May 6, 2012

Should government get bigger?

It’s long been a commonplace that cities are engines of economic and social development. Spatial proximity is synergistic – it provides economies of scale that extend well beyon

Alan Davies — Editor of The Urbanist

Alan Davies

Editor of The Urbanist

City tied up in knots (H/T Muenos Um Carro)

It’s long been a commonplace that cities are engines of economic and social development. Spatial proximity is synergistic – it provides economies of scale that extend well beyond a single firm or household.

However the “spillover” benefits of living side by side come at a price – the costs are also amplified by proximity. Cities produce negative externalities like noise, odour, violence and congestion.

As cities get bigger the benefits increase but the problems get worse. And Australia’s largest cities are getting bigger. For example, Melbourne is projected to grow from a current population of 4.1 million to 6.5 million in 2051.

So it’s disastrous that governments in Australia seem to be falling further and further behind in providing the sort of infrastructure and policies that’re necessary to support large and growing agglomerations of people and activity.

Consider this simple example. The railway level crossing on Melbourne’s Springvale Rd is currently closed 40% of the time during the two-hour morning peak. At the Mitcham Rd level crossing, the boom gates are down 45% of the time in the peak, sometimes for up to 7 minutes (more on level crossings here).

These sorts of inefficiencies limit the number of trains that can be run and hence constrain passenger capacity. They also delay buses, trucks and cars, thereby adding to travel costs.

Government involvement should be getting bigger as our cities get bigger! As Arnold Kling says, urban growth actually increases the demand for government.

When people are crowded together, many more externalities are created. Water and sewage management become a huge deal. So does planning a road and transportation system.

Governments should be spending more on infrastructure and taking action, like imposing taxes and regulations, to deal with externalities. Yet if we take this week’s Victorian State budget as an example, there’s little sign politicians are committed to managing big and growing cities like Melbourne effectively.

The Baillieu Government’s priority is balancing the budget (nothing unusual about that in the current political climate – the Gillard Government’s imminent budget will surely do the same). Apart from studies, the Victorian Government is funding precious few new major city-building initiatives.

The key new passenger transport projects are elimination of 3 of Melbourne’s 172 railway level crossings (that’s just 1.7 %!) and provision of 2.5 km of high frequency bus service from Huntingdale station to Monash University. These are good initiatives but too few by far. On the other side of the ledger, funding for cycling went backwards.

Making a city like Melbourne function effectively with a growing population requires government to think on a much grander scale. Government needs to get bigger and throw that weight around.

It’s as if Australian politicians don’t get that Sydney and Melbourne aren’t country towns anymore, when actually they’re now big cities by western standards. There are, for example, only 11 cities in the US (the third most populous country in the world) that have more residents than our two largest metropolitan areas.

‘Big’ government doesn’t just mean massive increases in expenditure on urban infrastructure and the associated hard decisions about where the revenue comes from, although both are necessary. And sooner or later both will be inevitable.

It also means more interventionist government, particularly using taxing and regulatory powers to change behaviours e.g. pricing road and parking space and/or using tax incentives to encourage more efficient vehicles or to bring forth more land for development.

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7 thoughts on “Should government get bigger?

  1. Smith John

    Grade separating level crossings – just one of the too many important public transport infrastructure projects that could be funded with the $5 billion plus that some people want to throw at a poorly justified Metro Rail Tunnel.

    Once a major project gains enough traction that it becomes unfashionable to question it, hardly anyone from that point stops to think about the opportunity cost – what else could be done with the same money, perhaps for more benefit.

  2. melburnite

    I like the London system, with a mayor providing leadership, but only a sort of oversight planning power, incl transport. In Aus we could do with such a position, or alternatively a commission or authority of some sort with elected and appointed members to at least provide far-sighted and comprehensive planning at least somewhat removed from government influence. At the very least subsume Vicroads into an overall planning system !

  3. hk

    It is a big swallow to accept the MSD described as Melbourne in “is projected to grow”, with a 2012 population of 4.1 million, as a City. The MSD of more than 8,000 square kms according to some is about 45 to 65% urban. In my opinion we would progress discussion on effective and efficient government of our urban system more meaningfully by describing the different areas of Urban Melbourne using aggregations of post codes or suburbs. (If LGAs or SLAs are used as the comparable unit then the outer shires with their villages become problematic). Maybe approaching a finer grained disaggregation within the general sub regions of Kevin O’Connor’s five Melbournes would clarify prioritizing infrastructure investment to provide more balanced economical, environmental and equitable outcomes.

    hk: An important issue. The urbanised area would be a better measure as I’ve discussed here, but I wasn’t prepared to put in that amount of effort for a passing reference. AD

  4. Stephen

    Dear Urbanist: For some years the Australian electorate has been opposed to 1.5-2% pa population growth, most of which ends up in Sydney or Melbourne. For some years, LabLib governments have deliberately been looking the other way. When will you realise that the infrastructure is never going to keep up? The English-speaking nations are almost the only highly developed countries on the planet that still worship high population growth as an economic engine?

  5. Herceg shayne

    Melbourne already has a population greater than some European nation’s, it needs a voice, a mayor, a Lord Mayor with powers, with responsibilities for public transport, roads, policing, sanitation, infrastructure etc… Someone who’s job it is to focus solely on Melbourne and nothing else. The smaller LGA’s should be merged into a single LGA.
    Melbourne needs what Brisbane already has!

    …Yes, Or failing that, lots more freeway’s with spaghetti junctions offramp’s slicing through everywhere!

    Herceg shayne: There was a discussion here on the issue you raise a few weeks ago. AD

  6. IkaInk

    Don’t worry Alan, I’m sure all of these problems are nothing that a new likely to be above ground East-West Freeway connection with off ramps all through the inner suburbs can’t fix.

  7. Last name First name

    Parker Alan •OAM,
    Seeing yesterdays news that the liberal premier had nothing for cyclists in the budget. I sent the following o the Premier and Mulder .

    Good morning gentlemen.

    You have stuffed up the progress made by your Liberal predecessors, Sir Hubert Opperman would turn in his grave.

    Rupert Hamer and Brian Dixon would not be amused. I heard all these gentlemen give their full support to the implementation of the Melbourne bikeplan in 1980. Since then VicRoads by its ignorance has killed more cyclists than I care to think about

    Now you are being conned by VicRoads just like some of you’re your labor predecessors and before Sir Rupert Hamer promised to have a Melbourne Bikeplan to make cycling safe. Blame yourselves if thousands of cyclists demonstrate at Vic Roads HQ and Parliament house this year.

    Why not renovate and restructure VIC ROADS so that it actually Implements it own bicycle strategy . Pack their directors off to the Netherlands, hire bicycles and ride their cities to see how its done, and makes their cities most attractive so that bicycle tourists brings in A$ 350 million a year. It would be appreciated if the Hon Terence Mulder would join them.

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