State of Australia’s Fast Growing Outer Suburbs

Presented by Robert Hall

NGAA National Congress – November 21 2017

Today’s presentation

1. Influencing the narrative

2. Why do the Fast Growing Outer Suburbs matter?

3. Why investment is required now

4. Four ways that FGOS can make cities great again

2

A story of transition and opportunity

Economy (GRP)

$186.8b

11.3% of Australia’s

GDP in 2016. Up from

10.3% in 2006

Local Jobs

1.52m

12.8% of Australia’s

employment in 2016. Up

from 9.6% in 2006

Businesses

Grew by 7.4% (2014-16)

More than double national

rate (Australia had 3.4%)

Source: National Economics, ABS 3

Growth and diversity

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

1991 1996 2001 2006 2011 2016

Source: ABS Census of Population and Housing

Historical Population Growth, FGOS(enumerated population)

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

1991-96 1996-01 2001-06 2006-11 2011-16

Change in medium and high density

dwellings, FGOS

Australia's population is growing faster than in

almost any other OECD economy (Lowe 2014)

FGOS annual growth

Aust annual growth

4

Major job generator

9 of the top 25 job

growth hot spots are

Fast Growing Outer

Suburb LGAs

ChangeLGA No. %

Sydney (C) 101,705 19.5%

Melbourne (C) 49,170 10.5%

Brisbane (Metropolitan area) 55,713 6.9%

Perth (C) 28,076 17.1%

Gold Coast (C) 21,336 8.9%

Wyndham (C) 20,623 36.4%

Hume (C) 20,223 21.3%

Blacktown (C) 16,015 14.9%

Belmont (C) 14,436 32.5%

Bayside (C) 14,410 16.4%

Swan (C) 11,938 19.7%

Sunshine Coast (R) 10,974 9.9%

Casey (C) 10,507 16.5%

Parramatta (C) 10,254 6.6%

Maribyrnong (C) 9,678 24.5%

Adelaide (C) 9,438 7.0%

Moreton Bay (R) 9,224 8.2%

Wanneroo (C) 9,165 22.3%

Cockburn (C) 8,744 23.3%

Greater Dandenong (C) 8,6788.4%

Ryde (C) 8,324 9.4%

Brimbank (C) 8,297 12.1%

Whittlesea (C) 8,157 16.1%

Randwick 7,896 15.5%

Nedlands 7,834 35.2%

Job growth by LGA 2011

to 2016 (top 25)

Source: National Economics 5

From retail to research

High skilled jobs in FGOS

grew by 70,000

between 2011 and 2016

Source: ABS Census of Population and Housing. See data limitations about comparing 2011 and 2016 place of work data

Date note: High skill is defined by the ABS Occupation definition – level 1

-30,000 -20,000 -10,000 0 10,000 20,000 30,000 40,000 50,000

Hospitality

Admin

Transport & Logisitcs

Other Services

Mfg.

Const.

