Where to Invest? A regional analysis of small town development needs in an Australian state

Central governments are faced with decisions about which towns to invest in across administrative regions. Using a recent example from the Loddon Mallee region in the Australian state of Victoria this paper reports on research undertaken to assist policy makers at the state and local government levels to classify and group towns as a tool to assist in deciding how best to allocate funding for both economic and social development. Using Principal Components Analysis and Cluster Analysis as a starting point with data on 74 small towns across the region the research identified three clusters which reflected the agricultural and amenity production values of the regional landscape. Importantly the clustering of towns also reflected the spatial, employment and services relationship between these small towns and major regional centres and the Melbourne metropolitan region.