5.1
This chapter highlights key elements identified by people living and working in rural and regional communities to help facilitate growth and development. The elements have been grouped into five areas; connectivity, human capital, specialisation, amenity and institutions. Cutting across these five areas are four types of investment;
maintenance of services and facilities;
catalytic investment that stimulates further growth;
investment in capacity building of our rural communities; and
investment in human capital.
Introduction
5.2
The Committee was pleased to hear witnesses talk proudly about the development of their rural and regional towns, and frankly about the impediments to future growth.
5.3
These discussions left the Committee with the strong impression that regional towns and cities across the country have a good understanding of what is influencing change, what is needed, and how to get there. It also gave the Committee a useful list of elements for regional development.
5.4
The elements identified in the Committee’s evidence are consistent with the ‘essential ingredients’ identified by the RAI that ‘enable small cities to succeed and grow’. These essential ingredients include:
high rates of connectivity through physical and digital infrastructure so that firms and people can readily connect with others outside the city;
strong human capital able to support a density of high paying jobs that attracts the best talent and ensures that businesses and institutions in the region are capably led;
one or more globally competitive specialisations that enable the city to become embedded in domestic and global supply chains and develop groups of firms and innovation orientated organisations that enable the city to capture growth opportunities over time;
the type of amenity that makes a city ‘sticky’ or a place that people want to be for the long term so that existing citizens remain committed to spending their lives and careers in the city and others are attracted to join them; and
a network of high capacity institutions so that a city can capably and proactively act to develop itself.
5.5
These ingredients will be familiar to those interested in the development of towns and cities. The Committee has used these concepts to group the key elements presented in evidence.
5.6
The Committee is aware that many of the elements are interrelated. They represent a complex set of dependencies and connections that characterise the development of regions and towns, and drive social and economic growth.
5.7
Nonetheless, the Committee considers that the main elements can be separated and described. The following discussion represents the common threads identified by people working and living in regional areas about what is facilitating and constraining growth in their communities.
Connectivity
5.8
The Committee consistently heard that the success of any regional town depends on connectivity. That is, how it connects to the rest of the world. Here, connectivity – also referred to as hard infrastructure – includes:
Physical connectivity – by air, road, rail and ports – to capital cities, to economic markets, to governments and services, and to each other; and
Digital connectivity such as mobile phone and internet networks, including the National Broadband Network (NBN).
5.9
In a competitive and globalised world, the importance of capacity to be connected to other towns and cities cannot be overestimated.
5.10
Connectivity is the foundation for both traditional and modern business. For example, the availability of effective transport infrastructure allows for fresh produce, livestock, resources, manufactured goods, and retail stock to be transported more easily and efficiently to its market. It also allows people to travel more readily.
5.11
The Committee heard how the presence of and upgrades to regional airports, major roads, and rail links will improve connectivity and provide social and economic opportunities for regional towns.
5.12
For example, in its submission to the inquiry, Regional Development Australia Central West described the estimated economic impact of the inland rail project to Central West New South Wales. It stated:
A multitude of business and growth opportunities arising from the development of the Inland Rail have been identified…
The Inland Rail could create 491 potential new jobs in the Central West during the construction phase alone, 154 more regional jobs within Parkes, Forbes and Lachlan LGA’s post -construction, and an overall $216 million economic impacts to the Central West over 60 years.
5.13
Potential opportunities for intermodal hubs, a distribution centre, and business relocations and clusters were also identified.
5.14
Similarly, in its submission, the Illawarra Business Chamber cites research estimating that the construction of a South West Illawarra Rail Link – to improve the capacity and standard of passenger and freight access to the region – would return a $2.6 billion increase in gross regional product, and create over 1 100 permanent new jobs.
Information technology
5.15
Information technology has changed the way people live and engage with each other. It has also significantly changed how businesses and markets operate.
5.16
Being connected gives people greater flexibility in how they engage in the workforce, and where they do business. This includes greater opportunities for teleworking or working remotely.
5.17
In its submission, the Blue Mountains Living Lab discusses the shift to a more ‘digitally enabled economy and society’ where broadband is considered a utility much like water, electricity and gas.
5.18
It proposes establishing a network of public and private sector hubs in regional areas. This would not only offer a digital approach to decentralisation and regional development but would accommodate the modern preference for flexible, remote, and freelance work arrangements.
5.19
The Blue Mountains Living Lab further proposes ‘Australian Government Hubs’ co-locating public servants from different Commonwealth entities in regional towns. There are advantages of this teleworking model:
If Australian Government Hubs were established in select regional towns, then this would provide remote workers with a collegiate work environment that met this social need, while at the same time bringing employment opportunities closer to where people live. This in turn would have the spill-over effect of stimulating economic activity among local service providers meeting the needs of this workforce, and enable more engagement in local community and volunteer activity by skilled public sector employees.
5.20
The above example highlights the potential of reliable and effective telecommunication networks to facilitate public and private sector decentralisation. It is dependent however on fast and reliable digital connections.
5.21
The importance of digital connectivity is not restricted to traditional office based occupations. The National Farmers Federation highlighted the importance of telecommunications to the day-to-day business of the agriculture sector, particularly in the 21st century. It stated:
…reliable telecommunications infrastructure, particularly for broadband, must be a priority. Quality telecommunications underpin not only basic communications (including emergency calls), but other everyday activities such as online banking, weather information, trading crops and livestock, online learning, webinars and the maintenance of livestock traceability systems.
5.22
The Committee was not surprised to hear that the quality and reliability of internet connections varied markedly across the country, particularly in regional areas. The importance of improving digital connectivity in rural and regional areas was a strong message to the Committee. Professor John Halsey stressed this point:
First of all, in an absolutely fundamental sense, we've got to do a whole lot better than we are at the moment in ensuring connectivity wherever you are. It's hugely patchy at the moment. I know there's a lot of debate around the quality of the NBN et cetera, but in looking to the future one of the critical things we're going to have to continue to build is high-quality, affordable ICT connectivity.
