The independents, Oakeshott & Windsor, have everyone talking about rural and regional Australia – Ian McAuley dispels a few myths those of us in metropolitan Australia may be hanging on to. Read Ian’s observations on the need to end our trivialisation of regional policy so that we might have a hope of addressing the inequities and complex problems facing these communities.
In recent years politicians and journalists have limited their concerns to rolling off the words “rural and regional” as if alliteration is a substitute for meaning.
In fact, those words are meaningless, because every part of Australia, from Toorak to Penrith to the Pilbara can be called a “region”, and the term “rural” can cover everything from a dairy farm in the Adelaide hills through to vast cattle stations in the Kimberley. The term may be shorthand for “we don’t know and don’t really care; all we ever see of it is from an airplane window”.
It is in keeping with the media’s trivialization of policy, therefore, that many commentators have cynically said that we can look forward to an era of regional pork barrels.
So far, however, the claims of the independents have been mainly about regional policy generally rather than their specific electorates.
Regional policy has two objectives. One, common to most countries, is to reduce disparities between regions – disparities in private means and in access to public services. The other, which has been an off-and-on objective in Australia, is to ease pressure on our five big cities, where two thirds of us live. Australia has a strange settlement pattern, with only around 20 percent of the population in cities in the 30 000 to 500 000 band, which are the city sizes where large proportions of the population live in other developed countries. (These are the targets of the Government’s “Building better regional cities” program.)
On the first objective, Australia is free of the severe and entrenched disparities such as those between west and east Germany, or between US states which became clear when Hurricane Katrina exposed the poverty of the southern states. Old industrial cities such as Wollongong and Newcastle have been hard hit by industry re-structuring, but their pain has been nowhere the scale of the devastation that has occurred in places like Detroit.
We have avoided these problems in large part through strong centralization of public revenue and expenditure, with the Commonwealth collecting 80 percent of all taxes. The Grants Commission sets formulae for re-distribution to the states, providing them with the capacity (but not the obligation) to overcome disadvantages in geography or demography in delivering government services. Even more important, the Commonwealth provides almost all income support services to individuals. Those mechanisms protect states from the destructive feedback mechanisms of poverty reducing a region’s taxation base while placing heavy demands on social welfare.
Within states, however, there are many regions and communities with deep poverty. The most striking cases are the outback and isolated indigenous communities in the north – although many of the problems of these communities are manifest also in non-indigenous outback settlements. There are regions where the resource base, such as gold mining, has been depleted, and there could be more as climate change affects agricultural production. There are farming and horticultural regions which have suffered depressed world prices – in part a downside of a mining boom which has elevated our exchange rate. Other farming regions, particularly dairy regions, have maintained production but have lost population through consolidation. And there are hundreds of small settlements which once provided local services, but which are now within easy driving distances of larger cities such as Dubbo, which are pulling in people and businesses from surrounding districts.
Many of these regions have lost their young and are left with an older population, which threatens the viability of schools at one end of the population spectrum, and which places demands on health services at the other end.
These problems leave governments with difficult decisions. Withdrawal of a public service such as a police station to a larger centre can trigger a successive collapse of other public and private services, such as banks, ultimately wiping the viability of all businesses. On the other hand, maintaining services, or providing specific assistance such as town improvements, can give false hope, encouraging people to invest in houses and businesses and therefore worsening their ultimate losses.
These small region problems are best handled at a state and local level. If the Commonwealth is to be involved, it is best done through those tiers of government, even if this means diluting some of the credit.
The other objective of regional policy can broadly be described as decentralization, which was boosted by the Whitlam Government, who, with great gusto, established a Department of Urban and Regional Development. The unattractive acronym DURD contrasted with its glittering objectives.
Even had the program survived past the short tenure of the Whitlam Government, it had design flaws, for it ignored the need for infrastructure – roads and railroads – to connect these new growth centers to the rest of Australia. It paid no heed to lessons from the USA and Europe that transport links were the most important determinants of settlement patterns. Also, it was too taken with greenfield developments on the Canberra model, forgetting that national capitals are perhaps the only situations in which such developments work, because public servants work within a mini command economy, and because national governments can appropriate funds for a one-off splash.
Coalition Governments tended to favour assistance to particular firms in designated growth centers. They had the uncanny knack of enticing firms with maturing technologies: I recall assistance to an electric typewriter firm just before the word processor met the market, and to a film processing plant while digital photography was at the R&D stage. With the benefit of hindsight, it is clear that firms were simply taking advantage of cost advantages, such as state payroll tax reductions, Commonwealth grants and cheap land, to shift established operations. Such incentives, costly to public budgets, can do no more than attract branch activities, at the competitive end of their life cycle. They do not get high value-added activities associated with new or emerging technologies, because such activities need connection with major cities.
With their emphasis on broadband the independents are doing what previous governments haven’t done. Even more cleverly, they are giving non-metropolitan Australia a head start. Connections will be not only with state capitals, but also with the whole world. Of course, there will have to be improved transport infrastructure as well; large cities like Bathurst-Orange are still poorly served in this regard. Windsor and Oakeshott are well aware of these shortcomings as they drive on the goat track known as the New England Highway and as they see the Pacific Highway upgrade advance at the pace of continental drift. And that’s before mentioning railroads.
Also promising is the potential of linking non-metropolitan growth to environmental policies. The benefits of shorter commutes with less congestion are clear, and there has been mention of proximity to renewable energy sources. Another, less mentioned benefit, is saving Australia’s small reserves of rich horticultural land, which have been encroached upon by major cities.
With our new enthusiasm for decentralization we are off to a good start, but there are lessons to be learned from the past, and from international research conducted since we last had decentralization programs.
One lesson from the past is to have clear and objective criteria for any government programs of regional assistance; loose criteria with interpretation open to ministerial discretion make for “whiteboard” allocation.
A lesson from international research, particularly the work of Richard Florida, is that people won’t live in places they find unattractive. To the lay person this may seem so self-evident as to be a trivial point, but in the past there has been too little attention to the liveability of cities, particularly their aesthetic qualities. The people who can bring entrepreneurial and social creativity to a region aren’t going to be enthused by weed-infested empty lots, jungles of billboards, tacky signage, abandoned buildings and highways cutting through city centers, which characterize too many of our cities; the practicalities of town planning are important. So too is wider spatial planning, to avoid the risk of Australia developing a 1 600 km suburban strip stretching from Nowra to Rockhampton.
To attract settlers, and to retain their young people, these places need good schools, a challenge for state governments. Tertiary education, too is important: Armidale sets a good example of what is commonplace in the USA and other countries – the university city.
More basically, a policy of attracting people with entrepreneurial enthusiasm is likely to have more enduring results and to cost less to public budgets than the old policy of attracting business establishments to re-locate. In this regard it can be useful to find ways of attracting newly arriving immigrants, including refugees, to these growth centers.
Politically, this rediscovery of regional policy is a brave move, for it will take time to show dividends in terms of relieving pressure on our big cities, where people have shown their displeasure at the ballot box. Many will feel that they have been ignored in favour of others holding the government to ransom. If these initiatives are to have a life longer than DURD, they need explaining, and it would be ideal if the Coalition came on side, particularly the National Party, whose constituents stand to benefit, and the Liberal Party, which seems to have a visceral dislike of planning, even when planning helps develop new economic activity.
Ian McAuley spent several years in charge of a small regional policy unit in the Commonwealth Government, where he was exposed to the worst and best of regional policy.