This chapter sets out the Committee’s strategy for building and sustaining regional communities.
A placed-based approach
The research literature and evidence to the Committee asserted that placed-based approaches are the best way to develop rural and regional Australia.
The Committee consistently heard that a ‘one-size-fits-all’ approach to the regions does not work. Indiscriminate policies fail to recognise the diversity and difference that characterise rural and regional communities across Australia.
Regional Australia requires a long term and flexible strategy that can adapt to meet the needs of individual regional areas. This point was made at the outset of the Committee’s inquiry by Mr Jack Archer, Chief Executive Officer, RAI:
When we're thinking about best practice approach[es] to regional development, it is about flexibility in the way we invest, in the way we undertake programs and in the way we regulate and putting some rigour around that so that it's not just a dog's breakfast and government can actually be responsive to regional need and to place based need.
Ms Anne Dunn, a member of the Committee’s expert panel, also acknowledged the diversity of rural and regional communities. Ms Dunn emphasised the need for differences to be considered when developing national policy:
… there's a growing understanding, which is the place-based notion, that communities and local areas and regions have a story of their own around which they can build an identity, and around that they can build a future. More and more I hear people describing the unique characteristics of where they are and what their story is and what their strengths are. So I think there are real possibilities to build on that if we can move away from the idea that there is one solution for the whole of Australia.
The Committee shares these views. A strategy for regional Australia must support communities to find their own way and address their own circumstances. This strategy must also allow for regional decision making.
The Committee heard that while placed-based approaches have been introduced in various forms across the country, they have not always been effective. Local solutions can be ‘very difficult to achieve in the current Australian context’. Much of this is due to a lack of decision making power in the regions, with decisions often undermined by a lack of coordination of government activity.
This point was made by Professor Robyn Eversole in her submission:
Currently, nearly all significant decision making is driven centrally from Australia’s capital cities. Everything we know about regional innovation systems assumes that regional decision-makers can work together across sectors in a particular place to drive change. Yet in Australia there are no regional decision-makers. There are regional committees, groups, offices, and influencers, but they have few resources and little clout. They may strategise and plan, yet they are decision-takers, not decision-makers.
Professor Eversole described this as a ‘governance problem’, noting the concentration of decision making is in the capital cities. This is not only true for Commonwealth and state governments, but also the majority of universities and private and community sector organisations. The result can be described as ‘poorly connected’ decision-making for regional areas.
As a result, government decision-making overall is poorly connected to the realities of particular places. Policy action is sectoral rather than place-based, and made with little or no understanding of regional attributes, regional systems, or the on-the-ground impacts of decisions. This is not a policy environment that enables – or even allows – place-based innovation.
The Committee agrees with this assessment, and recognises the need for decision making to be regionally driven.
Having considered all of the evidence presented, the Committee recommends the following strategy for building and sustaining Australia’s rural and regional communities.
The Committee would like to acknowledge the discussions and input of the informal expert panel in developing elements of this strategy, particularly at the Committee’s final public hearing in Canberra.
The Committee considers that Australia as a nation will do best when its regional economy is strong. Strong national economic growth is underpinned by a foundation of strong regional growth. The strategy set out below has been developed against this principle.
The Committee’s strategy for developing and sustaining regional Australia consists of six elements:
build the enabling infrastructure for regional development;
identify national regional development priorities;
establish a Regional City Deals program;
strengthen the RDA network;
establish a public sector decentralisation policy; and
strengthen the role of regional universities.
In addition, the Committee calls for the preparation of a consolidated government policy on regional Australia; a Regional Australia White Paper. This policy should be prepared through a comprehensive Green Paper process.
Finally, the Committee acknowledges the need for ongoing parliamentary inquiry and examination of regional development issues. The Committee recommends the introduction of a Joint Standing Committee on Regional Development and Decentralisation to progress matters arising from this report.
