Policies for the Future of Regional Australia

… the rift between country and city is wider than at anytime in the last 150 years. The rift is so wide that thereturn of rural and outback prosperity – if by chance it

does return – will not quickly narrow the gap. For countrygrievances are not simply economic: the grievances are

social and cultural.

Geoffrey Blainey (2001)

Recently I was talking to a journalist about countryAustralia and he asked if I was afraid of One Nation. I

replied no, I was not afraid of One Nation, the politicalentity, but I was afraid of Australia becoming two nations.

John Anderson (1999)

Introduction

A cursory reading of recent debates about regional (defined here as non-metropolitan) Australia suggests that most areasare in decline, possibly terminal; that there is a growing ‘city-country divide’; that inhabitants of regional Australia live in a ‘land of discontent’ (McManus and Pritchard 2001); that current policy approaches are patentlyinadequate in view of suggested ‘market failures’ in the Australian space economy; and that governments should act decisively to reverse the current trajectory. The Australianhistorian Geoffrey Blainey has argued that at no time in thenation’s history has there been a wider chasm between the cities and the ‘bush’ (Blainey 2001). This portrayal gained added currency when, in 1999, the Deputy Prime Minister,

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John Anderson, described Australia as being in danger of becoming ‘two nations’ (Anderson 1999: 1).

This view of regional Australia has been challenged in two ways. There are those, including governments, who do not think that conditions in regional Australia are all that bad, certainly not uniformly so. And there are those who think that focusing on non-metropolitan regions as the highest aim of spatial policy is itself wrong-headed, whether or not regional Australia is in decline. The latter critics are more concerned about disparities within and between regions, whether these regions are outside the metropolitan areas or not. The different views of the condition of regional Australia are not unconnected to regional policy debates. Often, these views reflect different perceptions of the role of government in regional development. For example, those who see regional Australia’sfuture as unerringly bleak are often those most vocal in their criticisms of current policies and strongest in their support of more interventionist (European-style) approaches to spatial policy.

This paper seeks to go beyond the conventional wisdom of a country-city ‘divide’. It argues that regional conditions vary widely and that much of non-metropolitan Australia is not in decline, casting doubt on the existence of a divide and on arguments that the divide can, and should, be addressed by government. The paper also argues that positions held in regional policy debates and perceptions ofthe condition of regional Australia are closely linked. Views on policy reflect perceptions of the nature and causesof regional problems and of the capacity and desirability ofgovernment being involved in shaping regional outcomes. Current regional policy approaches are outlined and explained and a prognosis is provided of the future of regional Australia.

Conceptions of the ‘Regional Problem’

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Armstrong and Taylor have argued that governments should be clear about regional policy objectives (Armstrong and Taylor1993, p. 216). Clear objectives require a measure of agreement over the nature of the ‘regional problem’. Yet in debates over regional development in Australia, there is no clear agreement over what is to be addressed. Just as there are disputes over definitions, there are several ‘takes’ on the regional problem. The very term ‘regional’ (and, for that matter, ‘rural’) is contested. Equally, there is no clear agreement among observers and regional stakeholders asto what constitutes regional well-being, how this is to be measured, and whether it is primarily an economic or a social or an environmental phenomenon, or indeed some combination of the three.

Politicians are currently apt to talk about ‘rural and regional Australia’ (RaRA), while some complicate things further by adding ‘remote’. For some, perhaps many, observers, regional means non-metropolitan, that is, beyond the State capital cities. For others it means areas outside cities over around 100,000 people. In a nation of dominant primate capital cities it is hardly surprising that policy and debate should be focused on the relationship between city and country. The persistence of discussions of a ‘city-country divide’ (see below) indicates that for many the mainfocus of attention in regional policy should be on all areasbeyond the capital cities. Many country interest groups, like the Country Mayors’ Association (CMA) in New South Wales, see the regional problem as one of ‘imbalance’ between primate capital cities and other regions. These groups believe that the solution to what they see as the chronic underdevelopment of regions beyond the cities lies in redirecting development away from the ‘bloated’ cities (Country Mayors’ Association 1993). Such views have persisted, especially in regional areas, well beyond the time when governments ceased to address the supposed imbalance.

