Chapter 9 - The Sustainable Regions Program
9.1
The Sustainable Regions Program (SRP) was announced on 29 August 2001 by the Hon John
Anderson MP, then Deputy Prime Minister and Minister for Transport and Regional
Services as the major initiative under the government's
Stronger Regions, A Stronger Australia
regional statement. Its predecessor programs included the Regional Solutions
Program and structural adjustment packages for various regions affected by
closures of major employers or declines of major industries.[662]
9.2
In line with the focus of this inquiry, this chapter discusses
matters of interest to the Committee regarding the administration of the
Sustainable Regions Program and points of comparison with the Regional
Partnerships Program. The structure and operation of each of the Sustainable
Region Advisory Committees (SRACs) are also briefly reviewed. Issues of concern
with the program are drawn out in the following chapter with reference to
particular SR projects.
The program
9.3
The DOTARS submission to the inquiry provides detailed
information relating to the SR program, including its aims, guidelines,
assessment criteria, application processes and internal procedures.[663] Other information about the program
is available on the Sustainable Regions website.[664]
Funding and expenditure
9.4
Funding under the program was initially provided to
eight regions facing major economic, social or environmental change.[665] The eight 'prototype'
regions selected in 2001 to receive up to $100 million total funding until 30
June 2006 were the Atherton Tablelands, Qld, Wide Bay Burnett, Qld, Campbelltown-Camden,
NSW, Far North East NSW, Cradle Coast, Tas, Gippsland, Vic, Kimberley, WA and Playford/Salisbury,
SA. Six of the regions were allocated a maximum of $12 million across the
period of the program, while the Atherton Tablelands was allocated up to $18
million and Wide Bay Burnett $8 million.[666]
9.5
DOTARS reported in its 2003-04 annual report that $27.5
million had been spent in total on the SRP. $20.9 million was expended on the
program during 2003-04, and the SRP budget for 2004-05 was $32.5 million.[667]
9.6
A further $33 million of funding for two new
sustainable regions was announced during the 2004 federal election period. The
new regions selected to receive funding until 30 June 2008 were the Northern
Rivers and North Coast NSW (up to $12 million) and Western Qld and Western NSW
(also known as the Darling Matilda Way Sustainable Region - up to $21 million).[668]
Selection of the Sustainable Regions
9.7
The Committee has been unable to discover the process
by which sustainable regions were selected by the minister. In public documents
relating to the program or evidence to the Committee there is no mention of
consultation or comparison with other regions. The DOTARS submission, however,
states that the first eight sustainable regions were selected on the following
grounds:
Regions (including
urban fringe areas as well as those outside capital cities) were identified
against criteria that included remoteness as well as important socio-economic
and demographic indicators, such as levels of unemployment, family income and
structural change indices, amongst others. Importantly, each of the eight
regions selected initially demonstrated a strong degree of initiative,
self-reliance and commitment to community action.[669]
9.8
The SRP website contains regional profile documents that
provide an overview of each region's social and economic characteristics. The regional
profiles are dated between December 2002 and March 2003.[670] It is not known whether earlier
iterations of these documents were developed prior to the commencement of the
program to assist in selecting the regions or whether comparable analysis of
other regions was undertaken.
9.9
The Committee requested that DOTARS provide an
objective needs assessment to explain why the government selected the two new sustainable
regions. DOTARS witnesses said they were unable to provide this information
because the department was not consulted about the selection of the new
regions, as it was 'a government
decision-making process in the context of an election'.[671] However, Ms
Riggs told the Committee the decision may
have been based on the department's analysis of
the socio-economic indices of a number of regions identified by the minister's
office. DOTARS provided this information to the minister at his request in
mid-2004.[672]
Program administration
Role of DOTARS
9.10
Like the Regional Partnerships Program, the Sustainable
Regions Program is administered by DOTARS. Representatives of the department
attend SRAC meetings and provide advice to the SRAC and the Minister for
Transport and Regional Services on recommended projects. DOTARS receives
information about projects after the SRAC has completed its assessment of an
application and input the details into the TRAX system. The department then conducts
any required due diligence checks and advises the SRAC when the due diligence
process is complete, after which time the SRAC makes its recommendation to the
minister. The department then provides the minister with advice on the SRAC
recommendation and seeks the minister's
decision. The department also liaises with other government departments in
relation to projects that may impact on other portfolio areas or levels of
government.[673]
Role of Sustainable Region Advisory
Committees
9.11
The minister appoints a Sustainable Region Advisory
Committee (SRAC) in each region. The SRACs'
primary role is to provide advice to the minister on relevant regional issues,
including recommendations to fund or not fund project applications.[674]
The role, structure and operations of the SRACs are discussed in more
detail below.
