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Select Committee on Regional Development and Decentralisation
Regional development and decentralisation

BIRRELL, Mr Sam, Chief Executive Officer, Committee for Greater Shepparton


CHAIR: Welcome. Although the committee does not require you to give evidence under oath, I should advise you that this hearing is a legal proceeding of the parliament and therefore has the same standing as proceedings of the House of Representatives. The giving of false or misleading evidence is a serious matter and may be regarded as a contempt of parliament. The evidence given stay will be recorded by Hansard and therefore attracts parliamentary privilege. I now invite you to make a brief opening statement.

Mr Birrell : The Committee for Greater Shepparton was formed in 2013 by a group of community and business leaders. The goal was to unite the business and community leadership to advocate for the region. The committee is funded entirely by its membership, which are the large statutory organisations and local businesses. We work on a strategic plan that really focuses on four strategic pillars: a productive community, a connected community, a creative community and an inclusive community. So, with inclusion and creativity at the centre of our strategic pillars, we're more than just a business lobby group; we really are a community advocacy group. We are very interested in not only Shepparton but Victoria and Australia generally and how population balance can improve the liveability for everybody. So we've made our submission to this committee on that basis. Would you like me to outline some of the points and then take some questions?

CHAIR: Thank you.

Mr Birrell : We really welcome the focus on decentralisation in regional development. However, I would note that this has been discussed for many years in a lot of iterations, and I've been reading about even the Whitlam government's focus on decentralisation and its dreams for Albury-Wodonga. I made some comments in the press recently that I hope this time it's taken very seriously by our governments and also backed up with the required infrastructure.

In terms of the way that Australia is growing, we seem to be headed towards a country, at least on the eastern seaboard, with two megacities. The population growth for Melbourne is forecast, at 2050, to be eight million, and I think Sydney is very similar. The growth for the regional areas is not forecast to be anywhere near as great. I think this is a point in our history where we can address that. I make the point in my submission that an interesting comparison for Australia is Germany, which has a population of 80 million people, and the largest city is Berlin, with just over three million. It's very much focused its growth around very well connected regional hubs, whether they be of 150,000 to half a million. That allows for the protection of nature and farmland around regional centres, which gives people much better connection with physical assets of a region. It also means that they're closer to a central hub than they would be in a megacity, and that sense of community is really important for people to feel a sense of belonging. Also, what links it together is a very good rail system, the likes of which we don't have in Australia. I'll talk about that in a moment.

In relation to Shepparton, just to give you a bit of background, for those of you who aren't aware, Shepparton has a river running through it—the confluence of the Broken and Goulburn rivers. It is incredibly flat and it has some of the most fertile soils in the Australian landscape, so obviously it was going to be a place where irrigated agriculture became a real focus. Unlike Bendigo, which had its boom with gold—the room we are sitting in is evidence of that—Shepparton has evolved much more slowly and much more steadily as a result of the wealth of irrigated agriculture. It is very much based on fruit growing, so it's the ideal place to grow apples, pears and peaches, with the combination of soils and climates, but also has a very thriving dairy industry. So food manufacturing has obviously sprung up around that area and it is home to iconic food manufacturers, both in the dairy industry and in the fruit industry. I make the point that sometimes people conflate the fruit industry in Shepparton with the fortunes of SPC, Shepparton Preserving Company. SPC has made a good comeback in the last few years, but has gone through some difficult periods. I just make the point that horticulture is growing significantly in Shepparton, mainly due to orchardists being able to grow and sell to the fresh fruit market, which is an extremely dynamic sector at the moment, especially with potential for the export of fresh fruit. That is how Shepparton developed.

At the moment the population of Greater Shepparton is 67,000 people. Because of the nature of the agriculture it has a very densely populated farming sector, because of the significant amount of employment per hectare involved in orcharding and dairy, as opposed to some of the more broadacre farming of this area, and further west. I think there are only about 43,000 people in Shepparton itself, but 67,000 in the Greater Shepparton—a lot of small towns, many of which have their own food manufacturing companies. For example, Tatura is quite a small town but has Unilever and Tatura Milk Industries, so it is a significant smaller town with its own industry.