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Others reject the linking of regional to non-metropolitan, and suggest that regions should be thought to include metropolitan areas. These include the consultants National Economics, who have produced an annual State of the Regions Report since 1998 for the Australian Local GovernmentAssociation. For National Economics, there are a number of types of region in Australia, each with its own set of problems – core metropolitan regions (e.g. global Sydney), dispersed metropolitan regions (e.g. the Central Coast region of New South Wales), production regions (‘old economy’ industrial cities such as Newcastle and Wollongong), lifestyle regions (e.g. the coast), rural and remote regions (e.g. the wheat-sheep belt with its decliningsmall towns) and resource based regions (e.g. Broken Hill, Mt Isa, Kalgoorlie) (National Economics 2002). In the National Economics/local government view, it is the existence of growing regional disparities that should be thefocus of regional policy rather than any city-country divide. Hence there is a continuing tension among regional policy advocates over what the precise aim of policy should be.

What is Happening in Regional Australia?

What is actually occurring in regional Australia? Does it even make sense to talk about regional Australia as a singleentity? As noted above, traditional conceptions of the regional problem, reflecting ‘countrymindedness’ (Aitkin 1985) and resentment of the cities, persist, yet are increasingly irrelevant since regional conditions have become far more varied and the processes driving them more complex (Sorensen 2000). According to Stimson:

… our society is dividing on multiple dimensions – includingshifts in industry and occupational structure, income distribution, the incidence of poverty. … [The] differentiations across space in socio-economic phenomena also have complex multiple dimensions, which are explained inadequately by a ‘city/bush’ dichotomy popularly espoused

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by politicians and reported in the media (Stimson 2001, p. 198).

There are a number of features of Australia’s space economy worth noting:

Metropolitan primacy persists in several States, notably New South Wales, Victoria, South Australia and Western Australia. In 2001, for example, Sydney contained around 64 per cent of the New South Wales’ population and accounted for over 70 per cent of the State’s economy (Powell 1999). It is anticipated that these trends will continue.

The emergence of Sydney as a ‘global city’, with its ‘command and control’ functions, the emergence of businessservices and finance as key industries, and the development of a highly paid, multi-skilled workforce withan international focus and highly developed global links (Searle 1996). Cities are also becoming the key points of presence of the emerging ‘creative class’ (Florida 2002; Collits 2002c).

Australians’ traditional preference for coastal living hasincreased since the 1970s (Salt 2001; O’Connor 2001). While movements to coastal areas in New South Wales appearto have slowed between 1996 and 2001, it is likely that movements out of capital cities to coastal regions will continue. So too will the inevitable environmental pressures and conflict over development that has accompanied the ‘sea change’ phenomenon (Murphy 2002).

In inland regions, especially in the wheat-sheep belt, smaller communities with an already low population base have struggled to maintain population and economic function in the face of increased farm mechanisation and corporatisation.

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At the same time, larger regional centres have generally prospered relative to smaller communities, especially in inland regions, benefiting from scale economies and greater economic diversity, and driven by better transport, out-shopping and the regionalisation of government and other services. This is the so-called ‘sponge city’ phenomenon (Salt 2001; Collits and Gastin 1997; Productivity Commission 1999).

The decline of traditional industries such as meat processing, timber and dairying, driven by a mix of globalcompetitive pressures, environmental regulations and the demands of national competition policy.

The flight of youth from regional areas, particularly fromsmaller towns, in search of educational and career opportunities has robbed many places of talent and future community leaders, and is a continued source of despair tothese communities.

The impacts of government decisions on regional communities, for example in the areas of service delivery and national competition policy, has reinforced the drift of services to larger centres.

Globalisation has empowered some regions, industries and communities, disempowered others, and generally reduced the capacity of governments to shape regional outcomes (Sorensen 2000).

There is less dependence on agriculture to drive regionaleconomies, as regional urban communities have ‘uncoupled’from their local farm economies and become more diversified (Stayner and Reeve 1990).

There has been a drive towards greater value-adding and greater diversity in an effort by agricultural industriesto achieve greater profits, in response to a general decline in profitability among traditional agricultural

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industries such as wheat and wool. Emerging sectors include horticulture and viticulture, and many regional economies are increasingly reliant on the new sectors.

