WHAT DOES THIS MEAN FOR THE CITY OF MELBOURNE?
Inner City Lifestyles
Being the central municipality of a Greater Melbourne area and capital city brings social, economic, built and natural environmental conditions that impact on the opportunities of residents to lead healthy and safe lifestyles. Some potential implications include:
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Inner city living costs are high. Housing prices will continue to be unaffordable for many lower and middle income households and cause housing related stress.
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A large number of people living alone as the city attracts students and young professionals which may have implications for social inclusion.
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The central city brings people together to do business, socialise, participate in sport, arts etc. Some of these activities are linked with problems around personal and community safety, alcohol and other drug use and related harms, sometimes involving weapons, theft and drug possession and use.
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Increasing urban density and moving towards a 24-hour city may lead to more congestion, noise and pollution.
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As the climate changes there will be impacts, for example, urban heat island effect which may lead to increases in heat-related illness and deaths and threats to infrastructure including curtailed rail services, over extended emergency services, and failures of electricity supply.
Designing places for improved health and wellbeing
In Victoria, local government is required and well-placed to prevent disease, prolong life and promote public health and wellbeing, as outlined under Section 28 of the Public Health and Wellbeing Act 2008.
Local governments key roles in this space are to create a physical environment which promotes and supports good health and wellbeing (for example, a walking and cycling friendly environment, places for people to connect, access to fresh food and transport, clean and free of graffiti, access to sports facilities, libraries and other multipurpose community hubs), providing health promotion messages around healthy lifestyles, provide support services, community development, policy and planning, advocacy, research and regulation.
Managing a 24-Hour City
With the municipality increasingly open around the clock, there will be a need to cater to people’s different needs over the 24 hour period. City of Melbourne will face conflicting needs and objectives in planning to cater for a growing number of people and different populations (for example, worker population, resident population and student population) in the city centre. The mix of activities in which people engage while in the city also changes between day and night..
Increasing urban density also presents other public health challenges around noise management, air quality and stress related to increased city congestion. The major safety concerns over the next five years include public drunkenness (43%), assault/physical violence (25.6%), traffic flow (17.4%), drug use (15.7%) and managing growth/increased population (13.8%).
Cost of living
The cost of essential items such as food, clothing, housing, health services and transport are rising which means people already experiencing disadvantage will face increasing financial pressures. The implications of more money going to basic essentials such as rent/mortgage and utilities are less money left over to spend on other expenses. This will have flow on effects as it limits people access to transport, going out and accessing other vital services putting people at an increased risk of social isolation, mental illness and food insecurity.
For data sources and references see the accompanying document (DM#8417055)
For more detailed information and data about health trends and priorities see DM#7441302
SOCIAL INEQUALITIES
INTRODUCTION
While overall, the Melbourne municipality is considered socially and economically advantaged, there are marginalised community groups and areas of disadvantage which can be overlooked.
The ACOSS Poverty in Australia report found nearly 2,265,000 people in 2010 (12.8% of all people) were living below the poverty line and 600,000 or 17.3% of them were children. The measure of poverty was 50% of median income in Australia. Poverty among single parent families has increased by 15% since 2001.
DID YOU KNOW?
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Melbourne Local Government Area has Victoria’s socially and economically most advantaged area and some of Victoria’s most disadvantaged areas on the Australian Bureau of Statistics Socio-Economic Indexes for Areas (SEIFA).
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In 2011 more than a third of the population (36%) earned, between $1 and $399 per week.
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In 2012 around 4.5% of adults reported they had run out of food in the past 12 months and could not afford to buy more. By 2013 less than 3% had run out of food and could not afford more.
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22% of residents report they don’t always have the quality or variety of food they want because some foods are too expensive.
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Low income families with either two or one parents would need to spend 43 to 46% of their incomes respectively, to maintain a healthy diet, which is above the recommended 30% of income for food.
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40% of Australians believed that 'inflation/cost of living' was one of the top three issues facing the nation; making it the number one issue for June quarter 2012.
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The proportion of residents with a profound or severe disability was 1.6% in 2006 and 2% of the municipality’s population in 2011.
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41% households have no car. 39.9% say this is due to rising petrol prices.
WHAT DOES THIS MEAN FOR THE CITY OF MELBOURNE?
