42 Regional policy

Introduction

Australia’s regions are the backbone of the nation’s exports sector.^[1] The major industries of regional Australia – agriculture, forestry, fishing and resources extraction – accounted for almost 70 per cent of Australia’s exports in 2023.^[2] However, despite the consistent economic contribution to Australia’s prosperity, regional Australia has experienced significant social shifts over the last 50 years, like non-metropolitan regions in other first world economies. The influence of globalisation, trade liberalisation and the application of neoliberal policies since the 1980s accelerated the pace of urbanisation, with ageing population trends in most, but not all, non-metropolitan Australian regions. Rapid technological change and capital investment in industry have further amplified these trends, which have both driven, and been driven by, rationalisation and centralisation of services and infrastructure, consequently compromising liveability and pushing people into cities. However, while these trends have not been reversed, COVID-19 had a marked impact on the demographic profiles of rural, regional and remote  communities across Australia.

The influence of globalisation, trade liberalisation and the application of neoliberal policies since the 1980s have accelerated urbanisation, and ageing population trends are apparent in most, although not all, non-metropolitan regions. Rapid technological change and capital investment in industry have amplified these trends, which have both driven and been driven by rationalisation and centralisation of services and infrastructure. This has consequently compromised liveability in regional areas and pushed people into cities. These changes have had profound impacts on rural, regional and remotely located businesses, communities and people.

Australian regional policy seeks to maintain economic and social vibrancy through regional-scale governance and ‘place-based’ policy solutions however, despite the rhetoric; Australia’s regions are shaped and largely controlled by the Commonwealth and the capital cities. International policy ideas and trends such as endogenous development and place-based initiatives have been influential in the direction decision makers have adopted for Australia’s regions, but without consistency of focus, funding and support, ‘fragmentation is one of the defining characteristics of the Australian model of regional development.’^[3] It was not always the case. Until the late 1970s, Australia’s regional policy was framed by a commitment to equity, which did not necessarily elicit efficient industries. The 1980s saw significant restructuring of policies and entire industry sectors as Australia began to engage with globalisation and the international marketplace. More and more, rural, regional and remote communities were threatened by rationalisation and centralisation of services and government investment. Australia’s industries are now some of the most efficient in the world and globally engaged. Many are based in non-metropolitan locations, but this has not necessarily augured well for communities and resident populations. This chapter will review regional policy over the last century and examine the impacts of policy decisions on communities and industries in rural, regional and remote areas of Australia.

Defining rural and regional Australia

Unlike other jurisdictions, in Australian political and public policy discourse, the notions of ‘region’ and ‘regional’ are often understood as synonyms of ‘rural areas’.^[4]. A federal parliament Standing Committee^[5] noted that, from a national perspective, regions in Australia have been defined in a number of ways including as:

• 85 biogeographic regions of Australia, identified cooperatively by federal and state government scientists;
• 69 statistical divisions, based on agreed definitions of a ‘region’ and identified cooperatively by federal and state statisticians and used by the Australian Bureau of Statistics;
• the 64 regions identified by the formation of voluntary Regional Organisations of Councils (ROCs), which are groupings of the approximately then 700, now more than 560 local governments in Australia;
• the 57 regions of the federal–state natural resource management regional bodies administering the Natural Heritage Trust and National Action Plan on Water Quality and Salinity; and
• the 54 regions of the nation’s ACCs.

Regional Australia is not homogenous; it includes a large, spatially diverse area with considerable economic, climatic, social, environmental, population and settlement diversity. However, regions are generally assumed to have something in common, such as topographical features (for example, the Snowy Mountains) or industry (like the Wheatbelt, known for its agricultural products, or the wine region of South Australia). Territorial boundaries are usually politically significant and may influence the distribution of power and resources. For example, state boundaries often delineate particular funding arrangements or policies.

From a policy perspective, there are a variety of regional administrative designations. There are multiple agencies, such as the Commonwealth government Regional Development Australia (RDA) committees, Western Australian Regional Development Commissions, local government regional zones and local government areas, each of which have defined roles with particular boundaries and funding arrangements.

The Australian Bureau of Statistics (ABS) Census of Population and Housing is held every five years. Because participation is compulsory, it provides a consistent range of information about the economy and populations for all Australia. ABS boundaries occasionally change with population fluctuations but are consistent enough to provide useful baseline information about places and people. The data are divided into geographic areas, defined by the Australian Standard Geographical Classification (ASGC). The ASGC determines statistical areas based on population densities, geographical structures, such as remoteness, and urban/rural definitions.^[6] Most states have multiple regions.^[7]

The ABS divides Australia into five classes of remoteness (Remoteness Areas [RAs]) based on the Accessibility and Remoteness Index of Australia (ARIA). This employs road distance measurements to the nearest service centres. The RAs are:

• major cities
• inner regional
• outer regional
• remote
• very remote.

