Regional Australia suffered during economic boom

September 28, 2010

A review of the latest census data shows that as Australian cities, suburban areas and coastal areas were enjoying an economic boom, regional areas were experiencing a decline in fortunes.

Research by Murdoch University’s Senior Economics Lecturer, Dr Anne Garnett, has revealed that over the past 15 years population and employment growth rates in rural and remote areas were far below metropolitan and coastal areas.

“Between 2001 and 2006, the period of economic boom, population grew by over 7 per cent in metropolitan areas and less than 4 per cent in rural areas,” Dr Garnett said.

“Employment growth in rural Australia was half that of metropolitan areas.

“Interestingly we found that growth rates in suburban areas and coastal areas were much higher than in the cities.”

Dr Garnett said rural and remote areas were suffering because more people were moving out of these areas than moving in. The majority of those leaving were heading for capital cities.

Dr Garnett cited a number of reasons for people leaving, including families and teenagers leaving for education purposes, a lack of social facilities and a shortage of doctors, nurses and hospital services.

“The 2006 drought saw around 60,000 people lose their jobs in agriculture, not to mention more jobs lost in industries associated with agriculture,” Dr Garnett said.

She added that the mining boom had not offset the negative growth.

“Contrary to popular belief, many jobs created by mining are actually in capital cities, not in regional areas.

“Between 2001 and 2006 the number of people employed in mining in capital cities doubled.”

Dr Garnett said that there were already labour shortages in the agricultural industry today and that they are set to get worse.

“Severe labour shortages of over 100,000 people are predicted in the agricultural industry in rural Australia over the next few years,” she said.

Similarly, the mining sector is predicting skilled labour shortages in the very near future.

Dr Garnett said there were a number of policy options that could be considered to improve the situation in regional Australia.

“The Government should consider expanding the program that reduces higher education loans of general practitioners who work in rural areas for a minimum time period.

“Housing also needs to be improved for school teachers and nurses, and they should be given higher wage loadings.

“The ‘Pacific Solution’, where temporary visas are offered to general labour workers from the Pacific region, could help solve seasonal labour shortages.”

Other countries including New Zealand, the United Kingdom and Canada take advantage of temporary visas. Their experience shows that often the same workers return each year.

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Media contact: Hayley Mayne
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