MAV RURAL & REGIONAL PLANNING CONFERENCE 2013

1. MAV RURAL & REGIONAL PLANNING CONFERENCE 2013 WHAT INFRASTRUCTURE INVESTMENT IS NEEDED TO REPOSITION REGIONAL VICTORIA? John Henshall, Director, Essential Economics Pty Ltd 4 July 2013

2. Do we really need to ‘re-position’ Rural and Regional Victoria? • Regional Victoria has strong attractions in its cities and towns, and its rural areas. • Lifestyle, jobs, land availability, high amenity, good access to major cities and to Melbourne. • Leisure and recreation: Great Ocean Road, Great Alpine Road, the Grampians, Wilson’s Prom, Yarra Valley, Sunraysia, etc. • History and Heritage: grand ‘Victorian’ cities, scenic small towns, gold rush era, Alps to Deserts, Shipwreck Coast, Glenrowan and Ned Kelly, Sovereign Hill, Echuca Port, etc.

3. A Case in Point: my hometown • Wangaratta, NE Victoria • 1959: 12,000 people. Now: 17,960 people • Then: Jobs in the textile/woollen mills, in a bank, in retail, on the farm • Now: Jobs diversified - health, education, professional services, tourism, etc. • Accessibility: Then - Hume Highway. Now - Hume Freeway. 2.5hrs to Melb. • Growth in nearby small towns: Beechworth, Milawa, Rutherglen, Myrtleford, etc – mainly in tourism and agriculture. Residential choice expanded. • BeechworthThen: ‘Beechworth Bakery’ and National Trust classification for the town. Plus a Prison and a ‘Lunatic Asylum’. • Today: thriving tourism industry; fine dining; boutique shopping; accessible to surrounding wine region. Circuit touring – from Beechworth to Rutherglen, Yackandandah, Myrtleford, Bright, etc. • Today: the North-East is a desirable place - Jobs, lifestyle, residential choice, high amenity. • All regions in Victoria have attractive assets.

4. So, why re-position Rural and Regional Victoria? • Population and labour force growth is occurring in Regional Victoria, with RV capable of taking a larger share of Victoria’s state-wide growth. More jobs in RV are required. • Industries in Regional Victoria need attention and encouragement, especially in the face of industry restructuring and strong global competition. • Regional Victoria has the capacity and capability to further develop its local and regional economies and to absorb urban growth. • Regional Victoria can assist in taking some growth pressure off metropolitan Melbourne. • Regional Victoria needs to identify and grasp the opportunities ahead.

5. GROWTH is occurring • Regional Victoriais to experience strong population growth: +1.3% pa 2011–2031 (Victoria in Future 2012). • Regional Victoria to accommodate additional +430,000 residents by 2031. • Regional Victoria to account for 25% of State growth to 2031. Could reach 30%. • Victoria’sgrowth projected at 1.3% pa to 2031, and an additional 1,705,000 pop. • Melbourne’sgrowth projected at 1.4% pa to 2031, and +1,275,000 persons. • Regional citiesaccounted for 56% of regional growth, 2006-2011 (+56,000 pop cf 100,000 pop for RV).

6. GROWTH is occurring (cont.)Population Growth 1991-2011 Source: Implications of Population Growth on Infrastructure and Resources in Regional Cities, Essential Economic on behalf of Regional Cities Victoria

7. GROWTH is occurring (cont.)Population Growth Scenarios 2011-2031 Source: Implications of Population Growth on Infrastructure and Resources in Regional Cities, Essential Economic on behalf of Regional Cities Victoria

8. Is Growth Necessary? Is it Good? • “Growth for the sake of growth”: NO! • Growth is taking place – Natural Increase is contributing to growth; people are migrating in to the regions; households are forming; hence: growth in demand. • Some regions and local areas declining: demand shrinking. Businesses and Jobs lost. • Youth leave the towns and farms for big cities. • Towns die – public/private investments lost. • Witness declining towns in parts of Regional Victoria. • Outcomes compounded by ageing population in Regional Victoria. • Growth adds vibrancy and vitality to a place • Increased demand leads to increased investment and growth in businesses and jobs • Growth needs to be environmentally sound.

9. Growth is Projected – Regional Victoria needs to be well-placed to deal with it • Growth in population generates growth in urban development and the requirement for more infrastructure and services. • Growth in regional population means growth in regional (resident) labour force numbers. 2011-2031: +597,000 new population means about +250,000 new labour force entrants (Medium forecast). • Jobs are needed for these new entrants to the labour force. • Preferably, jobs will be located locally and in regions where people live. • Job Choice is needed: provide a diversity of jobs that people want.

10. Regional Cities have Growth Capacity • Victoria has ten regional cities: Ballarat, Bendigo, Geelong, Horsham, Latrobe, Mildura, Wangaratta, Warrnambool, Wodonga Shepparton. • Important regional foci for economic development – manufacturing, agri-processing, services, etc. • Regional cities currently have approx. 178,000 residential lots to accommodate growth (source: EE). • Includes 87,000 zoned lots and 91,000 un-zoned lots. • These lots can accommodate an extra 427,000 population. • This growth potential is equivalent to 58% of existing population in regional cities in 2011. • Regional cities have 4,700ha of developable industrial land that can support some 188,000 jobs (at 40 jobs/ha).

