DISCUSSION STARTER 7
REGIONAL AUSTRALIA AND THE GLOBAL IMPACT

This discussion process will culminate in a major national conference in Sydney on July 14-15, 2001.

This and other Discussion Starters aim to develop ideas for and interest in the conference, to ensure the most informed and productive level of discussion possible within our resources.

USING THE DISCUSSION STARTER
The project sponsors encourage you to use the Discussion Starter in a group discussion in your locality, community organisation or trade union. If that's not possible, work through the points and questions yourself.

In either case, your feedback on this topic into the discussion process is vital to develop the agenda for the July 2001 conference.

GUIDELINES FOR GROUP DISCUSSION

1. Select a facilitator and a note-taker for the discussion
2. All participants should introduce themselves and say what they expect to achieve from the group discussion
3. Either a guest resource person, or someone in the group, should briefly introduce the first point in the Discussion Starter (5 mins).
4. In turn, each participant should comment on the discussion point.
5. At the end of discussion on each point, the facilitator should try to briefly summarise the views expressed, and if agreed, the not-taker should record the summary.
6. This process should be repeated for each point.
7. After all points are discussed, participants should be invited to briefly say if their expectations were met.
8. The summary of the discussion should be returned to Now We The People's Sydney office, by email if possible info@nowwethepeople.org Fax: 02 9211 1407. Post: PO Box K941, Haymarket NSW 1240.
9. The discussion should be no longer than 90 minutes, and there should be a refreshment break during or at the end of the discussion.

1. Introduction
All Australians live in a region. Over the last 10 years, booming "global Sydney", East Melbourne and Northern and Central Perth have led the pack, with the declining rural region of the Eyre and York Peninsulas in South Australia in the rear, and with some traditional production zones and outer suburban areas also suffering greatly.

In most regions, persistent unemployment, loss of government services, loss of commercial services - especially banks, and volatile prices for farm products, are reflected in stagnant or falling populations, very high youth suicide rates, and continuing abysmal marginalisation of Aboriginal communities. These growing social stresses in many regions have motivated many positive initiatives, with an increased community leadership role for women, and a growing recognition that everybody, including Aboriginal people, have to be part of finding solutions.

This has been a decade of economic rationalism, of allowing "the market" to allocate resources, with government backing off. However, in some areas, such as environmental regulation, the government has increased its involvement. Regional Development is a marginal policy area for federal and state governments, although, for political cosmetics, there are Departments and Ministers for Regional Development.

Australia's experience of economic boom combined with wide regional differences under globalisation is similar to that in Europe and North America, but the Australian government has not responded with a determined, well-financed and well-focused policy.

Instead, exercises like the 1999 Regional Australia Summit mainly urged communities to pick themselves up, to develop local leadership. Well, rural and regional communities have taken a lead - and rebelled against their traditional political representatives.

Australia's political backlash against the unequal spreading of the benefits and costs of corporate globalisation is also similar to events in Europe and North America.

The political backlash has taken several forms:

• the Pauline Hanson One Nation movement, emphasising racist policies towards Aboriginal people and non-white immigrants, pro-gun sentiments, and traditional authority in the home. This response is most marked in rural Queensland, NSW and Western Australia, but also in outer suburban areas of Brisbane, Sydney and Perth.
• electoral swings to Labor and Independents in Victoria and Queensland;
• an urban youth movement against corporate globalisation. Economic rationalism, with its National Competition Policy promoting user pays and privatisation, and free play for global corporations, has hurt much of Australian society.

This Discussion Starter aims to deepen the understanding of the regional problems and the regional opportunities there are to create a better Australia.

The information used in the following pages is mainly drawn from State of the Regions 2000, prepared by National Economics for the Australian Local Government Association.

2. Regional Experience of Corporate Globalisation in the 1990s
Australia can be divided into 58 regions, in the following categories:

Core metropolitan - 9 regions. Global Sydney, Northern and Central Perth, Brisbane City, and then Inner Melbourne performed best, Central Adelaide and Hobart and southern Tasmania notably less on growth and employment and level of high skilled workers

Dispersed metropolitan - 11 regions. These suburban areas of the major cities, as well as the NSW Central Coast and Westernport Victoria, did well in the 90s, except for southern Adelaide and southern Sydney.

