Issue 1

Introduction to the Issue

Mike Hefferan and Bruce Wilson

Page Number - 1

Housing affordability is an issue that affects all Australians, including those living in rural communities. Local governments in rural Australia are the most visible level of government for communities, and they are best placed to see first-hand the social and economic pressures that are impacting their communities. In this research, we consider the changing role of non-metropolitan local governments with respect to housing, and what it tells us about the state of Australia’s federal system. We examine the findings of a national survey of local government before exploring the challenges of rural local governance and access to affordable housing. We then show how one rural council facilitates a range of activities to address housing challenges, and then compare its actions with those of its neighbours. Overall, we find it is not common for rural local governments to take a proactive approach to affordable housing, and we discuss the ways in which rural councils can take a leadership role in addressing local issues of housing affordability.

John Martin, Andrew Beer, Alan Morris, Chris Paris and Trevor Budge

Page Number - 4

This study assesses the impacts of continued population growth in the largest Australian cities on housing affordability. Using data from the Australian census and other complementary sources over the period 2001-16, we estimate a system of seemingly unrelated and spatially lagged regressions to identify the relationship between a city’s population size on the one hand, and average wages and housing costs on the other, while controlling for the confounding influence of other geographic, demographic and economic determinants. We find that annual home sales values have risen roughly thirty times faster with population than annual full-time wages across Australia. An increase in the population of an urban area by 100,000 would increase annual full-time wages by roughly $150 and annual home sales values by roughly $4,800. Our analysis also finds that real wages have not kept up with the high costs of living in large cities. For example, our model predicts that, ceteris paribus, price-to-income ratios (PIRs) in Greater Newcastle could rise from 7.0 to 8.4, if the city grows to the size of Sydney. And PIRs in Sydney themselves could rise from 13.6 to 14.8 by 2056, if the city grows to its expected size of 9.2 million. Relatedly, we find that there are no wage benefits to urban areas situated in close proximity to a large metropolitan centre, but these areas are more likely to have expensive local housing markets due to spatial spillover effects.

Akshay Vij, Jeffery D. Connor and Andrew Beer

Page Number - 26

The empirical analysis of the cost structure of local government has traditionally employed population as a proxy for municipal output, despite longstanding reservations as to its suitability, especially in terms of local service provision (Boyne, 1995). Based on alternative proxies for local government output, and employing data drawn from the South Australian local government system over 2015/16, the present paper examines per household expenditure dispersion by comparing estimates based on population size with estimates based on the number of households and businesses. We then consider how exogenous variables affect the per household expenditure structure of local councils in South Australia. Policy recommendations are drawn for improvement in South Australian municipalities.

Carolyn-Thi Thanh Dung Tran, Gemma Perez-Lopez and Brian Dollery

Page Number - 47

The COVID-19 pandemic is exerting ongoing economic effects on communities locally and globally. Government responses to the ongoing crisis range from mere social distancing recommendations to lockdowns. In New Zealand, a strict lockdown regime was implemented for a 7-week period during which public activity was restricted and shopping limited to the nearest supermarket or pharmacy. During this period, overall retail spending declined substantially. This study employs a multi-region input-output (MRIO) model to investigate the impact of this reduced activity from an urban population on the wider-regional economy. The results reveal that the change in consumer spending and displacement has spilled over into the adjacent economies resulted in a shift in the regional economic landscape. Moreover, our results suggest that the effects of withheld spending during the lockdown propagate unevenly across retail sectors and beyond administrative boundaries once lockdown is lifted. Although millions of dollars remain unspent, the accelerated pace of consumer spending after lockdown reveals a shift from previous large-scale global shocks.

David Dyason, Peter Fieger and Riaan Rossouw

Page Number - 66

This study seeks, through the perspective of Professional Business Advisors (PBAs), to understand how government business programs help and/or hinder the provision of small business advisory services in a regional (non-metropolitan) Australian setting. An emergent theme identifies such programs as significant conduits for regional business knowledge transmission. However, those programs are also perceived by PBAs, who deliver such programs, as imposing substantial constraints for the provision of such services. The identified constraining factors include issues of PBAs’ financial viability, ineligibility of businesses to access such programs, capriciousness of programs, and a clash between technology utilisation and infrastructure reliability in some non-metropolitan regional areas. Regional Australian PBAs service a heterogeneous collection of businesses across large geographic areas. Yet, the potential for PBAs to support the process of knowledge transmission is severely constrained by current government programs aimed at start-up businesses, but ignoring organisational growth. Such constraints raise concerns that have regional policy implications.

Alan Labas and Jerry Courvisanos

Page Number - 88

There are quite a few examples in Iceland of people living in isolated and sparsely populated communities, both along the coastline and in inland valleys. Those who live elsewhere, particularly in larger and more successful communities, have sometimes maintained, or at least insinuated, that those people must be trapped in their traditional environment. But can we be sure of this? According to Roback (1982) people’s migrations and choices of residence are influenced by amenity value and quality of life. It is a well-known fact that we do not all have the same tastes, needs and wishes. Therefore, the municipalities or individual communities within each country should differ, as Tiebout (1956) argued. Such theories might, for example, indicate that a strong desire or need for close proximity to a varied, wild and untouched natural environment pulls people towards remote and sparsely populated communities and prevents them from moving away. In this article, we investigate the different wishes and priorities of people inhabiting different regions in Iceland, focusing on residential conditions with special emphasis on the difference between inhabitants of remote and sparsely populated regions and those who live on the fringe of the capital area. The analysis is based on data from a survey of more than 6,000 respondents conducted in 2016 and 2017.

Vifill Karlsson

Page Number - 113

Review of Winchester, S. (2021) Land... how the hunger for ownership shaped the modern world. London: William Collins.

Michael Hefferan

Page Number - 145