Submission to the Parliamentary Inquiry Into Best Practice Approaches to Regional Development, the Decentralisation of Commonwea

Submission to the Parliamentary Inquiry into Best Practice Approaches to Regional Development, the decentralisation of Commonwealth entities, and supporting corporate decentralisation.

Joint Submission from the NSW Southern Tablelands

September 2017

INTRODUCTION

The Southern Tablelands region of NSW encompasses the Goulburn Mulwaree, Yass and Upper Lachlan Local Government areas, adjoining the borders of the national capital. It is experiencing rapid growth with the expansion of the Sydney - Canberra corridor. A significant proportion of residents from the region work in Canberra in public administration. In total, 21,400 jobs in the ACT are filled by workers living in NSW. This provides the region with skilled public administrators and, with the introduction of the National Broadband Network, and improving transport links, the region’s public administration staff represent a potential workforce for decentralised Sydney and Canberra based government and corporate employers. The region’s population is growing as evidenced by the 2016 Census, and with that population growth come opportunities and challenges to plan for and provide social and economic infrastructure that will sustain employment within our region.

This joint submission has been prepared to highlight to the Parliamentary Committee that regionalization does not have to exclude communities less than 150kms from Canberra or Sydney. Rather, there are advantages for federal and state governments to closely consider the value of locating public service entities outside of the nation’s capital cities, but within travelling distance to them, as part of a hub and spoke approach to regional development policy.

Our submission provides four case studies to address the terms of reference for this inquiry. Each case study serves to illustrate the potential benefits and advantages to government and /or the private sector of relocating from metropolitan areas to a regional centre which is close enough to Canberra or Sydney to enable daily access if required. Case Study 1: The National Collection Storage Precinct Project highlights the economic, social and environmental benefits of such action.

Decentralisation opportunities arising from industry and Small to Medium Enterprises (SMEs) looking for cost effective relocation should be actively promoted by local, state and federal government networks as a central plank in regional development policies. Case Study 2: Towards a new wool selling future in NSW examines the cost savings that businesses can achieve through decentralisation from a metropolitan area such as Sydney and relocation to regional NSW.

Opportunities for regional development and investment exist across all the Southern Tablelands region’s key employment and industry sectors, and the region has a highly skilled workforce to meet future regional growth. Supporting access to tertiary education impacts on the region’s ability to skill and reskill the workforce. Case Study 3: The Country University Centre Program highlights how government investment in education, training and skills development can ensure the region’s workforce remains competitive to take advantages of new opportunities and to contribute to the social and economic fabric of the region.

As Sydney and Canberra grow, so too does the cost of doing business for government and the private sector. Rising industry and business property rentals and transport costs and labour market competition are propelling the case for decentralisation and the role regions can play in addressing the need for cost effective solutions. Decentralisation can provide significant cost benefits to industry and business, can assist government better plan the growth of its cities while promoting policies encouraging of regional development.

Our experience in the Southern Tablelands has been that unless state and federal policies are complementary in areas of regional development assistance, to encourage decentralisation within the state this can lead to gaming of systems by businesses looking for the best deal. Too often, states and regions compete to lure businesses from metropolitan areas. Case Study 4: 400 Jobs lost to Victoria highlights the potential for regional policy failure. Despite diligent negotiations, incentives and efforts by local government, a significant business was lured from

NSW to Victoria, because intrastate relocation was not considered eligible for state or federal government incentives.

The Federal Government’s active policy of decentralisation of relevant government departments should also include consideration of government incentives for industry and business to relocate from highly populated urban areas to the regions, and particularly the inner regions surrounding metropolitan areas. Continued investment in information technology and transport links will also assist government’s decentralisation objectives.

The Southern Tablelands region is well placed to capitalise on relocation and investment opportunities. Our region is diverse and offers much potential for investment and development. From a skilled labour market to available infrastructure and services, the Southern Tablelands provide not just cost benefit to industry and business in location and relocation, but also social, community and lifestyle benefits. The cost of housing and warehouse/factory space for example, are just two potential savings.

