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Senate Select Committee into Jobs for the Future in Regional Areas Submission by Rockhampton Regional Council The following submission is made by Rockhampton Regional Council (RRC) in response to the Senate Select Committee into Jobs for the Future in Regional Areas and associated matters covered by the Committee. The unrelenting march toward metro centralisation of Australia and hollowing out of regions beyond commuting distance is at the heart of this submission. This trajectory is no longer acceptable and the consequences of policy inaction at both State and Federal levels and pursuit of government "business as usual" will be increasing disparity and inequity and increasing political instability in regional Queensland and Australia. Talk of “just transitions” away from existing out-of-favour industries is interpreted by many as code for “we no longer need regional Australia” and its productive primary industries including resources and agriculture. Much of regional Australia has been on the wrong end of decades of unjust transitions – centralisation of decision making, economic activity and populations in metropolitan areas and struggling or declining regional and local economies and populations. If we first focus on growing our regions and local economies, the need to even try and “manage” industry transitions will diminish. This submission calls for Federal and State policy settings that actively nurture, sustain and grow our regions. We need policies, practices and investment to generate jobs and growth and affirmative action to favour the regions before market forces finish the regions. Time is of the essence. Actions need to be urgent and untied from the protracted planning and analysis paralysis that mires many good intentions. There need to be defined, measured and localised targets for jobs and growth beyond the metro and peri-metro areas. There needs to be real partnerships between all three levels of government and those partnerships must be systemic rather than ad-hoc and be backed by real commitment and resources. About Rockhampton Regional Council Council is the custodian of approximately $2.5 billion in assets on behalf of our community and employs over 900 people. Our annual operational budget is over $200 million and we will spend around $110 million per annum on capital projects over the coming three years. Council’s procurement policies result in approximately 75% of all spending on the supply of goods and services being with local businesses. Council owns and operates the Rockhampton Airport and Fitzroy River Barrage and maintains some 2,000 kilometres of sealed and unsealed roads. It also operates and maintains extensive water and sewage treatment facilities and reticulation networks. In addition, Council provides facilities and services such as waste management, libraries, theatres, swimming pools and some 390 hectares of parks, sporting fields and recreational areas. In recent years Council has taken a deliberate and necessary step to build its own economic development capabilities with the establishment of it’s Advance Rockhampton business unit. Council and Local Government generally are deeply invested in their region – we drive on the roads we build, play on the fields and parks we maintain, serve our friends and neighbours, and are a part of every dimension of the community. Local Governments are also the only tier of government that is exclusively focused on local areas and as such are well positioned to identify local issues, potential solutions and local priorities. Nationally, Australia's 537 local Councils employ around 189,500 people, own and manage nonfinancial assets with an estimated written down value of $428 billion (2016– 17), raises around 3.6% of Australia's total taxation revenue per annum and have an annual operational expenditure of around $36 billion (2016–17). Source: ALGA 2019 Federal Election document Rockhampton Regional Council Submission September 2019 Page 1 About Rockhampton Rockhampton has a population of over 80,000 people. It is centrally located in the wider Central Queensland region and provides higher order retail, health, education, business and community services to a regional population of over 230,000 people. Rockhampton is also the headquarters for CQUniversity, the State's only dual sector university and TAFE, and is a regional hub for government services. Rockhampton is strategically and centrally located on key intrastate road and rail networks and has an international standard airport catering for regular passenger services, international charter flights and both general and specialised heavy lift air freight. Rockhampton also ranks highly in terms of cost of living and housing affordability. Rockhampton has however been impacted by multiple significant natural disasters over the past 8 years including major flooding in 2011, 2013 and 2017, severe TC Marcia in 2015 and bushfires in the Gracemere area in 2018. These events have impacted on the community, the local economy and Council's