Regionalisation Ambition 2032 - Year 3 Progress Report

Overview

Purpose and Framework
The Regionalisation Ambition 2032 is a 10-year national strategy led by the Regional Australia Institute (RAI) to rebalance Australia’s growth by strengthening regional communities. The framework is built around six interconnected pillars—Population, Jobs & Skills, Liveability, Health, Productivity & Innovation, and Sustainability & Resilience—with 25 measurable targets. The Year 3 Progress Report tracks progress against these targets, highlights policy developments, and identifies areas needing further action.

National Context and Strategic Importance
In 2025, regional Australia continues to experience strong population growth, driven by internal migration from cities and increased interest in regional living. This growth brings challenges, especially in housing, education, health, and workforce development. The report stresses the need for a holistic national strategy that integrates regional priorities into broader policy frameworks, particularly as Australia transitions to a net zero economy.

Jobs & Skills

• Recruitment difficulty in regional areas dropped from 58% to 50% but remains higher than in cities.
• The proportion of highly skilled workers is steady at 55.2%, below the 62% target.
• School attainment rates declined to 73.9%; post-school qualification rates rose to 59.5%.
• Calls for improved access to education and training, especially in remote areas, and place-based workforce strategies.

Liveability

• Wellbeing scores (Personal Wellbeing Index) remain below the target; new data pending.
• Digital inclusion is improving but lags metropolitan areas.
• Rental vacancy rates remain tight at 1.9%; building approvals rose by 3.7%.
• Childcare services increased by 3.5%, but access remains limited in remote areas.
• The report highlights the need for targeted investment in housing, transport, and health infrastructure.

Population

• Regional population grew from 9.78 million to 9.91 million (1.3% annual growth).
• The share of younger people (15–39) rose slightly to 30.2%, below the 35% target.
• Migration to regions increased marginally, with 16.7% of overseas arrivals settling regionally.
• The report calls for a National Regional Population and Settlement Strategy and reforms to migration settings.

Health (New Pillar in 2025)

• Medical practitioners increased to 365 FTE per 100,000, still below metro levels.
• Allied health professionals rose to 551 FTE per 100,000.
• Regional Australians accessed fewer Medicare services and NDIS services than metro counterparts.
• Years of potential life lost due to premature death decreased, but disparities remain.
• Emphasizes investment in health workforce, innovative care models, and technology for remote support.

Productivity & Innovation

• Regional share of GDP increased slightly to 38.5%.
• Productivity grew by 0.5% (target: 1.2% per annum).
• Workforce participation rose to 63.7%.
• Regional business entries and trademark registrations increased, but patent filings declined.
• Calls for support for entrepreneurship, digital innovation, and targeted investment.

Sustainability & Resilience

• Emissions intensity in regional Australia decreased by 4.8%.
• 71% of regional Australians live in areas with moderate or high disaster resilience.
• Progress is limited by data gaps, especially in renewable energy employment.
• Calls for improved data collection, community engagement, and coordinated disaster resilience strategies.

Policy Developments

• Federal and state initiatives include the expansion of Regional University Study Hubs, National Housing Accord, Net Zero Jobs Plan, and Early Years Strategy.
• States have launched housing programs, regional connectivity initiatives, and workforce development schemes.
• Emphasis on place-based decision-making and collaborative governance.

Community and Stakeholder Engagement

• RAI engages regional communities through events like the National Regional Housing Summit and Executive Education Program.
• The National Alliance for Regionalisation (34 peak bodies) contributes to policy discussions on migration, education, and housing.

Regional Leadership and Case Studies

• Case studies highlight regional leadership, such as Advance Cairns’ Roadmap 2035, Western Downs Regional Council’s Economic Development Strategy, and Greater Shepparton’s Community Connector Program.
• These examples show how regions use the Ambition framework for strategic planning and measurable outcomes.

Housing Challenges and Solutions

• Housing remains a critical issue, with persistent shortages and affordability pressures.
• The report recommends long-term planning, enabling infrastructure, tailored responses, and collaborative action.
• Calls for increased investment in social and affordable housing and support for local governments.

Migration and Inclusion

• Migrants in regional areas often have better employment outcomes than those in cities.
• The report advocates for improved settlement support and inclusive community development to attract and retain migrants.
• Supports reform of skills recognition for overseas migrants.

Innovation and Entrepreneurship

• Digital innovation is growing, supported by programs like Innovate with nbn.
• Case studies (e.g., Observa Care, Terra Lab) show regional businesses leveraging technology.
• Encourages continued investment in connectivity and innovation infrastructure.

Environmental Sustainability and Circular Economy

• Regional communities are leading in circular economy and renewable energy initiatives (e.g., Katanning Energy, Capricorn Coast’s Eco Destination Certification).
• Calls for more support for community-led energy projects and circular economy strategies.

Conclusion and Call to Action

The Year 3 Progress Report concludes with a call for systemic change and long-term planning. It urges governments, industry, and communities to collaborate on building a resilient, inclusive, and prosperous regional Australia. The RAI reaffirms its commitment to tracking progress, improving data availability, and supporting regional leadership through the Regionalisation Ambition 2032.

Key Findings

Strategic Insights

Mixed Progress Across Targets
Of the 25 Ambition targets, 18 showed progress, four went backwards, and three await new data. While there is positive movement overall, significant gaps persist between regional and metropolitan outcomes, especially in health, education, and workforce participation.