We have much to offer by way of quality of life, improved living standards social connectedness and community investment. Our communities are enterprising and innovative, and work hard to attract industry and business investment.

Dr Ursula Stephens

On behalf of: Goulburn Mulwaree Council Southern Tablelands Arts Upper Lachlan Shire Council Goulburn Chamber of Commerce RDA Southern Inland Community Plus Inc.

Regional Australia can increase its contribution to national innovation and growth and provide improved quality of life for its 8.8 million residents. But we must stop seeing our regions as victims of change and we must stop misunderstanding this part of our economy.

Regional success is built on a balance of local ingenuity and proactivity, and informed, consultative state and federal leadership. We need to lift expectations; about what our economy can do what government can do and what regional people can and are already doing. It’s time for a period of change on our own terms.

Jack Archer. CEO Regional Australia Institute

The RAI discussion paper, The Future of Regional Australia: Change On Our Terms, highlights that by improving collaborative government approaches at all levels of government, better social, economic and environmental outcomes for regional Australia can be achieved.

The Committee’s discussion paper summarises the themes of extensive research in regional development across the globe. These ‘place based’ approaches were well articulated by Andrew Beer in his contribution to the Committee’s Public Hearing (7th August)

Good practice in regional economic development is accepted as focusing on endogenous growth – that is growth that takes place because of the assets, abilities and talents of the region and the people within it.”

This has consistently been the approach to economic and social development in the communities of the Southern Tablelands, where the Councils and regional organisations have invested heavily to identify key advantages and opportunities that harness the strengths of our region.

The absolute advantage of the Southern Tablelands region is its location. It is traditionally known for its strong links to agriculture and the rich history of the district. The region has

5 strong competitive advantages for business and industry. These include location, infrastructure and competitive land prices. When coupled with the range of lifestyle options, the Southern Tablelands region is becoming increasingly attractive to industry.

Located just off the Hume Highway, the city of Goulburn is ideally situated between Sydney and Canberra, and within easy reach of the South Coast and the Snowy Mountains. Goulburn Mulwaree Council is focused on assisting businesses of all sizes and boosting the growth of the region’s economy. Council's Economic Development team plays an important role in shaping the area's current and future vitality and prosperity and in facilitating the area's role as a leading New South Wales business location.

Council actively encourages new businesses in the region; and has recently been successful in attracting agribusiness and manufacturing companies to relocate. A supportive Council, with a 'can do' approach to customer service has resulted in new industrial developments for Goulburn and the Southern Tablelands region.

The Upper Lachlan Shire is the windfarm capital of southern NSW, with significant new investment in windfarms and renewable energy. Additional solar and wind farms and bioreactors have been developed in the Goulburn Mulwaree LGA. With this investment has come new associated businesses and services, including in areas of technology and smart agriculture. Many hundreds of residents commute daily from Upper Lachlan villages into Canberra for work , recreation and study.

The growth of our ‘tree change’ communities has also brought new businesses, new energy and enthusiasm to our local villages, as people make the decision to relocate from metropolitan areas to a more relaxed and engaging lifestyle. Their decision has often allowed them to be debt free and with discretionary spending power that benefits our local economy and promotes strong social and cultural capital.

The current policies of state and federal governments to actively promote - telework arrangements are an important part of the decentralisation framework. As well as providing

significant savings to governments, these policies encourage the development of coworking spaces in our communities that foster collaboration between community and business workers, contractors, consultants and public servants in safe and WHS compliant workspaces.

The following case studies highlight the challenges for our region to achieve success in the ‘decentralisation’ game. As a region that is close to Canberra and just two hours from the outer metropolitan area of greater Sydney we have much to offer governments at state and federal levels, that does not require massive re-location of public servants and their families. Rather, it requires strategic and consistent decision making by governments about how to achieve multiple policy outcomes, including best value for money, without political constraints.