Regions and regional Australia are not static; there is constant change, driven by market forces, climatic conditions, social trends and even political arrangements. These influence where people live and what livelihoods they pursue. Policy decisions are also fluid but influential; how and where public and private investment is directed impacts job prospects, liveability and accessibility and therefore the links between people and places.

Regions and regional Australia are not static; there is constant change, driven by market forces, climatic conditions, social trends, and most recently, a pandemic. Policy decisions are also fluid but influential; how and where public and private investment is directed, affects job prospects, liveability and accessibility and consequently the links between people and places.

Regions can also be functional economic areas with specialisations and competitive advantage, meaning that they have physical or resource attributes that give them advantages over competitors. Another type of functional region is defined by natural resources, such as a water catchment or natural endowments. However, even though rural and regional Australia can be defined in many ways, in broad policy terms, regional Australia is assumed to be all the towns, cities and communities outside Australia’s six largest capital cities.^[8]

Australian Regional Development Policy in the Twentieth Century

Collits explains that regional policy ‘typically responds to regional disparities and often focuses on economic development, jobs and investment’.^[9] This focus is not particular to Australia. In most international jurisdictions, regional policy is viewed as economic policy with the objective of setting policy levers to avoid regional disparities and uneven development.^[10] In its Europe 2020 Strategy,^[11] the European Commission states that regional policy is an investment policy, supporting and promoting job creation, competitiveness, economic growth, improved quality of life and sustainable development. In Australia, in addition to its strong economic focus, regional policy also seeks to address liveability and ensure comparable services for those living outside the large cities.

In the current Australian context, neoliberal policy settings encourage capacity building and economic growth through harnessing regional attributes, rather than through external investment and government-led initiatives. Where there is recognised regional disadvantage, it is expected that regional policy has the potential to be a strategic intervention, rather than directly investing in initiatives.

Policies impacting regional Australia

Traditionally, the Commonwealth has viewed regional development as a state responsibility because the states have constitutional responsibility for transport, resource management, infrastructure, land use activities, planning, the environment and local government, all of which are important to rural, regional and remote places. The distinction between regional policy and other general policies that have impacts on regional Australia is often blurred. Some national policies have more of a regional impact or focus than others, but they are not necessarily referred to as regional policies. For example, water and climate policies, energy and transport policies and National Competition Policy have all had a considerable influence on regionally based industry sectors and, in some cases, the liveability of rural, regional and remote communities, but their influence is not limited to the regions. Aboriginal interests, for example, are rarely specifically articulated in regional policy, partly because of the different ways these interests are incorporated into institutional structures. Generally, there is a separation of responsibilities and governance structures for regional development and Aboriginal affairs.

Even at the state level, regional policy has had decreasing prominence as businesses and populations have gravitated to the capitals. However, there have been some exceptions when, for political or market reasons, governments have re-focused their policy and investment attentions on the regions. Perhaps the most outstanding example of this was the introduction of the Royalties for Regions program by the Western Australian (WA) government in 2008, which will be discussed below.

Postwar period

There have been periods when the Commonwealth has taken a more overt regional policy position, imposing policies that have had significant influence on regional Australia. The post–Second World War period was the first time the Commonwealth specifically used regional policy as an economic mechanism to assist Australia to transform from a wartime to a peacetime economy through domestic reconstruction and a national regional development program. The Commonwealth encouraged postwar migrants to relocate to regional areas by sponsoring jobs on major infrastructure projects such as the Snowy Mountains Scheme and hydro-electricity projects in Tasmania. Returned servicemen were incentivised to take up soldier settlement blocks throughout rural areas to repopulate the hinterlands and reinvigorate Australia’s agricultural industry.

At the same time, the Australian government encouraged particular sectors to develop, which had both direct and indirect impacts on regional areas and local economies. This was done through various reconstruction policies, rather than specific regional development policies. For example, tariff protection and import controls in the postwar period enabled manufacturing and new factory jobs, some, but not all, of which were in regional towns, such as Geelong, Newcastle, Whyalla and Gladstone. This significantly boosted the populations of those towns and their role as regional centres.

