Today what I want to do is outline for a few minutes the government’s agenda in Digital and Cities and the intersection between them and our interest in partnering with other governments, with business and community in these areas.

I can’t emphasise enough that the answer here won’t be big brother government solving all the problems, it just doesn’t work that way. And as someone who’s worked a lot more in the business community than in politics, I am absolutely convinced that working together, collaborating, will be the only way we will solve many of the problems that we need to, to unleash this great potential that I see.

I’m sure I don’t need to convince many people in this room of the importance of our cities and for millennia they have played an extraordinary role in human achievements. They are, as some have put it, probably the greatest achievement, the greatest innovation, in human history – our cities.

Worldwide, I think it is the age of the city more than ever and as we’ve become more and more productive in agriculture and more and more productive in manufacturing and processing, what happens in the centre of our cities is at the heart of the global economy.

Any economist will tell you that our cities are absolutely essential to innovation. They’re where we come together to share ideas – and that collision of ideas drives a better world and a world that most importantly is able to deliver more with less. The only reason we are able to construct cities that focus on things beyond feeding ourselves and clothing ourselves, the very basics of life, is because we have learnt over millennia to produce more with less. And much of that innovation of course has come from our cities and the wellbeing and prosperity we all enjoy as a result of that.

So they (cities) are absolutely central to the collision of ideas and absolutely central to the clustering of knowledge and innovation which is at the heart of the future prosperity of this country.

There’s no doubt, if we turn to the state of our cities, that we in Australia are lucky to enjoy some of the great cities of the world and I know as someone who has travelled and worked in many of the great cities of the world every time I have flown back into Sydney or Melbourne – we’re in NSW so I’ll focus more on Sydney – you fly over that harbour and the harbour bridge and you’ve been on the plane for 24 hours and you’re half asleep, half awake, trying to get through that last of the scrambled egg on the Qantas flight, it is always amazing to me as you look down at the harbour and the harbour bridge and our city of Sydney, just what an extraordinary city it is and it’s true of all the Australian cities. We are blessed. And all the global ratings tell us that, at a time when of course the liveability and the desire of people to live in our cities is more important than ever.

We can thank our forbears for our great cities and we can thank in many ways the extraordinary innovation in agriculture in Australia which has meant we were urbanised from the start because we were able to produce all the food we needed, and much more, with a relatively small group of people. So that urbanisation and the strength of our cities comes from much of the strength of the Australian economy over 200 years, in its modern form.

But we are seeing population growth at a rate, or at least at a volume, that we haven’t witnessed before. Yes, the percentage rate of the growth in population mightn’t have increased much, but the numbers certainly have. Every three or four years we are adding about a million people to the population of Australia – and most of those are living in cities, whether it’s our CBDs, our suburbs or our regional cities.

So we’ve got to build effectively a new city for every million, every three to four years, which is an enormous challenge for governments with budgets that are struggling and with balance sheets that are stretched. This is one of the challenges that I think technology can help us with a great deal.

It’s also no surprise that as we are moving towards more of a knowledge economy and moving away from a traditional focus on manufacturing and agriculture – and move more towards services – the jobs are being created in our centres. Actually, I’ve been trying to get the numbers on this. As a former management consultant I’m a bit pointy headed, I love the numbers. And I’ve been trying to get numbers on the growth of our CBDs relative to the growth of the overall economy. What was striking was how hard it was to get those numbers. But I did manage to finally sort of piece it together and it was very, very clear that the jobs in our CBDs are growing much much faster than across the economy.

So what’s happening? These clusters are forming in our CBDs and more and more of the jobs are there. But guess what? More and more of us are living further out. And that challenge of people living in one place and working in another and the distance between those two increasing, and the congestion between those two increasing, is a very real issue for all of us.

Along with that come housing affordability challenges, as the price of houses and land in particular per square metre in our city centres has increased astronomically – and you look at the price of land per square metre in Sydney, you go back 15 to 20 years it was more like a couple of thousand dollars per square metre, now we’re talking 6,7,8, ten thousand dollars a square metre, depending on where you are. So extraordinary changes as we’re seeing more and more clustering of jobs in the centre and more and more people wanting to live closer to the centre because of that clustering of jobs.

So congestion, housing affordability and transport links not being what they should be – and I think under investment in our cities given these changes – is the real challenge we face, despite the extraordinarily positive things about our cities here in Australia.

I firmly believe that unless we rectify these issues, that we put at risk the greatest asset of all, which is our human capital, our people. More and more the great people and organisations of the world that can create jobs, the entrepreneurs that are the job creators, that do the innovation, they are mobile. They will live where the opportunities are greatest and where the liveability is most attractive. That competition we face between cities across the world, for people and organisations, is intensifying, and will continue to intensify in the years to come. And so that is what makes it absolutely imperative that we address the challenges of our cities and we are able to attract, retain and develop great people and organisations from across the world.

As a good management consultant I work in threes – and there are three parts to the focus of the Federal Government in our cities policy. The first is innovation and productivity which I’ve talked about. We need to have cities which encourage innovation and productivity and the sorts of layouts, the way places work, is changing – and the sort of precincts that are most effective for innovation and productivity within our organisations is changing. We need to focus hard on that.

