Trends and Melbourne - September 2014



INTRODUCTION

Melbourne, Australia and the world are changing. Changing demographics, economic downturns, environmental impacts, changing community and social expectations and growth in technology will all affect what is planned and built. Understanding these changes will help us plan and adapt for what Melbourne municipality needs today and in the future.

Information sheets have been prepared to provide a snapshot of the current situation and emerging trends important to the City of Melbourne’s future. These information sheets cover the themes of:

1. People

2. Housing

3. Environment

4. Lifestyles

5. Social Inequalities

6. Economy

7. Knowledge

8. Infrastructure

9. City Governance

Each information sheet is intended to prompt your thinking about these themes and their implications on the future planning for the City of Melbourne.

Acknowledgements

This research report is an update of a paper that was first prepared to provide a new Council with information to support strategic planning and development of the next Council Plan. This update was prepared as a series of fact sheets based around less than ten key issues for the four years ahead. Each sheet addresses three things: introduction, key statistics and implications for the municipality and City of Melbourne. It is intended to provide conclusions or recommendations for actions - it asks questions to stimulate thinking and discussions.

PEOPLE

INTRODUCTION

Between 2008 and 2013 the Melbourne Local Government Area’s residential population increased by almost 30% (around 26,500 people) to an estimated 116,447 people. In the last year (2012-13) our population grew 10% or 11,000 people, making Melbourne City the largest and fastest growing municipality in Victoria.

While the municipality’s population will grow, our demographic profile will remain similar, in contrast to the trend in Australian and Victorian where households will get smaller, and populations will continue to grow and age. This will test our assumptions about current and future demographic characteristics of our population.

DID YOU KNOW?

• The municipality’s estimated resident population is approximately 116,447 (30 June 2013).

• In the coming years, the population is expected to grow rapidly at an average annual rate of 5.8% reaching a forecast population of over 133,000 in 2016.

• Unlike Australia and Victoria, Melbourne Local Government Area’s (LGA) population is not ageing and is not expected to age. From 2011 to 2016 the older population is forecast to remain proportionally the same or decline. Median age has remained 28 years.

• Average household sizes in Australia have remained the same (2.6 people per household) over the past 10 years. In contrast, the municipality’s average household size increased to 2 persons per household and could be expected to remain at that level for the next few years.

• Australia is experiencing a reversal in fertility trends with minor increases in fertility rates (i.e. more babies) while Melbourne City has low fertility rates.

• Young people and young adults (12 to 35 years of age) comprise the largest proportion of residential population at just over 60% and this is forecast to remain the same in 2016.

• The area has become more multicultural since 2006, when 48.5% of the population was born overseas (53.5% by 2011) and almost 39% spoke a language other than English (43% by 2011).

• The population is more multicultural than the rest of Australia. In the rest of Australia, 26% of the population was born overseas and 19% speak a language other than English at home.

• More Melbourne City residents were born overseas than in Australia.

• A large number of international students live and/or study in this municipality.

WHAT DOES THIS MEAN FOR THE CITY OF MELBOURNE?

Population growth and migration

Victoria gained more people from interstate migration (particularly New South Wales) than any other state during the year ending 30 September 2013. This is the highest net interstate migration gain for the state in over 30 years and Victoria has now overtaken Queensland and Western Australia in net interstate migration.

The change in the interstate migration trend is being driven by employment options rather than the traditional driver which is lifestyle. Australians will still migrate to Queensland and Western Australia for lifestyle reasons however there is a perception that Melbourne has more job opportunities and more affordable housing.

Demographic changes

While the population continues to grow, it will remain relatively young. The proportionately largest resident group will continue to comprise youthful, culturally diverse, tech-savvy, relatively asset poor students (including a significant proportion of international students) and young professionals, often living in single person households and often from an overseas background. This cohort is likely to demonstrate a need for a range of services. They are considered mobile, and likely to live in Melbourne for a short time.

While the population will grow rapidly in the next five years no particular age group will increase its share of total population at the expense of any other. The cohort of older persons will remain around the same size proportionally, at around 10% of the total population by 2016, but their actual numbers are expected to increase from just over 10,000 in 2011 to just over 13,000 in 2016. Similarly, while the number of children of both primary and secondary school ages will increase from 5400 in 2011 to over 9300 by 2016, the proportion of school age children and teenagers is expected to increase only slightly. The number of children under five years of age is expected to increase from 3600 in 2011 to 4500 2016 while the proportion of total population will remain around the same.

The ageing of the national population may have implications for City of Melbourne. Increased pressure on the productive population of the nation and on government health and social security budgets may in the long term manifest as increased competition for limited government resources, devolution of responsibilities to Local Governments and competition for highly mobile skilled workers. In the future, many 70 year olds could still be fit and healthy and working, commuting to Melbourne municipality. Some of our older residents will remain healthier longer, but others will have high needs for community services.

The large and growing daily population, which includes residents, workers, students and visitors highlights the multiple roles of the municipality in residential, business, tourism and education and has implications for regulatory activities and services and prepare for older visitors or workers.

Households

We may need to re-think the conventional wisdom that this city has declining household sizes and how housing needs are addressed by high proportions of one or two bedroom apartments (see facts about household size above).

Although fertility rates are expected to remain low and the proportion of children is expected to remain the same, the youthful and growing resident population is likely to cause an increasing number of births in the (from 700 in 2007-11 to almost 1100 in 2012-16). Early childhood and other services to meet the needs of parents and children will be in demand.

Services

The growing population will increase demand for services from City of Melbourne, including waste collection and recycling, social, family and early childhood services, public and environmental health regulation (for example, dealing with noise complaints), open space and community facilities.