5.23
Ms Narelle Martin, an active member of Landcare, highlighted the lost opportunities that can follow poor connectivity:
…the ability to have fast, reliable and secure internet connection is a business imperative. I have had discussions with economic development officers in rural communities who have been approached by entrepreneurs with good businesses that could relocate to a different area, away from a capital city. One of the first questions asked is what sort of connectivity is available through the internet, both in terms of speed and band width. Unfortunately, the response continues to be that the standard service offered in rural communities is significantly below that of the well-connected urban areas. These potential businesses then do not relocate, taking their economic opportunities elsewhere.
5.24
The Committee acknowledges the provision of physical and digital connectivity remains primarily the responsibility of governments. Evidence to the Committee reinforced how such infrastructure can vastly improve liveability, and economic and social development in regional areas.
Human capital
5.25
The best asset of any region is its people. The Committee heard how the skills and experiences of people living in a region can solve challenges and create growth. In order to take full advantage of this human capital, the Committee heard that people in the regions need to be properly supported to work together and generate local solutions.
5.26
Leadership and capacity building was a particular theme at the Committee’s public hearing in Bendigo. The Committee heard how community and business leaders work together to create meaningful change. Mayor Margaret O’Rourke from the City of Greater Bendigo told the Committee:
…one of the things that is quite different in Bendigo is that collaboration. There is that deep DNA of bringing people together really easily and quickly, and that is business leaders or government officials. When there is an opportunity for something to be done on that stage from a collaborative point of view, we have always been able to pull people really closely together.
5.27
Ms Leah Sertori, CEO of Be.Bendigo, also described how developing leadership capacity has fostered partnerships in Bendigo:
I think that comes back to leadership. Within Bendigo we've got a number of different leadership development initiatives underway that have been able to develop the capability and capacity of business leaders to work together. We partnered with Rob Hunt, who was the founding managing director of Bendigo Bank and, really, the architect of Community Bank, to develop our own leadership program. From that we developed the relationship with Committee for Greater Shepparton and Committee for Echuca Moama. We developed a focus around regional export, looking at how we could collaborate to increase our supply, in particular into China.
5.28
Much of the evidence to the Committee emphasised the necessity of leadership within communities. Building leadership capacity was also a common feature of local training and education programs.
Skilled workforce
5.29
Having access to strong human capital in the form of a skilled workforce is also directly related to the growth of regional communities. Conversely, the absence of a skilled workforce is one of the main constraints on regional growth. A common theme in the Committee’s evidence was a lack of skilled people to do the work available in regional areas.
5.30
This point was highlighted by Ms Jo Podoliak from Regional Development Australia (RDA) Murray Lands and Riverland, who commented that a lack of skilled staff is inhibiting the growth of businesses in the region:
Unlike other regions, we have not a shortage of jobs but a shortage of skilled available workforce. That is a key significant factor for us. What keeps our business owners up at night is the lack of skilled available staff. That is limiting their expansion capability and the wealth in our region. One of the strategic directions for our region is to increase the capability of our commercial, community and government organisations in our region.
5.31
Similarly, in Kalgoorlie, the Committee heard that while ‘the next five years [will be] very, very strong for the area in a regional sense’ due predominantly to mining, they are struggling to find a workforce to support it:
We have 51 working mines in the City of Kalgoorlie-Boulder area, and there are some 600-odd that are in some form of exploration or early start-up. We are enjoying an unemployment rate of just 2.7 per cent at the moment, and there are hundreds of jobs available today for people with skills of various types, if only we could get the labour.
Most of our firms are struggling to find labour.
5.32
The Committee heard that factors contributing to this skills shortage include a general decline in population, gaps in education and training, reliance on fly-in-fly-out (FIFO) workers, and limited access to skilled migration. Two of these – education and training, and skilled migration – are discussed further below.
Case Study: WA – Goldfields Women’s Health Care Centre
The Goldfields Women's Health Care Centre has been providing health services to women in the region for well over 30 years. Statistics from 2012 show that approximately 13 000 females residing in Kalgoorlie-Boulder receive direct benefit from the service and there is an indirect benefit to approximately 29 000 women. Also in 2012, a survey conducted by the City of Kalgoorlie-Boulder reported: ‘the Goldfields Women's Health Care Centre provides amazing support to all cultural and family groups and is an invaluable service in our community.’
The centre provides services to new and expecting mums, parents, teenagers and women of all ages with broad based needs and cultural backgrounds. Services include self-development courses, general counselling, unplanned pregnancy counselling, grief and loss counselling and infancy and post-natal counselling, to include couples and families. There is also life coaching. There is a well women's clinic, featuring menopause and sexual and reproductive health and also complementary wellbeing services—such as massage and meditation.
In keeping with the centre's vision and mission to advocate and to provide services for women in the regions and their families, the Centre has also focused on expanding its service delivery to new markets. A partnership with Goldfields Centacare facilitates the centres delivering a stepped-care model of service and wraparound services in regard to clients with mild to severe mental health issues.
Education and training
5.33
The importance of leadership and human capital is reflected in the Committee’s principle that regional development requires significant investment in the education and training of people within regional communities, particularly young people. Such investment will build strong skilled workforces to meet the needs of regional areas. It may also lead to better population retention outcomes.
5.34
In its submission to the inquiry, the Regional Universities Network (RUN) highlighted the value of local regional education and training opportunities:
People who study in the regions largely stay in the regions to work. A study undertaken for RUN demonstrated that 60-80 per cent of employed, recent graduates of RUN universities were employed in regional Australia. A report by Cadence Economics for Universities Australia has estimated that for every 1000 university graduates entering the workforce 120 new jobs are created for people without a university degree. Regional universities therefore boost regional employment more broadly than just through their graduates.
5.35
Professor David Adams from the University of Tasmania clearly articulated the value of investing in human capital for regional areas when describing partnership approaches in Tasmania. He stated:
The broad principle that underpins the significant Commonwealth, state and university investment… is an assumption that a significant investment in regional human capital will convert over time to significant learning outcomes but also significant growth, innovation and productivity gains to justify the investment. That's the broad value proposition, and the nuance there is the notion of specifically investing in human capital and its future growth.
