The Good Oil by Rod Brown *
The Organisation for Economic Cooperation and Development (OECD), the leading think tank on public policy, spends a huge amount of time analysing the economic and social policies of its member governments.
In recent years, the OECD has been highlighting the need for national governments to shift away from ‘top down’ sectoral instruments towards more ‘bottom up’ local development strategies. This is because regions and localities have become the focal point for competitiveness and growth. But the message has not filtered into the Treasury corridors in Canberra. Regions have disappeared off the radar here and the May Budget is proof of that.
OECD thinking
Let me explain by referring first to the OECD’s synthesis of the situation. It argues that the focus on regions in the majority of OECD countries means that responsibilities need to be shared among different levels of government and private sector stakeholders. This means that a greater number of players need to be involved, and closer coordination between them has to be established. Likewise, for measures to be durable and equitable, they must be built on responsibility sharing and local empowerment.
The OECD says that the new regional agendas cut across issues and levels of government, and they foster partnerships between different players operating within the local area. These agendas promote coordination between agencies that cannot be achieved from a national orientation.
The debate surrounding decentralisation is closely linked. Many OECD countries are decentralising responsibilities to the regional and local levels, in line with the concept of subsidiarity. As a consequence, there has been a proliferation of new regional and local institutional networks and development agencies. OECD studies affirm that successful local development structures generally share the following features.
Partnership
This is a key defining feature of successful local development agencies. It involves genuine partnerships between public agencies and social players including employers, community and voluntary organisations, unions, development agencies, cooperatives, universities and so forth.
Networking
Local development initiatives rest on individuals and agencies that work together to delineate a common regional vision that can deliver projects.
Visible and autonomous structure
The aim is to have stable structures operating within designated geographical boundaries, with the ability to lead on strategy development, mobilising local people and other agencies, selecting and funding projects and monitoring and evaluating outcomes. This role will often be played by an independent local development agency, thus insulating it from short term political pressures and establishing a regional identity and a vehicle for communication.
Bidding by local development agencies
They should be bidding for funds from the public and private sector, and be prepared to commercialise services where appropriate.
Interestingly, the OECD also identifies a key problem faced by many development agencies – their lack of institutionalisation within the policy and implementation structure. For example, the Regional Development Agencies in the UK lack the resources and statutory authority to advance a coherent regional vision or strategy. This has been compounded by the emergence of better resourced sub-regional organisations which have undermined the RDAs (sounds very familiar!).
Finally, the OECD paper argues that local development needs to be within a supportive framework, where the national government fulfils the following.
- Provides technical support structures.
- Fosters coordination to avoid duplication and harmful competition, and to maximise synergies.
- Encourages local areas to develop good and consistent strategies, diffuse best practices and develop appropriate instruments that can be applied at the local level.
Implications for Australia
How does the OECD view transpose to the Australian situation? On the bright side, the recent Federal Budget announced the consolidation of regional programs under one banner. The 55 Area Consultative Committees (ACC) have also been strengthened, and commissioned to develop regional strategies and provide a stronger coordinating role in line with the OECD thinking. Interestingly, the ACCs now resemble the Keating Government’s REDOs that were scrapped within weeks by the incoming Howard Government.
On the dim side, there is no sign in the Budget that the Australian Government understands that the Federal agencies in regions (principally ACCs) cannot deliver nation building outcomes if they have minimal funding or influence.
The ACCs come under the Department of Transport and Regional Services (DOTARS), whose regional programs are virtually finishing in the next 12 months. The other two industry departments – Industry, Tourism and Resources (DITR), and Agriculture, Fisheries and Forestry Australia (AFFA) have been similarly neutered. In other words, it is a long way off the OECD advice about the need for stable regional structures that can lead, mobilise, network and so forth. I am tipping, however, that next year’s Budget will loosen the purse strings so that the Government can rebuild its regional credentials in the run up to the election.
Treasury has a vice like grip on things, so the funding will be modest. One area of expenditure is likely to be Auslink, the national transport infrastructure initiative, and the nearest thing the Feds have to a nation building program. Despite Deputy PM Anderson continually saying his beloved Auslink has to be revenue neutral, it simply cannot be for two reasons – it is important, and the Deputy PM and the National Party cannot continue to be treated like poor country cousins.
Finally, Local Government has the intellectual support of the OECD to get serious on the industry development front – and it is great to see a fair swag of large and medium sized Councils stepping up. They take the view that the issue is too important to leave to Federal and State agencies, whatever their rhetoric and noble intentions. As for the smaller Councils, where the regional development function is often a part time activity, I sense that quite a few are wary about getting involved in infrastructure development, investment attraction and jobs growth.
Should your Council be in this category, the better option is to stay involved with the local ACC and State development agencies. Investment attraction, in particular, is a difficult field and long term commitment is required. This is also the OECD message.
* Rod Brown’s Canberra based consultancy group, Australian Project Developments Pty Ltd, specialises in industry/regional development and government liaison. For further information telephone (02) 6231 7261 or email apd@orac.net.au