11. 10 Regional Cities Source: The Age

12. Regional Victoria capacityto support further population and employment expansion Residential Capacity - Regional Cities 2011-2031 Source: Implications of Population Growth on Infrastructure and Resources in Regional Cities, Essential Economic on behalf of Regional Cities Victoria

13. Regional Victoria hascapacityto support further population and employment expansion (cont.) Employment Capacity - Regional Cities 2011-2031 Source: Implications of Population Growth on Infrastructure and Resources in Regional Cities, Essential Economic on behalf of Regional Cities Victoria

14. Challenges and Issues • Job losses in regional cities (eg, Ford and Target in Geelong, SPC Ardmona in Shepparton). • Off-shore competition in manufacturing, food processing etc.. • High domestic costs of production. • High Aussie Dollar – but now lower rate. • Unemployment higher in Regional Victoria (5.7%) compared with Melbourne (5.4%), but much higher in many areas eg Shepparton, Latrobe Valley, Wodonga, Central Goldfields, Colac, Mildura • Climate: Impact on regional economies of drought, bush fires, floods.

15. Opportunities • Industry restructure eg dairy, food processing, timber, manufacturing, etc. • Opportunity to develop creative industries in regional cities and small towns (eg, Castlemaine, Clunes, Beechworth, Metung, Pt Fairy). • Build on NBN roll-out (eg Rushworth “The Age” spread). • Support transformation of industries to new technologies and markets: advanced manufacturing, agriculture, etc. • Attraction of skilled migrants. • Attraction of more visitors: an export industry for cities and towns.

16. Profile of Creative Industries in Rural Victoria • 5,500 creative businesses in rural Victoria (7% of all rural businesses). • 11,030 rural residents employed in the Creative Sector (3.5% of all rural workers). • Job provision focused on traditional creative and cultural activities (printing, publishing, libraries, archives, visual and performing arts), and increasingly on IT, telecommunications, advertising activities. • 12,360 rural workers are occupied in creative activities (representing 3.9% of all workers). Creative people generally highly educated, high income earners, business owners. Many have migrated (or returned) to rural areas. • Share of creative people living/working in the small towns is higher than the ‘total’ share for Rural Victoria (3.9%). • $710 million pa in Gross Value Added (GVA) is generated by the Rural Creative Sector. • Examples: Lorne (Music and Arts Festival) , Clunes (International Booktown), Kyneton (Piper Street Tourism Precinct). • Towns use creativity as a driver of economic change and economic development in their rural communities.

17. Clusters of Rural Creative Activity Source: Economic Profile of Rural Victoria’s Creative Sector, Essential Economic on behalf of Rural Councils Victoria

18. Regional Victoria Requires More Infrastructure and Services • To meet population and visitor growth • To support investment and jobs • To overcome existing backlogs in provision of infrastructure and services • To ensure industry is well-catered for with adequate infrastructure and services • To enhance liveability in regional Victoria • To take some growth pressures off metropolitan Melbourne • To meet environmental concerns

19. Examples of Key Needs in Infrastructure and Services – Regional Cities 2011-2031Medium Growth Scenario • Dwellings: +113,370 • Residential Land: +11,340ha • Industrial Land” +1,390ha • Hospital Beds: +1,440 • General Practitioners: +320 • Prim. School Places: +13,390 • Sec. School Places: +12,730 • University Places: +12,020 • TAFE Places: +32,100 • Aged Care Beds: +8,530 Source: Implications of Population Growth on Infrastructure and Resources in Regional Cities, Essential Economic on behalf of Regional Cities Victoria

20. Re-positioning Regional Victoria: what actions are required? • Attract more infrastructure and services to meet gaps / under-supply/ageing components • Attract more funding for infrastructure – public (what models?) and private • Set priorities for funding and implementation • Attract more business investment and enterprise • Generate more jobs and incomes • Build on competitive advantages of cities, towns, regions • Deal with the constraints • Address skills / educational gaps • Promote Regional Victoria as a place to live and invest • Attract more tourists and their spending

21. What actions are required? cont. • Promote local/regional farm etc production; agri-processing • Focus Government assistance programs on struggling sectors (where viable to do so), and those ‘transforming’ to advanced manufacturing, R&D, advanced agri-business, etc • Build on ‘global’ market opportunities; develop exports • Further develop and promote regional centres • Encourage inter-city links/connectivity • Further enhance living and working opportunities in small towns – ‘liveability’ • Encourage creativity in business and the wider community • Question: How to achieve all this?

22. Conclusion • Agree on the fundamentals: what do we want/need for our regions? • Acknowledge that the regions have capability and capacity to develop significantly. • Set priorities for action and implement these. • Expect bilateral support in Spring Street and community support. • Seek out and encourage the creative and innovative businesses and individuals. Q: What other priorities do we have?