5.36
The Commonwealth Department of Education and Training made a similar point in its submission, highlighting the value of school education to regional Australia:
Providing quality and accessible school education in regional Australia underpins regional development, sustaining rural and regional populations and developing the capabilities of young regional Australians. Regional and rural schools are also a significant part of local/regional economies and employment bases, both generating jobs and attracting people to the region.
5.37
The Committee heard that some regional communities had low Year 12 completion rates. Mr Brett Smith, CEO, Cradle Coast Authority, observed that around 72 per cent of adults in north-west Tasmania had not completed year 12.
5.38
Such poor educational attainment levels were challenging regional areas to improve social and employment prospects for young people. For example, in Burnie, the Committee was told the University of Tasmania has entered into a Memorandum of Understanding with the State Government to improve education and training outcomes for Tasmania.
5.39
Highlighted as a best practice model, Professor Adams described the significance of the university’s role:
…most of us have observed in Tasmania in the last five years is the university taking a leadership role in making this an urgent state issue. The issue of poor participation, retention and completion rates in Tasmania and in many regional areas of Australia has been around for a very long time. The difference in Tasmania is a public civic institution—the university—saying, 'We're going to make this central to our business.' That's what's changed the conversation in that a public institution that is also apolitical has been able to bring the parties together, which may have been difficult for a particular government of the day to do. In that sense, the urgency has increased but in a very cooperative way.
5.40
The Committee was impressed by this placed-based partnership approach and the active leadership taken by the University of Tasmania.
5.41
In his evidence to the inquiry, Professor Halsey identified three key areas – education resourcing, Cabinet consideration and RDA engagement – where the Commonwealth could intervene to better support education and training in rural, regional and remote areas. Specifically, Professor Halsey submitted:
1
Review, and where necessary amend, key legislation which frames and impacts on rural, regional and remote Australia to ensure there is an authorising element in the heads of Acts which recognises place and location as legitimate bases for the calculation and allocation of resources including an insistence on the provision of essential services.
2
Every Cabinet submission needs to include an assessment of the likely impact of it on rural, regional and remote locations and communities.
3
There should be concerted effort by all RDCs [Regional Development Australia Committees] to engage with education as an active partner, rather than a stakeholder. Achieving this requires modifying- perhaps expanding- the role for RDCs to include driving greater collaboration/connection between education (schools through to vocational education and universities) and local governing bodies as well as industry, other essential human services, ICT [Information Communication and Technology] infrastructure and also philanthropy.
5.42
The Committee supports Professor Halsey’s observations.
5.43
In 2017, the Commonwealth Government commissioned Professor Halsey to conduct an Independent Review into Regional, Rural and Remote Education. Professor Halsey’s report was finalised and presented to the Commonwealth Government in January 2018.
5.44
The Government accepted all 11 recommendations made by Professor Halsey.
5.45
The Committee also supports these recommendations. In particular, the Committee notes recommendations designed to establish a national focus for regional, rural and remote education; to improve ICT; and to enhance transitions into and out of school.
Skilled migration
5.46
There are many factors that attract people to places. Education, employment, family, amenity, and lifestyle all influence personal choices about where to live.
5.47
Sustaining and maintaining populations in regional areas is multifaceted. It includes efforts to:
Retain locals by giving them reason to stay;
Attract former locals by giving them reason to come back; and
Welcome new residents either through inter- and intrastate movement or international migration.
5.48
The Committee was told that migration could be used more effectively to support rural and regional communities, particularly skilled migration. In its evidence to the inquiry, the Federation of Ethnic Communities’ Councils of Australia (FECCA) promoted the value of migration to stimulate regional economies and reinvigorate industries:
Many regional areas rely on the influx of new people to maintain job supply and to rejuvenate or maintain certain industries. Well planned and thoughtful regional development relies on the ability to meet the needs of employers seeking to fill positions with qualified overseas skilled migrants. ABS data shows that 75 per cent of all recent skilled migrants were employed as at November 2016 and of the recent skilled migrants who were the main visa applicant, 82 per cent were employed.
Case Study: Vic – Luv-a-Duck
In 2010, Luv-a-Duck, the largest commercial business in Nhill, was seeking to expand in response to increased market demand but was unable to do so because of a lack of potential employees. This was the result of a declining working-age population, in a context of relatively low unemployment. A Karen community was relocated to Nhill to address the labour shortage and has contributed to the successful expansion of the business. With the inclusion of the Karen community into the local community significant growth was experienced in a range of areas, including but not limited to, health and education.
5.49
In his evidence, Mr Mark Glazbrook from Migration Solutions advocated for the better use of skilled migration to support regional areas. In particular, he said:
… there should be a greater focus on demand driven migration, which is where there is an employer who has a genuine need for someone who meets the skills requirement to fill a vacancy, especially in regional areas.
5.50
Mr Glazbrook noted that this has worked well for Murray Bridge in recent times, with an increase in population and decrease in unemployment.
I think that Murray Bridge is a really good example to look at how employers can use the Migration Program to attract the staff they need. People might come in on a temporary 457 visa or a temporary visa of some other description and then get residency and then go on to get citizenship but still staying in the regional area. Having a program that facilitates that is very important. But it is also important to make sure we are selecting the right people from the right places who are likely to remain in regional areas and not just use a regional area for a backdoor opportunity to get to a larger, more populated centre.
5.51
The RAI made similar comments, recommending an increase in migration to redress population loss and support private enterprise:
Increase international migration to rural and remote Australia through visa reforms and secondary migration support to stabilise population loss and facilitate business growth.
5.52
Filling skills shortages in rural and regional areas is one area where Commonwealth immigration policy can play a vital role. Treasury, for example, highlighted that:
… immigration policy provides a potential platform. Regional settlement programs have proven valuable in providing short-term relief to labour shortages especially in providing essential health services.
5.53
International migration is also crucial for some regional industries, in particular agriculture. The Australian Dairy Industry submitted:
Permanent and temporary migrants are also an important and integral part of creating and maintaining vibrant agricultural communities, and will continue to play an important role in meeting skills shortages.
