Stronger Regions, Stronger Nation
Strong regions are the building blocks of strong nations. The Australian Government's program of policy reform in rural and regional Australia has been about building stronger regions and is fundamental to the way this Government works. At its core is an understanding of the importance of the regions to Australia's economy, environment, wellbeing and identity.
The key 2012‑13 Budget investments that will improve the lives, wellbeing and growth opportunities for regional Australia include:
- $3.7 billion over five years for the national Living Longer. Living Better aged care plan — including improving aged care service delivery in regional, rural and remote areas, recognising special regional needs and including zero real interest loans and a viability supplement to assist providers in targeted areas;
- $1.5 billion Remote Jobs and Communities Program to provide a more integrated and flexible approach to employment and participation services for people living in remote areas of Australia;
- $1.0 billion over four years to start the first stage of the National Disability Insurance Scheme (NDIS) — providing people with disabilities in up to four regions personalised care and support;
- $524.2 million to strengthen Australia's biosecurity system — which underpins our unique biosecurity status, $36.0 billion in agricultural exports and 300,000 jobs in rural and regional Australia;
- $225.6 million to assist parents with the cost of child care, including those in rural and remote areas of Australia who are undertaking work, study or training, to better enable them to take advantage of employment opportunities;
- $77.7 million over four years for a new grants program to help dentists relocate to regional, rural and remote areas;
- $34.9 million to meet increased demand of GPs wanting to move to and remain in rural and remote communities;
- $8.2 million for the removal of the MV Tycoon wreckage from the Port of Christmas Island and remediation work at the site;
- $7.1 million to enable the not-for-profit organisation Community Based Employment Advice Services to better meet the demands of clients in regional areas with restricted access to employment services; and
- $2.9 million to continue the reform process that the Australian and Norfolk Island Governments are undertaking to build a more sustainable future for the Island.
In addition the Gillard Government is continuing to invest significantly in regional Australia through a range of existing measures including the Regional Development Australia Fund, the Health and Hospitals Fund, the Education Investment Fund and the National Broadband Network.
The 2012‑13 Budget reinforces the Government's long-term focus on generating social and economic development in regional Australia in recognition of the important role that the regions play in supporting Australia's national prosperity.
The regions of Australia are the patches in our patchwork economy, and are evolving in different ways at different speeds. It is for this reason that the Gillard Government is working with communities on place-based solutions to regional priorities, including on how best to grow regional economies.
It is a Budget that continues this Government's efforts to entrench regionalism in government policy-making to ensure people living in regional Australia are in the driver's seat — the regions know best what they can do to support their workforce, diversify their industries, strengthen their skills base and build prosperity in the face of change.
Ultimately, the dividend of the Government's efforts in regional Australia will not be limited to the communities that benefit directly through improved infrastructure and services, but will be felt by all Australians through better national economic performance and greater national wealth. This Government believes in harnessing the strength of Australia's regions to build a stronger, resilient nation.
The economy is undergoing structural change due to factors such as the continuing high dollar and the significant demand for our mineral resources from developing economies in Asia. This is creating uneven conditions in our economy and across regions, with boom times for some and significant challenges for others. The mining and mining-related parts of the economy are growing strongly, underpinned by strong demand for non-rural commodities. But some parts of the economy are under pressure from structural changes as well as ongoing global uncertainty.
The sovereign debt crisis in Europe continues to cloud the global outlook, undermining global growth and confidence and hitting government and industry revenues. This has had an impact on many of our key regional and trade-exposed industries as well as all spheres of government. Despite this, our commitment to deliver a surplus has remained resolute because it is the clearest possible sign of a strong economy. Returning the budget to surplus provides scope for monetary policy to respond to economic developments, as needed and consistent with the medium‑term inflation target.
It is a testament to the importance this Government places on regional Australia that this Budget reaffirms our commitment to the regions in the midst of one of the toughest budgets in recent years.
