Transitioning regional economies

Overall, Australia has benefited substantially from the mining boom, with gains still evident today around the nation. However, there have been transitional pressures for some people and businesses, and communities are still adjusting, said a Productivity Commission report into transitional pressures in regional communities.

'A highly flexible work force and a substantial use of fly-in, fly-out workers helped to spread the benefits of the boom and reduced adjustment pressures both during the boom and after it was over,' Commissioner Paul Lindwall said.

The report includes the Commission's early and preliminary design of an index of adaptability across Australia's regions.

It finds that employment in the mining sector remains significantly higher now than it was prior to the boom and that employment has grown over the past five years in about 80 per cent of Australia's regions. Adjustment from the mining boom may not be the only or even the main pressure being felt by regional communities.

'While incomes and house prices in some locations rose and then fell back in spectacular fashion, it appears that most mining regions are resilient, with a relatively high capacity to adapt to economic pressures. But remote and very remote regions, including Indigenous communities, and some locations in metropolitan areas, have a much lower capacity to adapt to change,' Commissioner Lindwall said.

Technological innovation and efficiencies in agriculture have led to growth in production, but using fewer workers. At the same time, regional populations have continued to become more centralised in larger towns and centres.

Some agricultural regions and a small number of mining regions have seen their populations decline and employment fall. 'These changes have affected the social fabric of these communities and naturally contributes to a feeling of being left behind,' Commissioner Lindwall said.

The report finds that there is no single approach that will facilitate successful transition and development in all regions of Australia.

It notes that some regional initiatives appear to have done little to facilitate transition and sustainable growth in regions. Investment in people and their capabilities (including local leadership) and removing or reducing restrictions on planning and occupational licensing are among the reliable ways of helping to lift investment in regions.

The draft report is open for comment until the end of July 2017 at http://www.pc.gov.au/inquiries-and-research/transitioning-regions/initial

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• High resolution - Regional Resilience (PDF - 11 806 Kb)

Regional Resilience (Text version of infographic)

What is the potential for regions to adapt?

A map of Australia with smaller maps inset of capital cities indicates regional adjustment potential. The map's legend shows:

• 244 regions are 'least adaptive'
• 748 regions are 'below average'
• 837 regions are 'above average'
• 256 regions are 'most adaptive'.

Regions least likely to adapt (about 12%) are spread across all areas.

There are roughly 2.5 million people living in these regions, with over half in urban areas.

Thanks to a highly flexible workforce, the benefits of the mining boom have spread to workers across regions.

Employment has grown over the past 5 years in about 80% of Australia's regions... and it remains higher in the mining sector now than before the mining boom.

We want your input. Read the initial report and make a submission.

The full report is available above.