Regional Australia InstituteRegional Australia Institute
  • About us
    • What is Regional Australia?
    • Our Staff
    • Careers
    • Board
    • Research Advisory Committee
    • Research Fellows
    • Corporate
  • News & Media
    • Media Releases
    • Move to More – RAI’s National Awareness Campaign
    • Stories of people who have #madethemove
    • Blogs
    • Regional Jobs Update
    • Newsletters
    • Editorials
  • Research & Policy
    • What COVID-19 means for regions
    • Current Project Agenda
    • Strengthening Liveability: a toolkit for rural and regional communities looking to grow
    • Migration Work
    • Policy
    • Publications Library
    • Regional Jobs Vacancy Map
    • Job Vulnerability Data Tool
    • Great Small Cities Data Tool
    • MOVE Tool
    • [In]Sight
  • Events & Programs
    • Regions Rising
    • Regional Australia Council 2031
    • Regional Activators Alliance
    • Lightbulb Moments
    • Pathfinder Initiative
    • Innovate with nbn Grants Program
  • Regional Australia Hub
  • Our Partners
  • Contact
  • Subscribe for updates

Public investment in regional economic development

Public investment in regional economic development

Blogs, Publications Library Cities and Towns, economics, Regional Cities, regional development July 31 2018

Government funded regional development programs have been criticised for being ineffective.

Growing regional areas so that they can accommodate larger populations is one possible solution to the ‘Big Australia’ debate. Making regional areas attractive places could help ease the burden on our major cities and offer a quality of life that can’t always be found in overcrowded metro centres.

But to be viable alternatives to major cities, regional areas need to offer residents social, health and community services as well as tangible economic opportunities, including access to employment. Regions with strong economies are generally better at offering these kinds of services and opportunities.

Boosting regional economies and helping them to pursue new economic opportunities is a priority for many governments. Governments at all levels commonly use regional economic development spending, sometimes in the form of competitive grants programs, to achieve this aim. These programs inject funding into places and businesses in the hope of catalysing opportunities and turning around poor growth trajectories.

These programs use funds that sit alongside other budget allocations that also contribute to improving regional social and economic infrastructure. They sit outside mainstream infrastructure programs that cover large scale transport, health or community infrastructure – and are a more agile policy tool. They enable governments to inject stimulus into specific places so that they can catalyse particular opportunities.

This is not to say that these programs are without their critics. Commonly censured for favouring projects in particular areas, especially during election cycles, these programs have also been criticised for doing little to measure or even create the ‘sustainable economic growth’ they were designed to stimulate. Their policy aims have been said to be too broad, so that they end up having had little or no economic impact at all.

But sometimes these criticisms go too far. At times, they have used the wrong measures to assess the impact of these programs. At others, they have confused a lack of evaluative evidence with evidence that these programs don’t work at all. Governments heeding calls to abandon these kinds of programs might then risk abandoning a policy tool that could be used, with a little more consideration, to bring real change to people living in our regional areas.

The baby and the bathwater

To better understand whether discretionary spending through these programs is catalysing regional economies, we need to better understand the way in which these program funds are allocated in the first instance. We need to look at what they funding and where the funding being directed. Are the projects they fund likely to stimulate a region’s economy, drive innovation and open new markets?

In 2017, the Regional Australia Institute (RAI) undertook this analysis. We looked at the kinds of projects that these discretionary programs funded. We analysed 866 projects across nine competitive grants-based programs from the Commonwealth and State governments between 2011 and 2016. All of these programs had regional economic development as a primary or lone objective.

We found that overall only about 23 percent of the $4.6 billion was directed to projects that had a direct purpose of stimulating economic or business growth in a region. The remaining funds were dispersed across diverse categories that included sports grounds, community halls, roads, health facilities, disaster or flood mitigation and water infrastructure. We called these programs ‘generalist’ programs. While they are designed as a catalyst for economic growth, they look to achieve this by spending on economic, social and community projects. In reality, we found that the overwhelming majority of funding is allocated to projects unlikely to achieve directly stimulate economic or business growth.

Specialist programs

But we did identify a kind of program design that was an exception to this pattern. We found that ‘specialist’ programs with a single, specific program objective and targeted to a specific area or type of activity allocated 96 percent of their funding to projects whose direct purpose was to stimulate economic or business growth in a region.

This is not to say that the kinds of social or community infrastructure generalist programs tend to fund are unworthy of funding or that they do not indirectly facilitate economic development. Investment in these projects may be sensible; however, economic development programs are the wrong mechanism to use to fund them.

Economic catalytic programs to cure all ills

Switching to specialist programs might help resolve the perceived confusion of objectives highlighted by the Productivity Commission in its recent review of regional development expenditure. It will also better enable the impacts of economic development investment to be measured.

Shifting to specialist programs would also avoid another potential problem wherein the use of generalist programs can mask underspends in other budgets.

Our analysis found that major health and social infrastructure projects were commonly funded out of generalist programs, as were other multi-stages projects. This leaves considered, long-term infrastructure planning (the kind we would need to accompany a Big Australia population policy) in regional areas incredibly difficult. Projects are subject to iterative funding for each stage, where the funding is contingent on the number and quality of competing applications. It also, leaves these projects vulnerable to decisions to close or refocus programs, which occurs regularly, particularly as a result of a change in government.

