Since responsibility for regional policy in Australia is not the sole province of the national government, another useful disaggregation of results is by state.
State governments are often more concerned about regional performance relative to the state average rather than the national average – that is with intra-state measures of income dispersion. Table 10 reports results for the standard measures of dispersion (Vw, Vuw, Mw) for each state calculated with respect to differences between each statistical division’s median income and the corresponding own-state median income. This data is also plotted for Vw in Figure 6. Regional incomes relative to the corresponding own-state incomes are recorded in Tables 11 and 12, while Table 13 highlights the contribution to own-state Mw of regions of regions classified by economic type.
Table 10. Measures of Regional Income Dispersion Relative to Own-State
Measure 1976 1981 1986 1991 1996 2001
New South Wales
Vuw 0.23 0.20 0.21 0.18 0.18 0.19 Vw 0.16 0.15 0.17 0.15 0.16 0.17 Mw 14.90 14.11 16.42 14.91 15.66 16.20 Victoria
Vuw 0.26 0.16 0.18 0.16 0.14 0.14 Vw 0.17 0.11 0.11 0.11 0.10 0.09 Mw 14.52 9.41 10.48 9.58 8.92 8.44 Queensland
Vuw 0.19 0.16 0.15 0.11 0.13 0.12 Vw 0.16 0.12 0.12 0.09 0.11 0.09 Mw 14.76 10.50 11.04 8.14 9.34 7.92 South Australia
Vuw 0.16 0.08 0.14 0.14 0.10 0.10 Vw 0.10 0.05 0.08 0.08 0.05 0.06 Mw 7.69 2.75 6.71 6.37 3.80 4.07 Western Australia
Vuw 0.24 0.26 0.28 0.24 0.27 0.23 Vw 0.14 0.15 0.16 0.13 0.14 0.11 Mw 5.73 5.59 7.62 5.03 4.91 5.39 Tasmania
Vuw 0.06 0.09 0.10 0.08 0.10 0.08 Vw 0.08 0.06 0.09 0.08 0.09 0.08 Mw 6.80 4.77 8.45 7.26 8.20 7.39
Table 11. Regional Median Individual Income Relative to Own-State (Ratio)
1976 1981 1986 1991 1996 2001
New South Wales
Sydney 1.12 1.12 1.15 1.13 1.15 1.15
Hunter 0.79 0.84 0.83 0.83 0.84 0.80
Illawarra 0.93 0.88 0.85 0.86 0.84 0.82
Richmond-Tweed 0.61 0.66 0.71 0.75 0.76 0.74
Mid-North Coast 0.65 0.66 0.69 0.74 0.72 0.72
Northern 0.74 0.81 0.77 0.82 0.82 0.81
North Western 0.76 0.83 0.76 0.80 0.83 0.84
Central West 0.81 0.83 0.81 0.82 0.87 0.85
South Eastern 0.89 0.84 0.92 0.97 0.96 0.93
Murrumbidgee 0.88 0.93 0.84 0.85 0.94 0.93
Murray 0.79 0.92 0.85 0.84 0.89 0.90
Far West 0.70 0.78 0.73 0.77 0.69 0.70
Victoria
Melbourne 1.10 1.07 1.08 1.07 1.07 1.07
Barwon 0.80 0.82 0.85 0.87 0.87 0.88
Western District 0.63 0.81 0.81 0.83 0.88 0.89
Central Highlands 0.74 0.73 0.78 0.81 0.83 0.84
Wimmera 0.70 0.85 0.78 0.78 0.87 0.86
Mallee 0.75 0.85 0.75 0.79 0.87 0.87
Loddon 0.70 0.79 0.80 0.82 0.84 0.85
Goulburn 0.68 0.88 0.83 0.86 0.90 0.91
Ovens-Murray 0.82 0.90 0.89 0.99 1.00 0.97
East Gippsland 0.74 0.82 0.82 0.83 0.80 0.78
Gippsland 0.75 0.96 0.90 0.86 0.83 0.80
Queensland
Brisbane 1.11 1.08 1.11 1.07 1.08 1.08
Moreton 0.76 0.86 0.88 0.92 0.92 0.94
Wide Bay-Burnett 0.76 0.79 0.76 0.79 0.75 0.76
Darling Downs 0.79 0.89 0.87 0.87 0.89 0.92
South West 0.90 0.97 1.00 1.06 0.99 1.12
Fitzroy 0.94 1.07 1.03 1.00 0.97 0.97
Central West 1.02 1.09 1.05 1.03 0.99 1.13
Mackay 1.28 1.24 1.11 1.09 1.11 1.02
Northern 1.17 1.11 1.07 1.04 1.06 1.04
Far North 0.97 0.98 0.95 1.07 1.11 1.03
North West 1.35 1.35 1.32 1.23 1.27 1.25
Table 11 (Continued)
1976 1981 1986 1991 1996 2001
South Australia
Adelaide 1.06 1.01 1.05 1.05 1.02 1.03
Outer Adelaide 0.73 0.90 0.90 0.93 0.98 1.00
Yorke & Lower North 0.78 0.88 0.76 0.77 0.81 0.81
Murray Lands 0.82 0.93 0.83 0.82 0.91 0.93
