SoR report warns of perfect storm for regions

By Adam Coleman

The eleventh State of the Regions (SoR) report unveiled today in Melbourne has identifies "a troubling convergence of factors that will impact regional economic development across Australia”.

Prepared for the Australian Local Government Association (ALGA) by leading forecaster National Economics, the report lists a number of issues (listed below) which collectively provide a grim outlook for communities unless swift and collaborative action is taken across the three levels of government.

The report divides Australia into 65 regions and analyses how individual regions are performing and predict the likely consequences of economic circumstances and trends for each.

Boadband failure

The report suggests a lack of progress in developing a National Broadband Network (NBN) has “slowed the rate of diffusion of the knowledge economy” and that broadband has mostly failed to spread outside of knowledge-intensive regions.

Speaking at the launch of the report, ALGA President, Cr Geoff Lake, said "Last year’s State of the Regions report identified $3.2 billion and 33,000 jobs lost to Australian businesses in 12 months due to inadequate broadband infrastructure. The current report indicates no improvement in these numbers for 2009."

Credible emissions plan

With Australia’s emissions per capita currently very high for a developed country, the SoR report argues that a credible plan to reduce emissions is paramount if Australia is to convince overseas creditors that the country is worthy of continuing investment.

“In the absence of a robust plan, investors will leave us to respond by ourselves, which would mean an immediate switch from the current balance of payments deficit to a surplus – a turnaround which will cause financial meltdown,” the report says.

Issues that collctively paint a bleak picture for regional communities, according to the report.

1. the impending costs of climate change and the further costs of greenhouse gas emissions abatement;

2. the global financial crisis;

3. record high levels of household debt;

4. the lack of progress in developing a National Broadband Network;

5. the failure of the knowledge economy to spread outside of the existing knowledge-intensive regions;

6. the tendency for young Australians to avoid the knowledge-intensive regions and head north and west to resource and lifestyle regions, or overseas to knowledge-intensive regions in other countries. Young adults from overseas (including overseas returned Australians) are seeking their future in the knowledge-intensive regions in Australia. These trends point to an increasing divergence between the cosmopolitan knowledge-intensive core-city regions and the relatively poorly-educated periphery; and

7. the vulnerability of resource based regions to the global downturn and to falling demand for emissions intensive commodities, and the vulnerability of rural regions, to the impacts of climate change.


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