This chapter 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 (RDA) network.
The current framework for rural and regional development in Australia is complex and interrelated. It includes different levels of government, funding programs, partnerships, and eligibility criteria.
For example, the framework of regional development in Australia contains a myriad of small to medium to large size projects aimed at improving community amenity and facilities, providing essential services such as education, training, health, and community services, and building significant infrastructure such as airports, roads, rail and the NBN. These projects vary from short to long term, and range from closely targeted to very flexible. They have differing funding cycles, timeframes and criteria.
The current framework also includes a variety of investment and partnerships with any or all of the three tiers of government, as well as the private and community sector.
At the Commonwealth level, the Department of Infrastructure, Regional Development and Cities has primary responsibility for policies and programs relating to rural and regional Australia. Some current key programs and initiatives administered by the department include the:
Building Better Regions Fund;
Regional Jobs and Investment Packages;
Stronger Communities Program; and
Community Development Grants Fund.
While the Department has specific portfolio responsibility to support regional development and local communities, all Commonwealth departments and agencies develop and administer policies that directly affect the development and growth of regional Australia; for example, education, health, employment, home affairs, defence and treasury.
This report does not provide an exhaustive list of these policies and programs. It does however discuss two key programs that were consistently raised in evidence as being directly relevant to regional communities – City Deals and RDA.
City Deals are a long term, place-based approach to driving economic and social development in cities across Australia. The program was introduced in 2016 by the Turnbull Government.
City Deals offer a bespoke model of infrastructure funding and delivery by bringing together the three levels of government, the community and private sector. The program aims to align ‘planning, investment and governance’ to drive, among other things, economic growth, employment, affordable housing, urban renewal and environmental sustainability. It aims to ‘secure the future prosperity and liveability of Australia’s cities’.
As a bespoke model, the program’s funding is tailored to suit local circumstances, objectives and opportunities. To date, the Commonwealth Government has entered into six City Deals with Townsville, Launceston, Hobart, Western Sydney, Darwin and Geelong. Some of these City Deals have been negotiated with larger regional cities.
City Deals represent the type of arrangement that rural and regional communities have been advocating as fundamental to drive regional development across Australia. That is, a partnership approach that is strategic, long term, place-based, and supported by key stakeholders.
The Committee is aware that the City Deals program is open to all Australian towns and cities. While there are no strict eligibility criteria to apply for a City Deal, the Department of Prime Minister and Cabinet offers the following three criteria for maximising success:
Willing and capable partners: The jurisdictions involved need to be willing and able to negotiate and deliver a City Deal. All levels of government must dedicate the resources needed for effective negotiation and implementation, as well as the political capital to drive difficult reforms and investments in the long-term interest of the City.
Opportunities to unlock economic potential and transform the City: There must be real opportunities to unlock economic potential in the City. City Deals are best suited to improving larger complex economic systems rather than simply providing an area assistance package.
Alignment with broader investment and policy priorities: City Deals should leverage government investment to further national policy goals, such as economic reform, rather than simply improving one location.
In her evidence to the inquiry, Ms Catherine Murdoch, from the Office of Coordinator General in Tasmania, told the Committee that having a direct line to Canberra, and aligning policy between the three levels of government was the ‘greatest outcome’ of the City Deal in Launceston:
Because I now have the City Deal, we are able to have these conversations at all the right levels. You'll notice that there are a lot of apprenticeships identified in here and new jobs through the university. …We had a meeting between the federal Department of Employment and Education, Skills Tasmania, our Department of Education, the Launceston Chamber, me and the councils about how, collectively, we're going to pull all of our programs together to achieve that.
So for me the City Deal is actually about policy alignment. That is its greatest outcome, because of those relationships that will be built, those conversations that we can now have because we have a mandate to collaboratively work together. I am a big fan. I think it's been missed sometimes because you're looking at the infrastructure. They may seem a little mundane in here, but all the initiatives are going to take us over the next five years—all three levels of government coming together across policy. It is going to be a whirlwind five years. I honestly can't wait to see the results.
It was a sentiment shared across the country. Rural and regional towns would like to enter into City Deals to facilitate the development and growth that regions have themselves identified.
At its hearing in Newcastle, the Committee heard how City Deals not only benefit those areas where the components of the City Deal are located, but the region as a whole. Mayor Bob Pynsent and Mr Stephen Glen from Cessnock City Council explained:
I think that the greatest opportunity that we have as a local government area is the concept of the city deal that the chair referred to before. We're part of the proposal with the implementation of the regional plan. We're one of the five councils, there being Newcastle, Port Stephens, Lake Macquarie, Cessnock and Maitland as part of that. That is a great opportunity for all levels of government to work together for the benefit of the wider Hunter region.
