Chapter 14 - Rural and regional communities

Chapter 14 - Rural and regional communities

...poverty and geographic locational disadvantage is a very serious issue that we need to grapple with in the short term rather than over the long term.[1]

14.1    Evidence to the inquiry pointed to the problem of poverty and disadvantage in many rural and regional areas across Australia. The evidence pointed to the generally lower incomes of those living in these regions; reduced access to services such as health, education and transport, and declining employment opportunities. These factors are compounded by the problems of distance and isolation.[2]

14.2    The Committee visited a number of regional centres and heard from a large number of organisations and individuals in these areas. These witnesses highlighted the difficulties faced by many communities in confronting issues of poverty and financial hardship and were particularly valuable in the insights they provided and the need for governments to address the issues raised.

The urban-rural/regional divide

14.3    The importance of focusing on locational disadvantage was emphasised during the inquiry. The experience of poverty is closely connected to where people live and the resources which are collectively available to people who live in a particular locality. QCOSS stated that an important feature of poverty in Queensland and 'an emerging feature' of poverty in Australia generally is the 'place-based nature of poverty....poverty is not spread equally and evenly around the state and there are particular localities that experience a set of characteristics that are both disadvantageous to that locality and reflect significant groups in the population who are living in poverty and financial hardship'.[3]

14.4    Other States and Territories reflected similar concerns. WACOSS commented on the problems of regional disadvantage in Western Australia –'we feel very strongly about regional issues in WA. People living in poverty in the remote areas are doubly disadvantaged as a result of high living costs and reduced access to services'.[4] NTCOSS reflected on the specific characteristics of the Northern Territory which impact on poverty in the Territory, including remoteness, a large Indigenous population, the problem of distance with a small population spread over a large geographical area and high population mobility. NTCOSS noted that these factors 'pose challenges in providing adequate physical and social infrastructure as well as costs for people in the NT'.[5]

14.5    One study described the spatial dimensions of poverty since the 1970s in non-metropolitan areas as 'the emergence of declining rural towns with large numbers of households on social security payments, declining industrial towns which have experienced severe cutbacks, and selected coastal regions in NSW and Queensland attracting large numbers of low-income people who are either in low-paid casual work or unemployed'.[6]

14.6    Submissions and other evidence graphically highlighted the plight of many communities in rural and regional areas across Australia, as illustrated below.

Poverty in rural Australia – the plight of the bush

From [CWA] branch to branch, we are concerned with poverty because we are concerned with drought. We are also concerned with poverty because we cannot afford to keep our farms going. Poverty is only one tiny part of it, because rural life has changed so much. Our kids are educated out of our communities, we cannot get doctors, we no longer have banks, we do not have trains and we do not have public transport, yet, when you put into action ideas for getting those little communities to pull together and be more self-reliant, they turn up in droves. The volunteer spirit is still very strong. But in terms of poverty there is a lot of stoicism and resilience – a "we'll be right" attitude.

Committee Hansard 27.5.03, p.444 (CWA of NSW).

Another thing I would like to touch on briefly is rural women. There is a culture within the rural community of being a stalwart...but one thing I have noticed is that when you go to rodeos or country community events you see very thin women with reasonably well presented children and reasonably well presently husbands, and you talk to people and they will quietly say, "They are doing it very hard". You can see exactly what has gone on. These women are sacrificing themselves to make sure that their children are looked after and their husbands can get out there and still work their properties.

Committee Hansard 28.7.03, p.1066 (Hon. Jonathan Ford MLC).

Rural and regional communities are generally poorer than metropolitan regions with unemployment often being the cause of financial constraints for many. Access to social services and subsequent lack of opportunities in the areas of education and health exacerbate the deprivation in these areas.

Submission 148, p.28 (Catholic Welfare Australia).

Limited employment possibilities and poor access to health services, education and transport, lower the quality of life for many in rural communities. While this pattern is not uniform across rural and remote Australia...many people are living with the consequences of economic deregulation, industry restructuring, the withdrawal of government services, such as hospitals and schools, and the closure of banks and other businesses. This has led to job losses and reduced incomes and further exacerbated rural poverty levels.

Submission 184, pp.17-18 (COTA National Seniors).

The vulnerability of many regional and rural communities has become magnified by the recent drought...the drought combined with already high rates of unemployment, fragile local economies and the ongoing loss of many social and community services has been devastating for many individuals and families.