South East 0.89 1.10 0.98 0.98 1.08 1.08
Eyre 0.97 1.03 0.82 0.81 0.91 0.94
Northern 1.03 1.07 0.94 0.95 0.91 0.86
Western Australia
Perth 1.00 0.99 1.02 1.00 1.00 1.01
South West 0.74 0.85 0.81 0.88 0.86 0.88
Lower Great Southern 0.87 0.94 0.82 0.85 0.86 0.85 Upper Great Southern 1.08 1.11 0.92 0.90 1.05 0.84
Midlands 1.11 1.03 0.87 0.89 0.97 0.89
South Eastern 0.97 1.04 1.11 1.25 1.38 1.28
Central 1.05 0.95 0.94 0.99 0.99 0.94
Pilbara 1.64 1.75 1.76 1.64 1.67 1.56
Kimberley 0.90 0.99 1.06 0.99 0.97 0.99
Tasmania
Greater Hobart 1.11 1.06 1.11 1.10 1.10 1.10
Southern 1.00 0.83 0.85 0.89 0.86 0.89
Northern 0.93 0.97 0.95 0.96 0.96 0.97
Mersey-Lyell 0.97 0.99 0.94 0.95 0.92 0.92
Regardless of measure VIC, QLD, SA and WA experienced intra-state income convergence over the 1976-2001 period – with this convergence tendency being most pronounced in VIC and QLD. By contrast on two out of the three measures TAS and NSW experienced intra-state income divergence.
Analysing the data from each sub-period also reveals some interesting contrasts. During the period 1976-81 all states except WA experienced income convergence. Recall from Table 5 that this was also a period of inter-state income convergence. The 1981-86 period saw all states except QLD experience income divergence. This was, not surprisingly, a period of inter-state income divergence also. The 1986-91 period saw both inter-state and intra-state convergence. The final two sub-periods, which were ones of neither convergence nor divergence at the inter-state level, each produced significant differences at the intra-state level. 1991-96 saw income convergence being experienced within SA and VIC and income divergence being experienced in all other states. By contrast, 1996-2001 saw income divergence being experienced within NSW and SA with income convergence being experienced in all other states. Taking these
last two sub-periods together, a strong convergent movement can be observed for the regions of VIC while a consistent divergent movement can be observed for the regions of NSW. As these states are the most populous states these contrasting movements deserve further research to determine the underlying causes.
Table 12. Patterns of Convergence/Divergence Relative to Own-State
1976 -1981
1981- 1986
1986- 1991
1991- 1996
1996- 2001
1976- 2001
1991- 2001
New South Wales
Sydney UD DC NSC UD NSC NSC UD
Hunter UC DD NSC NSC DD NSC DD
Illawarra DD DD NSC DD DD DD DD
Richmond-Tweed UC UC UC UC DD UC NSC
Mid-North Coast NSC UC UC DD NSC UC NSC
Northern UC DD UC NSC NSC UC NSC
North Western UC DD UC UC UC UC UC
Central West UC DD UC UC DD NSC UC
South Eastern DD UC UC DD DD NSC DD
Murrumbidgee UC DD NSC UC UC NSC UC
Murray UC DD NSC UC UC UC UC
Far West UC DD UC DD UC NSC DD
Victoria
Melbourne DC UD NSC NSC NSC NSC NSC
Barwon UC UC NSC NSC NSC NSC NSC
Western District UC NSC UC DD NSC UC UC
Central Highlands DD UC UC UC NSC UC UC
Wimmera UC DD UC UC UC UC UC
Mallee UC DD NSC UC NSC UC UC
Loddon UC UC UC UC NSC UC UC
Goulburn UC DD UC UC NSC UC UC
Ovens-Murray UC DD UC UC DC UC DD
East Gippsland UC NSC UC DD DD NSC DD
Gippsland UC DD DD DD DD NSC DD
Table 12 (Continued)
Lower Great Southern UC DD UC NSC NSC NSC NSC
Upper Great Southern UD DC DD UC DC DC DD
Notes. UD = upward diverging, UC= upward converging, DD = downward diverging, DC = downward converging, NSC = no significant change.
