SENATE INQUIRY – THE INDICATORS OF & THE IMPACT OF REGIONAL INEQUALITY IN AUSTRALIA

SUBMISSION BY CAIRNS REGIONAL COUNCIL

8 May 2018

OVERVIEW

The Cairns Region Although Cairns is well known for its position in tourism in Australia, the city’s primary economic and social function is as a regional capital – a transport, distribution, manufacturing, administrative and services hub for the Peninsula Australia Geographic region referred to as Tropical North Queensland for tourism purposes and often as Far North Queensland (see Map 1). The major characteristics of the Cairns/Far North Queensland Region that make it vulnerable to regional inequalities are: 1) The region is geographically large – about one and a half times the State of Victoria and as deep from north to south as the rest of Queensland and as the State of New South Wales (see Map 2). 2) The region is distant from the nearest metropolitan centre – Brisbane. The distance from Cairns to Brisbane is the equivalent to the distance from Brisbane to Melbourne. The distance from Cairns to the region’s northern most population (Saibai Island) is a further 930km making the distance from Brisbane to the Saibai Island community the equivalent of Brisbane to a point in the Southern Ocean well south of Tasmania (see Map 3). 3) The regional population of Far North Queensland is approximately 287,000 (2016). Although the population around Cairns is the densest in northern Australia, the large Gulf Savannah Sub Region and Peninsula/Torres Sub Region are sparsely populated (see Map 4). The Gulf, Savannah, Cape York and Torres Strait communities have some of the highest vulnerabilities to inequality in Australia compared with metropolitan areas (see Table #1 of Socio-Economic Indexes for Areas (‘SEIFA’) Indices, SEIFA Indices measure the relative level of socio-economic characteristics of a community based on a range of Census data). 4) As well as the usual resident population, Cairns (as an international tourism centre) also services a significant visitor population with some 30,000 visitors staying in the region on any given night. This ‘visiting’ population needs to be taken into account when determining regional infrastructure and service provision otherwise they may be insufficient to service the people ‘on the ground’. 5) The Far North Queensland region’s geographic spread of population also impacts access to health and education services, particularly in more remote parts of the region. This lack of access contributes to inequality when compared to metropolitan based populations. 6) The Cairns/Far North Queensland Region has a very high Indigenous population of 16% of total (Cairns City 9%) (see Table #2), as well as (for a regional city), a high level of resident population from overseas (31.2%) and interstate. 7) The region is deep into the tropics and historically posed greater challenges to development than southern Australia – challenges that have increasingly been met resulting in strong (albeit fluctuating) economic and population growth ahead of most regional areas of Australia. 8) The region can be subject to significant weather events, in particular cyclones and heavy rains/flooding. As well as the risk to personal safety, these events have the potential to adversely impact access to services particularly where roads are ‘cut’ or where transport infrastructure such as railways, airports or seaports are restricted. Such ‘cuts’ in transport links also adversely impacts the regional economy through the inability to get goods and services ‘to market’. 9) Costs of living and doing business in the Cairns and Far North Queensland region are also a

potential cause of inequality. Fuel, insurance and energy costs are key examples in this regard and are impacted by the region’s geographic location and the lack of high levels of competition in some sectors.

Recommendation 1

It is submitted: a) That the best way to overcome many of these inequalities is to bring metropolitan level services to Cairns; b) That Cairns and the region is now of a population size to support many of these services; and c) That complementing these increased services in Cairns must be major improvements in transport and related infrastructure to ensure connectivity between Cairns and the surrounding Far North Queensland region so the improved services are easily accessible by the regional population more broadly. It is further submitted that if this investment takes place, underlying economic conditions and the recent history of regional growth is such that national and regional economic and social benefits will be realised as a result.

Map 1: Area Covered by the Far North Queensland Regional Organisation of Councils in the Cape York Peninsula Australia/Tropical North Queensland Geographic Region

Source: Cummings Economics 2018.

Map 2: Areas Compared

Source: Cummings Economics 2018.

Map 3: Distances

Source: Cummings Economics 2018.

Map 4: Peninsula Australia/TNQ Sub Regions & Service Centres

Source: Cummings Economics 2018.

