Having spent the first fifteen years of my life in Townsville, I’m a great supporter of regional Queensland, but as an economist I think the Government needs to do some further analysis before it commits large amounts of money to regional infrastructure under plans announced by the Local Government Minister last week (Regions set for boost):
LOCAL Government Minister David Crisafulli announced further plans to create infrastructure for regional communities.
“There is a prospect of growing regional centres and I think it’s something we should embrace on one condition – the infrastructure has got to be delivered ahead of the game,” Mr Crisafulli said last Monday.
The regional infrastructure plan appears consistent with the Queensland Plan aspiration to have half the population living outside South-East Queensland in thirty years’ time. But it’s unclear how the Queensland Plan aspiration can be achieved – assuming realistic policy settings – given that the Queensland Government population projections show SEQ’s share of Queensland’s population at 66.6 per cent in 2031, up slightly from 66.1 per cent in 2006. The Queensland Plan’s aspiration means around 1 million people more would have to live in regional Queensland than currently expected (based on the 2031 projected population; the number would be even higher if based on a projection of the 2044 population). I’m skeptical about whether this can be achieved.
The Queensland Plan is still only in draft form. Before the Government finalises it, and commits large amounts of money to regional infrastructure, it should seek updated official population projections from Queensland Treasury to see if its expectations of regional population growth are achievable. The whole point of official population projections is to inform infrastructure and service delivery decisions, and hence it’s important to update these projections which were last reviewed in 2011.
I am skeptical about the whole Queensland Plan.
Yes, these big picture plans typically don’t achieve much.
It would appear that the draft Queensland Plan has a few fatal problems including:
1) A flawed assumption that future migration and population growth have no connection to what is actually likely, achievable, or desirable to people actually making their own decisions.
2) Like most planning processes, the concepts of tradoffs and opportunity cost never get a look in. Magic pudding economics takes over.
3) It fails to recognise that the cost of providing government services in regional areas is significantly higher per capita. Promoting regionalisation is simply fiscal lunacy and can only result in declines in service levels, and/or tax increases to cover additional costs. A regionalisation objective is completely inconsistent with LNP desires for small and low taxing government.
4) It assumed that spending billions on regional infrastructure will actually make a difference to regional economic productivity. With the exception of port bottlenecks (currently being fixed) and communications, marginal infrastructure enhancements (like further flood immunity in sections of the Bruce Highway) will make little (if any) difference to productivity and competitiveness. Few regional infrastructure investments stack up under the scrutiny of a formal benefit cost analysis.
5) The consultation process that underpins the Plan to date has really just been a conga line of vested interest groups seeking their pet project.
A planning process that is not based in reality, lacks rigour, and panders to vested interest groups can only lead to poor outcomes.
Jim, I agree with your assessment.
Thanks for your comment, Jim. Great points.
The Qld Plan is pie in the sky nonsense .The reduction of rising unemployment and under-employed in Qld needs to be the focus of the Newman government policy agenda now.
Thanks for your comment Chris. You’re right the Qld plan doesn’t really do anything to improve the current labour market.