Role of the minister
9.12
Funding decisions relation to the Sustainable Regions
Program rest with the Minister for Transport and Regional Services. The SR guidelines
contain a similar statement to the RP guidelines regarding the effect of the
program's discretionary nature:
The Sustainable Regions
Programme is a discretionary grants programme. The funding of projects is
at the discretion of the Minister for Transport and Regional Services.
Therefore, meeting the assessment criteria and addressing one or more regional
priorities does not guarantee funding.[675]
9.13
In contrast to the fourteen RPP projects on which the
minister's decision contradicted the
department's advice, DOTARS gave evidence to
the inquiry that there were no occasions on which the minister's
decision to approve or not approve a Sustainable Regions application had
differed from the department's advice.[676]
The SR guidelines
9.14
The Sustainable
Regions Programme Guidelines (hereafter the 'SR
guidelines') was the only publicly available
guidance document on the program prepared by DOTARS.[677]
Unlike RPP, where applications can be submitted directly to DOTARS,
applications for SRP funding must be submitted directly to the relevant SRAC
and assessed against the regional priorities. Accordingly, the SR guidelines
are a briefer and more general document than the RP guidelines.
9.15
The SR guidelines cover the rationale for the program,
the eight 'prototype'
regions, general project assessment criteria, a list of regional priorities for
each region, eligibility, administration, funding and reporting requirements.
There is also minimal information about the application and assessment process,
bearing the disclaimer that the process may differ between each SRAC. The guidelines
state that potential applicants should contact the executive officer of the
relevant SRAC for more information about the program. [678]
Assessment criteria
9.16
There are ten general assessment criteria for the
program set out in the SR guidelines, of which the following three are
mandatory requirements:
- Retrospective funding will not be permitted for
any projects.
- The project should not be inconsistent with
other Federal Government policy objectives and relevant law.
- Proposals must comply with relevant planning and
environmental laws.[679]
9.17
The remaining criteria include consistency with
regional priorities, project sustainability and regional benefit, the absence
of other avenues of government funding, the level of regional and partner
support, project management experience on the part of the proponents and the
project not directly competing with existing businesses.[680] The application of and adherence to
these criteria are discussed in the following chapter.
9.18
Although it is not listed as a mandatory requirement,
elsewhere the SR guidelines state that applications under the program must
address one or more of the regional priority areas identified by the SRAC.[681] Regional priorities are discussed
below in relation to each sustainable region.
Administrative processes
Due diligence
9.19
The Committee noted that the due diligence process for
Sustainable Regions applications is more rigorous than the Regional
Partnerships requirements. The Sustainable
Regions Programme Internal Procedures Manual provides a three point scale
outlining the level of due diligence required according to the amount of
funding sought. Each step in the due diligence process is outlined.[682] It is of particular interest that
due diligence checks are conducted prior
to the SRAC recommendation and the department's
advice being presented to the minister, in contrast to the practice found in
some cases with RPP where due diligence checks only occurred after funding had been announced.[683]
Funding contracts and recovery of
grant monies
9.20
Like RPP, successful applicants for SR funding enter
into a funding contract with DOTARS. The Committee sought to ascertain whether
SRP grant monies could be recovered if circumstances were discovered that
demonstrated the grant should never have been made due to a breach of the
program guidelines. The department's response
indicated that while funding agreements provided for termination, there was no
formal process for recovering any milestone payments that had already been
made.[684] Mr
Yuile, Deputy Secretary of DOTARS, told the
Committee:
The question of recovering money would depend upon the
circumstances involved. Clearly, the funding agreements would provide for
termination if there was some breach which is contrary to the Commonwealth's
intention or the Commonwealth's agreement to the grant. The question of
recovery would have to be looked at in relation to individual circumstances.[685]
Audit and review
9.21
The SRP was the subject of an internal audit which had
not been completed at the time of DOTARS' submission to the inquiry. The DOTARS
submission outlines the program evaluation framework and states that the first
stage post-implementation review of the SRP, completed in 2004, found that the
implementation of the program had been satisfactory.[686] However, the Committee was only
provided with summary information regarding the outcome of the review, and was
therefore unable to make its own assessment.
