By contrast, 13.5 kilometres north of Perth sits an internal mall anchored by national department stores chains.  The quality of retail offer draws residents from throughout the northern sub-regions of the City with carparks overflowing every Thursday night and Saturday. Public transport services are intermittent, with busses running down a major road past the centre.  A public library and small community centre are the only truly public spaces, with a service station being the only node activated outside of retail operating hours.

Both of these centres are very successful at meeting the needs of specific users, but few would argue that they perform the same function.  Yet within Perth’s Strategic Growth Plan – Directions 2031 and Beyond, their position in the defined hierarchy of centres is the same.

This inconsistency exists in many urban planning strategies in Australia (plus many regional strategies) due to both an ongoing belief that defining a hierarchy of centres is necessary, and the wide range of factors that are considered by planning agencies in establishing such a hierarchy.  These include:

• Encouraging a spatially logical, and equitable network of centres
• Recognising the historic (and potentially political) importance of a centre
• Recognising the current physical characteristics of centres including major activity drivers and infrastructure
• Foreshadowing places of priority public sector investment
• Foreshadowing desired changes in the scale and function of centres

By taking into account all of these considerations, the resulting classification of centres can be, at best, illogical and, at worst, counterproductive to the development of a productive, vibrant and resilient urban system.  This is due to the hierarchy not answering some fundamental questions, including:

• Are we assessing current performance or anticipating future performance?
• Are we placating local interests or are we planning for the best possible outcome for our City?
• Does a spatial distribution that looks balanced on a map equate to the best possible outcome?
• Do all public sector investment agencies agree and support the priority areas identified in the hierarchy?

A far more effective tool for strategic activity centre decision-making is to move from the assignment of a hierarchy based upon a wide range of factors, to assignment of an activity centre typology based upon a single area of focus – the current function of a centre.

Pracsys defines activity centre typology as the manner in which centre in relates to, and engages with its users (residents, workers, visitors and enterprises).  Based upon the activity resulting from the interaction of users it is possible to classify commercial activity centres as one of four types (Figure 1).

Figure 1. Activity Centre Typology

This allows for the comparison of ‘apples with apples’ in a system where scale takes a back seat to function.  It also provides a more constructive language to use in setting a vision for a centre, i.e. remain performing the same function, or evolve over time into a different typology.

Finally, defining the typology of an activity centre provides a more useful, common language for different disciplines to utilise in defining and designing targeted interventions.  Pracsys draws upon an extensive benchmarking database that can help inform engineers (civil, traffic and structural), urban designers and planners as to the drivers that trigger a change in typology.  These are broken down into:

• Commercial drivers
• Accessibility drivers
• Social drivers; and
• Amenity/environmental drivers

Based upon an understanding of these, ultimate plans and designs can be developed to accommodate appropriate solutions, and encourage the desired change in function.

Focusing on how activity centres function provides a simplified framework in which City development can be planned.  It places the onus on justification of performance and constructive planning rather than loose, subjective and often political arguments for attraction of infrastructure investment, to focus decision-makers on initiatives that work to support the interaction between a centre and its existing and future users.

http://www.economist.com/node/21549956

Chinese living standards (i.e. wages) have been increasing rapidly since reform and opening up in the late 1970s, and the shortage of cheap labour is a continuation of that trend. It once seemed that there was a limitless supply of impoverished workers, eager to come in from the countryside to get a relatively high-paying factory job in one of the country’s industrial centres. Nowadays, the factories are finding it harder to attract and retain workers, and wages are soaring. It is most definitely a good news story for the Chinese people, as the benefits of the country’s industrialisation are filtering down. The downside, however, is increasing business costs in the country’s export-driven manufacturing sector. As well as wages, there have also been increases in land prices (presumably as a result of strong economic growth), and increased environmental and safety regulations. Once again, it means a better life for ordinary people in China, but also higher costs for the country’s manufacturers.

There has been speculation for some time that manufacturing of basic goods might move on from China, to other, lower-wage developing countries. This would be nothing new, as during last century, such manufacturing moved from the United States to Japan, then to Korea and Taiwan, and then on to China. Vietnam, India, Indonesia and the Philippines have all been seen as potentially the next base for low-cost manufacturing. Presumably Chinese labour costs will eventually reach the point where Chinese factories no longer have a comparative advantage in bulk, low value-added manufacturing. After all, the United States once had a world-beating manufacturing industry producing and exporting these sorts of goods.

However, the article suggests that there are still advantages to manufacturing in China that offset the effects of rising labour costs. It gives the example of PPC, a company that makes connectors for TVs, and who considered moving to Vietnam. However, it found that Vietnam lacked reliable suppliers of specialist services that it needed for its production process – such as nickel plating, heat treatment and special stamping. Ultimately, PPC did not decide to move out of China, and instead started automating its plant in Shanghai.