5.54
FECCA explained how agriculture-centred temporary migration can act as a pathway for permanent settlement, adding to population stability and the prosperity of local communities:
Migrant groups in the agriculture industry have been identified as a significant part of the seasonal agricultural workforce. Temporary skilled migrants could also contribute to the further development of the agriculture industry, contributing expertise and diverse skills. Most often, temporary skilled migrants will go on to become permanent residents and citizens. The skills that they bring subsequently remain in Australia and can further contribute to the industries that they are working in. Ensuring that all visas have a pathway to permanency is crucial in attracting migrants to rural and regional Australia.
5.55
In some cases, finding agricultural jobs for international immigrants and facilitating their movement into the regions can be the best fit for both regional communities and immigrant groups. The Refugee Council of Australia highlighted successful examples of such an approach:
The secondary migration of Rwandan families from Sydney to Mingoola and the case of a Burundian family who moved from Brisbane to Gracemere in Central Queensland were considered successful because all families who were involved had agricultural backgrounds. None could find suitable employment in capital cities and were feeling isolated. Opportunities to work on farms offered by regional Australian towns assisted them to prosper, become self-sufficient and contribute to their communities.
5.56
The more remote areas of the Northern Territory (NT) and Kalgoorlie also told the Committee about the benefits migrant populations have brought to their communities.
5.57
For example, the NT Government noted:
…we've seen that if it wasn't for migration from offshore we would actually be suffering a loss of population across the Northern Territory at the moment. We see migration as a very important component of Northern Territory growth going forward. We've been successful over the years. The Northern Territory was involved in advocating for the regional skilled migration scheme back in the nineties, which was a very successful scheme that bought permanent migrants into the Northern Territory.
5.58
Similarly, the Kalgoorlie Boulder Chamber of Commerce and Industry observed the value of migrants in bringing much-needed skills to reduce labour shortages in regional areas. The Chamber said:
The multicultural composition of this community is now a primary strength. The relatively new migrant population is very diverse and their skills cover the majority of primary industries. More of these valuable people are needed, however getting them has become difficult due to recent changes to government policy.
5.59
Policies that sustain and maintain population are vital for regional areas. The Standing Committee on Infrastructure, Transport and Cities is examining the issue of population distribution as part of its inquiry into the development of cities.
5.60
The Committee looks forward to the findings of the Committee’s inquiry.
Specialisation
Strategy
5.61
One of the most fundamental elements to any concerted regional development effort is a strategy. That is, knowing what you want to achieve and how you will achieve it.
5.62
Many government and industry groups shared with the Committee their strategic plans and road maps for regional development, clearly articulating a vision and plan for their regional areas. For example, the Mayor of Newcastle City Council, Councillor Nelmes, described the process of creating a vision for Newcastle:
The 2030 vision is our road map for the next decade. We've already undergone very broad community consultation to get to this initial document, and we're doing another 12-month process to update it to make sure our vision is in line with the broader community.
5.63
In his evidence to the inquiry, Mr Stewart Webster from the NSW Department of Premier and Cabinet, drew the Committee’s attention to NSW Regional Economic Development Strategies (REDS). REDS are a ‘bottom up’ approach to regional development aimed at driving sustained economic growth across the state’s regional communities.
5.64
Mr Webster explained to the Committee how the initial stages of the REDS process involves working collaboratively with regions to help articulate their vision:
What the [REDS] aim to do is for each functional economic region to identify what their vision is, which could go out to a number of decades. It should be based on what their endowments are, both physical and nonphysical. Leadership and institutional endowments are quite important….
…They need to identify the strategy they will need to pursue the vision over two or three decades and then work out what the action plan needs to be to implement that strategy over the next four or so years. As I said, the plan is not for these strategies to just sit on the shelf.
5.65
REDS are an example of setting a vision and strategy for the long term based on regional strengths.
Regional strengths
5.66
The Committee frequently heard that regions need to work out what they are good at and build on their strengths. To do this, regions should identify endogenous factors or endowments and ascertain the factors that make that area competitive.
5.67
For many rural and regional areas, endogenous strengths and endowments may come from the history and natural resources of an area – such as agriculture, minerals, ports, or tourism – and related industries and skills that have developed over time. For example:
Endowments can be natural such as superior agriculture land, mineral deposits, temperature climates or scenic attraction, or built such as roads or hospitals and can even be borne out of distance to other centres (and influenced by transport infrastructure). Human endowments, such as access to skilled or unskilled labour can also confer advantage, however labour is more mobile than natural or built endowments.
5.68
The Committee heard that regions that take advantage of their endogenous strengths and endowments are well placed to succeed. Professor Andrew Beer highlighted the link between a region’s endogenous strengths and its economic development capacity:
Good practice in regional economic development is accepted as focusing upon endogenous growth—that is, growth that takes place because of the assets, abilities and talents of the region and the people that live within it.
Government has an important role to play in mobilising those capacities by providing low-interest loans, by providing grants, by ensuring that infrastructure, telecommunications and other services are adequate for the task ahead, and by providing the encouragement and political leadership to deliver change.
5.69
Mr Webster also highlighted the importance of understanding a region, its strengths, and tailoring an approach to support its economic development.
So, if you actually believe that endogenous growth theories are the way to go—that that's actually why regions develop —then it …follows that you really need to have a good handle on what each little economy within a state or the country specialises in, the kinds of investments they need and the kinds of endowments they have or could have. It's got to be a horses-for-courses approach. It can't just be a cookie cutter across any state or any country.
Clustering
5.70
Strategies which build on the strengths of regional communities will maximise the growth and prosperity of rural and regional communities. The Committee heard that in some rural and regional towns, clustering has been used to do this, and improve competitive advantage.
5.71
Professor Michael Porter pioneered the concept of ‘clusters’ in 1998 to describe ‘geographic concentrations of interconnected companies and institutions in a particular field…important to competition’.
5.72
The Committee heard that clustering is a feature of many rural and regional communities, driving efforts to work more closely and collaboratively across industries.
