State jobs no quick fix for Valley’s woes

Bringing a government department to the Latrobe Valley in an effort to offset Hazelwood-related job losses is not a silver bullet for the region’s economic woes, a Melbourne economist has warned.

SGS Economics and Planning economist Terry Rawnsley said having a smaller labour pool presented challenges for businesses and departments relocating to the country. “One of the challenges for regional areas is bigger employers who might have 500-2000 jobs they need a deep labour pool,” Mr Rawnsley said.

“That’s where sometimes regional communities don’t have the depth of labour market to help those bigger organisations move to those regional locations.”

His comments come less than four weeks from the station’s closure and with some hopes pinned on the possibility of attracting a State Government department to the region.

Mr Rawnsley made the comments after unveiling research which showed regional Victoria contributed next to nothing to the state’s economic growth last financial year.

His research contained little good news for the region, finding the Latrobe-Gippsland region grew by just 0.4 per cent during that period.

While the result was better than other regional areas which recorded negative growth, it will provide small comfort for one bracing for the loss of about 750 jobs once Hazelwood closes.

“For sure that once the plant shuts there’ll be a recession and we’ve seen that in other places,” Mr Rawnsley said.

“There’ll be people who get jobs located nearby but they probably won’t be the same high-paying jobs.

“So you’ll get an income shock to the system.”

He said that income shock would be felt by businesses more than employees, meaning while companies held onto staff, reduced profits limited their ability to grow.

But Mr Rawnsley said spending in infrastructure, retraining and reskilling provided a potential way out for the region.

“I think the faster transport links are a really important factor,” he said.

“Within the past 10 years the links to Bendigo and Ballarat have been improved.

“They’re regular enough that people can commute to Melbourne if they want to and they open up opportunities for people.

“In Latrobe’s case you still want strong links to Dandenong and Monash in the south east (of Melbourne).”

Mr Rawnsley also gave the thumbs up to the State Government’s $266 million Latrobe Valley investment package, which has attracted criticism from some quarters for its failure to attract a large employer.

The initial stages of the government’s response to the closure has involved providing grants for existing businesses within the region to create jobs or transition plans as well as the creation of an economic growth zone to attract new businesses to the area.

“What you’re doing there is you’re finding the businesses in the Valley that have a competitive advantage and you’re supporting those ones rather than trying to plonk in a government department or a business that doesn’t fit into the jigsaw puzzle,” he said.

However, Latrobe City mayor Kellie O’Callaghan, an advocate of decentralisation, said moving government jobs to the region was about diversifying the region’s economy and pointed to ASIC in Traralgon as an example.

ASIC moved to the region in the aftermath of privatisation and now employs about 350 people.

“We’ve seen a lot of benefit from having government departments in our area,” Cr O’Callaghan said.

“We know it provides job opportunities for a range of people with a range of skills.”

But she agreed with Mr Rawnsley’s comments about the importance of improving transport infrastructure.

“That’s consistent with what we’ve been calling for,” she said.

“It’s the total package of having rail connectivity, not only for that passenger rail option for those commuters option.

“We also have to make sure that infrastructure is in place so if we have industries that develop in our region they can bring their products to market.”