Local, Independant and Effective

Needs of rural and regional Australia must be considered in budget planning - Grievance Debate

Posted September 02, 2014


CATHY McGOWAN (Indi) (19:50): I rise tonight to speak about the impact of the budget on rural, regional and
remote Australia—or rather the lack of information to understand what that impact will be. In the past there has
been far too little short-term planning for the needs of regional communities and too much short-term thinking
and attempted short-term solutions.

As a consequence the quality of health care, education, communications, transport and infrastructure has been allowed to fall behind other parts of the nation, leading to continued urbanisation and discontent in rural, regional and remote areas.

Tonight I call on the government to rectify this by quantifying, documenting and reporting on the impact of
budget measures on rural, regional or remote Australia next year and every year thereafter. There has been a
ministerial statement on regional Australia accompanying every budget since at least 1996-97; essentially, until
the 2010-11 budget they summarised specifically rural, regional and remote budget initiatives.

The nature of the regional statement was changed in the 2011, 2012 and 2013 budgets. The government's agreements with the
independents who held the balance of power included a commitment to a more formal and rigorous assessment
of the impact of the budget on regional Australia. This involved dividing estimates of the proportion of the
expenditure under, say, industry programs that would be spent in regional Australia.

There were no regional statements provided with the current budget and no reason for not producing them. In fact,
there was no ministerial statements accompanying this budget. In previous years there has been a statement about
overseas aid and about women and a statement about closing the gap between Indigenous and non-Indigenous
communities. They also ceased. Why does this matter? Why is it problematic? I believe one of the key instruments
for creating the pathway to the future lies in the budget.

The ability of the community to understand the strategies and vision behind it lead to community acceptance of, for example, higher rates of taxation, a budget levy, changes to specific payment levels. Without that understanding and engagement, the result is a loss of trust. The process of effective governance, the process of engaging with the electorate and the process of setting a vision is underpinned by the community understanding and accepting the logic of the budget. The budget is one of the
key tools available to parliament to help make the pathways to the future. The people who live in rural, regional
and remote Australia have a particular interest in knowing that the government considers their interests when
designing the budget.

This year, specifically the people of Indi, whom I have the honour of representing in this place, feel aggrieved
that this explanation was not offered. As an example of the type of impact areas that could be considered in a
statement, let's consider the National Australian Development Index. It is a framework that covers the following
areas: children and young people's wellbeing; community and regional life; culture, recreation and leisure;
governance and democracy; economic life and prosperity; education, knowledge and creativity; environment
and sustainability; justice, fairness and human rights; health; Indigenous wellbeing; work-life budget; subjective
wellbeing and life satisfaction.

Madam Deputy Speaker, without a process of understanding and measuring the impacts, and without clear
strategies, there will be unintended consequences on rural and remote populations. One example I would like to
draw your attention to is the recent report by Victoria University entitled Educational disadvantage and regional
and rural schools, which presents a bleak picture for education in regional areas. Students at public schools in
Melbourne and Geelong consistently have higher attendance rates and better educational outcomes than students
in rural Victoria.

The report finds that the gap in educational outcomes is not explained fully by the fact that rural parents are less
likely to be formally educated. Rural schools are disadvantaged by having fewer resources and a shortage of
specialist teachers to offer a variety of subjects. The report says that no rural or remote government school teaches
classes in environmental science, philosophy, sociology or classical studies, and any changes to educational
funding must take into account disadvantages to ensure that changes which may appear to impact in a minor way
on city schools do not have a major impact on rural schools.

Another example of the differential impact of budget changes on rural and regional Australians is the proposed
GP co-payment. Here I quote directly from the National Rural Health Alliance statement impact of a GP copayment
on out-of-pocket health care costs on rural and remote areas. Average out-of-pocket costs per GP service
are higher in regional and remote Australia than in the major cities. In 2012-13, the average out-of-pocket cost
for each Medicare rebated GP service, by geographical area, was $5.01 in major cities, $5.62 in inner regional
areas, $5.63 in outer regional areas, $6.08 in remote areas and $4.55 in very remote areas.

Assuming all other things remain unchanged, under the proposed new arrangements there would be a doubling of
average out-of-pocket costs for each GP consultation in all geographical areas. The new average cost to patients
would be $11.67 per service in major cities, $12.21 in inner regional areas, $12.24 in outer regional areas, $12.71
in remote areas and $11.28 in very remote areas.

These findings have to be seen in the context of the fact that rural people already postpone or avoid medical
consultation at higher rates than people in the cities. While 17 per cent of those in major cities had skipped a
medical service or medication in the past year due to cost, the percentage increased with remoteness to over 20
per cent in regional areas and to almost 35 per cent in remote areas. Importantly, it is likely that the impact will be
more serious in regional and especially remote areas. Notwithstanding the enjoyment and satisfaction of living
outside of major cities, people living in rural and remote areas tend to have lower incomes, pay higher prices
for basics, pay the same rates of tax and have lower levels of access to services related to health care, public
transport and education. These two examples in differences between regional and city populations in the areas
of education and health illustrate what can happen when we are not deliberate in measuring impact.

Finally, it is not enough to have a rural and regional budget impact statement. We must also be accountable to what
it shows. These are not new concepts. Previous independents from rural and regional Australia have stressed the
importance of measuring and reporting mechanisms. Better reporting of the picture of regional Australia needs
to be provided by reporting regional expenditure in the budget and in individual portfolio budget statements.

This will improve the accountability of government to regional Australia.

The finance department needs to develop a spatial accounting model which will provide greater visibility
into government spending and service delivery—what was spent and where it was spent and the location of
Commonwealth government positions, including forward estimates assumptions reported by regional location.
This will be done—this needs to be done—for mainstream service delivery portfolios such as education, health
and transport.

A website targeted with this information would make it easy for people to see the results of improved budget
reporting for their region and would provide interactive opportunities for the community to find out more and
make inquiries. Other public indicators of service performance and social, economic and population outcomes
should also be reported.

In closing, there will always be differences between the way things work in the country and the needs of rural
people. That is why I will call on the government to reflect this by ensuring that a rural and regional budget
impact statement is the core part of the budgetary processes next year and every year after that.

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