From about 1950 Keynesian economics (promoting government’s role in sponsoring economic growth through government expenditure and lower taxes to stimulate demand) became the principal ideology in Western nations.^[12] In Australia, public investment in regions was justified as it stimulated growth and sought to achieve spatially equitable development.^[13] This was not necessarily viewed as regional policy, but rather as regional development for the benefit of the entire nation. The Ord River irrigation scheme in WA, regulation of production and protection of commodities, fuel subsidies and cross-subsidisation of transport and communications infrastructure are examples. Until the mid-1970s, Australian industry was largely protected through subsidies and state regulation. The agricultural sector was a particular beneficiary with a range of subsidies and bounties to protect and support farmers. In addition, many regulatory authorities, statutory marketing and price support schemes were in place that shielded the agricultural sector from market fluctuations. Regional towns and communities were strongly supported by government-funded infrastructure on the principles of equity rather than market forces. Costly services such as transport networks, schools, health centres and other facilities were established throughout rural, regional and remote Australia, boosting communities and primary industry development. Despite the small and scattered towns and communities, the investment in rural, regional and remote places was justified by the notions of ‘state paternalism’^[14] and ‘countrymindedness’, which Lockie describes as the ‘association of Australianness with rurality and the broad acceptance of the importance of rural activities for the Australian economy’.^[15]

As early as 1890, the rural population was lamenting the ‘evil of centralisation which would seek to advance the capital city … at the expense of the country districts’.^[16] From the 1920s, countrymindedness was manifested politically through the formation and electoral success of the Country Party, now National Party. Despite the dominance of the coastal cities since European settlement, the egalitarian notion of the archetypal, usually male, Australian who ‘had a go and built the nation’ had considerable electoral cache throughout Australia, with broad acceptance of ‘agrarian socialist policies’.^[17] As a result, voters in rural, regional and remote areas had a disproportionate advantage at the ballot box in many jurisdictions. It was only in 2005 that WA finally secured one-vote-one-value legislation; until then rural votes were worth almost twice the urban vote,^[18] much to the chagrin of the Australian Labor Party (ALP) whose electorate was traditionally urban-based.^[19]

In 1972, the Whitlam Labor government established the Department of Urban and Regional Development (DURD) and, once again, the Commonwealth overtly engaged in regional development policy. DURD’s initiatives were based on specific policies aimed at improving co-ordination between the Commonwealth, states and local government. DURD formalised planning regions and developed a population distribution plan identifying growth centres.^[20] However, the Commonwealth’s regional policy focus was short lived. The Fraser government’s election in 1975 ended the federal regional development policy foray, leaving it to the states to look after regional matters until the 1990s. Since then, the importance of regional policy at the Commonwealth level has waxed and waned. As noted by Eversole, ‘the imperative to act in favour of Australian regions ebbs and flows with the political climate, creating a fragmented landscape of regional policy initiatives’.^[21] Politics, therefore, has considerable influence over what policies are implemented and where they are applied.

The late 20th century and neoliberalism

Until the late 1970s, Australia’s regional policy was framed by a commitment to equity, which supported communities throughout rural, regional and remote Australia but did not necessarily elicit efficient industries. The 1980s saw significant restructuring of policies and entire industry sectors after the election of the Hawke Labor government in 1983. Australia began to engage with global conditions and the international marketplace, and the broad government policy was reoriented to efficiency and market forces, which underpin neoliberal principles. The hallmarks of neoliberal policy principles are privatisation and state deregulation, increased reliance on market forces, rather than government intervention, to drive change, and devolution of responsibilities and functions from governments to the private and community sectors. Government, therefore, began to withdraw from its traditional role as a source of infrastructure investment and provider of services.

The shift to neoliberal principles was not limited to regional Australia, but its impacts were deeply felt in rural, regional and remote communities. The viability of regional communities came under scrutiny and government services and infrastructure expenditure began to be rationalised and/or centralised, shaped by user-pays and self-help ideals. Throughout the 1980s and 1990s, rural, regional and remote communities experienced reduced service delivery and infrastructure investment, as government responded to market demands rather than equity considerations. Communities were increasingly expected to more self-reliant. At a government level, the Commonwealth began to devolve responsibility to the states, and the states shifted many service provision responsibilities to local government – the least resourced tier of government.

Australia’s industries are now some of the most globally engaged and efficient in the world, but there are fewer people involved due to greater dependence on technical and capital investment, often at the expense of the labour force. Farmers, for example, use capital-intensive methods to maximise outputs; their farms are bigger to take advantage of economies of scale, but they often employ fewer people. The shift towards neoliberal principles in government policy boosted Australian gross domestic product but had a catastrophic impact on many rural, regional and remote communities as people left to access services in larger population centres or were squeezed out by the scale of many of the businesses left behind. This began a prolonged period of depopulation across all Australian rural, regional and remote communities, with the exception of those either on, or very close to, the coastline. By 2000, more than 80 per cent of the Australian population lived within 50 kilometres of the coast.^[22]

