AHURI BRIEF

City Deals: Coordinating the growth of Australian cities

Place-based partnerships between government, the private sector and the community

Last updated 18 Apr 2017

The Australian Government’s City Deals are a way for governments, industry and local communities to ‘develop collective plans for growth and commit to the actions, investments, reforms and governance needed to implement them.’ By bringing together all levels of government, the private sector and the community, City Deals aim to provide a coordinated investment plan for capital cities and urban regions.

The Australian Government signed Australia’s first City Deal with the Queensland Government and Townsville City Council in December 2016. The deal is a 15 year commitment to deliver transformative outcomes for Townsville and its residents so that Townsville will become:

  • the economic gateway to Asia and Northern Australia by 2030
  • a global leader in tropical and marine research and innovation
  • a prosperous and highly-liveable city for residents and visitors.

The Townsville City Deal aims to stimulate job creation, economic growth, investment in local infrastructure (particularly in the city and waterfront areas) and revitalise the urban centre. It commits stakeholders to developing strategies and projects such as:

  • North Queensland Stadium
  • making the city an international education and training destination
  • Townsville eastern access rail corridor (TEARC)
  • Cooperative Research Centre (CRC) for Developing Northern Australia
  • Townsville Port channel capacity upgrade
  • managing energy costs and boosting energy productivity
  • Townsville water security, supply and use strategy
  • increasing public transport.

The Australian Government has also signed City Deals for Launceston and Western Sydney, and in late May 2017 announced a City Deal for Darwin.

The Australian Government’s City Deal policy is based on the UK City Deal model, where cities or regions are encouraged to work with business and central government to grow the economics of that region—in essence boosting the local GDP.

UK cities are encouraged to pool multiple funding streams and business rate income into a single investment fund, leverage private sector capital and invest in local priorities. They can also borrow against future potential income to build critical infrastructure. The intention is that cities will create self-sustaining investment funds and will reduce their dependence on grants from the central government.

Success may be rewarded, as is the case for Greater Manchester, if the city exceeds the benchmark growth target it gets to keep the extra tax income generated by the extra increase in economic growth.

The first UK City Deals were negotiated between the eight largest English cities outside London and the central government between late 2011 and mid–2012. These cities estimated that their participation in the City Deals will create 175,000 jobs and 37,000 new apprenticeships in the 20 years from 2012.

A second wave of City Deals was completed in 2014 with the next 14 largest English cities and the six English cities and areas with the highest recent population growth.

Both the Australian and UK City Deals will be explored at the upcoming AHURI conference, Affordability and liveability in our cities in Melbourne on Thu 29 June.

Learn more about the UK's City Deal policy in the AHURI Brief, What is a UK City Deal?