Economists say govt’s $10 billion regional dev’t fund would fall short of its goal
As it turned out, the new minority Labor government is now standing on the crucial support provided by two independent MPs, who in turn were enticed by pledges of up to $10 billion regional development initiatives from the federal government.
However, economist are in agreement that government actions must go beyond the promised and dizzying amount of projects dangled before independent MPs Tony Windsor and Rob Oakeshott to throw their behind the government of Prime Minister Julia Gillard.
One major obstacle, according to most economists, would be the difficulty of attracting migrant workers and urban dwellers to fill the voids in infrastructure, skilled labour and dwindling populations solely on the committed extra funding for regional development.
ICAP economist Adam Carr told AAP that rural and regional Australia would require more than money to spur long-term development and in the process attract skilled workers as he stressed that the areas' problems were mostly ongoing and the huge money promised by the federal government would hardly change anything.
Both independent MPs naturally haggled for locally-focused projects such as hospitals, schools, roads, housing and even the introduction of broadband services on the fringe areas of the country.
Economists said that the efforts were commendable but when actual implementation sets in, the political factor would also start to creep its way into the process with one dominant concern, attracting people to try it out on the outlying regions.
Mr Carr said that it was almost natural that arriving immigrants flocked to the cities as he stressed that "regional Australia had problems attracting sufficient workers during the boom years, and I think they'll continue to have trouble attracting workers."
And while the federal government is dealing with this problem, the prospect of an exploding population is slowly becoming a concern, which raised the contradicting question of the wisdom of enticing immigrants to rural areas where job competition could end up too stiff for a multiplying number of available workers in the near future.
Economist Ray Attrill of 4Cast asserted that countering the global trend of migrants gravitating to urban areas should prove too difficult for the government and the possibility that regional areas could be transformed into something more palatable by the $10 billion project fund could only happen 'over time'.
Mr Attrill conceded that the huge amount of money should leave some dent in delivering the crucial services of health, educations and broadband access to rural areas but he predicted that only up to $700 million from the original amount would be actually used up in the immediate four years to come, making the initiative less attractive for people to opt for the rural adventure.