The vampire bleeding Australian cities

August 23, 2008

The social impact of increasing petrol prices and mortgage costs, and persistent inflation, continues to deepen. The financial pressure on lower-income households across Australia has massively increased, according to Jago Dodson and Neil Sipe in their study Unsettling Suburbia: The New Landscape of Oil and Mortgage Vulnerability in Australian Cities, released through Griffith University on August 11.

Dodson and Sipe used information collected by the 2006 Australian Bureau of Statistics census to assess the impact of increased financial pressures on households across the five largest Australian cities: Sydney, Melbourne, Brisbane, Adelaide and Perth. They assessed the data on a weighted index that accounted for household income, car dependence and the size of mortgage payments and assigned a VAMPIRE (Vulnerability Assessment for Mortgage, Petrol and Inflation Risks and Expenditure) rating for each local area — the higher the rating, the greater the vulnerability to increased fuel prices, interest rates and inflation.

The study found that the outer suburbs of the largest cities, typically populated by less wealthy households, serviced by less reliable public transport and relying heavily on private car travel, faced the highest vulnerability. The results confirmed the findings of the authors' 2006 study Shocking the Suburbs, which was based on 2001 census data, but showed that in large parts of the biggest Australian cities, the situation had become even worse.

In Melbourne, "42.3% saw their oil and mortgage vulnerability worsen during the 2001-06 period", the report found. In Sydney, the figure was 41%, while in Perth the figure was 39.5% and Adelaide 38.5%. Only in Brisbane was the situation "largely static".

Dodson and Sipe believe that their results show that immediate action by governments in developing greater access to public transport is needed. "Our research shows that the areas of greatest need in terms of public transport investment are the outer and fringe suburbs of Australian cities where households are generally more car dependent, and less wealthy", Dodson told Green Left Weekly.

The authors see both the federal Labor government's Fuelwatch and the Coalition's proposal to reduce fuel excise as inadequate measures in dealing with the social crisis caused by higher fuel and mortgage costs. "Neither of these approaches is likely to achieve any measurable impact on the exposure to higher fuel costs faced by suburban households. The evidence in favour of Fuelwatch as a method of stabilising petrol prices is weak", the report argues, while "fuel excise cuts of 5 cents per litre would have similar modest effect over the medium and longer term but would be achieved at far higher cost to government — approximately $1.75 billion based on current domestic fuel consumption levels".

Urban design that guides the development of Australia's cities assumes that private vehicle transport will be the dominant form of travel indefinitely, "despite many rhetorical commitments within Australian metropolitan plans to reduce car reliance and promote travel by alternative modes", Dodson and Sipe argue.

"Increased public transport investment in currently under-served areas is essential. More broadly, urban plans need to seriously question whether they are capable of producing cities that can function under much higher fuel prices", Dodson told GLW.

Where state governments have developed plans to extend public transport infrastructure, these are largely inadequate or misdirected, Dodson and Sipe argue.

The proposed underground CBD rail loop in Brisbane, the North-West Metro in Sydney and a similar proposal for Melbourne, would spend public money developing infrastructure where it is not most needed and "would inevitably crowd out investment in new rail infrastructure to oil- and mortgage-vulnerable outer suburban zones". The alternative, the report suggests, is to be found in "new outer suburban rail extensions and through improvements to interconnecting local bus services".

The social crisis facing outer-suburban, low-income households also has as much to do with the failure of the private ownership system to provide equitable access to housing. "Australia lacks a modest-income (not welfare) housing sector that provides a comparable level of security and stability to home ownership", Dodson told GLW. "A model of either cost-rental housing or non-profit rental is needed to fill the gap between public housing and home ownership."

Governments must also increase the frequency, availability and reliability of public transport to outer-suburban areas, to the level that exists in the nation's inner-cities. "There is a clear equity imperative to ensure that this level of public benefit is shared by those in the outer areas of Australian cities", the report argues.

"Modest extensions to existing suburban rail networks combined with comprehensively planned and high quality local suburban bus services would be a cheaper and more sustainable option for redressing suburban oil vulnerability than costly underground inner city services."

"State and federal governments need to develop a plan for addressing oil and mortgage vulnerability over the long term, through investment in public transport", Dodson told GLW.

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