Regional Cooperation and Development Forum
Opening address
Cr Paul Bell AM, ALGA President
Monday 7 November 2005 9.30am
See also: 2005 Regional Cooperation and Development Forum
Welcome to this - the ninth Regional Co-operation and Development Forum. This Forum provides us with an important opportunity to do a number of things. It allows us to assess the state of play in regional development in this country. Are we making progress, marking time or going out backwards? It also allows us to learn and share ideas about specific issues in regional development.
This year, we turn our attention to the importance of infrastructure - in particular, the importance of information and communication technology as a driver of regional development. And it allows us to explore the findings of the latest State of the Regions report. We will hear shortly from authors of this increasingly influential document - the Batman and Robin of regional economics - Peter Brain and Craig Shepherd.
The Forum also gives us the opportunity to hear from a range of key players. Today, we will welcome the Minister for Transport and Regional Services, Warren Truss, as well as the Shadow Minister for Regional Services, Simon Crean. We will also hear shortly from Garry Weaven, founder and excutive chair of Industry Fund Services, who will discuss the need for government investment in public infrastructure.
So, what's happened over the past 12 months since we last met? In essence, there's good news - but there is also room for improvement. To the good news first. And there's plenty of it. Most importantly, the second phase of the Roads to Recovery program - R2R2 - got underway in July. By any measure, Roads to Recovery has been an outstanding example of an effective Commonwealth/local government partnership.
- It is replacing dangerous bridges and upgrading intersections.
- It is repairing roads and improving traffic flows.
- It is boosting economic development, creating employment and improving the lives of countless Australians through 14,000 projects from our city centres to remote communities.
R2R2 will pump an additional - and much needed - $1.2 billion into local government for local roads over the coming four years. Local government is - of course - profoundly grateful to the Commonwealth for the Roads to Recovery program. While the additional funding will not fix all our road infrastructure problems, it is helping to reduce the rate at which our roads are declining. Without it, the state of local roads would be in a significantly worse.
Roads to Recovery is not the only injection of funding we've seen. An additional $150 million has been allocated to fund the strategic regional component of the Roads to Recovery program. And there has been an additional $90 million for the Black Spots road safety program. We also applaud the overall investment in road and rail transport through the AusLink program - a program worth $11.6 billion.
There have also been significant developments on the water front. The Australian Government has established the National Water Fund - a $2 billion bucket of cash providing funding for projects under three categories. The largest category - Water Smart Australia - has an allocation of $1.6 billion for major innovative water conservation projects. Most importantly, this funding pool is open to local government. Indeed, councils have already successfully accessed this program and are encouraged to do so.
The Australian Government has also increased funding for regional programs, including the Regional Partnerships.
Importantly, ALGA lobbied for - and got - direct assistance to help local government with its emergency management responsibilities.
Working Together to Manage Emergencies - will see $33 million invested in local government - most of it through a competitive grants program - over the coming four years. And we have seen the commencement of another important program - again, in response to requests by ALGA and our rural health partners. That program will see the Commonwealth provide grants to assist rural councils that have to step in and buy or build medical facilities to attract or retain doctors in their communities.
To date, $15 million allocated over three years. We hope that this is just a down payment and more will follow once the worth of this program becomes abundantly clear.
We also continue to see the Australian Government support much needed and improved natural disaster mitigation measures for local government. That's the good news. There is - of course - room for some improvement. ALGA is working on a range of issues to press home the need for further action to boost regional development and ensure that all Australians share in the benefits of our economic good fortune. There are a range of areas that we would like to see some further action. I'll list 12 of them today.
Point 1. Above all else, 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. This is particularly true in regional areas. At the same time, we face growing demand for services and infrastructure. The case for reforming federal-local government financial relations compelling. We need to replace the archaic system of financial assistance grants from the Federal Government with a system that delivers a fair share of national taxation revenue. Strong local government means strong regions.
Point 2. We need a broader policy approach to regional development. The Australian Government applies a well-articulated policy to regional development. It aims to make funding available to support the work of regions - a policy of helping communities to help themseves. John Anderson described it this way:
"We re-wrote the rules" - he said - "for regional development programs to forge partnership between the Commonwealth". "The best solution to a local problem is the solution that lcoal people find and support". Unquote.
Now, I strongly support this approach. It has helped to get a large number of important projects off the ground right round the country. The philosophy behind this approach is fundamentally sound. It says that local communities are best placed to decide and develop their own priorities. But this approach must go hand-in-hand with strong, focussed investment in regional infrastructure. I may be old fashioned, but I strongly believe in the concept of nation-building. Now the Australian Government has risen to the challenge on a number of occasions.
- " AusLink is an exercise in national building.
- " The Australian Water Fund is an exercise in nation building.
- " The Networking the Nation program was a major nation building program.
But others have gone further. There is - for example - a stronger emphasis on regional development in European Union and the United States. In Europe, very significant funds are disbursed through the EU Structural Fund to disadvantaged regions. In the United States, policy development is occurring through purpose-formed regional agencies. Australia, too, should consider a broader approach to regional development that genuinely seeks to build our regions within a national framework.
Point 3. We need to see direct support to help local government invest in infrastructure. Last year's State of the Region's report provided a compelling case of increased national infrastructure expenditure. It also gave us an innovative model to fund regional infrastructure based on local opportunities. In essence, it called for federal and state government to help finance local government infrastructure borrowings, substantially reducing the cost of projects and of the loan period.
