City life in decline, PM warned

The quality of life in Australia's big cities is falling and could get worse, Prime Minister Julia Gillard's own department has conceded in a confidential briefing.

It also warns the gap between the haves and the have-nots is widening.

The incoming government brief given to Ms Gillard by her department in September, released to _The West Australian _under Freedom of Information, also shows growing concern that the living standard problems faced by many is because of State Government incompetence.

Official measures of income show the nation has never been richer but pollsters have picked up growing anger at issues ranging from time spent commuting to big increases in energy prices.

In its brief to the newly re-elected Ms Gillard, the Department of Prime Minister and Cabinet effectively conceded the concerns of voters were real because of factors such as population growth and the clogging of major roads.

"The perception that the quality of city life is declining is supported by declining measures of liveability (including from greater congestion and longer commuting times), declining efficiency (such as land use planning and infrastructure that do not support business collaboration and innovation) and a lack of affordable housing," the department said.

"Without disciplined planning for growth, demographic pressures will negatively affect living standards, particularly in cities, as housing prices rise, congestion increases and it becomes more difficult to access services."

Another issue is the sharp rise in housing prices over the past decade. While higher incomes, lower interest rates and the continuing "favourable" tax treatment of the family home are described as reasons, the department argues that speculators were also to blame.

The Rudd and Gillard governments have focused on improving conditions for the most disadvantaged. But the department believes the financial situation for many poor Australians is getting worse.

"Australia still suffers from pockets of disadvantage, including among indigenous Australians, people with severe mental illness and households experiencing long-term joblessness," it said.