Submission 166, p.19 (Salvation Army).

We are actually seeing people who are in greater need than I have perhaps ever seen. I have been in the game for approximately 25 years and I have seen urban poverty right through to rural poverty. It is kind of the end of the line. They are coming forward, but it is only because there is nothing left. It is really awful. For example, I was in touch with a service station owner who was distraught because he had had to knock back a person who was trying to get some petrol on tick. The person who was wanting to get petrol on tick was a woman whose family had a farm. They could not pay their bills and so they could not get the petrol on tick. But if she did not get the petrol on tick she could not come in to work in the chemist's store where she earned $125 a week, which was what they used to feed themselves and to pay for the next lot of fertiliser for the farm. He was feeling awful; she was feeling awful. It is really very tough. I agree with you—people are beginning to come forward, but their level of need is far higher than what you would perhaps see in similar circumstances in an urban population and that is combined with a lack of familiarisation with the kind of help that is available, which is another stumbling block.

Committee Hansard 6.8.03, pp.1249-50 (Lifeline North Queensland).

14.7    The lack of services – both government and non-government – in a whole range of areas, such as education, health, transport, banking and other community services, and the general loss or downsizing of essential infrastructure was a frequently expressed concern during the inquiry. The Country Women's Association (CWA) of NSW described the situation in one small country town:

Mrs Brown – At Yeoval, which is another 25 kilometres on from Cumnock, which is 25 kilometres from Orange, there is a community bus once a fortnight. At Cumnock we have just got a doctor half a day a week – yes! – but we had no doctor before that.

Senator LEES – Is there a bank?

Mrs Brown – No. The bank moved into the post office when the bank closed, and then the post office closed. So we have the Commonwealth Bank and the post office in the general store.[7]

14.8    The decline of services and the social infrastructure can have a serious impact on local communities and can, in many instances, accelerate the decline of small rural communities. Anglicare Victoria spoke of this effect in the following terms:

We have talked about increasing centralisation of services, the closing of post offices, banks, hospitals and court houses in a lot of smaller communities; the loss of other businesses as the people employed in those services leave; the drop in school numbers and then school closures; and the general breaking down of social infrastructure in many small communities. Young people and families leave to get education or broader educational opportunities and do not return. Not only is the social infrastructure disappearing; the people left in the small communities are the most isolated and vulnerable – the people who do not actually have a choice to leave.[8]

14.9    The problem of poverty amongst Indigenous Australians in rural and remote areas was also highlighted during the inquiry. The Aboriginal and Torres Strait Islander Commission (ATSIC) stated that in remote areas the lack of accessible services and inadequate infrastructure greatly exacerbates problems that perpetuate poverty. In many remote communities, basic amenities and services such as water, sanitation, power, telecommunications, and public transport and housing are non-existent or insufficient to support the population.[9] Catholic Welfare Australia stated that rural poverty 'is most pronounced amongst Indigenous Australians. This is evident in all areas of their lives. Rural Indigenous Australians have a life expectancy 20 years less than non-Indigenous Australians and have twice the mortality rate of non-Indigenous rural Australians'.[10] For a further discussion of issues relating to Indigenous Australians see chapter 13.

14.10    Submissions emphasised the often 'hidden' nature of poverty in regional and rural Australia. The CWA of NSW referred to a study of jobless families in north-east NSW arguing that it was the intangibles that flowed from their financial plight that resonated. The CWA added:

...these families appear to lead "normal lives", working at school canteen, or going to TAFE, and so on, but they never invite anyone to their homes nor discuss even casually their personal circumstances with others. Most of the families live in unsuitable or unconventional accommodation, some sharing houses with virtual strangers, others sharing with relatives "for the time being".[11]

14.11    Recent drought conditions have also exacerbated the often dire economic situation with increasing hardship for many farming families and significant flow-on effects to local communities. Evidence to the inquiry from welfare agencies and local community groups indicated that many communities are faced with increasing levels of stress, family breakdown, domestic violence, suicide, substance abuse and crime as a result of these increasingly difficult economic conditions and the recent drought.[12]

14.12    An indication of the extent of hardship being experienced in rural and regional Australia is provided by the calls on assistance being provided by charitable and welfare organisations and other groups. The CWA in NSW spent $380 000 (up to a maximum of $1000 per family) in less than two months on assistance to farming families for their domestic needs.[13] The SVDP Society conferences also indicated continuing demand for their services. For example, one conference reported that:

The continual increase in the number of people is of great concern as financially this imposes a very serious demand on our limited resources. Our volunteers are finding there is insufficient time to properly assist people with material assistance, many of whom relish the opportunity to have a one-on-one discussion with a willing listener.[14]

14.13    Many rural populations are also ageing as younger people move to the larger towns in search of education, work or a better lifestyle. COTA National Seniors spoke of life in rural communities becoming harder for older people. A lack of suitable accommodation and services often leads to depression and a severe sense of isolation. Cutbacks and closures in hospitals and health services have had a particularly adverse effect on the lives of older rural Australians, many of whom are unable to access timely and appropriate care. There is a widespread lack of aged care facilities and support services, particularly HACC services, to enable older people to remain in their homes for as long as possible. With the movement of younger family members to cities and larger regional centres frail older people have even fewer resources.[15]

Social and economic disparities

14.14    A number of major economic and social disparities affecting rural and regional communities were highlighted during the inquiry and these are discussed below.[16]


14.15    Submissions pointed to increasing inequality in the distribution of employment opportunities between rural and regional areas vis-à-vis metropolitan areas. Mission Australia noted that 'the lower share of employment generated by primary industries in recent years, exacerbated by the current drought, has meant that many non-metropolitan regions have far fewer jobs than in past decades'.[17] UnitingCare Australia stated that communities in regions with single sector employment are particularly vulnerable to changes in policy that result in the movement of job opportunities away from the region. This disadvantage may be compounded in regions offering unskilled employment as the job market increasingly moves towards demand for skilled workers.[18]

14.16    During the 1990s there were significant variations in the rate of unemployment in the various States as well as variations within both the metropolitan and non-metropolitan areas of States and Territories. A snapshot of unemployment, based on 1996 Census data, shows that non-metropolitan regions had, on average, higher unemployment rates than metropolitan regions. In that year, non-metropolitan regions recorded an overall rate of 10.5 per cent, while metropolitan regions recorded an overall rate of 8.5 per cent. Within non-metropolitan regions, in general, the more remote areas exhibited below average rates of unemployment. Above average levels of unemployment were found in coastal NSW, particularly the North Coast, and south-eastern Queensland, as well as in areas surrounding Australia's major cities. It appears likely that these areas have attracted unemployed persons from large cities.[19]


14.17    Studies have found growing income disparities between people living in the capital cities and those living in rural and regional areas of the country. One study found that in 1996 household incomes in metropolitan regions were significantly higher – nearly $10000 or almost 30 per cent – than those in non-metropolitan regions.[20] Data for 2000-01 indicated that at the national level, average incomes in the capital cities were 20 percent above those in the balance of the particular State, and in each State capital city average incomes were above those in the balance of the State. The largest difference was in NSW where the capital city incomes were 30 per cent above the average incomes across the rest of the State.[21] However, regional areas are not uniformly disadvantaged in terms of income disparities, with different patterns being experienced in particular States and regions.

14.18    A study by Lloyd et. al. examined changes in the incomes of households living in regional Australia between 1991 and 1996.[22] The study found that 'there is a large and growing gap' between the incomes of those living in the capital cities and those living in the rest of the country. The incomes of metropolitan residents increased at about double the rate of those living in other major urban centres and regional and rural towns in the five years to 1996. The results indicate, however, that regional Australia is not uniformly disadvantaged and not uniformly declining. The biggest 'losers' in terms of income appear to be residents of small rural towns rather than residents of rural areas as such.

14.19    The situation for regions aggregated across Australia masks very different experiences in particular States and regions. Income inequality between regions becomes more apparent when the States are analysed separately. While incomes grew strongly in Sydney and Melbourne between 1991 and 1996, the growth was not as strong in most other areas of NSW and Victoria. Both Western Australia and Queensland had strong growth in most regions. In rural South Australia and Tasmania incomes increased substantially, but in other areas of both States real incomes were stagnant or declined.