Socio-economic inequality
The proportion of households earning more than $2,500 per week is relatively and Melbourne municipality is ranked 13th most socio-economically advantaged area in Greater Melbourne. There are, however, pockets of socio-economic disadvantage in North Melbourne, Carlton and Kensington. These suburbs have large, primarily public housing estate areas with high proportions of vulnerable groups including:
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low income earners (between $1 and $399 per week) and unemployed
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families with children under 0 to 12 years, particularly single parent households
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people with low English proficiency
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older adults and those with a disability, including severe or profound disability requiring assistance
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people living alone in public housing.
People of lower socio-economic status have worse health than those living in more advantaged areas. Evidence shows they rate their health more poorly, have higher rates of some chronic illnesses, lead less healthy lifestyles and are less likely to get health checks. Additionally, lack of economic resources limits access to basic essentials such as food, housing, transport and health care and can also limit participation in the community which leads to higher levels of anxiety, social isolation and marginalisation.
Disability
The proportion of residents with a profound or severe disability was 1.6% in 2006 and 2% of the population in 2011. More than 1,800 residents (up by 600 people since 2006) live with a profound or severe disability and are considered to need help or assistance in areas of self-care, mobility and communication, because of a disability, long term health condition lasting six months or more or old age. On a daily basis, there are likely to be even more people with disabilities in the municipality and all their needs must be considered.
Several important indicators of disadvantage suggest the population from Horn of Africa, in particular the Somali community which is the largest ethnic group from Horn of Africa, is at risk of marginalisation. The population from Horn of Africa is comprised of families from a predominantly refugee background. Overall, compared to the rest of the population, they are significantly more likely to:
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live in single parent families
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live in public housing
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achieve poorer educational outcomes
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experience poorer employment outcomes
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earn lower incomes.
Outcomes for the Horn of Africa community are not significantly improving over time. Also, analysis of census data shows in 2011 more than 66% of Somali’s were living at the same address where they lived five years ago, compared to less than 30% of the rest of the population, suggesting they’re ‘stuck’ in public housing. The Horn of Africa population numbers around 1800 people including approximately 500 children and youths.
Efforts directed at improving some of the above mentioned outcomes for the Horn of Africa community may have a significant impact on inequality and the overall wellbeing of the community.
Housing Affordability
The declining proportion of renters and mortgagees paying more than 30% of their income on housing in this municipality between 2001 and 2011 indicates a growing proportion of households are able to comfortably afford a dwelling in this municipality. These are often relatively affluent households.
In 2012, however, the poorest 25% of the population can at best afford 6% of the municipality’s dwellings. The number of dwellings affordable to the poorest 25% of the community (households earning less than $400 per week) has increased from 3,356 in 2006 to 3,589 in 2012. Further, less than 1% of new lettings in the municipality are affordable to households receiving incomes from Centrelink. By this measure 53 new lettings were affordable in 2001 and 131 in 2011.
Youth Unemployment
While the area has an overall unemployment rate of 5%, youth unemployment is growing. Analysis by the Brotherhood of St Laurence shows the inner Melbourne area has a youth unemployment rate of over 13%. Consequences of unemployment and a lack of job opportunities for young people can include: relatively lower quality of life and standards of living; lack of skills; and potential welfare dependency.
For data sources and references see the accompanying document (DM#8417055)
For more detailed information and data about health and socio-economic data see DM#7441302
ECONOMY
INTRODUCTION
The national economy faces a number of challenges but despite this there have been some recent positive developments. The challenges are:
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productivity growth in Australia appears to have slowed
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post Global Financial Crisis conditions and European debt crisis are changing the way people spend
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a strong Australian dollar, expected to remain high for some time to come
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we are facing a potential credit constraint over the next 5 years
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Australian consumer confidence remains very low
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concerns developing nations demand for resource show soon and how smoothly can Australia adjust to the high dollar and the end of the mining boom by transferring investment and resources increasingly into other sectors of the economy.
DID YOU KNOW?
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Business and employment in the municipality grew 6.5% and 8.4% respectively, between 2008 and 2012.
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There was a 13% increase in retail establishments from 2006 to 2012.
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International visitors to the area grew 7% per annum between 2008-09 and 2012-13 to 1.24 million.
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Visitors to Greater Melbourne spent approximately $10.7b in 2011.
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Median weekly household income increased from $1,070 in 2006 to $1,352 in 2011.
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Unemployment for residents was 5% in March 2013.
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Between 2007 and 2012, the economy grew 35% to $86.7b.
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In 2012 workers’ contributions to the GLP (Gross Local Product) was $167,660 each.
WHAT DOES THIS MEAN FOR THE CITY OF MELBOURNE?
