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February, 2006 DISCUSSION / OPINION PAPER: •
Infrastructure investment Background: Champions of the Bush Inc. is a group of well established companies operating in regional Australia, that passionately advocates and works for equitable consideration between the capital cities and provincial communities. Each of the member companies has made considerable long term enterprise investments in regional Australia, and employs (collectively) in excess of ten thousand people in provincial communities. The group currently comprises Bendigo Bank, Brown Brothers Wines, Gippsland Secured Investments, Neville Smith Timber Industries, Patties Foods, PFD Foodservices, Ritchie's Food stores, Rivergum Marketing, and Telstra Countrywide. Its advocacy is apolitical, intended to be constructive, and not in any way undermine the value of capital cities to the Australian economy and our national way of life. In broad terms, the Objectives of Champions of the Bush are: •
To instil pride in regional Australia The Victorian Government has announced its "Moving Forward" funding program for provincial cities in November 2005, aimed at "making provincial Victoria the best place to live, work, and invest". This very extensive program includes: •
A $100m Provincial Victoria Growth Fund Much of the detail of how this $593m+ in government funding is to be delivered is yet to be finalised, but initial support for such a substantial program cannot be denied. Champions of the Bush applauds the Victorian Government. This is by far the most significant recognition of the importance of regional Victoria within the State Budget allocations, and will go a long way to overcoming the disparity. Commentary: The Victorian Government has long promoted population growth in regional Victoria, and has implemented decentralisation and satellite cites policies throughout the preceding decades, in partnership with the Federal and State governments. Albury & Wodonga, Ballarat, Traralgon, Bendigo and Geelong have received the primary focus, with other provincial cities receiving secondary consideration as hubs for their surrounding rural communities. Numerous studies and reports have highlighted some decline of many smaller communities at the expense of these provincial centres, and the population shift of younger people to Melbourne. The so called "Seachange" demographic shift to the coastal fringe has been compounded by "Tree and Tee" change phenomenon, with families, empty nesters, and retirees moving to the inland bush lifestyle and golf development areas. Many of these growing municipalities are unable to meet the infrastructure and services needs brought by rapid demographic shifts. Many other smaller communities are becoming derelict, as funding is prioritised into provincial cities. Rural economies are changing from a principal dependence upon agricultural industries, to a more diverse mix of new enterprises and investment opportunities. There are many challenges confronting provincial Victoria that cannot be met by governments alone. Melbourne continues to be stressed by the effects of its population growth and urban sprawl. Insufficient public transport infrastructure and inefficient freight linkages are costing the Victorian economy billions of dollars per annum in longer commuting times and delays via a congested road system. The cost of urban development is spiralling, and fundamental health and education services are struggling to keep pace in the outer Melbourne "Activity Centres" targeted for high density development. These problems are not unique to Victoria or Melbourne, and the Victorian Government is undoubtedly well aware of the need to take some pressure off the metropolis by encouraging population growth in provincial Victoria. Population growth and development cannot rely upon cleaner air, lifestyle choices, and retirement communities alone. A major driver of a demographic shift is employment creation, ie: people need a job to move to - often two jobs per household. Regional employees commonly accept a lower level of remuneration because their housing and general living costs compare favourably to those encountered in the metropolis. Two recent studies#* indicate happier disposition and greater stability in the provincial centres, with employers demonstrating higher productivity at regional enterprise locations. These factors point toward a need for enhanced labour markets in provincial areas, so that the population (and Victorian economy) will receive greater benefits from "living, working, and investing in provincial Victoria". Whilst the components contained within the "Moving Forward" package will presumably benefit regional enterprises, further benefit should be derived from the anticipated 2005-6 Federal and State Budget surpluses. Taxation reform is predominantly as federal matter, but one significant impediment to employment growth is in the State government domain. Payroll Tax has long been regarded by the private sector as the single most irrational impost levied in Australia - that impacts upon the nation's ability to compete internationally. Regional employment opportunities would be created if the Victorian government created a differential scaled-down level of the Payroll Tax outside the metropolis of Melbourne. Merely changing the payroll threshold across the board will not create an incentive for new employment in provincial Victoria. Other unfavourable tax treatments should also be addressed, such as the "Fire Services Insurance Levy", which charges the higher costs of Fire Services in provincial areas to insurance policy premiums of regional employers. This is regarded by employers in provincial areas as patent inequity. Champions of the Bush therefore encourages the Victorian government's "Moving Forward" program to embrace a partnership with regional employers, to create a more equitable enterprise "playing field", and provide enhanced incentives for job creation. The will assist the targeted 1.8% pa population shift and the further growth that will take pressure off the unsustainable urban sprawl around metropolitan Melbourne. Successive governments have tried numerous policy measures over many decades for incremental decentralised outcomes. Here is an opportunity not previously affordable within our current generation. The Victorian economy may never again see the likes of these budgetary conditions again, and it may be too late for Melbourne, if fundamental taxation reforms do not enhance the prospects of provincial Victoria. Provincial communities and new emerging industry sectors require leaders who may not have traditionally been found in rural focussed citizens. Many move to the capital cities and abroad for their higher education and skills training, then return to a comparatively less global mindset. Young Professional Networks are being created, and leadership ambitions cultivated beyond the service organisations such as Rotary, Lions, Apex & co. Leadership needs to be encouraged and enhanced if our provincial communities are to reap full benefit from the emerging demographic shifts. Suggested initiatives include government enhancement of the "Regional Leadership Development Programs", and assisting with key note speaker visitations to forums in provincial cities. Our members would be available and keen to be involved in such initiatives. 'Champion of the Bush' seeks to work with government, and use our collective experience, influence and standing in our communities, to address these issues and create a better future for the Australia beyond the metropolis. # "Australian Unity Wellbeing Index", Deakin University, Prof Robert Cummings, 2006 *
"Benchmarking Regional Business Costs", 'Essential Economics',
for Regional Development Victoria, 2005.
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