INTRODUCTION
This inquiry was first referred to the Committee on 4 December 1997.
Progress was interrupted by the 1998 election and the Committee's involvement
in the inquiry into a New Tax System held earlier this year. As the inquiry
has extended over two parliaments, there have been changes in Committee
membership over that time. The Committee received 224 submissions and
conducted 22 public hearings, covering all states, during the course of
the inquiry. A list of submissions received and of witnesses who appeared
before the Committee at its public hearings appear as appendices to this
report.
The Committee has examined the condition of regional Australia, taking
in both metropolitan and rural areas, and looking in particular at employment
prospects as they reflect the declining economies of some regions and
the rising prosperity of others. Broad terms of reference were given to
the Committee, with an original reporting date of August 1998. The 1998
election and the exigencies of the parliamentary timetable since then
have resulted in some delay. It has also meant that some of the issues,
and some of the information gathered, have been overtaken by time. The
Committee is aware of the vast amount of research and data which is available
to specialists in regional economic affairs. The purpose of this report
is not to add to the data that is already available, but to highlight
the importance of this issue, and to emphasise the interest which Parliament
has in regional affairs. Its purpose is also to direct the attention of
ministers to the view held by more than a few parliamentarians that regional
policies are about the welfare of people, and not simply an adjunct to
a broad vision of national prosperity.
The Committee recognises a perception held in many circles that the regions
represent `a problem', not only for people who live there, but for parliaments
and governments, and for planners and investors. There is an expectation
that governments and parliaments should `do something' to arrest the decline
in prosperity and employment in regional Australia.
This expectation comes from an electorate which is understandably reluctant
to accept that towns and cities with strong historical dependence on particular
industries, and a strong sense of identity and community should be faced
with the departure of promising young citizens because there is no longer
any employment for them. There is understandable reluctance of non-metropolitan
communities and their elected representatives to accept that they should
constitute a permanent underclass in Australian society. Rationalisation
and adjustments to industry and service delivery may be considered inevitable
and necessary. The death of industries may even be endured, despite the
traumas of unemployment, although this becomes easier when people affected
believe that imaginative attempts have been made to compensate for the
loss to the region. More difficult is an acceptance of an inexorable decline
to the point where long established towns face virtual extinction.
The unemployment problem in regional Australia can only be addressed
by the revitalisation of regional economies. At its core this inquiry
is about the economies of the regions. Employment is a measure of the
health of regional economies, though not the only one. The Committee acknowledges
that consideration of industry policy bears some relevance to this inquiry
but has resisted the temptation to extend its inquiry so far beyond its
terms of reference. Nonetheless, the Committee has not shied away from
pertinent observations and recommendations on matters relating to global
and national economic issues which are related to regional economies and
their unemployment problems.
The declining fortunes of many regions in Australia over several decades
has been well documented and continues to make headlines. The Committee
visited Burnie soon after a decision was made to close the pulp mill.
It found a town suffering yet another job loss shock, its fate dependent
upon sharemarket values. The Committee visited Broken Hill to see how
a mining town in decline was attempting to reinvent itself as a tourist
centre, capitalising on its colourful past. The Committee's visit to Whyalla
was highly instructive. There was an opportunity to understand why current
heavy capital investment led to reduced labour needs, and that, despite
this investment, there was a medium term likelihood of the steel plant's
closure once the local iron ore lodes were exhausted.
It is fair to note that the Committee also found guarded optimism in
some industrial regions, with schemes afoot to create new industries.
The Committee's visits to Newcastle and Kwinana revealed the determination,
first, of an old industrial city successfully expanding its diversified
enterprises, and second, of a newer region taking strong advantage of
its location and efficiency to compete on world markets with high value
products and services. In rural areas visited by the Committee, modest
job-creation schemes were being planned. No one suggested that such schemes
had the employment potential of lost industries either in terms of numbers
employed or income levels previously achieved, but there was evidence
of determination and energy.
