Transitioning Regional Economies

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1 Those regions classified as ‘least adaptive’ are those with a relative adaptive capacity value that is more than one standard deviation below the mean relative adaptive capacity for all regions. There are 13 regions in this category.

2 Although, as noted in the Commission’s Regulation of Australian Agriculture report, the sugar industry has not followed this trend to increased economies of scale.

3 Denis O’Malley (sub. 4); NSW Government (sub. DR71); Queensland Government (sub. DR77); Regional Australia Institute (sub. DR57).

4 For example, Alasia et al. (2008), Dinh et al. (2016), Helliwell and Putnam (1995), HervasOliver, Jackson and Tomlinson (2011), Hill et al. (2011), Lawton et al. (2014) and Sherrieb, Norris and Galea (2010).

5 CED (2016, p. 11); Howard Partners (2013, p. 9); Tennant Creek Regional Economic Development Committee (2014, p. 28); VicDEDJTR (2015, p. 18).

6 For example, Cairns Regional Council and Advance Cairns (sub. 13, p. 7); Queensland Government, (sub. 26, p. 12); South Australian Government (sub. 34, p. 13); Upper Spencer Gulf Common Purpose Group (sub. 20, p. 1).

7 The ABS also defines smaller regions, but there are fewer data about employment over time because the source is surveys. The survey sample size is generally too small to be able to use it at the more disaggregated level.

8 Resources regions and agricultural (including pastoral) regions are defined as those with a share of employment in those activities higher than 10 per cent of total employment.

9 The data in figure 3.1 are year average employment growth rates. Unadjusted data show even greater variability.

10 Workingage population is measured as the number of persons aged 15 years and over. The ratio is also equivalent to the participation rate multiplied by one minus the unemployment rate.

11 The income data used in the analysis here are based on tax data from the ABS and the Australian Taxation Office. It includes employee, investment and business income. The ABS states that care should be taken in interpreting the data because some low income earners, for example those who do not lodge a tax return and do not have a payment summary, may not be present in the data.

12 For example, Cairns Regional Council and Advance Cairns (sub. 13), Western Australian Department of Regional Development (sub. 27), Western Australian Local Government Association (sub. 22).

13 The significantly larger employment requirements for a construction period in the resources sector is common in other areas such as infrastructure and manufacturing. It is important for the broader community to understand that larger employment requirements during these periods do not necessarily translate into long-term requirements.

14 Employment figures for these regions do not account for FIFO employment.

15 Although the Greater Darwin region has a relatively low share of mining employment (2.2 per cent in 2016), mining and construction sector projects have a large influence on population fluctuations (NT Government, sub. 37, p. 2)

16 The resources sector is defined as mining, mining construction and ancillary support.

17 The agricultural terms of trade refer to the ratio of prices received for agricultural outputs to the prices paid by farmers for agricultural inputs.

18 Measured as multifactor productivity.

19 The Commission (2016b, p. 447) noted that there were about 2100 primary subclass 457 visa holders in total in the agriculture, forestry and fisheries industry in June 2015.

20 Farina is not shown as a lost town because its population was not above 500 in either 1911 or 1961.

21 Satellite suburbs are urban areas within close proximity to a city that are not part of the larger metropolitan area of the city.

22 Systemic factors are those defined and measured consistently across all regions in the analysis.

23 Statistical bootstrapping has been applied to gain insights into the accuracy (defined here in terms of confidence intervals) for the metric. The technique uses random sampling methods. In each case, random sampling has been applied to regions within the dataset and the variables (indicators) that have been used in forming principal components.

24 Those regions classified as ‘least adaptive’ are those with a relative adaptive capacity value that is more than one standard deviation below the mean relative adaptive capacity for all regions. There are 13 regions in this category.

25 There are also two regions incorporating parts of the east coast of Australia in the least adaptive capacity category (Bundaberg and Gympie, in Queensland). The primary reason for their low score is due to low measures of human capital. Other regions with low adaptive capacity also tend to have lower measures of human capital.

