A 'Just' City

This is my speech delivered at the Committee for Economic Development of Australia's Sydney 2030 event on Friday, November 25.

Thank you to the Committee for the opportunity to speak with you today.

It has been a momentous week for planning in our city, with the release of the Greater Sydney Commission’s first plans.

Congratulations to the Chief Commissioner, who is here today, and the entire Greater Sydney Commission who have done a terrific job in developing the district plans, which I think will have many long-term benefits in helping Sydney to grow equitably for generations to come.

Let me also acknowledge the incredible inheritance we have been provided by the indigenous people of our country. As we plan for our cities, we have an obligation in keeping with the principles of sustainability - of which indigenous Australian’s are great custodians - that we take what we need in such a way as to leave capacity for future generations to meet their needs as well. 

Everyone in this room will be familiar with the economic achievements of the Baird Government – but just in case you’re not – let me quickly remind you of our recent success in the areas of the economy, infrastructure and jobs.

Sydney is in the midst of the biggest infrastructure boom in many generations - over $73 billion dollars of investment over the next 4 years.

This year NSW will spend more on transport infrastructure than the capital budgets for both New York and London and more on roads and rail than all other Australian states combined. 

Our government has created the fastest-growing economy in the country, growing 50 per cent faster than the average of all the other states

Across NSW, 330,900 new jobs were created since 2011. 

Our unemployment rate is 4.9 per cent compared to the national rate of 5.6 per cent. 

We have just under a third of Australia’s population but we’re creating half of the nation’s jobs.

For every two jobs being created in Victoria, there are three new jobs in NSW. 

We have a triple-A credit rating, better than those of the US, France, the UK, South Korea and New Zealand.

A large part of this success is due to Western Sydney, which is itself the third largest economy in Australia.

Since 2011 we’ve created almost 100,000 jobs in Western Sydney – that’s more than in the whole of Queensland, South Australia and Tasmania combined.  

So, we’re doing pretty well when we look at the quantitative economic indicators.

But there’s no point just displaying our economic success on the mantelpiece. I say this not to diminish what we have achieved by making the tough decisions to fix our budget position.

We need to dig a little deeper and consider what the real point of having a strong economy is. How does a strong economy actually improve the quality of people’s lives? Why is it great to have new homes, jobs, roads and rail? What do those things really do for us as a community?

Today I want to take this discussion that next step further to consider the desired effects of our economic strength.

For me, the ultimate goal of a strong economy is to create a city with equality of opportunity. When a strong economy is used properly, there’s an interdependent relationship between the economy, the environment, jobs and justice.

Through a strong economy, the government can invest in infrastructure like public transport, roads, parks, hospitals, schools and public facilities. 

With more people employed we have a more prosperous and peaceful society which therefore contributes, in turn, to a healthy economy. 

A fundamental player in this cycle – one that translates economic prosperity into infrastructure and shapes the urban environment – is the planning system.

Sydney is a sprawling metropolis – a growing city of 5 million people and 12,000 square kilometres.

As Planning Minister, I have a keen interest in the role planning plays in creating a just city.

Equality of opportunity is important in any community and any city, but as Australia’s largest and only global city, it’s perhaps particularly important in Sydney.

In a city of this size, with an extra two million people expected over the next twenty years, good decisions made about the built environment can further the cause of justice while bad ones can exacerbate injustice and lead to increased crime, inequality and social disenfranchisement. 

What do I mean by a ‘just city’? 

I mean a city that’s safe for all members of its community.

I mean one whose every feature – buildings, streets, transport systems, parks, institutions – is accessible for everyone.

I mean a city that’s functional, affordable, joyful, beautiful and inhabited by harmonious yet diverse communities.

Such a city is brought about when people have access to employment and education; when transport is accessible, functional and gets people quickly and efficiently from place to place; when public spaces are designed with safety and community in mind; when there’s housing to suit different needs and life-stages; when everyone can enjoy open space.

The benefits of these factors are exponential. For example, they foster community engagement and connection, which in turn increase safety.

You can’t plan a cohesive and just community in a piecemeal, siloed way.

The transport has to relate to the commercial centres which have to relate to the residential areas and so on.

It is also crucial for the planning system to have community buy-in so people have a sense of ownership and co-creation when it comes to their urban environments. 

A ‘just’ city is brought about by all people having access to information; by the planning system being transparent and easily understood by everyone.

This is why one of the things I’ve focused on is simplifying the planning system and improving the ways it encourages community participation.

Many of you would know I’ve often called the planning system ‘clunky and complex’ and for someone who has studied the planning rules and regulations for twenty years - even I find it difficult to navigate at times. 

While it may seem simplistic, a fundamental part of enabling effective public participation in the system is making it easier to understand and simpler.

This will always be challenging, but we have made changes to governance and engagement processes to significantly improve stakeholder confidence and trust in the planning system – with more to do.

To achieve the above we need a planning system that is simple and nimble. 

Community participation in planning processes makes decision-makers accountable, building trust and cooperation in the decision-making process.

It improves planning outcomes by gathering more information from diverse perspectives to inform decisions. It helps identify local concerns, values and priorities and can lead to practical solutions.

All the goodwill in the world however, won’t help us deliver the right environment for a just city without a strong economy.

It’s great to have a government and a planning system that encourage a ‘just’ urban environment by planning public transport, schools, hospitals and quality public spaces, but if we can’t put our money where our mouth is we can’t fulfil our commitments to our communities.

So you can see how all the government’s economic successes I outlined at the beginning of this speech – its record on jobs, infrastructure and the economy – give this government the opportunity to make Sydney a truly ‘just’, resilient and liveable city. 