The increasingly multicultural nature of the municipality’s residential population has implications for the types of social services and community activities City of Melbourne will provide in the future. It will affect the way Council and City of Melbourne involve the public in decision making, for example, how to increase the participation of people from a wider range of cultural backgrounds in local government decision making. Finally, it has implications for how City of Melbourne communicates and promotes to residents.

For data sources and references see the accompanying document (DM#8417055)

For more detailed information and data about health trends and priorities see DM#7441302

HOUSING

INTRODUCTION

Australia’s housing market is still dominated by home ownership, low density development and the separate house. In contrast Melbourne municipality has experienced a boom in flats and apartments over the past 10 years, driven by increasing residential land prices and the market perception of demand for smaller dwellings close to the city.

Housing affordability in Australia is worsening. International research suggests Greater Melbourne house prices increased faster than income levels. Australian cities are among the most unaffordable housing markets in the world. This pushes low and moderate income households to the outer Greater Melbourne suburbs for more affordable opportunities for first home purchase and renting.

DID YOU KNOW?

• There has been strong growth in dwelling construction from 2006 to 2012, especially in the Melbourne CBD (37%), Southbank (15%) and Docklands (8%).

• Between 2014 and 2016 new supply is projected to average 6600 dwellings per year, tripling the ten year average of 2100 dwellings per year.

• More than 10% of new homes approved in Victoria 2010-11 were built in Melbourne municipality.

• Over the period 2012-14 Melbourne Local Government Area will account for around 35% of overall residential urban renewal development activity in Greater Melbourne and will be the largest growing residential urban renewal area in Greater Melbourne.

• The proportion of flats and apartments increased from 78% in 2002 to 83% of all housing in 2010.

• The proportion of renters and mortgagees paying more than 30% of their income on housing declined between 2001 and 2011, from almost 61% to about 53.5%.

• 7% of private occupied dwellings are social housing.

• City of Melbourne’s StreetCount shows a slight decline in numbers of people sleeping rough from 112 in 2008 to 101 in 2012.

WHAT DOES THIS MEAN FOR THE CITY OF MELBOURNE?

Housing growth

In November 2013 there were 51 developments under construction, expected to yield around 11,732 residential dwellings by the end of 2016. Eighty-five proposed developments with a total of 15,515 dwellings have town planning approval and could be expected to begin construction within two years. A further 63 proposed developments yielding 17,580 dwellings could be expected to begin construction within three to five years (subject to town planning approval). This level of dwellings growth will drive a relatively high rate of population growth in the coming years (see population facts and introduction under ‘People’, above).

Between 2014 and 2016 new supply is projected to average 6600 dwellings per year, tripling the ten year average of 2100 dwellings per year. Melbourne is the only Local Government Area in Australia that is forecast by the Housing Industry Association to supply sufficient housing to meet forecast demand from residents by 2020.

The City of Melbourne will be involved in at least three major urban renewal projects at different stages of development in Docklands, Southbank and Fishermans Bend (See also Knowledge section, page 15) and E-Gate and City North over the next Council term.

Housing Types and diversity

Analysis of the diversity of the municipality’s housing stock revealed some clear trends and changes over the past six years. While there been strong growth in dwelling construction over the past six years, few three or four bedroom dwellings are being developed. Approximately 50% of new dwellings have one bedroom and dwelling size is shrinking with 40% of new dwellings having less than 50m2 of floor space. Around 42% of new dwelling construction is in higher density of 20 levels or more above ground. Finally, more than 90% of new dwellings are apartments.

Households are not declining in size. This has implications for the amount and type of housing needed to meet population growth and new information about the average household size and type. If more people are likely to work from home then this may also have implications for the type of housing that should be planned. Dwellings with a valuation of less than $300,000 have dropped from 43% in 2006 to 21% in 2012.

State Government housing has decreased by 4% in the past six years. Almost 70% of dwellings in the municipality are not held by owner occupiers, likely because dwelling growth is increasingly driven by overseas investors purchasing in the Australian market.

Some analysts and social researchers consider risks in the Melbourne housing market, including:

• A glut in the municipality’s market that could extend to the end of the decade.

• Financial losses on sale of dwellings. RP Data’s Pain and Gain report, showed 15.5% of all sales in Melbourne municipality in the final three months of 2013 were below the initial purchase price, compared to 6% in metro Melbourne. The average loss was $33,000.

• Possible loss of liveability and the creative class vision for the centre of the city as “a place of work, recreation and residence in almost equal measure”.

Public Housing

The Victorian Government is reviewing the future of social housing in Victoria, which could include new social housing funding and development models and changes to rent levels and terms of social housing leases. The intent is to make social housing financially sustainable but could result in higher rents, less security of tenure and low income households being forced to leave the inner city or live in a cycle of homelessness, poverty and transitional housing.

Although public housing comprises 7% of the municipality’s occupied housing, it is mostly concentrated in estates with relatively higher levels of disadvantaged residents who use City of Melbourne and other services.

Homelessness

Homelessness has a range of impacts, including poverty and poor public health outcomes. There are also clear links between discrimination against people experiencing homelessness or poverty and poor health outcomes. In the case of women and children there are clear links between homelessness and family violence.

For data sources and references see the accompanying document (DM#8417055)

For more detailed information and data about health trends and priorities see DM#7441302

SUSTAINABILITY AND CLIMATE CHANGE

INTRODUCTION

Cities around the world are capturing the opportunity to reduce environmental impacts to improve short term and long term health impacts for residents and city users. Cities are also preparing for climate change, given the high risk impacts of these changes on biodiversity, economies and societies.

Australians are estimated to have the fourth highest ecological footprint in the world. As the driest continent on earth, potable water supply is a finite resource and infertile soils present challenges for food production.