Strong Regional Economies Help Build a Strong National Economy
This Government's approach to regional development recognises that the performance of a single region can have an enormous impact on the performance of a nation. Our longstanding commitment to regional Australia is predicated, in part, on our understanding that the national economy relies on the strength of our regional economies. A diverse national economy is necessarily dependent on strong regional specialisation in trade-based industries, and it is by securing the future of the regions, that we secure the future of the nation.
The regions are crucial to shaping Australia's prosperity. One third of Australians live outside our major cities, yet it is the primary industries of regional Australia that produce almost three quarters of the country's export earnings—some $181.5 billion per year. As Asia becomes the main driver of global economic growth in the decades ahead, growth in the exports and produce of our regions will be one of the major determinants of how much our nation benefits from this global shift.
The patchwork economy
The regions of Australia are evolving in different ways at different speeds. An understanding of the patchwork economy as it relates to our regions is as critical to the national economy as it is to the Government's role in enabling each region to be its best. It is through this regional prism, underpinned by a strong evidence-base and advocated by some of the world's leading thinkers on regional and economic development, that the Gillard Government is playing its role in tackling the challenges facing our regions.
The Gillard Government no longer favours the 'one-size-fits-all' approach to regional development that prevailed for so long. Instead, we are tailoring national approaches to take into account the different opportunities and challenges faced by different regions. This is no simple task and requires an enduring commitment to consider how government policy levers are aligned and coordinated, and how they are designed to support the development of industries and regions from the bottom-up, not just from the top-down.
Making the patchwork stronger is, of course, made much simpler by acknowledging that each region knows best how to grow and prosper. They know their strengths and they have identified the hurdles. The Gillard Government will continue to help each region to capitalise on its opportunities, overcome its challenges and diversify its economic base in its own way. It is this commitment to localism that will see our regions, and our nation, flourish through self-determination.
Regions in transition
Australia is an economy in transition. A strong Australian dollar, changing patterns of land and water use, extreme weather events, the countervailing forces of subdued growth prospects for developed economies and the rapidly increasing economic weight of the Asian region and shifting employment demands across sectors are all transforming Australia's economy. Importantly, each of these events is having differential impacts across regional Australia.
Meeting the challenges of a national economy in transition requires us to meet the challenges of our regions in transition. From regions establishing new industries to diversify their economic bases to regions undergoing rapid mineral-fuelled growth and development, the Gillard Government is supporting each of our regions as they adapt to new and challenging economic circumstances.
This Government understands that the best way to tackle the challenges associated with our economy in transition is through innovation at the regional level. The mechanics of innovation — and economic development more broadly — are regional in their nature. It is because of this that we have asked communities to set economic priorities at the regional level, through our Regional Development Australia network, to build long-term strategies for investment around unique local capabilities.
Determinants of regional economic development
In developing its policies and programs for regional Australia, the Government has demonstrated how the principles that underlie growth and prosperity in our regions can benefit communities across Australia. This approach, based on a series of key determinants of regional economic development, seeks to maximise opportunities for regions to capitalise on their strengths.
The Government's program of place-based initiatives, for instance, demonstrates how competitiveness in our regions must be driven by skills, innovation, creativity and investment in modern infrastructure. The determinants of regional economic development are:
- education and skills;
- sustainable population growth;
- access to international, national and regional markets; and
- capitalising on comparative advantage and firm competitiveness.
Opportunities for Regional Australia in the Asian Century
The global economy is changing dramatically. In this interconnected global environment, Australia faces a range of challenges from those parts of the globe experiencing a prolonged period of sluggish economic growth and financial instability. It also faces immense opportunities from emerging economies closer to home. In Asia the scale and pace of economic transformation is unprecedented — its demand for goods and services has grown rapidly and its increasing economic weight is shaping its influence at the global level.
Australia's integration into Asia has contributed much to our national prosperity. Around three quarters of Australia's merchandise exports go to Asian nations such as China, Japan, South Korea, India and our ASEAN neighbours. Furthermore, around half of Australia's imports are sourced from Asia. Foreign Direct Investment from our Asian neighbours is also increasing in importance.