Production zones - 6 regions. Tariff cuts and loss of international competitiveness have hit the Hunter and Illawarra NSW, Ipswich Qld, and North and Western Adelaide the hardest. It is northern Adelaide which has suffered most, whereas population growth in other production zones has helped create jobs in retail and services.

Resource based - 6 regions. These are highly capital intensive and generally have low growth or falling populations. The Gippsland area, North-West Qld and the Pilbara-Kimberley WA have fared worst, and Darwin - Top End, because of its broader base in defence, tourism and administration, has fared best.

Rural based - 22 of the 58 regions are rural based, with diverse pastoral, timber, and agricultural, including irrigated, resources. Most of these regions have a slight population growth rate, but Eyre and Yorke Peninsula, Far and North Western NSW, the Mallee-Wimmera Vic, Mercy-Lyell Tas, Northern NSW and Western Victoria lost population and had poor jobs growth in the 1990s. The strongest employment and jobs growth was in Southern and South East WA, and Ovens-Hume Victoria near Bendigo, and the Murraylands and some other regions are quite prosperous when rural commodity prices are high.

State of the Regions gives the bleakest picture for many rural regions - decline in farm viability, low household incomes, high unemployment, about 2,000 farm households closing each year, fewer direct jobs and more sub-contracting in farming, decline in small towns with reduction in government services, closure of banks and small businesses.

The Mallee-Wimmera, Western Victoria and South East SA face major structural challenges.

Lifestyle based - 4 regions. These are Far North Qld, the Gold Coast and hinterlands, North Coast NSW, and Wide Bay-Burnett Qld. The first two areas have been booming, and the last two, with a high concentration of retirees, have notably higher unemployment, a lower skilled workforce and infrastructure shortages.

Discussion
Which kind of region do you live in? What has happened to jobs, education, health and transport services in your region during the 1990s?
Do you live in or do you know anybody who lives in a rural region? What do you know of the changes there in the 1990s?
Do you see these changes linked to economic rationalism and corporate globalisation - low or no tariffs, privatisation, user pays, deregulation?
What other influences have been working to cause the changes you noticed?

3. Impact of market policy in regions

Unemployment
In 1996 the Howard government initiated changes in the way the social security system dealt with unemployed people. A significant number of people aged over 40 were put on disability pensions, and a significant number of young people were put on the Youth Allowance.

As well, the work (activity) test was tightened and the income eligibility (means) test for unemployed people was loosened, and the work-for-the-dole scheme was introduced. These changes shift unemployed people into the "employed" category without really changing their circumstances.

If 1991 is taken as a base year, and today's figures are adjusted for the new way of counting unemployed, the real official unemployment rate has not changed significantly over the decade.

Corrected unemployment rate - selected range of regions

Region	1991	1996	1998	2000	Official June 2000
ACT	4.0	8.0	8.2	7.3	5.3
Brisbane City	6.4	8.5	8.3	7.8	6.0
Central Coast NSW	8.5	10.6	11.2	10.4	7.0
Central Western NSW	7.0	9.8	10.1	11.2	5.2
Eyre and Yorke SA	7.1	13.4	14.9	16.6	10.4
Gippsland Vic	7.2	13.3	12.7	16.2	10.5
Global Sydney	5.1	6.5	5.4	3.4	3.2
Hobart and Southern Tas	10.0	17.6	20.2	16.5	9.4
Hunter NSW	8.1	13.2	12.7	12.4	7.9
Illawarra NSW	9.8	11.4	13.7	11.7	8.0
Ipswich Qld	7.9	9.7	11.7	11.7	8.0
Mercy-Lyell Tas	11.5	14.0	16.3	21.1	10.6
Northern Adelaide	9.6	12.6	14.4	14.1	9.6
Northern and Central Perth	8.6	8.9	7.2	7.1	5.6
Sydney Production Region	9.0	11.8	10.9	8.8	6.1
West Melbourne	9.2	12.4	10.9	9.3	8.1
Wide Bay - Burnett Qld	10.2	13.2	13.8	13.9	10.7
Australia	7.6	10.1	10.1	9.4	6.6
Official Unemployed Rate	9.4	8.4	7.9	6.6

In the boom years from 1996-2000, 29 regions experienced a fall in corrected unemployment - nearly all in the cities, especially Sydney, and in the Queensland coal fields region; and 29 regions experienced a rise in corrected unemployment. Almost all rural regions had higher corrected unemployment by 2000.

