Friday, March 27, 2015

City Limits: Why Australia's Cities Are Broken and How We Can Fix Them, by Jane-Frances Kelly and Paul Donegan

Staff Review by Chris Saliba

A new book from the Grattan Institute, City Limits expertly shows how the Australian economy is wreaking havoc on the work-life balance of its citizens. This is essential reading for those interested in issues to do with transport, housing affordability and the modern labour market.  

The two authors of this book, Jane-Frances Kelly and Paul Donegan, come from the non-aligned policy think tank, the Grattan Institute. Both have extensive experience working in government and in policy research. City Limits examines the changing nature of the Australian economy and the pressure it is putting on Australians’ work-life balance.

In the post-war period, the manufacturing industry in Australia really took off. And so did the private car. Both worked together to bolster productivity and the economy: workers could drive quickly and reliably to their places of employment. As the car opened up the outer suburbs and made them feasible, a happy piece of synergy was that plenty of manufacturing jobs were created in these suburbs as well. It was possible for a lot of people to work quite close to home, aided by the car. Fast forward to 2015 and the economy has radically changed. Manufacturing is going off shore. In its place is an intensification in ‘knowledge jobs’ - work to do with information technology. These jobs are not in the suburbs, but are clustering around the major cities. As the authors note, even tech giants like Google and Yahoo don’t want their employees to work from home, but prefer them to work face-to-face. This is the best way to generate ideas and creativity, and it’s why firms are setting up shop in city centres.

The only problem is that more people are moving further out due to the high cost of inner city housing. Worse still, traffic congestion is horrific. People are spending many hours every week simply stuck in traffic. As one of the couples interviewed for the book remark, their life is ‘crazy’ because of all the travel. The result is a poor work-life balance, where family members don’t get to spend much time together. Jobs in these outer suburbs are scarce, due to the dynamics outlined above, and pay less than their city counterparts.

One of the main concerns City Limits has is the growing inequality the housing market and traffic congestion is causing. Those who don’t live close to jobs are losing out, either taking lower paying  jobs in their own areas or spending ridiculous amounts of time travelling to city centres. Those already cashed up and established in the inner city enjoy tax concessions that are simply unfair.

While City Limits paints a striking portrait of the Australian economy as it functions (or dysfunctions: the case studies show people living pretty depressing lives), the book doesn’t agitate for any radical kind of change. It more argues for tinkering around the edges: reform certain taxes, increase housing in the middle and inner ring suburbs, implement congestion taxes and use computer technology to create more efficient traffic flows. All good ideas, but somehow limited. In truth, the problems of congestion and high house prices are probably intractable. We’ve spent 50 years building roads and encouraging car use; economic growth is based on increasing the population. Politicians have little control over a globalised economy, hence job creation will increasingly be centred around cities. Ironically, the authors even note that traffic congestion, one of the main problems that the book confronts, is a sign of a healthy economy. There seems no real way out of this maze.

City Limits is an excellent study that presents a clear picture of the pressures facing our major cities, and why these problems have developed. The authors offer policy ideas that our politicians should surely look seriously at - and maybe improve on.

City Limits: Why Australia's Cities Are Broken and How We Can Fix Them, by Jane-Frances Kelly and Paul Donegan. Published by Melbourne University Press. ISBN: 9780522868005 RRP: $32.99

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