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Standing Committee on Infrastructure, Transport and Cities
Australian government's role in the development of cities

DODSON, Prof. Jago, Director, Centre for Urban Research, RMIT University


CHAIR: I now welcome the representative of the Centre for Urban Research at RMIT to give evidence today. Although the committee does not require you to give evidence under oath I should advise you that this hearing is a legal proceeding of the parliament and, therefore, has the same standing as proceedings of the representative houses. The giving of false or misleading evidence is a serious matter and may be regarded as a contempt of parliament. The evidence given today will be recorded by Hansard and attracts parliamentary privilege. I now invite you to make an opening statement before we proceed to discussion.

Prof. Dodson : Thank you. I am delighted to be here. It is really great to see the federal parliament investigating and reviewing the role that it has in the development of Australian cities.

I will briefly summarise the submission that was put together by members of the Centre for Urban Research based on our expert knowledge as scholars of Australian urban development and planning and people who are producing new knowledge about the way our cities are developing and evolving.

One of the really important points to start with is to recognise that Australia has recently signed up to some significant global agreements that have implications for urban development in the form of the United Nations sustainable development goals of which goal 11 commits national governments to strengthening national and regional development planning. Also, Australia has signed the new urban agenda in 2016 which has a number of elements concerning the role of national governments in the management of urbanisation and urban development, including article 89 which expects signatories to enhance the ability of governments to effectively implement national urban policies.

I have done some work for the United Nations leading up to the Habitat III conference, which you may have heard of, which occurred in Quito last year at which the new urban agenda was affirmed by the United Nations and its member states. It is clear that in a world of rapid urbanisation nation states certainly have a role in managing the development of the cities within their national borders and the UN Habitat program has been establishing a framework for understanding how national governments can develop urban policy and principles and objectives that they can work to under those policies.

I have undertaken a review of national urban policies in the Asia Pacific for UN Habitat. I did a further report summarising reviews of national urban policies across all of the six global regions and, finally, I authored a report on the current state of national urban policy around the world. Those reports are currently with UN Habitat and are being prepared for publication.

Ms BIRD: Do you have a time frame on that?

Prof. Dodson : They keep telling me a different time frame. This is the UN that we are dealing with. I am hopeful that by the end of the year they will appear.

I would say that the UN Habitat program is part of a wider program that it is developing around national urban policy. It sees that as a big priority and I think there are huge opportunities for Australia to learn from and contribute to the knowledge base that they are developing.

I should get onto the rest of the submission. We see some significant issues within urban development in Australia at the moment. Growth is perhaps one of the biggest issues that we are grappling with. Growth comes from a number of sources but principally international migration and to some extent natural increase, and this is likely to remain a defining feature of national urban development over the next few decades. Certainly, here in Melbourne the Census data that came out earlier this year demonstrates that over the past five years we have been growing at about 2.2 per cent per annum, which is a huge figure by the standards of the developed world. I have not seen recent comparative data but given the economic difficulties happening in other parts of the world I would be surprised if Melbourne was not the fastest growing city in the OECD at this point in time. Sydney is not far behind. Brisbane, Adelaide and perhaps Perth are not quite growing as fast but certainly Australia is a high urban growth country, and that is something that we need to recognise and respond to as part of our national policy system.

As part of that it is worth noting the Australian government influences city growth in a number of interlinked ways, including through the taxation system, the control of the monetary system, interest rates and so on, which shape to a great degree the rate and scale of urban development, and through national immigration policy. I think it is notable that an often unrecognised part of our response to the global financial crisis was to rapidly increase our international migration, which went up by a couple of hundred thousand over the course of 2008-2009 which led to massive new pressures on our cities. That additional demand in our economy helped manage us through the global financial crisis but it is not often commented about. We talk about the fiscal stimulus; there was a population stimulus that impacted on our cities as well.

