It was a great privilege to speak at the Developing Northern Australia Conference in Alice Springs about the strength of the Mackay economy and some of the initiatives we've deployed to encourage local economic development.
3. 3
MACKAY: Who are we?
117,703
POPULATION $7.5 BILLION GROSS
REGIONAL PRODUCT
PRODUCED BY
MINING AND
MANUFACTURING
$65,581 REGIONAL
GRP PER CAPITA
$4.6 BILLION ECONOMIC
OUTPUT FROM MINING
AND MANUFACTUING
SECTORS
PROVIDE OVER 1/3
OF AUSTRALIA’S
SUGAR
WORKFORCE
47,975
4. THE RESOURCE BOOM: 2002 - 2013
4
Source: IBIS World
Business Environment
Profiles, August 2017
High-growth period
5. THE BOOM AND MACKAY: 2002 – 2013
5
11,678
NEW DWELLINGS
11,022
NEW RESIDENTIAL
LOTS (32% INCREASE)
163 HECTARES
OF INDUSTRIAL LAND
DEVELOPED
27,694 ADDITIONAL JOBS
SIGNIFICANT PUBLIC INFRASTRUCTURE
27,522 ADDITIONAL PEOPLE
(30% INCREASE)
15. FACILITATING DEVELOPMENT IN THE MACKAY REGION POLICY
15
Policy provides incentives for development that will deliver economic development and growth
outcomes.
Concessions include:
• Dedicated point of contact
• Infrastructure charge concessions
• DA fee refund
• Delayed payment of infrastructure charges
• Service connection fee refund
• Reduced food and trade waste licence fees
• Reduced car parking
• Extended construction hours
Approvals linked to construction timeframe of two years and require use of local workforce.
Approvals condition no additional infrastructure upgrades at cost to Council.
16. FACILITATING DEVELOPMENT IN THE MACKAY REGION POLICY
16
• Schedule 1 – Major development within Mackay City Centre
• Schedule 2 – Major industry development
• Schedule 3 – Aged care and retirement living inside the PIA
• Schedule 4 – Rural and nature based tourism
• Schedule 5 – Commercial and retail
• Schedule 6 – Community facilities
• Schedule 7 – Residential development
17. 17
RANGE OF APPROVALS
City Centre Industry Aged care Tourism Commercial
and retail
Community Residential
Multiple
dwelling
Low impact Not-for-profit Motorbike
camp
Gym Theatre Multiple
dwelling
Student
accomm
Transit centre For profit Caravan park Shopping
centre
Netball facility Subdivision
Locomotive
shed
Fruit and veg
outlet
Hotel Cancer clinic
Subdivison Petting zoo Car yard Art gallery
Child care
18. APPROVAL SUMMARY
18
Schedule No. of Approvals Concessions ($M) Outputs ($M) Construction Jobs
1. City Centre 2 1.49 94.56 227
2. Industry 9 1.43 394.91 433
3. Aged care 3 2.88 164.07 393
4. Rural based tourism 5 0.14 3.87 23
5. Commercial and retail 4 0.60 75.1 272
6. Community facilities 5 0.32 30.20 76
7. Residential development 4 0.12 7.33 30
TOTAL 32 $6.99 M $770.04 M 1,454
20. CONCESSIONS EXPECTED TO BE REALISED
20
Schedule
No. of
approvals
Concessions
approved ($M)
Expected to
proceed
Concessions
($M) Outputs ($M)
Construction
Jobs
1. City Centre 2 $1.49 0 0 0 Nil
2. Industry 9 $1.43 6 $0.38 $56.77 123
3. Aged care 3 $2.88 1 $1.17 $64.52 140
4. Rural based tourism 5 $0.14 4 $0.13 $3.23 22
5. Commercial and retail 4 $0.60 1 $0.07 $10.58 22
6. Community facilities 5 $0.32 5 $0.32 $30.20 75
7. Residential development 4 $0.12 4 $0.12 $7.33 30
TOTAL 32 $6.99 M 21 $2.19 M $169.36 M 401
21. 21
SUMMARY OF APPROVALS
• 32 approvals:
- 8 completed
- 5 under construction
- 8 further expected to commence construction soon
- 9 not expected to proceed before lapse date
- 2 lapsed
• All community facility approvals expected to commence
• Majority of rural and nature based tourism approvals expected to commence
• Largest concession - $1.56M (Aged care)
• Smallest concession - $4,000 (Low impact industry)
22. 22
KEY LEARNINGS
• Concessions don’t ensure project feasibility.
• Concessions remove one of the biggest financial hurdles for the establishment of
smaller business – great for tourism, small businesses and not-for-profit organisations.
• Concessions are not likely to be the deciding factor for medium to large business,
however they do assist as a selling point.
• Concessions should be reported and monitored to decision makers
• Concessions need to be flexible and cater for wide range of uses.
26. 26
Domestic Visitors:
Total Domestic Visitors 883,000
Trend Change 10.4% growth
International Visitors:
Total International Visitors 45,000
Annual Change 7.4% growth
The Mackay region welcomed 45,000 international and 883,000 domestic overnight visitors
in the year ending June 2017.
Source: Tourism & events Queensland
Domestic Tourism Snapshot
Strong tourism growth
I suspect you all know but if not Mackay is about half way between Townsville and Rockhampton, a 1 hour flight from Brisbane
Population 117,703
Workforce 47,975
$7.54 Billion Gross Regional Product
$65,581 Regional GRP Per Capita
$4.6 Billion Economic Output from mining and manufacturing sectors
1/3 Regions Economic Output is produced by mining and manufacturing
Mackay provides over 1/3 of Australia’s sugar
From 2003 to 2008, the price of coking coal tripled, due mainly to demand growth from China, and to a lesser extent India
Important to note that this is in US$ and for much of this period the Australian dollar was much higher than it is now.
