Archive for the ‘Regional development’ Category

Addressing coordination failure

April 30, 2012

One of the strongest arguments for the federal government being involved in regional development policy is ‘coordination failure’. This is economic jargon for the failure of initiatives because of the inability of different stakeholders to coordinate their actions for their mutual benefit.

This is a BIG problem, and the strongest argument why Australia must have an ongoing regional development policy. Coordination failure arguably stems from four factors:

 The sheer size of our continent combined with modest population.
 The confrontational nature of the Westminster system, which works against getting agreement on most things. .
 The competitiveness of most federal and state programs.
 The lack of collaborative people, despite our belief that we’re easygoing and matey.

The last point is the most important, and the hardest to explain. The Cockatoo Network exists to connect the dots and find pathways for regional development projects. In our experience the ingredients of a collaborative person is someone who:

 Is naturally inclined to work through a problem, and who has the confidence and ability to share information.
 Is willing to take risks because of a belief that the proposal is a worthy one.
 Can see the light at the end the tunnel, and know it’s not a locomotive.
 Has loads of patience and perseverance.

These were once key attributes for jobs in the federal arena because of the belief that a national perspective could help in addressing coordination failure. But sadly this is no longer the case. And in any case federal officials now seem consumed by process, rather than product.

This was proved this month when we tried to get any one of four agencies – the Departments of RDA, Innovation and Agriculture plus the Murray Darling Basin Authority – to assume a leadership position on food value adding agendas across the Murray Darling Basin and beyond. Each agency said that while the agendas we had highlighted (regional branding, labelling, supply chains etc.) were very interesting, it wasn’t their role to lead or coordinate issues in this space.

This is arrant nonsense – but until there is a change, there is a marvellous opportunity for groups of councils and regional development boards to step into this space.

Advertisements

Collaborator Profile – Chris Gibbons (Littleton, Colorado)

April 17, 2012

Who and where are you? – I’m Chris Gibbons, Director of Business/Industry Affairs, City of Littleton, Colorado USA.

What’s your job? I am the co-creator and director of our Economic Gardening project, which is an entrepreneurial approach to economic development. I oversee a staff of three specialists: market researcher, search engine optimization and web marketing analyst and Geographic Information Systems specialist. We provide these services to businesses in Littleton to help them grow.
What’s exciting you at present? We are evaluating a number of new tools in the overlapping areas of network analysis, data mining, big data, network mapping and watering holes.
What are your top 3 tips on how to collaborate?
1. Build relationships one informal meeting at a time
2. Do start with projects or hot topics on the agenda.
3. Understand your partner’s world: outlook, constraints, objectives, culture.
What collaborative projects would interest Cockatoo readers? Littleton has a number of collaborative projects that have received national and international attention: economic gardening, the youth program established after the Columbine shootings, our immigrant integration program, our risk intervention group, our health committee.
Contact details cgibbons@littletongov.org U.S. phone no: 01 303.795.3760. We’re Mountain Time Zone.

Memo Mr. O’Farrell – regional development is all about connectivity

March 28, 2012

The O’Farrell Government seems to be making a reasonable fist of things, but it will surely be judged on how it tackles three issues – Sydney’s transport system, electricity prices and urban and regional development.

Why urban and regional development? Well Sydney’s traffic congestion, housing shortages and high rents are each a manifestation of past neglect of urban planning. But NSW policymakers simply don’t understand how its regions can help address Sydney’s problems.

By contrast, think for a moment of western Europe – regional cities in France, Spain, Denmark, Germany, Sweden, Italy and the UK tend to be bigger, more confident, more independent and they invariably host specialised industrial activity that defines them. And the European cities generally have fast and inexpensive air and train services connecting them to their world cities.

But back here Sydney sits like a seething blob on the edge of the Pacific, sucking in travellers from distant parts but exhibiting little business and cultural interaction with its regional cities, except for Newcastle and Wollongong.

So in one sense it wasn’t surprising when the NSW Department of Trade and Investment announced the closure of its offices in Goulburn, Broken Hill, Tweed Heads, Coffs Harbour and Parramatta.

Leaving Parramatta aside, this is a real kick in the guts to the regional cities affected. Coffs Harbour has a population of 70,000 and the second busiest airport in NSW. Goulburn is the anchor city of a rich agricultural region. Tweed Heads is part of a bustling cross-border conurbation that is a long way from Sydney. And Broken Hill is home to world-class mineral and environmental assets. So how can they be adequately serviced out of cities hours away, respectively Port Macquarie, Wollongong, Lismore and Dubbo?

