If Australia wants to fast track to a more productive and prosperous nation, we need to pivot attention away from Sydney and Melbourne and towards our regions.
Our urban primacy has Australia out-of-step with global population trends and on a path that will see our major cities just get bigger at the expense of liveability standards and productivity.
Today, nearly two-thirds of our population live in cities, which puts us at odds with the average OECD country which has less than half. More than 70 per cent of our population growth happens in our cities and around 80 per cent of new migrants are settling in urban areas.
Our modelling of current population trends has Sydney and Melbourne on track for mega-city status by 2056, cities of more than 10 million people, with Brisbane and Perth on track to be the size that Sydney and Melbourne are today.
We may be a land of sweeping plains, but it's clear we aren't living on them.
Big cities have their place, but for majority of Australians to live in just six of them here is counterintuitive to our 10 years of research. We know there is more for a country to gain when the population pendulum swings a little further to the regions.
At Federation, two-thirds of our population now living in our cities, lived in the regions.
While there is no denying the global trend towards living in increasingly urban areas, in Australia's case, the pendulum has swung too far.
It's time to rebalance the nation.
Today the Regional Australia Institute has set Australia an ambition to have 11 million people living prosperously in the regions by 2032, an extra 500, 000 people above the projected 10.5 million.
This target rides the wave of current demand and is good economically.
Interest in regional living is the highest in a decade; over the last two census periods there has been a net outflow of people to the regions and during COVID, we saw a 15 per cent increase in people who did. Importantly we have seen an increase in young working age Australians moving to the regions which is critical to addressing the aging demographic in our regions. The Regional Movers Index found that millennials (aged 24-40 years) accounted for the majority among all regional movers to each of the regional hotspots in March 2022, particularly attracted to housing affordability.
Economically, all Australians would be better off if more of us were living in the regions. To start, Australia's GDP would be $13.8 billion larger according to our modelling. Australia would also be better positioned to capitalise on productivity gains. Regional cities have agglomeration opportunities yet to be tapped. By contrast, large cities attract rapidly diminishing returns for agglomeration benefits because the "costs of being big", like congestion and the higher costs of living, undermines the benefits of having additional people.
For every additional 100,000 Australians who choose to live in small cities rather than the capital cities, we estimate that around $42 billion dollars would be released into the economy over the next 30 years through reduced interest payments on mortgages alone.
With more people living in our regions, we would have more people working in industries of the future which are regionally based - a decarbonised economy, agriculture and food production, resources, and renewable energy.
But to achieve 11 million people living in the regions, we need to focus on a number of critical areas that are holding the regions back.
Jobs, housing, childcare, access to health, education and digital services are all critical which is why to get to our 11 million target, we are launching a framework that acknowledges that regionalisation relies on meeting new targets in five key areas: jobs and skills, liveability, population, productivity and innovation and sustainability and resilience.
Issues in these areas are all interlinked. We can't solve the skills deficit, without improving education standards. Healthcare can't be improved without focussing on digital connectivity.
While there is work going on in many of these areas, today's framework is the first national and collective approach to regionalisation developed with input from levels of government, leading Australian companies and with more than 2000 regional community voices.
The framework calls for Australian organisations and regional leaders to make pledges or commitments of support to help achieve its 20 targets. So far more than 40 pledges have been made including pledges from Nutrien, nbn, Aurizon, Woolworths, Telstra, Essential Energy, Optus, NRMA Elders, Australia Post and Bendigo and Adelaide Bank.
Because just like the rewards will be shared, so must the challenges. It's time to rebalance the nation, together.
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