Build enabling infrastructure
The Committee acknowledges the RAI’s view that governments have diminishing control over many of the factors affecting regional Australia; particularly in a modern, globally connected and mobile world. These factors, which are described in Chapter four, include the global nature of the modern economy, technological change, changes to the environment and urbanisation.
The Committee also acknowledges that the basic responsibilities of government are unchanged. Governments have a responsibility to ensure adequate services and opportunities – such as education and training, employment, health services and basic infrastructure – for all its citizens regardless of their location.
Chapter five of the Committee’s report sets out some of the challenges faced by rural and regional communities in developing local economies. This includes attracting a skilled workforce, improving regional amenities, and improving digital and physical connectivity. These issues are correlated with the adequacy of government services and the degree of investment within regional communities.
The Committee believes that sustainable regional development must be primarily driven by local groups and businesses. However, it is the view of the Committee that governments are primarily responsible for building the enabling infrastructure needed to support regional growth and development.
The Committee recommends that the Federal Government increase its investment in building enabling infrastructure to improve connectivity, key services and amenity through coordinated regional plans.
National regional development priorities
The Committee heard that the best way for the Commonwealth to grow regional economies is to create the conditions for corporate Australia to thrive. Private sector investment will be more attracted to regional Australia if it knows the development and infrastructure priorities of government.
Establishing a list of national regional development priorities would provide certainty for rural and regional Australia. This certainty would allow private companies to make the best decisions on how and when to invest in regional Australia.
It would also increase the potential for catalytic investment within rural and regional areas. This occurs when knowledge of development priorities attracts investment, associated business, and further infrastructure development. This in turn improves the social and economic prosperity of regional communities, and creates more opportunities for growth.
The Committee recommends that each Regional Development Australia (RDA) Committee develop a coordinated regional strategic plan.
Developed in consultation with State and Territory governments, these regional strategic plans will identify a pipeline of infrastructure projects and priorities. It is expected that the regional strategic plans will identify potential Regional City Deals.
The regional strategic plans should be published, and will act as the evidence base for catalytic federal investment that will trigger further state, local and private investment.
Regional City Deals
City Deals are a strong mechanism to facilitate change through partnerships. City Deals bring together the three levels of government, the private sector and community groups to set priorities and direction in regional areas. They also bring together these groups to provide infrastructure investment and capital.
The Committee has consistently heard that rural and regional communities would like to negotiate City Deals with the Commonwealth to facilitate development and growth. While the Committee acknowledges the current City Deals program is open to all communities across Australia, it notes that the City Deals currently in place are with larger cities.
The Committee considers City Deals to exemplify a long term, flexible, placed-based approach to regional development. In particular, City Deals bring in those stakeholders who are best placed to affect real social and economic development.
The City Deals also provide regional communities with certainty about the future. This certainty will assist in attracting further investment and associated business to these areas.
It is the Committee’s view that the Federal Government’s City Deals program be extended to provide development and opportunity to cities, towns and regional communities. Furthermore, it is the Committee’s view that these Regional City Deals be the primary mechanism for driving all investment and policy in regional areas.
With a Regional City Deal at the core, the broader regional value of the deal must be considered as part of the planning, implementation and assessment process at hand.
An increase in APS resources would also ensure timely implementation of these deals.
The Committee recommends that the Federal Government’s City Deals program should be extended to provide development and opportunity to cities, towns and regional communities. Each new deal is to be approved by Cabinet, and evaluated after five years. The evaluation is to include an assessment of the social, economic and environmental outcomes for the region.
The Committee supports the RDA program, and the existing network of RDA Committees. RDA Committees have the potential to identify regional priorities, work across all levels of government, and collaborate with community, education and industry. However, the role of RDA Committees should be more specific and focused.
It is the Committee’s view that the role of RDA Committees be redefined to include two primary responsibilities. The first is to adopt a more specific role in attracting catalytic investment. The second is to advocate for and coordinate Regional City Deals at the local level.