The Hawke and Keating Labor governments (1983–96) implemented comprehensive neoliberal reforms, deregulated many sectors, including the finance industry, and sold off government entities such as Telstra, Qantas and the Commonwealth Bank to the private sector, all of which had immediate impacts on services at the local level, with many withdrawn because the private sector was not prepared to underwrite unviable businesses. Commonwealth and state governments were keen to re-orient the economy to capture the perceived benefits of an increasingly deregulated global marketplace. The Commonwealth government initiated several different regional development programs, purportedly to assist regional businesses and communities, but the emphasis was on economic efficiency, competitiveness and entrepreneurialism. The expectation was that self-directed and largely self-funded regional development programs would drive change. The commitment to laissez-faire (market-led) policies also led to the sale of state government assets, the privatisation of public services and the devolution of some public services to local governments. By selling off, contracting out or shifting the responsibility to private consultants and local government for inefficient publicly owned and operated assets and services, governments were able to reduce overall levels of expenditure and emphasise the role of markets in achieving an ‘efficient’ allocation and provision of services. In effect, neoliberalism privileged economic efficiency above social equity or, as Stilwell argued, ‘structural efficiency first, redistribution later’.^[23]

Australia was in recession in the early 1990s, and ‘interest in regional development policies … experienced somewhat of a resurgence’ due to two interrelated causes.^[24] First, the neoliberal reforms’ contribution to regional socio-economic disadvantage was becoming apparent, and second, the government was forced to consider the adverse implications of their reforms on the 1993 federal election.^[25] Government was increasingly challenged by regional voter dissatisfaction as services and infrastructure were rationalised or withdrawn and local capacity in the regions was compromised.

The Hawke and Keating governments prepared numerous regional development reports between 1990 and 1993, emphasising bottom-up, local entrepreneurship but with limited funding support. The Kelty Report (Developing Australia: a regional perspective) on regional economic development^[26] was launched in December 1993 by the federal government, with high hopes that employment difficulties and low incomes being experienced in many regional communities would be addressed. The report proposed the establishment of Regional Economic Development Organisations (REDOs) (later Regional Development Organisations [RDOs] and Area Consultative Committees [ACCs]) across Australia to develop individual regional strategies, promote regional development and improve policy co-ordination between federal, state and local governments, a strategy that was subsequently taken up in the federal government’s Working Nation program in 1994.

Working Nation was a departure from previous approaches as it viewed ‘government as facilitator, rather than the driving force’,^[27] but the overarching message was still self-reliance. Australia’s geography, its spatial imbalances and the high concentration of its populations on the coastal fringes raised particular problems for government. In the absence of a coherent national policy for urban and regional development, jointly implemented by federal and state governments, there was limited manoeuvrability for the redress of regional inequality.

The agricultural sector was particularly hard hit by the transition from a favoured, government-supported industry sector to one that was expected to compete internationally without government subsidies or other protection. Economies of scale, technological primacy and increased harnessing of scientific and economic efficiencies demanded capital investment, and inevitably caused the failure of inefficient operations. These changes, over a relatively short period of time, accelerated a process of decline in parts of regional Australia that had historically been economically and socially dependent on agricultural production.

Regional environmental policy

One new area of policy that did attract broad political and funding commitment was the environment. Since the early 1970s, environmental issues have increasingly come to the forefront of discussion regarding sustainability. Debates regarding the conflict between economic and environmental sustainability gained political traction. The Brundtland Report^[28] crystallised the debates highlighting unsustainability in terms of a threat to survival. The report overtly linked environmental sustainability and the uneven distribution of economic benefits.^[29]

After the Brundtland Commission emphasised the importance of sustainable development and pushed it to the top of the agenda of the United Nations and the multilateral development banks,^[30] environmental protection became a major Australian government policy objective. In the late 1980s, the federal government embarked on a series of sectoral ecologically sustainable development investigations, which culminated in the adoption of the National Strategy for Ecologically Sustainable Development in 1992.^[31]

A national land care program was jointly proposed by the National Farmers’ Federation and the Australian Conservation Foundation, and in 1989 then Prime Minister Bob Hawke, in the Statement on the Environment, announced the Decade of Landcare. Water catchment and the management of salinity were two key areas. Programs included in the Decade of Landcare focused on implementing ecologically sustainable land use around Australia, promoting research and action regarding land degradation throughout rural, regional and remote Australia, and raising awareness of the importance of conservation and sustainable practices.

australian Regional development policy 2000–2022

The policies driving regional development at the conclusion of the 20th century aimed to maintain economic and social vibrancy through regional-scale governance and place-based solutions, in line with the ‘new’ paradigm that gained considerable traction in the first decade of the 21st century. The ‘new’ paradigm in regional policy has been strongly driven by the Organisation for Economic Co-operation and Development (OECD) since about 2006. It emphasises area-specific or place-based approaches, rather than whole-of-government arrangements.

