What if government spending causes urban sprawl?

In today‘s Age, there is an interesting article about how the outer suburbs of Sydney are the ones least affected by the recent economic downturn.

On the whole, it is far from surprising that the outer suburbs are least affected by the economic downturn. Most of the economy of these outer suburbs is concentrated in sectors which are not dependent on good climatic conditions (like farming) or fluctuations in global market prices (like mining or tourism and also farming).

What is surprising, however, is the fact that – in spite of the highly conservative politics that results from their low living costs – the following quotes demonstrate a fact I never even suspected beforehand:

“I think we’re probably one of the least affected because we have a really high percentage of people in the the public service,” including 9000 teachers and 8500 health services workers, she said. “They’re people we need regardless of the economic climate.”

This revelation is food for thought that I have never noticed before. If outer suburbs have a very high proportion of public sector employees compared to the rest of Australia, it stands to reason that reduced government spending and regulation might actually discourage urban sprawl for the simple reason that there would be too few private sector jobs in sparsely settled suburbs.

I had always thought that eliminating government regulation and drastically cutting spending to simple military, intelligence, police and administration services would be a sure way to increase sprawl because the public tends to prefer the great housing space offered by sprawling suburbs. Today’s Age revelation thus is a serious challenge for both left and right, and one I would be eager to see serious discussion and comparisons from abroad.