importantly, they have greater potential for expansion by winning services contracts with interstate and international clients. They are no longer tightly tied to the local production base as they can tap into manufacturing production chains all over the world.

This is a scenario of ‘two tone’ metropolitan economies emerging in Australia, featuring globally connected and ‘permanently’ prosperous cores, surrounded by ‘client’ suburban economies which until recently enjoyed a consumption driven prosperity of their own, but whose inherent fragility is now being exposed.

Access to Opportunity

The vulnerability of these ‘client’ suburban and regional economies stems, in part, from their constrained adaptability. Current transportation networks effectively lock them out of many opportunities and reduce their capacity to generate new businesses via agglomeration synergies.

This can be demonstrated using Melbourne as an example. In Figure 1; the central and inner eastern suburbs of Melbourne — which tend to host the ‘thinking’ part of the value chain — are privileged in terms of access to jobs, skills and services (remembering that one person’s job is another’s service). Meanwhile, many of Melbourne’s most at risk groups (as measured by the ABS’s Socio-Economic Indexes for Areas (SEIFA)), are effectively trapped in inaccessible locations (Figure 2). Although not presented here, their predicament is even worse when their access to opportunity is viewed in terms of public transport travel.

Figure 1. Percentage of Total Jobs Accessible by Car within 30 minutes (Peak Hour)


Macroeconomic Resilience

Until the advent of the crisis, many commentators saw Australia has holding a privileged or ‘lucky’ position, because the nation’s commodity exports were closely linked to the ongoing economic and city building boom of China and other developing countries. Australia was also seen to have built a relatively flexible and adaptable economy with a diversifying export base in services (e.g. education) and high value added manufacturing.

National Competition Policy, ushered in with the release of the Hilmer Report in the early 1980’s, sparked an aggressive process of micro-economic reform which delivered deregulated markets and, it is claimed, more nimble enterprise in the commercial world. Some of the major microeconomic reforms milestones over the past 25 years include:

• Campbell Inquiry into Deregulation of Australian Financial System

• Floating of the Australian dollar

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Australian and international research has also demonstrated that urban form influences physical activity and mental health (Gebel et al 2005) by a range of measures including:

• Encouraging walking through networks of pathways connecting destinations within neighbourhoods

• Providing public transport to support walking to and from stops

• Getting school children walking to school by providing a safe and convenient routes to schools

• Supporting cyclists with bikeways, lockers, showers and signage

• Supporting social connections by having safe and well designed public places for use by all ages of people

• Having mixed use areas with shorter travel distances between places of interest and activities to encourage walking

• Having appropriate recreation and community facilities for use by the community

Many of these ideas for urban form and supporting facilities are good planning principles that have been around for a long time but are now being looked at as a health imperative. These issues bring a new set of players into the urban planning sphere including health workers, medical practitioners and recreation planners, who increasingly want to understand the role of urban planning and how to influence good health outcomes.

When these health outcomes are considered in planning decisions, there are other benefits to the community and environment such as the reduction of greenhouse gas emissions from reduced car use; increased social connectivity by encouraging walking; and better use of public facilities such as pathways and parks.

Current Initiatives

There are now many examples showcasing the greater awareness of the link between health and the built environment as well as professions and organisations working together to encourage physical activity through urban planning initiatives. Urban planners’ knowledge of their role in addressing health issues needs improving, though planners who have been in the profession the longest have the best understanding of these issues (PIA 2002). The following are examples of Australian initiatives promoting active lifestyles through urban planning.

Advocacy and Collaboration

A unique partnership between the Australian Local Government Association, National Heart Foundation and the Planning Institute of Australia with funding from the Federal Department of Health and Ageing will deliver ‘Healthy Spaces and Places’ a national guide for planners to encourage physical activity. This is the first time that a national initiative around this issue has been undertaken and it will provide a solid national policy framework.

Some State and Territory Governments have established high level committees that can coordinate effective responses to active living across a range of agencies such as health, local government, transport, planning, infrastructure and housing. The NSW Premiers Council for Active Living is a good example of an effective state level coordinating committee.

Research

A significant project known as the RESIDE (RESIDential Environments) study is being led by the School of Population Health, University of Western Australia. Approximately 5,000 people who are building new homes are participating in the study and surveyed as their new homes are being built, one year after they move into their homes, and two years after that. Geographical Information Systems are being used to examine people’s access to public open space, shops, public transport, footpaths, street layout and other aspects of the built environment.

Participants are surveyed before they move into their new homes to distinguish whether people select neighbourhoods that cater for their lifestyle and health behaviours, or whether lifestyle and health behaviours are shaped by the environment in which people live.

