Senate Economics References Committee
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Senate Economics References Committee Inquiry into the indicators of, and impact of, regional inequality in Australia Who we are Strathbogie Shire is a rural municipality in north central Victoria, with the Strathbogie Ranges to the southeast and the Hume Freeway and Goulburn Valley highway running north-south through the municipality. The shire’s population of approximately 10,000 people predominantly live in the towns of Euroa, Nagambie, Violet Town, Avenel, Longwood, Ruffy and Strathbogie. Most of the shire is rural in nature, with significant areas of native vegetation on the ranges. The main employers in the shire are agriculture (20%), manufacturing (15%) and retail (11%). Many residents travel to the neighbouring regional centres of Benalla, Shepparton and Seymour, as well as Melbourne, for employment. The shire has three distinct agricultural regions: irrigation of horticulture and broad acre crops adjacent to the Goulburn River and Lake Nagambie, dryland cropping and mixed farming on the plains, and dryland grazing in the hills and ranges. The shire also has a growing equine industry and is becoming known as the ‘Horse Capital of Victoria’. Issues Common to the majority of rural Shires, social and economic disadvantages can be driven by levels of education, health, utility costs, employment opportunities, transport availability (heavy reliance on private vehicles) and the cost and/or convenience of goods and services. The rate base for small rural municipalities is low in comparison to metropolitan and provincial Councils. Thus, the rate in the dollar per assessment is usually higher than most to fund core services and infrastructure. Rural Councils have a vast network of roads, bridges, culverts and associated infrastructure that are utilised by residents, visitors, industry and people passing through. These assets require expensive maintenance and renewal strategies which must be funded largely by Federal and State grants, as the low base of rural ratepayers will not have the capacity to keep paying higher rates each year. Strathbogie Shire has an elderly demographic, and many struggle to cover energy costs both winter and summer. The lack of reliable public transport and the high cost of fuel can disadvantage greatly this demographic that have to travel for medical and specialist services to nearby regional centres. Lack of services and choice locally leads to greater expense for certain groups and can create greater burden for rural communities. Infrastructure is the basis of publicly available assets essential to the functioning of an economy. Infrastructure includes roads, railways, buildings, recreational precincts, water supply, waste water systems, education facilities, and telecommunications. Municipalities, especially the smaller municipalities like ours, will continue to rely upon government providers for the infrastructure they need. Government funding – from a variety of sources – typically makes up 40 per cent of Council’s budget, and while this contribution to regional development efforts is welcome, Council is only too aware that funding priorities are established around regional focal points, not local needs. The ability of any single agent to affect infrastructure outcomes is limited; hence Council has invested heavily in participating within Strategic Alliances (e.g. Hume Regional Road Group) to better target Federal and State Government investment funds in an attempt to obtain a stronger presence in negotiations for necessary funding to improve our own local economy. Both the local community and Council are seeking growth with respect to population, gross regional product, average income and the quality and quantity of their infrastructure. New work practices including ‘telecommuting’ and the continuation of career opportunities being concentrated in capital cities, requires significant upgrades in rural Australia. Broadband internet and mobile telecommunications coverage needs to be on a par with services in capital cities. In addition, all access to tertiary education requires people to commute outside the Shire, fast passenger service on the Victorian North East rail line is essential for facilitating career opportunities and retention of population in rural towns. Heavy reliance on privately owned vehicles for transportation to access employment, education and health services currently exists, thus placing a higher demand on road infrastructure to and from Capital Cities. This also means increased costs on individuals to access areas both within and outside our municipality. Strathbogie Shires population is skewed towards an older age demographic with three privately owned health/aged care facilities operating in the Shire. Very limited access to public hospital beds and hospitals which provide minor and major surgical services means the hospital stays for patients, with or without private health insurance, must utilise facilities outside the Shire. Improved services for our municipality, in particular the aged sector, would assist in achieving better health outcomes and provide employment opportunities. No existing community health services are based within the Shire. Indicators Like most local governments, Strathbogie Shire has some formal role in economic development activities and has been the primary agent for economic development since the mid-1990s. Local government remains the smallest and poorest tier of government in Australia and its circumstances are worsening. Over the last two decades, the real value of financial support to local government from the Federal Government has fallen – as has state financial support – while the tasks required of local governments by the other tiers of government have grown. Despite these pressures, the Strathbogie Shire has not shied away from promoting our region or local economy. Council has provided incentives or infrastructure to attract businesses, and has one staff member with responsibilities for economic development. In addition, Council has also joined with the state government in funding regional development agencies, Business Enterprise Centres and or initiatives. We also host special events designed to draw in tourists, to which we market our region nationally and internationally. The region is strategically located from a national perspective, with key interstate road and rail transport routes traversing the region. The Hume and Goulburn Valley road and rail corridors form the backbone of the transport network in the region. The Hume Freeway and the Goulburn Valley Freeway are the main interstate road freight transport links between Melbourne and Sydney and Melbourne and Brisbane respectively. The regional economy is heavily reliant on agriculture and manufacturing with freight and logistics playing an important role and given the lack of funding available, Council needed to prioritise freight routes and attempt to limit the extent of local roads use by heavy vehicles, favouring State‐managed roads, hence also limiting/reducing the area of land that could be developed to support local growth. Reports consistently identify the asset renewal gap the regional councils are facing and the growing demand for access to farm storage and new industrial sites with larger and heavier equipment. These productivity gains are dependent on network access and this is a funding and asset management challenge for Council. Impacts While economic development has been an important driver of policy, the programs and actions of Federal and State governments have largely ignored regional impacts. The focus on the national economy or the state economy per se has given scant attention to the distribution of growth opportunities at the regional or local level. This has meant that the gap between prosperous regions and those that struggle has widened, and that insufficient attention has been paid to the development of an adequate infrastructure for economic development at the local and regional scale. If the governments achieve a more equal regional income distribution, the Strathbogie Shire could have included the provision of upgraded, expanded and/or new infrastructure that would have enhanced the competitive position of the region; provided for labour market training and education; and small business development programs. It follows that policies to reduce income inequalities should not only be pursued to improve social outcomes but also to sustain long-term growth. Redistribution policies are a key tool to ensure the benefits of growth are more broadly distributed. Notwithstanding the benefits of physical growth, it is also important to promote equality of opportunity in access to and quality of education. This implies a focus on families with children and youth – as this is when decisions about human capital accumulation are made -- promoting employment for disadvantaged groups through active labour market policies, childcare support and in-work benefits. Inadequate infrastructure impacts on potential developers/investors within rural municipalities and more often than not determines the feasibility of investment. Without appropriate access to service infrastructure, i.e. water and power connections, the decision is not a sound choice, therefore it is imperative that there is support for equality across Australia..