Much like other Liberal–National (Coalition) governments, the Howard government (1996–2007) showed little inclination to drive a national regional development agenda, maintaining ‘that local and regional development was a State responsibility’ and the Commonwealth was often a ‘competitor, rather than a partner of the States’.^[32] The place-based approaches, framing the regional development ‘problem’ as the lack of regional competitiveness and underused potential, was a convenient reason for the Howard government not to pursue a national regional policy agenda.

Despite the rhetoric that regional policy should be shaped by the regions themselves, the control mechanisms of power and resources resided in the federal and state parliaments and resources flowed according to political and centralised policy commitments. Almost counterintuitively, the ALP has traditionally been more committed to implementing regional policy than its more conservative Liberal/Country/National Party opposition, continuing its long tradition of bypassing the states. Between 1996 and 1998, the Howard government distanced itself from ‘the Keating Government’s regional interventionism’^[33] and dismantled the Regional Development Program. The REDOs and RDOs, were scrapped although some RDOs survived as local corporations. The ACCs remained and were restructured for the purpose of channelling federal funds to regional communities,^[34] but they were usually small organisations with limited regional impact.

Structural changes in the financial, transport, manufacturing and trade sectors affected the geographic distribution of people, industries and wealth in regional Australia, inducing new configurations. Under the Howard government, labour and employment conditions were deregulated and flexible work arrangements such as fly-in/fly-out (FIFO) and drive-in/drive-out (DIDO) became increasingly popular. Long-distance commuting practices were used by many private and public sector organisations, enabling employees to choose where they live, often in the capital cities and larger, better-resourced regional centres, and travel to work in other places, usually accommodated in employer-paid accommodation.^[35] Flexible work arrangements reduced the need to continually invest in smaller, less resourced communities, causing many benefits, such as income expenditure and housing investment, to flow to the bigger centres instead.

Continued orientation of the Australian economy towards global markets intensified the effect of market mechanisms, causing continual change in technologies, products, markets and modes of distribution. The impact of technological change was double-sided: it increased demand and employment, but it also displaced workers and made some jobs obsolete, particularly in the agricultural and manufacturing sectors.

From a social perspective, restructuring was not achieved without pain and a sense of loss for many in regional Australia. The consistent paring back of regional development investment continued to incur voter backlash. This was particularly evident in the rise of One Nation in the 1998 Queensland election. One Nation received 23 per cent of the primary vote, and won 11 of 89 seats in the 1998 Queensland state election.^[36] The party’s success was generally attributed to its appeal to rural voters, who were increasingly disillusioned with the major parties and felt their lifestyles were under threat.^[37] The Commonwealth responded with attempts to soften the non-interventionist policy direction, but once again there was limited time and investment, resulting in policy fragmentation,^[38] and the electorate was not convinced.

The resources boom

From 2001 onwards, Australia experienced a decade of outstanding growth and prosperity, principally on the back of a resources boom, fuelled by almost insatiable demand from China for resources, including coal, iron-ore, energy and agricultural products. Many did not see this boom period coming and many rural, regional and remote communities were unprepared, especially those at the centre of the mining boom, in regions such as the Pilbara in WA and the Surat and Bowen basins in Queensland. This boom period continued unabated for more than a decade, despite the GFC (2007–09) dragging down the major global economies.

The boom had broad impacts across all of Australia, with many people and communities, especially in the cities, where most long-distance commuting miners resided and businesses and mining service providers were located, enjoying the benefits. The outcomes for people living in rural, regional and remote communities were mixed. For those communities close to mining activities, the impacts were not always beneficial, with intense demand for housing, infrastructure, services and labour driving up prices and displacing many who could not compete with the wealthy mining companies. Furthermore, the decades-long neglect of regional services and infrastructure impeded responsive development,^[39] causing housing shortages and inadequate utility services.

The outcomes of the boom are a classic example of uneven growth and the two-speed economy. Regional Queensland and WA bore the consequences of the boom conditions; the former due to its large coal mining operations and the emerging coal seam gas industry, and the latter principally due to its huge and rich iron-ore resources, but also its offshore oil and gas reserves. In the Pilbara, at the height of the boom, the overall cost of living was 37 per cent higher^[40] than that in Perth.

