Executive Summary

Nearly 9 million people live in rural and regional Australia. Employing around one third of Australia’s workforce, Australia’s regions produce approximately 40 per cent of the national economic output.
Undoubtedly, the economic success of Australia relies on the economic success of Australia’s regional areas. Australia’s national economic prosperity is underwritten by investment in rural and regional economies. This government investment must be informed by well-coordinated national and regional development strategies.
With increasing pressures on Australia’s capital cities, investment in rural and regional economies may also help to address many of the problems experienced in metropolitan areas. This includes population growth, congestion, and high cost-of-living expenses.
On 1 June 2017, the House of Representatives established the Select Committee on Regional Development and Decentralisation to inquire into and report on best practice approaches to regional development, the decentralisation of Commonwealth entities and supporting corporate decentralisation. The aim of the inquiry was to examine ways to build the capacity of rural and regional Australia, and to unlock its latent potential.

21st century Australia

Regional Australia, like the rest of the nation, exists within a world of increasing complexity, uncertainly and change. Much of which is the result of globalisation.
The impact of globalisation is a number of so-called ‘megatrends’. These ‘megatrends’ include increasing urbanisation, the ageing of populations, increasing connectivity between and among countries and regions, and rapid technological change.
This changing modern world has ramifications for the way regional development policy is conceptualised, formulated, and implemented.

Challenges

The Committee found that rural and regional Australia is currently challenged by two key issues: the perception of regions as ‘second rate,’ and the ongoing trend of people moving to the state capitals.
The Committee strongly rejects the perception of Australia’s rural and regional communities as inferior to capital cities. Rather, the Committee promotes the value, and advantages of living and working in regional Australia. Far from being a deficit to the nation, Australia’s regions may well hold the answers to many of Australia’s social, economic and environmental challenges. To this end, rural and regional communities must be supported as sustainable, vibrant and enjoyable places to live and work.

Opportunity

There are clear opportunities presented by our regions. These are broadly encapsulated in the following: people and human capital; capacity and desire to contribute to and share in the nation’s output and growth; natural assets including resources such as land and water; environment and amenity; strong sense of community and identity; uniqueness and diversity.

Regional investment

Collaborative investment – by the three tiers of government, private sector and community groups – and improving the amenity of rural and regional towns is needed to attract and retain people in regional areas.
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.
The second is catalytic investment. This type of investment drives development and growth, and leads to further investment. For example, the presence of an airport, hospital, 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 and transform the economic and social prosperity of regional towns.
The third is investment in capacity building of our rural communities particularly education and training and leadership development.
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.
Governments have a responsibility to provide and facilitate all types of investment. They have a responsibility to provide adequate services and opportunities for all its citizens regardless of where they live. They also have a responsibility to facilitate catalytic investment, by providing such investment or by creating the conditions for it to occur.

Decentralisation

It is the Committee’s view that decentralisation – corporate and Commonwealth – must be part of a broader regional development strategy. The Committee found that decentralisation of public and private entities has many advantages, including alleviating congestion and pressure on capital cities.
Commonwealth decentralisation must work to attract further investment and ‘clustering’ opportunities within towns and communities. For example, the presence of a government agency or function should work to attract relevant industry and businesses, the establishment or expansion of services, and education and training opportunities. To this end, decentralisation should act as a catalyst for social and economic change.
The Committee recognises that decentralisation may be met with initial resistance by those having to relocate from a capital city to a regional area. It also acknowledges however, that in the long run, decentralisation can result in positive outcomes for government, rural and regional locations, and employees.
The Committee has set out the basis of a solid Commonwealth decentralisation policy. It insists that any decentralisation of Commonwealth entities must balance the benefits of decentralisation with the requirement for efficient government. In other words, it must not take away from an agency’s ability to perform its functions.
It also advocates for decentralised Commonwealth agencies or functions to be a ‘good fit’ for the new location. Elements that give rise to a ‘good fit’ include those that give a location a natural advantage for a particular agency. For example, the physical environment, the presence of existing industry or businesses, or the availability of a skilled workforce make a rural or regional town a sensible choice for a Commonwealth entity.
For the private sector, the Committee asserts that the best way for governments to support corporate decentralisation is to create the policy conditions and framework for private entities to invest in rural and regional areas. Collaboration, the identification of regional development priorities, and investment in rural and regional amenity are ways to do this.

Regional development principles

The Committee presents 12 principles for building and sustaining regional Australia. These principles challenge traditional thinking about regional development, and set a new foundation for developing the regions, particularly in a modern, globalised and mobile era. The 12 principles emphasize the importance of:
long term, flexible, and committed policy making;
decentralised government and corporate entities;
identified national regional development priorities;
local education and training to build human capital;
collaboration between all levels of government, the private sector and community; and
universal access to reasonable services.
It is the Committee’s view that all regional development policy should be based on these principles.

The strategy

Australia as a nation will do best when its regional economy is strong. Strong national growth is dependent on strong regional growth. The Committee sets out a strategy for developing and sustaining regional Australia. The strategy, underpinned by the regional development principles, consists of six elements:
1
build the enabling infrastructure for regional development;
2
identify national regional development priorities;
3
establish a Regional City Deals program;
4
strengthen the Regional Development Australia network;
5
establish a public sector decentralisation policy; and
6
strengthen the role of regional universities.
The Committee also calls for the preparation of a consolidated government policy on regional Australia; a Regional White Paper, and the establishment of a Joint Standing Committee on Regional Development and Decentralisation.
The Committee’s call to establish a Joint Standing Committee on Regional Development and Decentralisation recognises the need for an ongoing committee dedicated to examining and progressing the broad issues affecting rural and regional Australia. The Committee should also have responsibility for overseeing the Commonwealth’s decentralisation program.
The Committee is proud of Australia’s rural and regional communities. In particular, it is proud of the people living and working in these areas, and their attitude and determination to build sustainable regional futures. The Committee shares some of these stories in case studies throughout the report.

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