DID YOU KNOW?

• Residential greenhouse emissions in Melbourne municipality were estimated at 6.07 tonnes CO2-e per capita in 2012-13.

• Non-resident emissions were estimated at 14.24 tonnes CO2-e per worker in 2012-13.

• Total residential electricity consumption increased from an estimated 223.6 million kWh in 2011-12 to 249.8 million kWh in 2012-13.

• Non-resident electricity consumption also increased from in 3b kWh in 2011-12 to 3.5b kWh in 2012-13.

• Daily water consumption per resident in the area declined on average by 4.2% per annum from 142 litres in 2008-09 to 112 litres in 2012-13.

• Workers’ daily water consumption decreased by an average of approximately 1.4% per annum from 108 litres in 2008-09 to 102 litres in 2012-13.

• Garbage collected per household per year increased 2% per annum between 2006 and 2012.

• Recycling per household per year in the area increased 3% per annum from 2006 to 2012.

• In 2012, 32% of residents and 29% of businesses have done something (saving water or installing more efficient air conditioning) to prepare for extreme weather events.

WHAT DOES THIS MEAN FOR THE CITY OF MELBOURNE?

Climate change

The most relevant predicted effects of climate change on the municipality include: reduced rainfall; higher temperatures and heat waves; increased evaporation; sea level rise and storm surges; intense rainfall events; increased storm frequency and intensity; increased wind speed with consequences for the economy, public health, and infrastructure.

Greenhouse emissions

Data for greenhouse emissions show total emissions in the municipality of 6,442,240 tCO2e in 2012–13 which includes emissions from electricity, gas, landfill waste, private vehicles and public transport. This is estimated as 6.07 tCO2e per resident and 14.24 tCO2e per worker. If electricity consumption in the municipality continues grows, greenhouse emissions may also be expected to increase in future. Greenhouse emissions are driven by demand for energy, which has impacts locally including increasing the temperature of the city. Sustainable energy use requires the adoption of energy conservation measures and a switch to more sustainable generation of energy. Melbourne is reliant on the most greenhouse intensive fuel source for its energy.

Waste and recycling

From 2006 to 2012 garbage collected per household has grown 2% per year and shows Melbourne’s households have been consuming more materials each year and throwing away more waste to landfill. Without any change this trend may continue in the future. The amount that households recycle has also increased from 2006 to 2012. An understanding of the environmental footprint of goods consumed in the city will assist behaviour change programs.

Water consumption

Water consumption indicators show that the downward trend in daily water consumption by both residents and workers, from 2000 to 2007 has slowed since 2008, possibly because water restrictions ended. The recent water consumption pattern from 2010-11 to the present has been almost flat, at about 100 litres per worker. It did however continue to decline to 112 litres per resident. If this recent water consumption trend remains unchanged further reductions in daily water consumption by residents and workers will be harder to achieve in future.

Infrastructure

Provision of water incurs a significant social, economic and environmental cost through the construction of storage, treatment and transport.

Reducing the consumption of potable water may be achieved by using water carefully, installing water efficient fixtures and appliances, designing gardens and open space to use less water, harvesting rainwater and storm water and recycling water. Melbourne has an opportunity to provide leadership in integrated water management. Reporting water use can help engage residents and workers about reducing their water consumption.

Implications for transport infrastructure include more frequent transport interruptions due to extreme weather events, which will impact on productivity. Infrastructure is required to support modal shifts in transportation toward walking, cycling and public transit to minimise congestion, air quality and emissions impacts.

Food Security

Climate change and peak oil present a threat to cities’ food security. Cities worldwide are integrating agriculture into urban environments, using rooftops or clean, disused land to produce food and improve health and wellbeing.

Public Health

Climate change may have increasing public health impacts such as illness and death from heat waves, injuries related to extreme weather events; infectious disease outbreaks due to changing patterns of mosquito borne and water borne diseases; possible poor nutrition among some disadvantaged households, from reduced food availability and affordability; and potential mental health issues (depression and suicide). The city’s natural assets have significant opportunities to mitigate the health impacts of climate change.

For data sources and references see the accompanying document (DM#8417055)

For more detailed information and data about health trends and priorities see DM#7441302

LIFESTYLES

INTRODUCTION

The way people are living their lives is changing. People are working more, connecting with others via social media, sitting for long hours in their car or at their desks and eating more fast foods. These unhealthy behaviours are resulting in physical and mental health impacts with rising rates of obesity and chronic illnesses such as heart disease, type 2 diabetes, cancer and mental health issues such as anxiety and depression.

In addition, the majority of the world’s population is living in urban environments. With rapid development and population growth, inner city living and lifestyles are changing and this is likely to have significant health and wellbeing impacts.

DID YOU KNOW?

• On average residents scored their own quality of life 75.4 out of 100 in 2012 and 76.5 in 2013.

• In 2012 more than 57% of residents reported their health was either 'excellent' or 'very good' and in 2013 around 65% of people living in the municipality reported their health was either 'excellent' or 'very good'.

• Residents’ reported level of satisfaction with feeling a part of the community was 67.5 in 2012 and 68.2 in 2013.

• In 2012 almost 43% of residents reported they helped out as a volunteer and in 2013 it was over 49%.

• 94.5% of residents do not eat enough vegetables, 46% do not eat enough fruit, similar to state averages.

• 34% of male residents and 14% of female residents are overweight, similar to state averages.

• Male residents have significantly higher rates of cancer (11%), and women significantly higher rates of heart disease (8.6%) than the state average (6.1% and 5.2% respectively).

• Male residents consume more alcohol at risky levels (41%) than the state average (33.3%).