Many areas of inland Australia are facing pressures on water availability and quality, not just because of the severe drought being experienced in 2002. There has been pressure on irrigators to reduce their take from the rivers of the Murray Darling Basin, tied to competition policy, the needs of downstream users, reforms to pricingstructures and to emerging imperatives for greater environmental flows to enhance water quality. These new pressures have focused attention on the sustainability ofinland regions and industries traditionally reliant on irrigation, such as cotton and rice.

The advance of service industries, for example business services and community services, has continued apace, andnot only in metropolitan regions (Stimson 2001).

There has been a marked decline in manufacturing in metropolitan regions, providing fewer opportunities for traditional ‘smokestack chasing’ investment attraction strategies in regional areas.

Changing patterns of industry ownership and the development of national supply chains, and a greater focus on ‘command and control’ functions in major cities,have reinforced metropolitan primacy and given it new forms, based on agglomeration economies (O’Connor, Stimson and Daly 2001).

These patterns suggest increasing complexity and reinforce the arguments of Sorensen, Stimson and others thatit is meaningless to talk of one ‘regional Australia’. It isalso inaccurate to talk of a city-country divide. While there is no doubt that people in the cities have better access to some services, this is inevitable in view of the economies of scale that apply, and national and State

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governments are endeavouring to ensure that services in regional areas are acceptable to regional communities. Some problems, like the shortage of doctors in many regional areas, are complex and difficult to resolve satisfactorily. Other problems are being addressed through a range of initiatives. At the same time the capital cities are a falseand unrealistic benchmark for measuring regional developmentoutcomes. The real challenge for regional businesses and communities is to measure their performance against other, similar regions and against their own earlier performance. The growth of the capital cities should be seen as being beneficial to regional areas. They provide a market for the agricultural products of the regions, income through tourism, and services that enhance the sale of regional products to the world. The economies of metropolitan and non-metropolitan Australia are inextricably linked and mutually dependent.

Regional Policy Shifts

Australia’s federal structure and vigorously partisan politics have had implications for regional development policy. At the national level, conservative governments havetended to leave regional policy largely to the States, whileLabor governments have been more activist and interventionist, especially the Whitlam Government of the 1970s. At State level, the limited resources available have generally left governments unable to have much impact. Localgovernment, a persistent critic of regional policies, constitutionally weak and chronically under-funded but demanding a greater role in regional development, has lookedlongingly towards Europe with its larger budgets, focused regionalism and greater commitment to subsidiarity. Many of the over 700 local government areas across Australia are toosmall to be effective agents of regional policy, except in Victoria, where forced local government amalgamations in the1990s rendered them of a size able to address regional development. The principal role for local councils has been

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as partners with, and funding recipients of, the regional programmes of higher levels of government.

Much of the debate over regional policy in Australia has focused on the Commonwealth’s various entries to and exits from regional development (see Beer 1998; Beer 2000; Taylor 2000). Typically, the Commonwealth’s lukewarm approach is seen as harming the achievement of regional policy objectives. Yet this preoccupation with the Commonwealth misses much of the regional policy story in Australia. In particular, it misses the changing nature of regional policyobjectives over time, in response to a number of variant andcomplex processes and trends, and the complexity of the policy processes themselves.

In the 1970s an attempt was made, however limited and imperfect, directly to shape spatial outcomes through a national regional policy. The problem was largely seen as metropolitan primacy and the development of ‘bloated cities’. Governments provided open-ended incentives for firms (mainly manufacturing firms) to relocate. There was anemphasis on industrial recruitment, and faith in government solutions. The approach was ‘top down’ and one policy was seen to fit all situations. Globalisation had not then had its dramatic impact on our space economy, and terms such as ‘regional competitive advantage’ and ‘sustainable development’ had not yet appeared in government regional policy documents.

