Issue & Challenges

4.1  Context

Historic and Emerging Characteristics – An Overview

The Melbourne South East region was rapidly urbanised in the Post War period and continues to extend outward today. Development was largely directed along linear corridors following major road and rail routes, however, some intermediate development has occurred in the eastern and inner southern sections.

The region encompasses extensive industrial development, that commenced in the 1960s with factories in the Oakleigh, Moorabbin and Dandenong areas, and has since evolved into the modern business and manufacturing estates that dot the region today. Manufacturing plays a prominent role in regional employment, business development and investment. Industry continues to thrive in the Monash, Kingston and Greater Dandenong areas, and provides vital employment for the residents of Melbourne’s burgeoning outer south-east.

Indeed, the fringe is seen to be increasingly economically dependent on these economic strongholds, and concerns have been raised about the latter’s ability to sustain future employment demands. Development on the fringe has been primarily residential and commuter oriented, and lacks close-at-hand employment opportunities (refer Figure 2). Added to this, is the range of social challenges facing areas such as Casey, Cardinia and parts of Frankston and the Mornington Peninsula . There is a growing social disparity between middle ring and fringe residents in areas such as education, work skills, employment participation and safety levels. Infrastructure and service provision in areas such as education, health and public transport are lagging.

Significant Manufacturing Focus

Manufacturing is very prominent in the region in terms of employment, business development and investment in new buildings. This is a reflection of a long term expansion of factory development that began in the Moorabbin, Oakleigh and Dandenong corridor in the 1960s, but has matured into new forms seen in the modern business parks and factory estates that are dotted throughout the region today. Close study of the types of manufacturing in the region reveal that parts of the new high technology sectors are well represented. Areas of strategic concern include national and state manufacturing policy, the availability of skilled labour and the efficient transport of goods and people.

Advanced Business Services Under-Represented

Employment, business development and investment information shows that the region has not attracted as much of the fast growing business services sector and associated office development. This reflects the concentration of these activities in the inner city, facilitated in part by government expenditure on infrastructure and changes in housing controls. Although some new economy sectors are well represented in the south-east (such as high-tech manufacturing), there is a need to provide further higher order jobs in the region, in order to support business growth and innovation, and broaden the range of employment opportunities.

This will require policy and statutory development to address new relationships between office-type and production functions. There is a need to reflect the range of requirements of modern industrial establishments (eg. administrative, research and logistical functions, in addition to storage, warehousing and distribution) which has important implications for greater flexibility in the Victoria Planning Provisions.

The Emergence of Two Melbournes

According to figures in a report authored by O’Connor and Healy[1], an important pattern emerges when metropolitan sub-regions are analysed in terms of journey-to-work destination:

Table 1 – Comparison of “First” and “Second” Melbourne

First MelbourneMetropolitan sub-regions where more than 30% of resident workers travel to the Core (central city) for employment:

  • Core (75.7%)
  • Inner East (38.4%)
  • Inner North / Inner West (46.4%)
  • Outer North (30.5%)
  • North East Corridor (33.9%)
  • Outer West (42.4%)
Second MelbourneMetropolitan sub-regions where fewer than 30% of resident workers travel to the Core for employment:

  • Inner South East (17%)
  • Outer East (16.5%)
  • Outer South East (7.7%)
  • Peninsula (7.2%)

Source: SGS Economics and Planning Pty Ltd (2002) Prosperity for the Next Generation; Phase 2 – Synthesis of Existing Information, March.

As demonstrated, there now appears to be two distinct Melbournes – one with a labour market focus on the central city, and another in the East. Given this separation, it has been suggested that (1) the Mitcham-Frankston Corridor forms an appropriate basis for economic planning and (2) that ‘Second Melbourne’ may be slipping behind ‘First Melbourne’, in adjusting to the new economy and the forces of globalisation.

Regional Linkages

Regional linkages between jobs and housing are evident in the south-east region. Employment centres in the north and west of the region, in municipalities such as Whitehorse , Monash and Kingston , draw upon labour from new residential areas in Casey, Frankston and the Mornington Peninsula . As such, planning for employment growth and the provision of services must be considered in a regional context.

Regional Economic Inter-dependencies

National Economics have undertaken modelling of the determinants of economic activity and degree of connectivity for the region. This has enabled the tabulation of Disposable Household Income Dependency between LGAs (Local Government Area or Municipality), or in other words, what proportion of a council’s income can be attributed to activity in another municipality (refer Table 2).

