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Regions offer a national productivity solution

Release Date: 21/12/2016

The Australian Government has asked the Productivity Commission to assess the impacts of the transition of regional economies following the resources boom. As the Australian economy transitions from a resources-led boom it is important that challenges and opportunities are considered.

The Illawarra Business Chamber Executive Director, Chris Lamont, said the transition from the mining investment boom to broader-based growth is underway in the Illawarra as in many parts of Australia.

“It is important that governments look at the potential of regional Australia to drive state and national productivity. The lower cost base and tangible competitive benefits of regions, like the Illawarra, offer important gains that could power the nation in the decades to come if the investment is made in connecting infrastructure,” said Chris Lamont.

The Illawarra region is the State’s third largest economy, contributing $16.5 billion to the State’s economy and is also the third largest urban area in NSW totaling 5,620 square kilometres.

“This is a dynamic and innovative region that boasts emerging growth industries and a skilled workforce. Diversification is not about saying farewell to current industries but encouraging new ones including ICT, high value professional service activities, financial services as well as growing education and training, health, transport and logistics activities,” said Chris Lamont.

Regional capitals jointly generate $225 billion a year or more than 15 per cent of Australia's economic activity every year. Population growth in regional capitals is outpacing the national average and this growth is impacting regional economies, with the current labour force of approximately two million people set to grow by almost 500,000 in the next 15 years.

“The creation of productive regional capitals can provide the next economic boom for the country, however, it requires the vision and commitment to invest in infrastructure and services. Incentives for private investment in regions together with targeted government initiatives are essential in achieving the potential of regional Australia,” said Chris Lamont.

The Productivity Commission’s Transitioning Regional Economies inquiry is due to be completed in December 2017 and is expected to be linked to the Commission’s inquiry into Australia's productivity performance due in September 2017.

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Media contact: Katherine Baker 0417 135 858

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