‘In those Local Government Areas in which immigrants are concentrated, Local Government's response to immigrant needs has, with a few exceptions, been slow and uneven. Many Local Governments recognise this and generally perceive the problem to be sourced in financial constraints.’ This evaluation of immigration and local government budgets (Cutts 1992:xii) is supported by the concurrent evaluation of immigration on State government budgets: ‘the present financial capacity of State governments is not adequate to provide education, housing and other services on the scale needed by many immigrants if they are to be fully integrated into Australian society’ (Mathews 1992:xxiv). At a higher level, the Commonwealth government and its policies of fiscal restraint are blamed. Yet it is recognised by both documents that immigrants from non-English speaking backgrounds (NESBs) contribute more to government budgets than they claim back.

This purely financial outlook is a common rationale for limited action on social or urban issues, including planning which addresses multicultural issues. Making sure migrants, new and old, receive a ‘fair go’ is more often seen in the light of the goals of a democratic, interesting, vibrant country. While Australian popular opinion varies, often in direct relation to the strength of the economy, some level of immigration has been accepted by both parties.

For over twenty-five years, Balmain has been a testing ground for a new inner-city politics characterised by the prominence of environmental and planning issues, the rise of Independents as a political force, and a commitment to open government and public participation unprecedented in Australia (Power 1969; Jakubowicz 1972; Balmain Residents Case 1975; Johnston 1979). The most notorious battles have been within the Australian Labor Party where in the 1970s branch-stacking reached new heights for this old Labor art form. In seven years the local branch grew from 70 to 700 (Wheelwright 1983). But the local council has also been the scene of major conflicts, initially over the introduction of new industries into Balmain, then their containment and now their replacement. Central to all these changes have been Balmain's new middle class who began ‘gentrifying’ the peninsula in the early 1960s, before this term was coined in England let alone used in Australia.

The most recent conflict has involved five sites, covering 23 hectares or 7 per cent of the peninsula, which once made Balmain a centre of Australian manufacturing. The only one still operating is the Caltex plant at Ballast Point – the company's largest oil and grease plant in Australia.

Because cities are the places where most people live, where most goods and services are produced and traded, and because they are the primary sources of advanced technology and business innovation, what happens in them and to them is of central importance to a society.

The better they are planned and developed, the more effective they can be in aiding wealth creation. Their structure, nature and functioning also affect the quality of life, social justice and equity and the natural environment. They provide the setting for and are an expression of a nation's cultural development.

Growing concern over the environment, increasing globalisation of the economy, the rapid uptake of information technology, and the persistence and deepening of divisions between groups within the city are leading to new and unstable patterns of working and living. The future of cities as we know them is uncertain. They need to and are replacing their infrastructure, but what kind of government and administration should be making decisions about the new structure is problematical.

The challenge is to find a way of accommodating diverse and changing urban activities. How do we provide and finance ‘urban’ services, and how do we democratise governance of the emerging urban space? How do we manage the transition from the inherited form and structure to the new urban space and accommodate new patterns of urban development within it? These questions do not imply either physical or technological determination but a recognition of the impact of dynamic economic forces and changing social attitudes on physical development, which is itself long-lived and shapes subsequent development.

The pursuit of social justice via the various urban programs of both the Commonwealth (Building Better Cities) and the States has been compromised well into the 1990s by the accelerated restructuring of the Australian economy and the high unemployment that will persist in its wake. The likelihood is that whilst recovery is now underway, even the more optimistic forecasts of economic growth (3–4 per cent) will not create enough jobs to lower unemployment much beyond 5 or 6 per cent before the end of the decade. According to a recent report on the medium-term outlook for the economy prepared by the Economic Planning Advisory Council (EPAC) (1993), this would still leave between 140 000 and 220 000 long-term unemployed out of work by the year 2001, and pockets of ‘hard-core’ poverty and inequity within the cities. The federal Labor administration has to bear a major part of the responsibility for this given the policies pursued throughout the 1980s, not the least being the over-reliance on monetary stimuli at the expense of fiscal measures.

This claim is followed through in the second section of this chapter by examining some of the income and wealth effects in the markets for labour, housing, and public services that I believe will make for a more rather than less unequal Australian society.

This chapter concentrates on recent planning initiatives in South Australia. It goes beyond official publications to review, comment on and provide a critique on those developments. In doing so it seeks to place them within a wider, if more superficial, appreciation of current trends in State urban planning operations generally. A major linkage is made between these two dimensions by analysing the concept of strategic planning which is a common ambition of all State operations, and a prominent and distinctive feature of the South Australian current experiments.

Setting the Scene

There are some background assumptions and interpretations that should be outlined. While government policies and actions of all kinds and all levels impact on urban conditions, the States build and operate the cities. Commonwealth policies and actions, whether targeted on urban issues or unintended in their urban impacts, have great influence. They tend to be more abstract in their character and effect. State policies involve constructing the built environment of the cities, operating it and servicing its people, so that they are a mixture of the abstract and the physical. Local policies are mainly physical in their orientation and impact and considerably influence the character of the street and the suburb.