Table #1: SEIFA Indices – Cairns/Peninsula Australia/Tropical North Queensland Region Index of Index of Disadvantage Advantage & Disadvantage Economic Education & Local Authority Resources Occupation Score Decile Score Decile Decile Decile BRISBANE 1048 9 1060 10 8 9 CAIRNS 980 6 971 6 4 7 Douglas 981 6 959 5 4 7 Cassowary Coast 931 3 912 2 3 2 Tablelands 949 4 932 3 3 4 Mareeba 936 3 926 3 3 4 Etheridge 932 3 929 3 4 3 Croydon 884 1 897 2 2 2 Carpentaria 858 1 874 1 1 2 Burke 921 2 921 3 1 4 Cook 917 2 915 2 2 5 Weipa 1064 10 1047 9 9 5 Yarrabah 518 1 651 1 1 1 Wujal Wujal 596 1 694 1 1 1 Hope Vale 621 1 699 1 1 1 Lockhart 595 1 696 1 1 1 Kowanyama 580 1 676 1 1 1 Pormpuraaw 652 1 731 1 1 1 Doomadgee 548 1 660 1 1 1 Mornington Island 624 1 715 1 1 1 Aurukun 504 1 641 1 1 1 Mapoon 688 1 769 1 1 1 NPA 694 1 771 1 1 1 Torres 901 2 933 3 1 8 Torres Islands 672 1 759 1 1 2 Napranum 570 1 665 1 1 1  Denotes Deciles 5 and above. Source: Cummings Economics from Australian Bureau of Statistics (ABS) Cat No. 2033.0 & 55.001. Table #2: Current Numbers & Proportion of Population Indigenous, (Usual Place of Residence), Census 2016 FNQROC/LGAs No. % Cairns 14,099 9% Carpentaria 803 41% Cassowary Coast 2,802 10% Cook 925 22% Croydon 50 17% Douglas 897 8% Etheridge 42 5% Hinchinbrook 661 6% Hopevale 846 92% Mareeba 2,802 13% Tablelands 1,825 7% Wujal Wujal 262 93% Yarrabah 2,494 97% Total FNQROC 28,513 11% Non-FNQROC 16,690 74% Total Peninsula Australia/TNQ 45,203 16% Source: Cummings Economics from ABS Census 2016.

Relationship With Other Regional Areas While there is some degree of commonality in regional areas of vulnerability to inequalities, it needs to be recognised that there is a strong regional structure around Australia, that there are differences between regions and especially those in the North compared with southern Australia. Recommendation 2 It is submitted that in principle, the approach to regional development should be led by the local regional community who are most familiar with their opportunities and needs with the role of the State and Federal Governments being cooperative support in providing infrastructure and services that are their responsibility and a policy framework conducive to regional wellbeing and progress. In the North, the size of the seven major well established and historic regions (see Map 5), in many ways parallels the six states across southern Australia and although populations are lower, this regional structure needs to be respected and reinforced and each treated as a distinct entity for regional development policy purposes. Map 6 of regional air services in northern Queensland illustrates these distinct regional structures. In the past, because of low populations, there has been a tendency to concentrate infrastructure spending and services in Townsville and Darwin. It is important to recognise the new levels and patterns of regional population in the North and to provide infrastructure and services on a wider basis to maximise progress and to provide a more equitable delivery of services. Table #3 illustrates. Table #3: Value of Building Approvals, Public Sector, Major Northern Regions, 2011-12 to 2015-16 Cairns Townsville Fitzroy Northern

SA4 Region SA4 Region SA4 Region Territory 2011-12 $50 m $273 m $66 m $202 m 2012-13 $31 m $245 m $200 m $301 m 2013-14 $34 m $78 m $80 m $220 m 2014-15 $24 m $80 m $23 m $254 m 2015-16 $54 m $147 m $61 m $569 m Total $193 m $823 m $430 m $1,546 m Source: Cummings Economics from Australian Bureau of Statistics Cat No. 8731.0. Note: The SA4 (Statistical Area Level 4) region in Queensland covers the regional centres of Cairns, Townsville and Rockhampton and their immediate surrounding region – in the case of Cairns it includes Cassowary Coast, Tablelands, much of Mareeba Shire and Douglas Shire.

Map 5: Major Economic Regions, Northern Australia

Source: Cummings Economics 2018.