14.20    Not only did the income gaps between regions increase in the 1990s, income inequality within regions also increased. The proportion of households in the middle income ranges declined while the proportions in the high and low income ranges increased. Non-metropolitan areas had a much higher proportion of low income households than did the capital cities and a lower proportion of high income households. The proportion of low income households grew more slowly in the capital cities than the rest of Australia, except rural areas, during the 1991-96 period, while the proportion of high income households grew more rapidly.[23]


14.21    Submissions pointed to the lack of access to health services for people living in rural and remote areas.[24]

14.22    The Australian Institute of Health and Welfare (AIHW) noted that access to health services in regional Australia is influenced by the lower number of GPs; lower rates of bulk billing; and lower levels of access to specialists and major hospitals as a consequence of greater travel distances. For example, with regard to medical practitioners, AIHW statistics show that in 1999 there was generally a higher proportion of medical practitioners relative to population concentration in capital cities than in non-metropolitan areas. For other rural and remote areas, the percentage of medical practitioners was generally lower than their proportion in the population.[25]


14.23    Submissions also pointed to disparities in access to educational opportunities, (especially secondary education) for people living in non-metropolitan areas. Children in these areas are less likely to complete their education than those living in metropolitan areas.[26] While there is considerable regional variation across non-metropolitan Australia there appears to be a clear negative relationship between the proportion of 16 year old children attending school and the degree of remoteness of the locality. Areas exhibiting below average continuation of children to post-compulsory education are concentrated throughout central, western and northern Australia.[27]

14.24    There are also disparities in access to higher, technical and further education. While mining areas (particularly in Western Australia) have a relatively high proportion of people with tertiary qualifications, in many areas of NSW, Queensland, South Australia, northern and western Victoria and the Northern Territory, the proportion of people with these qualifications is well below the non-metropolitan average.[28]

Addressing poverty and disadvantage in regional and rural areas

14.25    Evidence to the inquiry proposed a number of strategies to address poverty and disadvantage in regional and rural areas, including:

These approaches include strategies to improve access to universal services and, in addition, provide more targeted initiatives for rural and regional areas.

Improved access to services

14.26    People living in rural and regional areas need greater access to a range of government and other services, including health, education, aged care, transport and other community services than is currently provided. Catholic Welfare Australia emphasised that decisions on the continuation of services such as transport, health, police, post offices and schools in rural areas should be influenced by social considerations, not purely economic factors.[29]

14.27    ACOSS suggested that the Commonwealth and State Governments should commit to national minimum standards of access to essential community services, including public health, education, and social welfare services. This commitment would help stem the loss of publicly-funded services in many areas of Australia. ACOSS suggested that the commitment should be implemented jointly by the Commonwealth and State Governments through the Council of Australian Governments (COAG) process.[30]

14.28    The Committee has made a number of recommendations in other chapters to address several of these issues, especially in the areas of health, education and housing. Provision of government and other services in rural and regional areas remains an urgent need that the Commonwealth and States Governments should address as a matter of priority.

Regional development strategies

14.29    The need for regional development programs to address poverty and disadvantage in regional areas was stressed in some submissions. The Queensland Government noted that:

Regional development is an important tool to enable people in regional areas to participate in economic development and achieve sustainable increases in living standards. Without regional development, poverty and disadvantage in regional areas are likely to increase.[31]

14.30    VCOSS also noted that regional development strategies that focus on maintaining a proper share of economic development in rural and regional areas are needed to halt the rural decline. Such strategies should include a mix of business and industry stimulation, local education and training initiatives and social housing development.[32] Anglicare Victoria noted that it is often difficult to attract investment 'beyond a certain circle around metropolitan areas. Profits from industries are often not invested in local communities. There are often no employment alternatives when industries close down in rural areas'.[33]

14.31    States have implemented various regional development strategies. In Queensland, the most decentralised mainland State, the Government provides substantial infrastructure investment support to regional areas – in the 2002-03 Budget, $2.1 billion of planned capital outlays (43 per cent of the total) were allocated to regions outside southeast Queensland. In addition to capital investment, the Office of Regional Development within the Department of State Development coordinates regional development policy and implements regional economic development projects from a whole-of-government perspective.[34] The Victorian Government has developed regional development projects and a major regional regeneration program based on public housing estates. The Government has also expanded job opportunities with more than a third of jobs growth occurring in rural and regional Victoria in recent years. In addition, the government has established a Regional Infrastructure Development Fund to maximise regional growth and development activities.[35]

Job creation initiatives

14.32    Submissions and other evidence argued that job creation initiatives such as public infrastructure development programs and the encouragement of labour-intensive private sector services should be targeted to regional areas.