Business and employment
The municipality attracts employment from, and generates income for, other areas. The local economy (GLP) grew significantly from 2007 to 2011. Business numbers and the workforce also grew significantly between 2008 and 2012. The most recent burst of commercial employment growth has been driven by the development of Docklands which provided the capacity to accommodate knowledge intensive office based employment.
The workforce is forecast to continue to grow, but more slowly, by 2% per annum to 510,000 workers in 2016. Between 1996 and 2011, employment in Greater Melbourne increased by around 560,000 jobs and our municipality contributed almost 30% of that growth (160,000 jobs). In 20 years, Greater Melbourne will add over 900,000 jobs, of which one quarter will be within Melbourne Local Government Area.
Unemployment among residents has been comparatively low but the trend now appears, since 2008, to be increasing and has now reached the same rate as metro Melbourne.
Adjustment after the mining boom
Nationally, the mining investment boom peaked in 2014, though it will still underpin activity for the next few years. Meanwhile broadening investment beyond mining was expected to drive growth, softening the impact on the economy. The high dollar may have adversely impacted Australia’s transition from mining and public investment-led growth last decade to balanced growth as business investment outside the resources sector remained weak since the GFC. Recovery is expected to be two years away, though, once it comes will significantly boost growth and employment in industries such as finance, business services and health services which have a large presence in the municipality. This also has implications for population growth as interstate migration to Melbourne may increase as growth in the non-mining sector picks up (see people section, page 2). State and Federal Governments are likely to experience little employment growth over the next few years, potentially increasing pressure on City of Melbourne to deliver services and infrastructure.
Manufacturing
In late 2013 and early 2014 the remaining two major car manufacturing companies in Australia, Holden and Toyota announced complete closure of manufacturing by 2017. Prior to this, the car manufacturing industry employed around 2000 people or only 0.5% of employment in the municipality. The contribution of the industry is up to $300 million, or 0.3% of the economy. While car manufacturing is a small fraction of the local economy the closures may indirectly impact other sectors through lost supply contracts.
Car manufacturing sites in Port Melbourne are large and the potential increase in intensity of use of these properties after car manufacturers leave could affect the urban form of the city, economic activity and traffic volumes/public transport.
Productivity
In contrast to productivity decline nationally, the value of worker productivity in the Melbourne Local Government Area has increased 27% since 1999. Although productivity growth has slowed between 2006 and 2010 it increased again in 2011 and may continue to grow, rather than decline. The biggest productivity and wage pressures have been identified in mining and utilities industries, nationally, but these comprise only 2% of the local workforce in 2012.
Public transport facilitates networking benefits in cities. Ability to connect with other businesses by walking or using efficient public transport contributes to central Melbourne’s high Effective Job Density (EJD). Congestion has a significant impact on the economy with a cost to the city of $3 billion a year. Reducing congestion by prioritizing more space efficient transport has been identified as a way to improve productivity.
Retail
Over the last 5 years the retail sector has performed well, though turnover is expected to continue to grow slowly over the next five years because of lower consumer confidence, households reducing debt and online retail. Online retail is expected to give consumers more power and take more market share from traditional retailing. This could impact on retailer profit margins and returns to retail property, prompting some investors to consider investing in other sections of the property market.
Opportunities for future growth
Following the end of the mining investment boom, mining will continue to be a driver of growth, though not the only one. Australia's top five economic prospects for the future are likely to include: tourism, agribusiness, wealth management, international education and gas. Melbourne municipality is well placed to play a continuing role in international education and wealth management, both of which are acknowledged strengths of the local economy. Other economic sectors that could be important include tourism, health and out-patient services, and the ICT sector. The local health sector has shown strong growth in both employment numbers and the floor space and this will continue for the next few years.
For data sources and references see the accompanying document (DM#8417055)
For more detailed information and data about health trends and priorities see DM#7441302
KNOWLEDGE
INTRODUCTION
Cities in the 21st century are becoming powerful places for the creation and exchange of new ideas, which are transformed into innovations that drive economies and underpin prosperity. Three key factors include:
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Education
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Innovation.
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Internet and social media.
DID YOU KNOW?
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88% of households have internet access and 90% of them use broadband, higher than the Australian average (77%).
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Around 7% of households earning $120000 or more are without home Internet.
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42% of households earning less than $40 000 are without home Internet.
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The number of patents granted to individuals or corporations in Melbourne municipality increased from 90 per 100,000 residents in 2010 to 103 per 100,000 residents in 2013.
