Targeting assistance in a resource-dependent region

Abstract

The economic development of Australia's rural regions has been overwhelmingly based on the use of the natural resource base, comprising land, water, minerals andforests, on which regional economies are still largely dependent. For all that this hasachieved, we are now at a stage in the development of the Australian economy wherethis dependence has not only resulted in many regions failing to sharecommensurately in national economic growth, but where the ways in which thenatural resource base is used are starting to threaten its capacity to sustain thetraditional rural industries indefinitely.This paper draws on research undertaken to investigate the socio-economic impacts of proposed reductions in irrigation farmers' access to groundwater in the Namoi Valleyof NSW. That study afforded a rare opportunity to understand the nature of a region'seconomy and business environment at considerable depth. In doing so we believe itoffered some insights into how to respond to the threats posed to these rural towns.The observations presented here are confined to the broad regional developmentimplications of the study, rather than to the research undertaken to assess the impactsof the Namoi Groundwater Sharing Plan.The paper asserts that current theories on agglomeration economies and industryclustering can throw considerable light on what is happening to the economies oftowns in the Namoi, and to similar regions in the rest of the nation.