14.33    A number of submissions suggested that nation building projects could be undertaken. ACOSS argued for the implementation of a national public infrastructure development program targeted to disadvantaged regions, with priorities to include social infrastructure development such as public housing, hospitals and schools. The development program should be designed to generate jobs in two ways – in the construction of infrastructure, and by improving the efficiency of the regional economy. Contractors should be required to source as much of the labour for these projects from within the regions concerned, and to establish partnerships with local Job Network services to take on local unemployed people.[36]

14.34    Catholic Welfare Australia also proposed that nation building projects could be undertaken under collaborative partnerships between Government and business to deal more adequately with major environmental problems, including salinity and water management. The Government 'should target funding of such projects to areas of greatest disadvantage to stimulate employment and reduce poverty in those regions'.[37]

14.35    Submissions argued that governments should encourage the expansion of labour-intensive private sector services in regional centres, for example, by improving education and training and other public infrastructure and promoting tourism development. ACOSS noted that this is probably the most sustainable basis for employment growth in disadvantaged regions. Governments can help disadvantaged regions compete for employment opportunities by investing in education and training to improve a region's skills base. Institutions such as regional universities also generate jobs in their own right. Local public infrastructure such as roads could also be improved to help attract both employers and consumers.[38]

14.36    Evidence differed on the efficacy of using tax concessions or other subsidies to encourage employers to relocate to disadvantaged regions. Catholic Welfare Australia argued that governments should implement tax credit regimes as an effective wage subsidy for new jobs created in areas of greatest regional disadvantage. These arrangements would provide tax credits for employers in disadvantaged regional areas to take on additional employees. Similar schemes have been operating in several US states.[39] ACOSS, however, argued that the use of tax and other concessions are a costly way to improve job opportunities. They may have unintended consequences, for example, by drawing employers away from surrounding areas that may not be much better off. A related problem is the destructive competition between State Governments to attract private sector investment using these concessions.[40]

14.37    Submissions also argued that industries should be encouraged to decentralise and some government departments and agencies could be relocated to regional centres.[41]

Capacity building

14.38    Submissions emphasised the need for capacity building as a means of addressing poverty and disadvantage within communities. Mission Australia noted that it was important to 'build community networks so as to improve social capital, and to strengthen the capacity of communities to deal with the consequences of hardship'.[42] ACOSS noted that community capacity-building is often a crucial first step towards economic and social revival of disadvantaged regions – 'initiatives planned by local people are more likely to achieve their objectives than those that are delivered from the top down'.[43] There is a need for skilled facilitators to be employed to get communities organised, determine what actions need to be taken and mobilise the people of the community for their own betterment. Submissions noted that while it was important to draw on local community skills this should be combined with effective government resources and encouragement.[44]

14.39    States have implemented various community development programs. The Victorian Government has a community building program with a strong regional dimension which is complementary to its regional infrastructure development program.[45] The Queensland Government operates a community renewal program which works closely with local communities to promote a variety of projects, including those that provide increased employment and training opportunities and those that improve services and facilities.[46]


14.40    The Committee believes that the poverty and disadvantage experienced in many rural and regional communities needs to be urgently addressed by all levels of government. The Committee considers that access to government services in such areas as health, education, housing and transport as well as other community services, such as banking, needs to be expanded in many regional areas to provide the necessary social infrastructure to enable these communities to function effectively.

14.41    The Committee also believes that Governments should play a key role in building up the economic infrastructure of these communities by developing national public infrastructure development projects, and maintaining and extending regional development and other job creation strategies. It is only by concerted and sustained government action that the disturbing urban-regional economic and social divide can be overcome.

Recommendation 69

14.42    That the Commonwealth and State Governments maintain and expand services in such areas as health, education, housing and transport to rural and regional areas.

Recommendation 70

14.43    That the Commonwealth and State Governments set national minimum standards for access to essential community services, such as health, education and welfare services in rural and regional areas.

Recommendation 71

14.44    That State Governments maintain and expand regional development strategies in rural and regional areas.

Recommendation 72

14.45    That the Commonwealth Government develop a national public infrastructure development program targeted to regional areas focusing on such areas as transport, hospitals and schools.

Recommendation 73

14.46    That State Governments encourage the expansion of labour-intensive private sector services in regional areas by improving education and training and other public infrastructure and/or providing tax concessions or other subsidies to encourage employers to relocate to regional areas.

Recommendation 74

14.47    That State Governments support local employment and social development initiatives in rural and regional areas.

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