The Committee recognises the independent review of the RDA program, and the reforms announced by government. In particular, it supports the new performance measures to ensure the activities of RDAs are monitored and measured.
It is the Committee’s view that the RDA network should be able to work across state and territory boundaries. This would foster more strategic regional development in these areas, not constrained by geographic borders or local politics.
The Committee recommends that the Federal Government strengthen the role of the Regional Development Australia (RDA) program. This includes, but is not limited to:
lead cross government collaboration and build strong bipartisan partnerships between the RDA Committee and key stakeholders in the region;
where appropriate, redistributing the RDA network to map across state and territory boundaries to develop practical and effective economic zones;
giving RDA Committees specific responsibility for attracting catalytic investment from state and federal governments that are likely to lead to further regional investment;
giving RDA Committees shared responsibility for advocating and coordinating Regional City Deals at the local level;
increasing the resourcing of RDAs to fulfil their role and functions; and
develop regional strategic plans to drive social, economic and environmental outcomes for the region. It is expected the strategic plans will be flexible and continually updated to reflect changing circumstances.
The Committee acknowledges that there are considerable benefits to locating more government agencies to regional areas. Relocation can benefit the regional area, the employees of the agency, and improve the effectiveness and efficiency of the government agency itself.
Decentralisation can also assist to alleviate congestion and pressure on capital cities.
The Committee acknowledges that there are risks to relocation. Any decentralisation decision has to be made at the right time and for the right reasons. In particular, the choice of a location for any government agency must be carefully considered. Where possible, it should be a natural fit with the rural and regional area. For example, the natural environment, presence of existing industry or businesses, or the availability of a skilled workforce must provide advantages for the relocated entity.
The Committee also notes however that a natural link between the nature of the agency’s work and the local area is not a necessary precondition for successful relocation. In these cases – that is, where the work of an agency is not dependent on the environment – the location chosen must not reduce the efficiency of the agency.
The Committee also notes that in some cases, it may not be appropriate to have the regulator too close to those industries it is overseeing lest the regulating agency be compromised in terms of its independence and impartially.
Once a decentralisation decision is made, the process should be well planned and communicated to staff. Agencies should consider targeted incentives to encourage employees to relocate over the short term.
The Committee recommends that every Federal Government agency should assess the possibility for relocation whenever appropriate, but always when one of the following occurs:
a new unit, agency or organisation is created;
an organisation is merged or reorganised; or
a significant property break occurs such as the termination of a lease.
The Committee recommends that:
decisions as to whether to decentralise an agency should be part of a broader strategy for regional development; and
the objectives and reasons for any decentralisation decision are clearly stated and publically available.
The Committee recommends that decisions on a gaining location for a Federal Government agency should include assessment of the following factors:
employee career opportunities;
amenity of the gaining location;
opportunity for family employment;
existing workforce capacity in the proposed location;
physical and digital connectivity of the gaining location;
access to higher education opportunities and opportunities for local workforce development; and
risks associated with overloading existing services.
After a decision to decentralise an agency has been made, the Committee recommends that the process of relocation includes:
strategies for communicating the relocation process to staff;
consideration of short-term incentives to relocated staff;
support for flexible working arrangements including teleworking; and
close collaboration with the local organisations of the gaining area.
The Committee recommends that the Federal Government does not apply any limits on numbers of Senior Executive Service staff in agencies when those Senior Executive Service positions are located in regional areas.
The benefits of decentralisation for policy design and program implementation is to provide flexibility and understanding at a regional level. This requires decision makers to be located, as much as possible, close to those impacted by their decisions while still ensuring that the regulating agency maintains its independence and impartiality.
The Committee recommends that every decentralised agency conduct an evaluation of the decentralisation at one year, five year and ten year points; and publish the results of that evaluation.
Strengthen regional universities
The Committee stresses the pivotal role regional universities play in regional development. This extends beyond the provision of tertiary courses and conducting research. Regional universities drive innovation and change, connect well informed people and groups, develop local leadership and human capital, and enhance the social and cultural capital of regional towns and cities.