Map 6: Regional Scheduled Air Services in Northern Australia

Regional Economic Background Over the past 40 years, the Cairns/TNQ region has produced the largest population growth in northern Australia and is now the largest in population. Chart #1: Estimated Residential Population, Northern Australia Regions, 1976 & 2016 300,000 287,199 264,060 245,740 250,000 226,314

200,000 173,892 177,240 144,050 150,000 128,030 89,500 98,228 99,827 100,000 55,550 50,000

0 Rockhampton Mackay Region Townsville / NQ Cairns Peninsula / Darwin / NT Kimberley / Central QLD Region TNQ Region Pilbara 1976 2016 Region Note Boundaries: . Rockhampton/Gladstone Region – Fitzroy plus Central West. . Townville Region – Townsville SA4 plus Queensland Outback North less Carpentaria SA2. . Cairns Region – Cairns SA4 plus Queensland Outback Far North plus Carpentaria SA2. Note: Hinchinbrook Shire included with Townsville/NQ. Source: Cummings Economics from Australian Bureau of Statistics Cat No. 3218.0 et al. In on-the-ground Census count population including visitors, it is now well over the 300,000 mark. Apart from growth in the city of Cairns, the regional hinterland has a substantial and expanding population. The region is tropical and faced early historic challenges to growth. However, the region is not poor in underlying resources accounting for 26% of Australia’s water runoff with outstanding terrestrial and marine biological resources and substantial mineral resources. Underlying forces have been conducive to development of these resources: o Growing global markets especially nearby in Eastern Asia; o Improving transport and communications breaking down old cost barriers of remoteness; o Technology developed suitable to the tropics; o Success breeds success factors. Standing behind the region’s growth over the last 40 years has been a major expansion of “outside” earnings (regional exports), from a large expansion of agriculture (the region is now Australia’s third largest fruit producer), fisheries, mining and the region’s development as a leading domestic and international tourism destination. This growth has provided the foundations in a modern economy for an expansion of manufacturing and service industries some of which have developed markets outside the region in Australia, across the North and into the nearby Papua New Guinea/Pacific area including the region’s substantial marine and aviation servicing sectors and international education. Cairns has also become Australia’s north-eastern operational naval base and coastal surveillance centre. This growth has also laid the foundations for expanding provision of regional services in health, education, recreation, cultural and sporting facilities, especially located in Cairns as the regional hub city with major benefits not only to Cairns residents, but to residents throughout the Far North Queensland region.

Inequality The following provides key demographic and economic measures for the Cairns Local Government Area compared with the Brisbane Local Government Area, 2016 Census indicating especially the low level of provision of higher education. Table #4: Inequality Measures Compared with Brisbane, Census 2016 Cairns Brisbane

LGA LGA Median Weekly Income $693 $770 Internet Connected to Dwelling 82.3% 88.0% Unemployment Rate 7.7% 6.8% Average Motor Vehicle per Household 1.7 1.7 Proportion Professional in Workforce 19.2% 29.9% Proportion Attending Educational Institution 10.4% 26.6% Attending University or Tertiary Education Institution Level of Education Bachelors Degree of Higher 16.2% 32.6% Source: Cummings Economics from ABS, Census 2016.

TERMS OF REFERENCE Fiscal Policies Most regional economies are fairly narrowly based and heavily dependent on “base” industries that earn income from outside the region. The Cairns’ regional economy is fortunate in having a range of “base” industries. However they are mostly highly exposed to world market conditions and international trade competition. It is vital that fiscal and monetary policies do not further contribute to instability for regional trade exposed industries, as occurred during the mining boom, when government deficits and countervailing higher interest rates (compared with overseas) helped lead to a sky rocketing Australian dollar with major detrimental impacts on tourism, manufacturing and other trade exposed industries. Chart #2 illustrates the movements in the Australian dollar during this period. Chart #2: Australian Dollar Trade Weighted Index

The following table gives interest rates October 2011, compared with other major countries. Table #5: Comparative Official Interest Rates, October 2011 Percent Australia 4.75% European Central Bank 1.25% Canada 1.00% Bank of England 0.50% USA 0.13% Japan 0.50% Source: Reserve Bank of Australia, Table F13. The following chart illustrates what happened to tourist expenditure in the region during this period. Chart #3: Tourism Expenditure, Tropical NQ Region, Overnight Visitors Nominal & Real 3500 LOW POINT 3000 REAL (-25%)