What can we do?

There are two clear, positive steps forward.

First, we need to understand the long-term impact of these programs as policy levers. Our analysis focused only on the allocation of funds to different types of programs. This is only part of the puzzle, but it did show that we need to adjust our expectations for program impact and that we need to find good ways to measure this. We need to better understand the circumstances in which these programs produce the best results.

We also need to look at the tools in our broader policy suite so that we don’t set these kinds of program as a default. This is a research priority for RAI in 2018. We are looking closely at regions in transition, identifying a variety of policy approaches and looking to understanding their effectiveness. We want to understand and assess these policy levers, rather than abandon them outright.

Second, we need governments to be very clear about their policy aims when they design and implement programs in regions. Our research has shown that these programs can target specific growth opportunities when they are used in a considered and targeted way. Setting clear objectives up front and then selecting the right level to meet these objectives will make programs much less vulnerable to criticism. They will be more likely to deliver for regions too.

Click here to read the full paper

Sign up to our Regional Futures e-News to make sure you stay up to date with the latest news and information.

Share this article:

  • Click to share on Twitter (Opens in new window)
  • Click to share on Facebook (Opens in new window)
  • Click to share on LinkedIn (Opens in new window)
  • Click to email this to a friend (Opens in new window)
Want to leave a comment?
Faster broadband could mean more jobs for Wollongong InSight into how your region is tracking

Related Posts

Just what the doctor ordered

#MadeTheMove, Blogs

We’ve Summited!

Blogs, Event

Momentum gathers in regional labour markets

Blogs

Regional Australia InstituteRegional Australia Institute
p 02 6260 3733
e info[at]regionalaustralia.org.au
Privacy Policy | Terms of use
© 2017 Regional Australia Institute
ABN 65 152 955 667
  • Subscribe for updates

HOME

ABOUT US
What is Regional Australia
Staff
Corporate
Careers

Work with us

Contact us

Tools and products
[In]Sight
Great Small Cities Data Tool
Pathfinder Initiative
Regional Online Heroes
Lightbulb Moments

Our work
Current Project Agenda
Policy
Blog
Publications Library

Media room
Media release
Media coverage
Events
Newsletters
XML Site Map | Website built by OPF Consulting
About Andrew McConville

Andrew McConville is the Chief Executive Officer of the Australian Petroleum Production & Exploration Association (APPEA), a position he has occupied since April 2019.

As Chief Executive, Andrew is responsible for leading the Association and its members to be the effective voice the Australian oil and gas industry, building community trust and support, driving advocacy and engagement, developing the industry’s key policy positions and executing a strategy for growth of the Association.

Andrew is an advocacy and corporate affairs professional with more than 25 years’ experience across the oil and gas, agribusiness, banking and finance, FMCG and government sectors. 

Andrew holds a first class honours degree in Agricultural Economics from the University of New England, a Master of Science in Agricultural Economics from Oxford University and is a Member of the Australian Institute of Company Directors.

About Paul Cronin

Paul Cronin is the Head of Corporate Affairs at Aurizon. Aurizon is Australia’s largest rail freight operator and a top 100 ASX company. Each year the company transports more than 250 million tonnes of Australian commodities, connecting miners, primary producers and industry with international and domestic markets. Approximately 80% of Aurizon employees live and work in regional communities.

In his role Paul is responsible for Organisational Communications, Media, Stakeholder Relations, Brand and Sponsorships.

About Robert Musgrove

Since joining Bendigo and Adelaide Bank in 1987, Robert has held a wide and varied range of positions across the Group, from Customer Service Officer to playing a pivotal role in the development and expansion of the Community Bank® model. Robert is currently General Manager Corporate and Public Affairs, with responsibility for shaping and maximising the Bank’s position through external communications and championing its point of difference to all stakeholder groups. Robert and his team also have responsibility for Government and industry consultation, as well as the Bank’s early work in climate change action and E.S.G. reporting (environment, social, governance).

From 2006 Robert’s roles have included responsibility for the Bank’s key innovative partnerships, as Head of Group Strategy, and Executive Engagement Innovation, before leading the creation of the Corporate & Public Affairs division in 2018.

Robert is a director of the Bendigo Art Gallery, a director of Community Sector Banking, and a member of the Victorian Government’s Regional Partnerships group representing the Loddon Campaspe region.

About Grant Cairns

Grant’s team is responsible for serving and meeting the financial services needs of our rural commercial and agribusiness customers in over 70 locations across regional Australia.

Grant joined the Commonwealth Bank in 2005 and has broad experience across the Business and Private Banking (BPB) division. His leadership roles include heading up the Client Acquisition, Transaction Banking, Asset Finance and Industry Specialists teams. He has also held executive roles managing the Bank's Commercial Lending and Asset Finance products and portfolio.

Prior to joining the Commonwealth Bank, Grant worked as a General Manager within the McCarrolls Automotive Group. He started his career as an accountant at KPMG.