These new arrangements are not only insulting and send bad signals to investors, but they defy regional development best practice, which is that connectivity systems are critical. That is to say, regional officials have a critical role in connecting people and organisations, and connecting regions to potential investors and government officials in the major cities.

Goulburn will be a key test of changing this wrong-headed decision. Local state member Pru Goward is also minister for community services, and would appreciate the connectivity issue. And Goulburn’s sister city is Yass, where local state member Katrina Hodgkinson is also the minister for small business. Together they can hopefully point out the folly of this decision. Watch this space.

This article appears in Rod Brown’s Good Oil column, April 2012 (LG Focus)

Rural not synonymous with economic decline, says OECD

December 16, 2011

 Huge regional variations in economic and social conditions within a country require a rethink of the way governments design policies to boost growth and jobs, says a new OECD report.

The economic crisis has hit some areas far harder than others. The OECD’s first Regional Outlook calls on policy makers to pay greater attention to regional factors such as amenities, accessibility, size, infrastructure and demographics, industry specialisations and networks. The report focuses on the need for good governance and coordination of policy around these regional factors and rejects the idea that governments should rely on budget transfers to reallocate resources between rich and poor regions.

The Regional Outlook observes that policy-makers have traditionally looked to major cities to spur economic dynamism. But on average 70% of the economic growth of OECD countries occurs outside the big metropolitan hubs. And although predominantly rural regions can be among the slowest-growing regions in the OECD, they are also over-represented among the most dynamic. Contrary to popular belief, “rural” is by no means synonymous with economic decline, the report says.

 Read the Secretary-General’s speech

RDA Fund underwhelms

October 18, 2011

 

The first round of the Australian Government’a $1 billion play in regional development got off to an inauspicious start last month, and there are lots of confused punters.

Why? Mainly because there were only 35 successful applicants out of 550 submissions – a very low success rate of 6.4%. Thankfully some of the winners were Cockatoo members.

The Department is pointing out that the success rate was actually higher because 249 applications didn’t meet all the criteria. That is splitting hairs.

The problem is that Minister Crean talked the program up way too far i.e. $150 million per round is not much across 55 regions. And an urban centre likeGeelongwith marginal seats should NOT have received two lots of $10 million. If you’re one of the 93.4% who missed out, DO NOT give up. Crean has stressed the importance of being persistent.

 Notwithstanding the above, the RDA Fund criteria are sound. Our view is that program funding needs to be doubled due to the underlying need for community infrastructure in the smaller councils/towns. They don’t have the revenue base, whereas cities likeGeelong,Bendigo, Gold Coast andNewcastle(who cornered over $40 million in the first round) have countless more funding options.

 The 55 RDA Committees must also prioritise the projects before they go to Canberra. They should be told to put a maximum of two projects forward in any six month period (i.e. total of 110 acrossAustralia) – with an ‘understanding’ that at least one would be funded. This would avoid the large number of submissions at present, and give the RDACs a reason for existence. We are currently lobbying certain MPs to this effect.

 The good news is that there are other well-resourced programs in other federal portfolios. 

Contributed by LG Focus – see October edition.

 

Beware the bolting regions

July 8, 2011

The Grattan Institute (Melbourne) has just released a report recommending that governments should tilt funding towards fast-growing regions.

Titled “Investing in regions: Making a difference”, it argues that government funding should steer away from slow growing regions without sustainable economic foundations, towards ‘bolting’ regions where people and jobs want to go.

The report also recommends that governments should cut funds to those regional universities making a modest economic impact, and subsidise students to attend higher education facilities in capital cities.

It’s all reminiscent of Treasury economists in awe of Adam Smith’s doctrine of following the invisible hand of the market. I guess theGrattan Institutehas only been around a couple of years, and has to make its mark. But peddling these sorts of recommendations is downright dangerous.

 Bolting versus lagging regions

 The fault with the Grattan analysis is that governments are duty bound to help lagging regions to adjust to market shocks and minimise social dislocation and distress. Every developed nation offers subsidies to lure labour-intensive firms into such regions. Examples here are northernAdelaide, northernTasmaniaand more recently the Lower South East region of SA.

 As regards redirecting expenditure, how do you define a bolting or lagging region, and over what period? The report listsCairnsas a bolting region – WRONG because the tourism market has now collapsed and unemployment is high.

 The report also recommends that governments should forget about trying to attract investment into lagging regions on the basis that it’s a lost cause. KeyMurrayBasincities – Mildura, Shepparton,Tamworth, Orange-Bathurst, Albury-Wodonga, Wagga – that are now recovering from the drought are in that category!  