The economic significance of Australia's regions will become more important as Australia adjusts to the changing world economy and positions itself to capitalise on the Asian Century. We are seeing increased Asian demand for our natural resources and agriculture sectors, and we are likely to see increased opportunities for the service sectors of the economy including tourism and education, as well as specific areas such as water management and planning. Many of these industries are centred in regional Australia.
Engaging with Regional Communities
Localism and regionalism have driven this Government's approach to regional development and formed the cornerstone upon which we have sought to engage with the regions. It is no coincidence, then, that we have placed significant value on our engagement with local communities. Our goal is to ensure regionalism becomes a fundamental part of Australia's governance.
Regional Development Australia and Local Government
This Government has done more to empower, and engage directly with, regional Australians than any other. We have established and continue to strengthen Regional Development Australia (RDA), a national network of 55 committees made up of local leaders who work with businesses, community groups and all levels of government to support the development of their regions. The dynamic RDA network is a demonstration of the fundamental shift this Government has made in its approach to regional development—that is, by empowering local people to develop local solutions to local issues.
This Government has also forged a strong and lasting relationship with Australia's 565 local governments, which together represent a comprehensive network of local knowledge, expertise and enthusiasm. Working in partnerships, with RDAs, local governments and local business and community groups helps us to maximise the benefits of our investments in regional Australia.
Place-based approaches
The Gillard Government has been working with all levels of government and individual communities to develop place‑based solutions that meet the needs of regions in transition and support Australia's national priorities for better economic, social and environmental results. The basis for place-based solutions is simple: by working with local and State governments, communities themselves and relevant local stakeholders, the Government can help develop and deliver tailored policy responses that address the unique challenges facing individual regions. Over the past year, the Government has achieved significant outcomes for regions that have been the focus of these place‑based, strategic interventions.
In Tasmania, a Memorandum of Understanding has been signed between the Commonwealth and Tasmanian Government — linked to the Tasmanian Forests Intergovernmental Agreement — to help improve economic and community outcomes by developing tailored Regional Economic Development Plans that identify specific place-based investment opportunities. A number of projects have recently been announced, including investment in dairy, aquaculture and a state-wide data sensor network that has the potential to transform agricultural production across Australia. The projects leverage private sector investment and will create thousands of new jobs for Tasmanian communities.
Work is underway to investigate economic diversification opportunities that will assist communities in the Murray Darling Basin prepare and adapt to a water constrained future. Through our Regional Development Australia committees, we have been working directly with communities to identify opportunities for growth and diversification with the support of regional experts. The focus of this work is to identify practical solutions which build on the strengths of regions, such as existing industries, local skills and the natural resource base, to support communities' economic resilience.
The Latrobe Valley is a major producer of electricity for Australia, fuelled by brown coal, which also makes it one of the country's largest carbon emitting areas. The Commonwealth's cooperative agreement with the Victorian Government takes a collaborative approach for the region that best responds to the impacts of a transition to a low carbon economy in the medium to longer-term, including through developing economic opportunities for the region.
In the Illawarra, a taskforce led by the Commonwealth Department of Industry, Innovation, Science, Research and Tertiary Education, and comprising membership from the New South Wales Government and business, is delivering a $30.0 million structural adjustment package to support workers and communities affected by industry changes in the region. The Illawarra Region Investment and Innovation Fund will help stimulate investment and diversify the economic and employment base of the region. Thirteen projects were announced under the first round of funding earlier this year, with a second round currently open to applications.
The Commonwealth has also signed a Memorandum of Understanding with the Queensland Government to deliver place-based approaches to regional development in that State. The agreement will help regions to realise their economic potential by responding to their distinct challenges, such as disaster relief and the impact of a high Australian dollar, and opportunities, including the resources industry and tourism. Northern Queensland has been identified as the first priority region under this agreement.