Additionally the cost of production was up near $100 and its now closer to $40
What the boom meant for Mackay?
27,694 additional jobs
163 hectares of developed industrial land (321 hectares of zoned industrial land added in 2006)
27,522 additional people (30% increase)
11,678 new dwellings / 11,022 new residential lots (32% increase)
Significant public infrastructure:
Blue water lagoon, blue water trail, art gallery, entertainment centre etc
What does our region’s growth journey look like?
The impact on the settlement pattern was intense in doubling zoned industrial land in 2006, and expanding residential areas by more than 23%,
We approved and built 8,500 new residential lots in high growth period, that did not exist in 2002.
This slide shows the impact of growth on the Mackay urban area – where just under 70% of our region's population now resides.
This highlights the impact of the recent higher growth above 2% per year from 2003-2013
For example: the new industrial activity forced Council to more than ‘double’ the Paget industrial zone from 176 ha to 503 ha in 2006 (MCPS)
By 2015, 60% of this enlarged Paget 500 ha estate are now been used
Unemployed persons:
- 4,261 (Dec 2001)
3,352 (Mar 2017)
Unemployment was as little as 2.5% during the high growth period in 2008, however it peaked at over 10% in 2015.
Its now back at 3.9% with over 1300 job vacancies.
Estimated resident population.
Turning point in 2013/14 where we started to see a slight decline.
Population usually resident
2006: 103,567
2011: 115,960 (12,393 growth since 2006)
2016: 117,703 (1743 growth since 2011)
Population has continued to grow over the last 5 year period but at a much slower rate.
Peaks:
2009-10 Non-residential $621.2M
2012-13 Residential $571.4M
2015-16
Non-residential $47.6M
Residential $106.1M
At the peak of the boom we were building more houses than the Sunshine Coast despite being less tan 1/3rd of their size.
2017: back to 2006 levels
Still higher than pre-2002
Total passengers for 2017 calendar year = 763,000
Source: Federal Bureau of Infrastructure, Transport and Regional Economics (BITRE), Dept of Infrastructure and Regional Development
So when we fell off a cliff what did we do and how successful was it.
Council rolled out a stimulus package as part of the 2015/16 budget.
The package included:
Facilitating Development Policy
Events and Conference Attraction Program
Better Community Building Fund
Façade Improvement
103 Events and Conferences supported through the program since 2015 which has injected $52 million into the local economy
Key events secured by the program include:
DestinationQ Conference,
Indoor Netball Super Nationals
T20 Allstars Cricket Festival
The Footy Show,
Pre-season AFL and NRL
International Rugby Sevens
Maroons Origin Fan Day
Elton John and His Band – Once in a Lifetime
International Pro Darts
Women’s Big Bash
The Better Community Building Fund was first established by council in 2015-16 as an economic stimulus measure. It was for shovel-ready projects that would use local contractors and provided grants of between $75,000 and $250,000.
The success of the fund prompted council to provide another $2 million in the 2016-17 budget. We were able to leverage other private and government funding.
The Façade Improvement Scheme was first introduced in 2015/2016 in the Mackay City Centre but has since been extended to other commercial areas throughout the region.
The Scheme involves Council providing funding up to $3,000 to co-contribute to improvements to building facades in commercial locations with active frontages and pedestrian thoroughfares. The works must be undertaken by local contractors.
To date the scheme has provided 55 approvals, equating to $165,000 in rebates, which equates to $850,000 in spend with local contractors.
32 approvals
Brought forward projects like an ICON Cancer Centre. No longer travelling to Brisbane.
Broad range of approved uses across all schedules.
32 Approvals
$6.99 million in approved concessions to infrastructure charges
$770.04 million in economic output
1,454 construction jobs (ongoing jobs not modelled)
Schedule 2 – Industry has provided the most approvals followed by Schedule 6 – Community Facilities.
Not all approvals will be developed.
Approval of concessions does not guarantee that a project will commence.
21 of 32 approvals are expected to commence.
21 approvals expected to commence equate to - $2.52 M
9 approvals not expected to commence equate to - $4.71 M
The majority of the 11 approvals not expected to proceed were provided significant concessions:
4 provided concessions over $500,000
5 concessions above $200,000
2 concession under $200,00
It is unlikely that even the granting of 100% concessions on these infrastructure charges would allow the project to commence as charges are not the only factor relating to project feasibility.
If all projects were to proceed Council would not be at a loss as we have capacity in our infrastructure networks and would receive infrastructure charges which would otherwise not be received at all. Win-win for Council.
Residential vacancy rates have dropped since September 16.
Peaked at 9.8% in December 2014 and currently sit at 3% (Dec-17).
Job growth has been experienced in Mackay in 2016 and 2017. First positive growth since 2013.
Approximately 8,000 jobs from June 2014 to March 2016.
Approximately 6,000 jobs gained from March 2016 to Dec 2017.
Unemployment rate now 3.8%
The Mackay region welcomed 45,000 international and 883,000 domestic overnight visitors in the year ending June 2017.
Domestic Stats -, growth of 10.4%. with business up 13.0%, holiday up 10.5% and VFR travel up 2.6%.
Holidaymakers extended their stays in the region which contributed to overall growth in visitor nights up 12.4%
International Stats - 7.4% growth Visitation from Germany increased and is the region’s largest source market ahead of NZ. The average length of stay in the region shortened which resulted in a 13.3% decline in international visitor nights. It Was predominately VFR visitors who shortened their stay with holiday makers visitation and nights both growing.
State provide first $9m in funding in May 2018.
$250m in planned projects over next decacde.