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10 Built environment

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4 Effectiveness of management of the built environment

The arrangements for the management of Australia's built environment are complex. The states and territories, together with local governments, have the primary responsibility to plan for urban growth and change. As well as urban planning, these governments invest in infrastructure such as roads and railways. They also invest in, or regulate, utilities such as power and water. The Australian Government has no direct planning responsibilities, but its policies in areas such as housing, environment, infrastructure, immigration and economic policy, as well as its regulatory functions, have an impact on the livability and environmental efficiency of the built environment. Industry and community actions are also important shapers of the built environment. Increasingly, the private sector is providing critical infrastructure, and individuals and households participate in voluntary programs that can affect the use of environmental resources such as water and energy.

Given the range of mechanisms for managing the built environment and the breadth and complexity of issues that need to be managed, assessing the effectiveness of the management processes is a challenging task. In this report, management effectiveness is addressed only at a broad level. It is beyond the scope of this report to specifically look at each of the mechanisms and make a formal assessment of their effectiveness. Unlike in other environmental domains, there is usually no direct relationship between a management mechanism and a particular environmental issue in the built environment. The most important management approaches tend to be multifaceted, and aim to address social and economic issues as well as environmental ones. The task is complicated by the variability of specific characteristics across the full range of communities, meaning that generalisation is needed to derive conclusions at the national level. Nonetheless, using informed opinion and input from experts, it is possible to make relevant statements about management effectiveness—even if only general ones. This is the approach that has been taken in this section, including in the assessment summary at the end of the section.

Overall, current management for the built environment is considered to be only partly effective. This rating is heavily influenced by disparate management arrangements, which often lack coordination. Although there is often a good understanding of context leading to the development of plans—at least for particular aspects of the built environment—the follow-through in terms of inputs and processes is weaker, leading to outputs and outcomes that are less than effective.

A 2010 ADC Forum cities report, Enhancing liveability, observed that:³⁸

These factors [congestion and housing affordability], together with real concerns about the long-term sustainability of suburban development, have fostered significant levels of community unease, and shone a spotlight on the current mechanisms to address the key issues facing our cities. The general view appears to be that these mechanisms are not producing the outcomes we need.

The forum identified six governance issues requiring attention:

• lack of community support for urban planning principles
• lack of integration in planning
• a poor relationship between planning and budgets
• lack of policy alignment between levels of government
• lack of land-use planning systems to address the need for increased density and co-location of housing, and other infrastructure and services
• lack of research to assist policy making.

These challenges have been recognised at the political level. In a speech in August 2009, the Minister for Infrastructure, Transport, Regional Development and Local Government, the Hon. Anthony Albanese MP, stated that 'the need to pay attention to our cities is more urgent than ever'. He observed that 'disparate decision-making processes are producing suboptimal planning, land use and settlement patterns'. He foreshadowed a National Urban Policy to 'articulate the challenges facing our cities' and 'highlight how a systems approach to thinking, policy decisions and allocation of resources can achieve greater benefits'.

In December 2009, the Council of Australian Governments (COAG) agreed to reforms to ensure that capital cities are better placed to meet the challenges of the future. It established nine criteria for capital city strategic planning systems, a number of which are directly relevant to the livability and environmental efficiency of the built environment. COAG agreed that, by 1 January 2012, all states will have in place plans that meet the criteria, and these plans will be independently reviewed by the COAG Reform Council.

In 2011, the Property Council of Australia asked residents to rate their state or territory government's performance in planning and managing urban growth (Figure 10.18). A large majority of residents in all capital cities rated the performance as fair or worse, with Sydney and Darwin having the lowest ratings.

Source: Property Council of Australia⁶

Figure 10.18 How residents rate their state or territory government's performance in planning and managing urban growth

Another perspective is provided by a KPMG assessment of city planning systems, which was commissioned by Built Environment Meets Parliament in 2010.³⁹ (Built Environment Meets Parliament comprises the Property Council of Australia, the Australian Institute of Architects, the Planning Institute of Australia, Consult Australia and the Green Building Council of Australia. It holds an annual summit between parliamentarians and the property and building industry to discuss opportunities to improve life in Australia through the built environment.) Desktop research assessing each capital city's planning against the nine COAG criteria produced an average score of 54% (Table 10.5). Melbourne rated the highest and Hobart the lowest. The report's authors noted that the COAG criteria had only been recently adopted and that different jurisdictions are at different stages of the reform process.

The National Urban Policy was launched by the Australian Government in May 2011.³ Its purpose is to guide policy development and public and private investment in cities by articulating a set of goals, objectives and principles. The three goals of the policy are productivity, sustainability and livability, supported by good governance. The State of Australian cities 2010 report⁴⁰ provides a benchmark against which the policy can be assessed. The report will be published on an annual basis to track progress against the objectives.

Governments at all levels use regulatory and other instruments that can affect the form and structure of the built environment, as well as the use of resources and the generation of waste within the built environment. These include mandatory standards, fees and charges, licences, or other restrictions on activities or operations. Suasive approaches, which encourage changes in behaviour through the provision of information, are also used.

