This chapter sets out the background to the Committee’s inquiry, and describes how this report is structured.
On 1 June 2017, the House of Representatives established the Select Committee on Regional Development and Decentralisation. It was only the second House Select Committee to be established in 15 years.
The Committee was asked to inquire into and report on best practice approaches to regional development, the decentralisation of Commonwealth entities and supporting corporate decentralisation. The Terms of Reference for the Committee’s inquiry are on page here.
In launching the inquiry, the then Chair of the Committee, Dr John McVeigh MP, highlighted the value of regional Australia. He said:
So much of our economic success rests in the resources and work of our regional towns and cities. It is important that we examine ways to better support these communities and to strengthen their social and economic future.
Australia’s regions make an invaluable contribution to the nation. Investing in rural and regional Australia is for the long-term benefit of Australia as a whole. For regional development policy to be effective, it must build the capacity of rural and regional Australia, and unlock their latent potential.
Australian Pesticides and Veterinary Medicines Authority
The Committee is aware that the relocation of the Australian Pesticides and Veterinary Medicines Authority (APVMA) from Canberra to Armidale has attracted a great deal of media attention and interest. It is also aware that this relocation is still in progress.
Although this inquiry did not specifically review the transfer of the APVMA from Canberra to Armidale, the Committee did receive evidence about this relocation.
Evidence received by the Committee which was critical of the APVMA relocation argued that the move has:
resulted in a loss of experienced staff thus making it less effective;
resulted in unacceptable personal costs for affected staff and their families;
generated high relocation costs;
generated concern that key approvals for agricultural chemicals will be delayed;
seen insufficient engagement with and “buy-in” from the local council; and
been the result of political objectives.
For example, the Eurobodalla Shire commented:
As has been the experience with the Australian Pesticides and Veterinary Medicines Authority (APVMA) relocation to date, a major potential cost is the loss of employees who are unwilling to relocate. This can particularly affect agencies which are reliant on a skilled workforce, and for which training replacement staff can be time consuming and expensive.
There may also be additional costs associated with redundancy payments for those staff who do not wish to relocate, loss of corporate knowledge, and high incentive payments to attempt to entice staff to relocate.
The Community and Public Service Union (CPSU) also argued that:
There is no doubt that APS [Australian Public Service] jobs deliver important economic benefits to a community, particularly so in regional Australia but the process used for the re-location of the APVMA is not an appropriate template for achieving this…
CPSU does not support the relocation of existing APS agencies, functions or jobs:
Relocation does not provide the net increase in APS employment needed to rebuild policy development and service delivery capacity.
The high transaction costs of relocation, including the risk of damage to agency and APS capacity, makes it a less cost effective and less efficient method of increasing APS employment in regional locations. Indeed, the cost benefit analysis for the relocation of the APVMA showed an overall net economic loss.
Relocation can also involve unacceptable personal costs for affected staff and their families.
Evidence supportive of the APVMA relocation argued that:
relocation will enhance and encourage clustering of complementary agencies and organisations; and
it may assist in strengthening the regional economy and generating regional investment and employment opportunities.
The Armidale Regional Council was very supportive of the move. It noted:
The relocation of APVMA is a perfect example of where the establishment of government offices within our region will provide opportunities for genuine partnerships to be forged with locally based organisations including the University of New England, to create a centre for excellence in Agriculture within our Region…
Our regional economy is underpinned by education, agriculture and technology, and this will enhance the delivery of services from the APVMA over time and will attract ancillary and like businesses to the region notwithstanding the partnerships which will evolve with UNE.
The Committee notes that while the evidence received on the APVMA was in some cases critical, this should not detract from the benefits that decentralisation can offer regional Australia. Much of the criticism of the APVMA has focused on the short-term challenges. The Committee’s inquiry has found however that in the long term, decentralisation can have positive outcomes for rural and regional towns, and for government. The transfer of the New South Wales (NSW) Department of Primary Industries from Sydney to Orange is a good example.