Across Northern Australia more generally, the Commonwealth has established a Northern Australia Ministerial Forum, which brings together ministers from relevant Commonwealth, State and Territory jurisdictions to identify challenges and opportunities for one of Australia's most vast and untapped regions. The Forum is working on a collaborative way forward on key issues such as the opportunities for the beef industry, infrastructure priorities to support development, the implementation of carbon farming initiatives and ways to leverage efforts between tiers of government and the private sector. Building on this work, the Government has invested in a collaborative initiative with the Queensland Government to develop a North Queensland Irrigated Agriculture Strategy. The Strategy will identify and demonstrate the viability of new irrigated agriculture opportunities for northern Australia and assess potential environmental, economic and cultural impacts to ensure that future developments are genuinely sustainable.
Australian Government Investment in Regional Australia
Projects coming online
Over the last few years, the Government's commitment to regional Australia has been evident in the sheer size of the investments it has made in our regions, culminating in the $4.3 billion of regional initiatives announced in last year's Budget. Many of these investments—including in regional digital productivity through the National Broadband Network, in regional health through the Health and Hospitals Fund, in regional education through the Education Investment Fund and in community infrastructure through the Regional Development Australia Fund—are coming online in this and coming years. Over the lives of these initiatives alone, the Government is investing over $35.0 billion in the productivity, liveability and sustainability of communities in regional Australia.
Building the Education Revolution (BER) is a $16.2 billion investment that provides education facilities, through new infrastructure and refurbishments, to all eligible Australian schools. The BER is the biggest capital investment in the education sector in the history of this country and the single largest element of the Government's $42.0 billion Nation Building - Economic Stimulus Plan. It invested in the future of this country by modernising schools in every community across Australia, including in regional Australia, for the use of generations to come.
The Government's $27.5 billion equity commitment for the construction of the National Broadband Network (NBN) is helping to connect regional communities to the internet, reducing the disadvantages faced by regions as a result of the significant distances and presenting opportunities for new ways of living and working. The NBN will deliver high-speed broadband access to all Australian homes, schools and businesses by 2020. It is a key nation building project that will help drive Australia's productivity and transform service delivery in key areas such as business, commerce, health and education. It will give regional communities the potential to benefit from the digital age, with fair and equal access to affordable, high speed broadband.
In October 2011 NBN Co Limited announced the twelve month rollout which included 32 regional areas. Building on this, in March this year NBN Co Limited released its three year fibre rollout plan with more than 3.5 million homes, schools, hospitals and businesses to have construction of the NBN either commenced or completed within the next three years — including 238 regional centres. The three year fibre plan massively increases the rollout to regions and will prioritise regional communities with limited or no current access to broadband, bringing unprecedented and transformative opportunities to the regions. Importantly, the Fixed Wireless and Long Term Satellite services will deliver high speed NBN services to homes and businesses outside the fibre footprint by the end of 2015, delivering the benefits to our remotest Australians.
The $5.0 billion Health and Hospitals Fund (HHF) supports the building of new infrastructure for clinical care, training and research in the health sector, and for related needs such as patient and carer accommodation. Around $1.8 billion of the HHF has been specifically allocated to meeting the needs of regional Australia. This funding will help to improve the quality of regional hospitals and clinical training, and provide better access to cancer treatment, renal dialysis and mental health services.
Funding has been allocated for 76 projects from the HHF Regional Priority Round 4 valued at $475.0 million. The primary focus of the HHF Regional Priority Round is to provide capital funding to projects in regional communities to support upgrades to regional health infrastructure, expansions to regional hospitals and to help support the clinical training capacity of regional hospitals.
The Government's Education Investment Fund (EIF) is supporting world-leading, strategically-focused infrastructure investments that will transform Australian tertiary education and research. Over the four competitive rounds of the EIF that have been held to date, $274.5 million (or 21 per cent) of allocated funds went to regional institutions or campuses, for teaching and learning infrastructure and $180.9 million for research infrastructure projects.
