Warrnambool City Council director of city growth Andrew Paton said regional Victoria had plenty to offer to accommodate future economic and population growth.

“But the policy settings and 21st century infrastructure needs to come with us,” he said.

“Material investments in areas such as transport links, water, utilities and telecommunications are needed to support our region’s industry to compete in a global market.”

His comments come after figures compiled by SGS Economics and Planning show the south-west’s economy shrunk by 1.2 per cent in 2015-16. In contrast, inner Melbourne’s economy grew by a blistering 3.9 per cent.

“We know there’s a bit of a trend in regional Victoria that the GPD has dropped, but I think we shouldn’t be too gloomy about one year’s data. We also can’t bury our head in the sand about the challenges and what that presents,” Mr Paton said.

“We have anecdotal evidence of investments presently proposed in our region that are swinging between going to a metro area versus the regions.

“Unless we can compete with infrastructure that is available with the metros it’s always going to be challenging to attract that investment, but our advocacy is really strong around this to state and federal governments that we can accommodate the economic and population growth but we need to have the policy settings and the infrastructure.”

Mr Paton said regional areas like the south-west were the answer to Melbourne’s soaring population and congestion problems.

“The projection is for Melbourne to be eight million by 2050 and I think there’s a real opportunity for the regions, through our lifestyle and housing affordability to play a key role in that solution,” he said.

“If there was policy and significant support and investment around more economic migration to the region that had jobs attached to it, that would be a big step forward in growing regional Victoria.”

Regional Cities Victoria said the state government should prioritise regional jobs to help stimulate economic growth. 

Chair Anna Speedie said its pre-budget submission outlined five key policy proposals. Cr Speedie named  job creation, business attraction and infrastructure investment as the keys to unlocking regional growth. 

“Investment is required to ensure our regions can adapt to current and future challenges, attract more people and enable new business,” she said.

“Regional Victoria is facing challenges on several fronts, be it Hazelwood in the Latrobe Valley, Alcoa just outside Warrnambool, SPC in Shepparton or the impacts of the Murray Darling Basin Plan.

“These factors and many more have contributed to the regional economy going backwards, yet again, in total contrast to Melbourne which continues to surge ahead with annual growth of almost 4.5 per cent.” 

Cr Speedie said there should also be further investment in tourism and transport infrastructure projects.

“There are many world-class tourism projects identified and costed by our Councils that are worthy of Government investment – it’s a real opportunity to further support local jobs and drive economic activity in line with the Government’s focus on the visitor economy,” she said.

“We’re also keen to see the $970 million promised to regional Victoria from the lease of the Port of Melbourne rolled out to regional cities as a priority, to improve freight routes, transport logistics and facilitate better port access.”

Member for South West Coast Roma Britnell said the SGS Economics and Planning figures showed more focus was needed outside the city.

“Melbourne cannot sustain this type of growth, it’s already congested and its services are struggling. This is regional Victoria’s opportunity,” she said.

Mrs Britnell said the south-west had plenty to offer through agriculture, industry and tourism.

“The region successfully produces so many other agricultural products, beef, lamb, seafood, grain, fibre and timber. The ability for increased productivity with the right policies to facilitate this is the Liberal party’s focus,” she said.

“To realise this potential we need major investment to encourage businesses to expand into the regions.”