Australians who rushed to the regions during the COVID-19 pandemic may be temporarily stuck there amid the housing squeeze, and will need meaningful work and dynamic communities to stay.
Michael Malakellis, a senior economist and principal director at KPMG, said the tight rental market was likely stopping Australians from moving between the cities and regions like they did before the pandemic.
"People are locked in, if you can't rent a place you're not going to move," Dr Malakellis told the Regional Australia Institute's national summit in Canberra on Wednesday.
Working remotely was also losing its appeal, with more employees likely to choose a combination of working from home and in the office, he said.
"One of the reasons is: we recognise what you learn by being amongst people cannot be replicated."
The institute is holding a two-day summit, calling on the country's leaders to ensure all government policy decisions have a regional lens.
Its regionalisation ambitions for the next decade include a target to reduce job recruitment difficulty below 40 per cent.
But according to the regional think tank's progress report on its targets, the rate increased from 64 per cent to 69 per cent between 2022 and 2023.
Dr Malakellis said skills gaps were often the result of a failure to offer workers meaningful and well-paid jobs.
"(We need to be) thinking carefully about why we want to have more jobs or more people.
"If (we) have more people, (we) need to make sure they have meaningful jobs and are living in communities that are safe and making them happy."
Infrastructure planning was a vital part of sustainably growing regional Australia, he said.
Earlier, Regional Development Minister Catherine King said the government was committed to the $120 billion Infrastructure Investment Program, made up of more than 700 projects.
But a long-awaited review of the program would show $33 billion cost pressures, or a blow out of 41 per cent under the coalition government.
"The review has found that many of the projects committed by the previous government did not have merit to meet strategic national investment priorities," Ms King said, adding the review would be published at a later date.
When the government first flagged the cost blow outs in May, Nationals leader David Littleproud said the review would leave regional parts of the country at risk.
"You've got to ask the question about the sincerity of Catherine King in this government. This is about setting up a budget that regional Australia pay," he told Sky News.
"If the road and rail infrastructure isn't right and to get product from a paddock to your plate, or onto a ship, then the bills aren't paid and your cost of living goes up."