The federal government also influences transportation systems through its control of airports, telecommunications and various locations of public services and so on, so it has a very significant influence on urban development. To take this point further, there are a number of very important stressors that are affecting Australian cities in the contemporary period. Population growth is just one of them. Responding to that population growth with adequate levels of infrastructure and public services is continuing to place pressure on urban governments, local governments and state governments and those stressors are also starting to impact on standards of living and social inclusion. Housing affordability is one big macro indicator of that but it is a general indicator for a raft of social stressors that are going on, including socioeconomic inequality. We are also seeing issues of environmental degradation continuing to roll out across our cities.

The built environment report that was part of the Australia state of environment report that came out last year, to which I was a contributor to some of the background work, argued that without improved coordination and integrated urban planning increased population pressures and poor design and planning are likely to have increasingly negative future consequences on liveability and environmental efficiency, so we are facing many of the negative effects of inadequately managing the scale of growth that we are facing.

In response, our submission suggests that the Australian government must do a number of things. One is to develop institutional capacity, to develop capability within the federal government that is able to lead a national agenda for city planning. Under the previous Labor government some capacity was developed. That was downgraded—if that is the way to put it—under the first term of the present government. When Prime Minister Turnbull decided to elevate city planning and cities policy to a higher level within his priorities there was a big scramble within the federal public service to figure out how to develop capacity in a very short time frame to respond to that new agenda setting, and I think we are still probably not at the point where we have systematic, coherent policy development across the public service, so that is something that the federal government needs to think through.

As part of that institutional capacity development, I think we need to see a national agenda setting program within the federal government. We have seen the Smart Cities policy come out, but that is more of a program than a systematic national policy. It tends to target specific interventions rather than having a systemic view of the way our cities are developing. It is very much focused on productivity and digital transformation.

As part of the capacity development, there needs to be cross-portfolio coordination to help develop that national planning agenda. I think it is appropriate that the current concentration of national policy capacity within the department of premier and cabinet is appropriate, but improved linking across environment, infrastructure and other parts of government is necessary.

This mirrors the challenges in the housing policy portfolio. I have recently produced a report for the Australian Housing and Urban Research Institute that argues that national housing stock is worth $6 trillion, yet we do not have a dedicated identified policy development capacity within our federal government to specifically focus on how we manage that huge national asset. The responsibility for housing across all the different parts of the housing system is split between Treasury and the Department of Human Services. Plus, there are other parts of housing policy that are influenced within the ATO, the Reserve Bank and so on through their responsibilities.

Mr WALLACE: Can I get you to expand on that a little. When you talk about the housing portfolio being worth $6 trillion, do you mean new housing or all existing housing and housing under construction?

Prof. Dodson : The $6 trillion is a measure that CoreLogic, RP Data or one of those agencies has estimated based on their property valuation dataset; that the total value of Australia's housing stock is around $6 trillion. That is very significant when you compare it to about $1.5 trillion in the share market and about $1.6 trillion in superannuation funds, many of which are also invested in the share market. Our housing stock is a huge national asset. We have an assistant minister. We do not have a portfolio, though, in terms of an agency with responsibility for understanding simply how that housing stock contributes to productivity and the functioning of our economy.

Mr WALLACE: We do not have an assistant minister for housing, do we?

CHAIR: He is the assistant minister to the Treasurer, but his responsibility is housing.

Prof. Dodson : But we do not have an agency that is dedicated to understanding the housing system. We had a National Housing Supply Council, but that was closed down in 2013. Although it did not have complete systematic policy responsibility, it was a dedicated element within the federal government that monitored trends in the housing market, the housing system around affordability and so on, and then provided a degree of policy advice to the government about how to respond to pressures and challenges. That is getting a bit off the track in talking specifically about housing.

I think it is questionable at this point in time, if we look at the way urban policy has developed at the national level, whether we are meeting some of the expectations that are set for us under the New Urban Agenda and the Sustainable Development Goals. Although it is not absolutely defined, the way the UN defines national urban policy is much more systematic than the fairly programmatically driven model that we are pursuing at the moment.