Table 13. Relative Contribution to State MW By Regions Classified by Economic Structure
1976 1981 1986 1991 1996 2001
New South Wales
Capital City 0.50 0.53 0.56 0.55 0.60 0.58
Major Provincial Town 0.15 0.15 0.14 0.16 0.16 0.18
Agricultural 0.09 0.07 0.08 0.06 0.06 0.05
Agricultural/Manufacturing 0.09 0.06 0.08 0.08 0.05 0.05 Resource Development 0.01 0.01 0.01 0.01 0.01 0.01 Warm Climate Coastal 0.13 0.15 0.12 0.13 0.13 0.13
Other 0.02 0.03 0.01 0.01 0.01 0.01
Victoria
Capital City 0.49 0.52 0.54 0.54 0.58 0.57
Agricultural 0.09 0.08 0.10 0.11 0.09 0.09
Manufacturing 0.20 0.26 0.21 0.20 0.19 0.19
Agricultural/Manufacturing 0.23 0.13 0.16 0.15 0.14 0.15 Queensland
Capital City 0.36 0.32 0.43 0.39 0.38 0.45
Major Provincial Town 0.18 0.19 0.18 0.16 0.16 0.16
Agricultural 0.01 0.01 0.00 0.01 0.00 0.02
Agricultural/Manufacturing 0.22 0.20 0.22 0.26 0.25 0.25 Resource Development 0.05 0.06 0.04 0.04 0.03 0.03 Warm Climate Coastal 0.01 0.01 0.03 0.06 0.08 0.02
Other 0.18 0.20 0.09 0.08 0.10 0.06
South Australia
Capital City 0.52 0.17 0.54 0.56 0.43 0.47
Agricultural 0.10 0.16 0.18 0.17 0.20 0.17
Agricultural/Manufacturing 0.37 0.67 0.28 0.26 0.37 0.36 Western Australia
Capital City 0.02 0.13 0.21 0.05 0.00 0.18
Agricultural 0.19 0.09 0.15 0.18 0.11 0.16
Agricultural/Manufacturing 0.33 0.21 0.21 0.21 0.26 0.22 Resource Development 0.44 0.56 0.43 0.56 0.62 0.43
Other 0.02 0.00 0.01 0.00 0.01 0.00
Tasmania
Capital City 0.63 0.49 0.53 0.55 0.51 0.54
Agricultural/Manufacturing 0.11 0.31 0.30 0.29 0.34 0.35
Other 0.26 0.19 0.17 0.16 0.15 0.11
0 0.02 0.04 0.06 0.08 0.1 0.12 0.14 0.16 0.18
1976 1981 1986 1991 1996 2001
Year
Vw
New South Wales (SD's) Victoria (SD's) Queensland (SD's) South Australia (SD's) Western Australia (SD's) Tasmania (SD's)
Figure 6. Weighted Coefficient of Variation: Statistical Divisions Relative to Own-State
7. CONCLUSION
Our examination of trends in Australia’s regional income dynamics over a twenty-five year period gives strong support to the suggestion by McGillivray and Peter (1991) that for economies in the later stages of economic development regional inequality can be expected to follow a pattern of short-run oscillations around a longer term trend of relative stability.
This begs the question, however of what implications we might draw for government policy from our empirical findings. On the one hand, one could argue that twenty-five years has elapsed and regional inequality has not been impacted on significantly by existing federal and state regional policies and that greater priority needs to be given to this area by all levels of government – since to ignore persistent inequality can give rise entrenched economic, social and political problems. On the other hand, one could attempt to use the findings of this paper to argue that devoting extra resources to regional policy would represent a waste of scarce resources since history suggests that progress made towards the goal of reducing inequality in a given time period is likely to be reversed in the next phase of development. It could be however that political cycles in terms of the degree of emphasis given to regional policy by successive governments provide part of the explanation behind the oscillations in regional inequality that have been observed. If further research suggests that this is indeed the case, then putting regional policy higher among the policy priorities of government over the longer term may yield significant returns in accelerating the currently painfully slow crawl towards convergence.
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