Effectiveness of place-based transition packages
When communities and regions face major economic changes including the closure of a major employer in the town or region, governments often step in to help the region manage these changes. This assistance can come in the form of a place-based transition package.
Examples of these packages include the Sustainable Regions Programme, which ran in various places throughout Australia; the Commonwealth and Tasmanian government’s Caterpillar Transition Taskforce, as well as the Commonwealth and South Australian response to the closure of the Mitsubishi plant – which included the Structural Adjustment Fund for South and the Labour Adjustment Package.
Placed-based transition packages are distinct from other policy instruments because they are targeted at a local economy or a specific place. They are designed to be responsive to the specific economic experiences of towns and regions – no two of which will be exactly the same.
The packages are offered to help displaced workers find new jobs, and to create jobs in other businesses and industries.
Yet these interventions have their critics. In 2017, the Productivity Commission recommended that place-based transition packages no longer be funded by governments. The Commission cited a lack of evidence of the effectiveness of these packages which, they claimed, was largely due to their lack of robust and transparent evaluation.
However, a lack of evaluation data does not necessarily mean that these packages are ineffective. Instead, it points to a large evidence gap: where and when have these packages produced results, what lessons can we learn from past experiences, and what kinds of things do governments need to avoid?
Through this research, the RAI is addressing this evidence gap as part of our Shared Inquiry program 2018. This body of research fits within our Regions in Transition theme.
We are working with the University of South Australia and Southern Cross University to interrogate the historical data and to understand the impact that these transition packages have had on the communities in which they’ve been implemented.
So far we have identified several key factors that influence these interventions. We’ve also compiled a list of policy tools that governments commonly use when implementing them, which are set out below:
| Commonly used policy tools within place-based transition packages | |
| Type of assistance | About |
| Employee assistance | Usually involving career counselling, retraining, and access to Centrelink without usual waiting periods. Generally coupled with grants based interventions. |
| Exit assistance | Payment to individual businesses to leave sector. (compensation) |
| Regulatory reform assistance | Support (financial or otherwise) given through a regulatory reform or changes in laws/policy. Examples include, preferential rezoning, waiving of fees, levies or taxes. |
| Grants to business | Usually a merit based grants program that has the broad aims of ‘diversifying the economic base’ of an area/place and creating jobs. |
| Grants for regional industry/sector projects | Grants usually to improve regional mechanisms and build regional capacity. |
| Grants for community projects | Usually to improve social outcomes for a place undergoing a transition, including amenity project. |
| Individual company assistance | Incentives or assistance to an individual company to either stay in operation or move into the region. |
While this work is still ongoing, several key issues have already emerged. Firstly, best practice tells us that any place-based packages work best when local communities, institutions, businesses and leaders are not only consulted on the intervention, but work with governments to target and implement the supporting package. This means not only building leadership capacity in regional communities, but collaborating with leaders and enfranchising their decisions through the process.
Secondly, place-based transition packages have funded hundreds of projects over the last two decades, and while there has been some failed projects, there have been some successes too. It’s important to better understand the factors that drive these distinctions so that governments can more effectively target future packages. A big part of this is understanding what success looks like, what can be measured and how interventions can be better monitored and evaluated.
The next stage of the project involves more analysis of historical packages but complements this with important case study work. We’re talking to six communities to understand where government money has been spent, to get a better sense of the impact these packages have had and what their legacies have been. The six places we are looking into are Whyalla (SA), Nhulunbuy (NT), Wide Bay (Qld), Grafton (NSW), Burnie (Tasmania) and Port Kembla (NSW).
The research will conclude early in 2019 and a project report will be released shortly thereafter.
Has your community been through one of these major economic changes? If so we are keen to hear your story. Please get in touch with us at [email protected]
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