I think the federal government also has a role in enabling and improving the capacity of state and local governments to undertake city planning through to governmental collaboration. In this regard, I would note the issue of vertical fiscal imbalance, which is endemic to Australia's constitutional relationships and arrangements in the sense that the states have at least formal constitutional responsibility for spatial planning, urban planning within their roles, yet they have relatively weak taxation powers compared to the federal government. As I mentioned, the federal government has a significant influence on urban development through its various instruments and responsibilities, particularly immigration, for example. Plus it has most of the taxation power. There is necessarily a tension between the responsibilities of the state governments and their capacity to meet those responsibilities certainly when it comes to fiscal issues.

Finally—and this is perhaps no surprise—a research centre at a university might advocate for improved research capacity building within Australia. However, we do not currently have any systematic nationally organised mechanism for drawing on the capability, knowledge and resources of our universities. We have a substantial capability within the universities, but that is not harnessed to respond to federal government priorities in a systematic way at the moment.

Various scholars, such as myself and people who are in leadership positions within research centres, schools and faculties within Australian universities would like to see something more systematic where we can collaborate and cooperate around a national research agenda for cities. It is very fragmented at the moment and, I would argue, underresourced. That is a final point I would make. That is a bit of an opening statement. I am very happy to take your questions.

Mr WALLACE: I really enjoyed your submissions. Thank you very much for the work that you have done. At the bottom of page 6 of your submissions you state that there is no specialised agency with sufficient expertise to oversee urbanisation at a national level and support the government in developing an enduring narrative about Australian cities. We have an assistant minister for cities, Mr Paul Fletcher. Clearly, you have been talking about, in your view, that we do not have a federal housing minister—I think that is what you are saying—and that we do not have a federal cities minister as such. We have an assistant minister. Do you see benefit in rolling them up into one and having a department and a minister responsible for cities and housing?

Prof. Dodson : That is what I would prefer to see. The importance of cities to our national productivity, to the national economy, to our society and to our environment is immense, and I think that is of a scale now that we need dedicated portfolio capability and an advocate within ideally the cabinet who can represent the interests and questions around cities and work with colleagues in the government to both push an agenda within that specific portfolio frame but also to be a coordinator who pulls in the other portfolios across government, including areas like health, education and so on, to ensure that the federal government is getting the best value from the various forms of investment that it makes through other areas of policy.

For example, if you are dealing with new growth areas, schools and health services are really critical to making those areas liveable, generating high levels of social cohesion and so on, and giving people access to those services. If you do not have education and health working in concert with the planning process for those areas, you are missing out on some of the efficiencies that can be generated through that better coordination. That model on the ground needs also to be replicated and put into practice at the policy portfolio level so you are getting those conversations. I am not a public sector manager, but you could start to imagine ways of incentivising the heads of the public service to work more effectively with each other to get better coordination.

Mr WALLACE: This inquiry is split up into two segments. One is in relation to cities and the other one is in relation to the regions, how we work with our existing housing stock and our existing smaller regional cities and how we make them more liveable. As a regional member, we ought not forget our regional cousins that do not live in the big smoke. I do not want to put words in your mouth and I do not want to be accused of leading the witness, but do you see a role, if we took on board what you suggested, for a department of cities and housing? Where would the planning for our regions sit within that sort of department? Do you think that they should be left to their own devices or should they be involved in this at a national level as well?

Prof. Dodson : I think if you were going to do this systematically you would include a regional perspective into whatever you call this portfolio. We have had experience in Australia, going back probably 40 years now, to the Department of Urban and Regional Development, which was prominent in its time but it was heavily critiqued as well. I would not say that we resuscitate that model, but having a perspective on how all the parts of Australia's settlement system and patterns of settlement work together, through understanding the role of the major cities but also regional cities and regional towns I think would be very valuable, because that would then give a better sense of where the priorities are in terms of infrastructure, service delivery and all of those kinds of questions.

Mr WALLACE: Specifically in relation to transport: if we are talking about linking regional towns/cities with metropolitan cities through fast trains and so on, I would have thought that ideally you would want to have those discussions within the one department?