Since the abandonment of a national regional policy basedon attempting to counter metropolitan primacy, regional policy approaches in Australia have converged to reach something of a consensus in the 1990s. The key feature of this policy is that it should attempt to influence outcomes in partnership with locally driven strategies and objectives, recognising, on the one hand, the limits of government policy and, on the other, the reality (including the political reality) that communities and regions value ‘place’ and are willing to put resources into strengthening

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their local economies. The position is one of ‘limited’ government intervention, or ‘strategic intervention’. It is not simply a position that markets should rule spatial outcomes unimpeded by any intervention, but it is also a rejection of substantial intervention. Policy now seeks to influence some of the drivers of regional development, largely at the margin, and in ways that ‘make a difference’ where this is possible. Not all governments agree on every regional policy issue, but there has nonetheless been clear policy convergence. Most governments have long since ceased to pay anything but the merest lip service to the decentralisation agenda that drove the Commonwealth, Victoria and New South Wales till the late 1970s.

Elements of the consensus include the following:

A belief in regional competitive advantage as the way forward for regions;

The development of partnerships with and among local economic development agencies;

Local solutions to local problems, that is, tailored, region-specific policies designed for particular kinds ofproblems;

Facilitation of regional development outcomes rather thandirection of where economic development should occur;

Bottom up approaches with communities rather than governments claiming ownership of regional problems and determining solutions, largely based on competitive grantfunding delivered to a plethora of ‘meso level’ agencies operating at the regional level;

Acceptance by government of the central role of leadership at the local and regional level;

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A growing preference for ‘gardening’ (growing existing regional firms) rather than ‘hunting’ (recruiting new businesses from outside the region); and

A belief that managing change in regions is now the key regional policy objective.

The Australian regional policy approach described here issometimes contrasted (unfavourably) with approaches overseas, for example the United States and Europe (Manning 2001). Yet Hugonnier (1999) demonstrates that many OECD countries have adopted policies that resonate with those described above. For example, he notes the need for sustainable development to be central to regional policy considerations; the relevance of region-specific policies and programs to variable regional problems; the limitations of ‘conventional regional policy responses’, for example massive assistance targeted at lagging regions; the desirability of reducing assistance to declining industry sectors; ‘making the most of globalisation’; the importance of partnerships; and a policy focus on maximizing regional growth rather than reducing disparities between regions. Hugonnier’s survey of OECD regional policy shifts shows thatAustralian policies are now broadly in line with international practice, the appeals of the Australian policycritics notwithstanding.

How Did the Current Policy Consensus Come About? The Driversof Regional Policy Change

Policy development and policy change are complex processes with multiple dimensions and explanations. In Australia, with its three tiered system of government, short term electoral cycles, spatially differentiated electorates, vigorous political debates, varying geography and widely (and increasingly) divergent regional issues, it is not surprising that regional policy would be subject to shifts in emphasis, changing levels of resources, and the comings and goings of intellectual fashions. Regional policy is

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also, of course, hostage to many other areas of policy whichinevitably have varying and often unforeseen impacts on regions.

The ‘canvas’ on which regional policy debates are paintedis also subject to dramatic shifts over time, as regional development has multiple and variable drivers that include natural resource endowments, changing technology, new production methods, individual lifestyle preferences, business and investor location decisions, business performance, and human capital (Sorensen 2000). Nonetheless,it is possible to discern policy positions and chart their changes over time (Collits 2002a and b). Of course, the sometimes subtle changes that have occurred in regional policy objectives and content can be obscured by more dramatic, but perhaps less important ‘marker events’. A goodexample of this was the abandonment of regional policy by the Howard Commonwealth Government in 1996. This proved in the longer term to be simply part of the electoral cycle andhad no real implications for the evolution of regional policy objectives. Yet it was seen by some (for example, Beer 1998) as indicative of the triumph of economic rationalism. Regional policy duly reappeared at Commonwealthlevel in 1999, again at an expected stage of the electoral cycle (driven in part by the rise of Hansonism and the One Nation Party). What is important to the analysis here is notthe reappearance but the direction of policy when it reappeared on the Government’s radar screen. Focusing on theevents of 1996 and 1999 can obscure the longer-term evolution of policy ideas.

Hence there have been two processes occurring in Australian regional policy. The first is essentially a political process. Interest in regional policy has waxed andwaned over time, especially in Canberra. Generally, Coalition (conservative) governments (1949, 1976, 1996) havetended to view regional policy as the proper preserve of theStates, and have wound back inherited regional programmes. On the other hand, in the States, the process has been more

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evenly evolutionary and bipartisan, though on occasions there have been more dramatic overturnings. The second process, occurring separately from the politically driven peaks and troughs of policy interest, has been a more fundamental shift in thinking about policy objectives. There can be both politically driven events and longer-term trendsthat require deeper explanation. The dramatic events tell ussomething about regional policy evolution, but they do not tell us everything.