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From 2009 to 2011 50% of people employed in the municipality work in highly skilled occupations.
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Household spending in Australia on new age services passed that on retail for the first time, in 2011.
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On any one day in Melbourne Local Government Area there are more than 30,000 international students studying at a variety of educational institutions.
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Postgraduate enrolments in higher education grew 22% from 2007 to reach 35,351 in 2010.
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42.5% of the population is attending an educational institution, higher than the Australian average (30%).
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Researcher’s employed at universities in the municipality grew from 4165 in 2010 to 4207 in 2012.
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Metro Melbourne is home to 50% of the top 20 biotech companies listed on the Australian Stock Exchange.
WHAT DOES THIS MEAN FOR THE CITY OF MELBOURNE?
Knowledge economy
The knowledge economy is comprised of three sub-sectors: core, intermediate and peripheral. The core of the sector comprises three sector comprises businesses and organisations that engage in activities including generating knowledge; transferring knowledge by providing educational services; or facilitating the transfer of knowledge by producing or providing goods and services that serve as a medium for transmission. The intermediate sector comprises businesses and organisations that use knowledge intensively as a key enabler in the production or provision of goods and services (for example, professional services firms). The periphery comprises other businesses and organisations that use knowledge to some extent in the production or provision of goods and services.
The majority of the local workforce is employed in the core and intermediate knowledge sectors. Of 428,590 workers in 2010, almost 284,150 (approximately 66 per cent) worked in businesses or organisations falling within the core or intermediate knowledge sectors. It is also estimated that the core and intermediate sectors of the economy directly contributed around 50% of the GRP in 2010.
Innovation and patents activity
The number of patents issued to residents or corporations is an indicator of innovation, which is a result of the production and use of knowledge. Melbourne municipality has a high level of innovation, as shown by an upward trend in the indicator of patent activity per 100,000 residents, from 2010 to 2013.
Over the past five years educational institutions of RMIT and University of Melbourne were each responsible for around 10% of patent grants. Universities contribute to the development of human capital and ability of people to engage in the global knowledge economy through collaborations relationships and by providing a research capability. Around 60% of grants were to businesses in the CBD and another 10% of patents granted were to businesses in the industrial suburb of Fishermans Bend. This area’s future as an innovation driver may be in doubt as it changes from an industrial area to residential (also see Housing section, page 4), and this may contribute to a small reduction in patents granted in Melbourne LGA in coming years.
Tertiary education
The former Victorian Labor government introduced a demand-driven funding model — in effect, a voucher system — to training institutes, including TAFEs. Maintaining quality in this system could present a risk to Melbourne’s reputation in education. Within two years, Federal Government will allow universities to set their own fees, which may have implications for the number of students in the city. Student visa applications to Australia have increased following previous declines and this suggests a recovery or partial recovery for the sector in the short term, at least. Melbourne’s education sector, which dominates international tertiary education in Australia, could benefit from increased student migration. The strong dollar (mentioned above in the Economy section), however presents a risk to student migration.
Internet and innovation
The NBN will further increase the accessibility of broadband internet and provide higher internet speeds to residents in particular. Faster broadband services will create more opportunities to work away from the workplace, which can benefit the municipality, employers, individuals and the environment. The online revolution is changing the way people sell and consume goods and services and leading to more consumer choice and control. There is a risk that services such as education can easily be delivered from an institution anywhere in the world. On the less positive side, taking the opportunity to work and socialise more online from home, could impact the levels of social isolation experienced by residents of the municipality.
Local policies for the wider municipality could focus on creating an environment where creative ideas can be shared and leveraged, for example the gamification (applying game-design thinking to help engage the public in problem solving) industry. Use of connected devices and sensors creates data which can help cities understand key issues (for example, performance of infrastructure; environmental performance; people movement) as well supporting more efficient information exchange and services between City of Melbourne and the public.
Globalisation
The labour market is increasingly globalised and production processes are likely to become more capital intensive. As skilled workers become scarcer and possibly more expensive, the pace of labour saving innovations may accelerate. Any increasing scarcity of skilled workers should not greatly impact Melbourne municipality in the short term. The highly skilled proportion of the local workforce has consistently remained around 50% since 2009. We could also be expected to benefit from labour saving innovations in the future. The anticipated establishment of an ASEAN Economic Community (AEC) by 2015 presents opportunities key industries such as education, finance and human resource development.
For data sources and references see the accompanying document (DM#8417055)
For more detailed information and data about health trends and priorities see DM#7441302
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