Does decentralisation benefit Australia?

Chris Sheedy By Chris Sheedy, CA Today

6 November 2018

Every decade or so the policy debate around decentralisation heats up as politicians, academics and business leaders argue over whether big cities are hogging the opportunity, and whether rural regions boast the talent to staff new enterprises.

One side says businesses and government departments should be moved, or established, in regional areas to better assist local economies. The other side says these companies and departments should stay where the talent is.

With the political demise of ex Deputy Prime Minister Barnaby Joyce, who was broadly accused of ‘pork barrelling’ [an informal terminology to suggest project or government funds are used to please voters or legislators] when he moved the Australian Pesticides and Veterinary Medicines Authority (APVMA) from Canberra to his own electorate, Armidale, the matter seemed to have been put to rest.

Decentralisation policies date back to the 1930s. They come into fashion then fall out of favour for a broad range of reasons.

But since the recent change of leadership in Australia we’ve found ourselves in the midst of yet another decentralisation dance.

We spoke with Dr Amanda Walsh, Associate Director of Government Relations at the Australian Catholic University in Canberra, to develop a clear picture of the issues involved.

What drives the decentralisation debate?

It’s one of those public policy ideas that comes around every several years, whether at the city, state or territory level. In Australia, decentralisation policies date back to the 1930s. They come into fashion then fall out of favour for a broad range of reasons. The idea was at the height of its powers during the post-war period.

In the 1950s and early 1960s the Menzies government was very keen on decentralisation as a means of populating various regions. At that time, it wasn’t primarily aimed at public sector agencies; it was very much aimed at getting the private sector to invest in regional greenfield sites, or it was about luring private capital from the cities into the regions. There were financial incentives for businesses to relocate to somewhere regional.

Why has the policy discussion now focused primarily on government departments?

Over the years, the nature of the economy has changed and we’ve become a services economy. It has been recognised by governments and political parties that public service agencies are good sites for employment and for generating economic activity that has flow-on effects in local communities.

Plus, it’s much easier for governments to relocate - or start from scratch - their own agency in a specific region than it is to convince private businesses to do so.

Does decentralisation tend to have the desired positive effect on regional communities?

It’s one of those public policy areas that still doesn’t have a decent evidence base. There are occasionally studies carried out to try to determine whether decentralisation is successful.

You need to treat each case individually in order to figure out the precise impact it’s going to have.

But part of the problem, and this is broadly recognised, is that when you’re talking about place-based policy you need to examine the unique circumstances of a particular town or city to work out whether moving a particular agency is going to be a good thing.

You need to treat each case individually in order to figure out the precise impact it’s going to have. It’s not possible to develop a template that will work in all locations.

The move of the APVMA from Canberra to Armidale attracted quite a lot of negative press. Has it been a success?

We don’t know, yet. It will be monitored quite closely by a range of people and organisations to attempt to either prove that it was a great idea, or to prove that it was a waste of money.

Depending on what parameters and criteria you look at, you could probably make a case either way. It comes down to things like how well integrated into the local economy the new enterprise will be.

Will it create jobs in the community? How embedded will the organisation be in that economy? How much other economic activity is created?

So, successful decentralisation is complicated?

Yes. Potentially there is a range of benefits, but whether you can realise that potential depends on circumstances. Potentially you are creating jobs, but the jobs offered by public service agencies are often very different in nature to the types of jobs that exist in a region.

Are you going to be able to find people within that community to take those jobs, or will you have to import people from other communities? There’s also a concern about cannibalising jobs in the community.

Perhaps the new government department will remove all of the best and brightest talent from the local retail or tourism sector, for example. So how are you going to fill those jobs that are now vacant? And is there a university nearby where people can gain a qualification that will enable them to work in a public service environment?

Can decentralisation damage the place that lost the department, such as Canberra?

Local federal politicians have been scathing about the impact on Canberra, about jobs being ripped out of the community. But I think that is misstating the case.

It’s really about discrete work units that wouldn’t have had a very big impact on the jobs market.

The ACT is currently the fastest growing economy in Australia. If anywhere can replace jobs, it’s Canberra. And enormous departments are not going to be moved.

It’s really about discrete work units that wouldn’t have had a very big impact on the jobs market in a place like Canberra, Sydney or Melbourne.

Are there examples of successful decentralisation?

One example would be the NSW Government’s Office of Local Government, which was moved from Sydney to the south coast of NSW. That made sense.

That department has been located in Nowra for about 15 years. That’s an example of a successful decentralisation program.

About the author

Chris Sheedy is one of Australia’s busiest and most successful freelance writers. He has been published regularly in the Sydney Morning HeraldVirgin Australia VoyeurThe Australian MagazineGQIn The BlackCadillac, Management Today, Men’s Fitness and countless other big-brand publications. He is frequently commissioned to carry out copywriting and corporate writing projects for organisations, including banks, universities, television networks, restaurant chains and major charities, through his business The Hard Word.


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