Retail

Real estate

Mining

Wholesale

Arts & Rec

Ag

Govt

Utilities

Health

Media & telco

Fin services

Ed & training

Prof services

High skill Low to medium skill

Employment growth by industry by occupation skill type,

FGOS, 2011-2016

6

The type of high skill jobs in the FGOS

Source: ABS Census of Population and Housing

Occupation Change

School Teachers 10,183

Midwifery and Nursing Professionals 7,497

Construction, Distribution and Production Managers 4,352

Chief Executives, General Managers and Legislators 3,502

Medical Practitioners 3,391

Social and Welfare Professionals 3,305

Business Administration Managers 2,889

Health Therapy Professionals 2,608

Sales, Marketing and Public Relations Professionals 2,556

Accountants, Auditors and Company Secretaries 2,502

Engineering Professionals 2,476

Health Diagnostic and Promotion Professionals 2,160

Information and Organisation Professionals 2,136

Advertising, Public Relations and Sales Managers 1,972

Education, Health and Welfare Services Managers 1,963

Architects, Designers, Planners and Surveyors 1,672

Miscellaneous Education Professionals 1,639

Miscellaneous Specialist Managers 1,369

Business and Systems Analysts, and Programmers 1,337

ICT Managers 1,104

Financial Brokers and Dealers, and Investment Advisers 1,092

Natural and Physical Science Professionals 1,040

High Skill Occupations in FGOS – Largest growth 2011-16

7

Early stages of economic transition, but still a long way to go

Share of high skill jobs

FGOS 24%

Metro 34%

Source: ABS Census of Population and Housing

0% 10% 20% 30% 40% 50% 60%

Metro - CBD LGA

Metro - Elsewhere

Metro - Fast Growing Outer Suburbs

Regional Centres

Share of high skill jobs by LGA typology, 2016

8

9

WHY DO THE FAST GROWING OUTER SUBURBS MATTER?

2

Capital cities are driving Australia’s productivity

Table: Employment change – Annual Average Growth % by

part of Aust.

Annual average

growth %

2006-11 2011-16 2015-16

Metropolitan Australia 2.4% 1.6% 5.6%

Metro - CBD LGA 3.4% 2.5% 8.9%

Metro - Elsewhere 1.9% 1.0% 3.2%

Metro - Fast Growing Outer

Suburbs3.3% 2.6% 9.7%

Regional Australia 1.8% 0.4% 0.9%

Australia 2.2% 1.2% 4.1%

10

Our cities need successful Fast Growing Outer Suburbs

A doubling in city size is

associated with a

productivity increase of

between 2 and 5%

Source: Ahrend et al (2014) OECD 11

“There are some sorts of

industry, even of the lowest

kinds, which can be carried

on no where but in a great

town”

Adam Smith 1776

12

WHY INVESTMENT IS REQUIRED NOW

3

“The broomstick in the road”

Professor Phillip O’Neill,

Job Slide Report,

Western Sydney

University

-350,000

-300,000

-250,000

-200,000

-150,000

-100,000

-50,000

0

2006 2011 2016 2021 2026 2031 2036

WS Airport arrives

Difference between jobs and employed residents, Greater

Western Sydney

Sources: Western Sydney University and .id

NSW Transport Job Target

Maintains 0.84 jobs per

employed resident

No change to historical employment growth p.a.

13

How do we remain productive?

In 2016, there were 69

local jobs for every 100

workers living in the Fast

Growing Outer Suburbs

14

Road

congestion

estimated at $15

billion per year.

This is projected

to increase to

$53 billion per

year by 2031

CEDA 2016

15

Four waysFast Growing Outer Suburbs can make cities great again

4

1. Skills are the new iron

ore

16

Increasingly dependent on ideas and problem solving

Participation rate outcomes:

81% with a bachelor degree

50% if only completed year

10

Sources: RBA 17

Skill levels are improving, but still falling behind the national average

Completed year 12

49.9%, up from 38.4% in 2016

University degree

15.6%, up from 7.8% in 2006

FGOS

Australia

0

5

10

15

20

25

1991 1996 2001 2006 2011 2016

Share of population with a bachelor degree or higher (aged 15+)

Sources: ABS Census of Population and Housing

To reach the national qualifications level, an extra 207,606 FGOS residents would have to have finished a degree.

18

Housing as an economic development strategy

Just add Spring, Lake or

Link to the estate name

0%

5%

10%

15%

20%

25%

30%

35%

40%

Bachelor or higher Advanced

Diploma and

Diploma Level

Certificate Level No qualification

Point Cook City of Wyndham

Level of qualification, 2016

19

Diverse cultures are driving skills growth and can create new business opportunities

The average education level

of newly arrived Australians

in FGOS is significantly

higher than the overall FGOS

population.

