Australia’s metropolitan governance challenge

Posted October 01, 2018

  • Federal Government
SGS Economics and Planning Melbourne Transport

The famed livability of Australia’s major cities is under challenge domestically due to worsening traffic congestion, inadequate public transport services, diminished housing affordability and delayed provision of essential facilities and services in growing suburban communities.

Some commentators attribute this erosion of livability to rapid population growth, noting that Australian cities, notably Melbourne and Sydney, are amongst the fastest growing metropolises in the rich world. Some of these commentators are calling for a cut in Australia’s relatively high intake of international migrants to enable the cities to ‘catch their breath’ and mitigate infrastructure backlogs.

SGS Economics and Planning Marcus Spiller Affordable Housing

This paper argues that the foregoing narrative represents a misdiagnosis of, and an ill-advised solution to, the growing pains of Australian cities. Rather, the problem lies in systemic governance failure which has impeded the ability of Australian communities to harness the nation’s elite economic standing to provide the facilities and services required by growing cities - SGS Principal and Partner Dr Marcus Spiller.

This governance failure is characterised by limits to the democratic legitimacy of State Governments in transacting urban policy, foregone opportunities to efficiently fund infrastructure from land taxes and the development process and severe vertical fiscal imbalance which has cultivated generally unhelpful involvement by the Australian federal government in cities.

The paper further argues that the creation of genuine metropolitan governments is essential if Australian cities are to realise their full potential. A reform pathway is discussed whereby the Commonwealth (the Australian Federal Government) would facilitate the formation of metropolitan governments by sharing the national tax dividend from better cities with the States.

SGS Principal and Partner Marcus Spiller presented this paper to the Greater China - Australia Dialogue on Public Administration 2018 Workshop in Shanghai, September 2018.

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