• The area has the proportion of alcohol and drug-related ambulance attendances in Metro Melbourne.

• Melbourne municipality has the highest rates of chlamydia notifications in Victoria.

• The number of family violence incidences reported increased from 544 per 1000 incident reports in 2008-09 to 999 per 1000 in 2012-13.

• Crime increased 14% from 2010 to 2013 (from 26,712 to 30,537 recorded offences per 1000).

• 12.5% of residents report high to very high levels of anxiety and depression and 13% have sought professional help for a mental health problem, higher than the state average of 11.4%.

• 84.1% of residents mostly sit or stand at work all day, significantly more than the state average (64.2%).

• The number of noise complaints received by City of Melbourne increased annually from 10.5 per 1000 in 2008 to 13.1 per 1000 in 2012.

WHAT DOES THIS MEAN FOR THE CITY OF MELBOURNE?

Inner City Lifestyles

Being the central municipality of a Greater Melbourne area and capital city brings social, economic, built and natural environmental conditions that impact on the opportunities of residents to lead healthy and safe lifestyles. Some potential implications include:

• Inner city living costs are high. Housing prices will continue to be unaffordable for many lower and middle income households and cause housing related stress.

• A large number of people living alone as the city attracts students and young professionals which may have implications for social inclusion.

• The central city brings people together to do business, socialise, participate in sport, arts etc. Some of these activities are linked with problems around personal and community safety, alcohol and other drug use and related harms, sometimes involving weapons, theft and drug possession and use.

• Increasing urban density and moving towards a 24-hour city may lead to more congestion, noise and pollution.

• As the climate changes there will be impacts, for example, urban heat island effect which may lead to increases in heat-related illness and deaths and threats to infrastructure including curtailed rail services, over extended emergency services, and failures of electricity supply.

Designing places for improved health and wellbeing

In Victoria, local government is required and well-placed to prevent disease, prolong life and promote public health and wellbeing, as outlined under Section 28 of the Public Health and Wellbeing Act 2008.

Local governments key roles in this space are to create a physical environment which promotes and supports good health and wellbeing (for example, a walking and cycling friendly environment, places for people to connect, access to fresh food and transport, clean and free of graffiti, access to sports facilities, libraries and other multipurpose community hubs), providing health promotion messages around healthy lifestyles, provide support services, community development, policy and planning, advocacy, research and regulation.

Managing a 24-Hour City

With the municipality increasingly open around the clock, there will be a need to cater to people’s different needs over the 24 hour period. City of Melbourne will face conflicting needs and objectives in planning to cater for a growing number of people and different populations (for example, worker population, resident population and student population) in the city centre. The mix of activities in which people engage while in the city also changes between day and night..

Increasing urban density also presents other public health challenges around noise management, air quality and stress related to increased city congestion. The major safety concerns over the next five years include public drunkenness (43%), assault/physical violence (25.6%), traffic flow (17.4%), drug use (15.7%) and managing growth/increased population (13.8%).

Cost of living

The cost of essential items such as food, clothing, housing, health services and transport are rising which means people already experiencing disadvantage will face increasing financial pressures. The implications of more money going to basic essentials such as rent/mortgage and utilities are less money left over to spend on other expenses. This will have flow on effects as it limits people access to transport, going out and accessing other vital services putting people at an increased risk of social isolation, mental illness and food insecurity.

For data sources and references see the accompanying document (DM#8417055)

For more detailed information and data about health trends and priorities see DM#7441302

SOCIAL INEQUALITIES

INTRODUCTION

While overall, the Melbourne municipality is considered socially and economically advantaged, there are marginalised community groups and areas of disadvantage which can be overlooked.

The ACOSS Poverty in Australia report found nearly 2,265,000 people in 2010 (12.8% of all people) were living below the poverty line and 600,000 or 17.3% of them were children. The measure of poverty was 50% of median income in Australia. Poverty among single parent families has increased by 15% since 2001.

DID YOU KNOW?

• Melbourne Local Government Area has Victoria’s socially and economically most advantaged area and some of Victoria’s most disadvantaged areas on the Australian Bureau of Statistics Socio-Economic Indexes for Areas (SEIFA).

• In 2011 more than a third of the population (36%) earned, between $1 and $399 per week.

• In 2012 around 4.5% of adults reported they had run out of food in the past 12 months and could not afford to buy more. By 2013 less than 3% had run out of food and could not afford more.

• 22% of residents report they don’t always have the quality or variety of food they want because some foods are too expensive.

• Low income families with either two or one parents would need to spend 43 to 46% of their incomes respectively, to maintain a healthy diet, which is above the recommended 30% of income for food.

• 40% of Australians believed that 'inflation/cost of living' was one of the top three issues facing the nation; making it the number one issue for June quarter 2012.

• The proportion of residents with a profound or severe disability was 1.6% in 2006 and 2% of the municipality’s population in 2011.

• 41% households have no car. 39.9% say this is due to rising petrol prices.

WHAT DOES THIS MEAN FOR THE CITY OF MELBOURNE?

Socio-economic inequality

The proportion of households earning more than $2,500 per week is relatively and Melbourne municipality is ranked 13th most socio-economically advantaged area in Greater Melbourne. There are, however, pockets of socio-economic disadvantage in North Melbourne, Carlton and Kensington. These suburbs have large, primarily public housing estate areas with high proportions of vulnerable groups including:

• low income earners (between $1 and $399 per week) and unemployed

• families with children under 0 to 12 years, particularly single parent households

• people with low English proficiency

• older adults and those with a disability, including severe or profound disability requiring assistance

• people living alone in public housing.

