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Illawarra Business Chamber/Illawarra First Illawarra Business Chamber/Illawarra First Inquiry into Regional Development and Decentralisation Submission to the Select Committee on Regional Development and Decentralisation SUBMISSION – Inquiry into Regional Development and Decentralisation SUBMISSION – Inquiry into Regional Development and Decentralisation Contents 1. Introduction .........................................................................................................................................1 2. Background ..........................................................................................................................................1 2.1 Illawarra Business Chamber/Illawarra First .........................................................................................1 2.2 Overview of the Illawarra ....................................................................................................................1 3. Approaches to Regional Development ................................................................................................2 3.1 Best practice in regional development ................................................................................................2 3.2 Focus on Competitive Advantages .......................................................................................................3 3.3 Realising benefits of proximity to Sydney ............................................................................................3 3.4 Importance of transport connectivity to regional economies .............................................................4 3.4.1 Road connectivity .........................................................................................................................4 3.4.2 Rail connectivity ...........................................................................................................................5 3.5 Job creation must be a priority in regional areas ................................................................................7 4. Need for decentralisation of government administration ..................................................................7 4.1 Decentralised activities that could be supported in the Illawarra .......................................................8 5. Regional priorities ................................................................................................................................9 6. Enhanced productivity through regional development .................................................................... 10 7. References ........................................................................................................................................ 11 SUBMISSION – Inquiry into Regional Development and Decentralisation 1. Introduction The Select Committee on Regional Development and Decentralisation has established an Inquiry into Regional Development and Decentralisation. The inquiry will explore ways to increase the growth and prosperity of regional and rural Australia. While decentralisation of Commonwealth entities has been identified as a potential means to achieve this, the Committee wants to examine, more broadly, how public and private investment can assist in building and sustaining our regional communities. The Terms of Reference for this inquiry include: a) best practice approaches to regional development, considering Australian and international examples, b) decentralisation of Commonwealth entities or functions, as a mechanism to increase growth and prosperity in regional areas, considering Australian and international examples, c) actions of the Commonwealth that would encourage greater corporate decentralisation and what can be learned from corporate decentralisation approaches, d) examining the extent to which employment and growth can be supported by growing existing and new industries in regional areas, leveraging the strong transport and communications connectivity, e) actions of the Commonwealth that would encourage greater corporate decentralisation and what can be learned from corporate decentralisation approaches, and f) any related matters. 2. Background 2.1 Illawarra Business Chamber/Illawarra First The Illawarra Business Chamber (the Chamber) is the Illawarra Region’s peak business organisation and is dedicated to helping business of all sizes maximise their potential. Through initiatives such as Illawarra First, the Chamber is promoting the economic development of the Illawarra through evidence-based policies and targeted advocacy. The Chamber appreciates the opportunity to provide a submission to the Select Committee. 2.2 Overview of the Illawarra The Illawarra, as defined by the five Local Government Areas (LGAs) of Wollongong, Shellharbour, Kiama, Shoalhaven and Wingecarribee, is New South Wales’ third most populous area, home to over 380,000 people and an expected population of about 500,000 by 2050.1 1 NSW Department of Planning and Environment, Illawarra-Shoalhaven Regional Plan, 2015, page 3. SUBMISSION - Inquiry into Regional Development and Decentralisation 1 The region is the New South Wales’ third largest economy, contributing $16.2 billion to the State’s economy in 2013.2 The region is home to the University of Wollongong, one of Australia’s top 10 universities, Australia’s third largest international trading port and comprises a landscape of significant biodiversity value making it a region of national significance. The region is ideally located given its close proximity to Sydney and Canberra, as well as its global connections through the port of Port Kembla, which directly and indirectly supports over 3,500 jobs and is estimated to contribute around $418 million annually to the regional economy.3 The Shoalhaven Defence base (HMAS Albatross) also supports over 2,500 jobs and contributes some $295 million annually to the regional economy.4 3. Approaches to Regional Development 3.1 Best practice in regional development In recent years, there has been a growing awareness of the need and potential value of regional development, as Australia wrestles with the high cost of addressing affordability in our major cities and as business struggles to boost productivity and manage ever increasing costs. A cost effective way to achieve regional development is to invest in measures that link our capital cities with immediate proximate regions and locating government activities and functions to areas that can deliver a cost benefit to government and tangible employment and economic outcomes to regional areas. Global and structural changes also favour regions that are well-connected internally and to an increasingly globalised international economy. Linkages to a major international city or economic hub are particularly important. A fundamental principle in regional economic development is integration among regions through the movement of goods, services and people. The proximity to Sydney provides the Illawarra with a real competitive advantage. The importance of cities has long been understood in urban studies. The role of government in economic development has also changed since, at least, the 1990s, as policy has moved away from the highly interventionist and protectionist strategies of the past, to one based on strategic planning and collaboration between government, business and the community. However, the support of government in the development of hard infrastructure (roads, ports, fibre-optics, etc), and soft (sometimes termed ‘smart’) infrastructure (related to skills development, R&D, education, health, or environmental improvements) remains critical, particularly where regions are facing structural adjustment to external forces beyond their control. 2 note 1. 3 NSW Department of Planning and Environment, Illawarra-Shoalhaven Regional Plan, 2015, page 20. 4 NSW Department of Planning and Environment, Illawarra-Shoalhaven Regional Plan, 2015, page 25. SUBMISSION - Inquiry into Regional Development and Decentralisation 2 3.2 Focus on Competitive Advantages The transition of the Illawarra economy presents an important opportunity for the New South Wales and Australian economies. The strategic asset of Port Kembla is Australia’s largest motor vehicle import hub and the largest grain export terminal and the second largest coal export facility in New South Wales. The region has a strong record of providing innovative defence technology and services to the Australian and global defence industries. Importantly, the region is also endowed with a skilled advanced manufacturing labour force, supported by the research and education activities of the University of Wollongong. The continuance of this economic transition, however, is largely dependent on investment that provides improved transport connectivity between the Illawarra region, Sydney and Greater Sydney. As the development of Sydney continues (and, in particular, Western Sydney), many industry sectors will see benefits in relocating to the Illawarra. This is especially relevant for manufacturing and logistics businesses. Increased operating costs, increased land values and congestion pressures will require many businesses to look at relocation options if their operations are to continue. The Illawarra, located just 80 kilometres from Sydney CBD, provides an ideal relocation option for many of these businesses. To realise the potential of the region and its capacity to provide the productivity uplift and lower cost base sought by businesses, it is vital that improved transport connectivity in the form of improved road
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