Transcript BACKGROUND CAIRNS ECONOMY

THE CAIRNS
ECONOMY
Realities, Successes,
Failures, Lessons
Where to from here?
Ref: J2130
July 2008
A TIME OF CHANGE










2
Climate change doubts
Green house gas responses
New oil shock
Loss of air services to Japan
New governments
Council amalgamation
New political parties
Sale of airport
Credit squeeze
Inflationary pressures
MOST REGIONAL ECONOMIES
Industries earning outside income
based on natural resource
advantages

SERVICE INDUSTRY STRUCTURE
3
SERVICE INDUSTRY
OUTSIDE EARNINGS
 Trade area expansion, especially
higher order services.
 Specialist skills, “Clusters”.
4
1960’s / 1970’s
 Trade area expansion
= blocked - south weak to north.
 Special skill clusters
= weak – not enough.
 Base industry
expansion/diversification
= pursued.
5
CAIRNS’ FOREMOST
ECONOMIC ROLE
Servicing City/Capital
 (A transport, distribution,
manufacturing, retail,
administrative, services hub
for Far North Queensland)
6
CAPITAL OF A LARGE PREVIOUSLY
UNDERDEVELOPED
RESOURCE RICH FRONTIER REGION
7
The Tropical North Queensland region serviced by the city of
Cairns is 1½ times the size of Victoria. It is as deep from
north to south as the State of New South Wales, in area as
large as the British Isles, and about the size of California.
 TROPICAL  Initial challenges to technology
from north west Europe.
 Late settled.
 Initially slow to develop.
 Now catching up.
8
NOT POOR IN
UNDERLYING RESOURCES
 Plant Growth Potential.
 Marine Resources.
 Minerals.
 Natural Tourism Resources.
9
THE REGION ACCOUNTS FOR 26% OF
AUSTRALIA’S WATER RUNOFF
10
NOT POOR IN
UNDERLYING
RESOURCES
 Plant Growth
Potential.
11
MINING
 Traditionally smaller but on the
way up.
 Mining company jobs risen
recently from about 800 to about
1,600.
 Extra 1,600 on way over 5-year
time frame.
 Air links to 17 mining operations
– 2,100 ‘fly-in’ workers – more on
the way.
12
Mining Related
Air Services
Queensland Areas
13
Mining Related & Other Relevant Air Services,
Interstate & Overseas
14
NOT POOR IN MARINE RESOURCES
No.
3000
EMPLOYMENT IN MARINE INDUSTRIES
BY STATISTICAL DIVISIONS, 2006.
2,550
2000
1,090
730
1000
0
Cairns/Far North
Tow nsville/North
Mackay/Mackay
S o urc e : A B S C e ns us da t a plus e s t im a t e d de f e nc e e le m e nt .
C UM M IN G S E C O N O M IC S .
15
TOURISM RESOURCES
Tourism Growth Phases
CAIRNS AIRPORT PASSENGER MOVEMENTS
(Excluding international transits)
No.
%
1997/98
2,725,000
0.4%
1998/99
2,770,000
1.7%
1999/00
2,882,000
4.0%
2000/01
2,972,000
3.1%
2001/02
2,878,000
(-3.2%)
2002/03
3,083,000
7.1%
2003/04
3,402,000
10.3%
2004/05
3,689,000
8.4%
2005/06
3,832,000
3.4%
2006/07
3,889,000
1.4%
2007/08
3,936,000
1.2%
Source : Cummings Economics from Cairns Ports data.
16
Asian crisis
+6%
Ansett collapse
+ 32%
High dollar
UNDERLYING FACTORS TO
REALISATION OF REGION’S POTENTIAL
 Growing Global Markets.
 Transport Developments.
 Development of Technology
Suited to the Area.
 Success Breeds Success.
17
GROWING
GLOBAL MARKETS
18
TRANSPORT IMPROVEMENTS
 Bulk carriers.
 Improved roads and freight
efficient road vehicles.
 Wide bodied jets.
19
 Impacts of skyrocketing fuel
costs.
 Greenhouse gas measures.
20
New Generation of Aircraft in 2009
Boeing Dreamliners
Airbus A380
21
TECHNOLOGY SUITED TO THE AREA
 Health.
 Plant and animal breeds.
 Agricultural mechanisation.
 Reef and rainforest viewing.
 Everyday living.
22
SUCCESS BREEDS SUCCESS
 Build up industry, population, infrastructure.

 More sophisticated business services,
education, health, sporting and cultural
facilities.

 More civilised/comfortable place to live.

 Fall in real costs of living and doing business.
23
POWERFUL ADVANTAGES
DEVELOPING
AS A SERVICE CENTRE
NORTHERN AUSTRALIA AND
NEARBY ASIA PACIFIC
24
TROPICAL AUSTRALIA - Business Numbers in
FINANCE, INSURANCE, PROPERTY & BUSINESS Services, June 2007
5,535
No.
6,000
5,000
3,804
4,000
3,759
3,312
3,453
3,000
2,000
1,000
501
510
417
25
Q
Tv
l /N
Q
Ca
i rn
s/
FN
in/
NT
M
ac
/M
ac
ka
y
Rc
tn
/F
i tz
ro
Nt
y
h
W
es
t/C
tl
W
es
t
Cummings
Economics
Da
rw
Ki
m
be
rle
y
Stat
Division
Pi
lba
ra
0
Source: ABS Data.
TROPICAL AUSTRALIA
MANUFACTURING BUSINESSES, June 2007
No.
1,200
996
1,000
729
800
582
660
636
600
400
200
111
135
117
26
Q
Tv
l /N
Q
Ca
i rn
s/
FN
in/
NT
M
ac
/M
ac
ka
y
Rc
tn
/F
i tz
ro
Nt
y
h
W
es
t/C
tl
W
es
t
Cummings
Economics
Da
rw
Ki
m
be
rle
y
Stat
Division
Pi
lba
ra
0
Source: ABS Data.
Percent of Workforce in Education & Health Services
Major Queensland Regions, 2006 Census (UPR)
Statistical
Division
Education
& Training
Health Care
& Social
Assistance
Total
Total
Workforce
Size
Toowoomba/Darling Downs
8.9%
10.7%
19.6%
96,765
Townsville/North
8.1%
10.7%
18.8%
94,377
Rockhampton/Fitzroy
8.3%
8.6%
16.9%
87,632
Cairns/Far North
7.0%
9.3%
16.3%
107,468
Source : Cummings Economics from ABS Census data.
27
OTHER

Indigenous communities.
 Defence and surveillance.
 Trade PNG and Papua Indonesia.
28
NEW OPPORTUNITIES
 In service industry catch up.
 In natural resource endowed base
industries.
 In expanding trade area
opportunities.
 In specialist skill cluster activity.
29
www.cummings.net.au