Tom Burton: time to get government out of the city

By Tom Burton

Friday March 3, 2017

Spreading the physical location of many government agencies around the country makes so much sense it is hard to understand why we are even arguing about it.

The economic arguments for governments decentralising their agencies are demonstrable.

The big cities are facing major congestion and infrastructure challenges, metro housing prices are now unaffordable for most first home buyers, and our GDP growth is narrowly based around about half a dozen well-heeled city postcodes.

Ex-Treasury boss and now NAB chair Ken Henry bluntly called out the issue of regional development last week: “On the basis of official projections of Australia’s population growth, our governments could be calling tenders for the design of a brand new city for two million people every five years; or a brand new city the size of Sydney or Melbourne every decade; or a brand new city the size of Newcastle or Canberra every year. Every year.”

“But that’s not what they are doing. Instead, they have decided that another 3 million people will be tacked onto Sydney and another 4 million onto Melbourne over the next 40 years. And even if we do manage to stuff an additional 7 million people into those cities what are we going to do with the other 9 million who will be added to the Australian population in that same period of time?”

Government directly drives around 30% of the economy and report after report has talked about the important anchoring role public institutions play in regional economies. Universities, hospitals and government offices underpin towns and regional cities, creating direct employment and spawning other service industries.

Harvard Professor Michael Porter popularised the phenomenon in his timeless work on industrial clusters. Porter wrote his treatise in 1998, just as the internet was emerging as an interesting disruptive force. Fast forward nearly 20 years and we find much of government stuck in post-war work places, locked up in high-cost buildings, concentrated in the inner regions of the big metro cities and Canberra.

The reality is most public administration is bureaucratic, done at desktops, and in a digital world can now be done anywhere there is a good internet connection. With a solid national fibre backbone network coming into play and NBN promising more than enough bandwidth for core administrative jobs, arguments for locating agencies and departments in the big cities and Canberra look thin and self-serving.

Indeed there is a revolution underway in workplace design and distributed working that has seen a tectonic shift in work practices, but which government has in the main ignored.

Collaborative tools like Slack, instant messaging apps such as Facebook’s Whatsapp, desktop video and audio tools like Microsoft’s Skype, and powerful desktop productivity programs such as Google’s real-time G Suite, all offer industrial grade ways to work distributively and remotely.

Not just remotely — but in a far more productive and creative manner than the traditional locked down, centralised offices, so favoured by most government agencies.

There have been some exceptions (NDIS is headquartered in Geelong), but in the main, there has been an unholy alliance between public sector leaders and the unions to push back on any minister who dares confront the absurdity of the continued centralisation of government.

Enter the ever-ebullient National Party leader, Barnaby Joyce. This week he launched his party’s Get out of the City campaign website. Joyce called on regional and rural people to send submissions to the Senate Finance and Public Administration Committee that is looking at the location issue.

The committee is also looking at the relocation of the Australian Pesticides and Veterinary Medicines Authority to Armidale. The move has been less than smooth, with reports of staff having to work out of the local McDonalds. APVMA chief executive Kareena Arthy told an Estimates hearing the chemical regulator would need to build a new facility in Armidale because there is no site big enough to hold it. Arthy also said the agency had lost about a fifth of its regulatory scientists who did not want to leave Canberra.

Central to the Senate inquiry will be an Ernst and Young report commissioned by Joyce’s Agriculture and Water Resources department to do a cost-benefit analysis of the APVMA move.

That report found net costs of between $9 to $23 million over a twenty year period. These are largely redundancy and new building costs, with EY broadly concluding Armidale’s gain would be less than Canberra’s loss.

As with any cost-benefit model the assumptions are critical and in particular how the ongoing dynamic flow on benefits are captured, and across what geographical regions. These have been contested by local economist blogger Jim Belshaw.

Joyce and Small Business Minister Michael McCormack have also been heralding the shift of the small Rural Industries R&D Corporation from leafy Barton to Wagga, another move that has caught the attention of the Canberra-centric world.

Joyce’s electorate includes Armidale, so is in the political firing line for pork barrelling. But while this will no doubt entertain the fishbowl of federal parliament, the bigger issue is the need for a well-articulated medium-term plan to rethink the location of government.

This plan should obviously contemplate the non-trivial transition issues and the need to develop programs to make the shift to the regions as family- and partner-friendly as possible.

Building clusters in regions around say health, education, communications would seem to be an obvious way to craft a longer-term plan to spread the benefits of government more equitably. 

Telling ministers and their offices they will have to also work from the new regional headquarters of their agencies would cement the shift. When parliament sits, ministers could vote electronically. Welcome to the 21st century.

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Paddy
Paddy
5 years ago

Move more of the bureaucrats working in Indigenous affairs and the resources sector to Darwin, Alice Springs, Cairns and Broome as part of Developing the North. And bureaucrats working in “regional/state development” and “community development” agencies should be relocated to regional areas like north-west Tassie, wheatbelt WA, north-west NSW, northern SA and western Qld.
Why get a job in a regional development agency working on projects for Geraldton or Wagga Wagga but not prepared to leave Sydney or Melbourne???

Mark Duffett
Mark Duffett
5 years ago

If the purported technological enablers of decentralisation are so compelling, and the arguments for location in major cities so weak, where are the indications of any such shift in the private sector? If anything the opposite is occurring there. Could it be there remain a great many dimensions to the effectiveness of personal and corporate interaction, not canvassed in this article, that drive urban concentration as strongly as ever?

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