For former Sydney-based couple Scott and Michelle Robertson, the move to Wagga Wagga 450 kilometres away has been one of the best decisions of their lives.

Prior to the move, the mid-30s couple with two girls had been renting a two-bedroom unit in Neutral Bay for $650 per week, according to a Sydney Morning Herald article in 2016. The move, however, has halved their rent and enabled them to live in a four-bedroom house. Car insurance premiums have also halved. At the time of the article, the couple had hopes of buying their own home – an option barely fathomable in sky-high priced Sydney.

As for work, technology has enabled the couple to service clients for their graphic design business remotely.

Stories like this are ones which governments, especially in New South Wales and Victoria, like to see shared as a means of encouraging Sydneysiders and Melbournians to think about relocating to regional areas.

Such encouragement is being coupled with incentives. In NSW, those who move from a metropolitan area to purchase a regional property are given one-off payments of $7,000. In Victoria, first home owners who buy new homes in regional areas receive grants worth $20,000. As well as taking pressure off large cities, governments are hoping to help boost regional economies.

This comes at an interesting time for regions and towns around Australia. Amid rapid population growth, growing congestion and skyrocketing dwelling prices, many governments and planners feel it is time to rebalance economic and population growth outside of our two largest cities. In theory, greater ability to work remotely should help regional workers and businesses access opportunities without needing to be located in large economies. From opportunities to enjoy beautiful landscapes to having smaller and less congested commutes and a greater sense of peacefulness and community, rural and regional living has much to offer.

Courtesy of broader shifts toward a more service based economy, however, many regional localities face headwinds. In May 1998, seasonally adjusted ABS data indicates that around 413,700 Australians were employed in agriculture, a largely regional industry. By May this year, that number had fallen to 325,900.

Over that same period, employment in the largely urban focused sector of finance and insurance increased from 317,400 to 443,600. Centralisation of government services to cities and regional centres has left many smaller communities floundering. So too has the closure of other facilities such as bank branches.

In the innovation economy, many companies and startups prefer to cluster together and to tap into a deeper and greater diversity of clients, suppliers and skilled workers as well as opportunities for collaboration. For lifestyle, many principals and workers of innovative enterprises prefer to live in larger centres and be closer to opportunities for entertainment and social and cultural interaction.

This raises questions about how Australia can effectively plan regional economies and communities. For answers, Sourceable spoke with John Brockhoff, principal policy officer at the Planning Institute of Australia, and Patrick Fensham, principal and partner at SGS Economics and Planning.

At the outset, it should be acknowledged that opportunities and circumstances vary across different parts of regional Australia. Opportunities in Victoria’s coastal town of Lorne, for example, differ from those in the Latrobe Valley, the Hunter Valley, larger centres like Newcastle or more remote places such as Tennant Creek or Mount Isa. This also comes at a time when debate about Australia’s overall population is intensifying.

According to Brockhoff, many parts of rural and regional Australia are being impacted by a number of megatrends which are leading to an inward draw toward large cities such as Sydney and Melbourne as well as regional centres. This includes aforementioned issues associated with the growth in relative importance of the service based economy.

This, he said, is impacting regional Australia in different ways. On one hand, a number of regional cities are doing well. This includes places such as Newcastle, Wollongong, Geelong, Ballarat, Bendigo, Albury-Wodonga and several others. Such centres have the ability to tap into a decent range of industries and services and therefore to offer reasonable opportunities for business, employment and lifestyle. Several of these centres, as well, enjoy proximity to Sydney and Melbourne and are able to link in with these cities.

However, Brockhoff says many smaller communities and towns are swimming against the megatrends of increased urbanisation and the shift to the service economy. They face greater difficulty in maintaining a full range of services and planning for a vibrant community.

This, he says, is difficult to shift and to battle against. Accordingly, more diverse and larger regional centres – especially those closer to Sydney or Melbourne – enjoy brighter prospects compared with their smaller and/or more remote counterparts.

Irrespective of this, Brockhoff stresses the importance of avoiding a one-size-fits-all approach to regional development. Rather, he said, each region must have a plan which capitalises on strengths or opportunities which that region enjoys or can offer. These will differ for each region. Some could include a particular landscape or character, such as a natural riverside or historic setting. They could also include specialisations such as a farm-to-plate type of concept. For others, it could incorporate the emergence of one or more high-tech agricultural, mining or tourism industry opportunities.

Especially in remote areas, he says hard work is needed to exploit every opportunity on offer.

On the flip side, he warns against showering struggling regions with ill-targeted targeted spending that is not strategic and does not offer support over the long term. Without  adequate research about the value of ad hoc investments, there is potential, he said, for regional white elephants to emerge as an ill-conceived response to aforementioned megatrends.

These challenges can only be tackled effectively, he said, through targeted efforts and integrated economic development and land use planning.

“We are strongly arguing that yes, you do need to invest in regional Australia,” Brockhoff said.

“But you need to get behind organic, specialised locally-grown economic development initiatives which have community support and are well targeted for the specifics of say Ballarat, spa country, the Goldfields or whatever the feature oir initiative that you have going for you.

“I think every region needs to have an organic, locally grown, economic development strategy which builds on its region’s strengths. You can’t push against the tide of some of these megatrends. But at the same time, you might 100 per cent support and fund well-thought local development initiatives.”

