ECONOMIC DEVELOPMENT AND INFRASTRUCTURE COMMITTEE Inquiry into local economic development initiatives in Victoria July 2013 ORDERED TO BE PRINTED Victorian Government Printer Parliamentary Paper No. 242 Session 2010‐13 Parliament of Victoria Economic Development and Infrastructure Committee Inquiry into local economic development initiatives in Victoria Cover design by Geronimo Creative Services. Printed in Victoria, Australia by On Demand. Cover images supplied by Visions of Victoria (used with permission): Bridge Road, Richmond, Mark Chew Hanging Rock, Marg Tornell View of Melbourne’s skyline from the Shrine of Remembrance, Mark Chew City Circle tram outside Flinders Street Station, Mark Chew The Myrtleford Butter Factory, Peter Dunphy Lorne Great Ocean Road, Robert Blackburn Ballarat, Peter Dunphy Paddle Steamer Canberra on the Murray River at Echuca, Tourism Victoria Daylesford and the Macedon Ranges, Peter Dunphy Horsham Regional Art Gallery, Daryl Wisely Ballarat Town Hall, Robert Blackburn Exterior of Forum Theatre in Collins Street at night, Mark Chew Victoria Park Lake, Shepparton, Robert Mason ISBN: 978-0-9751357-6-1 Web version: 978-0-9751357-8-5 Economic Development and Infrastructure Committee Parliament House, Spring Street EAST MELBOURNE VIC 3002 Phone: +61 3 8682 2832 Email: [email protected] Website: <http://www.parliament.vic.gov.au/edic> This report is also available online at the Committee’s website. This report is printed on recycled paper. Table of contents TABLE OF CONTENTS The Economic Development and Infrastructure Committee vii Committee members and staff ix Terms of reference xi Chair’s foreword xiii List of recommendations xv List of figures xix List of acronyms xxi Chapter 1: Introduction 1 1.1 Background: Growing business is everyone’s business 1 1.1.1 Role of local government in economic development 2 1.1.2 Role of state and Commonwealth governments 3 1.1.3 Role of business and other stakeholders 3 1.2 Scope of the Inquiry 4 1.2.1 Inquiry process 4 1.2.2 Report overview 4 1.3 Key themes and findings 6 Chapter 2: Current local economic development initiatives in Victoria 9 2.1 Local government initiatives 9 2.1.1 Economic development strategies 10 2.1.2 Business support programs 15 2.1.3 Business attraction 18 2.1.4 Statutory planning 19 2.1.5 Local government one‐stop‐shops 19 2.1.6 Infrastructure provision 20 2.1.7 Encouraging the formation of business clusters 22 2.1.8 Supporting the green economy 23 2.1.9 Buy local campaigns 23 2.1.10 Tourism, festivals and events 24 2.1.11 Supporting small‐to‐medium enterprises and home‐based businesses 26 2.1.12 Special rates and charges 26 2.1.13 Differential rating 27 2.1.14 The National Broadband Network and the digital economy 29 2.1.15 Supporting the local labour market 30 iii Inquiry into local economic development initiatives in Victoria 2.2 Victorian Government initiatives 31 2.2.1 Business support and attraction services 32 2.2.2 Regional Development Victoria 35 2.2.3 Regional Growth Fund 36 2.2.4 Regional Victoria Living Expo 37 2.2.5 Infrastructure provision 38 2.2.6 Places Victoria 39 2.3 Australian Government initiatives 40 2.3.1 Infrastructure Australia 40 2.3.2 Regional Development Australia 41 2.3.3 Federal constitutional recognition of local government 42 Chapter 3: Partnership approaches to local economic development 43 3.1 Defining the roles of government and business in economic development 46 3.2 Local government in regional, rural and interface areas 51 3.3 Partnership approaches to local economic development 54 3.3.1 Cooperation models at the local level 56 3.3.1.1 Regional Development Australia committees 58 3.3.1.2 G21 — Geelong Region Alliance 60 3.3.1.3 Collaboration between Casey and Cardinia councils 62 3.3.2 Partnerships with the private sector 63 3.3.2.1 South East Melbourne Manufacturers Alliance 63 3.3.2.2 NORTH Link 65 3.3.2.3 Ballarat, Dandenong, Melbourne and Wyndham Committees 65 3.3.2.4 Chambers of commerce and retail traders associations 66 Chapter 4: Barriers to success for local economic development initiatives 69 4.1 The Victorian planning system 69 4.1.1 Delays 72 4.1.1.1 Planning permits 72 4.1.1.2 Planning scheme 74 4.1.2 Planning policy commitment 75 4.1.3 Planning reform 76 4.1.3.1 Reforms to Guidelines for planning permit applications in open, potable water supply catchment areas 78 4.1.4 Appeals process 79 iv Table of contents 4.2 Compliance 84 4.2.1 WorkSafe and occupational health and safety 87 4.2.2 Green tape 88 4.2.3 Government grants 90 4.3 Infrastructure 90 4.3.1 Infrastructure framework 93 4.3.2 Transport and infrastructure 95 4.3.2.1 Public transport 95 4.3.2.2 Rail 96 4.3.2.3 Roads 97 4.3.3 Information and communications technology 99 4.3.4 Utilities 101 4.4 Population issues 102 4.4.1 Population decline 102 4.4.2 Rapid growth 104 4.4.3 Skilled workforce 104 4.5 Barriers at a local government level 106 4.5.1 