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Shifting Focus to Whole of State Development

Clr Peter Woods Clr Peter Woods OAM - President, Local Government Assosiation of NSW

I want to look at shifting the focus to the whole of state development, because, you see, that's a concept that has never really been seriously entertained by the politicians or those involved in the planning process. It has always been Sydney out. It has never been looking at the whole of the State in terms of the State's development.

The current development path of NSW is certainly not sustainable from an economic, social and environmental perspective.
This path creates polarisation and fragmentation. Over the past 20 years, we have witnessed growing disparities in employment, wealth, income and educational opportunities between regions and within regions in the state. Not just a growing divide between Sydney and the bush, but a growing divide between regions within the greater metropolitan area.

Sydney and the Greater Metropolitan area as a whole, are straining under population growth pressures. Our transport infrastructure is overloaded, traffic gridlock is an everyday occurrence, the existing rail system is near capacity and some experts predict that it will not have the capacity for any additional rolling stock after 2006, air quality has deteriorated to a point where proposed major developments have had to be aborted, residential and industrial land supplies are under pressure - the list goes on.

To a large extent, Sydney is choking on its own success. Sydney has been booming and it's prolonged economic growth and resultant opportunities are a powerful population magnet. While a burgeoning Sydney is bursting at the seams, many regions of NSW are crying out for new and further development. Many parts of regional Australia have suffered major downturns as the result of the combined effects of economic rationalism, structural change, technological change and demographic shifts. These have had major impacts over a relatively short period of time.

These regions are struggling to adjust, to encourage the growth of new industries, to replace old jobs with new and to put new foundations under their communities. Many are succeeding despite the past neglect of governments and government agencies, however, these efforts would gain momentum if they were reinforced by a coherent strategy for the development of the whole state, at they same time greater growth in the regions could help relieve pressure on Sydney.

One reason for this outcome is that State Government agencies have been unduly focussed on the development of Sydney and have neglected the rest of the state. Another reason is the forces that shape the modern economy. Without intervention, the forces of globalisation and the knowledge economy will continue to concentrate the benefits of economic growth in globally oriented capital cities, or more specifically, the globally oriented sectors of those cities.

Australia has perhaps three such cities - Sydney, Melbourne and Brisbane, of which Sydney is obviously pre-eminent. Contrary to popular belief, the IT economy concentrates rather than decentralises activity if left to its own devices. Let me make it clear, I am not advocating strangulation of economic growth in Sydney. I recognise that Sydney is the economic growth engine of the NSW economy if not the Australian economy. However, there is a growing cost to this growth and given the constraints referred to, the current pattern of growth is not sustainable.

The dilemma is: how to maintain the impetus of Sydney while at the same time relieving the growth pressures and sharing the benefits of growth more equitably across the state?

In recognition of this dilemma the Local Government and Shires Associations established a Whole of State Development Task Force to consider future development strategies for NSW, with particular emphasis on the role of Local Government. The Task Force was assisted by National Economics (NIEIR) in producing the publication A Framework for Whole of State Development. The framework addresses the challenges confronting NSW. We argue that a new vision is required by all spheres of government, business and community to guide the development of NSW over the next 20 years. From a Local Government perspective, the case is put for the adoption a "Whole of State Development" approach, where the local and regional dimension to state economic development is recognised and emphasised in new policy directions.

The "Whole of State Development" approach aims to ensure that all NSW regions share in the benefits of globalisation and the digital revolution. Measures are required to build the knowledge base, infrastructure and innovative capacity of all regions. The new approach requires a major resource commitment and strategic coordination from all spheres of government. Local Government seeks to be a pro-active partner in this process. Whole of State Development involves devolution of responsibilities and resources to regions, but it doesn't involve a reduction of the role of government. In fact, quite the opposite, a Whole of State Development approach involves intervention, public investment and planning - terms, of course, guaranteed to send a shiver down the spines of the economic rationalists (in both Macquarie Street and Treasury).

The Local Government and Shires Associations of NSW put forward the following vision to guide Whole of State Development:

"NSW will be one of the most confident, well-managed, dynamic, competitive and open economies of the Asia-Pacific region. The state will be fully integrated into the global economy - a multi-cultural society that encourages continuous flows of investment, people and knowledge flows and ideas. The basis of its wealth and well being will be innovation, social cohesion, good governance and ecological sustainability. It will be a creative, adaptable, high skilled and knowledge-based economy where firms, organisations and citizens of all ages are engaged in continuous learning and innovation. It distinguishes itself by an all-embracing commitment to reconciliation between indigenous and non-indigenous Australians."

"All regions share in the benefits of the new economy. Regions have access to world class transport, financial and technological infrastructure and services. This includes advanced information communications technologies, which are used by local business networks and community organisations to enhance global links, knowledge flows and local learning. Resources and responsibilities are devolved to local government and regions to enable them to implement strategies to attain their economic and social potential. Its cities and regions are socially enriching and safe places to live offering good opportunities for jobs, investment, and learning, with outstanding infrastructure and amenities. It values and conserves its environmental and cultural assets".