5.73
Mr Garry Styles, General Manager of the Orange City Council, observed that clustering can act as a catalyst for further development – particularly with regard to decentralisation of government agencies:
… if you look at that sort of cluster and opportunity arrangement and you start to try to put a focus around what the federal government might decentralise, you can get linkages. We've seen the Paraway company move to Orange. That's an offshoot of Macquarie Bank and it's focused on agribusiness. We've got this large cluster of specialist professionals—scientists and things like that – who are starting to aggregate and drive that cluster forward in Orange.
5.74
At its public hearing in Geraldton, the Committee heard that clustering was central to the region’s plan for growth; by ‘bringing industry together to actually lead developing industry’. Geraldton is piloting three cluster projects focused on tourism, horticulture and marine services.
Ms Palmonari from Plan Midwest explained:
The clustering work is very much around making those connections. …quite often we get stuck in our own little businesses or in our own offices when we really should be out there speaking with one another.
Case Study: International – Silicon Valley, USA
US research universities, both private and public, produce most of the country’s science and engineering graduates, and are often major drivers of economic development in the areas in which they are located. Silicon Valley is a successful innovation cluster that brings together local universities with a longstanding aim of stimulating economic development by developing technology and then transferring that technology to local industry. This in turn stimulates the creation of new businesses in university-centred science parks. Technology companies commonly locate their operations near the best universities in order to enable their own research departments to work with leading scientists and to recruit promising students.
5.75
Mr Todd West from Mid West Development Commission provided further evidence of the horticulture cluster as an excellent example of success in the Geraldton region:
A classic example of that would be our horticulture cluster. We've taken a very fragmented industry locally here with a number of Vietnamese families and, through this entity that we've got called Progress Midwest, which is specifically setup at arms-length from government to help facilitate these conversations, we've got these guys around the table, they’ve got a board together and they are starting to talk export and what they can do to grow and expand. So we've gone from an inward-facing community to an outward-facing community.
5.76
Similarly, in Tasmania:
Tasmania did clustering a long time before it was popular to call it that. That is what I feel has happened. I think it has strengthened identity within these regions. In some ways, because of downturns in some industries, we are developing new clusters and differentiations across those regions. Certainly, education pathways and the university transformation are what we are looking to regionally to transform the north and the north-west again to get ready for the knowledge industry. Creative industry booms—innovation and technology—are where we are now heading. Yes, it has been absolutely the policy of the state government to do that and that is how we are differentiating ourselves.
5.77
In central west NSW, the health care and aged care sector is a dominant employment sector and an important industry. RDA Central West noted that there is a clustering opportunity for this sector:
There is a strong case for encouraging greater public and private sector relocation in the health industry to the Central West, and in particular the health precinct developing around Bloomfield and Orange Base Hospital on Forest Rd. Bloomfield Hospital and many other health services provide a referral centre not only for the region but much of Western NSW.
Greater collaboration between these existing services and University Schools of Rural Health, with biomedical and health companies that could be encouraged to move to the area would likely benefit not only the region but much of regional NSW through outreach, product and service improvement.
5.78
The theory of clustering holds that the concentration of industry and associated entities offer three competitive advantages:
increasing productivity of local companies;
stimulating innovation; and
prompting the creation of new businesses within the cluster.
5.79
A further benefit identified in the Committee’s evidence is that clustering – or areas of specialisation – can help to establish career paths for people. This occurs when there is a wider range of employment opportunities in similar or like-skilled industries that allow for promotion or lateral movements of people.
Amenity
5.80
Amenity refers to those characteristics of a town that attract people to it, and give them reason to stay. In other words, amenity refers to a town’s liveability, and what makes a town a good place to live, work and do business. It can also be described as a town’s ‘soft’ infrastructure.
5.81
Witnesses at hearings and those who made submissions to the inquiry talked passionately about the amenity of their local communities and why regional towns are great places to live. In particular, the Committee heard about:
proximity to major centres and capital cities;
access to good schools, health and community services;
arts, dining and entertainment precincts;
recreational and sporting facilities; and
5.82
In short, many people promoted the advantages of living in rural and regional towns across Australia.
Case Study: SA – The James Morrison School
Internationally renowned jazz musician, James Morrison, has a 30 year association with Mount Gambier through an event called Generations In Jazz, which is an annual student competition. Each year, over a weekend in May, 6,000 people attend. The James Morrison School is a faculty of University SA’s school of music, who do all the accreditation.
The James Morrison School has a close relationship with Julliard jazz academy in New York and the institutions have a student exchange program. The school has performed in New York and New Orleans. The school has 100 students, all jazz musicians, who are all highly focused. They have their own jazz club, the Morrison Jazz Club and Mr Morrison also brings over specialists to Mount Gambier from Melbourne when they are touring Australia.
Mr Morrison chose Mount Gambier as he wanted somewhere where his students wouldn't be distracted; where they would be wholly and solely focused on their studies and their art. Of course, he had the connection to Mount Gambier through Generations In Jazz.
Through this academy, Mount Gambier has attracted more than 100 people to Mount Gambier and this provides a financial and cultural benefit to the city.
5.83
Professor Anthony Sorenson spoke about the importance of amenity for regional towns in attracting and retaining population. He commented:
…I think it’s indubitable that those places with high environmental amenity and infrastructure amenity, in terms of accessibility, good water supply and that sort of thing, which perhaps have cultural diversity—there is certainly a cultural component to amenity—all of these dimensions can make places that people want to live in and can bring in migration from outside.
5.84
The importance of amenity is not just about attracting workers to regional communities; it is about attracting their families as well.
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As mentioned earlier, Kalgoorlie has a significant FIFO workforce and is struggling to attract permanent residents due to the perception of a lack of amenity in the city. Mr Ron Mosby, Executive Member of the Kalgoorlie-Boulder Chamber of Commerce and Industry, explained:
The challenge is to get people to come to Kalgoorlie to have a look. When they do see the amenity that we have—the beautiful roundabouts and infrastructure like the Oasis swimming pool and waterpark activity area, the parks and gardens and the sporting facilities—they are actually amazed. The challenge is to get people here to see that sort of amenity and get past the perceptions of living in regional WA.
