A major review of Victoria's Latrobe Valley has found the region will require years of Federal Government support as it moves away from its dependence on brown coal.
The Latrobe Valley is home to the State's largest power plants and the Federal Government's carbon tax is expected to shift power generation away from brown coal to gas and renewables.
The deadline for the buy-back scheme to phase out at least one power station in the region was postponed late last week.
Richard Elkington from the Latrobe Valley Transition Committee (LVTC) says the report explores ways to adjust to the coming changes.
"Whether there's contract for closure or not, the carbon price is going to result in perhaps earlier closure of the power plant than the owners may have originally planned for," he said.
"So whether there's a contract for closure or whether there's not, there's going to be an impact of a carbon price in the Latrobe Valley." The report stated the challenge for the region will be large and complex, and the scale of adjustment, significant.
It also acknowledged that securing new private capital in the current market will be difficult, stating that appetite for new investment in resource exploration and technology development is limited.
It said, "While the LVTC understands the current funding difficulties facing the Victorian and Commonwealth governments, it believes each should make clear long term commitments to supporting the region's transitions." The Federal Minister for Regional Development Simon Crean says the Government is already investing in projects to develop the Latrobe Valley.
He says there is potential to develop clean coal technologies, opportunities in carbon farming and room to develop training and education.
"We haven't waited for certain things to happen," he said.
"What we've done is to get the committee working, identifying the opportunities and we'll work out the best way going forward, how to respond to that." The LVTC report released today identifies opportunities to help grow and diversify the region's industry base and labour market.
"The report suggests a number of initiatives including transitional support for business and workers, strengthening the workforce by encouraging greater participation in higher education, and a focus on infrastructure to support industry growth and diversification," said the Victorian acting Premier, Peter Ryan.
"The Victorian Government's response to this plan will include further initiatives to support the Latrobe Valley turn vision into a reality," he said.
"These will be in addition to the $10 million Victoria has contributed to the Latrobe Valley Industry and Infrastructure Fund." Mr Ryan said the LVTC report has been developed to underpin the Victorian Coalition Governmentâs soon-to-be-released Latrobe Valley Industry and Employment Roadmap project.
Mr Crean says the Commonwealth has already delivered a down payment on regional diversification with the recent announcement of a $3 million grant for the $6.2 million second stage of the Latrobe Regional Airport project.
"The report will be used to guide the Commonwealth's investment and service delivery in the region," Mr Crean said.
The report was developed over 14 months.