The Phase 2 initiative

As the first five years of the Building Better Cities program came close to an end, the Government, led by Prime Minister Keating, had to debate and decide upon an extension of the Program. While Keating had little to do with Better Cities after its establishment (he was on the back bench for a significant period) when he became Prime Minister he began to take considerable interest — especially after he attended the opening of Blacktown Railway Station and saw the enthusiasm of the impressive crowd.

The Minister for Finance, Kim Beazley, was firmly opposed to any extension of the program, arguing that it had achieved its objectives and was, in any event, too tightly focused.

Brian Howe argued strongly for a new round of the initiative, focused on new objectives but keeping the emphasis on integrated, multiple-outcome Area Strategies as the means of delivering Commonwealth funds.

The new emphasis was to be on the nation’s economic ‘gateways’ — the major linkages between our physical economy and the rest of the world, where opportunities for port and airport expansion combined with urban renewal initiatives were both very evident and very necessary. The privatisation of airports had left large areas of land available for new economic initiatives and the Government wanted to take full advantage of this, as well as create better access to and from airports and seaports as an efficiency measure.

Urban renewal and urban growth management remained key components.

Phase 2 of Better Cities was put forward also as part of Keating’s ‘One Nation’ initiative, and he supported it in this context.

In the event, Howe won the debate, but only with the personal support and intervention of Keating, who directed that a further $200 million of Commonwealth funds be included in the 1995 Budget.

The Sydney Morning Herald around that time reflected the uncertainty of the likely outcome with a headline that read ‘Keating to scrap the Better Cities Program’.

The Australian National Audit Office records the subsequent history:

A second phase of the program (BCP Mk.II) was announced in the 1995 Budget with estimated Commonwealth funding of $200 million over four years. This was to deal with national economic gateways such as air and sea ports, urban growth management and urban renewal. The Commonwealth entered into BCP Mk.II agreements with four States (New South Wales, Queensland, South Australia and Tasmania) before the March 1996 election.

Following the election, the Government announced that the program would not be continued. The 1996 Budget provided funding to meet existing contractual commitments. Appropriations and expenditure for BCP Mk.II are set out in Table 4.

Table 4: Building Better Cities Mark II

Commonwealth Appropriations and Expenditures

Financial Year





Appropriation spent









Source ANAO 1996

The Howard Government wanted nothing to do with urban Australia, and signalled its intentions in its first Budget by scrapping the BBC program, apart from final funding commitments under BBC Phase 1. It had also abolished the Department of Housing and Regional Development in which it was located, transferring the residual program management to the Department of Transport and Regional Development under National Party Minister, The Hon. John Anderson MP.