Cities thrive while regions dive

Australia, often touted as the lucky country, is thriving.  We can lay claim to four of the top 10 most liveable cities in the world.  But the all-consuming process of city building has come at a high cost to the rest of the country.  Regional Australia is languishing. Our single-minded focus on cities can no longer be sustained and we have to develop a widely-shared national strategy to spread the benefits of economic growth.

Australia is not alone in facing this dilemma.  The UK’s Brexit vote earlier this year highlighted the significant divide between flourishing London and much of the rest of England.  London has become the financial capital of Europe and, unlike many European cities, its population is growing.  International industries in banking, IT and media have set up shop in London, and tourism is booming.

So while 75% of Londoners voted to stay in the EU which has delivered huge benefits to them, their compatriots felt they were missing out and chose to leave.


In Australia we have enjoyed 22 years of continuous growth and yet the Liberal Turnbull government only managed to scrape into power with a single parliamentary seat.  Since the mining construction boom has passed, the economic benefits of the ensuing services boom have been concentrated in Sydney and Melbourne.

In my book, ‘Destructive Cities’, launched a couple of months ago, I argue that the service sector boom will not naturally spread to regional Australia through market forces.  In fact, quite the opposite is true.  The forces of technology and globalisation will negatively impact our regional areas.  So, for example, in our largest and fastest-growing industry - health - technology is driving remote diagnosis, allowing resources for medical research and hospitals to remain concentrated in cities.

Our second-biggest employer sector, retail, has significantly shifted online so that there is no ‘bricks and mortar’ retail growth in many regional areas.

Historically, we’ve pursued decentralisation policies through a sort of public/private cooperation to site large single companies in regional areas, such as the Ford plant in Geelong or IBM in Ballarat.  Decentralisation on a business-by-business basis is no longer a realistic strategy.  The collaborative and sharing economies of our future require scale.  For example, both Atlassian in Sydney and Amazon in London need to be based in inner city areas to secure enough highly-skilled employees.


We need regional policies which can help share the growth experienced in capital cities.  And that’s not only for the sake of those who live outside our big shiny cities.

Both Melbourne and Sydney are forecast to have a resident population of 8.5 million in just 35 years.  Globally, cities attracting service industries are facing major problems with housing affordability and traffic congestion.  These factors can put a drag on economic growth and can create major social and political problems.

As a world city, London is already in danger of becoming a victim of its own success.  Both Sydney and Melbourne face similar scenarios.

Fairness and economic logic demand that our development opportunities be more broadly spread.  If not, political instability will result.

The starting point is a vision for regional Australia as a partner in services sector growth, both participating and adding value.  And our cities have to be re-imagined.

Brian Haratsis Executive Chairman E: P: 03 9600 0500 
Brian Haratsis is MacroPlan’s Founder and Executive Chairman. Brian is an economist and future strategist with over 30 years’ experience as an advisor to governments and major corporate clients throughout Australia. Brian commands an unparalleled, on-the-ground knowledge of residential markets across Australia, having worked extensively and regularly in all capital cities and key regional markets.
About MacroPlan MacroPlan’s experienced and qualified economists align their understanding of macro-economic forces with micro-economic variables such as geographic and industrial characteristics, demographics, labour market shifts, resource demand and commercial realities.  Contact Brian Haratsis, Executive Chairman today to discuss your property research requirements.