(March 1994)

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The SEQ 2001 Project

After a conference on issues facing South East Queensland, a Regional Planning and Advisory Group (RPAG) was formed in 1991 to undertake the 'SEQ 2001' project, under the Chairmanship of the then Deputy Premier.

RPAG was commissioned to examine the land use and infrastructure implications of rapid population growth in SE Queensland. RPAG adopted a workmanlike approach, and its reports in July 1993 included much useful data, and many interesting insights into the region. RPAG identified the adverse impacts of rapid population growth, and suggested that 'growth management' was a better alternative to allowing market forces free reign, or to limiting growth. Growth management would be based on: a preferred pattern of urban development; stated policies; and a set of institutional arrangements.

Whilst there was general support for the idea of doing something about SE Queensland's rapid population growth, RPAG's methods and recommendations have attracted some criticism. This resulted in an independent reviewer suggesting the need for substantially more work before some of the conclusions would be credible.

SEQ 2001 was Based on Very Dubious Assumptions

RPAG's task was based on a series of dubious assumptions, making it impossible to reach meaningful conclusions. RPAG was commissioned to deal only with the broadly defined 'real estate' implications of population growth. Though economic growth was considered in doing so, the project was fatally weakened by ignoring economic development. Thus RPAG's proposals could neither ensure economic prosperity, nor provide for the deeper tax base needed to finance its suggested higher environmental and services standards.

Economic development (a measure of the effectiveness with which business and the community can support high productivity industry) is not the same as, or always a consequence of, economic growth. Its linkage to population growth is even less certain.

SE Queensland has an under-developed economy. Queensland has few sophisticated or large local firms, and a high dependence on outside investors. Economic support functions (business and industrial services, technology, financing) are weak. Economic growth has been slow with incomes sliding backwards by international standards in per capita terms. Tourism (an apparently low productivity / low wage industry) has become the fastest growing sector, reflecting an inability to compete in more productive sectors. Apart from small niche exporters and tourism, SE Queensland acts as an administrative, transport and service centre for the State's resource based regions. This is a weak strategic position, by the rapidly rising standards of the Asia / Pacific region.

Economic development is important because it accelerates economic growth, and also affects the ability of a region to compete in high productivity industries (ie those whose high value added sustain high wage rates and exchange rates). The traditional idea that regions should rely on their 'comparative' advantage (ie compete in their most productive existing sectors) has been replaced by the need to raise productive capability as a basis for creating 'competitive' advantages, if relative incomes are to rise.

RPAG accepted the economic framework established by the 1992 state economic policy Leading State, though research into Industrial Location and Tourism was undertaken. There is little substance in this framework. Firstly, Leading State did not establish effective machinery to deal with economic development. Secondly, RPAG's investigations into Industrial Location and Tourism mainly considered the location of industry within the region rather than whether desirable industries could prosper there at all. Current thinking about industrial location was not mentioned. Preferred growth industries were nominated on the basis of unsupported assertions. Methods suggested to foster economic growth are inadequate to develop the economy, or to ensure community prosperity, relevance or security in the rapidly developing Asia / Pacific region.

The SEQ 2001 project took too narrow a view to find a useful vision of a prosperous future for SE Queensland because, apart from migration, only factors within the region were considered in depth. Insightful vision required first analysing the global situation to determine how SE Queensland should adapt to put itself into a better position.

SEQ 2001 assumed that rapid population growth was a given planning factor. However the economic activity and employment stimulated by housing and other investments on behalf of interstate migrants is itself a major attraction for further migration. This feedback creates a 'bubble' which could potentially burst. Furthermore increasing population might just 'import poverty' through straining government and social services.

RPAG identified the need to catch up a services backlog due to past and present population growth, and also suggested higher services and environmental standards. RPAG did not suggest where all the extra money might come from. Expected efficiency gains from growth management are very doubtful in practice. Thus choices are: much higher tax rates on SE Queensland's under-developed economy (noting these rates are limited by international competition for industry); or a deeper tax base (ie lifting per capita incomes to lift revenue at given tax rates). A deeper tax base requires economic development, which would invalidate some low productivity industries RPAG targeted.

Institutional Arrangements Proposed for Growth Management are Impractical

RPAG suggested that SE Queensland's growth be managed by an unrealistic politically driven and public sector centred planning process. The administrative coordination this requires would be a constant struggle. Proposed growth management principles, based on cooperation and building on existing organisations, lack credibility because they are incompatible with recent heavy handed public sector reforms. The overall approach is too complex, and the public sector now too ineffective, for services costs to be necessarily reduced. Increased 'red tape' and rising costs are the most likely outcomes.

There is more to Managing SE Queensland than `Real Estate' and the Public Sector

Effective management of SE Queensland by its own citizens can not be achieved by dealing mainly with the factors on which SEQ 2001 focused: broadly defined 'real estate' issues (ie housekeeping), and matters in which government has a direct involvement. Other key mechanisms are markets, social trends, national and supra-national governance. RPAG ignored the option of suggesting methods to influence the outcomes these will produce. Governments can not control market outcomes (eg stimulate growth centres if this is contrary to market trends). However, there are ways to influence what market mechanisms will tend to 'freely' produce without directly controlling the results in particular cases.

Remedial Action Appears Necessary

There has been controversy about some of RPAG's findings and the institutions proposed for growth management. Important issues will thus take too long to resolve. 'Red tape' from proposed methods for growth management would increase economic uncertainty and risk bursting the interstate migration / housing investment 'bubble'. In the long term, SE Queensland can not enjoy a higher level of 'livability' and environmental standards, in the face of increasing population pressure, on the basis of the industrial profile and capabilities of its presently under-developed economy. Despite this, the SEQ 2001 project left many organisations with an understanding of their future roles which will perpetuate economic under-development in SE Queensland. This should be remedied.

A Proposal to Develop SE Queensland

Serious economic development is essential for the growth of industries which have sufficient productivity to support high incomes, as well as environmental and livability standards like those which RPAG sought. Purposeful environmental, social, cultural and political development are also required. Policies which now encourage population growth accompanied by low quality economic growth (eg low taxes) might be moderated.

Better management of SE Queensland can be achieved by enabling existing organisations and people (in the community, private and public sectors) to increase their effectiveness in doing so. A formal 'regional outline plan' supported by administrative / political machinery would simply be in their way. The establishment of new apolitical machinery for economic development is required because of the need to 'create' competitive advantages, given that existing comparative advantages lie in low productivity sectors (eg tourism). Better government machinery could be created if coordination were treated as a means for organisation building, while allowing individual agencies to deal with 'plans' and 'outcomes'.

SEQ 2001 was a useful initiative in focusing on land use and infrastructure issues in SE Queensland, though it was not a viable basis for politically driven management of the region as a whole. An Association / Institute linked to a non governmental 'parent' body, might now have a useful role in stimulating attention to SE Queensland's economic development by those exploiting strengths and creating new business opportunities, and also in highlighting points of agreement and disagreement about land use and infrastructure issues.

The above case is available in more detail