Grant has completed Australia's flagship Asia Leadership Program and holds a Bachelor of Commerce, Accounting and Finance as well as a Master of Applied Finance. He is also a Chartered Accountant.

Outside of work, Grant enjoys spending time with his young family, playing golf and reading.

About Eacham Curry

Based in Sydney, Eacham Curry is the Director of Government and Corporate Affairs for Expedia Group in Australia/New Zealand, spearheading governmental affairs and public policy strategy on behalf of Expedia Group’s ANZ portfolio of online travel brands such as Expedia, Wotif, Stayz and Egencia.

A champion of collaboration, Eacham forges close working relationships with government, regulatory bodies, industry, community and media stakeholders, and represents Expedia Group on key industry associations. As such, his voice helps shape the debate surrounding the travel, tech and e-commerce opportunities and landscape in ANZ. He is regularly spokesperson on public policy matters impacting Expedia Group’s business in ANZ.
• In 2020, he joined Australia Regional Institute’s (RAI) Council / Board
• Also in 2020, he was elected as the Foreign Company Representative Director to the Japan Association of Vacation Rentals (JAVR)

Eacham has extensive past experience in political and economic leadership a roles ANZ and in Asia. Prior to joining Expedia Group, Eacham was the Managing Director of Barton Deakin Government Relations in Western Australia, having established that operation in 2013. He joined Barton Deakin Government Relations after serving as a Chief of Staff across several portfolios, including Transport, Commerce, Finance and Small Business, in the Western Australian Barnett Government from 2008 to 2013.
Prior to relocating to Western Australia, Eacham held a variety of Federal government relations and political staffing roles for many years, and was a chief of staff and senior adviser to ministers in the Howard Federal Government across the Health and Ageing, Defence, Veterans’ Affairs and Family and Community Services portfolios. A veteran of 22 political campaigns he has also twice been a delegate for the internationally recognised Australian Political Exchange Council on delegations to China (2004) and New Zealand (2008).

About Robert Poole

Robert joined KPMG in February 2017 and is National Lead Partner – Food & Agribusiness. He works across the agri-business and food supply chain to help businesses build profit and growth; solve complex problems and harness new ideas. Robert has a team of food and agri-business specialists who work on projects across management consulting, risk, deals advisory support and enterprise.
He is also leader of the Operations Advisory team leader in Melbourne and is responsible for the day-to-day performance of a team of 110 people - working across multiple disciplines including financial services, supply chain, procurement and defence. He has successfully built a strong food and agri-business practice from scratch and placed KPMG as the number one professional services firm in the Australian food and agri-business sector.

About Gavin Williams

Gavin Williams is Chief Development Officer, Regional & Remote at NBN Co.

Mr Williams was appointed to the Chief Development Officer Regional & Remote in October 2019, bringing more than five years’ experience at NBN Co and 25 years within the telecommunication industry across Australia.

He has held leadership roles that have spanned engineering, product management, marketing and strategy disciplines across consumer, business and wholesale markets.

Prior to joining NBN Co, Gavin held positions in Optus, Telstra and was principal of an independent consultancy. He was a Board Director of Southern Cross Cable.

Mr Williams holds a Bachelor of Engineering degree (Hons) from the University of Melbourne and a Master of Business Administration from Macquarie University.

About Mark Ashburn

Mark leads stakeholder engagement for Prime Super. We have a national team of 20 (mostly regionally based) professionals who assist and inform employers and individuals on superannuation matters.

Prime Super has been a partner to regional Australians for more than 20 years. We are a high performing independent super fund owned by our nearly 130,000 members. The fund is open to all and our mission is to ensure every member has the opportunity to enjoy the best financial retirement outcome they can expect from their lifetime of work.

About Ben Gursansky

Ben Gursansky joined Telstra in January 2019 as the Head of Rural and Regional Affairs.

Prior to joining Telstra, across 20 years Ben has held a number of senior policy and management positions within the agriculture sector and Government. This included working with Saputo Dairy Australia, Australian dairy processor Murray Goulbourn Co-operative Ltd, the SA Farmers Federation Grains Council, Australian Pork Limited and in management consultancy. Ben was also a policy adviser to the former Federal Minister for Regional Development, the Hon Simon Crean.

Ben holds a Bachelor of Applied Science (Agriculture) with Honours from the University of Adelaide, a Doctor of Philosophy (PhD) from the University of New England, and a Master in Business Administration (MBA) from the Melbourne Business School.

About Graeme Wedderburn

Graeme has more than 30 years’ experience working in business and government at the highest levels. Before joining TransGrid in November 2018, Graeme’s career included Director of Specialised Capital Group, Westpac’s investment banking arm, General Manager, Government and Corporate Affairs with Origin Energy and consulting for business and governments in Australia and Asia with a range of firms including KPMG. In government, Graeme served in a number of roles including senior adviser to Australia’s Minister for Foreign Affairs and as Chief of Staff for the longest continuously serving NSW Premier.

loading Cancel
Post was not sent - check your email addresses!
Email check failed, please try again
Sorry, your blog cannot share posts by email.