The Committee does not believe that energy and determination alone will
revitalise the regions and create more employment opportunities. Leadership
and commitment at the local and regional levels need to be matched by
more effective support from the states and the Commonwealth, particularly
in attracting investment into the regions. This may well involve a reversal
of current business and government policies of reducing services
in regions; a trend criticised in the regions as much for its negative
symbolism as for the practical disadvantages that have flowed from it.
If services are withdrawn from regions in a way which takes no
account of the practical difficulties faced by people who live there,
then what implications does this have for the encouragement of private
sector investment? The Committee notes that the rationalisation of private
and public sector activities have achieved cost cutting and efficiency
objectives that may be defended –even lauded – at one level,
but it also notes that these policies have resulted neither in the development
of many new industries in the regions nor the creation of conditions to
stimulate full-time employment opportunities.
It became evident to the Committee that while some attempts have been
directed at regional planning and development, these have generally been
piecemeal and of varying degrees of effectiveness. The overlapping roles
of the states and the Commonwealth in regional matters was a frequently
noted cause for concern for those who made representation to the Committee.
During the course of its inquiry the majority of the Committee
believe that there was considerable evidence of the operational problems
faced in many regions by clients of the newly-established Job Network.
The majority of the Committee notes that despite changes to Job Network
that have been implemented since the Committee took evidence in mid-1998
significant difficulties remain for people in regional and remote locations.
These include reduced access to employment services due to an insufficient
geographic spread of providers and mobile services which are not fulfilling
their obligations. The majority of the Committee is also concerned that
about the continued lack of, adequate performance data, and independent
regulations and complaints procedures. It is the view of the majority
of the Committee that the implementation of Job Network revealed a continuing
mind-set common to many Commonwealth government programs which assume
a `one size fits all' solution as appropriate for a continent of such
regional diversity as Australia. In this instance, a `grand plan' conceived
in and directed from Canberra failed at the outset to take account of
existing employment and community support groups. Many operators and clients
faced financial strain and personal stress as a result, with particularly
serious consequences for regional areas dependent on the provision of
government services. Government party senators do not agree with the conclusions
of the majority of the Committee in relation to the implementation and
operation of Job Network (Chapter 4) and have included dissenting comments
to that effect at the end of that chapter.
Historically, Commonwealth governments have left the states to run regional
policy in accordance with their constitutional responsibility. There have
been periods of Commonwealth policy directed at establishing regional
growth centres. In recent years governments of different party persuasions
have generally followed the line that local or regional initiatives are
more likely to lead to effective implementation of regional development
projects. The Committee believes that the implementation of this policy
would be more effective if there was sufficient Commonwealth funding
and effective consultation between governments. Thus the Committee has
heard complaints from local government, which has the fewest resources
to effect regional and local development, frustrated in its attempts to
implement development policies at the ground level. The future of regional
Australia is too important to leave to the vagaries of state and local
government. A Commonwealth initiative in policy coordination is
required.
This report reflects, in the main, the views and recommendations of the
entire Committee. However, Government party senators do not support some
of the report's recommendations. These are identified both in the list
of recommendations, and in the body of the report where they arise.
Opposition and Australian Democrat senators on the Committee also wish
to state at the outset their view that the Commonwealth Government must
take increased responsibility both for regional development and for past
policies which have contributed to regional decline. Many submissions
to the Committee expressed disappointment at Commonwealth actions, such
as the withdrawal of Commonwealth agencies from communities, and blamed
these actions for initiating decline in those communities. The Committee's
report contains reference to overseas experience in redressing rural and
regional decline, and these experiences provide a useful guide for the
Commonwealth to take action to review policies which have contributed
to decline, and develop policies and initiatives to promote rural and
regional development. It is the view of the Opposition and Australian
Democrat senators on the Committee that to do less would be to break faith
with the many rural and regional Australians who participated in this
inquiry for the purpose of conveying their desire for action to the body
they believe to be best-placed to take such action: the Commonwealth Government.
Government party senators strongly dissent from this view and affirm
the underpinning philosophy of this report. That is, we need a `bottom
up' approach; that leadership is vital at the business and regional level;
and that the role of government has to shift from being a `doer and director',
to being a `change leader' in regional and economic development.
Senator Jacinta Collins
Chair