Academic journal article Australasian Journal of Regional Studies

Maximising the Benefits of Development in Australia's Far North

Academic journal article Australasian Journal of Regional Studies

Maximising the Benefits of Development in Australia's Far North

Article excerpt

1. INTRODUCTION

With the election of the Rudd Labour Government in late 2007, came a renewed emphasis on development in Northern Australia--as evidenced by, for example, the decision to transfer the $20 million Northern Land and Water Taskforce to the newly created Office of Northern Australia (Albanese et al, 2008). Yet despite the fact that much of the region is sparsely populated, it is clear that the north will face increasing development pressures--even in the absence of any new-found interest from the south.

The fertility rates in some Indigenous communities, for example, are significantly higher than those of the general Australian Population (ABS, 2006a). So many northern communities are likely to see rising populations. Likewise, there is evidence to suggest that agricultural practices will continue to intensify across the western and middle parts of the region Northern Australia (Stoeckl et al., 2006). Furthermore, Australia is currently in the grips of worldwide minerals boom, and many local councils are trying to encourage the tourism industry, if only to diversify their regional economies.

That there are also development pressures being exerted from 'the south'--as per the northern Australia task force whose task it is "to examine the potential for further land and water development in northern Australia" (EWN Publishing, 2007)--indicates that this part of Australia is likely to change, perhaps radically, in the not too distant future. Yet whilst many northern inhabitants may welcome this new-found interest in the region's future, there are at least some who urge a cautious approach--to wit the World Wildlife Fund (WWF) who say that 'time is running out to ensure development does not ruin northern Australia' (Australian Broadcasting Commission, 2008).

Policy makers may therefore be asked to choose between competing options, such as: to develop or not to develop; to promote project A or project B. Or policy makers may be asked to consider ways of promoting development in a more 'sustainable' manner. And they may thus be eager to access information that allows one to answer questions like those below:

1. Which industries create the most regional economic benefit?

2. How can policy be changed so as to increase the size of regional benefits that occur as a result of development?

3. How does the total regional economic benefit of an industry compare with its environmental and/or social cost?

In theory, it would be possible to use either a 'fancy' Input-output (IO) model or a Computable General equilibrium (CGE) model to answer questions 1 and 2 (and, in some cases, question 3). And although 'standard' IO models (and very simple CGE's) require researchers to accept many, questionable assumptions, there are many sophisticated models and techniques available. For example, IO analysis has been adapted to allow for dynamic relationships (Leontief & Duchin 1986; Robinson & Duffy-Deno 1996; Nabors et al 2002). The models can also be extended to consider distributional impacts--using what is termed a SAM (social accounting matrix--see Berck and Hoffman, 2002), and they are also able to allow for multiple regions--eg the core-periphery models of Hughes and Holland (1994). Furthermore, models can allow for non-linear relationships between inputs and outputs (Wang 2001; Liew, 2000) and can be extended to include economy-environment interactions (Cumberland 1966; Huang et al. 1994; Hawdon & Pearson 1995; Gustavson et al. 1999; Eder & Narodoslawsky, 1999; Lenzen and Foran, 2001; Doherty and Tol, 2007)--hence the earlier comment re their ability to provide information that might allow one to answer question 3.

The main problem here, however, is that none of the currently available models provide information at a fine enough geographic scale. Table 1 provides an indicative list of a range of different applied models currently in use in Australia. …

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