Prof. Dodson : Absolutely. If you are expanding the ambit to include the regional dimension, you would necessarily have to have a vision or a sense of strategic direction as to how the overall national settlement system is going to evolve. What is the role of the major cities within the national spatial economy? What is the role of different regional centres which are growing and, therefore, are likely to be needing greater levels of service and infrastructure in the future, which are not growing or perhaps declining, and how you manage the response to those as well would need to be part of this question.

I think that simply going through that exercise would be valuable just to ventilate the issues and to ask the question about how the federal government sees Australia's spatial economy developing. At the moment, there is not really a systematic view. It tends to be developed on an ad hoc basis. We saw the Northern Australia policy, for example, that came out. That is a question that is posed, but it is not really done in terms of how Northern Australia relates to South-East Queensland or South Australia, for example. It is done on a bit of an ad hoc basis. I think it would be valuable to have a perspective like that. Not myself, necessarily, but colleagues of mine have advocated for a national spatial perspective within the federal policy frame in the past.

Mr WALLACE: Thank you.

CHAIR: I could not agree more. It would appear that we have never had a plan of settlement. Is that correct?

Prof. Dodson : Not that I am aware of, no.

CHAIR: I have done a lot of research. We had posses on horseback riding out for weeks and they came back with nothing. So, with this we have had a situation where we have an incredible imbalance of settlement, two of the most expensive cities in the world, increasing congestion, and undersupply/deficit of infrastructure. In terms of the plan for growth, our previous hearing found that we should have infrastructure master planned and it should always be attached with a master plan of land use, and probably setting up a situation for a master funding plan which is value capture, so the first two components are combined to produce the maximum uplift. The idea is that we look at the prospect of infrastructure driven densification in our major urban areas, which is one area of the inquiry, and the other is a strategic decentralisation to rebalance our settlement, economy, opportunities and the things you talked about. It is important not just to provide health, education and environment but to use those as incentives; to provide the incentive to get people and businesses to move to regional areas that may have quick connectivity to major cities. Could you enlarge on that just as a concept? Are we in agreement?

Prof. Dodson : I think we are at the point where those approaches need to be considered in much greater detail and explored to see how viable they would be. Obviously continuing to concentrate more and more people within single cities like Melbourne and Sydney is producing a whole raft of stresses and challenges. There are a number of regional cities close to main metropolitan areas that have the capacity to take on further population.

I see two challenges in response to your question, which are not insurmountable, but they are challenges. One is how you get the balance of master planning and infrastructure development right between being too deterministic and saying, 'This is exactly how things are going to proceed,' where you have a 30-year kind of blueprint or master plan and that is inflexible. That is a model of planning that went out of favour in the 1980s and 1990s, having very firm, inflexible master planning processes. I think we can develop a contemporary version of that that is not too deterministic and focuses on the big picture.

Secondly, it is relatively easy to direct population to regional areas, because you can manipulate the release of land and so on. It is much harder to get employment to shift there. So, the question of the mechanisms by which you can encourage firms, businesses of different size, to move to regional locations versus locating in the city centre in the major metropolitan areas is a big question and a challenge. There certainly has not been enough research on those kinds of mechanisms and policy thinking as to how you might achieve that.

Certainly, if you have very fast connectivity and say, for example, you were connecting people from Bendigo to the city centre of Melbourne in half an hour, that might overcome the need for jobs, because the commute would be not much greater than a half-hour commute within metropolitan Melbourne, say, down towards the south-east, for example. We do not have a very good research base that could test whether that is viable as a strategy.

CHAIR: The opportunity for these regional areas to attract businesses and people to move there because there is a competitive advantage, in that housing will be much cheaper, the costs of living will be much cheaper and your daily commute, if your business is located in that area, will be much less, and on the days when you need to go into the major urban area you have a half-hour commute, would be attractive.

