Background
Regional Australia has been on the losing end of economic rationalism, globalisation and structural change for nearly half a century. Good jobs in country towns have evaporated and opportunity for regional communities have diminished as a result.
Agricultural employment has declined as a result of the steady decline in family farming and the rise of corporate agribusiness with its high levels of capital intensity and mechanisation.
Successive governments have withdrawn public services from regional communities in the pursuit of the purely ideological goal of “small government”. The result has been the loss of skilled, well paid jobs from those communities and a loss of services that could support growth, jobs and a reduction in regional inequality.
Manufacturing businesses that were once the lifeblood of regional economies have closed or moved offshore as a result of relentless competitive pressure from low-wage, low-cost producers in other countries. Much of that has been enabled by state governments effectively offshoring regional jobs through procurement policies that favour purchase of infrastructure such as rail rolling stock from overseas.
Banks and other financial services businesses have closed vast swathes of their branch networks that had provided secure, well-paid, skilled jobs for tens of thousands of people in regional communities around the country.
Successive governments have targeted necessary investments in productivity enhancing and investment attracting public infrastructure at cities, while investment in regional infrastructure that would attract investment, create employment opportunities and start to reverse the decline in regional economic conditions has languished.
Automation of mining processes, which are predicted to accelerate in coming years, has seen the labour intensity of mining decline as output increases.
The result has been an ever-growing concentration of income and wealth in our cities and a slow, hard grind on the part of regional communities trying to stay afloat.
Future risks
There are considerable future risks to the Australian economy, and regional economies in particular, posed by ongoing structural, economic and technological change. Climate change and drought impacts are another layer weighing on already vulnerable regional economies.
Longer, more intense droughts are predicted to be a feature of the Australian climate under most climate change scenarios forecast for Australia. In the absence of mitigation and adaptation measures, agricultural production will likely be hard hit. That means further contraction in agricultural employment.
Submitters to the inquiry repeatedly emphasised that low cost power for industry and certainty around long term energy policy is a precondition for future investment in new industries and new jobs in regional Australia.
It beggars belief that an advanced country such as Australia does not have a national energy policy. Not having an energy policy is the antithesis of responsible public policy making.
Australia has no energy policy, a dysfunctional energy market and a shortage of investment because of decisions taken a decade ago by vested interests, partisan business organisations, media outlets and the conservative political parties to weaponise climate change rather than engage in responsible policy making on climate change.
Evidence to the inquiry demonstrates that regional communities and the economies that sustain them face serious labour market deficiencies, particularly in relation to skill formation and re-skilling through the vocational education and training system.
Submitters consistently expressed confidence in TAFE as the vocational education and training provider of choice and consistently expressed disappointment and concern over the ongoing neglect of the TAFE system.
On the other hand, while submitters expressed confidence in particular private VET providers with whom they had direct experience, overall confidence in the depth and quality of private VET providers is generally quite low.
Further risks to regional communities whose economic base is in coal mining are emerging from international coal markets and the financial systems that underpin them. All of these risks require government action to focus on regional employment opportunities and work with business, industry, local stakeholders and unions to develop a planning framework that delivers good jobs to the regions.
Continuation of a divisive and polarised debate around climate change will continue to magnify these risks and almost guarantee that regional communities, no matter how hard they try, are unable to effectively tackle them.
Opportunities
It is clear from the contributions made to this inquiry from regional communities that many of the opportunities outlined in chapters 2, 3 and 4 of this report can be realised if we move on from the climate wars. The endless, confected conflict between fossil fuels and renewables which has brought rational government decision-making to a standstill on climate policy, energy policy and industry policy generally is now a major barrier to economic progress in regional Australia.
It is not a conflict that regional communities find helpful; it is not a conflict they want. There were no submitters to this inquiry who framed their submission in those terms. Submitters representing a wide range of interests from diverse geographical areas with an equally diverse range of economic characteristics do not see their futures being determined by the outcome of a phoney war between fossil fuels and renewable energy.
Regional communities support their coal industry while recognising international market conditions pose future risks, and they support the investment and employment opportunities that renewable energy and other new industries can provide. It is not a zero sum game for them.
What regional communities want is for government to act to provide the conditions necessary for the creation of regional jobs.
Role of government
As outlined in chapter 5, submitters to the inquiry made it clear that the creation of regional job opportunities requires extensive government support and intervention. If the market alone provided the conditions for the creation of new industries and jobs in regional Australia, it would have done so by now.
Government policy is critical to the development of new and existing industries. An actual national energy policy would provide investment certainty for the energy sector. Government procurement policies play an important role in the development of new industries including biofuels, recycling and the jobs that flow from them.
The Australian Manufacturing Workers’ Union provided strong evidence to the inquiry that government procurement in rail, defence and renewable energy manufacturing play an important role in anchoring manufacturing hubs in regional communities. The AMWU also provided evidence of the additional costs associated with State governments procuring rail rolling stock from overseas.
A further example of where government can play an important role in the development of new industries and jobs is in the lithium value chain.
Labor senators endorse the proposition that government should focus on policies that will capture value for Australia from the lithium value chain through onshore refining and manufacturing, rather than reliance on what are likely to be short-lived high spot prices for lithium ore exports. It only requires the correct Government support to ensure that the maximum benefit flows back to regional Australian communities.
Labor Senators' view
This inquiry is a welcome contribution to the body of material before the Parliament that will contribute to the development of policies to support new industries and jobs in regional Australia. For this we are grateful to all those who made submissions to the inquiry and in particular those who appeared at public hearings to place evidence before the Committee.
It is tempting in the circumstances to make a series of sweeping recommendations to government on the range of matters before the inquiry. There have been many valuable ideas and policy propositions put before the inquiry. Many of them will require more careful consideration and consultation with local communities than is feasible within the timeframe and terms of reference of this inquiry. Principally for this reason, Labor Senators are not making specific recommendations, bar one, to government arising from this inquiry.
It is absolutely clear that the lack of any semblance of a coherent energy policy is a major risk to the Australian economy and this risk is owned lock, stock and barrel by the Coalition Government which has signally failed on a policy which should be a pillar of the economy.
The absence of an energy policy is serious. It is as serious as coherent economic, defence or health policy. It is an abrogation of government responsibility to the Australian people and it is dishonest on the government’s part to pretend that energy policy is superfluous. It is important to the regional communities whose representatives made submissions to this inquiry and to the people who make decisions about investments that will create the regional jobs that the country has a coherent energy policy that will underpin the aspirations of regional Australia for good jobs, new opportunities and a sense of genuine inclusion in Australian prosperity.
Recommendation
That the Commonwealth government implement a coherent national energy policy that will provide investment certainty, reduce energy prices, credibly reduce Australia’s emissions and provide opportunity to all Australians for full economic participation.
Senator Tim AyresSenator Anthony Chisholm
Deputy ChairSenator for Queensland
Senator for New South Wales