Whilst recognising common challenges facing all metropolitan and non-metropolitan regions of the state, we also recognised the distinctive challenges facing different types of regions and identified five types of regions in NSW for analytical purposes:
  • Established Sydney, "Global Sydney" (booming Sydney), the areas closely integrated with the global economy and the information economy - eg CBD, Nth Sydney, Southern Sydney, Eastern Suburbs, Chatswood and other inner ring suburbs.

  • Developing Sydney, Western and South Western Sydney and the Central Coast Rural NSW, largely west of the great dividing range

  • Post Industrial Regions, the Hunter and Illawarra

  • Lifestyle Regions, north coast and to a growing extent, south coast of NSW.

The challenges include increasing congestion and other environmental problems associated with the growth of Sydney, population decline in rural areas west of the Great Dividing Range, rapid population growth in lifestyle regions (North Coast/South Coast) and Developing Sydney, and ongoing structural change in industrial regions. The Whole of State development approach is built around principles of sustainable development. This involves a comprehensive approach to developing all of the State's regions encompassing economic development, social well being and ecological health. The principles are:
  • A state-wide network of globally oriented regions and inter-regional linkages

  • Innovative communities and enterprises

  • Regional leadership and stewardship

  • Reconciliation and cooperation

  • Social cohesion

  • Ecological sustainability

  • Knowledge based regions.

To attain the Whole of State Development vision, the state needs to build on its strong and diverse economy with value added industries in mining, agriculture, manufacturing, information, advanced services and high technology industries. People at all levels of society and workers need to be involved in continuous learning, acquiring new skills and competencies. The Whole of State Development approach proposes to:
  • Ensure that the global competitiveness of Established Sydney is matched by a commitment to improving environmental quality and lifestyle amenities.

  • Target a population increase of a minimum 75,000 in rural NSW (west of the Great Dividing Range) by 2021. This may seem a modest or trivial target but the initial challenge is to stem population decline. So, therefore, it is really containment, and increase, which in effect gives a more dramatic increase in real terms.

  • It entails significant public investment in education, transport infrastructure, research and development and information and communications technologies in rural centres that demonstrate growth potential. It also proposes tax incentives to encourage job creating investment into designated development zones.

  • Planning Sydney as a multi centred city with strategies to increase the number of knowledge based jobs in the regional centres of Developing Sydney (Western and South Western Sydney) and improving public transport access to these centres. Some of Sydney's growth problems such as air quality and congestion would be relieved by the wider distribution of employment and profit generating activities.

  • Promote active revitalisation of the industrial regions of Wollongong and Newcastle. These regions have a capacity to take some of the population growth of Sydney, but only their economic base can be shifted faster to value added industries and their rail infrastructure links to Sydney are upgraded.

  • Encourage further diversification of lifestyle regions of the north and south coast with investments in education, amenities and infrastructure.

In developing the Whole of State Development framework we considered three scenarios for the development of NSW over the next 20 years.

The head in the sand scenario which persists with the current path and results in a state population of 7,428,000 by 2021. It results in poorer economic performance, slower growth of non-metropolitan regions and population decline in rural NSW.

The Laissez faire scenario where the market is given a free hand and results in a NSW population of 7,607,000 by 2021. It results in higher rates of economic growth associated with growing inequality and environmental damage, particularly in Sydney. Infrastructure is inadequate to meet the challenges of regional development, because public investment in infrastructure is severely constrained.

The Sustainable development scenario results in a population of 7 473 100 by 2021. It results in population and economic growth in all areas. It includes positive measures to target an increase in population of rural regions by 75,000 people, stimulate revitalisation of the industrial regions, constrain over-development of Sydney, and infrastructure investment and careful environmental management of lifestyle regions.

Clearly only the latter is acceptable. This will only be achieved through a fundamental shift in development policies and a strong partnership between all spheres of government based on a shared vision of growth that embraces all regions of the state and indeed, Australia.

The Whole of State Development framework puts forward a number of recommendations designed to help achieve the sustainable development scenario and enable all NSW regions, and the people, to share in the benefits of economic development, whilst maintaining environmental quality and social cohesion. The Associations are currently pursuing these recommendations with the state and federal governments.

This came about as a result of an awareness by local government representatives from metropolitan councils that the present course of action is not sustainable. That Sydney will choke on its own pollution. At the same time we had local government representatives from their communities in non-metropolitan areas saying that the bush was closing and that there was a drive of people to the metropolitan area.

It was only by bringing the two parties together, to recognise the problems on a statewide basis, that we got something that would never have been achieved ten years ago. And that was a unity of purpose based on problems. The problems of the city can be the solutions for the bush; the problems within Sydney can be resolved by a far more strategic and equitable approach to the planning imperatives.
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