The Turnbull government’s new Smart Cities Plan sets the goal of delivering more innovative, productive, connected, economically thriving and healthy cities.
Central to this plan is the delivery of the City Deals approach to urban planning and funding infrastructure, which is currently in use in the United Kingdom. It calls on governments, industries and communities to develop collective visions for growth and commit to the actions, investments, programs and governance needed to implement them.
Included in the plan is a central financing unit, with an initial $50 million of funding, designed to connect infrastructure projects with interested parties in the private sector. The focus is on long-term deals, and how the new infrastructure could bring returns for investors.
“In 20 to 30 years, where do we want our regions to be? Everyone has to be ‘signed up’ to that, so we can steer progress towards that,” KPMG partner Paul Low said.
While the Smart Cities Plan has strengths, without strong leadership and support for a shared vision by federal, state and local government, implementation could be challenging. Building consensus, setting out a long-term plan and gaining agreement is not simple.
While the framework and potential access to funds has been provided, it’s now up to the cities and regions to work together to make it happen.
Global stage, competing cities
Big and small cities compete for businesses, labour, investment and more — not just from neighbouring cities, but from around the world. Young high achievers are willing to move for optimal opportunities, so as the population in Australia ages it will be vital to attract people to ensure urban and regional centres renew their productive workforces.
The goal of Smart Cities is to identify and develop the necessary infrastructure to enhance long-term economic potential. With better transport, streamlined importing and exporting, efficient employment locations and digital connectivity, cities should be easier to live in, do business with and be more competitive.
“All of those things are about creating competitive city regions, so that our cities such as Brisbane, Sydney and Melbourne, and regional cities like Canberra, Geelong or Newcastle, can compete on the global stage, because the traditional economic boundaries and our labour supply are less restrictive,” Low said.
A City Deal should extend beyond a “one-dimensional solution”, such as providing more houses, to a more comprehensive view of how the houses link to other aspects, such as business growth or transport options.
“It’s about how you connect outcome areas, and how we deepen the way we think of our economy and measure economic contribution,” Low said.
Who needs to lead the vision?
A “smart city” needs alignment and collaboration between all levels of government, community leaders, interest groups and the private sector, all working towards a shared view of how services and infrastructure are planned and delivered to communities. They need to agree on a vision for how a region is going to develop across a whole range of areas — from economic to social, environmental, financial, skills and education, digital and transport connectivity, housing affordability and more.
“Federal government is important, but state and local governments have to own it,” Low said. “It needs to be driven on a program basis at state and local level, while the federal government can assess programs on their merits with a focus on payment by results. It has to have very strong political leadership at an individual and collective level to enable the critical conversations to agree on the trade-offs between different investment pathways.”“This alignment creates opportunity to leverage infrastructure investments more effectively …”
Low says agreement on the “key economic corridors and precincts” for a city is essential, aligning Commonwealth, state and local interests.
“This alignment creates opportunity to leverage infrastructure investments more effectively through more directed and cohesive investments,” he said.
KPMG director Said Hirsh says there is a myth that delivering City Deals in Australia could be complex due to the three tiers of government. However, he says the Australian set-up is no more complex than Britain or the United States. It is the rules that govern the relationships between the different tiers of government that differ, which means the structure of the deals needs to accommodate these differences.
What needs to happen is to preserve the underlying principles of strong strategic vision, meaningful local risk-taking, robust prioritisation, outcome-based funding and fit-for-purpose delivery structures. These principles, Hirsh argues, can be adapted to an Australian context.
Keeping a Smart City vision on track
Once a shared vision is agreed upon, the next step is to investigate horizontal integration — which is when you start to look at the levers to pull, Low says.
“For example,” he explained, “labour programs, land, economic opportunities and employment opportunities — and which corridors to create access to with new infrastructure.”
Low and Said advise these seven steps for better outcomes:
- Establishing geographic, demographic and thematic priorities: areas and activities are not isolated, so interactions between initiatives may support or hinder the ability to implement a new vision.
- Hold wide and repeated consultations on the plan: confer with the appropriate people frequently, to help people feel “ownership” of the vision.
- Give key decision-makers and stakeholders a say: for example, engage property owners, transport owners and the city council.
- Know where the money is coming from: have a clear, realistic plan and cost out the early stages.
- Focus on feasible projects and actions: a good vision will help make the conversion from the theoretical to reality easier.
- Once a plan is launched, stick to it for several years: it can be tempting to reinvent plans and policies, however focus on implementation.
- Review progress regularly and adapt your course as needed: sticking to a plan does not mean it is rigid — select key performance indicators that make it possible to monitor the inputs, outputs and impacts.
Early days, but change is coming
Low says it could be 12 months to two years before the fruits of the Smart Cities Plan start to show. While projects could be announced sooner, all the behind-the-scenes work will take time. He says some groundwork is already underway in Queensland, with the south-east region looking at ways to enhance their economies and competitiveness. Low says the challenge in Queensland is bringing together the needs of both rural and urban communities across a vast space.
“How do you bring all of those people on to the same page? How do you measure economic opportunity, so everyone can see the role of their community, no matter what environment they are living in? So between the metropolitan and rural environment, there may at times be some tension in the conversation,” he said.“How do you bring all of those people on to the same page?”
The Queensland government and the SEQ Council of Mayors have commenced this journey, with the first phase of a SEQ City Deal being explored between the two levels of government. SEQ has had a long-standing regional planning model. This has been underpinned by a state commitment to regional planning and local governments with the scale, capability and capacity to work with the state to drive new, innovative thinking.
The SEQ City Deal has the potential to leverage a credible regional partnership. It could provide confidence to the federal government that it has a worthy candidate to invest funds towards agreed shared outcomes.
While the Smart Cities Plan has been announced, strong leadership is needed to turn the proposal into reality. According to Said: “Everything has to come from the local political leadership — the stakeholders have to sit in a room at some point and sign the deal.”
Low says City Deals can’t be done without consideration of the broader impact. “In Australia, people get really excited about big projects … but there has to be a programmatic view on how individual projects relate to drive better outcomes across the spectrum of aspiration,” he said.
To find out more, read the KPMG and Property Council of Australia report Introducing UK City Deals: A smart approach to supercharging economic growth and productivity