These types of approaches, particularly mandatory ones, can often be effective in achieving policy outcomes. This is most likely when the policy outcome is defined in specific terms, such as achieving a particular standard (e.g. a building code), meeting a predetermined target in reducing the use of a resource (e.g. energy efficiency standards) or reducing an activity that is considered undesirable (e.g. air pollution or waste generation). The adoption of emission standards for Australian motor vehicles has, for example, had a direct and significant impact on the quality of air in Australian cities. However, organisations such as the Productivity Commission have raised concerns that such approaches, unless properly designed, can have unintended consequences or may not be the most cost-effective way of achieving outcomes, particularly when the approach entails significant indirect costs. There are also concerns that regulatory processes are too fragmentary and suffer from inconsistent objectives, or that they move the focus from managing risks to gaining an 'approval' tick. (See, for example, Section 4.4 — Environmental and building regulations in Rethinking regulation — Report of the taskforce on reducing regulatory burdens on business.⁴¹)

In some cases, it is argued that a desired outcome, while 'reasonable' from an environmental perspective, may impose considerable social or economic costs that were not properly considered in the setting of policy (see Productivity Commission⁴²). This view inevitably creates a tension between those who view environmental issues as important issues in their own right, and those who see environmental issues within a broader socioeconomic context. Whatever the 'right' view, it is important that those responsible for designing regulatory approaches fully consider all costs and impacts of the proposed regulation so that properly considered decisions can be made about the appropriate approach.

Approaches that 'internalise' externalities through appropriate pricing regimes, where appropriate, tend to lead to more flexible and less prescriptive approaches for dealing with environmental issues; however, this is at the expense of a direct link between the policy approach and the desired environmental outcome. Mandatory labelling to inform consumers in a way that provides an incentive to use an environmental resource more efficiently can also be effective in changing behaviours. In general, the more information that is available to inform decisions, the more likely it is that the right decisions will be made. However, voluntary schemes that rely on the goodwill of people to modify their behaviour often have limited effect and run the risk of being tokenistic.

A particular area of concern for the built environment is traffic congestion. An important mechanism for dealing with traffic congestion is improving public transport. In 2009, the Senate Standing Committee on Rural and Regional Affairs and Transport undertook an inquiry into the investment by the Australian Government and the states in infrastructure and services for public passenger transport. The committee identified a number of concerns relating to the management effectiveness of public transport, including the need for better institutional arrangements, for more strategic, long-term planning, for better integration between transport planning and urban planning, and for more complete networks. Most submissions argued for a significant investment in public transport infrastructure, including cost-benefit analysis. The committee found that 'significant catch-up investment in public transport is needed, particularly in light of the current strong growth in patronage, and the inevitability that congestion-free public transport will be more important in future as our cities become bigger and more congested'. The committee also considered that improvements in passenger public transport could be complemented by congestion charging, to help reduce congestion by discouraging motorists from travelling when congestion is likely, while recognising that such charges are difficult politically. Congestion charging could also improve fuel efficiency. A 2008 Bureau of Infrastructure, Transport and Regional Economics working paper found that 'congestion charging is gaining favour as an enduring solution that directly targets congestion, has strong theoretical foundations, has worked well in key cities and provides an innovative source of finance'.⁴³

A number of approaches have been adopted by governments to improve the efficiency of energy use in the built environment, including provision of information by governments, a requirement for disclosure of information by sellers and producers, mandated energy efficiency standards in the Building Code of Australia, mandated investment in more energy-efficient equipment and technologies, and subsidies and other financial investments. These are supported by nongovernment initiatives such as Green Star certification by the Green Building Council of Australia. Readily available, comprehensive evaluations of the effectiveness of these policies and programs are lacking. Undoubtedly, they have led to improvements in energy efficiency, but the efficacy of the various approaches, particularly relative to each other, and their cost-effectiveness do not seem to have been systematically evaluated. The National Framework for Energy Efficiency, which has been established by the Ministerial Council on Energy, aims to improve the coordination of energy efficiency programs across governments. An energy efficiency and data gathering and analysis project has been established to improve the development and evaluation of energy efficiency policies.

Urban water supply has also been a focus for governments in recent years. Governments are responding in a number of ways, including by investing in new water supplies, improving the management and delivery of urban water services, and allowing for greater innovation and more efficient water use. In doing so, they have been confronted by issues relating to planning, regulation, pricing, market and institutional reforms, and public confidence. The National Water Commission's second biennial assessment of progress in implementation of the National Water Initiative in 2009⁴⁴ found that much more work is required to fully implement the urban water reform actions agreed under the 2008 COAG Work Program on Water — in particular, to establish transparent urban water supply security standards, and to develop strategies for urban water security that are flexible and robust.

Assessment summary 10.3—effectiveness of management of the built environment

Component	Summary	Assessment grade				Confidence
		Ineffective	Partially effective	Effective	Very effective	in grade	in trend
Understanding	There is generally a good understanding by the various management entities of issues affecting the built environment. This understanding is improving through initiatives such as the State of Australian cities report and the National Urban Policy; however, understanding is adversely affected by the complexity and interrelationships of a wide range of issues
Planning	Planning is hampered by the diverse range of entities involved and a lack of coordination among them. This lack of coordination has been recognised, and steps are being taken to rectify it. Information deficiencies and conflicting or unclear objectives are also hampering planning
Inputs	Inputs are applied in a piecemeal fashion and not always in a manner consistent with plans There is a poor relationship between planning and budgets. Budgets are not always adequate, and there is underinvestment in infrastructure, particularly that relating to public transport. Improved planning should lead to more effective use of resources
Processes	The lack of coordination across various entities significantly hampers effective processes. Under the Council of Australian Governments initiatives and the National Urban Policy, there is potential for improved alignment between levels of government
Outputs and outcomes	Partially effective inputs and processes are leading to partially effective outputs and outcomes in terms of the livability and urban environmental efficiency of the built environment, as assessed in Section 2 Although expected improvements in planning and processes should have a positive impact on outputs and outcomes, this may be counteracted by increasing pressures on the built environment, as identified in Section 3

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