The debate on population growth has always taken place at a national level, although the impacts need to be planned for at the local level. Yet local councils often don’t have the resources to meet the demand.

Obviously, a larger population means a bigger revenue base to provide services, but money is needed upfront to invest in the planning and infrastructure. It’s an issue examined by Adam Creighton and Oliver Hartwich, both research fellows at the Centre for Independent Studies (CIS), in their new report Australia’s Angry Mayors: How Population Growth Frustrates Local Councils.

In this edition of BTalk I ask whether a levy on developers makes the most sense. After all, they’d be paying to build the infrastructure to support the new homes they are building and selling. It’s not a popular move with local councils or with the guys from the CIS — they think there is a better way to obtain the required funding.

The ideal solution, says Oliver, will see councils wanting to compete for the new population, not have it foisted on them or trying to avoid it altogether. The ideal scenario, says Oliver Hartwich, is where you have a link between taxation and population — so a local council can offer lower tax to residents in exchange for a bigger population base.

We touch on another part of the problem: many councils are perhaps reluctant to welcome new development because the increased supply could reduce the value of existing homes. It’s another repercussion of our house price bubble, which seems to skew so much economic behaviour in this country.

First published on CBS News