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«TABLE OF CONTENTS Acknowledgements Disclaimer and copyright Executive Summary Northern Australia - Beyond the Tropic of Capricorn Strategic Benefits ...»

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RETHINKING THE FUTURE OF NORTHERN

AUSTRALIA’S REGIONS

More than mines, dams and development dreams

Rethinking the future of northern Australia's regions

TABLE OF CONTENTS

Acknowledgements

Disclaimer and copyright

Executive Summary

Northern Australia - Beyond the Tropic of Capricorn

Strategic Benefits of a Northern Focus

Regional Development Priorities

[In]Sight: Australia’s Regional Competitiveness Index

Applying [In]Sight Results in Policy Analysis

Policy Priority: Building Regional Capability for Endogenous Growth

The Relative Competitiveness of Northern Australia

Regional Competitiveness in Human Capital

Regional Competitiveness in Infrastructure and Essential Services

Regional Competitiveness in Economic Fundamentals

Regional Competitiveness in Institutions

Beyond the Average: Patterns of Competitiveness at the Local Level

The Competitiveness of Northern Australia’s Large Regional Cities

Case study: Townsville, a Leader in Infrastructure and Human Capital

The Competitiveness of Mid-sized and Small Regional Centres

The Competitiveness of Regions with an Extensive Mining Linked Economy.................. 42 The Competitiveness of Regions with an Extensive Agriculture Linked Economy........... 44 Remote Agricultural Regions

Case Study: Kununurra, Building a New Future

The Competitiveness of Regions with an Extensive Tourism Linked Economy................. 49 The Competitiveness of Indigenous Communities in Northern Australia

Critical Challenges: Desert Regions, Building an Accurate Statistical Picture................ 55 Challenges and Opportunities for Development Beyond the Current Competitiveness Profiles

Overcoming the Infrastructure Bottlenecks

Developing Regional Economies Through Exports of Services

Resolving Land Tenure in Northern Australia

–  –  –

Resource Centre Transitions

Agriculture and Access to Water

Remote Governance Challenges

Developing a White Paper on Northern Australia

Appendix A: Methodology

[In]Sight Results Guide

[In]Sight Key Findings

The [In]Sight Data Collection Process

Survey of Regional Business Conditions and Perspectives on Regional Development

Weighting

Additional Data Sources

Contacts and Further Information

End Notes

–  –  –

Independent and informed by both research and ongoing dialogue with the community, the Regional Australia Institute (RAI) develops policy and advocates for change to build a stronger economy and better quality of life in regional Australia – for the benefit of all Australians. The RAI was established with support from the Australian Government.

Acknowledgements This report includes an infrastructure analysis and map contributed by Parsons Brinckerhoff.

The RAI also acknowledges the following people and organisations who have contributed significant feedback

and ideas during the development of this report:

 Allan Dale, Cairns Institute, James Cook University  Department of Agriculture  Department of Infrastructure and Regional Development  Department of Prime Minister and Cabinet  Department of Regional Development, Western Australia  Department of State Development, Infrastructure and Planning, Queensland Government  Department of the Chief Minister, Northern Territory Government  Office of Northern Australia  Regional Development Australia Far North Queensland and Torres Strait  Regional Development Australia Fitzroy and Central West  Regional Development Australia Kimberley  Regional Development Australia Mackay Isaac Whitsunday  Regional Development Australia Northern Territory  Regional Development Australia Pilbara  Regional Development Australia Townsville and North West REGIONAL RESEARCH REPORT – NOVEMBER 2013 4 Rethinking the future of northern Australia's regions Disclaimer and copyright This research report translates and analyses findings of research to enable an informed public discussion of regional issues in Australia. It is intended to assist people to think about their perspectives, assumptions and understanding of regional issues.

No responsibility is accepted by RAI Limited, its Board or its funders for the accuracy of the advice provided or for the quality of advice or decisions made by others based on the information presented in this publication.

Unless otherwise specified, the contents of this report remain the property of the RAI.

Reproduction for non-commercial purposes with attribution of authorship is permitted.

REGIONAL RESEARCH REPORT – NOVEMBER 2013 5 Rethinking the future of northern Australia's regions Executive Summary Northern Australia remains the topic of fierce debate and renewed policy interest.

While discussion often centres on the prospects for particular industries or projects, it is essential that the national debate and resulting policy frameworks take into account the diversity of situation and opportunity in the north.





Part of the Regional Australia Institute’s mandate is to work with communities, government and policy makers to help unfold the story, to begin meaningful and productive conversations, and to support regions to achieve development which meets their needs, capacity and goals.

To identify the imperatives for a balanced, regionally responsive development strategy for northern Australia, this paper has reviewed the competitiveness profiles from [In]Sight: Australia’s regional competitiveness index for seven Regional Development Australia (RDA) regions and 74 Local Government Areas (LGA) north of the Tropic of Capricorn.

Consultation and input on the results and issues highlighted by this work was then sought from leaders in regional development across northern Australia to refine and focus the findings and implications.

The results of this process show very clearly that infrastructure and human capital are the two most serious bottlenecks for growth in northern Australia. Business sophistication is also weaker on average compared to the rest of Australia and is likely to act as a further constraint in many areas.

In contrast, economic fundamentals in northern Australia have been very high, reflecting the extent to which the resources boom has occurred, and continues to occur in northern Australia.

Discussion of the development of northern Australia is usually held at this general level.

