Last month, Norm Cameron, Goldfields Shire Council (Vic) argued here for a strong regional development program, including a ‘best cities program’ for the regional cities. We invited Lindsay Neilson, former federal Mandarin and architect of the Better Cities Program of the 1990s to reply.
The Better Cities program had three components in each State – inner urban, outer urban and regional. The bulk of the money was in metro areas, but there were valuable regional projects in each State. Leaving aside that issue, I agree with Norm that much needs to be done in regional Australia, and this issue will become more important as our national population increases. There seem to me to be some realities that governments are failing to address.
My recent involvement as a member of the Panel conducting the Inquiry into the Need for a Population Policy for Queensland on behalf of LGAQ has been very interesting. There is strong metropolitan opposition to rapid population growth, especially in lifestyle areas like the Sunshine Coast, (but it is reflected nationally) but still strong support from regional Australian for more jobs and more people.
The reality seems to be that the labour demand from the resources boom in WA and Queensland (and it may slow because of the Resource Rent Tax) will result in continued high levels of immigration because our capacity to meet labour demand from local population growth and internal migration is quite limited.
The structure of the resources sector, with contracting-out of mine construction and operations, labour supply and worker accommodation and support, means the impacts are not all regionally located – workers Fly-In, Fly-Out from Perth and SEQ, equipment is supplied from Melbourne, repair & maintenance services may be in nearby cities (viz. Mackay, Rockhampton), while the port cities, notably Gladstone, are booming. The boom has metropolitan as well as regional multiplier effects.
It is highly likely that the Intergenerational Report and the Housing Supply Council have underestimated the rate of likely population growth in Australia off the back of the resource sector’s labour requirements alongside the recent restrictions on the capacity of overseas students to stay in Australia after completing their education. That means, if we accept FIFO labour arrangements for the resources sector, contributions to regional development by that sector are actually well below what they might otherwise be. The Resources Rent Tax, if used appropriately, may provide new funds for infrastructure, but there is a catch, in my view.
Unlike the Better Cities Program, the Infrastructure Australia funding doesn’t capture multiplier effects – no partnership investment in associated developments is sought. This is a big weakness of the infrastructure sector – too captured by the engineering mentality of individual projects, and the accounting mentality that demands project-based cost-benefit analysis. We thus overlook the lesson that adding related investment to an infrastructure item to produce a ‘development package’ as with Better Cities, draws in private sector investment in a big way. Better Cities ($816 million) has drawn in $5 billion plus state-local-private investment into the precincts (as at 2004) and it’s still happening e.g. East Perth Redevelopment Authority.
The general lack of sophisticated ‘development economics’ thought around infrastructure investment is highly disappointing and a step backwards from the Hawke-Keating government’s approach.
The resources boom will actually add to metropolitan growth pressures, to inflationary pressures on house prices, and to the shortfall of both urban and regional infrastructure.
And even without the resources boom, Australia at 36 million may see a Geelong of 700,000 people, a Ballarat and a Bendigo of 300,000 to 400,000 each, and so on. Planning for these changes still demands a national approach, but there is no sign of this happening – not through Infrastructure Australia, not through the Major Cities Unit, not through any regional development organisation that I’m aware of.
There are huge challenges in all of this, and they are not on the policy horizon in any meaningful way.
Best wishes, Lyndsay Neilson (lyndsay.neilson@gmail.com)