I would just add that the city deal is important. Whilst there might be some suggestions of activities within that city deal, they may not relate directly to the Cessnock LGA. But they would relate to the area as a whole, and the Cessnock LGA would benefit from whatever happens in the other areas as well. So, it's about the whole region—those five council regions. That's what we see as really important.
The Launceston City Deal in particular is a very positive story and one which stands as an example on how such deals can be successfully implemented. It’s not just about funding, but policy alignment and cooperation with the City Deal acting as the catalyst:
I think the city deal is the absolute catalyst. And, by going through it, we've realised—all of us—the benefit of actually aligning and working together. I think some sectors are better and more used to it. In education and employment, I do believe there is that conversation between the state and the federal government. I think what this city deal does for them is actually give them a project to proactively work on together to demonstrate the alignment and be able to pull in new businesses and things around how they can work together.
New City Deals and Regional City Deals can be built on the lessons learnt through the experience of Launceston and elsewhere.
Notwithstanding the benefits of City Deals, the Committee heard that Commonwealth funding processes can have the unintentional consequence of creating competition rather than collaboration between regions.
Ms Leah Sertori from Be.Bendigo highlighted this point when explaining the importance of regions sharing ‘knowledge, skills and capability’ to develop a regional strategy:
The barriers to that at the moment are a competitive bid environment with the Commonwealth. Just as an example, the way in which the City Deals have been floated by the Commonwealth creates a competitive tension between, say, Bendigo, Ballarat, Geelong and Albury. We're not going to share our intellectual property with a competitor at a time when we're seeking investment to get something off the ground. So I think being mindful of the culture that Commonwealth programs unintentionally influence is also important.
The Committee recognises this as an unintentional consequence of any program offering targeted funding to regions and communities.
Regional Development Australia committees
RDA was established in 2012 by the Gillard Government as a network of 55 (now 52) RDA Committees across the country. The program brings together all levels of government, the private sector and community groups to support the development of Australia's regions.
RDA Committees are made up of local leaders who work with the three levels of government, as well as with business and community groups, to support the economic development of their regions. The New RDA Charter, which was released in August 2017 by the then Minister for Regional Development, Senator the Hon Fiona Nash, states:
RDA Committees have an active and facilitative role in their communities and a clear focus on growing strong and confident regional economies that harness their competitive advantages, seize on economic opportunity and attract investment.
Working in close partnership with fellow RDA Committees, all levels of government, and the private sector, RDA Committees will:
collaborate with relevant stakeholders to identify economic opportunities and leverage private and public sector investment to the regions;
connect regional businesses, councils and industry sectors with international trade partners, financial markets and potential investors;
promote and disseminate information on Australian Government policies and grant programs to state and local governments and industry, business and community sectors;
support community stakeholders to develop project proposals to access funding;
develop and maintain positive working relationships with the local government bodies in their regions;
facilitate public and private sector decentralisation;
assist in the delivery of Australian Government programs, where relevant and where requested by the Minister;
engage with regional entrepreneurs and emerging business leaders to explore new opportunities to grow local jobs in their regions;
provide information on their region's activities and competitive advantages to all levels of government, industry, business and community sectors; and
provide evidence-based advice to the Australian Government on critical regional development issues positively and negatively affecting their regions.
Each RDA Committee is guided by a locally developed regional plan which outlines the priorities for that area. The effectiveness of RDAs to drive local and regional development is dependent on a number of factors, including the:
skills, experience and drive of staff engaged by the RDA;
resourcing available to RDAs to implement plans; and
the capacity of RDAs to establish and maintain productive partnerships with key stakeholders.
RDA performance – mixed success
The Committee received evidence from seventeen RDAs across Australia – either in writing or in evidence provided at public hearings. The performance of some RDAs has been strong.
RDA South West (RDA-SW) from Western Australia listed some of its successes in its submission:
… RDA-SW has become skilled at developing partnerships, since it does not have the funding to do anything independently. For example, RDA-SW is a significant contributor to funding the South West (WA) China Business Office (with five other partners); an independent NBN Advisor service (with three other partners); and, a subregional tourism strategy (with 10 other partners).
… Regional services in some states are a co-operation between the Commonwealth and State Government, but in Western Australia RDAs stand apart from the WA Development Commissions. To rectify the problem, RDA-SW and SWDC have jointly prioritised and worked together to produce an investment blueprint that has yielded more than $300m in infrastructure funding over the past three years.
