Regional policy, regional deals, and regional voices

Australia’s regions don’t just need funding, but the power to decide how to spend that funding, Kim Houghton and Kylie Bourne write.

With a Federal election fast approaching, the National Parliament is again turning some attention to Regional Australia. Every seat will count, and there is a common feeling that dissatisfaction with major party performance on regional issues has led to new independent members in the national and Victorian Parliaments, triggering Federal Government rethinking on policy.

In a recent article, researchers argued that Australia’s current high representation of regional ministers – and one parliamentary secretary – places Regional Australia in a unique position of now “calling the shots”. Regional issues are gaining traction at the highest level: there are more ministers ready to receive advocates and there is a greater chance that regional leaders will “have an opportunity to be heard”.

A new role for the Federal Government in regional development could emerge from the Federal Parliament’s Select Committee on Regional Development and Decentralisation. In June 2018, the Committee completed a 12-month inquiry which examined approaches to regional development, the decentralisation of Commonwealth entities and supporting corporate decentralisation.

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The Committee’s report, Regions at the Ready: Investing in Australia’s Future, made 13 recommendations to support and promote the economic development of regional communities. The Federal Government has recently provided a response to the recommendations which gives indications of how it sees its role in regional development.

“The Committee will examine best practice approaches to regional development, the decentralisation of Commonwealth entities, and supporting corporate decentralisation.”

The Government’s response is based on its public commitments to decentralising Federal public sector staff, continuing to offer grants programs for regions, changing the role of its network of Regional Development Australia Committees, and piloting a deals-based approach to agreeing and funding regional priorities.

Of these actions, it is the deal-making model which has the greatest potential to mark a departure from the regional policy framework of the last decade.

Our organisation, the Regional Australia Institute (RAI), has written on the significance of deals approaches for regional cities, having seen the impact of this model in the United Kingdom. Deals are designed to bring together key players including the regional community and different levels of government, and commit to a long-term place-based approach to developing regional economic and social resilience.

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In the UK, deals are helping revitalise cities in England’s north. However, these city deals are having a limited impact in the regions surrounding the cities of the north, the regions that were strongly in favour of Brexit.

These are the places ‘left behind’ by decades of policy-making that focused on cities in the belief that economic benefits delivered to a centre would spill out to the surrounding communities.

In the absence of the manifestation of such benefit, the Brexit vote can be seen as an instance of what Andrés Rodríguez-Pose from the London School of Economics calls the “revenge of the places that don’t matter”, which University College London’s John Tomaney identifies as the “struggling mill towns, declining coastal resorts and former coalfields that have been largely untouched by the growth in big cities”.

Using deals to reach beyond cities to these ‘forgotten places’ in their own right is a promising policy option.

In the UK, the London-led version of devolved decision-making is being seen as less than satisfactory for some northern regional leaders and their smaller communities. One Yorkshire is emerging as a locally-led reaction to the perceived weaknesses of London’s preference for developer-led, city-centric policies. It contrasts with a vision of rejuvenated economies based heavily on the big cities like Sheffield and Leeds to offer an approach “where power is devolved to the larger regional scale to create a more inclusive form of development that addresses the needs and aspirations of communities beyond the big cities.”

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Approaches like One Yorkshire bring into sharp relief the unequal power dynamics between players in city deals. While the concept of central government-initiated multi-level negotiations was welcomed in the cities in the north of the UK, it has become clear that these negotiations are not always amongst equals, and still favour the most economically powerful actors.

Regional policy in Australia is only starting to experiment with deals, and with closer partnerships between regional organisations and state and federal governments. Generally, policymakers have been very good at informing regions, and quite good at inviting their ideas by consulting with them.

But the spectrum of public participation goes much further, into the unfamiliar territory of collaboration and empowerment. This is the essence of the differences between a grants program and a deals process. A real shift in Australia’s regional policy framework would see state and Federal governments empowering regions to make decisions on priorities that are then endorsed and resourced.

The research by Andrew Beer, John Tomaney, and the RAI highlights the importance of not just of funded programs for regions, but of enabling regions to determine the nature and mix of that funding.

Movement on this would reflect the emerging global best practice examined by the Select Committee. It would also require a significant departure from the status quo, and at present this is just a small part of the response to Regions at the Ready.

The true impact of a changed national approach to regional development will depend on the extent to which an inverted decision-making process is recognised and supported by regional voters and validated by central government decision-makers. Progress down this path would mark a significant rethinking of regional policy.