Overall, there is a strong interdependency between LGAs, with Monash being the most influential provider to its neighbours. For Bayside, Kingston , Knox, Maroondah, Monash and Whitehorse , about 50% of household income is derived from the region. For the southern LGAs of Cardinia, Casey, Frankston, Dandenong and Mornington, the reliance upon the region for household income is around 70%. These conditions have prompted discussion of a ‘Third Melbourne’, in addition to the ‘Second Melbourne’. This is of major strategic significance, given that the southern LGAs will be accommodating over 250,000 new residents. They are not identified as areas of future jobs growth and existing journey-to-work trips rely heavily on the private vehicle.

Regional Industry Strengths

Analysis of recent economic performance data prepared by National Economics (1998) clearly confirmed that the Region’s economic drivers were concentrated in Greater Dandenong, Kingston , Monash and Knox.  These four municipalities generated:-

  •           approximately 77% of the Region’s medium technology output;
  •            some 74% of advanced manufacturing output of the South East;
  •        approximately 72% of total manufacturing output.

These key economic areas were also the most significant sources of employment (refer Table 3) with some 56% of the Region’s employment and the highest export generators (refer Table 4).  The four municipalities, together with Whitehorse dominated the Region’s business services output (70% of regional output).

  • The proposed reinforcement of the designated Transit Cities and the creation of new activity/employment centres will provide opportunities for investment and employment growth.  This approach greatly lessens the strategic risk placed on sole reliance on existing activity and industry generator areas being able to meet future employment requirements.

Need for Accessible Employment Opportunities

  • The research to date has clearly indicated that one of the most significant challenges facing the region is the current and likely future growth of large residential populations and consequential demands for employment.
  • There are several important implications arising from this:-
  • an effective economic strategy for the region will need to provide a large pool of employment opportunities which are readily accessible to the growing residential populations of the outer south east;
  • the sustainable provision of this pool of employment will need to be driven by “strategic employment”, that is, employment where industries, services and outputs have a substantial export component;
  • as part of this requirement, there is a need to develop advanced business services and knowledge-based industries and services to lead employment growth in the region;
  • an economic strategy therefore needs to be focused on the development of attractive and amenable environments to ensure the initiation, development and consolidation of advanced business services and knowledge-based industries.

Business Outcomes

The new north-south public transit system is required to provide improved business outcomes for an integrated employment and investment market in the region.  This will facilitate the creation of new integrated employment and lifestyle nodes.

These nodes will be used to attract key suppliers, advanced business services, research and development facilities and training institutions that are directly relevant to the region’s prospective industry clusters in manufacturing, food exports and other identified sectors.

An improved public transit system will make it possible for the manufacturing heartland around Dandenong to better capitalise on the substantial pool of engineering, scientific and business skills available to the north in Maroondah and neighbouring municipalities.  In addition, it will be more convenient for young people and re-trainees to access the educational institutions geared towards the needs of local clusters.

In short, improved connectivity and the formation of new foci for advanced business services will provide a platform for the creation and retention of tacit knowledge relevant to the region’s industrial strengths.

Enhanced Regional Performance

The Strategy for the long term economic sustainability of the region needs to provide a framework and implementation plan focused on consolidating existing export strengths and identification and development of new export strengths for the region.  The development of a strategic employment component in the new transit spine of the region is an essential element in the securement of sustainable wealth and employment for the region.  Therefore, there are key implications as to what types of industries are to be attracted to the TransitCities and the new activity centres.

Need for Labour Market Development Programs

In order to deliver the employment benefits which the Strategy is directed to generate to the ‘jobs poor’ areas of the outer South East, the Strategy will need to be supplemented with targeted labour market programs where skills and training requirements are identified and delivered to the region.

In summary, the Strategy needs to provide several essential conditions to achieve sustainable investment and employment development.  These are:-

  • the creation of an attractive environment to secure advanced business services, knowledge-based industry and a strategic industry focus for the region;
  • the need to achieve the strategic sequencing of projects (that is, the identification and implementation of a pathway to build strategic industry in the region);
  • development of a business clusters program to maximise the effectiveness of investment and ensure that there is a flow-on of investment and skills to the rest of the region, which the core public transport corridor will generate.

Risks of Inaction

If no action is taken, the region is open to several risks:-

  •  the risk of the declining significance of the eastern region in absolute and relative terms to other areas of Melbourne;
  • general decline of the export performance of the region as key elements of existing generator areas lose relevance in the dynamic national and world economies;
  • increased dependence on Central Melbourne;
  • extreme risk for the population growth areas of the region;
  • high risk of under-employment for the high growth areas of the region.