The repayment structure established under this tri-level financing model would ensure that debt is repaid rapidly at the beginning, tapering off as local government assumes more responsibility in later years. The model would also reduce the average cost of capital at the time of project completion. This model - or something similar - is worthy of further consideration and we encourage the Australian Government to fully examine its merits.
Point 4. We must strengthen local government's use of information and communication technology. Another opportunity can be found with an ALGA proposal currently under federal consideration. We are suggesting that the Australian Government invest $275m in a Better Rural Services program. This would fund local government ICT infrastructure to enhance rural service delivery.
It would, in many ways, follow up the Networking the Nation program with direct investment in the capacity of regional councils to deliver for their constituencies, countering the effects of the digital divide. More broadly, the nation must plough ahead with a robust investment in broadband. As the State of the Regions report will show, an investment of as little as $3 billion in extending and deepening broadband cover will yield six times this amount in benefits - or more than $27 billion over 30 years. In particular, broadband will have a stunning effect on the ability of regions to boost exports.
Point 5. We must continue to invest in local roads. Make no mistake. The Roads to Recovery program is making an immense contribution to the economic and social life of regional communities. We must continue and accelerate this investment in local roads. At the same time, we must also press ahead with our asset management projects so that we get the very best value from our R2R dollar. Our message is clear. R2R is a terrific program. We have four more years of R2R2. But it is clear that a further program is needed to get the job done. As John Anderson said at this year's Roads Congress, we don't only need Roads to Recovery Mark II - we need a Mark III as well.
Point 6. We need a whole-of-government approach to regional development. Like ALGA, the Australian Government supports a whole-of-government approach to regional development. But we find the body most likely to drive this approach - the Regional Development Council - struggling to push the agenda. Every time this ministerial council explores an approach in one area - say health or education - they find it difficult to engage decision and policy-makers in the relevant portfolios. We are - in other words - hitting the silo walls - not breaking through them. It is a problem that has been faced by many Indigenous communities for many years. Today, the COAG trials are specifically aimed at breaking down these barriers and providing a whole-of-government approach to addressing the specific needs of Indigneous communities in the targetted communities. We must ensure this same approach is taken to regional communities. We've got to get agencies collaborating to meet community need - not communities battling multiple agencies to get things done. The solution is not easy - but there must be a better way.
Point 7. We need better regional governance arrangements. 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 spheres of government and across regional development organisations. Most importantly, local government must lead regional arrangements, not be subservient to them. The Commonwealth and state governments should more effectively engage local government and Regional Organisations of Councils in the planning and delivery of policy and programs at the regional level. Local government must be the building blocks of regional arrangements.
Point 8. We must support regional aviation. Regular, accessible, affordable and viable air services are a vital factor in regional development. Country communities with air services show economic growth nearly twice that exhibited by those without them. Regional aviation is also a key element in equity of access for many country people, and can be a matter of life and death in rural and remote areas. As you might expect, we took a keen interest in the work of the parliamentary inquiry into regional aviation. It released its report - Making Ends Meet - in December 2003. The report provides powerful arguments for better resourcing and federal assistance for local government owned regional airports. I acknowledge the considerable work undertaken by the Australian Government to support regional aviation. This has been done through assistance to regional airlines and additional funding to assist regional airports with new security requirements. However, we encourage the Government to implement key recommendations of the report including the call for the introduction of a better regional airport subsidy scheme. In particular, the Australian Government should implement the recommendations of the parliamentary report on regional aviation by introducing a subsidy scheme.
And it should be helping to fund the big infrastructure maintenance costs these airports are facing now and will face in the coming years.Point 9. We must encourage learning communities. 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.
Point 10. We must intensify business development. There is a reluctance on the past on the Commonwealth to artificially prop-up business in regional areas. That's understandable. But I believe we should see a more dynamic and innovative approach to stimulating economic growth. ALGA, for example, has long argued the merits of using enterprise zone mechanisms to attract business to regional areas. Enterprise zones may not be a magic bullet - but they represent a concept that should be given a go. We would urge the Australian Government to look again at the merits of enterprise zones. And - in a more general way - we would urge a more creative approach to innovation in regional development.
Point 11. We must encourage positive reform that delivers community benefits. ALGA is currently participating in a COAG review of compeititon policy. It is looking at where the next round of reform will go and what benefits might flow to the nation as a result.
It is critically important that we continue to support initiatives that keep the Australian economy forging ahead. Sustainable economic progress is critical if we are to continue to maintain the living standards we enjoy today. At the same time, however, we must sound a warning. Competition policy is not a god unto itself. It is a means to an end. We must ensure that competition policy does not crush communities in its path. They key to getting it right lies with the public interest test. Any wider application of competition policy must benefit the community. It must not be done simply for the sake of ideological purity.
Summary
These are, then, important suggestions for progressing regional development. It is not an exhaustive list. There are of course other proposals and ideas that need to be pursued. But the take-home message 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. This will be particularly true if - or when - the economy takes a turn for the worst. It would be wrong to say we are not making progress in Australia. We are. But if want Australia to reach its full potential, we need to ensure no region is left behind in the pursuit of economic and social success.
Thank you.
Cr Paul Bell AM
ALGA President
7 November 2005, National General Assembly