Yet, the most important insight from the analysis is an understanding of the particular opportunities and challenges that three distinct types of regions offer in northern

Australia:

1. Northern cities - Northern Australia’s large regional cities (Townsville, Cairns, Darwin, Mackay and Rockhampton) do not share the constraints of the north as a whole and are competitive in their own right. Significant growth is most likely to occur in this group over time regardless of the development approach taken by policy makers.

2. A diverse group of mid-size towns - Amongst the diverse mid-size towns of the

north are a mixture of situations driven by location and industry:

o For those places close to the northern cities, the barriers to further development are lowered by the existing concentration of people, infrastructure and other economic resources REGIONAL RESEARCH REPORT – NOVEMBER 2013 6 Rethinking the future of northern Australia's regions o Mining centres feature some of the strongest economic fundamentals of any region in Australia. Yet, their wider competitiveness profiles are often poor, emphasising how much of the boom’s growth has been driven by outside resources and has not yet translated into broader, sustainable, long term competitive strengths for these regions o Intensive agriculture regions (e.g. Queensland, Katherine and the Ord River Irrigation Area) which have opportunities emerging in Asia, and o Tourist hubs such as Broome, Alice Springs and Whitsunday.

3. The very remote pastoral areas and remote Indigenous communities which include many of the least economically competitive LGAs in the country.

A strategy for northern development must explicitly recognise these differences in situation and opportunity to be successful.

A detailed assessment is essential across these groups to identify the specific infrastructure, health and education limitations which are creating barriers to growth and development across northern Australia.

Leveraging the export services opportunity - linking with Asia and increasing the value to the regions of tropical expertise, education, mining and agriculture related services is important for sustained growth, particularly in the northern cities and specialised midsized towns.

Mining centres, which have done well in recent years, face a need to find some level of economic diversity. There is awareness of this at the regional level, and perhaps state/territory level, but, as yet, less so in the national debate or policies.

Expanding agriculture will continue to be a central concern in northern development.

Despite the work already done, a clearer and more definitive consideration of the opportunities or otherwise for expansion of intensive agriculture into new areas remains needed. For the extensive beef industry, which underpins many remote economies, economic diplomacy in export markets, addition of processing capacity (if feasible) and renewed industry innovation are opportunities to grow the value of this crucial part of the northern economy.

These broad strategies for industry development can then be integrated with knowledge of different regions to more precisely establish the scope of economic opportunity in northern Australia and the practical policy changes needed to unleash the region’s potential.

However, conventional regional development policy thinking and approaches are unlikely to be an agent of significant change in the most remote communities. While many communities have specific opportunities in resources, agriculture or tourism, government continues to dominate economic activity in remote Australia.

To facilitate the economic and wider development of these very remote places, policy

needs to firstly focus on:

REGIONAL RESEARCH REPORT – NOVEMBER 2013 7 Rethinking the future of northern Australia's regions  Resolving the complex impediments to using leasehold and Indigenous land and water as a flexible economic asset, and  Reforming the governance of public investment to provide these remote communities with more responsibility and say over their future.

Overall, the challenge for the next stage of policy implementation is to bring some new sophistication and ambition to this discussion.

It is important to move away from a structure where the regions’ strategic planning is driven by interests outside the region, who may have limited local knowledge and, despite the best of intentions, suffer no personal or organisational risk if outcomes for communities go wrong.

The challenge for policy is to create an approach that devolves genuine responsibility to people in the regions, incentivises their leadership in building a different future and provides the time needed for this seismic shift in approach to occur.

Northern Australia has too often been the recipient of groups of one-off strategies that may be positive in isolation, but add up to little significant change for most of the communities and people in the north.

Amongst all of the issues and opportunities in northern Australia, this is perhaps the core challenge for the development of a White Paper on Northern Australia.

REGIONAL RESEARCH REPORT – NOVEMBER 2013 8 Rethinking the future of northern Australia's regions Northern Australia - Beyond the Tropic of Capricorn Northern Australia is broadly defined as the land north of the latitude of the Tropic of Capricorn, extending from around Carnarvon on the western coast to Rockhampton on the eastern coast (as illustrated in Figure 1). Alice Springs falls just south of the latitude’s arc as it extends across the Australian continent.

Figure 1: Map of Northern Australia

The region extends across three states/territories, comprising seven Regional Development Australia (RDA) regions. Northern Queensland’s four RDAs are Far North Queensland & Torres Strait, Fitzroy & Central West, Mackay Isaac Whitsunday and Townsville & North West. Pilbara and Kimberley RDA represent the north of Western Australia. The Northern Territory is represented by a single RDA region – an issue which does restrict the level of detail possible in economic analysis. Therefore, much of the analysis of this paper focuses on the 74 LGAs within northern Australia, eight in Western Australia, 16 in Northern Territory and 50 in Queensland, to more accurately consider the level of variability evident within and between regions in northern Australia.

For the purposes of this paper, Alice Springs has been included in the analysis of Northern Territory data. Despite being south of the Tropic of Capricorn, Alice Springs is the second largest urban centre in the Northern Territory and services an additional 18,000 people in the surrounding region beyond its population of 28,000 peoplei. This wider economic influence extends its market size boundaries above the tropic line. In contrast, Exmouth in Western Australia is excluded from the analysis despite being north of the Tropic of Capricorn. This is due to its inclusion within the Mid West Gascoyne RDA, which has the majority of its regional boundaries below the tropic line. Advice was sought from the Australian Government’s Office of Northern Australia to assist in determining these boundaries for the purposes of analysis.



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