Sustainable Region Advisory Committees
9.22
The Committee invited all eight SRACs to make a
submission to the inquiry, but none responded. This was particularly
inappropriate. SRACs are publicly funded bodies and play an important role in
the administration of millions of dollars in public funding. As such, they need
to not only be accountable but also to participate in the scrutiny of their
performance and conduct.
9.23
However, the chairs and executive officers of the
Atherton Tablelands SRAC (ATSRAC), Cradle
Coast SRAC and Kimberley SRAC gave evidence to the Committee at public hearings
and a number of SRACs included information about their evaluation processes
when responding to the Committee's request for
minutes and recommendations.[687] The
composition, regional priorities and practices of each SRAC are briefly discussed
below.
9.24
According to the SRP guidelines, the role of the SRAC
is:
...to advise the Minister on matters relating to the
implementation and management of the Sustainable
Regions Programme, including assessment and recommendation of projects.[688]
9.25
More specifically, SRACs are responsible for
determining regional priorities in consultation with the local community,
calling for expressions of interest for funding, inviting applications and
assessing applications against the regional priorities and the project
assessment criteria. SRACs then input information about the project into TRAX
and recommend projects to the Minister for Transport and Regional Services.[689]
9.26
Unlike the advice of ACCs in relation to RPP
applications, which is only provided through DOTARS, SRACs provide
recommendations about SRP applications directly to the minister. As discussed
above, SRP applications cannot be submitted directly to the department.[690] This avoids some of the pitfalls
associated with RPP projects where the ACCs' advice
was not passed on to the minister by the department or the ACC was given
insufficient time to assess an application.
SRAC composition
9.27
SRAC members are appointed by the minister and usually
comprise business, community and local government representatives.[691] The nature of membership of each
SRAC is outlined below.
9.28
Each SRAC is supported by an executive officer (EO) who
reports to the SRAC Chair. The EO's role is
similar to that of ACC EOs, and involves providing information about the
program to the local community and assisting applicants to develop project
proposals.[692]
Relationship with ACCs
9.29
Most SRACs have a member or an 'observer'
from a local ACC who attends committee meetings. Evidence to the Committee
indicated that ACCs and SRACs communicate about projects. For example, Mr
Vieira, FNQACC EO, was aware that ATSRAC
had considered and expressed concerns about an expression of interest for SRP
funding made by A2 Dairy Marketers, as discussed in a previous chapter of this
report.
9.30
One SRAC from which the Committee took evidence –
Kimberley SRAC –shared administrative arrangements with the Kimberley ACC. The
SRAC and ACC shared office space, an executive officer and a chairperson. This
raised concerns about loose application of program guidelines and encouraging
applicants to apply for the 'easiest'
source of funding. For example, the Kimberley Aboriginal Pastoralists
Association (KAPA) first applied for funding under one program, and when their
application was rejected, applied under the other program and received funding.
