07.10.2021Megaregion becomes even more important as geopolitical winds change
With headlines in the news media like “G7 leaders seek right balance in dealing with their China dilemma”, “US v China: is this the start of a new Cold War?” and “Could China replace Australian iron ore with metal from Africa?” being seen on a regular basis, it is clear that the world’s focus has shifted squarely towards the Asia Pacific region, also seeking to understand how to work in a highly competitive environment.
As global economies diversify and new large megaregions are established in major economies like China, USA and Europe, Australian cities need to be able to compete. This throws up challenges and opportunities for Australia to maintain its competitiveness in the region.
Committee for Melbourne’s May 2020 report, entitled “Reimagining Australia’s South-East“, called for the establishment of an East Coast Megaregion across Melbourne, Sydney and Brisbane. An East Coast Megaregion would utilise the benefits of collaboration that include being able to negotiate collectively on a world stage and develop sufficient scale to achieve greater export capabilities into international markets. The report estimates that Australia’s pre-COVID-19 economy could have benefitted significantly from such a megaregion, adding an estimated $268 billion to the economy over 30 years, even if only a conservative 1% improvement was achieved over that time period.
And now, as the economy recovers from COVID-19, the benefits of co-operation will be even more significant. As our supply chains have been disrupted, international students have sought alternative nations in which to study and the geopolitical landscape has seen a greater focus on our region, the ability for Australian cities to establish scale and efficiencies will be even more important.
Confusion and inefficiencies have reigned as states have implemented differing health rules and restrictions across Australia to manage COVID-19. Whilst the benefits of collaboration across the country were initially demonstrated by the newly formed National Cabinet, this did not seem to last very long. This has highlighted, more than ever before, the need to establish greater formal cooperation and collaboration frameworks across the nation.
As the Australian economy recovers from COVID-19, and reacts to a changing political and technological landscape, it is likely that, amongst other things:
- there will be a greater need to scale-up new industries and enhance our export capabilities in areas such as agriculture, advanced manufacturing, and medical manufacturing;
- there is a need for coordination and innovation across borders as the focus on connectivity and technology becomes even more important, and
- it makes sense for each of the major cities of Melbourne, Sydney and Brisbane to co-ordinate their large infrastructure investments in a strategic way, to enhance the likelihood of greater overall returns for the future.
It makes sense to consider Melbourne, Sydney and Brisbane as a combined megaregion, given that the eastern seaboard region represents 64 per cent of Australia’s population and around 70 per cent of GDP. By 2050, the combined population living in the Melbourne-Sydney-Brisbane corridor is expected to increase from 64 percent to 71 per cent. This combined opportunity – offering greater ability to scale-up operations, create trading and marketing blocks and develop significant competitive advantages – is something which should not be lost.
The Committee’s report identifies some initial steps that could be taken to harmonise approaches between the states on areas like regulation, tourism and planning, as building blocks for something more ambitious in the future. Those recommendations comprise small and relatively simple undertakings, to large-scale investments and initiatives. They include:
- combined tourism/investment attraction campaigns;
- an integrated and more efficient transportation network (e.g. faster-speed rail, freight, rail gauges, alignment of transport ticketing systems);
- technology and data sharing;
- combining specific state government resources;
- alignment of red tape, including business laws and regulations;
- alignment of skills and education systems, and
- possible creation of new cities as links between the larger cities.
As geopolitical winds shift, and Australia’s economic recovery rests upon new innovative approaches, our report’s recommendations appear more apposite than ever. The potential such a project of economic and social significance offers for the post COVID-19 recovery period, especially in light of geopolitical and technological shifts, cannot be understated.
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