1. Integrated transport, land use management and moving people Paper prepared for BIC National Conference, October, 2013. Institute of Transport and Logistics Studies | Faculty of Economics and Business Professor John Stanley

2. Critical policy/program problems Congestion GHG emissions Social exclusion Energy security/price Safety/health Road pricing reform (Behaviour change; revenue raising) New land transport policies and programs that will Reduce the need to travel Encourage travel by lower impact means Improve the environmental performance of travel Provide travel opportunities for all Moving People 1 Moving People 1 Focus 2

3. Four major subsequent developments  National Urban Policy  11 initiative areas relevant to Moving People themes  COAG Capital Cities Strategic Planning Review  Highlighted continued need to improve land use/transport integration and do more on social exclusion  Infrastructure Australia mid 2012 review  Focused on shortcomings in strategic planning and funding/financing  2013 election resulted in a federal government that has indicated roads are its business, not PT 3

4.  Transport solutions alone won’t solve city ‘transport problems’  MP2 argues for an integrated land use/transport approach, with land use being the lead focus  Looks at how to fund relevant initiatives  User pays, value capture, asset sales, etc  Explores the opportunity to develop a social enterprise approach to rural/regional accessibility  The current presentation focuses on the land use/transport connection  With a bit on funding Moving People 2 4

5. Great cities don’t just happen! 5

6.  Cities reap agglomeration benefits from size (i.e. 1+1>2)  But confront rising externalities, particularly in transport (e.g. congestion, air pollution)  How can our cities get better as they get bigger?  Understand what is happening to our cities, to help plan for the future 6 Getting better as our cities get bigger

7. Structural economic changes are leading to greater job concentration: Melbourne example 7

8. Some typical urban characteristics › As distances from the centre increase - Household incomes decrease - Accessibility to jobs decreases  Particularly by public transport - Housing affordability increases  But transport costs rise - Productivity levels fall and productivity growth slows 8

9. Economic framework for our cities › Job creation is a high priority › Urban structure matters for productivity/jobs › The knowledge economy tends to involve centralising and clustering - And draws on city liveability to attract talent › Agglomeration analyses are supportive of activity clustering in cities and a polycentric city is efficient, provided - There aren't too many clusters - They are well connected to the centre - And not too far from the centre › Local accessibility (20 minute city) is important for wellbeing 9

10. State and Land use/transport – COAG Strategic Planning Review focus (Stanley and Smith 2012) State + 10

11.  Start with a vision for your city (valued outcomes)  Perth:... a world class liveable city; green, vibrant, more compact and accessible with a unique sense of place (Directions 2031, p. 21)  Perth’s five key themes:  Liveable; prosperous; accessible; sustainable; responsible  Melbourne’s five valued outcomes 1.Preserve and enhance distinctiveness 2.Ensure city remains globally connected and competitive 3.Promote economic/social participation 4.Build strong communities 5.Ensure environmental resilience Vision and valued outcomes 11

12. Land use development directions needing transport support  Promoting agglomeration economies in the central city and in a small number of selected urban nodes  Supporting precinct scale urban renewal more broadly, including unlocking capacity in the middle suburbs  Improving accessibility for outer urban residents, particularly in the growth corridors  Supporting freight and logistics, tourism and in trade-exposed business (which means, for example, ensuring good seaport and airport access)  Helping to reduce the distances that people need to travel to undertake most activities  Supporting strong communities/neighbourhoods  Improving the integration between the capital city and regions For PT, this means both a trunk role AND local access role 12

13. Strategic transport objectives  Improve the efficiency with which transport infrastructure and services are delivered and used  Includes measures to reduce the costs of congestion  Substantially increase the share of travel that is undertaken by public transport, walking and cycling  Which have lower impacts on the community and environment than travel by motor vehicle (e.g. safer, more healthy)  Focus on the key nodes and corridors for trunk movement and on local accessibility at neighbourhood level  Reduce the environmental impact of travel  Particularly transport greenhouse gas emissions (where road transport is the biggest contributor);  Provide people with travel choices, irrespective of their personal circumstances (e.g., financial and physical capacities), to enhance social inclusion, health and wellbeing  Including local transport choices  Important roles of bus, cycling and walking to achieve these objectives 13

