It's time for locals to take back the wheel

For too long nearly all the important decisions for our economy have been made by a small number of people least affected by those decisions. They are made by those who support big government, including representatives from big business and unions as well as a handful of senior public servants. This must change and the people affected, the locals, have to be bought on board.

The recent experiences with the car industry, and SPC Ardmona in Shepparton, show that making decisions and then leaving the locals to deal with any negative outcome without proper support is not constructive. If decisions are being made that have impact on people in a certain geographic areas than assistance must be forthcoming, assistance the locals control.

We do have quality decision makers in government, some of the best in the world. This includes politicians and those in the Reserve Bank, PM&C, in Treasury and in most key portfolios. But when an interest rate or a policy is changed those who will be most affected, those in communities across Australia, must be provided with the capacity to work with those decisions and influence their own futures. Then change will be better managed, a sense of control will be extended and confidence, particularly the confidence of small business people, will improve. A national program of Local Economic Development is needed now.

Australia was once a world leader in matching high quality macro economics with higher quality micro economics. Back in the days when John Button was reforming the Australian manufacturing sector the government made sure that affected industries, communities and individuals were not only supported through the changes but had every possible chance to make decisions on what their local economies would look like in the future.

The process we developed for changing the culture of central agencies and educating and empowering locals was so good that we exported them across the world to other economies that were experiencing major change. Our approach of flexible program guidelines, targeted training workshops, specific responses for different industries and regions, developing better understanding of local politics and communications as well as focused support for small business were the basis of economic and social reform in various ex soviet countries and emerging economies.

I was first engaged with local economic development and labour market reform when I moved to Canberra from Goulburn, New South Wales in the late 1980s. I joined a group of public servants who were a small but significant part of a large department. We worked with regions, enterprises and people affected most by John Button’s industry restructuring. We provided access to information, to experts and to funds. The affected workers and the key business stakeholders in the communities then decided on what retraining was needed, how downsizing would take place, what new business opportunities should be investigated and which job creation schemes best suited their situation.

But empowerment of local communities was always a process that would be resisted by senior public servants who only trusted themselves to ‘get it right’. It is hard to change a culture of control that has existed since federation and public servants were not used to giving decision making away to someone else. The cultural change was significant and not always successful. Not long after starting in this job I received a phone from a senior person in the now defunct Federal Office of Local Government. Geelong was a major centre of industry reform at the time (nothing changes) and I was informed that the people in Geelong did not have the capacity to respond to the crisis and that we could fix Geelong from Canberra. I was appalled and told him firmly that our process of local empowerment was the best way to deal with change. He wasn’t convinced and never would be. He was part of the position that can become the great enemy of good change management - he was a centralist. 

After the change of government in the mid 1990s Amanda Vanstone became responsible for labour market reform and she understood the need to empower locals, but her public servants resisted her approach. Vanstone had over sixty Area Consultative Committees scattered around Australia. These were run by local business people who volunteered their time to develop and influence local economic planning to better their own communities; administrative support was provided by the federal government. I met one public servant in Canberra who was responsible for funding and management of the ACC process. She told me she was frustrated because the ACCs “would not do as they are told”. One person in Canberra truly believed that she knew better than the hundreds of business people involved in their own community’s development and welfare. This is nothing but paternalistic centralism and we must overcome these attitudes if we are going to manage current change and deal with future change.

There are some good current examples of local empowerment, including in Newcastle and now in Geelong, where locals are having a say in what their community will look like. But there are too few good examples. The development of local management committees of senior business people to identify opportunities and the barriers to achieving constructive outcomes are a key part of these positive responses. These senior people know how to influence politicians and how to work with the three levels of government to get results. The involvement of local union representatives from the larger businesses and engagement of training organisations were ways of bringing the community together to achieve results and overcome hurdles. We also currently have activities that aim to empower local communities, through various government programs, but the lack of funds and flexibility makes empowerment an unlikely outcome. Ad hoc responses are not strategic or sustainable. We need a national approach: a well-funded national program that all communities can access.

This national program would be an ongoing program that focuses on empowering locals to make decisions and influence their future. The role of the Canberra based public servant then becomes one of gathering and communicating information needed to make decisions at the local level, of providing opportunity to develop skills for local decision makers, of providing the secretariat support needed at the local level to free up the people who can have an influence and then providing funds to support local projects and responses. The public servant should then make sure there is accountability; that funds for projects are spent as agreed in contracts; and that reports to parliament are of high quality.

We must have a national program of Local Economic Development and remove the power given to far away developers and let the locals make decisions that affect them. Then when our centralised decision makers change interest rates, or modify education and training systems, or remove tariffs, bring in new taxes and levies or whatever the major change is, the locals will feel they might be able to make it work for them.

Peter Strong is the executive director of The Council of Small Business Australia.