Early results show that people walked more for recreation than transport and a large number of people walked outside their immediate neighbourhood. The final results of the study will be available for local and state government policy makers, planners and developers.

Education and Training

Urban planning courses are starting to integrate health concepts into the teaching curriculum. For example, the University of New South Wales (Faculty of the Built Environment) teaches a Healthy City course to planning students. In this course links are forged between planning students and community health workers in the Faculty of Medicine to enable greater appreciation of the roles each profession plays in providing better health outcomes in the community.

The Planning Institute of Australia (Victoria Division) conducts workshops for practitioners on Healthy Cities and Communities. These workshops explore how cities and communities can increasingly promote health especially through different disciplines and organisations working collaboratively.

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• Corporatisation and privatisation of Government Business Enterprises

• Tariff cuts across a range of industry sectors

• Improved labour market flexibility

• Introduction of the Good & Services Tax

Figure 2. SEIFA Advantage / Disadvantage Bottom Quintile (2006)


On the face of it, these reforms served Australia well. Australia has returned consistently lower levels of unemployment compared to the UK over the past 3 years (Table 1). The cities exposed to the mining boom such as Brisbane and Perth had particular low unemployment rates (Table 2).


AUS USA UK EUR

Jun 06 4.8 4.6 5.4 8.4

Jun 07 4.7 4.6 5.4 7.4

Jun 08 4.3 5.6 5.5 7.4

Dec 08 4.5 7.2 6.3 8.2

Jan 09 4.8 7.6 6.3 8.4

Feb 09 5.2 8.1 6.5 8.7

Mar 09 5.7 8.5 6.8 8.9

Source: Australian Bureau of Statistics, Office of National Statistics, Bureau of Labour Statistics, Trading Economics.

Over the last 18 months Australia has also clearly outperformed the US, where the economy has been shrinking at a considerable rate. When compared to the other major capital cities, Sydney has experienced a significant jump in employment since June 2008 (up from 4.2% to 6.4%). This reflects to some degree Sydney’s exposure to the international financial markets. However, the past 3 months have seen a noticeable increase in the unemployment rate across all Australian cities.


SYD MEL BRI ADE PER HOB CAN

Jun 06 4.9 4.7 4.1 4.7 3.4 5.2 2.6

Jun 07 4.4 4.9 4.3 5.3 2.9 5.1 2.7

Jun 08 4.2 4.6 3.0 4.8 2.8 3.9 2.4

Dec 08 5.4 4.4 3.5 6.1 3.1 4.1 2.8

Jan 09 5.5 4.9 3.8 6.4 3.5 4.5 2.6

Feb 09 5.8 5.4 4.1 6.3 4.1 4.5 2.1

Mar 09 6.4 5.6 4.3 7.0 5.0 5.2 3.7


One scenario for considering the impact of the global economic crisis on Australia and its communities is that this apparent resilience will continue to work in Australia’s favour, so that the Australia might resume a steady growth path in relatively short order. This view would assume that large reductions in interest rates and current stimulatory packages announced by the State and Commonwealth will be sufficient to see the nation through what might be seen as something of a ‘cyclical’ downturn.

Another scenario involves a more structural change in commence and trade which would move the economy away from debt driven household consumption. Regions will be affected in different ways, depending on their inherent capacity to participate in value chains. Scenarios involving increased government intervention in the economy, including a much stronger emphasis on developing infrastructure to drive productivity, are also being suggested by various economic commentators.

All of these possible scenarios need to be taken into account in assessing the impact of the global economic slowdown on the distribution of advantage and disadvantage across Australia’s capital cities.

References1. Baum, S 2006, ‘Socio-Economic Disadvantage in Post Fordist

Cities’, in State of Australian Cities National Conference, Brisbane, 30 November - 2 December 2005, Griffith University, Brisbane

2. Spiller, M 2003, ‘Urban Agglomeration of Advanced Business Services in Australia – Some Policy Implications’ in State of Australian Cities National Conference, Sydney, 3 - 5 December 2003, University of Western Sydney, Sydney

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Volume 2 2009SGS in the Media

Outer Suburbs Buck Unemployment

The Age Newspaper’s Ben Schneider has reported on SGS analysis showing that “Melbourne’s more affluent inner suburbs, not its outer suburban mortgage belt, have been responsible for the rise in unemployment at the end of last year with professional jobs being shed in high numbers...” Using Department of Education, Employment and Workplace Relations data, SGS’s analysis found that increases in unemployment had occurred almost exclusively in inner Melbourne.

