Regional Economic Development Strategies

In 2018, the NSW Government assisted local councils to develop Regional Economic Development Strategies (REDS) based on the concept of a Functional Economic Region (FER).

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Functional Economic Regions (FERs)

FERs are made up of one or more Local Government Areas in regional NSW that work together to create smaller economies with strong economic links.

The Centre for Economic and Regional Development led this work and managed a panel of expert contractors to collaborate with councils and local stakeholders on their REDS.

The REDS provide a clear economic development strategy for the region. They guide government investment in economic development initiatives in regional NSW, through programs such as the Growing Local Economies Fund and other government grant programs. The REDS provide a realistic pathway for job creation and regional development.

Engine industries 

Some NSW Government programs use the REDS to determine the targeted industries that are most likely to support economic growth in a region.

Engine industries vary by region, normally have a competitive advantage and tend to trade their goods outside the local area or sell their services to non-locals.

Retail and restaurants are ineligible. Examples of engine industries include:

  • Agriculture
  • Forestry
  • Manufacturing
  • Mining
  • Tourism
  • Aged Care Services [1]

In rare cases, population-serving industries that are typically ineligible may extend service provision beyond the FER. For example, specialist health services provided to patients outside the FER. These industries may be deemed eligible where it can be demonstrated that such service ‘exports’ are material to the FER.

Other eligible industries are those that provide key inputs or services to an eligible industry identified in the REDS. For example, transport and logistics are eligible where it addresses transport barriers faced by eligible industries such as agriculture and manufacturing.

If you are considering applying to a NSW Government fund you are encouraged to get in touch with the concierge, or relevant NSW Government program administrator, to discuss your eligibility.

Example of eligible industries identified in REDS

Examples of eligible industries 

Example functional economic region
Agriculture South Western Slopes
Tourism Far South Coast
Transport Mid-Lachlan
Food Product Manufacturing Murray
Fishing Far South Coast
Health Insurance Lithgow
Forestry and Logging Abercrombie
Mining Western Plains
Timber Product Manufacturing Snowy Valleys
Motion Picture and Video Production Far West
Tertiary Education Southern New England High Country
Public Order and Safety Services Southern Tablelands
Beverage Product Manufacturing Mid-Western
Aged Care Wingecarribee
Hydro-Electricity Generation Snowy Valleys


Map of Regional Economic Development Strategy (REDS) areas

Download the strategies

Central Coast and Lake Macquarie
Central Orana
Clarence Valley
Coffs Coast
Cowra Shire
Eastern Riverina
Far South Coast
Far West
Hastings Macleay
Lower North West
Northern New England High Country
Northern Rivers
Orange, Blayney and Cabonne
Snowy Monaro
Snowy Valleys
South West Slopes
Southern New England High Country
Southern Tablelands
Tweed Shire
Upper North West
Western Murray
Western Plains
Western Riverina

REDS bushfire addenda

Following the unprecedented 2019-20 bushfires, the Department of Regional NSW undertook a review of the REDS for 22 FERs that were most affected by the bushfires to identify economic impacts, how strategic priorities in each REDS have been affected and key levers and focus areas for economic recovery. The Bushfire Addenda accompany the REDS for those 22 bushfire affected FERs. 

Learn more about the REDS bushfire addenda

Frequently asked questions

How are the REDS used?

The REDS identify regional specialisations and engine industries and are the primary evidence base to identify and prioritise NSW Government investment and policy decisions to support regional economic development.

What is a Functional Economic Region (FER) and how does it relate to the REDS?

Local government boundaries do not always reflect the boundaries of regional economies and economic interaction. REDS are based on FER boundaries, which mostly include multiple LGAs, to better target investments aimed at growing or establishing regional competitive advantage. The size and nature of the FER will differ across the state and will be informed by economic data from the Australian Bureau of Statistics.

How do the REDS benefit councils?

The REDS provide a clearly articulated economic development strategy for the region which can be used to inform and guide the economic development activity of councils and business. The strategies may also be used to support grant applications to the NSW and Commonwealth Governments.

How will the Bushfire Addenda be used?

The REDS Bushfire Addenda were developed following the 2019-20 bushfire season. The REDS Bushfire Addenda have been prepared for the 22 most impacted FERs. They identify economic impacts of the bushfires on the region including impacts to engine industries and focus areas and priorities for economic recovery. The original REDS and the REDS Bushfire Addenda will help guide place-based bushfire recovery in NSW.


Email the REDS Project Mailbox with your enquiry.


  • [1] Identified as eligible where the service offering materially attracts new residents, indicated by a significant net inflow of retirees.
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