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0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Nominal $M Real

Source: Cummings Economics from Tourism Research Australia. Recommendation 3 That the Committee’s report emphasises the need for overall fiscal and monetary policy to aim at maintaining stability in the levels of the Australian dollar. We note that the Reserve Bank of Australia has, as part of its role, a duty to ensure that its policies and powers are exercised in such a manner as to best contribute to the stability of the currency of Australia. Recommendation 4 In relation to individual regions, it is difficult to track through the levels of Commonwealth Government capital and recurrent expenditure budgets to assess its impact on regional economies. It is recommended that in presenting the Federal budget, summaries be developed showing the expenditure relating to individual regions at the SA4 or other suitable level to enable analysis of regional Federal Government investment to be undertaken.

IMPROVED COORDINATION See Recommendation 2 above. There are a number of avenues available for receipt of grant moneys for specific projects at a regional level from both the Federal and State Governments. Many of these programs are contestable, involve significant resources in the preparation and lodgement of multiple applications, are administered by a number of different government departments and have a variety of differing assessment criteria. For local governments, this can result in a piecemeal approach to infrastructure funding with potential for inconsistency with overall regional infrastructure priorities. In particular, there is potential for the assessment and criteria for grant programs to influence infrastructure investment decisions when in fact, infrastructure investment should occur on a ‘needs’ basis with grant programs providing an avenue for funding these priority investments.

Recommendation 5 It is recommended that a review of the approach adopted for grant funding of regional infrastructure projects be undertaken. Ideally, regional infrastructure priorities should first be set through close tri- partite (Federal, State and Local) government and stakeholder collaboration and consultation. These priorities should be based on the needs of a particular region taking into account constraints on socio- economic advantage as well as opportunities that align with a region’s particular competitive advantages. Once regional infrastructure priorities have been clearly established, grant and funding programs should then align with those priorities and be administered at a consolidated level rather than through individual departments. We understand the Federal Government’s City Deal program provides a basis for tri-partite government collaboration in this regard. The Cairns and FNQ region would benefit from access to this program.

REGIONAL DEVELOPMENT POLICIES See Recommendation 2 above. Regional Development Australia (‘RDA’) Boards provide a valuable connection between government and stakeholders in regional areas and support economic development opportunities. Cairns Regional Council works closely with representatives of RDA Far North Queensland and Torres Strait Inc. The Chair of RDA boards is appointed by the Federal Minister for Regional Development in consultation with state, territory and local government counterparts where appropriate. The RDA Chair appoints the Deputy Chair and Committee Members after agreement is provided from the Minister for Regional Development and state, territory and local government counterparts where appropriate. Recommendation 6 It is recommended that appointments of Regional Development Australia boards have greater involvement of local authorities as elected representatives of the community.

INFRASTRUCTURE There is a massive need in the Cairns region for expenditure on infrastructure to bring it up to appropriate levels. History has shown that this investment in infrastructure can bring major rewards in both economic stimulus and positive impacts on the quality of life of a community. As an example, the $35 million spent on upgrading Cairns airport in the early 1980s played a major role in switching on billions of dollars in investment and recurrent tourism income now worth $3 billion a

year. Cairns Regional Council is appreciative of the Federal Government making the Northern Australia Infrastructure Facility (‘NAIF’) available to support investment in key infrastructure priorities across Northern Australia. Having said this, to date, no projects in the Far North Queensland region have received NAIF funding. Cairns Regional Council welcomes the recent changes in the NAIF lending guidelines which are expected to increase the pool of projects potentially eligible for NAIF funding. A further broadening of the fund to include an element of grant funding for regional infrastructure projects in Northern Australia would also be welcomed. It is also noted that local governments are not listed as ‘partners’ on the Office of Northern Australia website whilst Federal Government departments and relevant State and Territory Governments are. Whilst this may be an unintentional oversight, it is important that local authorities be actively engaged in the policies and investment relevant to the development of Northern Australia. Recommendation 7 It is recommended that the current Northern Australia Infrastructure Facility be paralleled by another special “non-loan” fund. Recommendation 8 That relevant local regional authorities (Councils) be included as key partners for the Office of Northern Australia and actively engaged with in the process of formulating policy and investment initiatives aimed at developing the Northern Australia region. INFRASTRUCTURE AND THE ENVIRONMENT It is noted that the Cairns and Far North Queensland region is the gateway to two of the world’s greatest natural treasures in the World Heritage Listed Great Barrier Reef and Wet Tropics Rainforest. The region’s unique natural assets also underpin key facets of the regional economy. Appropriate environmental protections are critically important but also need to be underpinned by comprehensive scientific research and local input. Recommendation 9 It is recommended that environmental policies affecting infrastructure development in regional areas be based on science and take into account local input.