Prof. Dodson : Conceptually, yes. In practice, it is a bit harder than that. I should say under our current configurations. I have a PhD student, Todd Denham, who is currently investigating the experience of regional commuters from the satellite cities of Melbourne to the centre of Melbourne, principally by train, and trying to understand their experience of that. The work he and I have done together is showing that under the current travel times, which are about an hour and 20 minutes from Melbourne to Bendigo, for a commuter it does become quite wearying if you are doing it on a daily basis. Three days a week seems to be about the level at which you do not get that erosion of amenity in terms of family life, spare time, undertaking leisure activities and so on.

The question for this model that you are outlining would be, what is the quality of the transport connection? How fast can you get people from the satellite cities to the main urban centre and what strategies can you put in place to accelerate the growth, deepening and widening of the labour market within those regional towns? One of the challenges that people who move to regional cities or towns for a tree change find is that, it might be fine for a few years but then when they start to look for a promotion or a higher level as they move up their career trajectory, they often find it difficult to find those new opportunities in the regional town, because the labour market is just simply not as developed and advanced as it is in the centre of somewhere like Melbourne or the centre of Sydney with a very advanced economy and many high paid, high value jobs. Regional towns just do not offer that depth. An economic strategy around encouraging greater population growth or decanting or decentralising population to those regional towns would have to be very thoughtful about the ways that it can enable and grow the local labour markets, particularly for the higher-value jobs.

CHAIR: In that we look at community in terms of time, not distance—

Prof. Dodson : That is right.

CHAIR: —if those commutes can be reduced to 15 or 20 minutes, for instance, in the deputy chair's electorate of Wollongong, that could very easily be achieved with high-speed rail.

Prof. Dodson : That is right.

CHAIR: So, it would be a shorter commute than most regions in Sydney if you were driving—actually you do not drive, you park on the road in peak hour—it would have an advantage. But when you are looking at growing Melbourne to eight or 10 million people by 2050, if you put all of those into Melbourne or you are putting them on the outskirts of Melbourne, you are creating more and more traffic. If you could have satellite cities that provide fast rail into the hub, you are leveraging that jobs market and providing no more congestion. You are not increasing congestion and you are not increasing the house prices.

Prof. Dodson : I broadly agree with you on that point. We do not have a sufficient evidence base in terms of analysis and modelling that has been done, including people's preferences and trade-offs around relatively cheaper housing versus commuting costs, moving to a regional area versus living in perhaps the middle or outer suburbs of Melbourne. We simply have not done that research to verify what is a hypothesis, and I think a fairly compelling hypothesis. Whether that would work in practice—that could benefit from some research to understand exactly how that might work.

Certainly, improving the speed of the transport system, both the regional connections but also the metropolitan connections as well, would be very valuable. As the previous witness, Dr Marcus Spiller, pointed out for Sydney, if you have a very good public transport system that meshes together the entire labour market of Sydney in an efficient and fast way, that enables productivity. It is a similar way of thinking of that across the regional scale as well.

Ms BIRD: I would like to explore that a bit further. I am interested in your point that we do not have enough research on this space. I suggest to you that nobody moves to Wollongong for cheaper housing prices. It is very expensive, because it is land bound between an escarpment and the sea. It is very attractive coastal land. Probably the Central Coast and even up to Newcastle is experiencing a similar thing. What you are finding is people selling up in Sydney, buying slightly cheaper but still very expensive housing for lifestyle, and they are actually the high-value job workers who are making that decision, which is very different from what is happening with the west of Sydney.

I think it is an important point that you make—and I have not heard anybody make it before—that the actual experience is quite different in terms of when people move and why they move. That brings me to my question. One of the other things it looks to me like we need to get a better handle on—and we raised this with the cities department when they are developing their matrix and so forth—is that we do a lot about people's connections to things, where you live, your house and your property, to infrastructure, that is, whether you drive, get a train or whatever, and people's relationships are often not well researched and understood.