While I’m talking about the idea of a ‘just’ city, the elephant in the room when it comes to Sydney is, of course, housing affordability. 

While it is not the role of government to define what the great Australian dream is for individuals, we have an economic system that is based on the promotion of home ownership. Our retirement welfare system is predicated on debt-free home ownership in retirement in order to avoid poverty in old-age. 

We have a growing population and an estimated backlog of undersupply close to 100,000 homes. Of course an obvious way to address that is by creating more houses.

Let me start by acknowledging the importance of housing supply. Supply is a fundamental driver and lever for increasing affordability.

Our progress in meeting that shortfall in supply and delivering more homes for Sydney’s booming population is unprecedented.

Just last weekend we announced that over the next five years, our pipeline of new dwellings is expected to reach 185,000 – or 37,000 new homes a year.

Record approvals are flowing through to record commencements and completions, with more than 65,000 commencements in the twelve months to June.

NSW is leading the country with 75,000 homes under construction.

Overall there is a record $20 billion pipeline of residential construction underway.

As Planning Minister, I can make it easier and easier to build more homes. That's exactly what we've done and will continue to do.

The federal government has recently implored the states to focus on increasing supply and focus on transit oriented development. That’s exactly what we’re doing – with more homes than ever before.

It is now time for the federal government to articulate how they will partner with the states in order to use the levers available to them – to help more Australian families into stable and secure housing.

As important as supply is, housing affordability is not a simple supply and demand equation.

The premise that the more you supply of a product, it therefore increases the competition and reduces prices is great in theory but in relation to the housing market it is much more complex. 

With the price of borrowing at record lows, and generous federal tax incentives that encourage investment in property, Sydney is a prime target for investors. 

While we welcome investment in NSW, our primary focus is making sure Sydney families have the opportunity to enter the housing market. 

While we will continue to do everything in our power to make it easier for quality new homes to be built in the right locations, supply alone won’t solve Sydney’s housing affordability problem.

It’s time for a real debate about the policies, outside of supply, that governments at all levels can do to help provide greater opportunity for people to buy homes.

For the states to be asked to reasonably consider the abolition of inefficient state taxes, the federal government needs to outline how they will enable the states to raise the necessary revenue to run schools and hospitals for a booming population.

Earlier this year the NSW Government was ready, willing and able to have a discussion about tax. Disappointingly our leadership on this issue fell victim to the Canberra culture that promotes opposition over consensus.

It’s a major concern to me as Planning Minister of the most populous state, but also as a dad to three young children, of increasing reports that without parental support the dream of home ownership is becoming harder and harder to obtain.

That's not a situation a government of any persuasion should be proud to oversee. 

We should not be content to live in a society where it's easy for one person to reduce their taxable contribution to schools, hospitals and other critical government services - through generous federal tax exemptions and the ownership of multiple properties - while a generation of working Australians find it increasingly difficult to buy one property to call home.

In June this year the Reserve Bank said “policy should not unduly advantage property investors at the expense of prospective owner-occupiers.” The RBA went on to say that they “believe there is a case for reviewing negative gearing.” 

Governments at all levels, from national to local, need to make sure their housing policies focus on equality of opportunity.

Surely the focus of the tax system should be directed towards the type of housing we need. Why should you get a tax deduction on the ownership of a multi-million dollar holiday home that does nothing to improve supply where it’s needed? We should promote investment in the type of housing that is needed by the burgeoning populations in cities like Sydney. 

We know that the federal US Government tax credit scheme for affordable housing has delivered millions of new affordable rental dwellings and continues to receive bi-partisan support.

The former federal government’s decision to end new funding for the National Rental Affordability Scheme leaves a vacancy for private and institutional investors who were willing to contribute to affordable rental housing as an asset class.

If the purpose of the tax system is truly to promote the wider public good, then encouraging affordable rental housing fits clearly into this category and we should be encouraging private and institutional investment.

The community is not here to serve the economy, but we quite rightly focus on a strong economy to serve the community.

Therefore how do we encourage private and institutional investment in affordable housing for ordinary Australians on low incomes? We need to consider, for one example, Defence Housing Australia, funnelling private investment into a particular form of housing that's needed by a particular segment of the community, successfully for many years.

So ladies and gentlemen, in conclusion, the role of government is to express the will of the people and create a city that provides opportunity for everybody.

City planning can provide that opportunity. I have every confidence that this government’s vision for Sydney will help bring us closer to that ideal.

As we recognise the principle of inter-generational equity we must also acknowledge the shared challenge of intra-generational equity. 

We need a city that is just. 

We need a city that provides opportunity for everybody – not just the privileged few like us who are enjoying this lunch today.

Urban growth can be equated with human progress. We don’t need to leave anybody behind as we grow. Density can be done in a way that contributes to opportunity and a better environment in which to live. 

Conversations about development and change should not be about winners and losers. Instead if we grow in a conscious and thoughtful way we can ensure that growth is coupled with an improvement in our shared quality of life.

If we do not tangibly demonstrate to communities that growth can contribute to an improved quality of life – then we will ultimately fail in our mission.

That’s what inspires the NSW government. Providing the same opportunities for people across all of our state and all of this great city – from the east to the west.

People and their needs should be at the heart of economic policy.

We don’t get to choose if the economy is more important than social or environmental outcomes.

The city is its people – and we are the city. The story of Sydney is simply not finished.

We have a shared responsibility to work together to deliver a great outcome for all of our citizens of this great city and this great state, and it's my vision and the vision of the NSW Government as well, that we deliver a just city for everyone.