People of lower socio-economic status have worse health than those living in more advantaged areas. Evidence shows they rate their health more poorly, have higher rates of some chronic illnesses, lead less healthy lifestyles and are less likely to get health checks. Additionally, lack of economic resources limits access to basic essentials such as food, housing, transport and health care and can also limit participation in the community which leads to higher levels of anxiety, social isolation and marginalisation.

Disability

The proportion of residents with a profound or severe disability was 1.6% in 2006 and 2% of the population in 2011. More than 1,800 residents (up by 600 people since 2006) live with a profound or severe disability and are considered to need help or assistance in areas of self-care, mobility and communication, because of a disability, long term health condition lasting six months or more or old age. On a daily basis, there are likely to be even more people with disabilities in the municipality and all their needs must be considered.

Marginalised community groups

Several important indicators of disadvantage suggest the population from Horn of Africa, in particular the Somali community which is the largest ethnic group from Horn of Africa, is at risk of marginalisation. The population from Horn of Africa is comprised of families from a predominantly refugee background. Overall, compared to the rest of the population, they are significantly more likely to:

• live in single parent families

• live in public housing

• achieve poorer educational outcomes

• experience poorer employment outcomes

• earn lower incomes.

Outcomes for the Horn of Africa community are not significantly improving over time. Also, analysis of census data shows in 2011 more than 66% of Somali’s were living at the same address where they lived five years ago, compared to less than 30% of the rest of the population, suggesting they’re ‘stuck’ in public housing. The Horn of Africa population numbers around 1800 people including approximately 500 children and youths.

Efforts directed at improving some of the above mentioned outcomes for the Horn of Africa community may have a significant impact on inequality and the overall wellbeing of the community.

Housing Affordability

The declining proportion of renters and mortgagees paying more than 30% of their income on housing in this municipality between 2001 and 2011 indicates a growing proportion of households are able to comfortably afford a dwelling in this municipality. These are often relatively affluent households.

In 2012, however, the poorest 25% of the population can at best afford 6% of the municipality’s dwellings. The number of dwellings affordable to the poorest 25% of the community (households earning less than $400 per week) has increased from 3,356 in 2006 to 3,589 in 2012. Further, less than 1% of new lettings in the municipality are affordable to households receiving incomes from Centrelink. By this measure 53 new lettings were affordable in 2001 and 131 in 2011.

Youth Unemployment

While the area has an overall unemployment rate of 5%, youth unemployment is growing. Analysis by the Brotherhood of St Laurence shows the inner Melbourne area has a youth unemployment rate of over 13%. Consequences of unemployment and a lack of job opportunities for young people can include: relatively lower quality of life and standards of living; lack of skills; and potential welfare dependency.

For data sources and references see the accompanying document (DM#8417055)

For more detailed information and data about health and socio-economic data see DM#7441302

ECONOMY

INTRODUCTION

The national economy faces a number of challenges but despite this there have been some recent positive developments. The challenges are:

• productivity growth in Australia appears to have slowed

• post Global Financial Crisis conditions and European debt crisis are changing the way people spend

• a strong Australian dollar, expected to remain high for some time to come

• we are facing a potential credit constraint over the next 5 years

• Australian consumer confidence remains very low

• concerns developing nations demand for resource show soon and how smoothly can Australia adjust to the high dollar and the end of the mining boom by transferring investment and resources increasingly into other sectors of the economy.

DID YOU KNOW?

• Business and employment in the municipality grew 6.5% and 8.4% respectively, between 2008 and 2012.

• There was a 13% increase in retail establishments from 2006 to 2012.

• International visitors to the area grew 7% per annum between 2008-09 and 2012-13 to 1.24 million.

• Visitors to Greater Melbourne spent approximately $10.7b in 2011.

• Median weekly household income increased from $1,070 in 2006 to $1,352 in 2011.

• Unemployment for residents was 5% in March 2013.

• Between 2007 and 2012, the economy grew 35% to $86.7b.

• In 2012 workers’ contributions to the GLP (Gross Local Product) was $167,660 each.

WHAT DOES THIS MEAN FOR THE CITY OF MELBOURNE?

Business and employment

The municipality attracts employment from, and generates income for, other areas. The local economy (GLP) grew significantly from 2007 to 2011. Business numbers and the workforce also grew significantly between 2008 and 2012. The most recent burst of commercial employment growth has been driven by the development of Docklands which provided the capacity to accommodate knowledge intensive office based employment.

The workforce is forecast to continue to grow, but more slowly, by 2% per annum to 510,000 workers in 2016. Between 1996 and 2011, employment in Greater Melbourne increased by around 560,000 jobs and our municipality contributed almost 30% of that growth (160,000 jobs). In 20 years, Greater Melbourne will add over 900,000 jobs, of which one quarter will be within Melbourne Local Government Area.

Unemployment among residents has been comparatively low but the trend now appears, since 2008, to be increasing and has now reached the same rate as metro Melbourne.

Adjustment after the mining boom

Nationally, the mining investment boom peaked in 2014, though it will still underpin activity for the next few years. Meanwhile broadening investment beyond mining was expected to drive growth, softening the impact on the economy. The high dollar may have adversely impacted Australia’s transition from mining and public investment-led growth last decade to balanced growth as business investment outside the resources sector remained weak since the GFC. Recovery is expected to be two years away, though, once it comes will significantly boost growth and employment in industries such as finance, business services and health services which have a large presence in the municipality. This also has implications for population growth as interstate migration to Melbourne may increase as growth in the non-mining sector picks up (see people section, page 2). State and Federal Governments are likely to experience little employment growth over the next few years, potentially increasing pressure on City of Melbourne to deliver services and infrastructure.