The reason I raise it is that someone had made a point with this committee a couple of parliaments ago as we rolled out the National Broadband Network about how we were expecting it to transform how we live. We got a lot of evidence that lots of programs have been put in place, for example, to get nurses and health specialists out to regional and rural areas. If they did not have good quality internet connections, which enabled them to stay connected to their families and so forth, they would not do it. It was actually the people-to-people connections that determined what people did. Similarly, as people get older they go out of the city to live, but they still want to be connected to see their kids and grandkids. Or the kids and grandkids go out of the city to buy affordability and they still want to be able to get back. It is about all of those people interactions. Has there been work done, perhaps pulling apart things like the ABS and so on, around whether it is actually about relationships and how they are changing and how that will drive city development, transport, infrastructure and so forth?

Prof. Dodson : I am not aware of specific research that has asked that question. I know there has been a debate within the economic literature noting that as our society has become more digitally mediated and we are mobile and connected 24 hours a day, doing a lot of our transactions via digital media, that face-to-face contact also takes on a higher value as well, because communication becomes so cheap, but if you want the really high-value interactions it is typically done in person.

The committee is meeting in Melbourne. We could have possibly done this by video link, but we might not have had quite the same level of engagement via that mechanism. So, it shows that face-to-face interactions are really significant. Part of the growth of the global economy parts of our major cities, like Sydney and Melbourne, has been driven by the need for firms to have that face-to-face connection, that density, that concentration of connectivity. Everyone is connected via mobile phone, but being able to have a coffee with a prospective business partner seems to be a really important dimension of how the economy works in the contemporary era. I am not sure whether I am answering your question particularly well.

Ms BIRD: My point is that that has implications for planning. We went to NAB yesterday, which has developed a space in one of their new buildings called The Village, because they discovered their customers actually needed a place where they could meet, sit with people or connect to some informal exchange of ideas and so forth. Yet we seem to be building cities that have less and less common space. Unless you want to pay and, as you say, sit in a coffee shop. Perhaps coffee shops would like that aspect of it.

Prof. Dodson : As an example, I have done some work on co-working spaces, which are increasingly common in the digital start-up area of the economy. They have taken on a very important role within that economic area, because anyone can start up a small digital business in their bedroom or in an office that is located anywhere within the metropolitan area. People like to locate in these co-working spaces because of the informal interactions they end up having with people who are not quite in the same business area; they may be a graphic designer or a web designer and they are working on an app. They get those informal connections that can lead to new ideas, new innovations and new businesses. With these spaces, the model is evolving to a very managed model whereby there is a space manager who curates exactly who sits at which desk to try to maximise the value of those interactions between who gets to bump into who. That could not really happen via a digitally mediated system in the way that they are currently configured now. Perhaps in the future, when we have virtual reality and we can sit at our desk at home—where we are looking through some goggles and we actually have people sitting in virtual desks around us and we can interact with them—that might be different. But at the moment the face-to-face seems really important. The innovation sector and that kind of digital terrain seems to thrive on the connectivity between people face to face.

Ms BIRD: One of the issues that we have been taking a lot of evidence on—and it gives me some concern about our cities—is that there is quite a reasonable focus, although it is never sufficient, on the public social housing aspect of providing accommodation in cities. The market is looking after the top end; there is no two ways about that. There are plenty of high-value and high-cost options. Then you have the middle, and people who are employed on not low- but reasonably middle-level incomes who are just being priced out of our cities. There is no incentive for the government or the private market to get into that space. If you get a block of land to develop, why would you develop lower-cost accommodation when you can produce high-quality stuff and reap a much bigger dividend on it?

We met one organisation, the Nightingale Group, that is doing some work in that space. Have you found any research or examples of where cities are managing their average income workers and indeed their low-income workers who often are not eligible for public housing as well?