Not before time, more Australian critics are confronting ‘economic Rationalism’, or what David Harvey (1992:597) calls ‘market triumphalism’: the idea that the organisation of our economic and social life through public policy should mirror the disciplines and principles of the market. While it is a loose coalition of different viewpoints, economic rationalism rests on two fairly basic convictions: that governments tend to be inherently inefficient in their attempts to produce or to distribute wealth and resources, while markets, through which ‘sovereign consumers’ satisfy their individual preferences, are ultimately the more efficient and equitable means of rewarding effort and generating productive growth. Left to itself, the market will provide. In a sense, the idea seems to be that the skills involved in running the country are not unlike those needed to run a business.

Against these suppositions – and they are, as Frank Stilwell (1993a:31-3) points out, based on highly restrictive and questionable assumptions – critics argue that government activities, from direct investment and regulation through to tax-based redistributions of income, are vital to the efficient functioning of the economy and society and, by extension, the Australian city. Academic and professional debates over the urban future, in league with State government and Federal government reviews of urban policy, have played an important role in challenging the doctrines of market rule.

Despite its awesome constitutional powers and periodical championing by those promoting rejuvenation of parliament, the Australian Senate remains the Cinderella institution of Australian government. For almost a century it has been overshadowed by a combination of responsible executive government and disciplined party politics. Responsible government, which locates the executive in the House of Representatives, has ensured the primacy of that chamber, while disciplined parties have extended the party divide into the Senate. Adoption of proportional representation as the electoral method for the Senate in 1949 fostered the emergence of minor parties and independents able to arbitrate between the major parties. This has given a fillip to the Senate and produced periods of stormy confrontation between the two houses of parliament. The most notable was in 1975 when the Senate refused to pass the government's supply bills and an assertive governor-general, Sir John Kerr, sacked the Whitlam Labor Government to break the deadlock. More recently, a Senate in which the balance of power was held by seven Australian Democrats, two Greens from Western Australia and a Tasmanian independent has forced the Keating Government to make significant changes to its most important legislation, the 1993 budget and Mabo legislation establishing a national system for processing native title land claims. Hence the Senate's powers and the way it harmonises with responsible government are again a matter of intense public controversy.

My purpose in this book is to change the way Australians think about their constitutional system of government. Baldly stated, the argument is that Australia has a constitutional system that is fundamentally federal and republican rather than parliamentary and monarchic. That is not to deny the parliamentary and monarchic elements, but to put them in proper institutional perspective as subsidiary parts of the larger constitutional system. This larger constitutional system is controlled by the Australian Constitution, which is essentially federal and republican.

In being federal the Constitution sets up two spheres of government, Commonwealth and State, and divides powers between them. Clearly, as the legislative branches of such governments, which are controlled by the basic law of the Constitution, parliaments in the Australian system cannot be sovereign or supreme in a Westminster sense. The Australian Constitution is republican because it is entirely the instrument of the Australian people who are sovereign. The monarchic forms of Queen and vice-regal surrogates remain as the formal parts of the executives for both the Australian and State constitutions but are entirely subject to the will of the people, as are the legislatures or parliaments. Hence, in substance and effect, the Australian constitutional system is truly republican because the people are sovereign and all the institutions of government are subject to the rule of the Constitution with its checks and balances.

As we have seen in earlier chapters, the Australian Constitution sets up a federal republican system of government in which the people are sovereign. All of the institutions of the Commonwealth Government – the parliament, the executive, including its monarchic trappings, and the High Court – are constituted with the particular powers and functions specified in or implied by the Constitution.

The Commonwealth itself is only one part of the larger constitutional system that includes the States and Territories. In this system the people rule not through a representative legislature, as might be the case in a unitary system of majoritarian democracy, but through the Constitution, which sets up and controls all the institutions of government, including, at the national level, the bicameral parliament with specified, and hence limited, powers. In sum, Australia has a constitutional rather than a majoritarian democracy, so that it is not appropriate to apply criteria or assumptions about the latter to the former.

Federalism entails the basic division of political institutions and powers between two levels of government, national and State, in such a way that each is independent of the other in certain fundamental ways. In a federal republic like the Australian, the institutional framework of federalism, including the division of powers between governments, is specified in the written Constitution authorised by the sovereign people. In other words, governments have specified and limited powers, whereas the people are sovereign.

Through the Constitution the Australian people established a system of multiple governments organised on a federal basis. Such a system inevitably entails complex and elaborate relations among governments in public policy-making and implementation. While intergovernmental relations are subconstitutional they are informed and structured by the Constitution. Moreover, there is enormous scope for improving the working of the federal system through reforming intergovernmental arrangements. It is here, rather than on constitutional reform, that attention needs to be focused because the outstanding issues requiring improvement in the Australian federal system can be remedied without constitutional change by restructuring intergovernmental arrangements.

One notable area for reform is redressing the acute imbalance between taxing and spending responsibilities of the Commonwealth and the States, called vertical fiscal imbalance, which will be considered in chapter 9. This chapter examines the Australian system of intergovernmental relations and recent attempts at improving their operation in shared policy areas.

Despite their significance for Australian politics and public policy, intergovernmental relations have been relatively neglected by those studying Australian federalism. Constitutional lawyers and fiscal economists, with little interest or competence in intergovernmental relations, restricted their focus to the more formal aspects of federalism. Political scientists, for the most part, did not remedy their oversight in the postwar decades because of a fixation with national politics and policy-making.

A towering exception was Rufus Davis who, after completing his PhD on federal-state relations at the London School of Economics and Political Science in 1950, published several articles on the subject (1952, 1955–56).