Article published by Regional Australia Institute

Australia’s 31 small cities are a diverse, growing and highly productive network of urban areas. They are already home to 4.5 million people and contribute 15 per cent of national economic activity as well as being the services hubs for the majority of regional Australians.

Analysis of small cities’ recent performance shows that they have been catching up to our major cities in productivity terms, now achieving 88 per cent of the productivity of the big five cities. Our small cities also outperformed the economic growth rates achieved by our major cities between 2002 and 2010. This demonstrates their potential contribution to future national economic performance.

But our convoluted, fragmented and overlapping system for governing cities is challenging small city growth. The current approach of ad hoc investment in projects in these cities through the Stronger Regions Fund and Royalties for Regions does not provide a clear opportunity to drive their future development beyond baseline projections.

Australia’s small cities also have a very diverse set of challenges and opportunities.

There is no national one size fits all policy that will ensure their future progress.

To fix this situation, the Australian Government should establish a Small City Deals policy to drive the development of our regional cities as a key part of its city agenda. City Deals are a locally led, coordinated approach to city development that includes all levels of government as well as non-government actors and private sector.

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