 Infrastructure

 The Grattan report argues that infrastructure investment may only have a limited impact on a regional economy – this is at odds with scores of surveys of investor surveys. The report nevertheless says that bolting regions should have priority for such expenditure – this would consign lagging regions to a permanent state of disadvantage.

 Universities

 The report’s recommendation for a downscaling of regional universities is short-sighted. RegionalAustraliacritically depends on building its skills base and development capacity. Along with Cooperative Research Centres, regional universities could be powerful ‘poles of competitiveness’ (as inEurope). If only we all realised it.

The better solution

Regional development is a messy, imperfect process. The interplay of economic and social factors is complicated by the intersection of local, state and federal politics. The result is a myriad of plans, strategies and programs peddled by scores of agencies.

Regional stakeholders are mesmerised by all this complexity. What they want is recognition and respect, and the knowledge that governments (plural) are systematically building their local economy and institutions. They intuitively know this will help them cope with company closures, droughts, floods, cyclones and the like.

In this context, the regional development approach being pushed by the federal government will hopefully deliver this recognition. It puts the onus on regional stakeholders to focus on their competitive strengths, and to collaborate with state and local government, local businesses, universities etc. to develop sustainable growth paths. It also challenges regions to be persistent!

This is good. These principles should become a permanent feature of regional development policy because it also puts the onus on the federal government to provide decent feedback to RDA applicants. And it sends a message to federal and state agencies to pay attention to projects that:

  • Align with a region’s competitive strengths.
  • Are best practice.
  • Measure up in terms of cost-benefit analyses and business plans.

So I suggest that councils assemble their ideas within this simple framework. Meanwhile, you might read the Grattan Institute report because it might be supplying oxygen to federal and state treasuries looking for cost savings!!!!!

Promises with timelines – best practice program administration

July 7, 2011

 While in Cooktown recently, I bumped into a character who was working at the Hope Vale community (just north) when Cyclone Larry ripped through in 2006. He said that among the helpers post-Larry was a government official who promised a refrigerated storeroom to enable regular supplies of fresh fruit and vegetables to the 750 residents.

 Well after 3-4 months of no word, the Hope Vale chap telephoned the number on the business card. No answer. A few weeks later, the same result. He tried a third time, but then gave up. He has now forgotten the department the official was from, and shrugs it off as another example of the tyranny of distance.  

 Unfulfilled promises and inordinate delays from government agencies are the norm in regionalAustralia. The problem arises from the over-selling of programs, compounded by administrative processes that are way too process-driven and slow.

 In my Brave New World, I’d close half the do-gooder federal programs, shift the savings into regional budgets, and move 10% ofCanberrabureaucrats into regional centres where they’d have Key Performance Indicators based around getting funding out promptly to the right areas. If the Cooktown region’s priorities are refrigerated storerooms, cyclone relief, teachers or harbour dredging, then that’s what they’d get – and within an agreed timeline. As I’ve said before, next time a Minister or Shadow Minister lobs in to discuss your needs, impress on them the need for  REAL DELIVERY.

Some day I will write a paper explaining exactly how this could work.

 

Weather radar too late to help

April 6, 2011

In 2005, Cockatoo had a whinge about the lack of weather radar coverage across central west and north west NSW, two of Australia’s key agricultural regions. Farmers were desperate to anticipate upcoming rain belts in order to time their crop sowings and harvests. The problem was that the radars at Moree and Wagga were too distant. The National Farmers Fedration shared our concern.

Anyway we’d received the Ted Whitten flick-pass from the Bureau of Meteorology until an email arrived later in 2005 indicating that the BOM had received special funding in 2003 for a new radar at Gunnedah, and the expected completion date was in 2007.

Well, the weather radar was finally commissioned at Gunnedah in September 2010! The once-in-a-generation benefits have been missed because the drought has come and gone, but the fact remains that eight years from decision to commissioning is a long time. Cockatoo has since been advised by a BOM spokeswoman that Gunnedah was 20th on the list of 21 radars for upgrading or commissioning.

Clearly BOM management never made the connection between their radar roll-out and its role in addressing the impact of the drought. This is one small example of the lack of integrated planning across regional Australia i.e. between agriculture, climate, transport, health, education, housing, community services. 

As we keep saying, we need a Department of National Development.

 

 

RDA Fund – angles for consideration

April 5, 2011

The big topic of interest at present is the Regional Development Australia Fund.

The guidelines were released last month for this $1 billion five-year program. Federal Minister Crean says this is a new approach to unlocking the potential of Australia’s regions via locally driven, creative solutions to regional needs. And he wants strong, well-researched, strategic applications for projects that stack up.