26 Regions have been classified based on the remoteness areas structure in the Australian Statistical Geography Standard for Statistical Area Level 2 areas, aggregated to the functional economic region level by weighting by population. There are four categories of regions. These are: major cities (which includes most capital cities and their greater metropolitan areas, as well as the Gold Coast); inner regional areas (such as Hobart, Canberra and Geelong); outer regional areas (such as Dubbo, Townsville and Darwin); and remote and very remote areas (such as Port Hedland – Newman, Karratha and Eyre Peninsula).

27 Government services include public administration and safety, education and training, and health care and social assistance, but may also include people employed in these industries from the private sector. The other services in figure 4.5 are accommodation and food services.

28 Although a higher concentration in mining had a negative impact on the metric, this was not always the case for concentrated employment in general. Employment in agriculture had a small positive impact on the metric, though industry diversity had a small negative effect.

29 Also discussed in the Commission’s Regulation of Agriculture inquiry report (PC 2016c).

30 Centre of Full Employment and Equity, University of Newcastle (sub. DR44, p. 14); Shire of Victoria Plains (Western Australia) (sub. DR49, p. 1), Western Australian Local Government Association (sub. 22, p. 21).

31 For example, Queensland’s Royalties for the Regions program provided $485 million to fund 151 projects from 201213 to 201415 (QAO 2015, p. 1); Victoria’s Regional Growth Fund provided about $570 million to fund over 1800 projects during 2011–2015 (VAGO 2015, p. 29); Western Australia’s Royalties for Regions program provided $4.2 billion in funding for over 3500 projects between 2008 and 2014 (OAG 2014, p. 5).

32 For the sake of clarity, such rigorous and transparent evaluation should also apply to state and territory regional expenditures.

33 Commission estimates based on ABS (2017d).

34 The private sector should also assist displaced workers. It is important that government programs do not relieve businesses of their obligations to assist such workers, including through actions to mitigate ‘phoenix’ activity (where corporate entities are deliberately liquidated in order to avoid paying employee entitlements and other liabilities) (PC 2015b).

35 Other assistance measures included a fast-track antidumping system, quotas on imports from developing countries at preferential tariff rates and the creation of a Steel Industry Authority (Button 1983).

36 The voluntary Dairy Exit Program was part of a broader $1.8 billion industry restructuring package, which also included direct payments to dairy farmers and support for dairy communities. Consumers of milk paid a levy of 11 cents per litre (from July 2000 to February 2009) to fund the package.

37 Alternatives to a labour market approach include those based on housing markets, business linkages, shopping and service districts, and administrative areas (to capture public service delivery) (Karlsson and Olsson 2015, p. 8).

38 Excluded rows and columns represented people who were in transit, offshore or on board vessels on Census night, people who had no usual address, and people who did not have or did not state a place of work.

39 This is consistent with how service centres are identified in the construction of the Accessibility/Remoteness Index of Australia (Hugo Centre 2015).

40 Changes to the RDA structure include the consolidation of four Melbourne regions into one (to take place at the start of 2018), and the expansion of the RDA network to some external territories (Nash 2017b; RDA 2017).

41 The PCA technique will be indifferent to the ‘direction’ that a component points. For example, looking at figure E.1, a component explains the same degree of the variation whether it is read ‘left-to-right’ (positive) or ‘right-to-left’ (negative). In constructing an aggregate index, it is important that components that are beneficial for adaptive capacity be considered as ‘positive’. This can necessitate reversing the sign of a particular component (that is, reading it ‘left-to-right’ instead of ‘right-to-left’).

42 The 2016 ASGS includes updated SA2 regions that differ slightly from those under the 2011 ASGS. Unless otherwise indicated, references to SA2 regions in this appendix refer to 2011 SA2 regions.

43 The FERs excluded from the analysis were: Lord Howe Island, French Island, APY Lands, Kangaroo Island, King Island, Tiwi Islands, West Arnhem, East Arnhem, Anindilyakwa, Christmas Island, Cocos (Keeling) Islands and Norfolk Island.

44 Equivalised household incomes are adjusted by household size and composition. It is an indicator of the income that would be needed by a lone person household to enjoy the same level of economic wellbeing as the household (ABS 2011a).

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