What, then, have been the drivers of longer-term change? Regional policy development in Australia has been characterised by what might be termed ‘pragmatic incrementalism’, borrowing from Charles Lindblom (Lindblom 1959; 1965; 1968). Policy change has been gradual. New bits have been added, and other elements have been discarded. Newideas have emerged. Old problems have either gone away or have quietly come to be regarded as insoluble (Downs 1972; Hurley 1993; Bridgman and Davis 1998; Collits 2002a). There is no one single explanation (such as the emergence of economic rationalism) for the current direction or content of policy. However, there are clear explanations apparent from an examination of regional trends, the emergence of newregional problems, the abatement of earlier problems, the acceptance by governments of new economic policy ideas generally, and reflection by governments and policy makers generally on the effectiveness of earlier approaches. The following discussion provides some clues to the nature of regional policy evolution in Australia and suggests that, despite the critics, there is a logic and coherence to the development of regional policy over time.

The Regional Policy Process in Australia: Pragmatic Incrementalism

The above described the content of current Australian regional policy and outlined its emergence and principal objectives. However, the process of regional policy-making in

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Australia also has a number of ‘marker’ characteristics of significance to current debates, as follows:

Policy is characterised by pragmatic incrementalism, thatis, successive governments, especially at State level, have generally built on previous programmes and approaches and added new tools rather than fundamentally reassessing policy.

Regional development has been typically a peripheral interest of governments, though this has changed in recent years at both State and national levels.

Generally, regional development is a part-time portfolio for the minister responsible for it.

Regional policy is generally something that all governments do – it is, to some extent, a ‘motherhood’ commitment.

Undoubtedly regional development is a heavily politicisedarea of policy, particularly since Australian (lower house) members of parliament are elected in spatial constituencies.

There is a regional policy ‘political cycle’ in which regional development comes to prominence at certain timesin the electoral cycle.

There are, therefore, limited windows of policy opportunity.

Regional policy is characterised by blame shifting between State capitals and Canberra – it is often hostageto Commonwealth-State relations.

Often the big questions of spatial development, such as the development of primate cities, are placed in the ‘toohard basket’ – they are ‘wicked problems’ whose

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resolution will always elude even governments that are motivated to confront them.

Policy is driven by programmes, and regional policy is often formulated post-hoc after specific programmes and initiatives have been deployed in response to specific problems.

Governance in relation to regional policy is characterised by separate programmes run by separate departments (silos), with resulting problems of fragmentation and coordination (Collits 2002b).

The processes described here reveal a complex set of conditions that drive regional policy, and, of course, regional policy itself is merely one part (and often a minorpart) of the business of government. At the same time that regional policy evolution was occurring in Australia as elsewhere, government itself was changing in important ways.Interest group pressures have increased and have become moresophisticated across the wide range of government policy interests; there are increasing pressures on government budgets; and government’s capacity to achieve desired spatial outcomes has waned as a result of globalisation. Theprocesses are a reminder that regional policy, and policy generally, is an imperfect attempt to deal with complex and shifting problems about which there is seldom consensus overends or means.

Critics of Regional Policy in Australia

Regional policy in Australia is not without its critics (Collits 2002b). One criticism is that it attempts to do toomuch. This view is typified by Sorensen, who has questioned the capacity of governments to intervene effectively in the spatial economy (Sorensen 1993; Sorensen 2000). In his view there is a ‘tyranny of the macro’ at work which prevents generally ill-equipped governments from having much of an impact on regional economic outcomes. He outlines what he

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takes to be the main drivers of regional development, and finds that governments generally have little ability to influence them (Sorensen 2000, p. 19). This view is shared, to some extent, by Commonwealth and State Treasuries and by the Commonwealth’s economic advisory body, the Productivity Commission.

An opposite criticism is that Australian governments don’t do enough in regional policy. Sometimes this criticismextends to the claim that regional policies or, more broadly, policies that have an impact on regions, have actually led to regional decline. Hence, according to Apthorpe:

The ‘free market’ and economic rationalism have given the regions what they have today – low performing economies (Apthorpe undated, p. 3).

