Rural Australia and the need for reform

Unless a better way of governing this country is found, I believe that rural and regional Australia will continue to suffer badly. I will speak largely about rural Australia, obviously because it is what I know, and who I have been fortunate to represent in recent years in my former role as President of the NSW Farmers’ Association.

There is a significant population imbalance in Australia. We are just about the most urbanised country in the world. Only 28% of Australians live in inland Australia in small rural centres and regional cities. Approximately 82% of the Australian population lives in major metropolitan regions and within 50 kilometres of the coast. The 2001 Census of Population and Housing showed that of the 6,371,745 people in New South Wales, 68.1% of the population lived in just six urban centres: the four with populations above 100,000 (Sydney 3,502,301; Newcastle 279,975; Central Coast 255,429; Wollongong 228,846) together with the Tweed Heads part of Gold Coast-Tweed Heads (45,024) and the Queanbeyan part of Canberra-Queanbeyan (29,928). This is notwithstanding that in all, there were 244 urban centres and 270 localities in NSW in 2001.

Rural Australia is in slow decline and is increasingly being omitted from key policy considerations. There is evidence that over 40% of towns in NSW are in decline. The towns most likely to be in decline are in the more remote areas. Meanwhile the 60% of towns that are growing are largely in coastal, semi-urban or mining areas. Growing or declining population can be an important indicator of the economic health of a regional community. A number of studies by the Australian Bureau of Statistics (ABS) and the Australian Bankers Association (ABA) have analysed demographic trends and their impacts on regional communities and in particular their impacts on smaller regional centres. While population loss or stagnation is only one among a number of potential indicators of decline, it is an important one and is the focus of much regional development discussion.

The ABS (1998) has made a number of points about the decline of small towns that place the problem in perspective. In 1986 there were 578 towns in Australia with a population between 1,000 and 19,999; in 1996 there were 678, or 100 more such towns. They contained 2.5 million people, or 324,000 more than in 1986. Of the 578 towns in 1986, 47% had grown by at least 10%. Most towns experiencing substantial population growth were coastal, peri-metropolitan or associated with particular growth industries such as tourism or wine growing. However 31% of these towns had lost population, with 10% declining by at least 10%.[1] Towns in decline were usually inland, in wheat-sheep belts, dry land grazing regions or mining regions. The proportion of people living in towns under 1,000 and on farms (defined as rural) also fell.

Another study, commissioned by the ABA (1998), examined trends in the position of local government areas from 1976 to 1996. Of the 700 local government areas (LGAs) across Australia, the study examined the 456, which it defined as ‘rural’, containing fewer than 17,500 people in 1996. Of these 456 LGAs, 215 had been subject to ‘a process of sustained population loss since 1976’:

The result is a process of demographic erosion that has reduced the number of people in 215 rural municipalities from 883,747 in 1976 to 778,452 in 1996 which is a decrease of 12% (ABA 1998: 2).

According to Nugent (1998), NSW population movements between 1991 and 1996 reveal complex intrastate demographic trends: the continuing domination by Sydney of the State's population, a pattern of inland migration to the coast and interstate, and very low growth or decline among inland regions. On one hand, 88% of coastal centres experienced population increase, with coastal towns having an average growth rate over the period of 16% compared to 5.7% for all rural centres. On the other, inland regions' average annual growth between 1991 and 1996 was a low 0.03% (0.63% from 1986-1991), and the population of most inland areas fell. Non-coastal centres grew at a significantly lower rate than the rest of the State. While towns with populations of 10,000 to 20,000 grew strongly, as did towns with 500 to 2,000 people, towns of 3,000 to 10,000 people recorded the lowest growth and lost population.

From this analysis there are a number of conclusions that can be drawn about demographic trends in relation to smaller regional centres in New South Wales. A majority of the small regional centres are losing population, and not all larger regional centres are growing strongly. Regions are not simply losing population to Sydney but to other states and territories. Inland regions are generally faring poorly in terms of population growth. It is important to note that the decline of many small towns and the forces driving this decline are not confined to New South Wales but are also occurring in other States and Territories.

Population growth or loss is not the only barometer of community economic health. It is also important to look behind the demographic trends to examine the underlying strength of regional economies. However as the population distribution continues to change, so, naturally, does the level of attention and understanding that governments have of rural issues. It is here that it becomes clear that Australia’s system of government has not adjusted to accommodate these changes.

In my former role as President of the NSW Farmers’ Association, I was continually frustrated in my approaches to government with their lack of understanding about rural issues. With only 11 rural-regional seats in the NSW Legislative Assembly of 99, it is little wonder that politicians place their focus on metropolitan and coastal issues.

A particular example of this lack of understanding came when the Federal Treasurer, Peter Costello, was reported as saying that a fall in agricultural production and rural exports due to drought was not enough to derail the strong growth of the entire economy. This ‘city-centric’ remarked showed little understanding of the way a drought cuts jobs, bankrupts business and destroys farming communities. It is not so much the fact that agriculture contributes 4% to the country’s GDP; it is the fact that in many communities the income that flows from our exports forms the basis of local economic activity. Work by the Australian Farm Institute (2005), has shown that the Farm Dependent Economy, which takes into account all the flow-on economic activity of agriculture, is about 12% of GDP, equating to $72 billion. The Treasurer’s comments ignored the social impact of drought, and the multiplier effect it has in regional communities. Little did he realise that a fall in the gross value of agricultural production of 19% (around $32 billion) as a result of the drought would lead to a decline in Australian GDP of around 1% and a loss of 44,800 jobs (11% of employment in the sector) in the five years to February 2004.

From the perspective of rural communities and agricultural industries, there are two major reasons why we need to look to reform of our system of government, to overcome and compensate for this institutionalised lack of understanding. One is the hidden costs to the entire Australian community of poor decision-making in relation to rural issues. The second is the human and social impacts of change affecting rural areas, which are not being effectively addressed by the current system. I will outline these briefly in turn.