Decentralisation push a bad idea that will not work, Grattan Institute says
Updated
The Federal Government's latest decentralisation push has been labelled a "thoroughly bad idea" by independent think tank the Grattan Institute.
Regional Affairs Minister and deputy Nationals leader Fiona Nash announced on Wednesday that all federal ministers would be required to justify why their agencies should not be decentralised and moved out of Canberra and other large cities.
Key points:
- Grattan Institute says 100 years of decentralisation policies have failed to boost growth in regional areas
- Economic activity is increasingly concentrated in major cities
- Regions need to focus on reskilling their workforces
Senator Nash said by mid-year, criteria would be developed for ministers to gauge whether their department was suited to decentralisation.
Grattan Institute fellow Brendan Coates said the push was just the latest in 100 years of failed policies to boost growth in regional areas.
"We've been trying this for a hundred years, to move people and jobs and economic activity to the regions from the city, and it hasn't worked up until now and there's no reason to think that this will be any different," he said.
Mr Coates said while the Government's latest push was different in that it was about relocating government agencies, the same principles applied.
"You're spending a lot of money trying to subsidise jobs in regional areas, trying to push those jobs to the regions, and all the while we've seen more and more economic activity concentrated in our major cities," he said.
Not much 'bang for buck' in pork barrelling
A Grattan Institute report released last year revealed that despite regional areas receiving disproportionate levels of infrastructure spending, the funding had done little to boost jobs growth, which was largely concentrated in Melbourne and Sydney.
Mr Coates said the report found that while Sydney represented 22 per cent of the national economy, it had received just 5 per cent of Commonwealth infrastructure spending in the past decade.
"Whereas the rest of New South Wales received more than a quarter of all Commonwealth transport infrastructure spending," he said.
"And it doesn't actually seem like we've received much bang for our buck.
"Instead it's largely been spent in marginal seats … in areas where governments look like they might win or lose elections, and that's been particularly the case in Queensland and New South Wales."
Harder to attract skilled workers in regional areas
Mr Coates said while most government agencies based in the ACT were there as an "artefact of history", even in Canberra there was still a large pool of skilled workers to choose from.
He said moving departments to regional areas could lead to less qualified workers taking up government positions.
"Either you attract less capable workers or you end up having to spend a lot more money to get those skills to regional areas," Mr Coates said.
"A great example is the move by Agriculture Minister Barnaby Joyce to move the Australian Pesticide and Veterinary Medicine Authority [from Canberra] to Armidale [in New South Wales].
"Now we've seen reports that there's been extra inducements offered to encourage staff to move to those areas."
Remote cities out in the cold
Mr Coates said satellite cities, such as Ballarat and Geelong, that were reasonably close to a capital city would likely benefit from decentralisation because people could still commute to Melbourne.
But he said remote cities such as Mildura, in Victoria's north-west, would continue to do it tough.
"Those that are inland or are relatively remote are always going to struggle in a global economy, where most of the economic gravity is really pushing economic activity towards our cities," he said
Instead, he said those locations should concentrate on reskilling the workforce and ensuring services were in place that made their city an attractive place to live.
Topics: government-and-politics, economic-trends, regional-development, canberra-2600, vic, mildura-3500
First posted