While the majority of Australia’s rich mining resources tend to be in remote locations, some are located where agriculture is also well established and highly productive – for example, the Darling Downs in Queensland, the Hunter Valley in New South Wales and the Peel region in WA. Land use conflict, access to land and water resources and pressure on services caused considerable antagonism between farmers and mining companies,^[41] and many state agencies and local governments did not have the capacity and were not properly resourced to deal with the issues.

Critics of the status quo

Communities and industry leaders looked to government for regional policies that would support towns and communities and help them retain the benefits from boom economic conditions. Beer,^[42] along with others,^[43] contends that regional development in Australia was hampered by a lack of long-term strategic directions and the outcomes of the system of federalism.

Beer is particularly critical of political ideologies grounded in neoliberalism that were wary of direct intervention in regional economies and emphasised short-term political responses, rather than long-term strategic interventions. As explained by Tiley, ‘the Australian Government had the financial capacity to empower an effective regional development network; the state and territory governments had the constitutional power; while local government had neither the funding nor the power, but had the commitment needed to deliver change’.^[44] Beer claims that the division of powers between the three tiers of government contributed to a clouding of the lines of responsibility and accountability, and that the importance and role of regional development were not understood or recognised.^[45] Consequently, resources and responsibilities are still abrogated by the spheres of government with superior power, which instead focus on short-term ‘political point scoring’. This was particularly evident in the Rudd and Gillard governments.

In 2007, the Rudd ALP government sought a return to interventionism and established Regional Development Australia (RDA) committees to administer regional funds through local government authorities, bypassing state government agencies,^[46] once again reverting to the traditional ALP practice of bypassing state governments. RDA committees replaced REDOs (later RDOs and ACCs), which were Commonwealth-funded offices in locations across regional Australia. The committees’ purpose has generally remained the same since the REDOs were established during the Keating government in 1993: identify key regional economic and industry development issues, investigate the prospects for a more even distribution of regional development and employment, examine actors influencing regional investment and suggest appropriate policy changes.

The REDOs, RDOs and ACCs were ineffectual, however, because they did not have the capacity to make a significant difference, lacking both resources and political continuity. The RDA committees were no different, although under Rudd the budget allocation was reduced and the community members working on the committees providing overarching governance were unpaid. The rhetoric of support for regional Australia was familiar, but the electorate was disgruntled, and the 2010 election returned a hung parliament. The ALP finally formed government after three independent, rural-based politicians gave their support in return for generous concessions to regional Australia.

Little changed under the Abbott and Turnbull Coalition governments (2013–18) with poorly resourced policy and rebadging of old initiatives. In 2016, under the Turnbull government, the Commonwealth reviewed the RDA committees, recommending their cessation.^[47] The review supported regional-specific solutions and the alignment of regional development boundaries with those of states and territories.

However, the author of the review, Warwick Smith, considered the Commonwealth commitment to regional Australia as piecemeal at best and perhaps even tokenistic: ‘the Australian Government, along with most state and territory governments, have not shown total commitment to the RDA programme’.^[48] Smith identified a range of structural inefficiencies that hindered the functionality of RDA committees, but perhaps the most fundamental weakness of the program was the lack of appropriate funding or support to enable the committees to deliver the Australian government’s regional agenda: ‘The Australian government delivers its broader policy and programs, even regional programs, in isolation to, and separately from, the RDA programme.’^[49]

The budget allocation for RDA committees has not changed for a decade, despite costs increasing over that time. In large jurisdictions such as WA and the Northern Territory, additional challenges such as the high costs of doing business in many rural, regional and remote places, travel time over large distances, poor connectivity and problematic telecommunications services, further undermining the efficacy of RDA committees. The annual budget of $18 million is expected to fund the entire national RDA program, across 52 committees. This essentially pays the salaries of the executive directors, with little left to achieve the central purpose of the committees: to support the development of regional Australia. Funding allocations available for projects, and decisions regarding how and where the funds will be spent, are often determined by other Commonwealth government commitments or local federal politicians’ agendas, rather than the local RDA committee or agreed funding priorities.

The arrangements reflect the ‘new’ paradigm of regional development, exhibiting ‘the familiar mixture of unconnected regional programs; inadequately resourced regional structures … and an unflinching faith that spending large amounts on infrastructure projects big and small across most regions is the best way to fund regional development’.^[50]

In 2017, the Commonwealth released its ‘Regions 2030 – Unlocking Opportunity’ policy.^[51] Despite its new name, the policy includes elements of many of its predecessors and of the ‘new’ paradigm, focusing on local decision making, tailor-made regional solutions and unlocking regional economies, all without a new funding model. Regional bodies with political power have never become a fixed part of the enduring regional administrative landscape and Commonwealth regionalisation in particular has always been controversial.^[52] This is especially evident with the focus on climate change and mitigation strategies.