14.  Central area  Mass transit to support agglomeration economies  Tram/light rail, bus, walk, cycle for local circulation  Inner areas  Tram/light rail, bus, walk, cycle  Middle/outer areas: The middle suburbs are probably the most neglected parts of our cities and most important for policy  A jobs focused metro strategy needs to align population growth with jobs and this is the where most people live and most jobs are found  Bus for trunk services feeding nodes/clusters and local circulation, with associated investment in arterial roads Will be a strong circumferential movement role in our larger cities  Connect growth areas to jobs (and seek local job growth)  Increase walking and cycling opportunities Also promotes health and safety  Use road corridors to promote distinctiveness throughout city Transport policy directions with a spatial face 14

15.  Support competitive freight and logistics  Access to/from ports, including inland ports  Develop key corridors and protect future corridors  Ensure good airport access  Seek opportunities to strengthen this cluster  Social inclusion/community building  Minimum PT service levels as per Moving People  Promote the 20 minute city with walk/cycling opportunities  Support growth areas housing affordability by improving outer accessibility and local community infrastructure/services  Increases income earning potential, which underpins financing capacity Some other ingredients 15

16. From ‘big projects’ to an integrated approach: impact on transport priorities  Transport emphasis needs to be on supporting desired land use directions through  Major projects to support the centre PLUS transport initiatives to improve the accessibility of the middle suburbs and fringe  Improving neighbourhood accessibility  This means an important focus on lower cost system/program improvements, esp.  Arterial roads  Circumferential bus networks  Local PT, walk and cycle  The latter initiatives are usually underdone in land use /transport strategies 16

17. Pricing/funding  The national funding gap that developed in late C20 was large (arguably $75b for roads alone)  NIEIR has shown how increasing economic returns are available from increased transport infrastructure spending (NIEIR 2013)  Fuel tax revenue is declining  Pricing/funding reform is needed to  Change travel behaviour, as argued in MP1  Raise $ needed for transformational change, to tackle our national land transport issues Growth in road traffic task and road expenditure, relative to population growth (1985-86 = 100; (BITRE data) 17

18. Road users need to pay more  Road users now seem to be barely covering their direct road construction and maintenance costs  When external costs are included, the shortfall is about $27b annually  Pricing reform is urgently needed to rectify this resource misallocation  And to help fund transport improvements Total road expenditures and Federal/State revenues 2000-01 to 2008-09 (current prices) (From BITRE Info. Paper 40) $43b $16b 18

19. Road pricing reform  Moving People 1 set out an approach based on mass, distance & location  Starting with a 2 year community conversation  The National HV Pricing Reform program seems to like MDL pricing for trucks (in time) but is moving away from an integrated approach in advocating a HV infrastructure coordinator (another silo!)  Europe is leading in this space  MP2 proposes starting by increasing fuel excise 14c/L  Hypothecating the $5 for ‘transport’ and quarantining rural/regional $ to those areas  14c/L is based on welfare maximising fuel tax (Stanley and Hensher 2012)  Also equals revenue foregone due to cessation of indexation  This will help to change behaviour and generate about $5b annually to help improve land transport, inc. PT 19

20. Beneficiary pays charging  Many benefits from transport improvements get capitalised in land values or benefit other users For example, Melbourne’s proposed East-West tunnel will benefit Westgate Bridge users, who could be asked to help pay for the tunnel  User pays pricing does not necessarily target the ultimate beneficiaries  Value capture (beneficiary pays) approaches need to support user pays, e.g.  Metropolitan liveability levy (linked to property value) - Could help fund improved growth area bus service levels  Special rates in areas where major transport improvements are delivered  Developer contributions 20

21. Some other funding opportunities  Asset sales  Surplus land is a common suggestion but why not sell or lease out a freeway to pay for an adjacent major PT upgrade? - Effectively impose a charge on users of a freeway who will benefit from a major PT upgrade  Increased borrowings  Our borrowing costs are at historic lows, so why aren’t governments taking more advantage of this to invest and raise productivity, etc (supported by the NIEIR research cited above)  Tax Increment Financing is an opportunity for local government 21

22. Concluding comments › Cities need integrated land use/transport strategies to meet their outcome goals › These need to focus attention on the city as system to meet its citizens' needs, not on big projects › And to include 10 year integrated funding programs, based on the LUT strategies › Intergovernmental agreements should embed these processes 22