CASE STUDY ONE: National Collection Storage Precinct

In 2012, Goulburn Mulwaree Council engaged consultants to assess the viability of an offsite collections storage precinct in the Goulburn region. The precinct would cater for the growing need for cost effective storage of objects and archives currently overflowing in national and NSW State institutions. The motivation for Goulburn was to further expand and diversify the regional economy, adding to long-term social, cultural and economic sustainability and prosperity.

The Scoping Study reviewed potential target institutions alongside the requirements for cost effective offsite collections storage, and potential sites. Research and consultation undertaken identified a substantial demand for offsite storage space for institutions and agencies located in Canberra and in Sydney. The Government Records Repository (GRR – the commercial arm of the State Records of New South Wales) and the National Museum of Australia (NMA), amongst others, were identified as having significant requirements for storage and related services, and indicated interest in storage infrastructure located at Goulburn.

As well as the immediate demand to store and provide access to museum collections and up to 300 linear km of library and archive collections, further potential demand was identified in other government agencies. The Scoping Study found that Goulburn could offer a solution that can be flexible, scalable and responsive to the needs of collecting institutions. There is a significant opportunity to establish a collections precinct in Goulburn that offers competitive advantages through economies of scale and locating a critical mass of expertise. This could be achieved through a staged approach, beginning with something quite modest that is planned with a view to long term growth.

Key findings highlighted that a clustered or co-located collaborative storage facility in Goulburn is a viable proposal that would have a twofold benefit: - • Solving extant collection storage issues for collecting institutions, both at a national and State level, and including provision for storage needs into the future.

• Providing much needed investment in Goulburn that will drive genuine regional economic development. (The Report is available from the Goulburn Mulwaree Council )

The Study highlighted the potential to leverage existing tertiary education relationships with Charles Sturt University, the ANU and the University of Canberra for a niche knowledge industry development in conservation and restoration of heritage and cultural items, theatre costumes and props, as well as creating a Centre of Excellence in Digitisation of records.

A strong business case was developed, framed within the wider context of developing a national cultural collection storage precinct that can deliver economies of scale through shared infrastructure and co-located facilities. The study was guided by two fundamental principles in relation to collections:

• The need to safe guard irreplaceable cultural collections through the provision of high quality storage facilities and sustainable collection management regime; and • The implementation for a collection storage model that effectively contains storage facility costs which in some instances are increasing at an unsustainable rate of 8% per annum.

For Goulburn, the driver of the project was the enhancement of social and economic wellbeing through strengthening of the local economy: the creation of new jobs and attracting new residents through diversifying into niche industries. The project would also enliven the growing creative capital of the region.

In 2012, the Parliamentary Public Works Committee was considering a proposal for a New National Archives Preservation Facility and Refurbishment of the Existing Mitchell Facility. A submission to the inquiry proposed looking to Goulburn and provided evidence of the benefits of such a proposal.

The arguments presented then have only strengthened in the intervening years. Despite support of successive federal representatives for this project, the decision to relocate public service entities from Canberra to Goulburn has been resisted by public sector decision makers.

This proposal has strong currency in the current economic climate – while value capture of under-utilised land in metropolitan areas (both Canberra and Sydney) is increasing the costs of warehousing and storage. Goulburn’s comparative land values represent significant savings for institutions prepared to think laterally about their current and future repository needs.

In Moving Public Servants to the Regions, the Canadian Parliamentary Library identified that public sector agencies need to be relatively independent or specialised, so as not to impair interactions with partner departments or agencies; and not have continual interaction with public officials or develop public policy on a daily basis. This project lends itself to these criteria and we commend it to the federal government for further consideration.

Recommendation: The Southern Tablelands now acts as a network of feeder communities into Canberra and should be considered as part of the federal government’s decentralization agenda.