Evidence suggests that individuals trained in a region tend to stay in that particular region, which has significant flow on effects for regional economies. The Gillard Government recognises this fact and the important role that regional tertiary institutions play for students and for their local communities. The Prime Minister announced an EIF Regional Priorities Round in October 2011 that will provide $500.0 million to higher education institutions and vocational education training providers across regional Australia. This funding will boost participation in tertiary education and invigorate the growth of research capabilities in the regions whilst positioning them to meet domestic skills needs now, and into the future.
The Government has established a $6.0 billion Regional Infrastructure Fund (RIF), which will be largely funded from the proceeds of the Minerals Resource Rent Tax (MRRT), to address critical infrastructure needs in areas supporting the mining industry. The RIF allows the Government to invest the proceeds of a resurgent resource boom to address urgent infrastructure needs, while supporting the mining industry, boosting export capacity and developing and growing regional economies.
The Regional Development Australia Fund (RDAF) is a national program to support Australia's regions and enhance their wellbeing and economic development. The program is administered by the Department of Regional Australia, Local Government, Arts and Sport and is designed to ensure that new investments build on strengths and reflect the characteristics, opportunities and challenges of our diverse regions. Under Round One of the RDAF, 35 projects at a cost of $150.0 million were funded across Australia to meet the identified needs of local communities. Applications for the $200.0 million RDAF Round Two are currently being assessed. The recent passage of the MRRT legislation now allows the remaining $573.0 million to flow towards the delivery of almost $1.0 billion through the RDAF.
The Commonwealth's plan for a Clean Energy Future is comprehensive and provides significant support for regions to take advantage of opportunities that arise as the Australian economy transforms to a low carbon future. Regional Australia will be able to capitalise on the development of Australia's world-class energy reserves and share in $10.0 billion of new investment through the Clean Energy Finance Corporation. Farmers and land managers will be able to gain rewards through various initiatives.
An ongoing commitment to regional Australia
The 2012‑13 Budget continues the Gillard Government's rich tradition in the regions by reaffirming its ongoing commitment to regional Australia, even through hard times. This Government will build on last year's $4.3 billion of regional initiatives by continuing to invest in the productivity, liveability and sustainability of our regions.
The enduring commitment that this Government has made to regional Australia is evident in so many of the policy initiatives it has undertaken and major investments it has made. The approach has been one of empowerment, increased engagement with regional communities, improved coordination across Government and unprecedented investment in regional infrastructure and services. The creation of a dedicated regional development portfolio, for instance, has been a critical step in coordinating the delivery of the Government's policies and programs to drive economic diversification and growth and better service delivery in our regions.
The Gillard Government established the Ministerial Advisory Committee on Regional Australia, to work with RDAs on location-based solutions to regional priorities and on how best to grow regional economies. Under this new ground-up structure, local leadership have refined and strengthened their vision and priorities. The Government has also established the new Regional Australia Institute. The Institute is about connecting the work already done or underway and identifying the gaps. The Institute has the potential, for example, to make a contribution to the debate on the competing land issues around coal seam gas. It will also assist in our ability to realise the opportunities available through the carbon farming initiative.
The Government has already provided significant investment in skills in regional Australia including through investments in - the Building Australia's Future Workforce Package which supports regional employers, workers, trainees and job seekers; the establishment of the National Workforce Development Fund to develop a new partnership with industry; and the Regional Skilled Migration Scheme and the Regional and Enterprise Migration Agreements, so regions and major resource projects can tailor migration solutions to meet their skills needs.
This year's budget provides funding for the following key new initiatives in regional Australia:
Aged Care Reform
The $3.7 billion Living Longer Living Better national aged care plan will improve aged care service delivery in regional, rural and remote areas. The plan recognises special regional needs and includes zero real interest loans and a viability supplement to assist providers in targeted areas. This major reform program will assist in the creation of a flexible and seamless system that provides older Australians with more choice, control and easier access to a full range of services. It also positions us to meet the social and economic challenges of the nation's ageing population.
