Throughout the latter part of 2022 and much of 2023 the nation’s job market exploded, even more so in regional Australia where online vacancies were reaching about 90,000 month-on-month. In May last year, the participation rate hit a record high in regional Australia at almost 65%, whilst last September regional Australia’s labour supply hit record levels at just below five million people employed. It was a period quite unlike anything we’ve seen in decades.
However, 2023 will also be remembered by many as the year of those interest rate hikes. And just like during the COVID lock-down era, where 10am press conferences became must-see, so too did tuning in on the first Tuesday of the month to see what decision the Reserve Bank of Australia’s Board had made. After years of record-low interest rates, a new generation of mortgagors was dealing with the ramifications of consecutive hikes.
Now, as February draws to a close and data from the last quarter of 2023 is progressively released, analysts, economists, and keen observers are beginning to formulate insights into what Australia’s economy will do in 2024 and the consensus appears to be revolving around one word: softening.
In January regional job vacancies dipped to 76,000 – a 2% decrease on December and 5.7% down on January last year. It sounds grim, but when you look at how metropolitan Australia fared, with greater drops both monthly (3%) and annually (12.8%) in job vacancies, the story in the regions remains much brighter.
I strongly believe regional Australia will remain a steadying beacon for the nation as this economic shift settles over the coming months. As highlighted in last year’s Intergenerational Report, and reiterated by the government thereafter, the regions will lead the way with Australia’s net zero transition.
Preliminary modelling from Jobs and Skills Australia (JSA) shows Australia will need between 26,000 to 42,000 more electricians in the next seven years, whilst the clean energy workforce is expected to grow from its current 53,000 person workforce today, to 84,000 by 2050. At the same time, almost two million workers in building and engineering trades are expected to be required. JSA states growth in these occupations is likely to be concentrated in regional Australia.
Whilst the regions will play a key role in the transition, how the communities that make up regional Australia will transition remains less defined. There has been a focus to date, and rightly so, on areas that house the country’s coal fired power stations. But what about communities that are heavily reliant on fuel or diesel? Places like the Midwest in Western Australia and regional South Australia. Their path to net zero is less defined and next month the Regional Australia Institute will release a new body of work focused on what can be done as 2050 edges closer.
The transition also brings with it a moment in time, where regional communities are being asked to have big conversations regarding the new infrastructure that is proposed to be built to support the low-carbon economy. These are important conversations, and if the regions are to have this starring role in reaching net zero emissions, then we must ensure the settings are right – for without strong foundations, a united transition cannot occur. I know work is underway in both western Victoria and western New South Wales communities that will be affected by new energy infrastructure, in developing a set of local parameters to ensure the transition occurs on their terms. I commend their foresight, as perhaps now more than ever, communities will need to bridge a divide about renewable energy, and it is only when the best outcomes for that community are agreed upon that the regions will prosper from this once-in-a-generation transformation.
Dr Andrew ‘Twiggy’ Forrest AO passionately summed this up in his National Press Club address on Monday, when he spoke about the nation’s journey to net zero, putting forward three potential policy solutions – including a carbon solutions levy – and outlining how he sees a supercharged green economy, supercharging the regions. Dr Forrest observed that the transition offers regions unprecedented economic opportunities, decentralising energy production from a few select communities to thousands more, bringing with it not only jobs in the sector but rippling out to encompass entire regions. It’s a sentiment that hasn’t been discussed much as part of the national conversation regarding net zero and I applaud him for shining a light on it.
Adding further weight to the need to discuss net zero in a regional context is the simple fact that regional Australia continues to grow. This morning, in partnership with the Commonwealth Bank of Australia, the RAI released its latest Regional Movers Index (RMI), which shows in the last quarter the net internal migration index rose to nearly 14% above the pre-COVID level. In its simplest form, this index shows more people are moving into the regions than leaving for capitals. And if regional Australia is growing, net zero is at our doorstep and is going to be a catalyst for immense change, then there really is an impetus to start talking about these issues, and now.
So, whilst the economy may be softening, regions are about to embark on a period of growth. Hard conversations, hard decisions, yet meaningful solutions are but waiting to be harnessed. And the regions are ready, so let’s ensure a legacy is put in place to guarantee the regions benefit from this investment, by listening to what they are saying and setting up the mechanisms they need, so they’re ready to navigate all this new future brings.
Liz Ritchie - CEO