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National Urban Policy – Careful What You Wish For

Historically, the Commonwealth has involved itself haphazardly in matters of urban planning and development. These forays have ranged from the visionary, such as the Whitlam Government’s national urban policy of the 1970s, to the ludicrous where Commonwealth Ministers, no less, decide where to put toilet blocks and suburban car parks. With the federal election looming, what do we want from the next Commonwealth Government on urban policy? This is a case of careful what you wish for. To greater or lesser degrees, Australian Government involvement in cities over the decades has misunderstood or wantonly ignored the first principle of sound national urban policy – subsidiarity. Subsidiarity requires that policy making and taxation should be left with the most decentralised sphere of governance “competent” to carry out the function in question. This is not a question of technical competence or the skills of politicians and bureaucrats. A subsidiary sphere of governance, such as State, regional or local government, is deemed competent to make policy decisions in line with the preferences of their constituents when these decisions do not infringe policy choices reserved for a higher order constituency, such as that of the nation represented by the Commonwealth. For example, regardless of the merits of their thinking, State Governments are not competent to make decisions about going to war or international trade treaties, because these are the defined province of the Commonwealth Government. If subsidiarity were set aside, and we focussed solely on technical competence, all urban policy – from the making of planning schemes to the granting of development approvals – could be theoretically run out of Canberra (heaven forbid). The Commonwealth has the financial capacity to do so. The Whitlam Government pursued a highly centralised model of urban policy along these lines. Some might even cheer on this approach today; what could be wrong with nationally uniform practices on all matters to do with strategic and statutory planning? The problem with ignoring subsidiarity is that it weakens democracy and stifles innovation in public policy. If local constituencies are allowed to make decisions on development control and infrastructure which affect only them – and they are prepared to wear the fiscal cost of these decisions – community welfare will be improved. This is because the shape of neighbourhoods and towns will be more closely aligned to citizen preferences compared to a one size fits all. In addition, the fact that different local communities will do local things differently means that communities will learn from each other about how best to tackle certain urban issues. Subsidiarity strengthens democracy because accountability lines are clear. If decision making for local things is shared across the spheres of government – local, State and Commonwealth – in a “partnership” arrangement, who is to be held responsible if things don’t work? Local, State and Commonwealth politicians can evade accountability by blaming the other sphere(s) of government for, say, constraining local discretion or not providing sufficient funding.