CONNECTIVITY

Connectivity is an important element of removing regional inequality. Connectivity has two elements:

 Physical connectivity – Physical connectivity enables regional populations to travel efficiently, safely, reliably and cost effectively both within region and outside region. Physical connectivity also facilitates trade and investment opportunities within region, within Australia and throughout the world. Key infrastructure supporting physical connectivity includes the road network, railways, airports, seaports and public transport.  Digital connectivity – Digital connectivity facilitates community access to data and information which can be used for a range of personal and business/economic reasons. In areas where physical connectivity is problematic, digital connectivity is even more critical.

Without strong physical and/or digital connectivity, regional communities are placed at a disadvantage to metropolitan areas, a factor which can lead to regional inequality.

For Cairns, the domestic and international airports are particularly important to regional development and community quality of life. The majority of visiting domestic and international tourists (approximately 3 million per year) access the region via the airport. It also provides the Far Northern community with direct access to many Australian cities as well as direct access to Asia and connectivity beyond. The airport also facilitates trade and investment opportunities particularly with the emergent Chinese and Asian markets and also underpins the region’s growing international education sector. Ongoing investment in airline route development has the potential to further grow the regional economy of Far North Queensland and reduce regional inequality through improved physical connectivity. Recommendation 10

That investment and policy making decisions at a Federal level acknowledge the key role that physical and digital connectivity plays in regional inequality and ensures that appropriate measures are implemented to address this.

PRIVATE INVESTMENT

The level of private investment in regional areas also plays a significant role in regional economic development and job creation, both of which can help address levels of inequality. Private investment decisions take into account the relative risk and return of competing investment alternatives and locations. To promote private investment in regional centres and regional infrastructure, policies and programs which support investment returns or reduce risk for private investors should be considered. Recommendation 11 In addition to the recommendations relating to the NAIF outlined earlier, the following are examples of policies that should be considered:

 Reduced corporate tax rate (even for temporary periods following investment) for new catalytic private investment projects in designated regional areas;  Access to accelerated capital allowances for private capital investment in designated regional areas; and  150% tax deductibility for costs incurred by businesses in relocating operations to designated regional areas.

EDUCATION The region is poorly served in availability of higher education, given its population. Private enterprise is leading the development of international education in the Cairns region but the city and region are still behind cities of comparable size in this regard (see Table below), resulting in a substantial inequality of opportunity as against other equivalent cities and regions, let alone against metropolitan centres.

Table #6: Comparative Employment in Higher (University Level) Education, 2016 Census Cairns & Equivalent Sized Cities (Significant Urban Areas) (employment per 1000 head of pop’n) Higher Education Population Ratio per Growth SUA Employment 15 – 59 years 1000 head 2011-2016 Hobart 2,151 118,306 18.8 20.2% Townsville 1,626 109,928 14.8 11.0% Cairns 606 89,243 6.8 27.0% Darwin 1,059 83,982 12.6 18.7% Toowoomba 1,458 74,707 19.5 23.7% Ballarat 1,057 57,847 18.3 21.8% Source: Cummings Economics from ABS Census 2016. Recommendation 12 Consideration should be given to policies which promote and encourage the establishment and expansion of regional tertiary institutions as access to high quality tertiary education ‘in region’ is a key factor in addressing regional inequality. It also assists with regional economic diversification and the retention of human intellectual capital in region following degree completion.