The full article in The Age can be accessed from the SGS website:

http://www.sgsep.com.au/news-outer-suburbs-buck-unemployment

Public Land @ 5 Million – Governance and Fiscal Reform

Careful management and investment in public land and the public domain are critical to successful consolidation in Australia’s metropolitan cities. In a presentation to the conference Public Land@5 million, SGS Director Marcus Spiller argued that to achieve the desired levels of densification in Melbourne, a significant proportion of the metropolitan area will need to overturn the traditional British anti-urbanism embedded in our suburban city structure, and embrace public space as the central rather than residual element. He said different governance/institutional arrangements, reconsideration of the commercialisation, corporatisation and privatisation models for managing urban infrastructure, and reform of the ways of raising the funds for investment in an enriched public domain were also needed.

The full article in The Age and the conference paper can be accessed from the SGS website:

http://www.sgsep.com.au/news-public-land-5-million

SGS Team Update

SGS Associate Director Praveen K Thakur, (MCom (Econ), Grad Dip (Econ), BSc (Hons) (Economics & Management)) SGS Associate Director, has relocated to Perth. Praveen, who has been with SGS since 2003, is an economist specialising in macroeconomic modelling, economic development, social cost benefit analysis and feasibility analysis.

Rejoining SGS, and also in the Perth team, is James Mathews. James’ is qualified in Economics and Business Management, and has a particular interest in economic development and policy work. James rejoins SGS after a year working as a director for AIESEC Australia (a youth leadership and international exchange organisation).

Mark Dutfield (B Resource Econ (Hons), M Econ (Econometrics)) has joined the Melbourne office. Mark is an economist with experience in policy and market analysis and environmental economics.

Yuan Deng (B Com (Actuarial Studies and Accounting)) has joined the Sydney office. Yuan specialises in statistical analysis and modelling. He is currently completing a M. Actuarial Studies at UNSW.

Marcus Spiller, a founding Director of SGS, has been awarded a PhD in the School of Global Studies, Social Science and Planning at RMIT University in Melbourne. Marcus’s thesis investigated “How Advanced Business Services drive the creation and adoption of new ideas in contemporary economies. The power of these Services to catalyse innovation was shown to depend on trust based relationships and social interaction. Advanced Business Services therefore work best with proximate clients. These findings point to the potential for a ‘core and periphery’ pattern of economic development to emerge across Australia, caused by the growing concentration of knowledge based services into Sydney and Melbourne”.

SGS News

Many of the urban policy agendas for our cities and towns focus on improving infrastructure, adapting to climate change, ensuring housing affordability and creating jobs. Just as important (and often overlooked) is the influence that the design of our cities and towns has on the health of its residents, especially in addressing the range of diseases exacerbated by physical inactivity.

Whilst many third world countries grapple with health problems from overcrowding, contaminated water and poor sanitation, one of Australia’s biggest health challenges (like many other western countries), is trying to get its citizens out of cars, off the couch and engaging in more physical activity. We are now so conditioned to using our cars for trips outside our homes that around 10% of our car trips could be substituted for a 10 minute walk (BITRE 2002).

The prevalence of overweight and obesity in Australia has been steadily increasing over the past 30 years and if the current trend continues unabated over the next 20 years, it is estimated that nearly three-quarters of the Australian population will be overweight or obese by 2025 (National Preventative Taskforce 2008).

Even though the recommended guidelines suggest 30 minutes of physical activity is required every day (Department of Health and Ageing 2005), around 9 million Australians do not do enough physical activity on a daily basis. This level of inactivity doubles the risk of cardiovascular disease, Type 2 diabetes and obesity, and increases the risk of breast and bowel cancer, depression and anxiety (Medibank Private 2007).

There is a high price for Australians to pay for this inactive lifestyle. Physical inactivity costs the healthcare system around $1.5 billion a year (Medibank Private 2007).

Addressing obesity and health issues resulting from physical inactivity is a complex issue and requires multiple responses including from the food industry, medical profession, marketing and education campaigns (Figure 1). However, research now shows that this problem can also be tackled by improving the way that cities and towns are designed.

Figure 1. Range of interventions required to address obesity

Source: Professor Louise Baur, Discipline of Paediatrics and Child Health, University of Sydney

Role of the Built Environment

In 2007, the Federal Government established a high level taskforce to provide recommendations for how the nation can alleviate significant health problems and thereby reduce the health budget.

The National Preventative Health Taskforce in presenting its initial findings acknowledged the role urban planning plays in addressing obesity and has highlighted the need to:

Reshape urban environments towards healthy options through consistent town planning and building design that encourage greater levels of physical activity and through appropriate infrastructure investments (for example, for walking, cycling, food supply, sport and recreation).

Enabling Active Lifestyles Through Urban Planning