The first round of the feds’ $1 billion play in regional development got off to an inauspicious start last month, and there are lots of confused punters.
In plain terms, there were 35 successful applicants out of 550 submissions – an embarrassingly low success rate of 6.4 per cent. Thankfully some of the winners were Cockatoo members. The Department is pointing out that the success rate was actually higher because 249 applications didn’t meet all the criteria. That really is splitting hairs.
Why? First, Minister Crean talked the program up way too far. Secondly, a $150 million spend wasn’t much across 55 regions. Thirdly, an urban centre like Geelong with marginal seats shouldn’t be receiving two lots of $10 million, especially when one is for the upgrade of Skilled Stadium! Fourthly, quite a few projects made a mockery of the criterion requiring ‘maximum leverage from external sources’.
If you are one of the 93.4 per cent who missed out, I would strongly suggest that you DO NOT give up. Minister Crean has stressed the importance of being persistent, so take him up on his advice.
I believe the RDA Fund criteria are basically sound, but the program needs to be doubled because of the underlying need for community infrastructure in the smaller councils/towns.
They simply don’t have the revenue base, whereas cities like Geelong, Bendigo, Gold Coast and Newcastle (who cornered over $40 million in the first round) have countless more funding options. The 55 RDA Committees must also be given the task of prioritising the projects before they go to Canberra.
In my view, the RDA Committees should be told to put a maximum of two projects forward in any six month period (i.e. total of 110 across Australia) – with a nod and wink from Canberra that at least one would be funded. This would avoid the large number of submissions at present, and give the RDACs some reason for playing along.
The good news is that there are other well-resourced programs in other federal portfolios. For example, in during November FAHCSIA will be unveiling a sizeable and flexible new program suited to councils.
Smart regional policy
There is a widely shared consensus across Europe that mobilising innovation potential of all regions is the way forward. To this end, a recent European Commission study ‘Regional Policy for Smart Growth in Europe 2020’ (Directorate-General for Regional Policy) calls for a refocusing of regional policy, and the policy prescription does make a lot of sense.
There are four suggestions that also make huge sense for regional Australia. My comments are in brackets.
1. Develop smart specialisation strategies
This calls for regions to concentrate resources on the most promising areas of competitive advantage based on clusters, cross sectoral activities, innovative services, high value added markets or specific research and innovation areas. The development of such strategies should be subjected to international peer review. (This is sound because by sticking to the principles of competitive advantage you can win arguments against Treasury! The proposed international peer review is also worth consideration, especially if it can stimulate investor interest in our regions)
2. Redirect programs
The European Commission study proposes that the substantial funds available under the EC regional cohesion policy be redirected to programs that conform with a smart specialisation approach. (In Australia, because we don’t have such program flexibility, we should be lobbying Canberra to track the EC experience).
3. Interregional cooperation
This recommendation is for better access to international research and innovation networks and for EC member states to run their own projects to this end. It calls for improved knowledge transfer and the use of the "Regions for Economic Change" and "RegioStars" initiatives. (This is most interesting. While there is interaction between Australian and EC academics, it rarely extends into policy research. Wouldn’t it be marvelous if our academics got involved in international research that could underpin good government policy!)
4. Develop a "smart specialisation platform"
The EC study recommends the marshalling of expertise from universities, research centres, regional authorities, businesses etc. to formulate and implement smart specialisation strategies by national and regional governments. (Australia’s regions are crying out for ways of aligning resources and program support to attract investors. Indeed collaboration between federal, state and local governments to develop such pathways would really shake things up! Companies do it, why shouldn’t governments?)
International collaboration – ideas please!
The European Commission has asked us to share our experiences in regional innovation. So I’m planning a quick trip in November. I am proposing to lay out a methodology for linking industry hot spots or clusters all across Australia and Europe, with a view to growing trade and investment in line with the Sunrise Trade Network that I’ve discussed previously in this column.
Examples of hot spots that I’d like to feature are:
- IT – north Sydney, Wollongong, Ballarat.
- Heavy engineering – eastern Perth, Latrobe Valley, Ipswich Road, Newcastle.
- Aviation – Sale.
- Food processing – Toowoomba, Wagga, Shepparton, Logan.
- Printing – Maryborough (Vic)
- Aged care – Victor Harbor, Atherton.
- Horticulture – Devonport, Virginia.
- Marine industries – Cairns, Gold Coast.
- Timber products – Albany, Gippsland.
- Ecotourism – Cape York, Great Lakes.
- Clean Energy – far west NSW, Bass Strait.
If you’d like to furnish material on these or other possibilities, please contact me and I will forward a pro forma.
Federal Grants
Stormwater grants – final round ($90 million available) closes on 7 December. The minimum amount of federal funding per project has been reduced from $4 million to $2 million.
Remote Indigenous Energy Program ($40 million) – brand new program to fund solar energy plants in around 50 indigenous communities currently using diesel fuel. I figure there are over 1000 such communities, but it’s a start.
Suburban Jobs Program ($100 million) – we are currently assisting one council in each of SA, Queensland and NSW – if you’re in WA or Victoria and would like a hand, please contact us.
*Rod Brown is a Canberra-based consultant specialising in industry/regional development, investment attraction, clusters and accessing Federal grants. He also runs the Cockatoo Network. He can be contacted at apdcockatoo@iprimus.com.au or phone (02) 6231 7261.
Go to the blog at www.investmentinnovation.wordpress.com for 550+ articles on issues relevant to Local Government.