Manufacturing

In late 2013 and early 2014 the remaining two major car manufacturing companies in Australia, Holden and Toyota announced complete closure of manufacturing by 2017. Prior to this, the car manufacturing industry employed around 2000 people or only 0.5% of employment in the municipality. The contribution of the industry is up to $300 million, or 0.3% of the economy. While car manufacturing is a small fraction of the local economy the closures may indirectly impact other sectors through lost supply contracts.

Car manufacturing sites in Port Melbourne are large and the potential increase in intensity of use of these properties after car manufacturers leave could affect the urban form of the city, economic activity and traffic volumes/public transport.

Productivity

In contrast to productivity decline nationally, the value of worker productivity in the Melbourne Local Government Area has increased 27% since 1999. Although productivity growth has slowed between 2006 and 2010 it increased again in 2011 and may continue to grow, rather than decline. The biggest productivity and wage pressures have been identified in mining and utilities industries, nationally, but these comprise only 2% of the local workforce in 2012.

Public transport facilitates networking benefits in cities. Ability to connect with other businesses by walking or using efficient public transport contributes to central Melbourne’s high Effective Job Density (EJD). Congestion has a significant impact on the economy with a cost to the city of $3 billion a year. Reducing congestion by prioritizing more space efficient transport has been identified as a way to improve productivity.

Retail

Over the last 5 years the retail sector has performed well, though turnover is expected to continue to grow slowly over the next five years because of lower consumer confidence, households reducing debt and online retail. Online retail is expected to give consumers more power and take more market share from traditional retailing. This could impact on retailer profit margins and returns to retail property, prompting some investors to consider investing in other sections of the property market.

Opportunities for future growth

Following the end of the mining investment boom, mining will continue to be a driver of growth, though not the only one. Australia's top five economic prospects for the future are likely to include: tourism, agribusiness, wealth management, international education and gas. Melbourne municipality is well placed to play a continuing role in international education and wealth management, both of which are acknowledged strengths of the local economy. Other economic sectors that could be important include tourism, health and out-patient services, and the ICT sector. The local health sector has shown strong growth in both employment numbers and the floor space and this will continue for the next few years.

For data sources and references see the accompanying document (DM#8417055)

For more detailed information and data about health trends and priorities see DM#7441302

KNOWLEDGE

INTRODUCTION

Cities in the 21st century are becoming powerful places for the creation and exchange of new ideas, which are transformed into innovations that drive economies and underpin prosperity. Three key factors include:

• Education

• Innovation.

• Internet and social media.

DID YOU KNOW?

• 88% of households have internet access and 90% of them use broadband, higher than the Australian average (77%).

• Around 7% of households earning $120000 or more are without home Internet.

• 42% of households earning less than $40 000 are without home Internet.

• The number of patents granted to individuals or corporations in Melbourne municipality increased from 90 per 100,000 residents in 2010 to 103 per 100,000 residents in 2013.

• From 2009 to 2011 50% of people employed in the municipality work in highly skilled occupations.

• Household spending in Australia on new age services passed that on retail for the first time, in 2011.

• On any one day in Melbourne Local Government Area there are more than 30,000 international students studying at a variety of educational institutions.

• Postgraduate enrolments in higher education grew 22% from 2007 to reach 35,351 in 2010.

• 42.5% of the population is attending an educational institution, higher than the Australian average (30%).

• Researcher’s employed at universities in the municipality grew from 4165 in 2010 to 4207 in 2012.

• Metro Melbourne is home to 50% of the top 20 biotech companies listed on the Australian Stock Exchange.

WHAT DOES THIS MEAN FOR THE CITY OF MELBOURNE?

Knowledge economy

The knowledge economy is comprised of three sub-sectors: core, intermediate and peripheral. The core of the sector comprises three sector comprises businesses and organisations that engage in activities including generating knowledge; transferring knowledge by providing educational services; or facilitating the transfer of knowledge by producing or providing goods and services that serve as a medium for transmission. The intermediate sector comprises businesses and organisations that use knowledge intensively as a key enabler in the production or provision of goods and services (for example, professional services firms). The periphery comprises other businesses and organisations that use knowledge to some extent in the production or provision of goods and services.

The majority of the local workforce is employed in the core and intermediate knowledge sectors. Of 428,590 workers in 2010, almost 284,150 (approximately 66 per cent) worked in businesses or organisations falling within the core or intermediate knowledge sectors. It is also estimated that the core and intermediate sectors of the economy directly contributed around 50% of the GRP in 2010.

Innovation and patents activity

The number of patents issued to residents or corporations is an indicator of innovation, which is a result of the production and use of knowledge. Melbourne municipality has a high level of innovation, as shown by an upward trend in the indicator of patent activity per 100,000 residents, from 2010 to 2013.

Over the past five years educational institutions of RMIT and University of Melbourne were each responsible for around 10% of patent grants. Universities contribute to the development of human capital and ability of people to engage in the global knowledge economy through collaborations relationships and by providing a research capability. Around 60% of grants were to businesses in the CBD and another 10% of patents granted were to businesses in the industrial suburb of Fishermans Bend. This area’s future as an innovation driver may be in doubt as it changes from an industrial area to residential (also see Housing section, page 4), and this may contribute to a small reduction in patents granted in Melbourne LGA in coming years.

Tertiary education

The former Victorian Labor government introduced a demand-driven funding model — in effect, a voucher system — to training institutes, including TAFEs. Maintaining quality in this system could present a risk to Melbourne’s reputation in education. Within two years, Federal Government will allow universities to set their own fees, which may have implications for the number of students in the city. Student visa applications to Australia have increased following previous declines and this suggests a recovery or partial recovery for the sector in the short term, at least. Melbourne’s education sector, which dominates international tertiary education in Australia, could benefit from increased student migration. The strong dollar (mentioned above in the Economy section), however presents a risk to student migration.