CASE STUDY 2: Towards a new wool selling future in NSW

In 2016, research undertaken by RDA Southern Inland (RDASI) has established a strong case for the relocation of the Yennora wool sales to Goulburn, including yearly savings of up to $2.6million and projected 5 year savings of up to $11 million. The catalyst for this project was the expiration of the head lease for Yennora in December 2017. For woolgrowers and their wool selling brokers, the real costs of the selling system have increased beyond expectations when closures and centralisation decisions were made previously. Show floor space for sale samples, sale day office rental, sale room fees, dining facilities for clients and transport and accommodation charges associated with attending wool sales in Yennora have continued to rise above and beyond what is considered a reasonable cost percentage of the total income received in the selling of a bale of wool. Of most significance is the fact that the current “Northern” sale centre location at Yennora is in one of the most expensive commercial property rental zones in NSW and possibly Australia

The RDASI report: Towards a New Wool Selling Future in NSW presents options to the wool industry to relocate the wool sales to Goulburn, including the potential for the development of a nationally significant wool education and tourism centre within a wool sales complex. The RDASI report also incorporates financial analysis by Deloitte. This analysis demonstrated up to $2.6million per annum in savings to the wool industry in relocating the NSW wool sales from Yennora to Goulburn, and up to $11million over five years. Savings were found in office and warehouse rental and wool broker travel.

The project has the strong support of local parliamentarians and the research report was launched in early 2017, by The Hon Angus Taylor MP. The Hon. Barnaby Joyce MP, expressed his appreciation for Wool Sales Relocation report via a letter to RDA Southern Inland. A strong supporter of the wool industry and decentralisation into regional areas, Mr Joyce emphasised that regional Australia deserves its fair share of services and opportunities and thanked RDA Southern Inland for commissioning the research.

This project highlights the challenges for state governments in providing support for industries to relocate from metropolitan areas to the regions. In the 1980s the NSW Department of Industry (formerly State and Regional Development) developed programs for encouraging regional development outside Sydney and to a lesser extent Hunter and Illawarra. The flagship Regional Business Development Scheme (RDBS) provided a range of assistance to business and industry wanting to relocate out of Sydney to regional areas or attract new inbound investment (from interstate or overseas).

In later years other programs such as the Regional Industries Infrastructure Fund were added to further support industry development in regional areas. The NSW government’s state- wide support for small business through current programs such as Jobs for NSW, the Small Business Grant and Payroll Tax Rebate, does not focus on regional NSW.

The Yennora Sales Centre has extended its head lease in the short term, meaning that this project is of continuing interest to our region. There are competitive efforts from Victoria to secure the Wool Sales Centre for that state. It is our view that the Commonwealth can play an important role in supporting regional communities to secure significant projects such as this.

Recommendation: The Committee consider how best to support regional communities to attract industries from metropolitan areas within their own state.

Case Study 3: The Country Universities Centres

The Country Universities Centre (CUC) Project is an initiative that captures the essence of endogenous growth - a project that emerged from the Cooma community to meet a growing need and build on community strengths. The objective of the project is to facilitate, deliver, promote and provide access to university education in regional & rural areas.

Working with regional industries (SMEC, Snowy Hydro and Council) the CUC sought to create a community asset that would be an attractant to families of staff moving to the area to fill vacant positions, so that they could utilise the facility for their preferred ongoing professional development.

The course offerings have expanded rapidly to support teaching, nursing, planning, early childhood, accounting, law and finance students enrolled in universities across Australia. The CUC provides a dedicated study space, high speed internet connection, after- hours access and students are supported by tutors and mentors recruited from the local community.

The Cooma Universities Centre was opened on March 6, 2013 as a joint initiative of Snowy Hydro and Cooma Monaro Shire Council. It is governed by a community led Board, and operates independently of government and Council as a social business.

The CUC provides a range of services to the Cooma region – • It serves as the primary point of contact for the delivery of university education • It facilitates and promotes education and career pathways between schools, vocational education and training providers, universities and industry. • It coordinates and supports research and partnerships, especially those which assist in the sustainable development of the region. • It advocates in the best interests of regional students. • It promotes and assist lifelong learning and raise community aspirations.