Recent policy proposals such as ‘Whole of State’ developmentin New South Wales, and enterprise zones based on North American and European funding models, involving far greater spatial intervention, have also raised the issue of whether the current limited intervention approach is adequate (Collits 2001). Such critics have attacked both the objectives and the process of regional policy (Collits 2002b; see also McManus and Pritchard 2001; Gleeson and Low 2000a and 2000b; Gleeson 2001; Gray and Lawrence 2001; National Economics 2002). Yet there is little agreement overeither means or ends, and real and potential regional policyobjectives are numerous. Should governments redirect population, or help declining regions, or help growing regions, or seek to influence the quality of life in regions, however measured, or reduce the disparities betweenregions, or provide more evenly distributed services, or allof the above? In what order of priority and in what measure?How are the above objectives to be evaluated? These questions are at the core of regional policy, and their answers are far from clear, yet they often go unremarked by

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the critics, who simply focus on ‘the need for government todo more’.

This leaves policy dilemmas that are still to be resolved, and the critics remain. What is clear is that one’s position in relation to the adequacy of policy is closely allied to one’s perceptions of the state of regionalAustralia.

Contrasting Views on the Future of Regional Australia

There seem to be (at least) two distinct ways of viewing regional Australia, two views of the processes driving regional growth, and two ways of conceiving the proper role of government. One view sees regional Australia as differentiated and certainly not in universal decline. It sees regional development drivers as complex and subject to an enormous range of forces, many of which determine where industry and businesses locate, and few of which are subjectto government fiat. On this view, government intervention should be selective and should seek to ‘make a difference’, while not prejudicing the market. Inherent to this argument,though generally unstated, is the view that not all regions will prosper. Sorensen, for example, emphasises the complexity of regional development processes and links this to a limited role for government. He refers to:

… processes of exceptional complexity over which governmentsexert only partial control or influence… the changes occurring have benefited some individuals and regional communities while causing others to perceive deep-seated economic and social disadvantage. The latter’s exasperation at governments’ seeming inability to improve their living conditions has fuelled the political revolt sweeping rural and regional Australia (Sorensen forthcoming).

The other view sees regional Australia as facing a ‘crisis’, with many parts in terminal decline. This situation is said to be unacceptable, caused by government

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actions and inaction, and requiring substantial and direct government intervention. Such government intervention is, onthis view, capable of turning around the declining fortunes of regions, even if at great cost to the taxpayer, provided the right ‘incentives’ are in place for industry to relocateor expand. Inherent in this argument is the view that all (or at least most) regions should prosper. Most governments currently subscribe to the former view. Supporters of greater intervention subscribe to the latter view.

The differential impact of change, with the co-existence of booming regions and declining regions, has given rise to two distinct regional responses and policy preferences. In Regional Australia, businesses and interest groups seem to divide into those who see a positive future for regions, andare active in driving their local economies and are involvedin their communities, and those who see decline all around them and generally blame governments for it. The former do not shun government help, but neither do they rely on it. They see opportunities in globalisation, and believe that many regional communities can prosper in the future. They understand the complexity of regional development. They are likely to hold non-traditional, community based leadership positions. Their focus is generally not on the relationship between their own community and the remote capital city. They probably do not think much about the role of governmentin regional development, other than to apply for grants under government programmes. The latter tend to look for topdown solutions, see State and/or Commonwealth government inaction (lack of ‘leadership’) as part of the cause of regional problems, and tend to look first to a central government for help rather than within their own community. Political action is more like to come from this group, as are solutions such as enterprise zones. Their membership, itis safe to say, is more likely to come from traditional community leaders, for example from local government. They think often about the role of government in regional development. There is a strong focus within this group on the relationship between the capital city and the ‘bush’.

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This may be seen as an over simplification. There are many regional communities and leaders who are active in local development and positive about their futures, but who would still like to see far more government intervention. However, the bifurcation of views does exist, and sometimes it is difficult to see if members of the two groups are really talking about the same regional Australia.