The Committee was impressed by evidence of catalytic projects in regional universities. Such initiatives highlight the potential of regional universities to design and deliver local strategies, and attract regional investment.
The Committee recommends that the Federal Government strengthen the role of, and better support, regional universities as pivotal institutions for social and economic development in regional areas.
Green and White Paper
Regional development, and in particular, growing regional economies is a complex policy area. The Committee is aware that it includes federal, state and territory, and local government responsibilities. Regional development involves complicated and interrelated economic, social, and environmental factors. All of these factors will combine to present a set of different circumstances for every different regional area.
The Committee received a large body of evidence during its inquiry – in 14 public hearings across the country and almost 200 written submissions. The inquiry has been a rewarding and enlightening experience for each member of the Committee, and we are very grateful for the input from regional communities, as well as our informal expert panel.
It has become clear to the Committee that the large number of issues affecting the regions and regional development require further investigation to develop a coherent, carefully considered set of policy approaches.
During our Darwin public hearing, the Committee heard how the government White Paper and its accompanying processes provided a foundation for the Office of Northern Australia’s work:
That's one mechanism which certainly helps, because it gives us a place to start. There's been the consultation, engagement with the broader public and communities and regions about what they see as priorities, and there are some agreements generally across government about where we start from. So, the white paper was great. We had 51 hard commitments that we could go forth on. As I said, now we're actually having that next sort of discussion, about what next.
Accordingly, the Committee considers that the Federal Government should prepare a White Paper, as a consolidated statement of regional development policy.
Given the complexity of the issues, the Committee considers that the White Paper should be preceded by a comprehensive consultation process, informed by a Green Paper. Green Papers are discussion papers prepared at the direction of a Minister for the purposes of public discussion and comment.
This process will inform a White Paper, approved by Cabinet. The Committee considers a White Paper is necessary to comprehensively state government policy in this area.
The Committee recommends that the Federal Government state its regional development policy through a comprehensive Regional Australia White Paper, following a Green Paper public consultation process.
The Green Paper process should include, but not be limited to the following issues:
consider regional Australia’s population needs as part of the broader national context. This includes urbanisation, ageing, depleting populations in smaller towns, and migration;
the use of the skilled migration program to support regional development;
improving education and training of young people – in particular Year 12 completion rates – in regional areas;
the development of a national regional higher education strategy;
the need for access to information technology, strong and reliable communication, specifically mobile phone and NBN;
the need for strong and reliable transport infrastructure to support passenger and freight requirements;
the role of amenity and social infrastructure, specifically the cultivation of social, cultural and community capital in supporting regional development;
incentives and strategies to improve private sector investment in regional areas; and
the role and funding of local governments to better support regional areas.
Joint Standing Committee on Regional Development and Decentralisation
It is the Committee’s view that the Federal Government establish a Joint Standing Committee on Regional Development and Decentralisation to continue the Committee’s work. The Standing Committee should be a joint committee of the Parliament and consist of Members and Senators.
Rural and regional Australia is fundamental to the economic success of the nation. An ongoing committee dedicated to examining and progressing the broad issues affecting rural and regional Australia would keep these issues at the forefront of national policy development. This includes policies related to public and corporate decentralisation.
The Committee sees value in a joint standing committee having oversight of the Commonwealth decentralisation program. It also suggests that the joint standing committee continue to engage with the informal expert panel engaged for this inquiry.
The Committee recommends that the Federal Government establish a Joint Standing Committee on Regional Development and Decentralisation. The role of the Committee will include but not be limited to:
monitor and report on the strengthened Regional Development Australia program including the revised role of the Regional Development Committees;
monitor and report on the implementation of the Regional City Deals program;
examine incentives and strategies to improve private sector investment in regional areas; and
review existing decentralisation of both public and private sector entities and identify further potential opportunities.