Smart budget – potential for smart developments

Will this be the turnaround for the government that many of us hoped for when Malcolm Turnbull took over from Tony Abbott?

While politics remains politics, and governments remain governments, the tone of this Budget is completely different from the shock horror Budget of 2014 that resulted in political uproar, a gridlocked parliament, and the unpleasant side effect of a rise in populism in Australia – with people, very understandably, fed up with their incumbent politicians.

So the tenor of the Budget is perhaps as important as what it promises. In reality, looking at the promises made over tens of Budgets in the past, the main result is generally a muddling-on of society and the economy. There are real questions regarding the economic data presented, and the targets they are aiming for, but nearly every Budget in the past followed similar lines and very few people actually check whether previous Budgets delivered on their promises, so that probably won’t be any different this time.

However the overall positive feel of this Budget generates a more positive sentiment towards the future. There is enough in it that people and businesses can take on board and use to their advantage.

It is clear that the large-scale problems that we are facing cannot be solved by government. It requires all people to look for new ways. We need transformations rather than tinkering at the edges and a positive Budget will stimulate people to put in that extra effort, to go beyond business as usual.

 The well-known quote from Albert Einstein is an appropriate one here. Insanity is doing the same thing over and over again and expecting different results.

Avoiding this requires a holistic approach to many of the initiatives launched in the Budget – I would suggest the sort of collaborative approach that we are taking in smart city developments, looking for multiplier effects in a close collaboration between all three levels of government, cities, local communities, business and the R&D sector.

If we first look at the infrastructure projects that the government has announced – better road and rail transport systems to and from suburbs, the inland freight train infrastructure, hydro-electricity infrastructure or the airport in Western Sydney. These are all projects that could be used to create transformations. However smart people, smart processes and smart projects are needed.

What I mean by that is that we should look at the potential multiplier effect of these investments. There are now many projects around the world where we can see how this works. New transport systems offer new opportunities for housing affordability projects, the ‘hubbing’ of schools, universities, innovation centres, new economic centres, entertainment and shopping precincts and so on. This requires cross-silo thinking and trans-sector leadership from the top to ensure that organisations and projects across the spectrum are directed to develop in collaboration and with the multiplier effect in mind. Without leadership from the top this will not happen – the projects will simple revert back to their traditional silo thinking mentality – and we will simply waste the opportunity to transform and maximise the potential of these investments with out-of-the-box thinking instead of a ‘business as usual’ approach.

Furthermore the Budget has a range of specific ICT initiatives that can support those involved in the projects mentioned above (but also in relation to other Budget initiatives) in moving in new and smarter directions. If you look for them there are lots of ICT projects that can be used in the digital transformation processes that are needed to address problems differently. There are projects for start-ups, education initiatives, innovation opportunities, and, hidden inside several other projects, a range of opportunities that could be used to work smarter.

Of course there should, perhaps, have been many more such initiatives, but I would like to look at the positives here rather than what the Budget doesn’t provide. Projects and initiatives covered right across the government spectrum include: the Digital Transformation Agency, Data61, Cyber security, ICT skilling, innovation hubs, e-health, Bitcoins, Crowd Sourcing, Biometrics and Fintech. All of these can be used in combination with many of the other initiatives mentioned in the Budget. It is critical that a holistic approach be taken in order to create synergy and that financial multiplier effect to make all of the initiatives smart projects.

Indirectly this can also assist housing affordability. For this we have to look at some of the projects developed in smart city environments in, for example, London, Copenhagen, New York City and Barcelona. All of these cities have exactly the same problems as Sydney and Melbourne, with average house prices around or above the $1 million mark. It is innovative organisations rather than government policies that are successfully addressing this issue, but that requires a different business model based on the triple bottom line concept we have discussed previously. Many of the infrastructure initiatives could have a positive effect on housing affordability if that paradigm is taken on board as a potential outcome of those investments.

Overseas indications are that a 30%-40% multiplier effect can be achieved by utilising the available funds in such a holistic way away. Sustainability is another element that, when it is included from the start, can lead to energy-neutral and carbon-neutral outcomes, all at very little extra cost, just by utilising existing funds in a smart way.

Smart local communities and smart cities are key to the success of this. If these investments simply become federal projects – based on their rigid procurement systems that work against a collaborative approach – then we will most likely miss out on multiplier effects and smart solutions. If, however, we start looking at collaboration with state government, local councils, business and the R&D sector then we can make a real difference. From a federal perspective the Digital Transformation Agency could also play a leadership role in changing the behaviour of the incumbent federal government towards such projects.

However, here also a positive. The Treasurer did mention the City Deals (part of the Government’s Smart City Policy). He mentioned this in relation to the City Deal for Western Sydney. The way that City Deals have developed over the last 12 months, under the leadership of Assistant Minister for Smart Cities Angus Taylor and his team at the Cities Division, is exactly along the lines of collaboration. We all have learned a lot over this period and these lessons can be put into practice as we move ahead with the infrastructure funds that the government is set to release.

But it won’t be easy to change the incumbent structures that are in place regarding how these funds will be used – typically in a non-collaborative and silo-oriented way. It is up to us, the people involved, to be smart about this and take the opportunity to find out how we can use these investments better and smarter.

The Smart City Policy is a good vehicle for this so let’s use it to the maximum. I have also suggested that we should investigate City Deals led by industry, and within the Australian Smart Communities Association I have set up an Industry Board where cities and industries are working together specifically for that purpose.

So let’s grab the opportunities that are available in this Budget.

Paul Budde

For more information see: Australia – Smart Cities and Smart Infrastructure reports

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