BUILDING HUMAN CAPITAL, ENHANCING LOCAL WORFORCE SKILLS & EMPLOYMENT ARRANGEMENTS See Recommendation 2 above. Variability of the pace and composition of growth over time and the difference between regions leads to a need for quick targeted responses that can come only from regionally led responses. For instance, during the mining boom, a problem was faced from demand with high wages being offered for skilled tradesmen with a negative effect on Cairns substantial marine servicing sector including three shipyards. Today, after construction being lower for a period, there is a sudden resurgence in need for skilled construction workers that is requiring attention. Thanks to local initiatives, the region has been successful in complementing its substantial maritime and aviation servicing sectors with the Cairns Great Barrier Reef International Marine College and Cairns Aviation Skills Centre providing specialist training.

DECENTRALISATION POLICIES There is often a lack of appreciation of the role of regional economies, especially in producing export incomes, in underpinning the nation’s progress and standard of living. Major productivity gains over the years often means that expanding production is not reflected in on-farm, on-mine, on-vessel, on-tourism attractions employment, leading to relatively slow growth of regional workforce and population. Trends to FIFO while benefiting Cairns, has made the situation worse in remoter areas. It is vital that services are kept up to and expanded for rural populations, if the efficient production of exports and foodstuffs is to continue. In the Cairns region, where strong additional resource based development is an opportunity, this question comes through to one of provision of infrastructure and services in decentralised areas as a platform for achieving that growth and one of bringing higher order services to Cairns to bring

their availability closer to the decentralised opportunities. Regional decision making helps get this balance right. Recommendation 13 That the major decentralisation need is for Federal and State Governments to respond in an adequate and timely fashion to meeting infrastructure and service needs in the regions.

ENERGY AND OTHER COSTS A current issue is the high cost of energy. Surveying for Queensland Electricity Users Network provided evidence of how this was detrimentally affecting business and industry viability in regional areas. In Queensland, as a major decentralisation policy, the State Government has adopted a Uniform Tariff Policy. Without it, power prices in many decentralised areas would rise to crippling levels significantly constraining regional economic development and therefore equality. Other costs of living/business that also impact regional inequality include insurance costs and fuel prices. Recommendation 14 That the Queensland Government be encouraged to keep the Uniform Tariff Policy in place. Similar policies which support regional competiveness and cost structures (such as insurance costs, fuel prices etc) should also be considered. That continued investment and support for regional renewable energy projects/solutions also be forthcoming to underpin regional energy security and competitiveness.

INNOVATION The Far North Queensland region has come out of a remote tropical frontier status and although progressing strongly, it is still important to develop technology specially adapted to tropical needs and its economic structure. The region has a history of innovation: o In mechanisation of agricultural industries like sugar, tea and coffee; o In animal breeding adapted to the tropics; o In selection and introduction of new fruits, vegetables and tropical ornamentals; o In landscaping in tropical areas; and o In overcoming tropical diseases like malaria, and dengue fever (recent). It is important to recognise that much of these important advances have come through private enterprise and entrepreneurship and it is vital that conditions are kept favourable.

MANUFACTURING There are three types of manufacturing in the region: 1) Primary product and mineral processing located where the resources are located; 2) Local community and regional service manufacturing; and

3) Skills based manufacturing that has broken out of immediate local and regional markets to earn income from outside the region to service wider state, national and international markets. By and large in the northern regions, the first two predominate and there is little of the third. The northern regions have been too ‘off-centre’ from national markets to develop much of this third class of manufacturing. The Cairns region however, has developed the third type in the foundry at Innisfail and its marine industry sector including shipyards and its aviation servicing sector. Statistical data indicates a strong drop in manufacturing employment in the region over the last 10 years but slightly less than State and National averages. The impact of a high Australian dollar and loss of competitiveness is indicated by the fact that in the 1960s, the bauxite mine at Weipa was built by a Cairns engineering firm. Engineering elements for the latest expansion are believed to be coming from China.