finances. The cumulative cost to Council of these natural disasters is over $100 million. Since the 2012-13 financial year, Council has spent $74 million on natural disaster recovery and reconstruction, $14.6m of which has been ratepayer funded. This in turn has affected Council’s insurance premiums which have increased on average by 19% pa since 2014-15 (an additional $1.05m). Much of Queensland and Rockhampton's wider service catchment has also been impacted by extended periods of drought. Individuals, families, businesses and communities are doing it tough in regional areas and Rockhampton is no exception. Rockhampton has experienced persistently high unemployment averaging 8.0% over the past five years and currently sitting at 7.4% (March 2019). It has experienced negative GRP growth in 2015, 2016 and 2018 and has effectively had no net increase in jobs or population in the five years to June 2019. Source: id.ecomony (National Economics NIEIR) If these local circumstances were reflected at a State or National level it would be seen as an economic crisis and significant policy and fiscal stimulus measures would be implemented. Rockhampton Regional Council Submission September 2019 Page 2 More broadly, but also in Rockhampton, wage growth has been low and people’s discretionary income has been decreasing with costs of living outpacing wages growth. The retail sector is reported to already be in recession with margins under intense pressure and online sales continuing to grow and erode traditional retailers. Building approvals in many areas, including Rockhampton, are significantly below longer term averages which flows directly on to viability and stability of the construction sector. Similar to other non-metropolitan, Rockhampton also experiences negative wealth effects through differential rates of property value appreciation when compared to Australia's major cities and nearby regions. Regions outside of metropolitan areas experience diseconomies of scale that could be reversed at least in part through better policy settings. Building critical mass of population in regional cities such as Rockhampton would support both their efficiency and sustainability. Regions and regional infrastructure projects are also structurally and systemically disadvantaged in competing with metropolitan business cases, including via both Building Queensland and Infrastructure Australia assessment frameworks. Advances in technology and telecommunications were hailed as solutions to the tyranny of distance for regional areas. It could be argued that while regional areas are now generally better connected socially, the economic impacts have been the opposite with both government and private sectors able to centralise and increase the efficiency of their service delivery and with on-line retail being able to service a national market form a single or small number of distribution centres. These large highly automated centres, either owned or third party logistics providers include operators such as Amazon (Melbourne and Sydney), Toll (Preston, Sydney), eStore Logistics and Cotton On (Avalon and Brisbane). Arguably, technology has widened the metro-regional divide rather than bridging it. Rockhampton Regional Council Submission September 2019 Page 3 Fighting for Our Future In the five years to 30 June 2018, 94.1% of Queensland's population growth was in South East Queensland (SEQ). Growth in Townville and Cairns was 4.9% of the total and the remaining 1% was spread across the balance of Queensland. Queensland Government population projections (2018 edition) forecast SEQ's population will grow by 1,945,771 by 2041 and represent 84% of total growth in the State. The Rest of Queensland is expected to grow by only 367,012 people (16% of total growth) with nearly half of that growth (49.3%) concentrated in Townsville and Cairns. Based on the historical share of growth over the five years to June 2018 (5.9%) the 16% projection may be optimistic. Between December 2013 and December 2018 there were 204,076 jobs created in Queensland with a 219,515 net gain in SEQ and 15,439 net loss in the Rest of Queensland. The two years to December 2018 isn't as bad for the Rest of Queensland with an increase of 17,163 jobs (but still just 12.6% of the total increase in State labour force over that same period). Over the same two years the SEQ labour force increased by 119,270 (87.4%). Of the 17,163 jobs created across the Rest of Queensland in the two years to Dec 2018 11,433 jobs were created in Townsville and 5,043 jobs were created in Cairns with Townsville and Cairns make up 96% of the labour market increase across the rest of Queensland. Federal Government employment projections suggest 150,400 new jobs will be created in SEQ in the next 5 years (86.6% of total employment growth in Queensland) and 23,200 new jobs created in the balance of Queensland (a meagre 13.4% of the total). Of those 23,200 jobs in the Rest of Queensland some 9,907 (42.7%) are projected to be created in Townsville and Cairns.

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