Place-based policy to solve regional inequality

In response to the Australian Senate’s Inquiry into Regional Inequality in Australia, the Regional Australia Institute (RAI) has identified many critical areas for policy focus in regions. These include human capital, where regions face education, employment and income inequality; transport and technological infrastructure; and innovation and entrepreneurship.  

To address inequalities between regions and ensure regional Australia continues to play a productive role in contributing to the national economy, governments need to work closely with regional leaders to develop place-based strategies and help provide the right political and policy settings for fostering regional growth.

The gaps are largest in the Heartland or more rural regions which have lower levels of education, employment, innovation and technological connectedness than more populous areas.  

But it’s not just remote regions which are suffering from ongoing inequality. In more closely connected regions, as well as Heartland regions, towns with populations under 1000 have less than half the number of doctors as the national average, only 62 percent have a primary teacher and about half have a secondary school teacher. This compounds already poorer health and education outcomes in regional areas.

Metropolitan high school completion rates are almost double that of regional areas, and residents of metropolitan Local Government Areas (LGAs) are two to three times more likely to have university qualifications as those in regional LGAs. 

A lack of opportunity should not be assumed as the cause of persistent inter-regional inequalities. Job vacancies in regions have grown by 20 per cent since February 2016 compared to only a 10 per cent increase in our largest cities. The lack of necessary transport and technological infrastructure means that regional areas are finding it increasingly difficult to fill those vacancies, impeding their ability to grow and diversify their labour markets. The result of these factors means that, since 2012-13, inner city incomes growth has outpaced regional income growth.

Only 68 percent of regional households have an internet connection, and only six of the one hundred most technologically ready LGAs are regional.  As a result, only 3 percent of the regional Australian labour force is employed in technology related industries, making it difficult for regions to “future proof” their communities against the impact of new technologies which will significantly change the way in which most jobs are done. At the same time, this gap prevents regions from taking up opportunities for the creation of new jobs.

Regional LGAs also still lag significantly behind their metropolitan counterparts when it comes to entrepreneurship and innovation, with only 21 regional LGAs present in the top one hundred on the RAI’s innovation index.

In our submission to the Senate Inquiry, the RAI suggests that more integrated and collaborative government approaches, at all tiers of government, could produce better outcomes for regional Australia by:

• improving local service delivery to ensure government spend on services supports local jobs and population retention;
• effective international migration strategies to stabilise the population and meet skilled and unskilled workforce demand;
• effective industry and economic policies to maintain and improve the competitiveness of the key local industry (this relies on effective national mining, agriculture and tourism policies) and supporting local entrepreneurial initiatives to diversify or expand the local economy; and
• enhancing connectivity to urban areas and international markets via improved transport and telecommunications infrastructure.

By recognising that different regional types face different problems, place-based policy can be developed so that regions can begin to address the barriers to them gaining stronger economic and social outcomes for their communities.

Click here to read the full submission

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