Sydney’s daily commute a $3.5bn drag

Slicing Sydneysiders’ commute to work could provide a $3.5 billion a year kick to the economy, according to new research that warns Australia’s biggest city is facing the prospect of becoming economically inefficient unless government, businesses and individuals embrace a shift to multiple economic hubs.

Building on the state government’s plan for three “30-minute cities” by 2056, Deloitte’s latest report in its “ImagineSydney” series found accessibility to work had the greatest impact on a city’s liveability and the outlook was grim if Sydney didn’t move away from a monocentric city where 60 per cent of employment activity was centred in the east.

On population trends, more than 50 per cent of the city’s population will live west of Parramatta by 2036 “further and further away” from the eastern economic centres of the central business district, North Sydney and Macquarie Park. Access to jobs and schools based on commuting time was already notably worse for people living outside the CBD and inner surrounds.

In contrast, access to hospitals and supermarkets was more even across Sydney.

“As this continues, we are likely to reach a tipping point where the economic gains from concentrating economic activity in a monocentric city are outweighed by the loss in productivity from travel time and congestion. At this point, the monocentric city model will no longer be economically efficient,” the report states.

It comes amid heightened debate about Australia’s strong annual population growth, fuelled by frustrations around congestion, house prices and wages growth. In the year to September 30, the population expanded 1.6 per cent, or 395,600 people, the equal fastest pace since 2013, according to official ABS data released last week.

It was driven by the strongest growth in net overseas migration since 2009, up 15.4 per cent, or 250,100, while Victoria grew the fastest of any state or territory at 2.4 per cent, above NSW’s 1.6 per cent. By 2056, Sydney’s population is tipped to grow to almost 8 million people, from 4.7 million, according to the state government.

In the wake of rising population in the west, Deloitte claimed achieving a 30-minute city required “greater accessibility to employment near where people actually live”, and backed the Greater Sydney Commission’s approach of three cities around the CBD, Parramatta and the new Badgerys Creek airport.

“Residents, tourists and economic activity are drawn to Sydney precisely because of its liveability. But it’s a delicate balance – we also need to manage our environmental impact, congestion levels and city density to maintain the liveability for which Sydney is known,” said Deloitte managing partner Nicola Alcorn.

“We have have a fair way to go to be a true 30-minute city."

On average, Deloitte found Sydneysiders’ one-way commute was 37.5 minutes. However, the commute was a longer 63 minutes for those travelling to the CBD for work. In peak hour, public transport “can be a more efficient way to travel” than driving, which was however faster early in the morning and late in the evening.

Factoring in part-time workers, people on average travel to and from work 6.7 work times per week, making it the most common trip people undertake each week, followed by travelling to schools.

Shortening the average commute through a “polycentric” 30-minute city would be worth $3.5 billion as agglomeration and shorter commutes boosted productivity.

In total, the benefits could be more than $10bn once factoring in investment in public projects and flow-on activity to industries, the report found. Social benefits such as greater work life balance and reduced environment harm would also flow.

While investment in public transport connectivity was critical, Deloitte urged governments to also look beyond transport to improve the liveability of Sydney at various policies across housing, zoning, tax, innovation and small business. For businesses, Deloitte urged playing around in the planning of precincts, expanding workplaces to Western Sydney and embracing flexible working.

Creating a more “bicycle-friendly” city would also improve accessibility, Deloitte citing benefit-cost ratio’s of bike lanes that show taxpayers can get “five dollars for every dollar spent on active transport infrastructure”.

In an op-ed today, Westpac Institutional Bank chief Lyn Cobley, said new technologies and leveraging best practice from “smart cities” around the world provided opportunities to rethink how challenges were addressed, noting the opportunity if done right was “enormous”.

But Deloitte cautioned a polycentric city was no “silver bullet” to reducing commutes and improving productivity, noting San Francisco had experienced a rise in travel time as it made the shift.

“There is a need for connectivity both to and between cities to improve accessibility and make the additional centres functional hubs. This can be supported both by large-scale infrastructure and public transport projects, as well as through on-demand transport and the technology applied in smart cities,” the report states.