15/07/2010 - 00:00

Regions need a say in determining destiny

15/07/2010 - 00:00

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It’s important Royalties for Regions is accepted as good long-term public policy and has cross-party political support.

No matter whom Western Australians vote for, the winners are invariably secretive politicians.

WESTERN Australia’s National Party developed the Royalties for Regions policy before the last state election in September 2008.

The election result meant that the two largest parties (Labor and the Liberals) did not have the numbers to govern in their own right, so it gave the Nationals the opportunity to be in alliance with either, and to implement its policies, especially Royalties for Regions.

The new policy rested on a foundation National Party belief – that social and economic investment in the regions of WA is good of itself, is a sound state-building philosophy, and should be sustained and substantial.

This belief is not exclusive to the Nationals; many in the community have long supported development growth, wealth creation and improved standards of living in WA’s regions.

What distinguished the Royalties for Regions policy from that long-held general aspiration was that, not only should regional investment be targeted and substantially increased to secure economic and social growth, it should also be permanently secured. This meant the policy must survive a change of government, or a government in which the Nationals are not present.

To achieve a substantial permanent regional investment commitment it is not sufficient to build support for this policy by new and welcome regional expenditure. It is not sufficient to legislate the Royalties for Regions formula and policy (legislation means that Royalties for Regions cannot be as easily undone by a future government), nor is it sufficient to set up a new regional administrative emphasis.

What is required is that Royalties for Regions be accepted as good long-term public policy with non-partisan or cross-party political support, and wide community support.

Looking in from outside it does appear as if that process is under way.

First, there is no doubt that the popular language of nation building translates into state building, and in the state and national interest this translates into developing, servicing, growing and investing in non-metro WA. The Pilbara Cities project is of this kind.

Second, it means not just re-balancing investment towards the regions in this term of state government, but making that rebalancing permanent. In the long term, that will result in a profound shift in WA’s economic and social direction and growth.

Third, Royalties for Regions needs wide popular and sustained support. This seems to already be evident in the country. I do hear contrary metro-centric views but politically on this front it seems that the Royalties for Regions concept is supported across WA’s political parties.

Fourth, for Royalties for Regions to have a transforming and enabling effect, the regions should play a greater part in determining their own destiny. This has a number of threads.

Two discrete regional needs seem apparent: the need for concentrated high-level fora for informed independent regional consultation and advice that is heeded reliable and effective; and for regionally based government decision-making and service delivery that is quicker, efficient and more productive, and results in the better service of regional business and society.

In the interests of focusing decision-making and action on the regions, a new department was required that was genuinely regionally oriented in function and responsibility, so the Department of Regional Development and Lands was born.

The challenge for the government and parliament is to decide to what extent this department should be truly regional. The ministry and department are Perth based and Perth is still where most decisions are made, even run-of-the-mill ones.

Central approval processes and budget mechanisms for Royalties for Regions must remain the province of state government, but their genesis and realisation will often be regional.

Many Royalties for Regions programs are already regionally promoted and facilitated where better outcomes and greater efficiencies result, but big projects such as Ord Stage 2 rightly have central oversight, and central administration is practical for individual benefits like the regional fuel card. Otherwise it is intended that as far as possible regional projects should be regionally conceived owned and executed, either through local government, or through regional for-profit and not-for-profit organisations.

I believe it is to its credit that WA’s government has accepted this devolution principle.

The act says that the Royalties for Regions fund (which is derived from 25 per cent of WA’s annual royalties, and has a 2010-11 budget of $897 million) is to promote and facilitate economic, business and social development in regional WA through country local government, regional community services, regional infrastructure and headworks, and such other subsidiary funds as may be determined by the treasurer and minister together.

A significant portion of the Royalties for Regions program is delivered through grants.

Any grants system, federal or state, has its dangers. The two biggest dangers are always the same: any hint or perception of vested interest or poor process in choosing successful projects; and any misconduct mismanagement or poor outcome in the expenditure and realisation of the grant.

The minister, government and parliament have acknowledged these dangers, so that apart from the normal safeguards provided by public sector standards and processes, they have recently legislated for the Western Australian Regional Development Trust.

The trust is a statutory advisory body to the minister for regional development and lands.

The trust does not represent the views of the WA government.

The trust is required to provide independent and impartial advice on the allocation and in the management of the Royalties for Regions Fund.

The trust must provide advice and make recommendations on any matter referred to it by the minister relating to the operation of the fund and to initiate its own advice and recommendations for the purposes of sections 5(2) and 9(1) of the act.

Accordingly, the trust provides high-level advice and recommendations to the minister as to: the apportionment of the monies into the subsidiary accounts of the fund; the application of the funds within the subsidiary accounts of the fund; and on any other matter relating to the operation of the fund referred to it by the minister.

The trust is barely a month old, so it is too early to report progress, but everyone would guess that the trust will take an early and active interest in governance and process; to do that we need to establish some principles.

Good governance requires sound processes, consistency, and integrity accountability and transparency. These are all ethically morally and managerially sound concepts that enable policy and services to be delivered efficiently effectively and affordably. Any governance system needs to ensure that sensible audit accounting and financial controls legal requirements and performance standards prevail.

Bad governance does not just mean the opposite to these virtues. It can mean over-governance with excessive checks on decision-making, or excessive legalistic and administrative processes that gum up the system.

Productivity will loom large in the trust’s consideration of Royalties for Regions matters.

Productivity is often thought of as economic, as producing more for less, but productivity is less often thought of in social terms.

Better regional health, education, training, sporting and cultural services, better varied and available affordable housing, and improved retail and urban regional environments all help move towards a more settled, more contented, more fulfilled society. As a result, employee turnover should fall, living costs should fall, leading to lower costs and greater efficiencies for the public and private sector alike.

I will applaud those Royalties for Regions proposals that can lead to such productive social outcomes.

• This is an edited version of an address by Andrew Murray, chair of the Western Australian Regional Development Trust, to executive members of the University of Western Australia and key members of the Pilbara community this month.

 

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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