The lack of stable leadership in the federal ministry has undermined commitment and policy coherence. Federal leadership changes since 2010 and major political disruptions associated with citizenship credentials of politicians have meant that regional development has not been a focus of successive governments, and the portfolio has lacked ministerial and hence leadership consistency. Since 2010 there have been ten ministers with responsibility for the RDA network. Not surprisingly, regional development policy has been described as ‘fragmented’ by a range of commentators and researchers.^[53]

Regional policy 2022-

In 2022, the Albanese-led Labor Party defeated the Liberal Party at the polls. Little changed for regional policy with RDAs continuing to be the vehicle by which the Commonwealth delivered programs. However, nationally, the transition away from a dependence on fossil fuels towards a more carbon neutral economy has presented complex and multi-scale challenges for rural, regional and remote communities. The practical implications of the national policies demanding large-scale renewable energy projects in regional Australia for the benefit of the entire nation are acutely felt at the local level. As noted by Krawchenko and Gordon,^[54] restructuring is inherently geographical and ‘place’ is fundamentally influenced as decarbonisation unfolds in rural, regional and remote places. A report by the Regional Australia Institute found that ‘communities feel overwhelmed by the scale and speed of renewable energy development in their regions. Approval and regulation processes are complex; community engagement is fragmented; there remains a lack of clear information about the transition; and some communities are experiencing fatigue from the cumulative impacts of consultation’.^[55] There is concern that Australia’s commitment to the Paris net zero emissions agreement will unfairly impact rural, regional and remote communities and businesses with the benefits flowing to the larger cities. Clear policy and regulatory frameworks contribute to social licence, but to date, a lack of meaningful engagement, project coordination and empowered community decision-making is undermining progress in key communities.

A second national concern for the Albanese government has been a housing crisis. It has been decades in the making and researchers link it to the ‘financialisation’ of housing, a cornerstone of neoliberal market dynamics.^[56] As noted by Watson (2025), beyond structural bottlenecks such as supply difficulties that limit the capacity to respond to demand, and inflated construction costs due to distances, local labour shortages and constrained access to finance and borrowing capacity,^[57] regional housing supply is further constrained by sluggish government coordination, and the requisite clearances for environmental and cultural protections.^[58] As noted earlier in this chapter, for more than three decades from the 1980s, there was mass migration away from regional Australia to the capital cities, but with the prolonged resources super-boom from the early 2000s, and the population shifts back to the regions during the 2020 pandemic, the pendulum has shifted back. With rates of population growth in regional Australia not seen for 50 years and a housing and accommodation market under extreme pressure, the potential for greater productivity and innovation in rural, regional and remote areas is constrained. The Regional Australia Institute argues that ‘regional housing challenges are structural, varied and different to capital city challenges. They require a suite of dedicated and place-based responses’.^[59] Failure to address these may have significant productivity implications for the entire nation.

The third challenge for the Albanese government has been national labour shortages, particularly skilled workers. Together with an ageing population, and a housing and cost of living crisis, productivity indicators show a worrying downward trend.^[60] The Albanese government is seeking to pivot its policy focus for Australia’s immediate future on addressing the underlying productivity drag, focussing its efforts on rural, regional and remote Australia^[61] where the majority of export industries are located. There are consistent calls for placed-based investments in skills, infrastructure and regulatory reform to lift productivity in the regions to meet the lift in productivity.

The ‘new’ paradigm

The twenty first century Australian regional policy approach is firmly embedded in the neo-liberal framework of the ‘new’ paradigm and its key characteristics as defined by the OECD and others.^[62] As explained by van Staden and Haslam McKenzie ‘place-based approaches frame the regional development “problem” as the lack of regional competitiveness and under-used potential, while acknowledging the geographical context of regions (social, cultural and institutional)’.^[63] The approach focuses on mobilising regional competitiveness, rather than compensating for the ‘locational disadvantages of lagging regions’^[64] and it favours endogenous asset development with ‘a preference for identifying and exploiting opportunities for growth, rather than ameliorating… decline’.^[65] Place-based planning also advocates regional interdependency, and as highlighted by Dufty-Jones and Wray ‘the fortunes of all cities and regions are intimately tied up with each other’.^[66]

Despite the economic primacy of regionally based activities over the last century, the population and economic growth has been evident in cities and often at the expense of regional areas. The phenomena of a two-speed economy and spatially uneven development was especially evident during the resources boom. More than a decade ago, Tomaney argued that ‘the concentration of economic activity in cities reflects the extent to which firms derive the benefits of agglomeration economies, which are the main source of productivity gains’.^[67]

