Rebalance the nation: how regional Australia can prevent Sydney, Melbourne and other capitals sprawling into unliveable 'megacities'

The statistics show that the pandemic prompted a rush from the cities. Many city people realised they could function equally well working remotely - and life outside work was more pleasant.

The result is that some areas are now feeling the pressures of growth: shortages of workers, housing, childcare - as well as the perennial shortages of doctors which have afflicted country towns and regions in recent years.

According to the Regional Australia Institute, non-metropolitan Australia has seen a doubling of job vacancies in the past two-and-a-half years. Nearly four million Australians there live in what it calls a "childcare desert".

"Regional home building approvals have declined in five of the last 10 years," the RAI says.

The complex challenge has prompted the institute to bring together politicians and policy-makers for a major Canberra conference this week to find ways to "rebalance" the nation - away from Sydney and Melbourne in particular.

The institute's chief executive wants a "holistic" approach.

"These issues are all interlinked," Liz Ritchie said. "You can't solve the jobs crisis without addressing housing. We know that you can't solve the skills deficit without improving education standards. Healthcare can't be improved without focusing on digital connectivity."

Of course, not all of regional Australia is on the up, with people moving in. Of the 400 or so local government areas, less than half were losing population, mostly very small numbers of people over any five year period. Around a quarter were losing sizeable numbers.

But the recent pattern has been a movement of people from the big cities to towns and areas relatively near - say Melbourne to Geelong or Bendigo - and then further afield.

In each of the last six quarters, the movement has been slightly further inland each time, according to RAI chief economist Kim Houghton.

"We are seeing patterns that people weren't expecting," Dr Houghton said.

According to the institute's latest report: "The major coastal cities close to the east coast capitals are the main destinations for city-dwellers making a regional move, with the Gold Coast the stand-out favourite. The Glitter Strip generally welcomes 11 per cent of all capital city dwellers who make a regional move."

The next most popular destinations were the Sunshine Coast, greater Geelong, Wollongong and Lake Macquarie.

"You've got stresses to do with growth for a lot of these places," Dr Houghton said.

Australia is one of the most centralised countries in the developed world. In the late 1940s, the number of Australians in the state capitals surpassed those living outside them, and the rise has continued ever since. At Federation, one third of Australians lived in the capitals; 121 years later, it is two-thirds.

There are signs the move to regional Australia is slowing as the pandemic fades. But the institute believes the door has been opened - and should be widened so more migrate.

The big worry is that what had seemed like a relentless centralisation of Australia to Melbourne and Sydney means they will become "megacities" of more than 10 million people by the middle of the century. Both would expand into seemingly endless suburbs.

A better solution, the RAI argues, is the expansion of regional Australia.

"Our research tells us that a megacity future isn't the right outcome for Australia," Ms Ritchie said. "We know as a nation we will be happier, more sustainable and more productive if we alter the path we are on."

She wants a commitment from government, industry and community groups to work towards "rebalancing" the economy and society towards regional Australia. This would not be done by decisions by government but by a broad set of changes - for housing policy, for example, or transport.

It might also involve a change of attitudes. Dr Houghton observes that there are often inspiring clusters of innovative enterprises in areas but they are under-appreciated.

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The Gold Coast, for example, has hubs of local companies manufacturing parts for the global automotive industry.

"Liveability" was the key to rebalancing Australia away from the potential megacities, he said. Liveability is hard to define but it comes from the mix of abundant work for people, and for people of all skills, good education, vibrant communities, affordable housing and a host of other factors.

The RAI calculates that there are 9.5 million people living outside the big cities. The forecast is for 10.5 million to be living there in 10 years. The institute thinks that a rebalancing of Australia could realistically mean an extra 500,000 above the forecast.

It has identified 20 key areas where measurable improvement would be possible by 2032. With about 77 per cent of employers in regional Australia saying they can't get the staff they need, the institute wants that "recruitment difficulty rate" brought down to below 40 per cent.

And it wants more skilled workers. In recent years, workers in regional communities have increasingly moved into lower-skilled occupations such as carers for the aged, coffee shop servers, drivers and sales assistants. The institute wants the proportion of skilled jobs to rise from the current 73 per cent of the workforce to 80 per cent.

School results need to improve. At the moment, 57 per cent of regional Australians have a "post-school" qualification. The institute's ambition is for this to rise to 65 per cent or higher.

To make regional Australia more "liveable", more doctors are needed. At the moment, there are about 328 per 100,000 people but it reckons this could be raised by an additional 100 full-time or the equivalent as part-timers.

None of this is achievable easily - the economic forces pulling people to the cities are strong. It would demand detailed changes to education, industrial, transport and even taxation policy.

New federal Minister for Regional Development Catherine King seems sympathetic.

The Ballarat MP says the Albanese government welcomes the RAI's ambitious vision because "empowering regions to have their voices heard and their solutions tailored for local needs is critical".