Speeches: 2004
Advancing Regional Australia: Towards a Ten Point Plan
When I was invited to speak here today, I wanted to focus on the importance of land transport to effective service delivery. In particular, I wanted to outline the critical role played by the Australian Government's Roads to Recovery program.
Address to Rural and Regional Service Delivery Conference
Councillor Mike Montgomery
President, Australian Local Government Association
17 February 2004: Dubbo, New South Wales
Thank you chairman.
I'm delighted to be here today in Dubbo, not least because this city has been such a success story in terms of regional economic and social development.
The city's success is a credit to the city of Dubbo, its civic leaders, businesses and community.
When I was invited to speak here today, I wanted to focus on the importance of land transport to effective service delivery.
In particular, I wanted to outline the critical role played by the Australian Government's Roads to Recovery program.
That program is delivering some $300m a year to assist local government address a massive backlog in road maintenance.
Local government is responsible for some 680,000 kilometres of road - nearly 85% of the entire Australian road network.
Because of the increasing financial pressure on councils, the ability to maintain our roads has been severely impaired.
The Roads to Recovery program has for the past four years helped councils across the country repair crumbling road surfaces, replace ageing wooden bridges with modern concrete structures, improve dangerous intersections and seal and upgrade dirt roads.
There are some 11,000 registered road projects, making life better for all Australian communities and businesses, from our city centres to remote townships.
That program was to have come to an end in less than 18 months. But, after a long lobbying campaign by local government, I'm delighted that the Australian Government last month announced that the program would be renewed for a further four years.
That's great news for regional and rural Australia. Some $850 million of the $1.2 billion allocated for the current program will be spent in regional areas.
The renewed program - or R2R2 as it has been dubbed - will see a continuing focus on rural and regional areas.
Transport Minister John Anderson has announced that one third of the funding of the renewed program - that's $400m - will be reserved for local government land transport initiatives of strategic regional importance.
The focus will be on projects that will enhance regional development by allowing councils to undertake local land transport infrastructure projects of strategic regional importance, particularly those that support emerging and expanding industries.
He has said that he will work with ALGA and other stakeholders to develop guidelines for the distribution of these funds and we look forward to doing just that.
In another development, the Minster has announced that funding would be made available for the regional land transport pool that will be established under AusLink - the national land transport plan that will be fully unveiled in May.
Beginning in 2005-06, some $265m will be made available for to fund land transport projects in outer metropolitan, regional and rural Australia.
These two measures will be important drivers of future regional and rural economic growth through improved land transport infrastructure.
John Anderson deserves a great deal of credit for creating and now renewing the Roads to Recovery program.
I might also add that we are also strongly encouraged by commitments from the Shadow Transport Minister Martin Ferguson to have a Roads to Recovery-style program incorporated under the AusLink plan.
While we are yet to see any details, he has spoken at length of Labor's commitment to invest in rural and regional transport infrastructure.
ALGA has, of course, been lobbying the major parties long and hard for further action on regional development.
As many of you would be aware, there is a desperate need to invest in infrastructure. Local government, for example, is under severe financial pressure and was finding it increasingly difficult to maintain and renew infrastructure such as local roads, bridges, civic buildings, sports grounds, libraries and entertainment centres.
Much of our infrastructure dates from the post-war period and is in dire need of renewal.
Improving regional infrastructure is vital if we are to improve service delivery to rural communities.
One of the biggest problems we face is uneven development across regional Australia.
Each year, ALGA commissions National Economics to produce the State of the Regions Report.
Local government has always been a strong advocate for, and driver of, regional economic and social development.
And we need to be.
The State of the Regions Reports over the past few years have documented a trend of growing inequality across our regions.
The 2002 Report showed that Australia had very few regions that were highly competitive in the modern global economy. Those that were, had captured a large share of Australia's economic output and income.
Equality of regional incomes had 'drastically' worsened since 1998.
The regions covering 20% of the Australian population with the highest levels of incomes had earned 30% of all income and claimed over 43% of the increases since 1999.
We should be learning from what others are doing in regional development overseas.
There has been unprecedented focus on regional development in Western Europe and the United States.
In Europe, significant funds are being disbursed through the EU Structural Fund to disadvantaged regions. In the United States, policy development is occurring through purpose-formed regional agencies.
That said, there are some encouraging signs for regional Australia.
Despite the impact of drought and international uncertainty, the Australian economy has performed well.
Late last year, unemployment in regional and rural Australia fell below six per cent for the first time in 21 years.
There has also been a surge in regional building activity, though this has been patchy.
And there has been some fine-tuning of the Federal Government's programs.
We acknowledge the move to simplify programs, with Regional Partnerships now integrating all of the Government's key regional funding initiatives, except Sustainable Regions, into one simple program.