Internet and innovation

The NBN will further increase the accessibility of broadband internet and provide higher internet speeds to residents in particular. Faster broadband services will create more opportunities to work away from the workplace, which can benefit the municipality, employers, individuals and the environment. The online revolution is changing the way people sell and consume goods and services and leading to more consumer choice and control. There is a risk that services such as education can easily be delivered from an institution anywhere in the world. On the less positive side, taking the opportunity to work and socialise more online from home, could impact the levels of social isolation experienced by residents of the municipality.

Local policies for the wider municipality could focus on creating an environment where creative ideas can be shared and leveraged, for example the gamification (applying game-design thinking to help engage the public in problem solving) industry. Use of connected devices and sensors creates data which can help cities understand key issues (for example, performance of infrastructure; environmental performance; people movement) as well supporting more efficient information exchange and services between City of Melbourne and the public.

Globalisation

The labour market is increasingly globalised and production processes are likely to become more capital intensive. As skilled workers become scarcer and possibly more expensive, the pace of labour saving innovations may accelerate. Any increasing scarcity of skilled workers should not greatly impact Melbourne municipality in the short term. The highly skilled proportion of the local workforce has consistently remained around 50% since 2009. We could also be expected to benefit from labour saving innovations in the future. The anticipated establishment of an ASEAN Economic Community (AEC) by 2015 presents opportunities key industries such as education, finance and human resource development.

For data sources and references see the accompanying document (DM#8417055)

For more detailed information and data about health trends and priorities see DM#7441302

INFRASTRUCTURE

INTRODUCTION

The municipality is increasingly becoming a residential city, but currently it is still a hub for work and cultural activity. Transport is critical in maintaining connections in and out of the area. The ability to maintain physical connections and networking benefits will come under pressure from population growth, carbon costs and ageing infrastructure. Ensuring infrastructure meets the needs of our future population will be a major challenge.

The State Government recently released its Plan Melbourne, Metropolitan Planning Strategy, which has major implications for future planning in the central city area. Future communication infrastructure means both opportunity and risk (see the Education and Governance sections).

DID YOU KNOW?

• The daily population including workers and visitors is over 887,000 people, forecast to reach almost 930,000 by 2016 and one million by 2020.

• City users walking, cycling and public transport to get to and around the municipality increased from 58% in 2007 to 62% in 2009 but are forecast to account for 80% of trips in 2030 (about 2,671,376 trips).

• In 2009 there were 2.1 million trips per day to, from and within the municipality. This is predicted to increase to around 3.3 million trips by 2030.

• 66% of trips within the municipality are made by walking.

• 41% of households in the municipality do not own a car.

• There are an estimated 3,872 total delivery vehicles per day entering the Central Business District.

• Over 90% of freight through the Port of Melbourne is transported by road.

• The carriage of goods through the Port of Melbourne is expected to quadruple to eight million TEU (Twenty-foot Equivalent Units) per annum by 2035.

• Over half of all workers, students and visitors access the internet while they’re in Central Melbourne.

WHAT DOES THIS MEAN FOR THE CITY OF MELBOURNE?

Communications and free wi-fi

A national infrastructure project, the National Broadband Network (NBN), is under construction which will increase the accessibility of broadband internet and provide higher internet speeds. Service is available in Docklands and the north of Parkville. It is under construction in parts of Southbank and construction, which will continue to involve City of Melbourne, is due to start in Carlton in 2014.

In March 2014, the State Government announced free public wi-fi will be rolled out in Melbourne next year. The experience of other Australian cities, for example Perth and Sydney is that terms of use of free wi-fi specify that services can be used for basic browsing or social networking, sometimes including session limits on downloads or hours. This service will be most helpful for both domestic and international tourists, but may also be of some use to students and day-trippers.

Community Infrastructure

An important part of Plan Melbourne is the concept of a 20 minute neighbourhood. The 20 minute neighbourhood is about planning and developing local areas to so that people can access a range of local services and facilities, ideally within 20 minutes of home and it is likely to become an increasingly important consideration for strategic planners.

East West Link

The State Government is planning an 18 kilometre cross-city road, extending across Melbourne from the Eastern Freeway to the Western Ring Road. The Minister for Planning has approved the first stage of the East West Link, a six kilometre section with a tunnel connecting the Eastern Freeway with City Link. Construction is due to commence in late 2014 and be completed in 2019. Detailed planning on the Western Section will begin in 2014, including site investigations, design work, community engagement and a planning approvals process. Construction of the Western Section is expected to start by the end of 2015. The connecting section, along the alignment of the Moonee Ponds Creek (known as Stage 1B) is subject to further planning approval by the Minister for Planning. Uncertainty on Stage 1B has caused the City of Melbourne’s urban renewal planning for the Arden Macaulay precinct to be put on hold.

Efficient Transport

City of Melbourne’s biggest transport challenge is influencing development of a public transport system to move increasing numbers of people into and around the city and to expand the system to serve growth areas within the municipality. While the municipality is becoming a 24-hour city it still needs a public transport system that is flexible enough, especially in the peak commuting times of day, to manage demand. Demand for sustainable modes of transport including public transport and active travel (cycling and walking) are increasing and capacity is inadequate to meet future demand. Overcrowding on public transport services may reduce the attractiveness of the municipality to business and employees and suppress job growth.

Expected large increases in pedestrian numbers by 2030 mean City of Melbourne will be challenged to ensure the quality of the pedestrian network and open spaces and find new ways to fund new and improved public transport infrastructure to move people around. For a transport network to be a viable alternative to the car, pedestrian and cycle paths need to be integrated with public transport systems. Integrating public transport with cycling and walking has implications for employment options, business competitiveness, access to services, health, activity and social connection, creating an attractive, people-oriented city, increased safety, reducing the cost of transport to the community, reduced traffic congestion, efficient space use, reduced pollution and sustainability.