Well a new approach was certainly needed. Our advice to local councils is to take this very seriously. Why? First, Crean’s mantra about wanting creative, locally-driven solutions gives local stakeholders every right to seek a solid dialogue with him and his department. And much of this should be face-to-face, not via written submissions. So don’t be shy.

Secondly, there are 55 RDA Committees competing for the $1 billion. It won’t be divvied up exactly, but each region might expect roughly $40 million in grants on the basis that a notional $20m from the feds has to be matched by state, industry and perhaps council contributions. This formula and processes could become a permanent feature of the landscape – so best to get used to them!

Thirdly, the crying need – in rural Australia at least – is to find better ways of progressing good ideas. The stumbling block is the connectivity problem due to distance, cultural differences, federal-state competition, personal rivalries, lack of familiarity with the issues, forgetfulness and stuff-ups. So when Crean et al talk about joined up agendas, tearing down silos, reducing red tape and fostering collaboration, it makes sense for local folk to sign on to these ideals. Indeed, you might think about making some of your RDA Fund projects a best practice collaboration model that delivers benefits far greater than the federal grant.

Angles for RDA Fund projects

Putting the above ideals into context, Minister Crean says the RDA Fund will commit between $500,000 and $25 million per project. We forecast that very few projects will approach anywhere near $25 million due to demands on the program and associated equity reasons. 

Crean says the funding will be directed towards lifting work skills and productivity, maximizing the opportunity of broadband, sustaining our environment, promoting social inclusion and improving water and energy efficiency. Note too that they must also align with the RDA Plan for the region. What sort of projects might really win favour? We think projects with the following angles will be well regarded:

  • Creation of sustainable jobs in small towns, especially in eco-tourism.
  • Public infrastructure that facilitates globally-connected, value-added industries in rural regions e.g. cool stores.
  • Reduction of obesity and alcohol abuse e.g. health and sports hubs.
  • Better integration of migrants into communities.
  • Indigenous projects that have a realistic chance of creating sustainable jobs.
  • Youth mentoring e.g. buddy systems involving mature age workers and pensioners.
  • Vehicles for improved community cohesion e.g. community centres, youth centres.
  • Water and waste management e.g. pipelines, aquifer storage.
  • Revenue streams for the National Broadband Network.

Be wary of seeking funding for the following: 

  • Roads and bridges – hard to make this innovative, and could be seen as cost shifting.
  • Local airports – upgrades are critical in some regions to get bigger aircraft and lower airfares, but costs are usually high and it could reduce your prospects for other projects.
  • Regional transport hubs – regions should NOT get suckered into these when there is a separate Department of Infrastructure and the Infrastructure Australia agenda.
  • Education infrastructure – surely BER was enough – if not, go to DEEWR.
  • Health infrastructure – don’t get suckered here either.
  • manufacturing and further processing – the days of subsidies to single firms are gone.
  • Climate Change – even the PM has given this the cold shoulder.

 Crean and the independents should be applauded for this program. But there will be a deluge of submissions and many will be go nowhere because $1 billion isn’t much at a national level. Councils should nevertheless work up their ideas, because I’ve got a hunch that the RDA Fund is going to evolve into an ongoing program. We are here to help. (This article appears in the April edition of LG Focus).

RDA up and running!

March 9, 2011

Simon Crean has just announced $1.4 billion for his new Regional Development Australia Fund – $350m of which is already committed to regions affected by recent floods. Expenditure is over 5 years, starting July.

This is a coup for Crean because many feared that Treasury would use the drought and other budget pressures to pare things back. And numerous RDA committee members and staff were thinking they’d been conned. But Crean’s standing in the Gillard Cabinet counted, and he is showing uncommon zeal in his championing of regional Australia. His Department has been slow to get into gear, and the substandard website reflects this. But the SES officers are a good mix, and staff numbers are climbing to over 200, which is probably a KPI in this town with bloated bureaucracies.

More importantly, RDA staff appears to be coordinating with other departments. The way things are unfolding is that RDA will be supporting a select number of high quality projects that are innovative, collaborative and ground-breaking and with cocktail funding that reflects the respective interests of the key parties.

Indeed, one defining feature of these projects is that they require a bit of thinking through – they will be more complex than shoveling money out according to tried and true engineering designs and costings e.g. roads, bridges, water infrastructure.

The great opportunity for Cockatoo members is to get involved in these projects because the RDA principles are virtually identical to what we have been espousing for the last decade. The guidelines should be on the RDA website around 10-11 March.

Two comments from Crean worth remembering:

  • “This is not an entitlement for every area in the country – they have to bid for them.”
  • “The money is one pool of funds that will be split up among the best projects, and the Government wants to get away from pork-barreling.”