There has also been a range of new measures that offer assistance for regional areas. These include, for example, measures to get additional doctors and nurses into areas of need and additional funding for regional universities.
A further development has been the formation of the Regional Development Council. The Council is chaired by the Deputy Prime Minister and includes state and territory ministers for regional development and ALGA representatives.
The inaugural meeting of the RDC, held in Canberra last year, clearly defined the strategic national issues where Governments could work together to promote strong and sustainable regional development.
The Council has endorsed a 'Framework of Co-operation' under which all spheres of government have agreed to share information, reduce duplication and improve co-ordination of regional planning activities to better promote economic and social development in Australia's regions.
The Council's next meeting will be in NSW next month and I'm optimistic that common ground can be found to form some genuine partnerships that can make a difference to regional Australia.
Some other developments have been somewhat less encouraging.
In August last year, the Deputy Prime Minister released Regional Business: A Plan for Action.
Prepared by the Regional Business Development Analysis Panel, the Report made a broad range of recommendations, including addressing anomalies in the zonal tax rebate scheme and establishing a taskforce to formulate a single regional structure that allows each tier of government and business to work in partnership.
The recommendations contained in the Plan for Action are commended by ALGA in so far as they recommend real policy initiatives that can realise new economic and business development opportunities in regional Australia.
However, some of the recommended actions - in our view - don't measure up.
The establishment of new policy frameworks and mechanisms, regulatory processes, regional task forces, advisory groups and planning strategies in many cases defers a real policy initiative in favour of another addition to an already crowded system of regional governance.
Real tools and incentives for businesses are needed to overcome the significant challenges faced in regional communities.
ALGA's submission to the Panel called for consideration of Enterprise Zone type-mechanisms.
These represent a substantial policy initiative, successfully used overseas to stimulate business activity and counter the effects of market failure.
It is disappointing that enterprise zone mechanisms have not been recommended as a way forward for regional Australia.
ALGA's submission to the RBDA was one of nearly 200, many of them from local government, many of them supportive of enterprise zones.
As we head toward the coming Federal election, I think there is cause for optimism for the advocates of regional development.
In October, John Anderson made it clear that - and I quote -
"Governments at all levels and the private sector must spend more on infrastructure in the coming years to avoid lost job opportunities, reduced economic growth and a funding catch-up nightmare for our children".
Significantly, he singled out the Roads to Recovery program as one that was investing in local roads around the country.
"Regional areas will suffer the most," he said, "if spending on infrastructure does not meet their needs, because their infrastructure and financial resources are already stretched to the limit."
John Anderson is right - and I hope his words are being heard loud and clear by his Cabinet colleagues.
There have also been encouraging from Labor.
Late last year, Labor's finance spokesman, Bob McMullen, made it clear that investing in regional infrastructure was going to be an election priority for Labor. His party would be - and again I quote - "funding big projects to assist rural and regional Australia".
ALGA is preparing a list of election asks, a significant number of them affecting regional development.
While not yet finalised, the regional requests are likely to focus on ten key points.
1. A fair share for local government
Point One. We need a better Federal funding deal for local government. Local government is a major service provider, a major employer and a major driver of economic development in regional Australia. But it has a very restricted ability to raise its own revenue.
And with growing demand on, and expectations of, local government, we need to replace the archaic system of financial assistance grants from the Federal Government, with a system that delivers to local government a fair share of national taxation revenue. Strong local government will lead to stronger regions.
Local government will be looking for strong commitments from the major parties to reform of local government financing.
2. Better regional governance arrangements
Point Two: We need greater regional cooperation. It is becoming increasingly clear that an approach to economic and social development that is regionally focused is the key to both strong local communities and a globally competitive national economy.
In Australia, a focus on regional development across government has led to a proliferation of regional structures and an ambiguity in the roles and responsibilities of different levels of government.
For effective regional development there needs to be a coordinated approach by all levels of government and across regional development organisations.
It is with this in mind that ALGA enthusiastically supports the recommendations of the recent Fair Share report on cost shifting and local government finances.
That report, brought down in November by the House of Representatives Economics, Finance and Public Administration Committee, calls for an Intergovernmental Agreement to identify the roles and responsibilities of local government and appropriate policy priorities and strategies at the local level.
The report also calls on the Australian Government to more effectively engage local government and established Regional Organisations of Councils in the planning and delivery of policy and programs.
It is time to capitalise on our regions and end the inefficient use of taxpayers' funds and the duplication of services that comes through a lack of consultation and coordination. It is time for a whole of government approach to regional development and governance.
3. Invest in local roads
Point Three. We must continue to invest in local roads. As I have already mention, the renewal of the Roads to Recovery program and additional funding for the AusLink regional pool have gone a long way to achieving this objective.