Prof. Dodson : There are various mechanisms by which one can increase the volume of affordable housing or social housing within cities, but we in Australia have tended to over the past 40 years to be reducing the extent to which we have mechanisms in place to provide affordable and social housing. In particular, our public rental stock has been run down and there has been disinvestment effectively. Most of the money that goes into public housing now goes into maintenance of the existing stock rather than production of new stock. There are mechanisms like affordable housing that could be used. We could be capturing the zoning uplift when land is rezoned for apartments, that is, to capture some of the value uplift from that to be put back into affordable housing.

Ms BIRD: Can you clarify for me what you mean by 'affordable housing'?

Prof. Dodson : There is no universal definition of affordable housing, but a standard that is often used is housing which results in no more than 33 per cent of income being paid in rent or mortgage by households in the bottom two quintiles.

Ms BIRD: Generally speaking, in policy terms, affordable housing ends up being a form of housing where you have to meet certain criteria in order to get into it as opposed to simply income. Because of its pricing structure, it attracts people on a particular income. That is the space that I am concerned about.

Prof. Dodson : In Australia, we have public housing, which has now been so residualised that you have to have very high special needs in order to be eligible for public housing. Social housing is typically seen as the next tier up from that in the broader international context, where you have a much more social dimension to it that is genuinely for very low-income people who may not have particular extra special needs, but there is a social value in having low income people in high-quality housing.

Affordable housing tends to be more in the next tier up in the income bracket, but obviously not for very high-income households. People like key workers, which is a term that is used for public sector workers who are not on high incomes but can be excluded from metropolitan housing markets, particularly the city centres. You would ideally have your nurses, police, fire officers and so on not having to live way out on the fringe but close to where they are needed. It is a challenge that we face in very fast-growing cities. Without mechanisms to capture the house price inflation that we have seen and retain some of that for the public good, rather than just accruing to private owners, whether they are landlords or homeowners. We do not have a particularly robust land taxation system. We have stamp duty as our main mechanism of raising revenue through property transactions. A number of economists—in fact, I would not be surprised if all the economists—with an interest in land economics in cities in Australia would support a generalised land tax. As house price inflation increases, property values go up and the tax revenue increases to respond to that, and that can be then used for various initiatives like affordable housing.

Another area that I am pleased to have seen some development in in the past six months through the federal budget is the establishment of a bond aggregator for social housing. That will enable community housing organisations, which is a sector that is growing—not at an especially fast rate but it is a growing sector which offers affordable and social housing—to access finance from the private sector that would otherwise be difficult to access because of the nature of the community housing sector. That bond aggregator model was designed by researchers at RMIT with the Australian Housing and Urban Research Institute. We were delighted that a version of that has been picked up in federal policy. That will take a while to set up but, hopefully, if it can attract the interest of, say, superannuation funds which have an interest in long-term secure but not necessarily high-interest investments, that money can be put into the community housing sector and, therefore, will enable greater borrowing to deliver community housing than is currently the case.

That is one option, but I do not think that will be sufficient to respond to the affordability issues that we are facing in Australian cities, particularly our very increasingly polarised housing markets with very high prices in the city centres, and then a decline to very low prices way out on the fringe, and the effects that that is having on our urban form and the way our cities function. You can see the high-rise development in Melbourne, an almost vertical kind of sprawl, and then way out on the fringe another form of urban development.

Ms BIRD: Thank you.

CHAIR: We have run out of time. Thank you very much for your contribution and attendance here today. If you have been asked to provide any additional information, would you please forward it to the secretary by 12 September 2017. You will be sent a copy of the transcript of your evidence and you will have the opportunity to request corrections to transcription errors. Thank you, again, for your attendance.

Prof. Dodson : Thank you for the invitation.

CHAIR: I dare say you will be contacted by various members here to have further discussions.

Prof. Dodson : I would be delighted to follow up if you want any further information or further conversation.

CHAIR: Particularly on the bond aggregator.

Prof. Dodson : I recommend you talk to your colleague in Treasury in the first instance.

Ms BIRD: Then we could explore negative gearing and other matters as well which were raised.

Prof. Dodson : I have not touched on that. Maybe another time.

CHAIR: Thank you.

Proceedings suspended from 10:41 to 10:45