Plan Melbourne also aims to support a growing central city and urban renewal in Fishermans Bend with a rail link to Melbourne Airport and a new rail tunnel called the Melbourne Rail Link from Southern Cross Station via Fishermans Bend to South Yarra. This new link will replace the former State Government’s rail plan (with five rail stations under the central city).

Plan Melbourne also contains transport plans involving solutions for improving the efficiency of tram trips by improving capacity and reliability of service; better integrating bus services with other public transport modes and expanded and improved pedestrian and cycling routes.

Freight

Increases in the numbers of vehicles used for freight transport over the next 15 years are expected. The large number of freight transport vehicles entering the Central Business District daily can be expected to increase and this will impact the amenity of the city centre as a recreational and retail destination as well as residential area.

For data sources and references see the accompanying document (DM#8417055)

For more detailed information and data about health trends and priorities see DM#7441302

CITY GOVERNANCE

INTRODUCTION

The scope of local government activities continues to expand with increasing population growth and rising community expectations of their local Council, for example rising community expectations/challenges/issues, State/Federal deficits plus modest rate rises, citizens want more influence as social media platforms empower them, digital government will change the business model, there is a need to improve performance reporting, and a large percentage of the local government workforce will retire in the next 10 years.

DID YOU KNOW?

• City of Melbourne currently has almost 20 advisory boards and 14 residents groups

• 13 million Australian’s visited Facebook in August 2012 and 12 million visited in August 2013.

• 9 million Australians log on to Facebook every day, or almost 39% of the total Australian population.

• Globally, 94% of executives report they use Web 2.0 technologies to boost their internal communications.

• 41% of residents feel they have a say on important issues.

• In 2012, over 56% and in 2013 almost 62% of residents surveyed had participated in citizen engagement activities in the previous 12 months.

WHAT DOES THIS MEAN FOR THE CITY OF MELBOURNE?

Public Participation

The ways in which people participate in citizen engagement are many and varied. Expectations of government decision-making and the citizens’ role in it will continue to develop over the coming years. The consequences of the trend toward increasing participatory government include when City of Melbourne engage the public during a Council term, how engagements are timed and planned for each new project, the provision of information, managing expectations and the conduct of engagement, methods used and diversity of stakeholders engaged for their contributions. City of Melbourne’s most recent community engagement initiative is establishing a Citizens’ Panel to obtain informed and in depth community input on major decisions.

Digital Government

The digital age is transforming the way some people engage with Council. Participate Melbourne is another recent City of Melbourne approach. It is an online dialogue and collaboration space providing a place to learn about the projects City of Melbourne is currently seeking input on and it gives the community a place to submit ideas and exchange views. While it has potential to help engage some in the Melbourne community in decision making it cannot replace more traditional, forms of public participation.

CityLab

CityLab, located at Melbourne Town Hall, provides physical and virtual space and tools to enable City of Melbourne to collaborate with the community to solve urban challenges. Its purpose is to influence decision making, planning and implementation to solve identified urban issues and to create innovative projects that generate measurable short term change, new learning, connections, and opportunities.

Online Open data

A commitment to open government has become a feature of many governments around the world, including in Australia. Openness has become internationally regarded as a precondition for good, democratic governance. Internet offers new opportunities for sharing government information and data with citizens on a larger scale ever before. Although Open Government is not limited to using the Internet to govern, the term is commonly associated, or used synonymously with the terms ‘e-government’, ‘government 2.0’ and ‘digital government’. In 2014 City of Melbourne developed an open data policy, created an open data portal and began uploading suitable data sets on that portal for public access.

Performance Reporting

In 2012 the Victorian Auditor General identified performance reporting in Local Government has a number of limitations. Victorian Councils are now mandated to report progress against their Council Plan objectives, annually and the State Government is applying a Performance Reporting Framework statewide to help ensure quality and consistency in Local Government reporting. City of Melbourne is piloting the framework.

Health and wellbeing responsibilities

Local government has a role in disease prevention, prolonging life and promoting public health and wellbeing, as outlined under Section 28 of the Public Health and Wellbeing Act 2008. Key roles in this space are to create a physical environment which promotes and supports health and wellbeing, health promotion for healthy lifestyles, support services, community development, planning, advocacy, research and regulation.

Local Government regulation

The Victorian Government released a report concluding Local Government regulatory activities must better respond to strong economic and population growth in Victoria and the State Government’s priorities. This implies an expectation that council’s accept the objectives of a State Government and administer state planning regulations in a way consistent with its objectives. City of Melbourne’s land use planning and planning and building regulation, continuous improvement agenda and procurement will all be influenced.

Government funding and cost shifting

Tight State and Federal budgets and modest rate rises will mean fewer resources available to deliver services and infrastructure with implications for the City of Melbourne’s capital works budget in the future. At the same time other tiers of government shift costs by placing more responsibility on Local Government. The number and diversity of responsibilities accepted by Local Government may increase, creating an environment in which City of Melbourne must do more with less.

Local Government workforce

A large percentage of the local government workforce will retire in the next 10 years, taking knowledge with them and requiring Local Government’s to tackle additional costs associated with recruitment and funding payouts to employees on retirement (for example, paying out unused leave).

For data sources and references see the accompanying document (DM#8417055)

For more detailed information and data about health trends and priorities see DM#7441302

-----------------------

TRENDS AND MELBOURNE REPORT

August 2012

TRENDS AND MELBOURNE

September 2014

................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download