The project was later rescinded after a project partner withdrew its funding
and KAPA provided an unsatisfactory milestone report to DOTARS.[693]
Funding of SRACs
9.31
The Committee received no evidence on general
arrangements for SRAC member remuneration. However, Mr
McDade, former chair of ATSRAC,
told the Committee he was paid $440 per ATSRAC
meeting.[694]
9.32
The Cradle Coast SRAC, which has different
administrative arrangements as discussed in the next chapter, pays its board
members an annual stipend and employs administrative and management staff. All
of the SRAC's costs are funded by the nine
councils that own the Cradle Coast Authority rather than from the $12 million
allocated to the region. The Committee was told that this administration
emerged from the Authority's request, because
the arrangements already existed and they preferred to 'keep
the money in the pool for projects rather than swallowing it up in
administration'.[695]
Regional priorities
9.33
Each SRAC has different regional priorities, which form
part of the mandatory requirements for applicants—their project must fit with
at least one of the region's priorities. The SR guidelines state that the
regional priorities were developed by each SRAC through a community
consultation process.[696]
9.34
As discussed below, the priority areas for each region
differ widely. However, the SRP guidelines identify some common themes:
While each region has differing priorities, some common themes
to emerge across the regions include job creation opportunities, a regional
identity, education and training at all levels, community development,
sustaining the environment, value adding to existing and growing industry, and
establishment of a new industry.[697]
Far North East NSW
9.35
The Far North East NSW (FNENSW) region includes the local
government areas of Tweed, Ballina, Byron,
Lismore and Kyogle.[698] $8.5 million
worth of projects from FNENSW from the region's $12 million funding have so far
been approved.[699]
9.36
The FNENSW regional priorities include business
and development, community development, environment related industries and
issues, knowledge and learning industries, cultural, creative and multi-media
industries, new rural and agricultural industries, industries associated with
population growth, infrastructure as an enabler of development, tourism, and
value-adding to traditional industries.[700]
9.37
The FNENSW SRAC has four members, including a director of a national sporting body and
former federal councillor with a national tourism association; a production
manager with a news and media company; a local hotelier and property developer;
and a local mayor.[701]
Campbelltown/Camden, NSW
9.38
This sustainable region includes the Campbelltown and Camden
local government areas, and has $11.3 million of approved projects from its
allocation of up to $12 million.[702]
Campbelltown-Camden SRAC has a strong business focus in its committee membership,
which includes members of a local business enterprise centre, business proprietors,
and the manager of a local university's Office
of Regional Development.[703]
9.39
Its priorities include addressing the region's social
issues, improving regional employment opportunities, developing and supporting
local industry, attracting sustainable and environmentally friendly industry,
youth needs, natural and built environment sustainability, and improving
transport infrastructure.[704]
Gippsland,
Vic
9.40
The Gippsland Sustainable Region covers the local
government areas of Latrobe, Bass Coast Shire, South
Gippsland, Wellington,
East Gippsland and part of Baw
Baw. It has also been allocated up to $12
million and has approved projects of $12.8 million.[705]
9.41
The Gippsland regional priorities include developing local
leadership capabilities, supporting existing industries, developing and
promoting a regional identity, identifying consequences of an ageing
population, facilitating investment, education and training, small business
assistance, provision of water, sewerage and transport infrastructure,
sustainable natural resource management, access to energy sources and
telecommunications.[706]
9.42
The Gippsland SRAC is chaired by a former energy industry executive and includes a local
government director of shire development and a retired police officer, author
and historian.[707]
Wide
Bay Burnett, Qld
9.43
This SRAC covers the largest number of local government
areas of the first tranche of SRACs—Biggenden, Bundaberg, Burnett, Cherborg
Community Council, Cooloola, Eidsvold, Gayndah, Hervey Bay, Isis, Kilkivan,
Kingaroy, Kolan, Maryborough, Miriam Vale, Monto, Mundubbera, Murgon, Nanango,
Perry, Tiaro, Wondai, Woocoo and Yarraman District of Rosalie Shire. It has
access to up to $8 million and has approved projects of $7.6 million.[708] The Wide Bay Burnett region also has
an additional $4 million allocated to it under a structural adjustment package.[709]
9.44
The committee has a broad membership, including two
mayors, a TAFE campus director, a grazier and two local business
representatives.[710] Its priorities
include fostering innovative industries, enhancing social infrastructure,
supporting sustainable use of natural resources, building on the culture of the
region and encouraging youth retention.[711]
Kimberley,
WA
9.45
The Kimberley SRAC includes the local government areas
of Broome, Halls Creek, Derby West Kimberley and Wyndham East Kimberley. [712]
The SRAC has approved projects of approximately $11 million.[713]
9.46
It shares its chair, executive officers and offices
with the Kimberley ACC. Some of the implications of this joint administrative
support structure are discussed above. The Kimberley SRAC members include three
shire presidents and four people from business and community organisations.[714]
9.47
Kimberley SRAC's
regional priorities include regional infrastructure, local cooperative
projects, indigenous enterprise and economic development, regional marketing
and new sustainable industry.[715]
Playford/Salisbury, SA
9.48
Playford/Salisbury SRAC covers the local government
areas of Playford and Salisbury.
