Local government dragging country into economic hell: report
AUSTRALIA on the brink of falling into the deep dungeon of debt occupied by Europe's most troubled countries if investment in regional areas remains unchanged, a health check of the nation's economy has revealed.
Commissioned by the Australian Local Government Association, the State of the Regions report analyses government debt, household wealth, the risk of inefficient infrastructure investment in regional Australia and the impacts of the mining industry on areas outside of Western Australia and Queensland.
By reviewing the same ten indicators used by the European Commission to asses when the "alert" should be sounded on developing imbalances than can lead to extreme economic difficulty, the ALGA found the "light is flashing amber" for Australia.
As of this week, the country is displaying four indicators as distinct from two to three in most of Europe and second only to Greece, Spain and Ireland.
The report found that while high unemployment and poor infrastructure was crippling regional Australia, the biggest threat was perhaps one we can do little about - the weather.
In many regions impacted by recent natural disasters leading economist Dr Peter Brian found some may never be able to foot the damage bill.
He estimated Victoria's Black Saturday Bushfires had cost about 0.4% percent of Australia's GDP and Queensland's flood disaster about 0.7% or "tens of millions of dollars".
With that in mind Dr Brian said it was possible whole communities could become uninsurable.
ALGA President Felcity-ann Lewis said the report reinforced continued calls for increased federal funding for natural disaster mitigation to $200million over the next four years.
She said protecting communities from natural disasters was critical in reducing recovery costs and impacts.
While Western Australia and Central Queensland were still benefiting from the mining boom, the report found non-resource regions had been blunted by significant economic damage as a result.
Infrastructure investment remained a core regional issue across Australia.
The report found that if regions had any hope of growing employment and real incomes, they must first grow their capital stock.
"What is required is a strategy which will increase transport infrastructure investment as a share of GDP to the pre 1998 benchmark of 2% over the next decade," the report read
"This will restore the ratio of transport infrastructure capital stock to GDP to 24% by 2023."