Fensham expresses broadly similar sentiments. As delivery of many services centralises, he says momentum is shifting away from smaller and more remote locations toward major cities and larger regional towns – especially those regional centres which are not far from Sydney or Melbourne. This includes not just the private sector but also government service delivery, which is being centralised into larger regional towns.

As a result, whilst larger regional centres are doing reasonably well, smaller and more remote communities face greater challenges.

These challenges are not always evident at first sight. Drive along Australia’s eastern seaboard, Fensham says, and many towns have tidy main streets.

Whilst he acknowledges that more can be done, Fensham says Australia is performing reasonably well at the small scale level at rolling out things such as regional arts programs. We have also done reasonably well, he says, at maintaining regional roads.

“If I was rating us, I would say that we were a C or C minus,” he said.

Both Brockhoff and Fensham stress that well-planned regional communities are critical. Australians have diverse preferences and many will choose to live in rural and regional areas, Brockhoff says. These choices must be respected and catered for. Skills and talents of regional Australians and their communities must be nurtured, he adds. They must be incorporated into the service based economy which Australians enjoy more broadly.

Furthermore, basic equity considerations dictate that Australian communities and societies should have opportunities to prosper wherever they are located.

Fensham concurs, saying Australia overall is a better country if our regional centres and towns can prosper along with our cities. It is also in our national interests, as well, to ensure that any social or economic divide between urban and regional areas is not unduly exacerbated. Amenity for places which are experiencing hardship needs to be maintained to ensure that these places remain attractive to investors when cycles turn and opportunities do arise.

At the margins, Fensham says generating opportunities in regional areas and making them areas more enticing places to live might be one part of the puzzle in helping to ease pressure on Sydney and Melbourne. That said, he cautions that the potential for regional areas to make a substantial difference in this area is limited. Double the population growth rate of Bendigo, for example, and you barely make a dent in population pressures for Melbourne.

In terms of what can be done, Brockhoff and Fensham want action in several areas.

First, Brockhoff says, it is important to avoid notions of major regional areas simply taking ‘spinoff’ growth from Melbourne and Sydney. Rather, places such as Newcastle, Wollongong, Geelong, Ballarat and Bendigo need to be considered as cities in their own right which generate their own organic growth, identities, industries and employment opportunities.

Some of these regional centres which are growing can seek to maximise their own supply chain connections and to open up to international markets in their own right, he said. To attract the ‘footloose’ innovative segment of the economy, effective placemaking strategies including attractive public places and lifestyle opportunities are needed.

Whilst more remote areas are swimming against the tide, he says they need to identify any strengths or opportunities they do have and maximise them.

Fensham says the federal government needs to take leadership and work with the states through mechanisms such as the Council of Australia Governments to deliver real outcomes under a joint approach.

First, he says states must be given incentives to pursue effective policy based on targeted areas and measurable outcomes.

Next, there are several areas where opportunities which could be explored. Alternative energy generation might be one opportunity for some areas. Managing the environment and avoiding degradation could be another. In Victoria’s Latrobe Valley – which is reeling from coal plant shutdowns – there could be a centre of excellence for waste management and recycling. In many areas, there are opportunities to inject something about Australia’s indigenous identity which is more positive compared with what was the case previously.

Next, more could be done to enable locally owned enterprises and suppliers to capitalise upon government spending and service provision. In the case of public sector hospitals, for example, more could be done to help locally owned businesses to secure contracts for things such as catering or planning.

This requires action both on the demand side and in building up local industry capability. On the former issue, public sector hospitals and other public agencies and departments could be empowered through procurement policies to source local contractors and services. On supply, efforts are needed to help develop local businesses, support co-ops and enable local suppliers to bid for larger projects.

Fensham adds that more opportunities could be made available though micro-finance for innovative projects. Models such as those adopted by the Australian Energy Renewable Agency or the Clean Energy Finance Corporation which operate in clean and renewable energy could potentially be applied in other spheres, he said.

Moreover, both Fensham and Brockhoff agree about the importance of connectivity to cities such as Sydney and Melbourne. Whilst not necessarily talking about super-fast trains, Brockhoff says there is no reason why those regional centres which are not far from these centres should not enjoy at least reasonable train services. Catching a train from Newcastle to Sydney, he said, should not take 2.5 to three hours (depending on where it stops) when it is only 160 kilometres away. As for further out places such as Albury Wodonga or Wollongong, Fensham says opportunities to connect these with major centres via FastRail could be investigated.

At a higher level, Brockhoff says Australia needs a national settlement strategy. This would provide a connected framework for decision making on national infrastructure priorities and the regions, a clear basis for city deals, opportunities to link funding streams to outcomes on economic progress and housing supply and provide context for the debate about migration.

Finally, Brockhoff raises concerns about current conversations around limiting population growth. A better conversation, he says, is about accommodating growth through better planning.

“You only really need to have that conversation about pulling back population growth if you do not have a way forward towards better planning and investment in the success of our cities and regions,” Brockhoff said.

“If you are planning well, that becomes a secondary problem.

“But a better conversation regardless of what population you have got coming down the road is ‘let’s plan responsibly for it – and ensure we improve living conditions and environment along the way.’”