NSW Country Economic Performance

1
NSW Country Economic Performance

• Tom Murphy
• by
• Western Research Institute
• Charles Sturt University
• Tuesday, 1st May, 2007

2
Outline

• Demographics
• Household Income Expenditure
• Industry Structure
• Significant Industries
• Infrastructure
• Innovation
• Conflicting Land Use
• Conclusion

3
Population Change 2000-2005
Richmond-Tweed 1.1
Northern -
Mid-North Coast 1.3
North Western -0.1
Far West -0.9
Hunter 1.0
Central West 0.5
Murray 0.6
Murrumbidgee 0.3
Illawarra 1.0
South Eastern 1.4

• NSW Average 0.9

Source Demographics Summary, NSW, ABS (cat. no.
3311.1.55.00), 2004
4
Population Growth 1999-2004
by Selected Regional Centres
Source Regional Statistics NSW, 2003-2004, ABS
5
Average Income
Richmond-Tweed 34,525
Northern 35,488
North Western 36,536
Far West 37,992
Mid-North Coast 34,687
Hunter 41,879
Central West 38,069
Murray 36,563
Murrumbidgee 36,432
Illawarra 41,817
South Eastern 39,655

• Country NSW 37,388
• NSW 41,099

Source Mean Taxable Income, ATO,2003-2004
6
Household Expenditure
Source Household Expenditure throughout
Australia, ABS,2003-2004 (Cat. no. 1380.0.55.003)
7
The Regions
8
Industry Structure
9
Most Significant Industries

• Agriculture
• Mining
• Education
• Tourism
• Retail
• Construction
• Transport
• Manufacturing
• Business Services

10
Regional Business Survey

• Conducted throughout regional NSW each quarter
  since 1999
• Surveyed respondents of businesses across eight
  statistical divisions and seven industry sectors
• Provides an indication of regional business
  sentiment.

11
Sales Performance
Net Balance is equal to the number of positive
responses less the number of negative responses
divided by total responses, with the result
expressed as a score between -10 and 10. A
positive score indicates an improvement and a
negative score a deterioration.
12
Reasons for Sales Performance
13
Business Performance by Sector
14
Westpac/CSU Agribusiness Index

• 48 statistical divisions across Australia
• Conducted in early January
• Weighted according to industry distribution and
  business population by statistical division
• December Quarter and March expectation

15
Economic Performance Index (EPI)

• Average results for business performance,
  employment and investment (capital expenditure
• Drought major negative

16
EPI across NSW

• Overall, negative EPI
• Positive EPI in Richmond Tweed, Hunter and
  Murrumbidgee regions
• Producers experienced negative business
  performance
• Upstream and downstream businesses reported
  positive business performance
• Expect to move to satisfactory in March Quarter

17
Drought across NSW

• 46 producers believed that current drought
  conditions were the same or worse as that in 2002.

Source Westpac/CSU Agribusiness Index
18
Drought
The impact of the current drought on Bourke
Economy and Community

• assess the extent of the economic reversal in
  Bourke as a consequence of the drought
• highlight the resulting social impacts

19
Bourke Gateway to the Real Outback

• An outstanding performer in the Barwon Darling
  Region prior to the current drought
• A showcase of how a community could thrive
  despite economic and social disadvantages

20
Main Findings (1)

• The current drought, one of the worst on record
  has severely impacted on
• Bourkes agricultural industries of cotton,
  horticulture and grazing, and
• All other businesses by
• an increase in tourism expenditure
• major construction works
• an increase in government services

21
Main Findings (2)

• Bourke economy contracted on average by an
  estimated 21 or 23 million in Gross Regional
  Product
• Around 200 jobs lost between 2001-2006
• Weakened business viability due to retention of
  staff

22
Main Findings (3)

• Impacts on the Bourke community
• higher crime figures
• increased family separation
• increased mental health issues
• reduced sponsorship of education and sport
• losing capacity to recover

23
Education Contribution to Local Economic
Development

• Charles Sturt University
• 223 million in GRP
• 3,100 full-time equivalent jobs
• TAFE NSW Western Institute
• 97 million in GRP
• Over 2,000 full-time equivalent jobs

24
The Economic Impact of CSU

• 60 of graduates were initially employed in a
  regional location
• 73 of graduates with a regional home location
  took up initial employment in a regional location
• 20 of graduates with a metropolitan home
  location took up initial employment in a regional
  location

25
TAFE Economic Contribution

• If Certificate 3 increases by 1 of workforce
  (i.e. 1,241) then average taxable income rises
  by 1,434
• Therefore for each Certificate 3 completion
  average taxable income rises by 1.15

26
Infrastructure

• 1970s to early 80s Government capital
  expenditure 7.2 of GDP
• 2003-04 3.6 of GDP
• Roads 22 in 1960s now 10
• 1 increase in infrastructure spending increases
  output by 0.17 and 0.39

27
Infrastructure Superannuation Funds

• 1988 95bn or 21 of GDP
• 2004 628bn or 80 of GDP
• 9bn infrastructure projects on stock exchange
• Public Private Partnership

28
Alexander Graham Bell

• Communications Transport

• 1847-1922

The first words spoken into a telephone
were Watson, come here, I want you. Result
Created and saved a trip.
29
Innovation Thompson Coupling

• Invented by Glenn Thompson
• Based in Orange, NSW
• Over 1500 registered shareholders
• Among the most important inventions
• Worlds first and only practical constant
  velocity joint

30
Conflicting Land Use

• 1995 Dwyer Leslie Pty Ltd and Powell
  completed a longitudinal study of the Oberon
  forestry industry
• Focused on plantation and timber processing
  sectors
• Also looked at the impact of the forestry
  industry on agriculture

31
Conflicting Land Use

• Powell study concluded
• Forestry industry significant to Oberon community
  127m output and 389 FTE jobs.
• Household income 15 million.
• There is scope for some conflict between
  community, forestry and agriculture.
• Multipliers 1.38, 1.24, 2.19

32
The Oberon Forestry Industry

• Forestry Industry contributes 137m GRP and
  almost 820 FTE jobs to Oberon Shire.
• Contributes 226m GRP and almost 2,000 FTE jobs
  to Central Tablelands economy, of which over 70
  originates in Oberon Shire.
• Multipliers 1.20, 1.24, 1.46

33
Oberon Sub-Division

• Rural subdivision contributes around 2.7m GRP
  and 40 FTE jobs to the Oberon economy.
• 2m GRP development (one-off)
• 0.7m GRP ongoing
• Agriculture industry contributes 14m GRP and 313
  FTE jobs.

34
Conclusion

• Skilled Stable workforce
• Diversified Economy
• Lifestyle un-congested, culture, education and
  health
• Enormous contribution to the States economy

35

• Country NSW a place of Vibrancy, Lifestyle and
  Opportunity