Infrastructure deficiencies to blame for mediocre economies of struggling regions

Infrastructure deficiencies have played a part in making it harder for struggling regions in Australia to increase their productivity, create jobs and improve incomes, the 2017 State of the Regions: Pillars of Growth has found.

The report, prepared for ALGA by National Economics, said that improving infrastructure will enable struggling regions to take advantage of their low housing costs and appealing lifestyle choices to attract people and businesses that will expand their local economic base, link them to the global economy and drive their regional economies. 

Dr Peter Brain, leading economist and co-author of the report, said: "Without draconian tax policies, the only way to prevent absolute and relative increase in income inequality between Australian regions is by increasing the rate of growth of productivity between Australian regions, and especially the lower productive non-metro core regions."

The President of ALGA, Mayor David O'Loughlin, welcomed the timing of the report.

"The State of the Regions report reinforces ALGA's call to support regional economic development through the targeted infrastructure investments needed to fix freight bottlenecks which play key economic roles on regional, and indeed national, freight routes," he said.

"A Commonwealth investment of $200 million per year for five years would immediately begin to unlock local and regional productivity improvements currently impeded by first and last mile bottlenecks which typically occur on local roads.

"Costings done on ALGA's proposal show that this investment would result in a direct cumulative GDP benefit of $1.72 billion over 3 years and create 4,100 jobs.

"Every year’s delay in the adoption of this approach imposes significant costs on the national economy by limiting the growth potential of struggling regions."

The State of the Regions report was launched at the Regional Cooperation and Development Forum held in Canberra on Sunday, 18 June 2017.