Following three years of growth and successful enrolments, diverse partnerships with regional universities and high student retention rates, the CUC has successfully lobbied the NSW Government to provide funding to scale up this model for other regional centres in NSW, including Goulburn, Broken Hill and Young.

Universities are not building bricks and mortar campuses, but through the implementation of the NBN and strong local partnerships that address local professional development needs, the CUC model demonstrates how governments at all levels can support access to higher education and training in smaller regional communities. Each new CUC will be locally run by a community led Board, and will work with industry, Councils and businesses to secure higher education opportunities that match emerging regional needs.

Recommendation: We commend this model to the Committee as a way in which the federal government can support and invest in regional communities, to ensure equitable access to higher education and learning and support professional development in regional workforces.

Case Study 4: 400 Jobs lost to Victoria

This example highlights the frustrations experienced by communities willing and working to encourage private sector decentralisation, and the importance of consistent and complimentary policies at local, state and federal levels.

In 2016 TMA (Ticket Master Australia) was seeking to relocate from metropolitan Sydney to regional NSW, bringing with it 400 local jobs. The Goulburn Mulwaree Council worked assiduously with the company to address its needs, and TMA sought assistance from the NSW government to help with relocation costs. The NSW Government’s view was that there was no net gain to the state, so the company was ineligible for financial support.

As a consequence, the company relocated to Victoria, resulting in a loss to NSW of significant revenues and 400 jobs. The Victorian Government is aggressively seeking to attract new investment with several supporting programs (Regional Jobs and Infrastructure Fund – 10 programs offering payroll tax rebates, infrastructure extensions, development support, etc). For example, the 2017/18 Victorian State budget allocates $173M tax relief to regional businesses by reducing payroll tax.

Unless state governments are consistent in providing incentives for metropolitan based businesses to relocate or decentralise to regional Australia, businesses will pursue those opportunities and effectively play one state off against another.

Recommendation: That the federal government consider supporting decentralisation of private businesses to regional areas through an AusIndustry -type assistance to cover

• payroll tax rebates for new employment generated in regional areas (for initial years but phasing out) • Hard infrastructure (eg electricity, water, gas) extension to a new site if it currently doesn’t exist • Relocation of heavy machinery.

Such assistance should be generally aimed at:

• manufacturing industries, key service industries and development of emerging industries • be limited to companies with < $50M annual turnover • exclude mining, retailing, general agriculture unless a case of significance can be demonstrated • not duplicating any other State or Federal assistance programs

CONCLUSIONS

As organisations that are heavily invested in building social and economic sustainability for our communities, we are appreciative of the Committee’s interest in promoting effective policies and mechanisms for decentralisation to improve regional growth and development.

We acknowledge the challenges for government in attempting public sector decentralisation, and the lessons learnt over many decades of how centralizing, and decentralizing can have deleterious effects on the communities that were expected to benefit. The hollowing out of communities and organisations that comes from failed or abandoned efforts can have many unintended consequences.

However, the role of ICT and the way in which citizens engage with government today is rapidly changing. As more interactions are online, it is now possible for businesses and government agencies to rethink how employees, contractors and consultants can work as distributed teams across the country, without having to be in a fixed office environment. The business and financial sectors have moved rapidly to reduce their bricks and mortar footprints, (and costs) by embracing flexible working arrangements, coworking spaces and online collaboration platforms.

Many regional communities of 15,000 – 40,000 residents, (too small to fit with the previous government’s Evocities model) are strong and adaptive communities. The communities of the Southern Tablelands (Yass, Crookwell, Goulburn) collaborate and plan strategically to leverage opportunities and funding. Initiatives are locally driven, align with regional strengths, are supported by targeted investments and guided by clear objectives. We have strong local and regional institutions able to assess and develop local economic assets, and committed to developing human capital and promoting innovation.

As our populations grow the communities of the Southern Tablelands will continue to focus on how best we can support and promote sustainable growth, appropriate services and leveraging the considerable assets that are within our gift.