This is a classic example of the benefits of an industry cluster, or at least an agglomeration. An agglomeration is when a number of producers in the same industry co-locate to share common infrastructure and suppliers. They are then able to access specialist services along their supply chain readily, and at lower cost. This is a form of economies of scale. In addition to these agglomeration benefits, a cluster involves a high level of interaction and linkage between firms at various stages of the supply chain. There is joint research and innovation, and major projects are undertaken jointly. Skilled employees tend to circulate among the firms in the cluster as well, resulting in highly skilled workers and knowledge flowing freely between firms.

So, does China have manufacturing clusters? The intuitive answer would be “yes”. There is considerable manufacturing activity co-located in a handful of manufacturing zones: the Pearl River Delta in the south, including the Shenzhen Special Economic Zone; Bohai Bay in the north, around Beijing; and about half way between, the Yang Zi River Delta, around Shanghai. At the very least, these are substantial manufacturing agglomerations. These agglomerations (or perhaps they are clusters), confer benefits on manufacturers located there that outweigh the increasing wage costs. Illustrating this point, The Economist quotes a GE vice chairman as saying that labour costs are often 30% lower in countries other than China, but that other problems outweigh this cost difference, such as the lack of a reliable supply chain.

In addition to the benefits of co-location/clustering, it is quite possible that China’s manufacturing industry will become either a) more capital intensive (as was the case with PPC’s plant in Shanghai); and/or b) more innovative. Either of these would increase Chinese labour productivity, and so further offset the cost of rising wages. Incidentally, this is the sort of response to rising labour costs predicted by classical economic theory.

So, what does all this mean for China’s manufacturing competitors in Australia? Will low value-added manufacturing become more viable in this country as the supply of cheap labour in Asia decreases? The short answer is probably not. Australia doesn’t have the population to support a global scale industrial agglomeration with domestic demand alone, and the idea of manufacturing and shipping large quantities of clothing or vehicles from Melbourne or Adelaide to… anywhere, really, seems unrealistic.

Beyond reigniting the debate on the merits and feasibility of a light rail system, the proposal has also sparked perhaps what is a more interesting debate…

“Assuming that Perth should have a light rail system, how should it be staged?”

Before any really constructive debate can take place, it is necessary to identify what economic, social and environmental metropolitan planning objectives a light rail system would serve. This in turn will inform the criteria for identifying and prioritising routes.

One of the primary objectives of Directions 2031 is to achieve a more accessible city through a more balanced distribution of population, dwellings and employment across the metropolitan area. This involves:

• Improving the employment self sufficiency of the outer sub-regions
• Increasing distribution of new residents and dwellings to the central sub-region
• Improving the efficiency and effectiveness of public transport

Like many of the numerous studies and academic reports on a future light rail system for Perth, the above proposal focuses on the latter two objectives, to the exclusion of the first, and arguably the most significant for the development of a sustainable city.

Beyond the Central Sub-region, Perth’s major activity centres are ineffective in delivering both the quantity and quality of employment growth required to support residential settlement patterns. A major feature of many of these centres is their large footprints, with nodes of activity within them only loosely connected e.g. Joondalup, Rockingham and Mandurah. By providing strong linkages between nodes and acting as an impetus for the activation of land between nodes, light rail can be considered economic development infrastructure. While it won’t be the panacea to the imbalanced distribution of employment in Perth, it has the potential to be used to develop the value proposition outer metropolitan activity centres need to attract high quality employment. Integrated public transport solutions for outer sub-regional Activity Centres can potentially:

• Promote greater intensity of activity
• Encourage diversification of activity
• Assist centres to develop economies based upon local comparative advantage

There is an enormous opportunity for a light rail system in Perth however without understanding the role that it can play in the achievement of metropolitan planning objectives, we risk developing a system that simply perpetuates the status quo.

One advantage of developing the high-speed rails is the provision of an alternative and/or cheaper alternative mode of transport. It is suggested that it will have lower passenger costs as compared to travelling by automobiles or air. Take for example, the Sydney – Melbourne air route. It is the fourth busiest in the world, and the flight time is about 1.5 hours, with a distance of approximately 881km. According to Google Map, this takes approximately 10 hours if travelling by the cheaper alternative to air travel – the car. However, with the high-speed rails operating at an average speed ranging from 250km to 350km per hour, it would only take about 3 to 4 hours to travel between Sydney and Melbourne. This compares to the total amount of time taken to travel to/ from airport, check in and time to collect luggage if travelling by air, as it would work out to be almost the same.

The high-speed rails are also less environmentally damaging. With the world becoming more aware of global warming and the potential cost of carbon footprint to Australia, high-speed rails offer the alternative solution to automobile and air travel. It is found that the electrically-powered high speed rail reduces pollutant and greenhouse gas emission, and will save on carbon emission costs.

