Backwoods Policy Making

Released on the Friday after the federal budget, the Government’s Sustainable Population Strategy is for the most part just 88 pages of promotional guff and colour photos.

But it isn’t entirely meaningless.

Seemingly minor policies in the population strategy suggest a larger plan by federal and state governments to shift population growth and employment away from cities and to the regions.

You’ve probably heard about the migration changes already. As Julia Gillard said, “I don’t want the first port of call for migrants to our country to always be the growing suburbs of Sydney and Melbourne”. That’s the payoff of the 2010 election’s small Australia rhetoric. Skilled immigrants will be directed towards regions rather than urban areas.

But it’s not only about migrants – governments want existing urban residents to move to the regions too. The Promoting Regional Living Program funds rural areas to promote themselves to city dwellers.

And on top of these federal initiatives are the existing state incentives for people to move away from the big smoke. A number of states – Victoria and Queensland, for example – boost their first home owners grant if purchasers buy away from urban areas.

You can understand why governments want to take pressure off city growth. Trains and trams seem packed. Infrastructure has not kept up with demand – or, if it has, no voters seem to believe it.

Yet policy makers shouldn’t forget the basic reasons many people want to live and work in dense urban areas when they haven’t been induced to do otherwise.

The Harvard economist Edward Glaeser has described the city as humanity’s “greatest invention”. Policies which try to divert growth away from cities – shift activity and population away from where they would otherwise prefer to go – could create more problems than they solve.

After all, an urban population is a richer population. In his new book, Triumph of the City: How Our Greatest Invention Makes Us Richer, Smarter, Greener, Healthier, and Happier, Glaeser describes the “near-perfect correlation” between urbanisation and prosperity.

City dwellers aren’t only richer – they’re happier too. The more urban a nation, the higher that nation’s reported happiness, even after you factor in the happiness-boosting effect of income and education.

Successful cities, Glaeser uncontroversially says, are those which attract smart and creative people, and allow those people to interact in close proximity to each other.

That interaction sparks aggregate economic growth and individual economic opportunity for creative and non-creative alike.

And, of course, cities have amenities. It’s easier to provide services to dense communities, and provide a greater array of those services.

None of these benefits of city living are novel to anyone, of course. They’re why cities exist in the first place.

Tree and sea changes may be appealing, but regional and remote areas offer fewer ways to earn money – and fewer ways to spend it. A report in the Sunday Age in 2009 found a substantial proportion of people moving to quieter parts of the country regretted it – 90 per cent planned to leave within the next five years.

As one academic said at the time, “People bought the dream about the idealistic country life, then they moved there and were confronted by the reality: poor health care, poor road quality, fewer work opportunities, expensive food, lack of entertainment, obesity, lack of ethnic diversity, difficulty making friends, conservatism and narrow-mindedness. They expected to find an enjoyable life with less work and less traffic. But they found a lack of stability, lower pay and longer commutes.”

We’re all familiar with the cliché that small towns have a sense of community. But cities have networks of communities. Not only are there are more people in a city with whom relationships can be formed, but the greater diversity of interests allows niche communities to develop.

Each to their own, obviously.

But the well-known advantages of urban living should make you wonder about the wisdom of deliberately encouraging people to move away.

Do we really want migrants to settle outside the capital cities, where formal and informal support networks are smaller or absent? Migrants choose cities for the same reason everybody else does – services, employment, and social opportunity.

And do we really want to be subsidising first home buyers – people early in their career and family life – to move to areas with more limited prospects for personal and job development?

Sure, if people choose to move away from cities and to regional areas, that’s their business. But it’s a problem if government policy deliberately induces people to do so – to buy houses and find their feet in areas which, all else being equal, have fewer opportunities, fewer essential services and offer a potentially lower standard of living.

Public policy should not favour cities, certainly. But neither should it encourage people to leave them.