Supporting sustainable growth in regional capitals
6.1
The committee heard that a policy response to support growth in regional
capitals would have flow on effects not just for that regional capital and its
region, but also for the capital city in that state. For example, for every 100
000 people who find a job in a regional capital, around $300 million a year in
lost productivity through congestion is saved. Further, because house prices in
regional capitals are lower, mortgages tend to be smaller, enabling residents
spend more money in the local economy.[1]
6.2
Throughout this inquiry, the committee was reminded that regional
capitals are not a single group with the same set of challenges, opportunities
and needs. Mr Perkins, Regional Development Australia Tasmania, summarised
this view during the Launceston hearing:
...regional capitals are not homogenous. They are all
different, and you will get different growth and different reasons for growth
in different areas at different times. You have to be careful, and government
policymakers in particular need to be careful that they do not make one policy
for all, because it is not going to impact all. In fact, you might end up
seeing money invested into some communities that actually has the reverse
impact by money being spent in the wrong spots.[2]
6.3
Further, policy makers also need to take care to consult with regional
capitals prior to announcing funding initiatives.[3]
6.4
Regional Development Australia Tasmania, and a number of other witnesses
and submitters, recognised that Commonwealth funds are finite, and for this
reason:
...evidence based strategic planning, and thinking through what
are the key priorities to grow our regions, needs to be thought through, moving
away from wish lists and wanting projects, rather than thoughtful and needing
projects. From our point of view it is making sure the distribution goes to
where it needs to go to and in the best way it can.[4]
6.5
However, there was a strong argument made in evidence for focusing investment
on regional capitals and particularly those that are growing. The Grattan
Institute concluded, on the basis of its research, that:
Local job attraction schemes, regional universities, small
scale roads and major infrastructure are all expensive, but they do not appear
to materially accelerate slow-growing regions. But not investing in regions
where we can get the best return for our tax payer dollars, we sacrifice higher
overall productivity and economic growth.[5]
6.6
A number of regional capitals experience social disadvantage at a higher
rate than capital cities, and this is particularly true for the towns that
surround regional capitals.
6.7
The committee was reminded by a range of witnesses, including Catholic
Social Services Australia (CSSA), that effort should be made to ensure that the
economic development of regional capitals is 'underpinned by a commitment to
fairness and opportunity for all' and 'is done is a way that improves the lives
of the most disadvantaged and does not cause further disadvantage to already
vulnerable communities'.[6]
The committee heard that services should be better coordinated between
providers and all levels of government. Further, governments should listen to
local residents about their needs. CSSA identified a range of positive measures
that could be supported to strengthen local communities in regional capitals. These
included social enterprises to generate employment and bring social benefits.[7]
CSSA called for government programs to incorporate a focus on 'social service
needs' and 'not just economic and employment' needs.[8]
6.8
The following recommendations contain measures that the government can
take to support regional capitals to address the challenges they face and take
advantage of their opportunities.