We have also made the point in this document that Victorian regional development has traditionally been seen through the lens of Geelong, Bendigo and Ballarat—and that flows off the tongue very nicely. Shepparton is often left out of that discussion, as have some of the cities in Latrobe. You want me to say Albury-Wodonga, too! I will make the point I was going to make, which is that, notwithstanding Albury-Wodonga is a significant population centre—and I was there studying on the weekend, actually—I like to think of there being a circle of five significant population centres within a 200-kilometre radius of Melbourne, each with its own significant identity and, also, with a population of over 60,000 people. So, rather than talk about Geelong, Bendigo and Ballarat and leaving it at that, I really think that these five population centres in the circle, which are Latrobe, Shepparton, Bendigo, Ballarat and Geelong, are all really capable of becoming population centres close to Melbourne. Obviously, Albury-Wodonga is a bit further away, but when you look at the four of those population centres, compared with what we have, it is quite different. That is because a fairly arbitrary line has been drawn in regard to what is and what is not a commuter distance, and I think Shepparton falls a few kilometres outside that rather arbitrary line. That is just in regard to rail.

In regard to what I think Shepparton needs to grow, obviously high-quality fast and reliable passenger rail, to allow the commute to Melbourne—not necessarily the traditional 9 to 5 commute as there are a lot of people in Shepparton who run businesses in Shepparton but need to do things in Melbourne. A huge number of them are clogging the Seymour car park at the moment to try to get a reasonable rail service into Melbourne. A more long-ranging and open-minded examination of the potential of high-speed rail. I have said from Melbourne to Sydney, but that conversation has been framed in terms of replacing an air route or an option to an air route between Melbourne and Sydney. It is not really about getting people from Melbourne or Sydney or vice versa. It is about opening up the regional areas in between. I think an air link from some of these regional cities to Canberra and Sydney is probably a necessary part of a decentralisation plan. Satisfactory amenity in the heart of regional centres so that they become desirable places to relocate. Urban landscapes are important, but schools and hospitals are absolutely necessary. Also, business, industry and development in regional areas, and the movement of appropriate departments to regional cities. I will leave it there and perhaps I can answer questions you might have.

Ms SWANSON: Thank you for coming along today. It is interesting to me, coming from the Hunter, because New South Wales is often referred to as Newcastle, Sydney and Wollongong. We have major cities outside of Newcastle, like Maitland in my electorate, that are sometimes overlooked. So I absolutely hear what you are saying in relation to places like Shepparton being considered. I note that you have looked back into the history of decentralisation back to the Whitlam years. It is one of those things where it falls in and out of favour throughout the decades. When you say 'adequate government support and infrastructure' can you pinpoint more strategically what you are saying there? What is your message back to the Commonwealth in that sentence you put forward?

Mr Birrell : I will go back and say that the reason our committee began was that Shepparton fell a long way behind during the millennium drought, when there was less irrigation water available. What those identified is how reliant we were on irrigated agriculture and how we had really done a lot of what we had done without much government investment. Shepparton has traditionally been under-invested by government. It is a place people have turned to. It has a great history of migration and multiculturalism. People have turned up and started their own businesses without much support. The millennium drought really exposed some issues that we had in our community when we did not have the resource of water to be able to make those businesses work for a period. They are coming back a bit. We really saw what the lack of government investment had led to. The results were fairly concerning, which is why so many businesses support this organisation to advocate for the region.

I will give you a couple of examples. I heard you talk to the people from Bendigo before in relation to rail and I am aware that the north-east line is unsatisfactory. Shepparton has four return services to Melbourne, which take in the realm of about 2½ hours, and in many cases longer. Bendigo has 24 return services. Governments have seen how putting 24 good, well-timed services here has managed to grow population. Shepparton has really been ignored in terms of rail. John Hearsch from the Rail Futures Institute wrote a report that I commend to you—I think this committee should be looking at it—on the inter-city: how we can rebalance population distribution in Victoria and create a state of cities. He described Shepparton as the poor rail relation. It has really been underfunded over many years. If we don't have connectivity with our capital city we cannot really grow and we cannot attract the professionals we need for our businesses and our services to expand.

That gives you an example of rail. But linking on that, one of our priorities is a bypass, so that there is better road access for all the produce we make that is going to the Port of Melbourne. We are working on freight rail. We would really like to see a lot of the milk and fruit products that are exported to China get off the road and give our farmers and businesses a chance to increase their profitability with a decent supply chain—so, freight rail. Those are some of the real priorities we have. We had a very poor hospital for many years. It had had no money spent on it. Thankfully, the sod was turned last week on the new $178 million stage 1 of GV Health. I honestly think that local government and the Committee for Greater Shepparton coming together and really deciding what our priorities are, and advocating for it, has helped that. So we have a role to play in this—not just sitting back and asking the government. We are saying we can really be a significant part of Victoria's population make-up, with the right investment.