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The quality of life in the regions may be their greatest future asset. The amenity of a town will attract human capital, and private investment, which will lead to economic development and prosperity. Development will then create greater amenity, ensuring an upward spiral of growth.
Marketing and promotion
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As noted in Chapter 4, one of the challenges for regional towns is changing fixed ideas about non-metropolitan communities. Many misconceptions stem from the perception that regional and rural towns are inferior to capital cities, and that people within these communities are living with second class services and amenities.
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The Committee shares the frustration of communities attempting to challenge these views, and acknowledges that the advantages of living in these communities must be better promoted.
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At its hearing in Wodonga, the Committee heard about the Evocities program. This is a marketing campaign established by seven NSW regional cities – Albury, Armidale, Bathurst, Dubbo, Orange, Tamworth and Wagga Wagga – that aims to ‘educate metropolitan residents about what regional NSW has to offer and to combat long held misconceptions about regional city living’.
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The success of Evocities is measured by the number of relocations to regional towns, inquiries to the program, and job advertisements. Cr Kevin Mack, Chairman of the Evocities Steering Committee discussed the success of the program:
… we've seen significant results. Since September 2010, [3,100] households have relocated to one of the seven Evocities. The campaign has generated over 6,200 relocation inquiries. The Evojobs website, which was launched in 2016, has advertised over 37,000 local jobs resulting in two million sessions on the site. Evocities has generated 2,694 media placements, and that's across the media outlets in New South Wales, including Sydney, and across a whole range of outlets, including Domain and tourism magazines—they include all the things that we want this exposure to be part of.
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The Committee is impressed by the Evocities model of engagement, and the collaborative nature of the advertising campaign. It encourages similar initiatives by other regional centres to attract new residents to its towns.
Institutions
Regional universities
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The presence of regional universities in rural and regional communities facilitates more than just the provision of tertiary courses to students. As a central institution, regional universities can provide the mechanisms needed for regional towns and cities to thrive. They are well positioned to:
bring together people who can think strategically and critically, make decisions based on evidence, and solve problems;
draw on national and international experience and networks;
create local centres of research and development to drive innovation and change;
directly link new ideas with regional industries and investment;
provide the foundation for government, industry and business to work collaboratively and in partnership; and
develop necessary education, training and skill courses to support the region’s needs.
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The Committee held one of its public hearings at the NeW Space campus of the University of Newcastle; a new $95 million development in Newcastle’s CBD. Professor Caroline McMillen, Vice Chancellor and President of the University of Newcastle highlighted the important role regional universities can play in the economic and social transition of regional areas:
I'm particularly passionate about the role of universities as partners in the process of regional transition. It's particularly clear to me that, where regional transition effectively occurs, where regions develop those wonderful, vibrant, strong communities, strong cultures and a strong jobs base that is going to be resilient in the future workforce; where they are 'sticky' and hold their young people; and where they are very much seen and clearly not only part of the national landscape but, equally, often connected through to global supply chains and have a global view, that's a remarkable future.
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In her submission to the inquiry, Professor Robyn Eversole succinctly described the importance of regional universities to regional communities:
Universities and other knowledge institutions are widely recognised as key players in regional development and drivers of regional innovation systems internationally. Universities’ role in regional development includes, but goes well beyond, their [research and development] role. It includes the roles universities play in developing human capital and leadership, and catalysing ‘knowledge spillovers’ and cross sector innovation in particular regions.
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Similarly, the RUN made the direct link between regional institutions, innovation and economic outcomes:
Universities’ education and research functions make them central components of the innovation system. They produce the graduates and postgraduates required to support high skill, knowledge-based jobs and industries, and generate much of the nation’s world class research. Universities Australia has estimated that Australia’s graduates are worth $188 billion to the Australian economy annually and that a third of jobs will require a university degree in the coming years.
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Notwithstanding the potential of regional universities, the Committee heard that many ‘are not resourced to play this regional development role’. Furthermore, in Australia there is ‘almost no attention to the internationally recognised importance of regional innovation as a driver of national innovation’.
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Professor Andrew Beer, a member of the Committee’s expert panel, suggests that regional universities should and could do more to drive regional development. He questioned:
…is it possible to assign additional roles and associated funding for universities that have a presence outside of the metropolitan regions so they can grow and perform a service function that does not sit with their current corporate models, that goes beyond their corporate model and public service?
Case Study: Tas – University of Tasmania
A new, international cross-disciplinary project aimed at improving sustainable regional development outcomes in Australia and South America is being led by the University of Tasmania. Associate Professor Robyn Eversole, Director of the Institute for Regional Development, has received more than $50,000 in federal funding to establish the Sustainable Regions Applied Research Network (SRARN). SRARN brings together university researchers and academics from across Argentina, Australia and Chile and is supported by the Australian Government through the Council on Australia Latin America Relations of the Department of Foreign Affairs and Trade.
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Professor Eversole, also a member of the Committee’s expert panel, proposes establishing Regional Development Centres within existing regional universities. Regional Development Centres are defined as:
… place-based, cross-sector university units that work with communities and organisations in and beyond particular regions to create sustainable regional development outcomes.
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Drawing on international experience, Regional Development Centres have the following characteristics:
1
they are part of university infrastructure, located within an institution that gives them access to scientific and technical expertise across disciplines and globally;
2
they are part of regional community infrastructure, located ‘in place’ and able to draw on embedded local relationships and expertise across sectors and communities;
3
they deliver tailored teaching and research programs that are co-designed with regional partners, relevant to local industries and organisations, and inclusive of local knowledges (including Indigenous knowledges);
4
they are resourced specifically to act as regional development catalysts and deliver impact, rather than being resourced solely for traditional academic activities;
5
centre directors are senior people based in the region, with considerable autonomy to co-design and co-deliver place-based solutions; and
6
centre staffing is generally small and comprises a mix of engaged academics and professional staff with strong cross-sector community links.