-5%

5%

15%

25%

35%

45%

Bachelor or higher Advanced Diploma

and Diploma Level

Certificate Level No qualification

Overseas arrivals Total population

Qualifications of recent arrivals, FGOS 2016

Sources: ABS Census of Population and Housing 20

Youth unemployment is a concern

Youth unemployment in

FGOS

15-19yo – 22.5% in 2016, up

from 18% in 2011

20-24yo – 12.4% in 2016, up

from 10% in 2006

Weak employment growth has impacted

youth more than any other age group

21

2. Local Agglomeration

– Increasing ideas per sqm

22

Exploit middle ring agglomerations

Dandenong

66,000 jobs

25% high skill

Monash

103,000 jobs

37% high skill

Melb Airport

47,000 jobs

20% high skill

Expanded CBD

342,000 jobs

50% high skill

Source: ABS Census of Population and Housing

Employment (POW) by SA2

23

Investing in productive infrastructure

83,000 Casey residents work in the

Monash to Casey Corridor

11,000 Casey residents work in the

Melbourne LGA

24

Local projects to increase ideas per square metre

Case Study: Metro

North West

Source: .id 25

3. Where is the culture?

26

Major gap in knowledge, health/research and cultural assets

27

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

Hospital University Cultural Govt

Fast Growing Outer Suburbs Greater Capital Cities

Jobs per ‘000 population, 2016

Source: ABS Census of Population and Housing

Household size trends suggest we need to rethink this social infrastructure

2.4

2.5

2.6

2.7

2.8

2.9

3

3.1

3.2

199119962001200620112016

FGOS Aust

Household size 1991-2016

Local Government Area 2011 2016 ChangeCity of Wyndham 2.90 3.03 0.13

City of Melton 2.96 3.02 0.06

Wollondilly Shire 2.94 2.99 0.05

City of Gosnells 2.76 2.81 0.05

City of Casey 3.01 3.06 0.05

Blacktown City 3.10 3.14 0.04

Liverpool City 3.15 3.20 0.04

The Hills Shire 3.10 3.15 0.04

Shire of Litchfield 2.75 2.79 0.04

Camden Council 3.03 3.07 0.04

City of Kwinana 2.63 2.67 0.03

City of Armadale 2.64 2.67 0.03

Shire of Serpentine-

Jarrahdale 2.89 2.92 0.02

Shire of Cardinia 2.80 2.82 0.02

City of Hume 3.06 3.08 0.02

Source: ABS Census of Population and Housing 28

4. Knowledge intensive

infrastructure

29

Infrastructure is not meeting economic and demographic demand

FGOS contribution to Australia

Population = 35% of growth

Jobs: 25% of growth

Infrastructure: 13% of

investment

25.2%

34.8%

13.2%

0% 10% 20% 30% 40%

Share of Jobs

Growth

Share of Pop

Growth

Share of Asset

Growth

Metro - Fast Growing Outer Suburbs Regional Centre

Metro - elsewhere Metro CBD LGA*

Chart: Share of national growth by selected indicators, 2011-16Note: Metro CBD LGA excludes Brisbane

When we exclude the FGOS from enjoying in the benefits

of agglomeration we must be going backwards.

Source: National Economics 30

31

Concluding ideas

Population Density Employment Density

Regional Knowledge

Networks:

Placing a higher priority on

investment that supports

knowledge-based activities

and collaboration

“There is no rule book for the next phase.

But imagination and creativity will get us

there”

Paul Keating, CEDA Annual Dinner 2017

32

Closing ideas

Take ownership of the narrative

How can FGOS help cities reduce the costs of success?

Develop a spatial plan of the region

Enlarge skill pool of residents in FGOS – existing & import

Determine an acceptable rate of population change (allow jobs to catch up)

Exploit the agglomeration potential in existing ‘middle ring’ employment

hubs – connections, networks, supply chains, knowledge transfer

Review planning and economic development and housing strategies (e.g.

household size assumptions)

Grow local knowledge outposts – housing density + new FGOS favourable

anchors

Facilitate out of regions exports

Evaluate projects – to understand what works?

33