Regional Australia in 2002 can also be seen as an amalgamof diverse conditions and trends. Regional threats and opportunities abound, yet vary dramatically across space andover time. Assessments of conditions should be realistic. While there are areas of concern, there are also many investment and lifestyle opportunities in regional Australiabased on natural resources, local skills, labour force stability, abundant land, affordable housing, low business costs, a good energy supply, strong regional universities and good transport links to metropolitan, interstate and overseas markets.

Underneath the visible population movements lies a rapidly changing and dynamic regional Australia with the birth of new enterprises and industries, the waning of old ones, the diversifying of the regional economic base and the creation of new economic opportunities. These change are occurring inall regions, even those generally thought to be ‘in decline’according to the single measure of population loss. This makes it extremely difficult to typecast regional Australia,despite the efforts of some in the media and elsewhere. There are many ‘regional Australias’. There is certainly little evidence that regional areas generally are in decline. New opportunities are being created, driven by profound social changes and technological advances as well as traditional economic location factors. Former ‘old economy’ centres such as Newcastle, a short time ago thoughtto be devastated by the closure of a traditional industry, have been reborn with new, environmentally friendly industries, far greater diversity and a whole new economic

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culture. More and more regions are becoming centres of amenity and tourism as new wealth in the cities creates moremarkets for short-stay breaks and cultural tourism. Real estate values in areas generally thought to be in decline have suddenly increased as new lifestyle choices develop. Regional branding is creating new images for many regions, often based on traditional strengths.

Better transport infrastructure around Sydney and the other State capitals is extending the reach of professional ‘lone eagles’ who are resettling to, and changing the face of, peri-urban communities and creating new service industries. Better health, early retirement, and superannuation savings are generating new areas for retireesto achieve a ‘sea change’, especially among baby boomers, and this is driving growth in many areas (Salt 2001; Murphy 2002; Murphy and Burnley 2003a and 2003b). Telecommuting, while never the panacea that some have made out, is still making it possible for business people to locate their operations outside the major population centres. More flexible work patterns too have had an impact on business and professional location decisions. The relocation of government functions, especially back office operations, is providing additional employment for semi-skilled labour.

This complexity and variability suggests that government policy responses should be flexible and tailored to specificregional issues. Regional conditions are infinitely more complex and subject to rapid change than simple and often inaccurate portrayals of a ‘divide’ suggest. It makes littlesense to compare small, inland centres to larger coastal settlements, for example.

Conclusions

The future of regional Australia is not guaranteed. Equally,it is not necessarily bleak. While there are undoubted challenges, especially where remoteness, lack of scale and narrowly based economies are impeding growth, there are also

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many opportunities for communities to take advantage of emerging industries, new technologies and changing lifestylepreferences. Whatever the current lifestyle preferences of city people, increasing pressures on urban and coastal environments together with improving transport linkages fromSydney to regional areas are likely to create new opportunities for communities in inland regions. Those places that make amenity and economic opportunity a feature of their development strategies will be well-placed to attract new generations escaping the city. Many regional businesses, for example, have identified lifestyle as the prime reason for their location.

The future of regional Australia must be built on competitive businesses, diverse and sustainable industries and open, welcoming communities. Government must continue tobe a willing partner in the enterprise, not as the sole driver of regional development but as an active and focused facilitator. Communities and regions will succeed where theyare willing to welcome change, where they provide a positiveinvestment climate, where they are vigilant, where they are constantly open to the need for re-invention, and where theyhave realistic and achievable goals. Businesses in regional Australia are in fact relatively optimistic about the future. A survey conducted by the Australian Chamber of Commerce and Industry in 2001 revealed that business confidence in regional Australia is strong and is likely to remain so in the medium term (Australian Chamber of Commerceand Industry 2001).

The pace of change is ever increasing as regional development processes become more complex, making it harder to predict the trajectory of regional economies and the future of regional communities. The current trend towards far greater divergence of regional outcomes is likely to continue, if not increase. Diversity within and between regions will be far more important than any ‘city-country divide’ in the future. The current targeted, region-specific, evolutionary regional policy approaches will be

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more relevant than ever in these circumstances. And no doubtthey will continue to attract the usual line-up of critics insisting that more should be done. On the other hand, acceptance that the regional policy objectives of governments in Australia – to help regions and communities better adapt to change – are just about right need not imply that everything about the regional policy process is perfect, nor that there is no unfinished business on the regional policy agenda.

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