Approved projects from the region total $8.5 million.[716] The SRAC includes two people from
the private sector and three from local government.[717]
9.49
Its priorities focus on improving education, training,
infrastructure, community health, social inclusion and industry.[718]
Cradle
Coast (North
West and West Coast Tasmania)
9.50
Cradle Coast SRAC covers the local government areas of King
Island, Circular Head,
Waratah/Wynyard, Burnie, Central Coast,
Devonport, Latrobe, Kentish and West Coast.[719] Approved projects in the region
total $7.8 million.[720]
9.51
The
regional priorities include participation in education, training and
employment, investment in growth industries and value-adding to traditional
industries, creation of new industries, environmental protection and reversing
population decline.[721]
9.52
CCSRAC membership has a broad base of skills and
knowledge, including ten members from banking, business, small business, a
university, several mayors and an ACC Tasmania member.[722] CCSRAC is based on the previously
existing Cradle Coast Authority, and the Committee considered that its
structure represented best practice among the SRACs. It is further examined in
the following chapter.
Atherton
Tablelands
9.53
The Atherton Tablelands SRAC (ATSRAC) covers the local
government areas of Atherton, Eacham, Herberton and Mareeba.[723] ATSRAC is comprised of the chair of
the Far North Queensland ACC, a university professor and the mayors of the four
local government areas covered by the SRAC.[724]
9.54
It was allocated up to $18 million until 30 June 2006 and has approved
projects totalling $14.6 m.[725] A
number of projects recommended for approval by ATSRAC
are discussed in the following chapter, as is the committee's
composition.
Western Queensland
and Western NSW (Darling Matilda Way)
9.55
The Darling Matilda Way SRAC was one of the new regions
announced during the 2004 election period. It covers the largest geographical
region of any SRAC. The Committee heard that as of August 2005 the SRAC had been
appointed, had met twice and was developing a community consultation process to
determine regional priorities.[726]
9.56
The Darling Matilda Way Sustainable Region covers all
or part of the local government areas of Aramac, Balranald, Barcaldine, Barcoo,
Blackall, Bogan, Boulia, Bourke, Brewarrina, Broken Hill,
Bulloo, Carrathool, Central Darling, Cobar, Diamantina,
Hay, Ilfracombe, Isisford, Jericho,
Longreach, Murweh, Paroo, Quilpie
Tambo, Unincorporated NSW, Wentworth
and Winton. Darling Matilda Way has been allocated funding of up to $21 million
until 30 June 2008.[727]
9.57
The SRAC is composed of four representatives from ACCs,
one mayor and several business and community representatives.[728] Its draft regional priorities
address tourism, industry, skilled workforce, lifestyle and business services,
infrastructure, natural asset management and business development capability.[729]
Northern Rivers and North Coast NSW
9.58
The Northern Rivers
and North Coast NSW Sustainable Region covers the local government areas of
Kempsey, Nambucca, Bellingen, Coffs Harbour,
Clarence Valley
and Richmond Valley Shires. Northern Rivers
and North Coast NSW has been allocated funding of up to $12 million until 30 June 2008.[730]
9.59
The SRAC's draft
regional priorities are job creation, retention and sustainability, skilling
the region, youth retention and indigenous employment.[731] At August 2005 it had met twice and
had requested its executive support staff to seek expressions of interest from
organisations in the region. The ACC shares its chair and executive support staff
with the Mid North Coast ACC.[732] The
six members include a local government and business and community
representatives.[733]
Issues with the program
9.60
The Committee's
examination of the Atherton Tablelands Sustainable Region Advisory Committee
and SR projects in the region drew out some concerning issues, which are
discussed in the following chapter. The Committee also made a number of
recommendations aimed at improving the transparency of the process of
appointing SRAC members and increasing scope for community awareness of and
participation in the application process, as outlined in Chapter 11.
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