SUMMARY

This Briefing Paper presents a comparative economic survey of the regions of NSW. Presented are key economic indicators for each region, as well as government initiatives to encourage regional development. Similar initiatives in other selected jurisdictions are also noted and assessed.

Unemployment rates vary between the regions of NSW, as they do between the regions collectively and Sydney. The average unemployment rate between January and August 2009 for Sydney was 6.3%. In that same period a number of regions had lower unemployment rates: the Murrumbidgee-Murray regions (in this regard, combined by the Australian Bureau of Statistics) had an unemployment rate of 5%; the Hunter region registered 5.7%; and the Northern/North West/Central West and Far West regions (again, combined by the ABS for this purpose) recorded 6.2%. Conversely the Illawarra and South East regions registered a joint unemployment rate of 6.6% and Richmond-Tweed and Mid-North Coast regions recorded a combined rate of 7% (pages 3-4).

Employment in the regions does not necessarily correspond to higher or lower rates of unemployment. While the Richmond-Tweed/Mid-North Coast had the highest unemployment rate (between January-August 2009) of any of the regions (or ABS grouped regions), there were over 22,000 more people employed in the two regions in 2006 than in 2001. The Murrumbidgee-Murray combined regions recorded the lowest January-August 2009 unemployment rate, and yet only around 4,000 more people were employed in 2006 than in 2001 (pp.5-7, 20-24).

Regional NSW, collectively, does have a higher unemployment rate than the other regional areas of the Australian states. South Australia has the lowest regional unemployment rate, while Western Australia has the second lowest (p.4)

In the USA, which has a substantial regional segment, unemployment rates in American regions appear even more pronounced. Compared to the national average unemployment rate (across the regions) of 9.8%, in February 2009, some regional areas of American states had unemployment rates of between 13% and 15% (p.25)

Assistance programs for regions in New South Wales have evolved considerably in the second half of the preceding century. In the 1970s, as well as providing assistance for individual firms in the regions, state (and federal) funds were applied to developing two regional centres (Albury-Wodonga and Bathurst-Orange) into growth centres. A regional industrial base was also planned in the Hunter. The failure of these strategies to achieve the aims for which they were established, led either to: the rationalisation of regional development policy (to an essentially firm-based assistance policy); or to the straightforward transfer of government departments to the regions; or to strategies essentially aimed at sustaining the lives of people already living in the regions - such as maintaining schools and hospitals (pp.25-32, 49-50).

Regional development programs in the other states of Australia, in their current form, were largely introduced in the 1990s. The state which appears to have the greatest degree of funding for regional development is Western Australia, where the chief executive officers of the WA development commissions are members of the public service with the status of a head of department (p.37)

A notable contribution to regional development comes from foreign direct investment (FDI). Several regions in NSW have attracted a significant number of overseas companies (pp.40-46)

Another contribution to regional development is the strategy of clustering. In its present day form it contributes to regional development by fostering the growth of companies that can exploit an association with an adjacent university. This has been particularly employed in the Hunter region: to expand a cluster of advanced technology firms that can take advantage of links with the centres of excellence at Newcastle University. There is also an expectation that a cluster of firms may be developed that can capitalise on the opportunities in the Rudd government’s Defence Capability Plan (pp.52-53).