Updated: Sep 3
David Downie, a strategic Adviser for the Centre for Regional and Rural Futures at Deakin University, speaks with the Director of Leeson Group Peter Leeson about the current economic development study by Deakin University for the Loddon Mallee.
Discussing energy within the Central and North-Western Victoria agricultural development, economic stimulus, and general development within the areas Loddon Mallee Region due to regional growth suffering compared to the inner cities of Australia.
Planning For Economic Development
David Downie outlined that they are working on how to increase investments in the region with a target to bring over $500-million through commercially-driven projects with private sector investments in the region.
Agriculture In Australia
Following a study of economic activity in the area, it’s clear that most of the industry in the North-West is either agricultural or an industry dependent upon agriculture. Tourism, manufacturing, and other general industries are minimal. Agriculture in Australia has a shallow rate of return which is near one to one percent on average. If we look at the Netherlands a small country of 17 million people, with an area of land dedicated to agriculture the area size of Melbourne, yet still they manage to generate about $185 billion worth of agricultural exports per year.
Reasons Behind Less Economic Growth
Australia, with over seven million square kilometres, generates only $35 billion worth of agriculture per year. The most prominent reason for less economic growth is the value in agriculture comes from high-value products, not low valued agricultural products. A small, irrigated area like Werribee near Melbourne, which is nearly 2300 hectares, generates about $130 to $140 million worth of agricultural output. These irrigated areas use only 15 to 17 Gigaliters of water. Where GMID generates about 1 to 1.2 billion dollars worth of dairy-related output from over 1100 Gigaliters of water, it also uses hundreds of thousands of hectares for the population. This is about 70 times the water consumption in the GMID and only 7-10 times the yield in economic terms. This emphasizes the fact that high-value agricultural products are far more beneficial than low value products.
Required Steps For Economic Growth
One of the most essential steps is encouraging a high level of private investment. The targeted level of economic growth cannot be achieved with the existing government structure. Another crucial step is to dramatically increase the availability of energy through transmission or locally and improve the availability of water. Hiring high skilled personnel will be more beneficial when compared to low skilled people and ensuring the availability of Digital Connectivity is also a vital element for economic development.
Role Of Energy
Energy plays the critical role in increasing economic development in any region. It can be used to dramatically improve the amount of water which will play a key factor in the economic growth in these areas. The process of Desalination can be conducted to treat the water and make it useable. This is how energy will play one of the essential roles in transforming the North-West economy.
These changes are possible if we have cooperation between the various levels of interest, which includes local government, state government, the federal government, and most importantly, the community groups and businesses.