We must also ensure the national land transport plan - AusLink - works for regional Australia as well as our capital cities. Again, the recent announcement that significant funding will be available for the proposed AusLink regional pool, beginning with $265m in 2005-06, is a terrific start. We look forward to seeing the rest of the AusLink white paper when it is announced around the time of the Federal Budget in May.
4. Support Regional Aviation
Point Four. We should be supporting regional aviation. In particular, the Australian Government should pay for the entire cost of the new security requirements at smaller regional airports, not just half the cost. It should also implement the recommendations of the recent House of Representatives report on regional aviation by introducing a subsidy scheme, and it should be helping to fund the big infrastructure maintenance costs these airports will face in the very near future.
The Australian Government was guilty of a massive cost shifting exercise when it off loaded small regional airports onto councils. Now it needs to make amends by providing some support to keep these important community assets viable.
5. Community-focussed structural adjustment funding
Point Five. We need to see greater use of structural adjustment funding. For example, there needs to be in place a package to accompany national water market reforms to ensure communities adversely affected by the introduction of the water market can make the necessary changes to find new businesses and income streams to ensure they are not left crippled by change.
6. Encourage learning communities
Point Six. Let's give some added momentum to the movement for learning communities. We need to be investing in programs and initiatives that will help skill our communities and better equip them to handle change and seize opportunities. By offering a greater range of learning opportunities in regional areas, we also are more likely to keep skilled younger people from abandoning the bush for city life.
A community committed to lifelong learning and capacity building can contribute to expanding commercial opportunities and offer new solutions to regional challenges.
The recent announcement by the Australian Government to grant resident visas to skilled workers who commit to living and working in regional Australia is to be congratulated. However, this policy does not address the major challenge faced by our regional communities in retaining skilled workers for the longer term.
7. Intensify business development
Point Seven. Let's intensify the focus on business development. The retention of skilled workers in the long term would be assisted by more effective policies to develop stronger industries in our regions.
As mentioned earlier, the Government is currently considering its response to the recommendations of the Regional Business Development Analysis Plan for Action.
ALGA has been disappointed with some aspects of the Plan for Action. For example, enterprise zone mechanisms have not been recommended as a way forward for regional Australia. We would urge the Australian Government to look again at the merits of enterprise zones.
We would also warn against setting up additional regional governance structures and instead look for practical tools and measures that help businesses overcome the barriers to doing business in the bush.
8. Improving access to financial services
Point Eight. We've got to ensure financial services are readily available in regional areas. The recent report of the Parliamentary Joint Committee on Corporations and Financial Services, Money Matters in the Bush, recognises the substantial void in the provision of banking and financial services in some regional communities.
The report suggests that more attention be given to steps taken in the UK, USA and Canada to widen access to capital and other financial services for those living in areas not well served by mainstream banking.
Australia could learn much from the establishment of community development finance institutions overseas. A report by the Australian Centre for Cooperative Research and Development - ACCORD - has highlighted just how many times and just how close Australia has come to considering real policies for financing community development.
The Money Matters report seems to be another example of "almost but not there yet."
The ACCORD report states and I quote:
"There can be no doubt that when it comes to financing the economic development of disadvantaged communities, Australia stands out from the rest of the developed world for its relative lack of response to this area of need."
ALGA calls on the Australian government to move beyond the consideration of options to the implementation of real policy initiatives to foster community finance and associated institutions in regional Australia.
9. Maintaining the NTN momentum
Point Nine. We must ensure the information superhighway doesn't bypass the bush. We have seen some excellent initiatives that have been designed to enhance regional access to information technology. The networking the nation program has been highly successful. But we need to maintain the momentum. The Australian Government has done well with NTN. But something else is needed to ensure the good work that has been done continues to drive change in regional areas in the years ahead.
10. Health care for the bush
Point Ten. If we are to ensure our regions prosper and grow, they need to get acceptable access to quality healthcare. Again, this is an area that we have seen - at long last - some decisive action by the Australian Government though more could be done. For example, we would like to see some assistance given to local government to offset the costs of offering lifestyle packages to health professionals, of buying accommodation and medical practices and even entire hospitals in order to keep communities together.
These are ten suggestions for progressing regional development.
There are of course many other important proposals around. But the key message we have is this - if we don't have a greater focus on regional development and a stronger role for local government, we run the risk of seeing growing divisions between those Australian regions that are doing well, and those that are being left behind.
It would be wrong to say we are not making progress in Australia. We are.
But if we are to ensure Australia reaches its full potential, we need to ensure no region is left behind in the pursuit of economic success and social well-being.
If we are to remain internationally competitive, we must ensure that every region is firing on all cylinders.
ALGA will continue to vigorously pursue these issues with the major parties as we approach the coming federal election.
Thank you.
Mike Montgomery, 17 February 2004