Remote Jobs and Communities Program
The $1.5 billion Remote Jobs and Communities Program will provide a more integrated and flexible approach to employment and participation services for people living in remote areas of Australia. Under the new arrangements, each of 65 remote servicing regions will be serviced by a single provider, and each provider will have a permanent presence in their region. Providers will work in close partnership with communities and they will jointly develop Community Action Plans that will direct effort to meet the needs of individual job seekers and communities.
National Disability Insurance Scheme
The Gillard Government will provide $1.0 billion over four years to start the first stage of the NDIS — providing people with disability in up to four regions personalised care and support. Under the NDIS, people with significant and permanent disability will have access to an assessment process that develops an individual support plan with funding allocated for reasonable and necessary supports. Local area coordinators will work with clients, providing information needed to make informed decisions navigating the system and assisting in planning.
Biosecurity and Quarantine Reforms
The Government has committed $524.2 million to strengthen Australia's biosecurity system, protecting $36.0 billion in agriculture, fisheries and forestry exports and 300,000 jobs in rural and regional Australia. This major investment will deliver a state-of-the-art quarantine facility, strengthen Australia's defences against pests and diseases and prioritise the reform of century-old legislation.
Jobs, Education & Training Child Care Fee Assistance program — Improving Education and Employment Outcomes
The Government will provide an additional $225.6 million over four years to assist more parents with the cost of child care in rural and remote areas of Australia who are undertaking work, study or training, to better enable them to take advantage of employment opportunities. This package will assist parents to enhance their skills and enable them to enter or re-enter the workforce, by providing significant support with the cost of child care so that it does not pose a barrier to participation.
Dental Relocation and Infrastructure Support Scheme
The Government has committed $77.7 million over four years for a new grants program to help dentists relocate to regional, rural and remote areas. This initiative aims to encourage and support dentists to practise in regional, rural and remote communities and to increase workforce and service delivery capacity in these communities.
General Practice Rural Incentives Program
The Government will provide funding of $34.9 million to meet increased demand from GPs wanting to move to and remain in rural and remote communities. This funding will ensure this highly successful program, which has already exceeded expectations, continues to encourage medical practitioners to practice in rural and remote communities and to promote careers in rural medicine.
Removal of the MV Tycoon Wreckage from the Port of Christmas Island
The Government is providing $8.2 million for the removal of the MV Tycoon wreckage from the Port of Christmas Island and remediation work at the site. The vessel broke free of its moorings and crashed into cliffs on 8 January 2012, and is now a wreck. In the absence of any practical action to commence a salvage or wreck removal operation by its owner, the Australian Government has stepped in to minimise disruption to port operations and restore vital maritime infrastructure for the Christmas Island community.
Community Based Employment Advice Services
This $7.1 million initiative will enable not-for-profit Community Based Employment Advice Services to better meet the demands of clients in regional areas with restricted access to employment services. This increased funding will support these important organisations to provide advice, assistance and information to Australians who experience difficulties in asserting and exercising their workplace rights.
Norfolk Island Reform Package
The Government will provide $2.9 million to continue the reform process that the Australian and Norfolk Island Governments are undertaking to build a more sustainable future for the Island. This investment delivers on the Government's commitment to ensuring the standards of living of residents of Norfolk Island are comparable with mainland Australia, without sacrificing the benefits to the community of self-government.
Student Income Support
To ensure that every region has people capable of filling the employment needs of a productive economy, the Gillard Government is committed to improving opportunities for regional students to go to university. The Government's response to the Review of Student Income Support Reforms will benefit almost 21,000 students across the country and give almost 5,500 additional students in regional areas access to independent Youth Allowance. Around 15,000 students across the country will also receive more support from relocation scholarships in recognition that students from regional areas experience higher costs to relocate for study.
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