Redlands (un) economic development strategy

Public consultation about the Redland City Council draft Economic Development Strategy will soon be over. The draft document put forward by Council is a shameful waste of ratepayers money and a wasted opportunity to improve business opportunities in this City.
The consultation process has been just as bad. There were only three “public” forums for up to 20 people at each session. Consultation with at most 60 people about a Strategy that should impact on 150,000 residents is not a good look. It compares poorly with the extensive community consultation that underpinned Redland City’s previous Economic Development Strategy.

Technical reports: “late again”

The Draft Economic Development Strategy released for consultation was supplemented half way through the consultation period with a 106 page Research Compendium. At least this time the technical reports were available during the consultation period, unlike the Toondah PDA scheme technical reports which were hidden from the community until after consultation ended.
The Compendium is a hotchpotch with some “global” and “unsubstantiated” findings about the previous Economic Development Strategy, the Rural Futures Strategy and the Tourism Strategy.  The Compendium shows that the draft Strategy is poorly researched and makes no attempt to build upon previous work done by Redland City Council.
The University of Queensland ‘Growing Business Technical Report’ suggests a need for Redlands to focus on maturing the economy to generate wealth and high value employment”. A focus on a maturing economy …not a “growth driven” economy is sensible.  But where was the community input?
Further the UQ researchers stated that “the ultimate goal was to have a self-sustaining economy rather than just a dormitory suburb of Brisbane”. An imbued understanding showing respect for our community and its Redlands 2030 Community Plan. An understanding which is  seemingly lost on the author of the draft Strategy.

The costs of demand driven industries?

The draft Strategy maintains  focus on “demand driven industries” – “construction” (or housing) and “retail”.  It is a strategy that ignores Council’s own stated role – “leveraging our competitive advantages including lifestyle and geographic location”. Further, the Strategy states the “commitment to environmental sustainability is set against an economic development vision …” . More jargon follows with the Strategy proposing Council …“find a balance between the economy and environmental sustainability”.  Such assertions have no place in our city’s Economic Development Strategy, seeking to exploit and trade-off our lifestyle and presumably the liveability of our city. Most importantly, these statements are inconsistent with the well founded outcomes of the Redlands 2030 Community Plan.
The strategy fails to provide any supporting economic analysis.  Where is the cost-benefit analysis of population growth and new housing as a basis of future economic growth?

If the future is so emphatically “growth driven” then a proper analysis should be a “lay down misère”.
Questions should also be posed as to what happens after the anticipated spurt of induced population growth? Will another sugar fix be required? Should the draft Strategy itself be a transition to a more mature and sustainable economic future?  An Economic Development Strategy contingent on a growth scenario is a no more than a cargo cult mentality.

More people and more rates?

New housing development comes at a cost to ratepayers.  This cost being the cost of infrastructure needed for each new (greenfield) residential lot.  By most estimates this is a cost to Council (ratepayers) of about $25,000 per lot. This $25k is over and above the contribution by the developers.  There are significant costs for our tax dollars as well, in the form of State infrastructure needed to support residential development.
Most of the Council’s infrastructure costs are met  from borrowing or higher Rates.  But more Council debt is not discussed or justified in the draft Strategy.  At the rate of investment needed to support residential development the Council could surely consider other forms of infrastructure, including broadband.  In fact the study skips over its own finding that Council can play a role in three areas, the first being “high performance internet”.  This role is not mentioned again.
According to the recent comments on the growing population in the city, it seems that at least some people believe (or would like to believe) that an increasing population will lead to lower council rates. However history is that rates increase well in excess of population growth.  The myth that more people leads to lower rates is a flawed, in fact it is an “unlikely” scenario.  More ratepayers means the community requires more services – more costs.  It is that simple.
Rates are determined on the basis of the cost services to be provided.  The formula is based on costs divided by a Statutory site valuation.  There is no excess obtained from new residents, unlike a shop or business where more customers might mean a greater profit.  In that sense…ratepayers are not customers!!
New and old residents of the City demand services (rightly) and should not be paying more so that any other sector pays less.   So existing residents cannot expect rate relief on the basis of a myth that more ratepayers will lower rates on a per capita basis.

A legacy of under-spending on infrastructure

It would be unfair to expect new residents to pay higher rates to meet the cost (or legacy) of underinvestment in infrastructure.   This is complex and distorted argument.  But a solution is available to Council: a forthright infrastructure plan.  An infrastructure plan should be a precursor to incurring more debt to service new greenfield development.
Increasing population through new residential development, especially greenfield development, requires Council to either borrow or increase rates to provide the necessary infrastructure.  The infrastructure funding regime recently put in place, caps the developer’s contribution to trunk infrastructure and now places a large onus for the balance on Councils.   This means that in Redlands, the Council needs to find in the order of $25,000 to provide infrastructure to each new block of land.  This cost is met by rate increases or debt.  In either case new development will cost Council and ratepayers for years to come. Surely a proper cost-benefit analysis should underpin the decision to adopt a “growth driven” economic paradigm.

Economic development: where to next?

There are a number of posts on this web site dealing with the draft Strategy.
In “Redland City’s Cunning Plan” we discussed the absence of any specific and measurable initiatives other than a fixation on the structure and operation of an “Economic Development Committee”.
We also published videos by Howard Guille, with his assertions that the draft Strategy is a recipe for a cargo cult mentality, discussions about the opportunities for an enterprise area and food for thought in the “Baby Boomers“.  A greater focus on building up the capacity of existing businesses is a big gap. A call for a more comprehensive community and stakeholder analysis (i.e. more than 60 people) should resonate with the hundreds of small businesses across the City.
Troubling also is that the draft Strategy is full of what one conservative observer labelled as “waffle”.  It states the obvious as some form of deductive reasoning.  Repetition, complex sentences (one of 45 words!), mixed tense (so that we are never sure where we are!) are basic flaws that detract from readability and comprehension of the document.
The key recommended output for an Economic Development Advisory Committee (with no Community representation) is sometimes described as an Economic Development Advisory Board.  All these might be simple errors but “clouded writing” is a symptom of “clouded thinking”.

Fixing the economic development strategy

The current Strategy is not a document that provides a sound basis on which to move forward.
A minimal amendment is to ensure there are community representatives on the board or committee (whatever) so that Council benefits from broader approach to achieving community prosperity.
However, the better way forward is for draft Economic Development Strategy to be withdrawn, re-worked by competent people and re-written.
Then it should be the subject of a proper consultation process.