A great deal of the successes that have been achieved have been down to what has occurred at the grassroots level – goodwill, significant trust, a common vision, full collaboration and parked egos.
RDAs have assisted regional businesses and, through them, regional development. An example from South Australia describes coordinating assistance for the unemployed:
…we run the jobs for Murraylands program, which is in its second year and having unbelievable results. What we have is an unavailable workforce. People who are unemployed may have generational unemployment issues in their families, and they need specific help. They need to be able to have an integrated program to help them get a job. The program that we've been running now with the benefit of some state government funding is a 16-week program. We've got federal government approval in terms of an approved provider, so we're not actually competing against Work for the Dole. Very much up front, people are given resilience training in terms of how you actually turn up for work every day, and the importance of those soft skill sets is just so critical.
It must also be noted that despite some success by the RDAs, they have also attracted criticism. Some of the feedback shared with the Committee included:
the lack of an overarching framework guiding the operation of RDAs;
RDAs are politically contrived, reflecting neither the regional economies nor regional communities and there are too many of them;
RDAs lack adequate resourcing; and
RDAs experience administrative uncertainty.
The Committee received evidence on the lack of consistent benchmarks across the 52 committees. Representatives from RDA Murraylands commented:
We benchmarked ourselves against our buddies—we did that internally—but we know because we used ABS census data so we had an absolute stick because what we need to do is be able to measure again our progress. That's the most important piece. We also had a quick look interstate—into Victoria and New South Wales—and neighbouring RDAs to see what they were doing, and there was some really interesting stuff happening out of those areas. However, it would be fabulous to be able to have those benchmarks, especially when you have like-minded regional economies across Australia.
RDA South-West, notwithstanding its successes, noted that ‘RDAs often stand as very small and poorly-funded operations’ despite being expected to be the government ‘brand’ for its regional engagement.
RDA Loddon Mallee was critical of the government’s lack of utilisation of the RDA network:
The Commonwealth Government does not utilise their network of RDAs to hear what issues or opportunities might exist in each region. The regional voice is not being heard in Government and as a result there is little empathy for the aspirations of a region, and little ability to impact decision making.
Finally, the Committee was given the strong impression that RDAs are working better and more effectively in some states and territories than others. Mr Bryan Gray, from RDA Darling Downs and South-West Queensland, commented:
… there is no official relationship between the state and the Queensland RDA. So the model in our state is different. I think the state government has pulled out of that model in New South Wales as well. South Australia, to us, is always the pre-eminent role and the model we look to in RDA. However, we do work with predominantly our local governments and we do work with our state government. But, as I touched on before in terms of infrastructure funding, there's no communication.
… we’ve got a nation that is disjointed in terms of the RDA model. There is a very effective one in South Australia and in Victoria, where it all began, but in Queensland we are under-resourced.
An independent review of the effectiveness of the RDA program was commissioned by the then Minister for Regional Development, Senator the Hon Fiona Nash, in September 2016. The report and government response were published in December 2016 and August 2017 respectively.
The independent review recommended the government ‘cease Regional Development Australia programme operations on 30 June 2017’ in favour of new arrangements. A similar recommendation was made by the Productivity Commission in December 2017 when it said the government should ‘abolish’ the program.
The government did not support the recommendation of the 2016 review. Rather, reforms were introduced to strengthen the program, and extend funding for RDA Committees to 31 December 2020.
A number of RDA program reforms were announced on 18 August 2017. The key reforms are:
RDA Committees will operate under a new charter that focusses their work on facilitating economic development by creating local jobs, attracting investment and driving innovation;
the four Melbourne RDA Committees will be consolidated into one, consistent with other capital city RDA Committees. The existing boundaries of all other RDA Committees are expected to be maintained;
geographic coverage of the RDA network will be expanded to the external territories of Christmas, Cocos (Keeling) and Norfolk Islands and Jervis Bay Territory;
a more rigorous merit-based RDA Chair, Deputy Chair and Committee member appointment process will be implemented; and
new performance measures will be established to ensure that the outcomes of RDA Committee activities are properly monitored and measured.
Each RDA Committee will also have a dedicated Director of Regional Development with direct responsibility for delivering the objectives and outcomes required under the RDA charter. The role will be covered by existing funding provided by the Commonwealth Government.
The Committee acknowledges the limitations and challenges of the RDA program as presented in the evidence. It also acknowledges the response of the government to reform the program.
Nonetheless, the Committee supports the RDA program, and the network of RDA Committees that is already in place. The Committee sees the potential of RDAs to have a more specific and focused role, particularly in identifying local priorities, attracting catalytic investment, and coordinating the Regional City Deals process. This is discussed further in Chapter 9.