Other advantages of high speed rail over automobile and air travel include lower accident rates than automobile travel. Job creations are amongst the many benefits that high speed rails have to offer. For further information, a thorough study was done by the Cooperative Research Centre (CRC) for Rail Innovation.

Pracsys has done a lot of financial analysis to determine whether various sustainable technologies, such as recycled water, are viable compared with current methods, such as traditional scheme water, in the developments of the future.

There is no doubt we need to embrace alternative technology; the problem is the capital costs associated with these technologies are often very high.  Add the fact that current technology is so heavily subsidised and the comparative cost really starts to add up – and the stakes get higher.

In making investment decision does the developer risk short and medium returns in the knowledge that cashflows will be positive in the future? Alternatively do we sit on our hands, watch and wait and hope that such technologies become relatively more affordable once others pave the way and economies of scale are achieved?

No-one wants to be the first to jump, the one to pay a premium for taking that leap of faith. Particularly given that we’re talking about the basics that everyone should have access to – water, power, transport. If the end user doesnt percieve the full value of these technologies then the developer will need to subsidise the price to make it attractive to market.

If Government, for example, were to embrace sustainable alternatives, who would pay for it? Would it put the basics beyond the reach of lower income residents?

There are some advantages in being the first to take the leap, to set benchmarks for others to follow. Water is a scare resource in Perth; it’s a fact that we need a more sustainable method of water supply.

The trick is to strike the right balance between the  risk and the benefits, both economic and environmental, of such action. And this means Governments making some hard decisions, working to sway public opinion on issues such as recycled water, and ultimately being convinced that they should take a chance, even if the figures don’t stack up in the here and now.

It is not simply a case of “build it and they will come”. If it is not planned correctly from the beginning, a development can quickly become a costly white elephant.

Pracsys is undertaking the economic analysis of a site next to the Mandurah train station which Landcorp would like to buy and develop over the next 10 years.

A transit orientated development (TOD) is directly impacted by transport, but there are broader issues than the traffic passing through. The fact that people are coming and going from an area does not necessarily make it a viable concern.

Planners need to determine what the site can bear in terms of residential development and, therefore, commercial and retail.

 The relationship between retail and residential development is relatively straightforward: the former is generally driven by the latter. Less clear is the relationship between residential and commercial space.

It is pointless to park a lot of commercial floor space without understanding what it would mean to the immediate area and surrounding region. How much commercial floor space is currently available, what is it used for and how functional is it?

The viability of a new precinct needs to be examined within this context. What would the development add to the area? Who will be attracted to it, what can it support and what will drive demand? How would it be connected to other precincts in the region?

There must be a specific strategy in place to ensure the viability of any development before a sod is turned. The number one lesson is: Don’t develop in isolation.

Firstly, how do they know what to spend it on?  

Put another way, how should Australia’s Government sector determine what economic projects are worth spending scarce public resources on?  Australia’s economy is functionally in recession, and market signals are very weak.  What sort of governance framework should be used to guide the identification and prioritisation of economic projects, programs and policies? 

Secondly, how do they acquire the capacity to spend it? 

While the Government sector is stepping into the breach left by the retreating corporate sector, there are limits to how much deficit spending can be sustained by Australia’s economy, and there are organisational limits to Governments’ capacity to actually spend it.  What might this mean for the structuring of government portfolios?

The State Governments of Queensland and New South Wales adopted similar sorts of tactics when they announced their budgets for 2009/2010.

Firstly, the States decided to spend more.  Their gross borrowings will grow to $18bn and $15bn respectively in 2009/10 to fund infrastructure and capital works of $18bn each (see Economics and Market Research).  Transport, utilities, health, education and housing are the big winners.

Secondly, the States are consolidating their civil services into “super departments” (13 each in NSW and QLD), to achieve operational efficiencies and integration and to ramp up their capacity to deliver the promised infrastructure programs. 

Queensland has gone one step further, bringing 13 departments under six clusters.  Thus the Departments of Infrastructure & Planning, Transport & Main Roads, and Employment, Economic Development and Innovation cluster under the Employment & Economic Development “mega-portfolio”. 

The challenge in NSW and QLD is to refocus the strategic and operational efforts of multiple departments towards a unified end. This is a particularly tricky task in the complex and multi-dimensional field of economic development. 

Planning WA recently released Directions 2031, a new strategy for land use planning, for public comment.

It takes up where the previous government’s Network City left off. A pivotal moment in planning, the 2004 policy produced a range of aspirational ideas for the city’s future. Directions 2031 moves into the area of more measurable goals, although it falls short on detail.

Perth is rapidly heading down the path of endless sprawl, but Directions outlines the need to curb this in favour of a connected city with much better public transport. It proposes increasing the average density per hectare in greenfields from 10 dwellings to 15. Critically, it proposes that 47 percent of this urban growth be infill development – more than 120,000 new dwellings in the inner and middle suburbs.

