In response to the first iteration of One Nation, the Howard government — which had slashed funding for regional development when it first came to power — was faced with the need to focus greater attention on the bush, seen as the source for the economic component of the anger that fuelled Pauline Hanson’s rise.
The result was some thoughtful, often nuanced, regional policy led by former Nationals leader John Anderson, but one that didn’t carry a whole lot of cash. One of the aims was to stop the erosion of services in small towns by funding the establishment of banking services in post offices; another was to try to leverage private funding into regional projects via a Foundation for Rural and Regional Renewal (still plugging away in Bendigo). Eventually, after Anderson had departed and budget discipline gave way to Howard’s floodgate mentality to government spending, this degenerated into massive Nationals pork-barrelling of regional grants programs and the humiliation of the notorious “regional rorts” report.
Confronted with the return of One Nation, the current government is once again turning its mind to regional matters. And, like the first time around, it’s started off trying to do it properly.
In December, Treasurer Scott Morrison wrote to the Productivity Commission (PC) asking it: “to examine the regional geography of Australia’s economic transition, since the mining investment boom, to identify those regions and localities that face significant challenges in successfully transitioning to a more sustainable economic base.” And he wanted the PC to, inter alia, “establish an economic metric, combining a series of indicators to assess the degree of economic dislocation/engagement, transitional friction and local economic sustainability for regions across Australia and rank those regions to identify those most at risk of failing to adjust”.
[Without foreign investment, rural Australia will buy the farm]
Better yet, he wanted it done stat — within 12 months, and with an initial report in April. That report came out on April 21 this year.
And yes, as requested, the commission came up with an economic metric composed of human capital (skills), financial capital (wealth), physical capital (infrastructure and plant), natural capital (local resources), social capital (community engagement) and industrial diversity. Not all of these can be accurately measured with current data, however, and in any event, the PC concludes, “there is no widely accepted method to define and measure the economic resilience and adaptive capacity of regions. Noting this, an index of relative adaptive capacity has been estimated but caution is required in interpreting and applying it to policy making aimed at building resilience and promoting economic development.”
Unsurprisingly, the PC is chary of government handouts to prop up regional communities. “Assistance to industries and regions has often been costly, ineffective, counter-productive, poorly targeted and inequitable,” it concludes (one feels like adding “but apart from that, it’s fine”). In the PC’s view:
“individual specific adjustment assistance (beyond generally available measures) is best reserved for unexpected circumstances and highly vulnerable groups of people, and should be aimed at helping individuals make a successful transition to employment. Assistance that creates false expectations about the future success of an industry or economic activity can lead to confusion and reduce individuals’ incentives to plan and adapt to changing circumstances.”
Notice that the PC wants assistance aimed at helping individuals — not industries or communities. Programs intended to help the latter tend to be ineffective, especially when they are directed at industries that aren’t viable. Programs that help the former to retrain and gain new skills are more likely to be effective in enabling resilience, especially in the wake of major structural changes in a region like the shutdown of a major employer. It also suggests assistance only be directed at communities coping with major but temporary problems, or the most vulnerable groups. Regions temporarily doing it tough, or communities that are relatively well-resourced to cope with structural change, are less of a priority.
[Is decentralisation regional sprawl by another name?]
Instead, the PC suggests some “no regrets” policies that will benefit everyone. These include reducing the burden of planning, zoning and development processes on business, addressing complex and duplicative environmental regulation and removing agricultural regulation in areas like foreign investment prohibitions. Inconveniently, it also notes the excessive compliance costs of the 457 visa program.
As anyone with a background in regional development knows, a key issue is what’s called the “sponge cities” effect. The biggest population shifts affecting the bush are not from rural to major city shifts, but from small regional towns to larger regional towns. These means that regional centres grow more quickly, provide greater economic opportunities, and retain services better than small towns, which face a future of declining population, poorer economic opportunities and fewer services. Some small towns are able to re-invent themselves and start growing again. Others are on course to vanish.
What’s the appropriate role of government in response to dying small towns? The PC believes they should be left to die:
“When people and businesses leave a regional community to take up better opportunities elsewhere, this often generates greater value and so increases the overall wellbeing of the population as a whole. However, such changes can have adverse effects on people left behind. Individuals who depart the region to pursue other opportunities are also often those who played key roles in the community, such as leading local sporting clubs and similar organisations. A shrinking of the population can harm a community’s social and cultural life, and reduce local leadership expertise and skills … It is a trend that cannot, nor should be, thwarted.”
The government would have wanted to hear little of this, but the PC’s response on regional development was always predictable. There’s a reason why Barnaby Joyce hates the commission. Back to pork-barrelling then.
When people up and leave a rural community for greener pastures, where do they go? The city! Do the cities have their stuff together? Sufficient jobs, affordable housing, infrastructure? If the answer is no, maybe it’s a good idea to try and stop the flight from rural areas into cities.
I take it you didn’t read the article, or didn’t understand it!
When small towns reach a certain point, it would seem to make sense to extend assistance to the remainers to move as well, and as expeditiously as possible. If done in an orderly manner instead of around a binary of porking and starving, not only would costs be reduced and regional cities benefited, but there might arise an industry around relocating/demolishing/rehabilitating/memorializing – regional employment!
Regional towns are set to expand in a carbon-constrained future. When the current practice of “going down to the city” to buy cheaper groceries becomes prohibitively expensive, then the local shops and town life will be certain to recover.
It was roughly between the years 1570-1550 BCE when the ancient nation of Israel while sojourning in Egypt for 400-430 years and while living in relative economic independence, comfort, peace and harmony in the rural Egyptian province known as Goshen. But the lure of the building, trades and real estate boom in the cities of Pithom and Ramses was too much and a mass migration from the country areas to the cities ensued. Mass unemployment and food rations followed eventually leading to indentured slavery in a cheap labor market within crime ridden cities. Enough, enough already, but you get my point.
How comforting it must be for the PS residing in a comfortable office in a sophisticated city to decide to rationalise country towns out of existence. Before leaping of that cliff it may be worth noting a few things:
1. climate change will create a dramatic shift of population and services away from urban centres to rural areas over the next two decades . That’s a fact not a supposition – the move inland to higher ground is already happening.
2. the rise and rise of China did not begin in big cities but began in the 1930s in small villages and towns through a planned program of access to education and the building of hundreds of factories right across rural China for manufacturing of domestic goods – many of which we now buy. It was agreed to by both the Nationalists and the Communists at the time and retained after the 1949 revolution. Our current strategy of cramming millions of people into ever shrinking size apartments in inner cites then trying to find meaningful work for them to do – just will not work.
3. Country towns service the people who grow our food, graze the cattle, shear the sheep, man the mines, etc, etc. They work harder than most city dwellers and face greater hardships (eg Cyclones, floods, droughts and bush-fires) than they could even understand. and
4. Pork Barrelling is rife in urban Australia so don’t be so pompous and patronising towards the people you depend on to keep your taps running, the lights on and your table full! The Nats are not the pork barreling specialists – both the Libs and Labor excel at it.