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Professor Eversole also sets out the type of activities that could be undertaken by Regional Development Centres:
informing policy with local and academic knowledge;
brokering linkages between universities’ specialised capabilities and practical on-the-ground opportunities;
leading cross-sector cross-disciplinary research and development initiatives to create innovative solutions; and
offering relevant capacity development opportunities for regional leaders.
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The Committee acknowledges the importance of regional universities as pivotal to regional innovation, change and growth. It supports efforts to extend their capacity beyond education provision to being a more central driver of regional development. This is set out in Chapter 9.
Partnerships
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Rural and regional Australia is ideal for fostering collaborative partnerships. A strong sense of community, shared priorities, and close government, business and community relationships position regional communities to mobilise regional development efforts.
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Coordination and partnership between all three levels of government – Commonwealth, state and territory – and local – the private sector, and community groups – was promoted as pivotal to facilitating public and private investment in regional communities.
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The more successful projects are those that can bring all key stakeholders to the table. This maximises the potential of available investment by pooling resources and directing them to significant projects. It also strengthens the likelihood of real action when all the key stakeholders have a collective willingness and commitment to invest in particular projects.
Case Study: International – Maastricht, The Netherlands
Professor John Cole observed that the Netherlands works corporately as a society to optimise their limited resources. The value of their exported agricultural produce is enhanced by value-adding further along the production process. Maastricht, for example, is an example of a place which has local government, businesses—including Global 500 businesses—leaders in complex technologies, and the universities working collectively.
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Ms Kathryn Woolley from the Orange City Council, explained this point:
The airport project is a good example where the three tiers of government have worked very well together. We've had a $19 million expansion to our airport that enables us to land hundreds of jets in there now. That, for a regional airport, is really a big investment, and there was private sector and government investment in it. With that kind of forward planning and doing that in a collaborative sense, I think there's a real opportunity there, because it means we're not sprinkling the money in various places where, frankly, they probably won't survive.
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The advantage of partnership approaches is two-fold. First, it brings people together to generate ideas and determine a plan. Second, it brings people together who have the financial support to implement the plans.
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The Committee consistently heard that the Commonwealth City Deals program is a good model for regional towns to work in partnership with key stakeholders, particularly government. This is discussed more fully in Chapter 6.
Case Study: Qld – Queensland Remote Area Planning and Development Board (RAPAD)
The Central Western Queensland Remote Area Planning and Development Board (RAPAD) was established in 1992 and is a regional development organisation and regional organisation of councils. It aims to foster, facilitate and promote the sustainable growth and development in Central Western Queensland. RAPAD has been working with government and non-government stakeholders at the local, state and federal level. In evidence to the Committee, Professor John Cole of Resilient Regions acknowledged:
RAPAD, the Remote Area Planning and Development Board, for example, in central western Queensland is probably one of the better examples of local, collective, shared activity with a strategic vision for a region. That is 12,000 people in an area the size of Germany, doing good things and recognising that they engage most effectively when they work together and they engage most effectively outside the region when they work as one.
Resilience of communities
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Regional communities that have the elements discussed in this chapter are more likely to succeed socially and economically. The combination of these factors creates a virtuous cycle from which regional growth and prosperity flow. These regional communities are also more likely to be resilient, and be able to withstand future challenges.
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As outlined in Chapter 4, rural and regional Australia now operate in a modern connected world characterised by ‘mega trends’, uncertainty and change. Much of this change is outside the control of governments, let alone small regional communities.
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For communities to prosper in this new environment, they must be able to manage and adapt to change. Communities need to be well placed to minimise any negative consequences of change. This point was highlighted in evidence to the Committee in Orange, where the local council acknowledged that the community was able to withstand the loss of jobs from the closure of a manufacturing company:
We have proven we are a very, very resilient community. We've had some closures with changes to manufacturing in Australia, but our job growth has been good. It might have flattened us for 12 months, but we keep going and going.
…our largest employer, Electrolux, closed, and the council's specific jobs-growth strategy has meant that our unemployment rates are actually really low. So we've managed. That was an impact of about 540 direct jobs and about 800 indirect jobs in one go, and the unemployment stats are showing that we have filled some of those sorts of jobs, and we haven't seen what you would expect in a structural adjustment like that. A major spike in unemployment didn't occur.
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In order to manage and adapt to change, communities need to know what change is occurring. The Committee heard from the Hunter Research Foundation Centre that change resulting from specific events can be measured by sets of publically available data. The Hunter Research Foundation Centre was funded to look at the social and economic changes in Queensland towns after investment in coal seam gas development.
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Professor Will Rifkin explained to the Committee the negative and positive effects on the town of Chinchilla as shown by rental costs, drug offences, number of businesses and wage and salary earnings. This information can then be used to inform future decisions:
We took our results back and looked at whether we ticked the box and captured their story. Then we represented this to the industry and the state government. So it helps people in capital cities to understand what they’re hearing from the regions. Within about a month of launching this website, it was being used by the managing directors of the gas companies.
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This information will show not only how a region tends to respond to change, but can also be a tool for creating a shared strategy. Professor Rifkin explained how the process of measurement can bring together the varying stakeholders, by requiring alignment of values and aims:
One of the ways to get them aligned is to have them agree on how to measure what's going on and how to measure the changes that are occurring. That's an initial step. So rather than getting them to agree on what to do, get them to agree on what they're measuring. It's called shared measurement and it emerged out of the shared value movement in business and corporate social responsibility.
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The Committee was told that the most important thing governments can do to help build resilient regions, is to support communities to help themselves. In its submission to the inquiry, the Institute for Resilient Regions noted:
If there are to be resilient regions, government should not do for us what we can do ourselves – individually or by working together cooperatively and collaboratively. Personal responsibility, private sector initiative and innovation and civic-mindedness are the attitudes and behaviours of social and economic resilience.
…the most constructive thing to be done by government in regional development will be to help our regions challenge themselves, think new things, explore possibilities unimagined and renew on their own particular pathways to the future.
