Victorian state government slashes regional development funding by $140 million

Last week's budget revealed a spending target of $106.6 million for regional development in 2023-24. That would be a 40 per cent cut from the 2022-23 target, and a 57 per cent cut from the actual 2021-22 spend of $247.2 million.

In line with overall spending cuts, the individual program performance measures in the budget have also been slashed, particularly when compared with the 2021-22 financial year.

The government is aiming to generate $35 million in regional business exports resulting from government programs, down from $45 million this year and $136 million in 2021-22.

The number of jobs generated in regional areas thanks to government investment will drop from 2427 in 2021-22 to just 500 in 2023-24. Meanwhile, new investment in the regions as a result of government assistance will be down to $350 million, compared with an expected $700 million in the current financial year and $1.4 billion in 2021-22, a staggering 75 per cent plunge.

The government expects "participant satisfaction with implementation of Regional Development Victoria (RDV) programs" to remain at a healthy 90 per cent but Moyne Shire Council mayor Karen Foster said the regional development targets hadn't made for satisfying reading.

"Over the past two years, we can see that money spent on regional development has been reduced by $140.6 million. That's a devastating blow, not only for us here in the south-west, but for regional communities right across the state," Cr Foster said.

"How can cutting funding to programs which encourage growth in rural and regional areas be considered a good thing when Melbourne is quite literally bursting at the seams and struggling under the weight of huge population growth?"

Cr Foster said regional development funding had been the council's "main conduit into government for many years" and had made many of its most important projects possible.

"A recent example of that is the Koroit worker cabins which have been a huge success in helping us to bring new workers to the region," Cr Foster said.

"Our region is an economic powerhouse when it comes to food production, renewable energy and manufacturing. We make a significant contribution to the state economy and the massive cuts we are seeing to rural and regional funding will inevitably lead to job losses and poorer outcomes for our community.

"It's incredibly disappointing, to say the least."

The Department of Agriculture also faces cuts after having its workforce decimated in 2022. Investment in agricultural industry development will be down nearly 10 per cent in 2023-24 and nearly 17 per cent from 2021-22.

Corangamite Shire mayor Ruth Gstrein said the cuts to agriculture and regional development were "certainly disappointing" and worried they would hold back projects crucial to the shire's growth.

"Rural municipalities don't have a lot of spare cash. We just can't do multi-million-dollar projects without assistance," Cr Gstrein said.

She pointed to the Camperdown Production Precinct plan, which will cost at least $30 million and will need government money to proceed.

"That's a big, expensive project but it's putting in enabling infrastructure that affects the whole town, putting in expanded effluent ponds (the lack of which) is really holding Camperdown back" Cr Gstrein said.

"I can appreciate things are tight post-COVID, but we would really hope to see that money start flowing again when things are back on an even keel."

South West Coast MP Roma Britnell said the agriculture and regional development cuts were "very concerning". "If we don't fund agriculture adequately we won't be able to actually produce the necessary supply of food," she said.

"When it comes to RDV, we are going to see so many programs that our community value being cut.

"All of these cuts just reflect one thing: we've got a government that's just wasted so much money. They're in a hell of a state."

A Victorian government spokesperson said RDV continued "to work across government to get the best results for regional communities".

"Over the next 12 months, Regional Development Victoria expects to progress delivery of around 650 projects including the Forest Mountain Bike Trails and the Port Campbell Town Centre Revitalisation," the spokesperson said.

Another spokesperson said the government remained "committed to the continued growth and modernisation of the state's agriculture sector".

"The 2023/24 Victorian Budget delivered programs to promote Victoria's world-class produce both here and abroad while also supporting farmers to upskill and thrive," the spokesperson said.