National strategy
6.9
Australian government policy does not reflect a particular focus on
supporting regional capitals to grow and achieve their potential.[9]
The Planning Institute of Australia cautioned that the 'most significant
weakness' for regional cities is 'the lack of a national plan to co-ordinate
and identify the relationships between regional capitals and Australian state
capitals'.[10]
6.10
The need for a national integrated policy for regional capitals at both
the state and federal level was identified as a key starting point to develop
regional capitals. Regional Capitals Australia (RCA) called for a regional
development policy that recognises the distinct role that regional capitals
play.[11]
Mr Archer, Regional Australia Institute, told the committee that:
Our view is that regional capitals are an issue that requires
national leadership. They occur in every state and territory, but their
development relies on local, state and federal government working effectively
together, because local governments are leading local planning and doing a lot
in the local community, the states are investing in health, hospitals and roads
and so is the Commonwealth. I think there is an opportunity for national
leadership to assist these places to get the focus they deserve, the resources
that can support their development and coordination between the activities of
those three levels of government, because we have not had a level of focus on
these places, at the moment, and I think we are missing significant growth
opportunities as a result.[12]
6.11
Professor Paul Burton called for national urban policy/settlements
strategy, and urged that this strategy reflect and influence state and
territory plans. Professor Burton warned that if a national strategy is not
developed then:
...regional towns and cities will continue to make their
individual cases for more growth (or in some cases limits to growth) in
isolation and without reference to any sense of a bigger picture. While some
regional towns and cities might succeed in their ambitions, most will not and
are likely to devote scarce resources in pursuit of unfeasible and implausible
ambitions.[13]
6.12
Mr Bob Davies, City of Greater Geraldton, noted the absence of a
'coherent policy and strategy framework' at the national level. Any strategic
plan should include a target of population movement from capital cities to
regional capitals. During the Geraldton hearing, Mr Davies explained that:
It would be lovely if there were some guidance at the
Commonwealth level in relation to regional capitals—the way that Regional
Capitals Australia defines regional capitals, the places which are the
hub-and-spoke thing that everyone out there depends on—which simply said, 'Our
policy for the regions is that 15 per cent or 30 per cent of the population
should move there by the year 2050.' And if states and COAG could come to a
view on that, that would be very helpful. It would send very strong signals,
for example, to the financial institutions and to other financing bodies and to
superannuation institutions and so on about where might be a useful place to
begin to invest.[14]
6.13
The committee considers that a national strategy for regional capitals is
essential and should incorporate a focus on both social needs and economic benefits.
As a starting point, however, there should be an agreed definition of regional
capital.
Recommendation 1
6.14
The committee recommends that the Australian government work with state
governments to develop a definition of 'regional capital'.
Recommendation 2
6.15
The committee recommends that the Australian government work with state and
territory governments and regional capitals to develop a national strategy for
regional capitals. As a starting point, the strategy should:
-
provide a framework for consultation between the respective
governments and regional capitals;
-
take into account the social needs and economic benefits of
regional capitals; and
-
provide an aspirational target of population movement to
regional capitals from capital cities.
Ensuring decision making and strategic planning is based on accurate data
6.16
Evidence before the committee demonstrated that it is impossible to
determine the quantum of funding that regional capitals receive from the
federal government and other sources. Regional capitals with large transient
populations or who service populations in surrounding areas reported that
without proper data, the federal government will continue to make funding
allocations based on the number of residents and not on the actual number of
people who use the services of regional capitals. The absence of quality data
makes it difficult to assess the effectiveness and equity of government funding,
and the needs of each regional capital.
Recommendation 3
6.17
The committee recommends that the Australian government develop a
national data set focused on regional capitals. Specifically, data should be
gathered on:
- who is using the resources in each regional capital (including
non-residents);
- how much Commonwealth and state funding is provided to each
regional capital; and
- the projected growth of each regional capital.
Fit for purpose roll-out of the National Broadband Network (NBN)
6.18
As discussed in Chapter 3, the NBN is a crucial piece of infrastructure
for regional capitals. However the rollout has been delayed at times and
service quality varies. RCA observed that access to the NBN is both an economic
and social equity issue:
It is clear that the internet has become both a critical
business and communication tool and an essential lifestyle service. It is
therefore vital that regional capitals have the high-speed internet to promote
the practicality of moving businesses and individuals to regional capitals. To
attract 'young wealth creators' and their associated high-tech industries,
high-speed broadband is crucial.[15]
6.19
The committee considers that the growth of regional capitals is closely
connected to, and dependent on, access to the NBN.
Recommendation 4
6.20
The committee recommends that the Australian government
accelerate the roll-out of the National Broadband Network to all regional
capitals across Australia.
Enhancing the role of regional universities
6.21
A skilled workforce is needed to ensure that regional capitals can
respond to opportunities for growth. As discussed in Chapter 4, regional
universities perform a critical role in supporting regional capitals to achieve
their potential. Regional universities can reduce skills shortages in the
regions — a problem identified by many regional capitals and discussed in
Chapter 3. This is because regional universities provide essential training and
support to students in the regions. Evidence to the committee overwhelmingly
indicated that students who are trained in regional Australia stay in regions.