This is not unrealistic but it will require fundamental changes in the way we think, live and plan for the future. 

Perth is not prepared to embrace density; quite the opposite in some inner suburbs where it is vehemently opposed. It won’t be easy to convince a population used to the quarter acre block model to downsize.

The building and development industry will also have to adapt – look at smaller blocks, more town houses, better use of public open space.

So, too, utilities and other key infrastructure. Will, for example, the water authority be able to cope with extra demand in the infill, assuming there is even room for such developments? 

There are ways to steer development in a certain direction, with the strategy proposing limits on land supply in certain areas and changing density zoning in others.

But Directions 2031 leaves a lot to the market at a time when the market is not really ready for change. This is a step in the right direction but does it go far enough? We need more detail about how the government proposes to fulfill its aims and reach its targets. If it wants Perth to head in a different direction, it is going to require more than a little political will.

One of the biggest problems in determining the answer is a lack of data – and the lack of a consistent and transparent way of measuring available data to make evidence-based decisions. 

Without standardisation it is difficult to compare, benchmark or integrate information. People just aren’t speaking the same language or are reluctant to learn how to communicate.

A conference in Melbourne recently, State of the Cities: Unlocking the Data, highlighted how critical good research data is to the success of cities. Data is not merely facts and figures, used properly it can enable improvements in three key areas:

• Productivity
• Liveability
• Sustainability

But what is being done to ensure that an evidence-based system for collecting, compiling and sharing essential data is adopted across the board?

Government departments have in the past been opposed to giving out information, stating privacy issues or concerns that the data would be used inaccurately.

However, the more information is publicly accessible the greater the opportunity to be efficient and proactive; the greater the opportunity for collaboration and innovation. 

This is particularly important for long-term sustainability. To get an accurate and holistic picture of the sustainability of everything from housing and employment to the environment (and how they interact), you need a better understanding of indicators, how they should be measured and compared.

It is all very well, for example, to proclaim Perth or Melbourne as one of the world’s most liveable cities, but why is it so? Such statements regularly grab the headlines but there is little if any discussion of how the researchers reached that conclusion. What measures did they use? What does the data really say? Is it an accurate assessment?

There are many different people and bodies gathering data but no real central governance of the issue that is so critical to our future. Infrastructure Australia, the Federal Government’s new national approach to the development and implementation of infrastructure, is a step in the right direction. Funding for the Cooperative Research Centre for Spatial Information (CRC-SI) will be another important step. 

But it is vital that everyone comes on board, and understands the value of quality, timely data – to make good decisions and to measure society’s progress.

Things might be a little more civilised in 21st century Western Australia, but outsiders can still wreak havoc if townsfolk are not prepared for the onslaught of change. 

Broome is a town at the crossroads after the State Government announced James Price Point, 60km north of the tourist hotspot, as the site for the Kimberley liquefied natural gas (LNG) hub. 

As big guns go, this is right up there — a multi-billion dollar driver industry that will have a profound impact on the communities of the Kimberley, and Broome in particular. Just how these communities emerge when the construction stage dust has settled depends on the planning for the arrival. Town planners and policy makers cannot be reactive, they must be proactive.

There is no doubt that with such a major piece of infrastructure on its doorstep Broome will experience a massive demographic change. The nature of the project attracts a far more diverse workforce than is currently the case. The industry and employment base  of the town will expand substantial, as will the resident population with the incoming people likely to expect more particular lifestyle options and amenity levels than has been the case up to this point.

Some town planners tend to think, ‘well, have we got enough land to cater for this influx of workers’, and once they’ve sorted where they’re going to put them, and whether the utilities are adequate, they move on. 

But land is only part of the equation. If a town like Broome is to profit from the arrival of the big guns it is essential to adopt an integrated planning strategy that considers everything from the changing employment base and residential requirements to environmental sustainability.

The scale of this project will position Broome as the major centre of the Kimberley  well into the future, but only if the planning is done properly. For lessons in how not to do it, planners, governments and community leaders need only look a little further south, to the Pilbara town of Karratha.Karratha is dominated by the resources sector, indeed it is the reason for its existence, but the general planning for the town across the board has tended to be reactive and ad hoc. One of the negative results of this approach is the fact that the tourism sector in Karratha is virtually non-existent, a situation that will take a long time to rectify.

And Broome has more to lose. It has a strong tourism base, the impact of an overheated local economy could be catastrophic long term. The planning strategy must consider how it can retain what is good about the town without losing sight of the need for change. This doesn’t just happen, it has to be planned.

Whatever the shelf life of this driver industry, planning must not only factor in how to accommodate the changes it will bring over the duration, but how the community will cope once it’s gone. When the big guns move on to the next town, as they inevitably do, those left behind want to be able to celebrate the changes they brought, not mourn what might have been.