Irrespective of the APVMA’s particular experience, the purpose of this inquiry and report is to examine these issues so that the lessons of decentralisation can be learned, and mistakes can be avoided. Further discussion on decentralisation is included in Chapter 7.
Other Committee APVMA inquiries
The Committee’s inquiry followed a Senate inquiry into the operation, effectiveness, and consequences of the Public Governance, Performance and Accountability (Location of Corporate Commonwealth Entities) Order 2016. This order was made by the Minister for Finance, Senator the Hon Mathias Cormann which provides for the APVMA to be relocated to Armidale, NSW.
The Senate’s inquiry brought into focus the issue of decentralisation, more generally. In particular, it brought into focus Commonwealth decentralisation as part of a broader social and economic development strategy for regional Australia.
The Standing Committee on Agriculture and Water Resources conducted an inquiry based on the Auditor-General’s Report No. 56 (2016-17) Pesticides and Veterinary Medicine Regulatory Reform. Its report and findings were published on 21 May 2018.
Standing Committee on Infrastructure, Transport and Cities
The Committee’s inquiry took place while the Standing Committee on Infrastructure, Transport and Cities was conducting its inquiry into the Australian Government’s role in the development of cities. Both inquiries share similar themes. The Committee looks forward to the tabling of this report.
This report is the third and final report of the House Select Committee on Regional Development and Decentralisation. The Committee tabled an Issues Paper on 24 August 2017 and an Interim Report on 8 December 2017 in accordance with the Committee’s Resolution of Appointment. These reports are discussed further in Chapter 2.
This report is structured into nine chapters:
The first chapter provides the background to the Committee’s inquiry.
Chapter two sets out how the Committee conducted its inquiry.
Chapter three lists 12 principles of regional development. These principles were formulated by the Committee after careful consideration of the evidence presented to the inquiry. The principles underpin the Committee’s report and provide the foundation for building and sustaining regional Australia.
Chapter four highlights the value of rural and regional Australia and discusses the new global environment. It also discusses two predominant challenges faced by regional Australia – the movement of people to the state capitals, and the mistaken perception of regional areas as ‘second class’ towns and cities.
Chapter five highlights key elements identified by people living and working in rural and regional communities to facilitate growth and development. The elements have been grouped into five areas including connectivity, human capital, specialisation, amenity and institutions.
Chapter six describes the current framework of regional development in Australia. It also discusses two Commonwealth programs raised consistently in evidence – the City Deals program, and the Regional Development Australia network.
Chapter seven focuses on the decentralisation of Commonwealth entities. It provides a brief overview of the Australian Public Service (APS), and the Australian Government’s current decentralisation program. Key factors for relocating Commonwealth agencies to rural and regional areas are also discussed.
Chapter eight discusses corporate decentralisation, and more broadly, private investment in regional Australia. It provides examples of private companies that have relocated from a capital city to a regional area, or have established themselves from the outset in a regional town.
Chapter nine is the final chapter of this report. It sets out the Committee’s strategy for building and sustaining regional communities.
Case studies from each state and territory are presented in this report. These case studies highlight good examples of individuals, businesses and towns that have a positive story to tell about regional Australia. Case studies that show the challenges faced by people and businesses in regional towns across Australia are also presented.
Five appendices accompany this report. They include:
Appendix A: Submissions to the inquiry;
Appendix B: Witnesses at public hearings;
Appendix D: Expert panel members; and
Appendix E: List of Australian Public Service agencies.
This final report represents a consensus of the Committee. It represents a consensus on the value and strength of regional Australia, and the principles that underpin its development. More importantly, it represents a consensus on the best way forward for building and sustaining rural and regional communities.
The Committee would like to thank everyone who participated in this inquiry. Over 300 people and organisations provided evidence to the Committee – either by written submission or in person at public hearings. The Committee greatly appreciates these contributions, and the interest in the Committee’s work.