6.22
The committee was particularly impressed by the work of organisations
like the Geraldton Universities Centre (GUC) which supports students in
regional capitals who do not have access to a local university.[16]
However, a number of limitations prevent organisations like the GUC from
applying for federal university funding.[17]
Recommendation 5
6.23
The committee recommends that the Australian government modify the university
funding criteria to enable organisations that support distance university
education to apply directly for funding administered under the Higher
Education Support Act 2003.
Tailored funding for regional capitals
6.24
Regional capitals perform an important function in their local
communities, and provide a range of social services to surrounding towns. This
was discussed in Chapter 2. Federal and state governments should recognise this
important regional role in funding allocation and provide incentives for
regional capitals to invest in infrastructure. Regional capitals require
additional support to maintain important infrastructure that is used by non-permanent
resident populations who do not pay rates in regional capitals.[18]
Federal funding should also recognise projected growth and not just the current
or past population.[19]
6.25
Regional capitals described a range of urgent infrastructure needs to
the committee. Federal funding should be reformed to ensure that regional
capitals are able to access investment — both public and private — to secure
the future of their communities. Both state and federal governments must
consider reforms to the current limits on fundraising to enable regional
capitals to do this. Further, greater cooperation between regional capitals and
between governments of different levels is necessary.
6.26
The federal government's Smart Cities Plan has the potential to address
some of the current funding deficiencies experienced by regional capitals, as
discussed in Chapter 4. However, with only three City Deals announced and
limited policy and implementation detail, it would be premature for the
committee reach a conclusion as to the effectiveness of this new program.
6.27
The committee supports the recommendations relating to infrastructure
investment made by the Senate Select Committee on the Scrutiny of Government
Budget Measures (the select committee) in its second interim report, tabled in
April 2016 (discussed in Chapter 5). The government has not yet tabled a
response to these recommendations. Should the government implement the
recommendations in full, the keys concerns raised by regional capitals
regarding infrastructure investment will be addressed.
6.28
The committee notes the effective awareness campaign conducted by
Evocities to promote the benefits of regional capitals to residents of Sydney,
as discussed in chapter 3.[20]
The committee considers that the Australian government should fund similar
campaigns throughout Australia, to ensure that residents of capital cities are
aware of the many benefits they could enjoy by relocating to a regional
capital. Movement of residents from capital cities to regional Australia would
also assist in containing urban sprawl and congestion in capital cities.
6.29
To ensure consistency with a national definition of regional capitals
and national strategy, the Australian government should review its funding
model.
Recommendation 6
6.30
The committee recommends that the Australian government undertake a comprehensive
review of its funding model in relation to Australia's regional capitals.
Recommendation 7
6.31
The committee recommends that the Australian government work with the local
government grants commissions in each state and territory to modify the Federal
Assistance Grants program to ensure that the program recognises:
-
the projected growth of each regional capital; and
-
supports regional capitals to fund the cost of maintaining
infrastructure used by residents in surrounding regions.
Recommendation 8
6.32
The committee recommends that the Australian government work with state
governments to develop a shared methodology for infrastructure assessment.
Recommendation 9
6.33
The committee recommends that the Australian government fund an
awareness campaign to promote the benefits and opportunities of relocating to
regional cities.
Conclusion
6.34
Regional capitals face a range of varied challenges. However, some
consistent themes have emerged. Regional capitals struggle to attract
investment, often compete against each other for government funding, while some
pay much higher insurance premiums. Many face demographic challenges such as an
ageing population, low education attainment or high unemployment. A number of
regional capitals have pressing infrastructure needs and struggle to work
within inflexible government funding systems.
6.35
Strong regional capitals are crucial to developing and maintaining
strong regions across Australia. While each regional capital has its own
strengths and weaknesses, some aspects are typical. Many regional capitals are
experiencing growth at a rate faster than the national average. Regional
capitals act as service hubs to the wider community providing access to health
care services, education opportunities, employment, and social and community
infrastructure. Regional capitals also offer benefits over Australia's capital
cities, such as affordable housing and the absence of congestion, while also
offering access to universities, jobs and healthcare.
6.36
Developing a national strategic plan for, and definition of, regional
capitals would contribute to ensuring that their significance is reflected in
federal policy and funding.
Senator Glenn Sterle
Chair
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