Population Growth Continues, But Youth Share Lags
Regional Australia’s population grew from 9.78 million to 9.91 million (1.3% annual growth), but the share of younger people (15–39) only rose slightly to 30.2%, well below the 35% target for 2032.

Migration to Regions Stagnant
The proportion of overseas arrivals settling in regional areas increased marginally from 16.5% to 16.7%, far short of the 40% target. Internal migration from cities to regions remains strong, with net outflow at its highest since 2000 (excluding COVID years).

Recruitment Difficulty Easing, But Still Above Target
Recruitment difficulty in regional areas dropped from 58% (2023) to 50% (2024), showing steady improvement but remaining above the 40% target and higher than in capital cities (45%).

Education Attainment Slipping
The school attainment rate for young people (20–24) in regional Australia fell from 74.8% to 73.9%. The gap with metropolitan attainment (now 89.4%) has not improved. Post-school qualification rates in regions rose slightly to 59.5% but remain well below the 65% target.

Housing Pressures Persist
Regional Australia’s population grew to 9.78 million, with GDP per capita increasing by 1.9%. The share of younger people (15–39) rose slightly to 30%.

Mixed Results in Student Achievement
The proportion of regional students at or above the strong proficiency standard in reading increased to 58.0%, and in numeracy to 56.3%. However, the share needing additional support remains about double that of metropolitan students.

Health Workforce and Access Improving, But Gaps Remain
The number of medical practitioners in regional Australia increased from 354 to 365 FTE per 100,000, and allied health professionals from 538 to 551 FTE. However, both remain well below metropolitan ratios. Regional Australians accessed 11.4 Medicare services per capita (vs. 19.7 in metros), and years of potential life lost decreased slightly to 49.3.

Net Zero Transition Requires Regional Leadership
Regional areas are central to Australia’s net zero goals but lack sufficient data and decision-making power. The report calls for a just transition framework and localised planning.

Sustainability and Resilience Advancing
Regional Australia reduced emissions intensity by 4.8%. The proportion of the regional population living in areas with high or moderate disaster resilience increased from 63.3% to 71.0%.

Productivity and Innovation: Modest Gains
Regional share of Australia’s GDP increased slightly to 38.5%. Productivity (GDP per hour worked) grew by 0.5%. Workforce participation rose to 63.7% but remains below the 68% target. The regional share of new business entries fell to 27.7%, while trademark registrations rose to 19.6%.

Policy and Governance Insights

Call for a National Population Plan
The report urges the creation of a National Regional Population and Settlement Strategy, with spatially disaggregated planning to guide growth, infrastructure, and service delivery.

Place-Based Decision-Making and Local Leadership
States and territories are increasingly devolving decision-making to local leaders, with new regional leadership networks and partnerships emerging to address workforce, housing, and service delivery.

Migration Policy Reform Needed
The RAI supports reforms to streamline skills recognition for migrants and prioritise regional settlement, aiming to better harness underutilised skills and address workforce shortages.

Housing Requires Dedicated, Long-Term Solutions
The report calls for a regional sub-target within the National Housing Accord, dedicated regional housing agencies, and investment in enabling infrastructure to address persistent shortages and affordability pressures.

Health Equity as a Critical Enabler
The new Health pillar highlights the need for targeted investment in regional health workforce, innovative care models, and improved access to services, especially in remote and very remote areas.

Net Zero Transition Demands Regional Leadership
Regional areas are central to Australia’s net zero ambitions but require a national framework (the REAL Deal) for coordinated investment, benefit-sharing, and localised planning to ensure a just transition.

Data Gaps Hindering Progress Tracking
The report identifies ongoing gaps in data for disaster resilience, digital inclusion, and renewable energy employment, and calls for investment in localised data collection and reporting.

Community and Industry Engagement Growing
Over $1 billion in pledges have been made by organisations supporting the Ambition. Programs like the Executive Education Series and National Alliance for Regionalisation are building momentum and leadership capacity.

Policy Recommendations

Recommendation 1: Population

• Creation of a National Regional Population and Settlement Strategy that models future population distribution to deliver optimal social, economic and environmental outcomes.
• Investment in focused awareness and attraction programs to increase settlement and retention strategies for migrants to key regional areas.
• Review of the skills recognition process for overseas migrants

Recommendation 2: Jobs and Skills

• Continued and greater investment in placed-based workforce development initiatives to match regional Australians with job vacancies.
• Enact the policy considerations in the Regional Roadmap from Jobs and Skills Australia.

Recommendation 3: Liveability

• 40% of the 1.2 million homes (480,000) under the National Housing Accord to be built in regional Australia.
• Appoint a National Regional Housing Commissioner and dedicated regional housing offices in each state and territory.

Recommendation 4: Health

• Coordinate investment and service delivery by the Commonwealth, State and Territories under the National Health Reform Agreement.

Recommendation 5: Sustainability & Resilience

• The REAL (Regional Energy and Legacy) Deal - a national framework that aligns governments, industry and communities to deliver legacy investments in Australia’s Regions through the energy transition.

Recommendation 6: Productivity & Innovation

• Regional Productivity Solutions – co-designed, placed-based investments in skills, infrastructure and regulatory reform to lift productivity in regions.