Mr DRUM: Thank you very much for putting the trains situation so clearly on the record—so we can leave that alone. Before we move forward with Shepparton would you acknowledge that the biggest threat we have is maintaining the status quo in relation to water policy? Of all the things that can either take the region forward or take it back, it would be to lose another 450 gigalitres of water from productive agriculture.

Mr Birrell : Yes, and thanks for bringing that up. Water is the resource. We noticed when it was not there. Obviously, we had reduced irrigation allocations from 2003 to 2009 because of the declining rainfall patterns that left Eildon really depleted. We just found how much money and much economic activity left our region.

If the Murray-Darling Basin Plan rolls out—and I think we all acknowledge that irrigation has been perhaps overallocated in the basin over many years. My view—it sounds parochial, and it will be—is that there have been more issues in Queensland and northern New South Wales. I think Victoria's had quite a good attitude towards responsible water policy over the years. Nevertheless, a lot of water has been returned from the Goulburn Murray Irrigation District consumptive pool to the environment. Some of that water is being used for environmental flows by the Environmental Water Holder and the catchment management authority, who are reporting improved river health as a result. However, there seems to be this sort of march towards achieving a number, without much focus on the socio-economic impact of achieving that amount of water returned from the consumptive pool to the environment.

We commissioned a socio-economic impact study—because the Murray-Darling Basin Authority hadn't at that point—that showed some really disastrous impacts should any more water leave the consumptive pool. We very much believe that the 450 gigalitres of so-called up water to South Australia presents a real and present danger to our industries. But not only that; we believe, and a number of the environmental advocates in the region believe, that trying to push that water through our river system presents a real and present danger to our environment as well. We think that needs to be a lot better thought out. Turning the Goulburn River into a channel just to try and help an environmental asset in South Australia is counterproductive. Water policy is critical for us, and our dairy and fruit industries are so reliant on it.

Ms CHESTERS: Just picking up on that: the 450 gigalitres that you are talking about is to come from voluntary on-farm infrastructure projects, so it's voluntary infrastructure for our farms. Are you saying that there isn't the potential for voluntary on-farm infrastructure projects, that we've reached the limit of that? I am just trying to understand. Are you saying that we've got all the projects we need and there are no more? That's my first part, as a follow-up to Mr Drum's question. My second part is about the integrity of the plan and about the call for a judicial inquiry to ensure that we've got integrity between the states and Commonwealth. Is that something that you see would help the region, if we can have the integrity of the plan? After that, I've got some questions about NBN.

Mr Birrell : I'll start with the first question first. I just make the point that, if I were a farmer and I were to go and buy a megalitre of water on the market at the moment, it would probably cost me about $2,600—to buy the permanent right to pump it out of the system. That's what the cost of it is, so, if the government either buys it back for that amount of money or gives that farmer a higher amount for an infrastructure project, then essentially that megalitre of water is leaving the region. There has been some system modelling done by the University of Melbourne, I believe, that shows what that megalitre is worth—not its cost but its value. By the time it's gone to grow some grass that gets fed to a dairy cow, and that milk has become cheese and has been exported to wherever, the value of that megalitre of water is closer to $17,000.

So, notwithstanding that I think there were some really good programs—and I was involved with some very good programs in the early period of on-farm investment—it is a law of diminishing returns as far as the efficiency programs there are, and eventually we need a certain floor of water in the system to be able to put through all of our, in many cases, newly developed efficient systems. If we just keep running these programs, eventually what will happen is that we'll have another dry period like we did in 2003 to 2009, the percentage of irrigation allocations will drop and then we'll be stuck with a period where there is physically no water for the dairy industry to buy on a temporary basis. Then we run the risk of there being stranded assets in terms of these very efficient irrigation systems that have been modernised but not the critical mass of water to be able to put through them. What we're saying is that the first four rounds of the on-farm irrigation efficiency delivered some very good projects and some very good savings—some good water back to the environment. But we really are at the tipping point now, especially if we have some dry periods.