We need to focus on accessibility and affordability. That distance between home and work and services has increased and of course the time has increased with the distance, in fact more so, because of the congestion. The second part of our policy is to really focus on how do we have more jobs closer to where people live and reduce the time for people to move from home to work to services.

And then finally sustainability and liveability. If people don’t have a sustainable, liveable city they are more and more inclined to go somewhere else. And that mobility is a real issue for us.

Again, in the spirit of three, there’s three levers that we want to pull to improve the performance in all of those areas: smart investment, smart policy and smart technology and this underscores the point that technology is only effective within a context where you’ve got the regulation right, and you invest the right way. You’ve got to get all three of those things right – smart technology, smart regulation, smart investment.

Starting with smart investment – traditionally and with the greatest respect to my state and local colleagues, we have been an automatic teller machine for the state and local governments. When you want some more money, you bring your card, slot it into the machine, put in your PIN and hope like hell you’ve got it right. And more often than not, states and local government have been pretty successful at that.

We are grant based funders of infrastructure investment for the most part. The Prime Minister is absolutely determined to change the nature of that relationship. In particular, we want to act much more as investors, not just grant givers. We’ve handed over the money with few conditions and we’ve often handed over money without asking for any kind of return. Now commercial returns aren’t the be all and end all of infrastructure investment, the public cost benefit is not the same as the commercial cost benefit of course – but I am convinced that if we focus on projects that can deliver a commercial return in the broadest sense, then we will get better projects.

Grants fail to create incentive for innovative financing, long term planning or consideration of reforms that are likely to drive productivity and make our cities more liveable. So this approach is really about looking beyond short term horizons to give long term returns to the asset’s owners, which are ultimately the Australian taxpayers. That’s smart investment.

Let me turn to smart technology. Things are obviously evolving quickly, as new technologies emerge at a pace that perhaps we couldn’t have anticipated. It was mentioned a moment ago about autonomous cars and I was involved in the late 1990s at looking at investments in autonomous vehicles in other sectors, in agriculture and mining, and at the time, everyone was sort of looking at this and saying well it’s never going to happen, you’re never going to have farmers sitting in a header without steering, you’re never going to have miners who don’t put people into trucks. It’s not going to happen.

Well, it’s happened. Past tense, it’s 15 years. I am quite convinced these technologies will advance very quickly. At what point will our cities be full of autonomous vehicles, I can’t predict that and I’m not sure anyone in this room can, but what I do know is that we have seen the pace in other sectors exceed most people’s expectations.

So whether it’s the private sector or state and territories, we know that technologies can provide unique solutions to problems we face and most of all the potential I see in technology is better utilising our assets. If you think about Uber, it’s all about better utilising cars through car sharing. If you look at what’s happening in carparking, there’s been similar technology better utilising our assets and our services. Think about our emergency services, there’s enormous potential we’re already seeing being realised there through better utilisation of our service providers.

I think at the centre of the need here is the provision of open data and analytics to transform all of our infrastructure investment – transport and of course in other areas. Opening up government data to the public domain I think is absolutely central to this and it’s certainly a central part of our policies. Our cities produce an enormous amount of data each day and yet not all of that data is made accessible to service providers who want to use that data for whatever purpose.

That’s why under the National Innovation and Science Agenda, the government’s releasing more non-sensitive public data for private sector innovation. We’re also supporting groups like Data61, good to see a representative here from Data61 today, and others to turn complex data into useable knowledge. And of course that translation is a very significant one, it’s not trivial.

But there’s all sorts of areas where we’re seeing open data starting to have an impact on cities all around the world, whether it’s in Brisbane, Chicago – and in all sorts of areas – in energy or in traffic (inaudible) and with it much more citizen engagement in driving reforms in our cities.

So very soon we’ll see the release of real time petrol data, we’ll see new technologies allowing better management of traffic and parking data and the sensor technologies behind that will be extremely important.

Let me finish with a comment on smart policy. Along with investment, we want to be partners in the future of our cities, with state governments and local governments, community and business, and with that requires a focus on smart policy and smart regulation. There’s definitely an element of needing to take away red tape.

But the vehicle we want to use in being a partner with all levels of government, in investment in technology and in regulation, is the City Deal, whereby Federal Governments will work closely with state and local governments and amalgams of local governments in some cases, particularly where the areas are smaller, to ensure we can deliver great outcomes for our cities. So jointly agreeing on the outcomes we want to deliver, jointly agreeing on the initiatives that are going to deliver that and jointly agreeing on pursuing the investments and the technology requirements to deliver those outcomes.

It’s about delivering better outcomes, better planning, coordinated governments and city based reform and those City Deals will be and are the centrepiece of our policies for driving change, reform and the betterment of our cities.

So this is an important opportunity for us to think long term about how we will live, work and interact in decades to come. The work that you all do and the discussion you’ll have at this conference is an integral part of that process. I am looking forward to some of the outcomes. Thank you for having me here today.