Capacity of smaller local councils 106 4.5.2 Ineffective economic development 107 4.5.3 Perception of local government 109 4.5.4 Resources dedicated to local economic development 110 4.6 Private sector 112 4.6.1 Transitioning sectors 112 4.6.1.1 Manufacturing sector 112 4.6.1.2 Retail sector 114 4.6.1.3 Agricultural sector 115 4.6.2 Representation of the private sector 116 4.6.2.1 Business representation in council elections 116 4.6.3 Financial barriers 118 Chapter 5: Local economic development in the 21st century 121 5.1 Promoting best practice in local government 121 5.2 Maximising existing resources 123 5.3 Identifying diverse funding sources 124 5.3.1 Infrastructure funding 126 v Inquiry into local economic development initiatives in Victoria 5.4 Attracting new investment and enhancing employment opportunities 129 5.5 International cases studies in local economic development 132 5.5.1 London 132 5.5.1.1 Greater London Authority and the Mayor of London 132 5.5.1.2 Department for Business, Skills and Innovation 134 5.5.1.3 Local Economic Policy Unit 135 5.5.1.4 Enlightenment Economics 136 5.5.1.5 London First 137 5.5.1.6 Commonwealth Local Government Forum 138 5.5.2 Manchester 139 5.5.2.1 Manchester City Council 139 5.5.2.2 New Economy 140 5.5.2.3 Downtown Manchester 141 5.5.2.4 CLES Consulting 142 5.5.2.5 Building on Innovations from the United Kingdom 144 5.5.3 Amsterdam 144 5.5.3.1 Amsterdam inbusiness 145 5.5.3.2 Centre for Innovation, Leiden University, the Hague 146 5.5.4 Berlin 147 5.5.4.1 Association of German Chambers of Industry and Commerce 148 5.5.4.2 Berlin Central Station 148 Bibliography 149 Appendix 1: List of submissions 155 Appendix 2: List of public hearings 157 Appendix 3: List of briefings 163 Appendix 4: Summary of local government economic development strategies 167 Appendix 5: Responses to email questionnaire 187 vi The Economic Development and Infrastructure Committee THE ECONOMIC DEVELOPMENT AND INFRASTRUCTURE COMMITTEE The Economic Development and Infrastructure Committee is a joint investigatory committee of the Victorian Parliament. The Committee was established under the Parliamentary Committees Act 2003 (Vic) and its members have been drawn from both the Legislative Assembly and the Legislative Council. The Committee’s functions under the Act are to inquire into, consider and report to the Parliament on any proposal, matter or thing concerned with economic development, industrial affairs or infrastructure. Contact details Postal address: Economic Development and Infrastructure Committee Parliament House, Spring Street EAST MELBOURNE VIC 3002 Telephone: +61 3 8682 2832 Facsimile: +61 3 8682 2818 Email: [email protected] Website: <http://www.parliament.vic.gov.au/edic> vii Committee members and staff COMMITTEE MEMBERS AND STAFF The Inquiry was conducted during the 57th Parliament. The members of the Economic Development and Infrastructure Committee are: Mr Neale Burgess MP (Chair) Mr Ben Carroll MP (from 14 August 2012) Mr Martin Foley MP (Deputy Chair) Mrs Christine Fyffe MP (from 21 March 2013) Mr Wade Noonan MP (until 14 August 2012) Mrs Inga Peulich MLC Mr Geoff Shaw MP For this inquiry, the Committee was supported by a secretariat comprising: Mr Sean Coley Executive Officer Dr Kelly Butler Research Officer (from 19 November 2012) Mr Scott Martin Research Officer (until 21 September 2012) Mr Matt Newington Administrative Officer Research Officer (from 24 September to 16 November 2012) ix Terms of reference TERMS OF REFERENCE The terms of reference were received from the Legislative Assembly on 20 June 2012: That under s 33 the Parliamentary Committees Act 2003, the Economic Development and Infrastructure Committee is required to inquire into, consider and report no later than 24 June 2013* on issues relating to local economic development initiatives in Victoria and, in particular, the Committee is requested to: (a) examine the range of existing local economic development programs being carried out in Victorian municipalities; (b) examine the appropriate role of local government in generating economic development and review the allocation of responsibility in this area with the State Government; (c) examine whether the role of local government in rural and regional areas has different economic development tasks to that of metropolitan based municipalities; (d) identify the barriers to local economic development, including compliance costs for business and planning delays, in operating in local municipalities and develop solutions to address these barriers; (e) examine ways in which municipal councils and the Victorian Government can jointly support local economic development, enhance and promote employment and attract new investment, especially in localities with emerging economic potential; and (f) investigate best practice local economic development initiatives relevant to the terms of reference.