Tiley explained, ‘relatively remote mining and agriculture-based regions faced a productivity-driven squeeze on their population carrying capacity, often characterised by continuing rationalisation of settlement patterns and the emergence of dominant “sponge cities”’.^[68] Economic development strategies and infrastructure investment in these regions needed to focus their particular competitive strengths’. More than a decade later, the cost of ignoring this advice is evident. Such advice was particularly painful for communities such as those in the Pilbara where their competitive strengths, the resources industries, were in such high demand, generating a significant proportion of the nation’s GDP.  Combined with the failure of government to act on decades of advice^[69] suggesting there was inadequate infrastructure or services to support the communities should there been increased global demand for commodities, they could not cope. In 2011, it was estimated there were more long distance commuting workers in mining transit worker accommodation (TWA) in the Pilbara than the entire population of the region.^[70] Long distance commuting, commonly referred to as fly-in/fly-out (FIFO) was very beneficial for Western Australia, and especially Perth, but there were few benefits for the host communities (those that were near or adjacent to minesites). By contrast, mining towns struggle to maintain adequate services due to the lure of higher paid mining jobs and the hollowing out of communities due to FIFO.

As a result of the prolonged resources-driven boom period, Western Australia has consistently been the fastest growing state population over two decades. Perth was the main beneficiary from population growth with a 36 per cent increase over 15 years to 2016^[71] and the  Western Australian per capita gross income up to 50 per cent higher than it was ten years prior and household net wealth increased by 70 per cent in real terms in the decade 2003–2013.^[72] In the Pilbara however, housing and accommodation shortages pushed costs to unprecedented levels, exceeding capital city prices.^[73] The overall cost of living in the Pilbara was 37 per cent higher than that of Perth in 2011^[74] with little change in 2023 (30 per cent higher),^[75] a powerful reason for people not to move to the region, particularly as services were well short of those offered in the city with no government enthusiasm to rectify the situation).

As explained by Tonts et al., ‘regional development in communities whose population and industry are dominated by one sector is strongly shaped by divergence and convergence forces of a strong core-periphery relationship operating at wider spatial scales, including fluctuating commodity prices, geopolitical circumstances and the vagaries of national and state policy’.^[76] Neoliberal policy regimes exacerbate the core-periphery, boom-bust dynamics through market forces, with limited safety nets to prevent mono-economies occurring in resource communities under extreme pressure, especially in boom conditions, thereby increasing their vulnerabilities and precariousness in periods of downturn. This goes some way to explaining why resource communities in remote locations are characterised by population churn, instability and poor public and private investment in infrastructure and services.

Conclusions

Regional Australia is, as you would expect, unique. However, many of Australia’s current regional development policies are not dissimilar to those of other First World nations, despite Australia’s significant climatic, political, geographic, environmental and economic differences. Nonetheless non-metropolitan areas are often viewed as the policy periphery, struggling to maintain population, vibrancy and viability as businesses and people are drawn to the political and economic centres located in capitals.

While Australian regional development policy dictates that the regions should have considerable autonomy because they understand local context, conditions and potential opportunities, the resources and decision-making power tend to reside in Canberra or the respective state capitals. Despite the Commonwealth claiming that regional development is the remit of the states for most of the last 120 years, it dictates overarching national policy by virtue of its fiscal dominance. Furthermore, it has considerable power over the other spheres of government and the outcomes for rural, regional and remote communities. The states also play a significant role in regional development, dictating how resources will be spent and where; ‘thus regional Australia’s organisations, institutions and governance mechanisms remain structurally on the periphery’.^[77] It is not surprising then that regional development initiatives and policies have lacked consistency, causing duplication and widening service gaps across multiple government levels.

According to Sotarauta and Beer, ‘to most observers, the regional development system in Australia appears chaotic and underfunded relative to needs’.^[78] The lack of uniformity and consistency of both Commonwealth and state regional development agencies have contributed to a national regional framework that is without coherence.^[79] Consequently, ‘fragmentation’ in regional development has been a major problem, with policy responsibility frequently shared between the federal, state and local spheres of government’^[80] and a slew of organisations, including many from the private sector, involved in the delivery of regional development programs. There are no signs that these trends are likely to change while Australian regional development policy is characterised by ‘modest government investment and locally provided inducements’.^[81]

References

About the author

Professor Fiona Haslam McKenzie was educated in Australia and the USA. Prior to her current role, she was the WA director of the Australian Housing and Urban Research Institute, served as the principal research leader of the Regional Economies – Enduring Community Value from Mining program from 2012 to 2015 and was subsequently appointed as co-director of the Centre for Regional Development at the University of Western Australia in 2015. Fiona has served on several government and private sector boards, undertaken work for corporate and small business sectors and has published widely.