Will Brumby’s new decentralisation initiative work?

The Ready for Tomorrow initiative announced by the Premier earlier this week is being sold as a way to relieve growth pressure on Melbourne.

Just why people would move to regional centres on a scale sufficient to ease the demands on Melbourne significantly is not clear, as there’s little in the announcement to suggest the Government has suddenly discovered the secret to growing jobs in the regions.

The track record of policy-driven migration in Australia is poor. The decentralisation schemes of the seventies, based on growing regional centres like Albury-Wodonga and Bathurst-Orange, were conspicuously unsuccessful in lowering growth in the major capital cities.

Decentralisation was supposed to be driven by manufacturing, which at that time was on the march out of the inner city. However rather than moving to regional centres, manufacturing largely moved to the suburbs and offshore. It now offers even less potential for underpinning decentralisation that it did 30 or 40 years ago.

I think the practical impact of Ready for Tomorrow is more likely to lie in enhancing the liveability of the regions than in giving respite to Melbourne. It is really a regional development program. As The Age’s editorial writer points out, even if the annual growth rates of the eight largest regional cities were to double, it would only relieve Melbourne of seven weeks growth.

Nevertheless, I suppose the prospect of cheaper housing and lower congestion in reasonable proximity to Melbourne may be sufficient to attract some new settlers to regional centres, especially if it is hyped as the sensible thing to do by the Government and regional councils.

But if it were to happen, there would be a serious risk (see my previous post) that all it would do is replace Melbourne’s fringe suburbs with regional dormitories from which workers commuted to Melbourne.

This could potentially create pressure for massive expenditure on transport infrastructure and result in more time spent travelling rather than working or in home-based activities. Given that 72% of Melbourne’s jobs are dispersed across the suburbs, the great bulk of that commuting could be by car.

Another risk is that the incentive to construct new dwellings at higher density is likely to be much lower on the outskirts of relatively small regional cities than it is on the fringe of Melbourne. This is mainly because greenfield sites in smaller cities are relatively close to the town centre, so it’s hard politically to argue the case for small sites.

And some of these migrants would otherwise have opted for medium density in Melbourne’s suburbs. Now they would probably choose a detached house in a regional centre.

Then there’s the loss of economies of scale in providing major services like hospitals and universities. Most new settlers will either have a lower level of service than they would otherwise have had in Melbourne or the Government will have to spend more to provide specialised services in more locations.

Thus fostering job growth in regional centres is a crucial task if excessive commuting is to be avoided. New settlers will of course create some local service jobs to meet their consumption needs, but there nevertheless needs to be a base of high quality jobs on offer locally.

The Government is apparently already thinking about moving some Government jobs to regional centres but the numbers mentioned are very small relative to the number of regional centres. The fact is there isn’t a plan for creating jobs on a scale that would offer noticeable relief to Melbourne.

In the absence of some external shock like a minerals boom, job growth in regional centres needs to be thought of as a long term and relatively slow project. It will require strategic investment in improving education, infrastructure and the liveability of regional cities, as well as increasing the capability of existing firms.

As the experience in the US with cities like Portland, Austin and Seattle shows, there is an opportunity to fashion unique places that in and of themselves attract workers and firms over time. This objective involves actions like preserving the distinctive qualities of regional cities and creating innovative new urban forms. Policy will have failed if new developments look anything like the conventional fringe suburbs of Melbourne.

That’s only one of a number of possible actions needed to grow jobs. It is nevertheless important because it has the potential in the longer term to keep talent within regional centres. One of the incidental things I’ve noticed in a project I’ve been doing on the global software industry over the last year is the high proportion of US software firms that are not located in big cities or in recognisable technology hotspots like Palo Alto. Many are in locations that have no obvious technology profile.

With that in mind, I think the component of the Government’s new initiative that’s directed at enhancing tertiary educational opportunities in regional centres makes a lot of sense. In the short to medium term most graduates will head for the big smoke, but in the longer term the US experience suggests some of them might start local businesses and stay within the region. Hopefully some of the other funding announced by the Premier on Tuesday will be used to make regional centres more attractive places for young people to stay on in or move to.

Thus I think the idea of diverting growth to the regions has serious risks. This is one reason why the disadvantages of sprawl should not be exaggerated but kept in perspective – it isn’t perfect but it’s better than decentralisation.

Economic growth in regional centres should be pursued as an important objective in its own right. It gives new generations the option of staying with their families and friends. But it would be a serious loss if our regional centres end up looking like suburbia.

5 Comments on “Will Brumby’s new decentralisation initiative work?”

  1. Moss says:

    An excellent, excellent analysis – I dare say the best I have read on the issue. I particularly like the comment about making the regional centers attractive to young people. This is how to attract the creative class. However, Victorian regional cities are not known for their subcultures around groovy music, bars, fashion etc etc that offer an interesting lifestyle to software engineers and their kin. And building detached housing on the fringes of said cities is not the way to bring the buzz.

  2. Zuko says:

    Getting more jobs in the new and growing fringe suburbs, attracting the creative class to those areas, ‘hipsterising’ Melton, with all the flow on this creates for better services, would seem a more useful and urgent task than selling the liveability of Ballarat. With good transport, Ballarat will take care of itself.

    Good post, thanks.

  3. […] significance of the three regionally-based independents*. I’ve previously argued (here and here) that there are big questions about the viability of decentralisation on a large scale, so today I […]

  4. […] previously concluded (here, here, here and here) that the prospects for diverting growth from our cities to regional centres on a […]

  5. […] argued before that this sort of “decentralisation” is poor policy (e.g. here and here). But I also think The Age has tended to ‘catastrophise’ the scale of the problem, […]

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s