Our major cities are becoming more congested and more expensive. Will we reach a breaking point when businesses decide to move to secondary centres? Could this process be helped along with a cohesive nationwide approach to regional planning.
Phil Dobbie talks to Dr Andrew Allen, Program Director for Urban and Regional Planning at the University of South Australia about regional development. In the early ’70s Australia experimented with regional growth centres. Is now a good time to revisit that strategy?
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- Today’s Transcript
Dobbie: Good day, I’m Phil Dobbie. Today, moving out of the city and taking your company or at least a division at a regional center. That’s today on BTalk Australia.
Our capital cities are getting busier and more expensive with high house prices and hours wasted in congestion. Is it really the way you want to run your business? And what’s the alternative? Dr. Andrew Allen is program director for Urban and Regional Planning at the University of South Australia. Andrew, congested cities, it’s not just an Australian phenomenon. How’s it handled in the rest of the world?
Allen: In cities like London they’ve done things like introduced congestion-charging. It’s probably more about trying to get people out of the city, not using their car — that’s one of the sort of key approaches. There’s also been an intent to trying to decentralise activity away from major capital cities, so you know, major cities of the world to regional centres. Sometimes central governments might try and provide tax breaks that make it advantageous to go into the regions. In fact they do this in the Australian system — they provide individual tax breaks which encourage people not to feel disadvantaged by going to a regional area. But for a mainstream business, such as what you see in the city, that doesn’t really apply that much — certainly not in Australian context. There are more people in the armed services that would be taking advantage of those sorts of tax breaks.
Dobbie: What are the incentives for businesses? A lot of these incentives are state based rather than federally based, aren’t they?
Allen: Yeah, quite often what they will do is provide some sort of what you might call staff upgrades. So they will say well if you relocate in this region we can give you a certain amount of money to make it easier to establish yourself in that location. Other things that state governments can do is actually provide access to industrial space so that the businesses don’t have to start something up from scratch. A lot of capital cities tend to do this when decentralising to the CBD from a suburban location. So at places like, you know, the North Ryde industrial park it’s easy to actually locate out there. But the trouble is in Australia, a lot of it is seen as more going out of the city location into the suburban location rather than saying going from Sydney to Wollongong or Sydney to Newcastle or Melbourne to Geelong.
Dobbie: For example, in the UK you see the Thames corridor full of businesses that have relocated out of London. And in Australia it’s the element of distance and distancing yourself from the support industries that you need.
Allen: Well, the other thing too, of course, is your access to work force — the trouble with places like Wollongong and Newcastle is that they’re very much smaller than Sydney. So you don’t have that critical mass of skills. So, if you need to recruit new staff, they may not be in the local area. You may be having to come up with a package or measures as an employer to try to put something through for you to relocate from a bigger city. And the situation you have with the employees is that they have to uproot, sell the house, get the kids into new schools, and all the rest of it. You wonder “what will happen if I lose my job or the company goes belly up?” and “will I be able to get another position in that locality?” So you’ve got all these problems with employees that make them reluctant to go into those locations.
Dobbie: So, should the state governments or even the federal government be doing more to try and develop these develop a diversity of industry in these regional areas?
Allen: Yeah.
Dobbie: There are incentives available for you to establish a business. But, I guess a lot of those incentives are available irrespective of where in regional Australia you go. Should there be almost like a growth approach where they pick a few regional centres and say let’s try and build this as the alternative Sydney and alternative Melbourne?
Allen: What you tend to find happening in Australia is more of a one-off approach these days, where they would say we want to get that company to continue investing in Australia. So they’ve just approved federal government funding to support a new hybrid car in South Australia. But it’s not necessarily uniform. If you look at Australia regional history, I’m going back to the early ’70s, they had this department open in regional development which nominated regional growth centres but it was driven by concerns about the inability of government at that point to provide adequate infrastructure in the capital cities. For example, large areas of Perth were unsewered. The obvious response was they said “let’s get people out of the cities and into the regions”. But, the economy at the time was bad and theynever really followed through on that growth. The only one centre that happened out of that were Albury-Wodonga. But maybe we need to revisit some of those ideas because with increased congestion, increased prices, and increased inefficiencies in capital cities, that might be a reasonable response.
Dobbie: Does this growth pole, I guess that’s the term for it, work — I mean it has worked overseas.
Allen: Yes, it has, I guess the challenge in Australia though is identifying where you could have a growth pole because we’re very capital centric in Australia. New South Wales is very Sydney centric. Melbourne dominates life in Victoria. Outside Melbourne you’ve got Geelong. Western Australia has Perth. It used to be shipbuilding and the steel industry in Newcastle. But with those industries declining it’s been difficult sort of building something on that. So with the growth pole you need something like a propulsive industry that will actually I guess attract like bees to the honey pot.
Dobbie: But technology would fit into that category wouldn’t it?
Allen: Yes, and the advantage the advantage with technology is that you can have these back office functions where it doesn’t really matter whether they’re in Alice Springs or Sydney and, or even India for that matter. And technology allows you can provide employment you know if it’s information technology you don’t really need to be right where your customers are. Australia’s no longer a low cost country in that regard. So a lot of companies opted to move offshore to provide those sorts of functions.
Dobbie: But it sounds it sounds like there’s a huge opportunity here. I mean, as you say, business is outsourcing overseas and yet there’s a large area of regional Australia where you know there are employment problems and yet, you know, there’s a work force there ready and eager. It’s just question of providing the right incentives for business to move there.
Allen: Yeah, the advantage of places like Newcastle and Wollongong is that they’re not that far from Sidney. Part of it is really trying to get that confidence in the business community that you can go there and you can then do well and your business can function just as efficiently and effectively as it could in Sydney. In fact, you may operate more efficiently because your employees are not spending two to three hours a day commuting to the outer suburbs.
Dobbie: That’s a lifestyle issue for the workforce. It’s definitely improved I think. Now the federal government has told me that regional development is really a state issue. States provide the grants — it’s in their interest to develop that regional spread to their economy. But if you want a cohesive approach it’s got to be a federal approach, surely?
Allen: Yes, the thing is that the federal government really holds the purse strings on for funding Australia. And if they really want to make a change of that magnitude it’s probably best through the federal government. But, as we’ve seen with the challenge of the Murray-Darling River, it’s really hard to get the states involved. You really have to have the states onboard with the Commonwealth in order to put an effective model forward. And that was part of the problem in the Whitlam years when they tried to establish this growth centres. I think unless you can get the state governments in a partnership it is difficult because we have have very dominant state governments. And without their support it’s very difficult to get the vote on new models for it. Sometimes what the Commonwealth can do is say “what we’ll do is act as an independent developer”. And in fact there’s quite a lot of Commonwealth land holdings around Australia. But they don’t have the critical mass in order to make this huge policy change. It’s also very political. So, the challenge is actually getting the state governments to work with the Commonwealth.
Dobbie: Thanks very much for your time today, it sounds like a lot of work to be done in this area before we really start to see some of these capital city congestion problems disappearing as more business moves out bush.
Allen: Yes.
Dobbie: And that is BTalk Australia for today. We’ll catch you again soon here on BNet.