MONETARY POLICIES & REGULATION A current problem facing the city and region is availability of finance for business development and investment. While the region’s economy and population is on the rise, there are widespread reports of the curtailment of bank lending, brought about by conditions in the property market in metropolitan centres and the collapse of the mining boom affecting some centres, is leading to curtailment of finance in geographical areas where these problems do not exist and there is a need for investment. Low rental vacancy rates in Cairns, historically low unemployment, a pipeline of public and private infrastructure projects and continued population growth would ordinarily be expected to result in increased supply of residential housing to meet anticipated demand. However, reports indicate that APRA’s restrictions on the investment lending of ADI’s is translating into the reduced availability of investment finance. For Cairns, this has the potential to act as a constraint on economic growth with housing supply potentially unable to meet anticipated demand. Recommendation 15 That the Committee engage with APRA to review the impacts of lending policy restrictions on regional centres with growth potential and to investigate ways in which this potential constraint to growth could be addressed.

REGIONAL STATISTICS There are real problems with the Australian Bureau of Statistics (ABS) Labour Force Series in providing reliable data at a regional level. This is causing substantial confusion and problems. Further details on the shortcomings in this data at a regional level can be supplied if required. It is essential that official data released at regional level be accurate to inspire confidence in decision making. Recommendation 16 That the Committee investigate the availability and reliability of statistical data necessary for sound decision making at a regional level.

TRANSPORT & COMMUNICATION Transport and communication costs play a pivotal role in creating situations of inequality. It goes without saying that the Cairns region is highly vulnerable to high costs of transport and communication. Transport cost reductions over time has helped much of the growth in tourism and fruit production. The region has a major stake in competition to keep airfares down and airport costs competitive. International communication links through the development of mobile phones, ATMs and the like have been an important factor in facilitating global travel with benefits to the region. As with other regions, it is vital to keep up and maximise opportunities digital advances can bring. In the provision of education, health and a number of other services, there are two approaches. One is to subsidise travel to metropolitan centres. The other is to subsidise the provision of services in regional areas. Having to travel to access education and health services will often involve a need for accompanying family travel, involving additional cost and social dislocation. Subsidising travel usually does not fully compensate the real costs of dislocation involved. Recommendation 17 That, as a principle, subsidisation err on the side of providing services as close as possible to regional populations rather than having regional populations having to travel to access services in metropolitan areas.

HEALTH The Cairns and Hinterland Hospital and Health Services region is now the largest in central and northern Queensland and services a number of the region’s most disadvantaged communities. Table #7: Hospital Admissions, Cairns & Hinterland Health & Hospital Services District Compared, 2015-2016 Total Income per Hospital & Health Service Income Admissions Admission Cairns & Hinterland 97,180 $839 m $8,600 Townsville 75,172 $864 m $11,500 Mackay 47,338 $367 m $7,600 Central Queensland 61,500 $518 m $8,400 Source: Cummings Economics from Annual Report 2015-16, Hospital & Health Service Regions. Patients are still often required to travel to Townsville or Brisbane for higher order services often requiring families to travel also. While this poses difficulties for Cairns residents, for residents in the Torres Strait, almost a thousand km further north with low incomes to start with, it is extremely undesirable. It is vital that higher order services continue to expand in Cairns to service the region’s significant population base. Recommendation 18 That Cairns Hospital status be brought up to University Hospital level for funding purposes to ensure the hospital is able to provide the majority of services required by the Far North Queensland resident and visiting population.

INEQUALITY CONSEQUENCES OF A HIGH INDIGENOUS POPULATION Indigenous populations throughout Australia tend to have low levels of education, low levels of workforce skills, low levels of workforce participation, high levels of unemployment and lower incomes

and ability to pay for private services and higher health expenditure needs. These special needs to overcome inequality need to be regarded as additional in those communities where there is a high level of indigenous population. In these situations, allocation of funding using a simple per capita basis will leave the region disadvantaged to other regions. Recommendation 19 That in regions and communities with high indigenous population, the special needs in fields like education, social and health services be recognised in public funding and provided over and above normal per capita allocations.

OLDER POPULATION There has been a long history in the region of older people retiring to the south with the availability of medical services a major factor, although historic factors of children moving south for job opportunities have also contributed. It is important that medical facilities in the region and other services for older population continue to develop. Recommendation 20 That in the allocation of funding, the special needs of older persons for health related services in regional areas be recognised to avoid a need for older persons to have to move from their traditional community.

REMOTE AREAS It is vital to reduction in inequality of services that grants commission funding for local governments and state governments continue to have an equalisation of services factor in it.