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The Institute of Resilient Region’s submission is consistent with the prevailing view shared by regional communities with the Committee. Rural and regional communities do not want to be ‘saved’ by government or given a hand out. For example, some witnesses stressed to the Committee:
[In Tasmania] In the first instance, we’re not asking for government to do anything for us. We’re prepared to do [that] for ourselves; we’re looking to the government to assist us to achieve what we want to achieve. I think we’ve been our own enemies and have been at fault ourselves by relying others to try to fix out problems.
[In Western Australia]…we took the view in Kalgoorlie-Boulder that we really had to be strong in ourselves. We had to be independent again. We had to develop a program that would look at development on an economic basis ourselves.’
[In Queensland] Imagine a regional community in distress where local leaders decide to start seeking solutions rather than asking government to fix it and working from within their own community to develop an idea that responds to local values, aligns with government policy and is attractive to corporate investors. This is what the application of the Regional Solutions framework has created for Highfields and other regional communities.
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The Committee is proud of Australia’s rural and regional communities, and in particular the attitude of people living and working in these areas. It was clear to the Committee that these communities want to be supported to set their own direction and develop their own solutions.
Investment in regions
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The Committee acknowledges that investment in rural and regional communities is four-fold. The first is investment that maintains the infrastructure of towns and cities and provides a basic level of universal services. For example, investment in roads, education and training, information technology, and recreation facilities. This is investment that maintains the status quo of an area.
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The second is catalytic investment, which drives development and growth and leads to further investment. For example, the presence of an airport, hospital or university, or government department. These investments can set off a chain of related outcomes including population growth, education and employment opportunities, improved social and cultural capital, and related infrastructure investment. All of which can markedly influence the economic and social prosperity of regional towns.
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The third is investment in capacity building of our rural communities particularly education and training and leadership development.
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The fourth is investment in human capital; the employment of people to design and deliver services in rural communities. This investment provides the greatest opportunity for government decentralisation policy.
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Highlighted below are three examples of successful regional towns that have benefited from public and private catalytic investment. They are Toowoomba, Orange and Geelong.
Toowoomba
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Toowoomba finds itself in the enviable position of possessing intergenerational wealth, partly driven by its location and historic economic development based on timber, coal and grains production. Indeed:
Growth took place during the late 1800s, with land also becoming used for cereal growing and dairy farming, with some timber-milling in the northern areas, and some coal mining. Growth took place through to the early 1900s, particularly along the railway lines. More substantial development took place from the post-war years, with the population of the Council area growing… to 92,000 in 1976. Significant development occurred from the 1980s, with the population rising from about 95,000 in 1981… to about 149,000 in 2011.
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In more recent times, Toowoomba also finds itself the beneficiary of private investment by the Wagner family – a local family with significant business interests in the Toowoomba region. The Wagners led the drive towards establishing a regional airport.
But we're seeing significant private investment, which is a clear indication to me that judgements have been made by people with money to invest. Look at the likes of Wellcamp airport, which currently has 80 flights a week, including one freight flight going into Hong Kong. Look at the Pulse Data Centre, which, once again, is a local investment company. Wellcamp airport, of course, has been funded by the Wagner family. Nobody's public money has gone into that. Look at the QIC development, which is just over here beside us and which is the biggest shopping centre built by QIC, who are a significantly capable investment group. It's the biggest shopping centre built in a regional capital. We have New Hope's Acland coalmining, which certainly keeps the rail line going with about seven million tonnes per year making its way to the Port of Brisbane.
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Toowoomba airport is an excellent example of private, catalytic investment that has produced positive business investment.
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Public investment has also helped facilitate this private investment, and contributed to Toowoomba’s development more generally. For example, Toowoomba will be the beneficiary of further public investment in the Melbourne to Brisbane Inland Rail project. A 126 kilometre section of rail from Toowoomba to Kagaru, including large scale tunnelling, will be delivered through a public/private partnership.
Orange
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Orange is a success story, having re-invented itself over the past few years and attracted new investment. Mr Garry Styles from the Orange City Council, spoke to the Committee about their methodology. It included placed-based approaches and a mix of public and private sector employment:
Orange is an example where you can see successful investment in decentralisation from both a government and a private sector perspective. In terms of what we view as best practice approaches, we take a locational preference approach in building those factors that make us attractive for the location of businesses, the creation of jobs. Our community has steady growth and a very good spread across the demographic, with a bit of a bias towards younger children, which tends to indicate that we've got a lot of job based growth.
On locational preference factors, we refer to the economic capacity and infrastructure, whether it be from a federal perspective, telecommunications, or roads and transport, and the amenity of the area if you're starting to look at decentralisation and supporting workforce. We have a very strong and diverse range of skills in our town. I think that has arisen because of, in part, the investment in public sector employment here as well as what we see from the business sector.
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As a result, the tourism and health sectors have been growing. The liveability of the town has attracted more people and lifted the permanent population.
Geelong
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The city of Geelong is a successful case study of decentralisation with the creation of a specialised hub for social insurance. The Transport Accident Commission, WorkSafe Victoria, the National Disability Insurance Agency and the Australian Bureau of Statistics Data Acquisition Centre have all been relocated to or were established in Geelong.
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Three levels of government, working with industry, have made significant investment into Geelong to drive decentralisation success. Geelong’s size, proximity to Melbourne, labour force reach and infrastructure and services, provide, in the City of Geelong’s view, solid advantages and opportunities.
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The City of Geelong believes that the relocation to Geelong of the Transport Accident Commission, and more recently WorkSafe and the establishment of the National Disability Insurance Agency have been catalysts for lifting Geelong’s profile and credentials as a social insurance hub. It argued:
Given Geelong’s strong social insurance eco system, there is merit in exploring the potential national and regional benefits of an agency such as Comcare being earmarked as an ideal fit for Geelong (Canberra headquarters and Melbourne based office). Geelong has the expertise, benefit of experience, talented labour force, lifestyle advantages and the supporting infrastructure to make such a relocation successful.
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Having previously been a manufacturing centre, Geelong has successfully transformed itself and continues to seek opportunities for further development.