Savings Ratio
Only 13 of the 58 regions have a positive household savings ratio, and some of the negative savings for regions are large. The positive cases were in the capital cities, Darwin, Southern NT, and Pilbara-Kimberley. The worst cases were Gold Coast and Hinterland, Goulburn, Ipswich, Loddon, North Brisbane, Westernport and Wide Bay - Burnett, which also have the higher corrected levels of unemployment.

Some of Australia's regions are in a virtuous cycle of advancement with high levels of productivity, high productivity growth rates, low unemployment rates and relatively high saving rates. Others are in a vicious cycle of low productivity, lower productivity growth rates, low savings rates and high unemployment rates. The virtuous cycle regions are heavily concentrated in Eastern Sydney and Eastern and Southern Melbourne.

A decline in the economy is underway. The people in the second group of regions are most vulnerable to any decline in the economy.

Discussion
What effect has the globalisation boom of the late 1990s had on your job, skills, income, savings? How?
Does the data presented demonstrate a sharp diversion in the experience of different regions in Australia in the 1990s globalisation boom?
How can funds for environmentally sustainable employment growth be better focussed on regions hit by the impact of global markets and "small government"? What other ways are there to link renewal of jobs in regions, and developing an environmentally sustainable economy?
Are the regions' natural resources being depleted because of current economic policy? If so, what is being done, and what can be done about this?

4. Political Reaction of Regions

• landslide against the Keating Labor Government in 1996, especially outside the inner-cities
• 23% vote for One Nation in the 1998 Queensland election
• 10% national vote for One Nation in the 1998 federal election
• 5% swing to Labor and Independents in rural Victoria in 1999 state election
• 9% vote for One Nation in the February 2001 WA election
• 10% vote for One Nation in the February 2001 Queensland election
• massive losses for the Liberal Party and National Party in Queensland, and for the Liberal Party in WA
• very strong swing to Labor in the 2001 Queensland election
• strong Green and Liberals for Forests and Independents vote in WA in 2001
• 11% swing to Federal Labor in the Ryan by-election in March 2001 in Queensland
• S11 and M1 urban youth protests and more vigorous industrial conflicts, such as the 1998 Maritime Dispute.

5. Elements of an alternative regional development policy
Under economic rationalism and corporate globalisation, high unemployment has taken on a strong regional dimension. Rural, traditional industrial and some high-growth lifestyle regions have very high unemployment. But a number of globally oriented regions have virtually full employment.

Real declines in commodity prices have resulted in income and job loss in rural areas.

Australian manufacturing has shrunk through lack of economies of scale, dependence on branch plants of multinational corporations, tariff cuts, inadequate Research & Development. This has led to high unemployment in production regions.

This experience of the 1990s reinforces a traditional Australian attitude in favour of "decentralisation" or regional development policies.

The traditional national economic policy in Australia up to 1976 was to encourage markets, but to ensure strong government support for infrastructure, education, research and development and technology; to have government boost spending markets when had their periodic recessions, and to transfer benefits to those with the worst chances in an open market. This was the hard-won lesson from depression and war.

Since the late 1970s, a new national economic policy has come to dominate, which means trade liberalisation, market deregulation, privatisation, user pays, low government taxes and even lower government spending. The "markets" are the only method of allocating resources.

This new approach - economic rationalism - took any focus off regional development policy.

Today, "regions" is restricted in government thinking to "rural". Federal, State and Local government are still poorly coordinated in developing regional development programs.

The broad features of an innovative regional policy are:

• Shift from trying to attract business into an area with incentives, to enhancing the skills of the businesses, households and organisations already in a region. New investment will be attracted to a region which has a positive strategy working.
• Increase the generation, spread and exchange of knowledge - this is crucial to innovation
• A focussed effort to direct capital to regions, through banks, super funds and government.
• Government responds to initiative and direction set within the region by providing finance and human resources for good projects. In the European Union especially, regional development policy is the economic policy. Government is crucial in providing stronger educational and research resources in regions, in providing modern transport and telecommunications infrastructure, and facilitating regional networking initiatives.
• A government commitment to repopulate rural and resource regions by say 150,000 - 200,000 in the next 20 years.