For the second part of your—oh, it was the judicial inquiry into the Murray-Darling Basin Plan.

Ms CHESTERS: The interpretive plan.

Mr Birrell : Coming from a Victorian perspective, because of the Victorian policy in relation to water—and we've had metering for a very long time—we have very high security water. Irrigation allocations weren't just handed out to people the way they were in some other states. I think that that means that the high security water in Victoria, particularly the Goulburn-Murray Irrigation District, was a lot better for the government to access for the environment because of its security. We have had metering for a very long time. We have, in comparison, had quite good compliance. I'm not really sure of the situation in northern New South Wales and Queensland. Obviously, with this Four Corners report it is disputed on many sides as to what exactly is going on up there. I definitely think that people should be only using the water that they have allocated to them and that the system needs to be made fair.

I would just argue: as there are so many different inquiries going on into the authority at the moment, or the plan, I would like all the governments to take a step back rather than just focus on the numbers and say, 'What do we want the plan to do?' We want it to manage our river system better and get better environmental outcomes whilst retaining a viable irrigation sector. I'm not sure that we can't achieve all of those things with a bit of constant monitoring of where the plan is going, rather than a focus on getting an amount of water back into the environmental pool.

Ms CHESTERS: My second question was about the NBN. Shepparton had some early fibre to the premises rolled out and, I believe, some fibre to the node later.

Mr Birrell : Yes.

Ms CHESTERS: Can you give us any examples of how fibre to the premises or fibre to the node have helped in regard to regional development?

Mr Birrell : It has helped my house. I was one of the people who had fibre to the house. It has created some different economic zones—

Ms CHESTERS: A digital divide.

Mr Birrell : Digital divide—that's a good way of putting it.

Ms CHESTERS: Is your CBD fibre to the premises?

Mr Birrell : Most of it is—yes, I believe. It's not something that I'm 100 per cent aware of. For the digital economy, I suppose, in an area like Indi, because of the hills and everything, the digital and mobile connectivity has been really difficult. Shepparton has that advantage of being flat. We do have some dead spots, but it has generally been okay. I will give you an example. Some of the connectivity really does help. I'm studying an MBA at the moment at La Trobe University regionally in Shepparton. There's an example of a great bit of regional development—the development of really good, meaningful, postgraduate, class, tertiary experience the regions. And there are students doing that in Bendigo, Mildura and Albury-Wodonga. I was in Albury-Wodonga studying on the weekend. But for my night classes on Wednesday I have a video link to La Trobe's city campus, which I think is facilitated by that. It really is excellent. So that's just an example. Some of those things and some of these meetings can be delivered with good digital connectivity that exists.

Ms McGOWAN: I have a quick follow-up question. Sam, I know that you're involved in the Fairley Leadership Program. One of our terms of references is about capacity building. That's a really good example that you just gave us. What else could you tell us around Shepparton, capacity building and its connection to regional development—and, particularly, the role of the Fairley Leadership Program in doing community based leadership?

Mr Birrell : Yes. This is a good argument for decentralisation because, when you have a community around a hub, I would argue that you get that connectivity more than you would in a newly built outer suburb of Melbourne with people who are living a long way from their city centre. Fairley Leadership takes on people to go through a yearlong leadership program to build their capacity and also their desire and their connectiveness with other community leaders. I did it in 2013, and it was pivotal in me wanting to be part of this growth, development and advocacy of Shepparton. I started out as a volunteer for this organisation before my predecessor, Matt Nelson, went to RDV and I was asked to apply for the job as CEO, coming from the agricultural sector. Then, on top of that, there was my ability to do a master's qualification within the region without having to leave. I'm probably an example of someone who Shepparton has been able to develop to become an advocate on its behalf. If we can get a huge number of people who are in their 20s and 30s doing that across the board in regional communities then we're probably going to be more of a place that attracts young professionals and other young people to come and live and also a place that's able to further connect its community and really build on, particularly, the inclusiveness that's a pillar of our strategic plan.

CHAIR: Thank you. We'll wrap it up there. Thank you very much for your attendance here today. You will be sent a copy of the transcript of your evidence, and you will have an opportunity to request corrections to any possible transcription errors. Again, on behalf of the committee thank you very much for sharing the Shepparton story with us.

Mr Birrell : Thank you.

Proceedings suspended from 12:41 to 13:28