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An alternative use for the proceeds from selling Telstra

By Russ Grayson - posted Tuesday, 3 September 2002

The sale of Telstra looms, and lobbying for access to the proceeds has started in earnest. The government plans to pay off the national debt. The Greens want to spend the money on urgent environmental problems such as the dryland salinity that affects so much of inland Australia and on rehabilitating the ailing Murray-Darling river system. Both of these are matters of high national priority, but there is another worthwhile use for at least the major part of the proceeds, another destination for the funds that promise to flow from the sale.

That destination is ... Sydney. Sydney a city in need? That might not appear credible to the federal government's accountant mentality, nor to the environmental lobby with its fixation on natural systems and its dearth of meaningful social policy, nor to rural Australians who see themselves as socially and economically deprived. But it is a destination that makes sense, given Sydney's pre-eminence as Australia's primary city, in light of information disclosed in the 2001 census and in the work of researchers.

City under challenge

The findings of the 2001 census, released in June by the Australian Bureau of Statistics, confirmed what we already suspected - that Sydney is the country's fastest-growing metropolis, that it is home to almost a quarter of the population of Australia and is the favoured destination for immigrants. All of this is placing strain on an urban infrastructure that is ailing and that government has difficulty in expanding to keep pace with population growth.


The scale of the trend in immigration was disclosed by veteran Sydney Morning Herald journalist, Alan Ramsey, in a May 2002 article. Quoting government sources, Ramsey reported that two-thirds of refugees entering the country over the past five years settled in Melbourne and Sydney, with Sydney absorbing the larger number of 15,465. Here, two-thirds congregate in just five local government areas: Parramatta, Fairfield, Auburn, Liverpool and Blacktown. With some exceptions in Parramattta, these are areas in the lower socioeconomic bracket and house a significant portion of unemployed people although the development of the Parramatta and Liverpool business districts - Parramatta has become a 'mini-city' - promise an expansion of local employment and small business opportunity.

The emergence of ethnic enclaves in those areas can be put down to the support given to new migrants by existing immigrant populations. And while business sees larger populations as good for consumption and business, none less than NSW premier Bob Carr have warned of the challenges that further immigration into Sydney could bring. These challenges include the high cost of providing sewage and water services to urban fringe areas and the maintenance of older infrastructure in the suburbs.

Deserving of support

Were Canberra to accept that Sydney is struggling to provide services and that its role as most-favoured destination for immigrants justifies spending Telstra sales funds on it, how could this be spent to provide greatest social and economic benefit?

Infrastructure would have to be a major area of expenditure. Providing sewage disposal and water supply are costly, yet the expansion of services is critical to residential and industrial development as well as to sanitation. But it should not be business as usual. With the Telstra proceeds flowing in, there would be an opportunity for state government to encourage and cajole local government to investigate and implement innovative strategies as well as ensuring that it applied the same encouragement to its own authorities.

Waste management is in further need of improvement. Although recycling consumes some of the urban and industrial waste stream, the metropolis is running out of landfill areas. In future waste may need to be carted, at great expense, to the Hunter Valley or over the ranges for disposal. New uses for old waste is needed, new imagination applied to an old problem.

The rail system is plagued by accidents, breakdowns, sabotage, vandalism and poor service. There is a dire need for an expansion of the system with new lines and by making connections between existing lines. Pyrmont has been linked to the CBD with a light rail (tram) line and there are plans to extend the service as far as Leichhardt. There is potential for extending it even further, not only in the older, densely populated suburbs of the Inner West, but into the eastern suburbs where population numbers are also high enough to make the service viable. A light rail service to Randwick (also servicing the University of NSW), Coogee, Maroubra and Bondi is not hard to imagine.


Architecture and planning are further areas where Telstra funds could be applied to new ideas and to further research. With more and more people calling Sydney home, the urban energy budget is rising because the new apartments and houses are, for the most part, gross consumers of energy. Were funds to go to expanding existing local government residential energy efficiency legislation and new, innovative models of humane medium density residential development, the Telstra sale would underwrite models with application elsewhere in the country. The same thinking could be applied to reducing residential water consumption through conservation and the reuse of some wastewater. That would not be hard - there are already examples out there.

As the coming state election will show, law and order are a real concern to the public. There has been increased crime in the middle ring of older suburbs, the same lower socio-economic areas that are absorbing many of the immigrants, and there has been a renewed focus on ethnic crime gangs. Law and order is never an easy challenge but there would be public support for both short-term management via improved forms of policing and a longer-term approach to address the social and economic problems underlying crime.

The allocation of some portion of the Telstra proceeds to social development would be justified, especially that which involves community action. The recent growth of community food gardens, which provide fresh food and social space as well as meaningful recreation, show the benefit of creating a sense of place and belonging and can go some way towards rebuilding communities fractured by economic and social stress. Such initiatives also boost community responsibility, and that means less vandalism and crime.

Finally, to create opportunity there would be a need to increase regional economic development, especially of the newer service industries, in western Sydney. Telstra funds might go to the further development of mini-cities such as Parramatta and Liverpool as economic foci as well as to clustering similar businesses and industries in enclaves, a practice which, in the case of the information technology industry, has produced synergies and mutual benefit.

Investment of the Telstra proceeds in the country's dominant city will be difficult to justify to other city and state governments as well as to vociferous lobby groups such as environmentalists and rural interests. But Sydney’s rapid population growth, its attraction to immigrants and the city’s role in the national economy justify it. With almost a quarter of Australia's population, the Sydney region should be handed a great deal more than a quarter of the income from the Telstra sale.

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About the Author

Russ Grayson has a background in journalism and in aid work in the South Pacific. He has been editor of an environmental industry journal, a freelance writer and photographer for magazines and a writer and editor of training manuals for field staff involved in aid and development work with villagers in the Solomon Islands.

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