1 ECONOMIC PROSPECTS IN A CHANGED GLOBAL ECONOMY

Ref: J2478 | August 2011 PRESENTATION TO WS (Bill) Cummings MINING, AGRICULTURE, TOURISM, TRANSPORT, CONSTRUCTION, MANUFACTURING, DEFENCE, EDUCATION, ADMINISTRATION, SERVICES

3 WHERE DO WE GO FROM HERE? MINING, AGRICULTURE, TOURISM, TRANSPORT, CONSTRUCTION, MANUFACTURING, DEFENCE, EDUCATION, ADMINISTRATION, SERVICES WHAT WENT WRONG?

4 WORKFORCE - FNQ STATISTICAL DIVISION (1) 2008 TO 2011 Average Employed (000) Average Unemployed (000) Total Workforce (000) Average Unemployment Rate % st half % 2 nd half % st half % 2 nd half % st half % 2 nd half % st Qtr % 2 nd Qtr % (1) Note: Cairns city and its servicing region. Source: Cummings Economics from ABS data.

DWELLING APPROVALS FAR NORTH QUEENSLAND STATISTICAL DIVISION Source: Cummings Economics from ABS data. Number 5

VALUE OF BUILDING APPROVALS FAR NORTH QUEENSLAND STATISTICAL DIVISION Source: Cummings Economics from ABS data. $M 6

7 RESIDENTIAL POPULATION GROWTH - CAIRNS

8 AVERAGE ANNUAL UNEMPLOYMENT RATE FNQ STATISTICAL DIVISION 1989 TO 2010 Source: Cummings Economics from ABS labour force data.

9 AVERAGE ANNUAL EMPLOYED FNQ STATISTICAL DIVISION 1989 TO 2010 Source: Cummings Economics from ABS labour force data.

10 POPULATIONAV UNEMPLOYMENT RATE YEARGROWTH1st HALF2nd HALF 2007/08 4.4%-5.6% 2008/09 3.2%5.5%10.2% 2009/10 2.6%11.0% 2009/11 Est. 1%8.7%10.0% TWO YEAR LAG Source: Cummings Economics from ABS population & labour force data.

DWELLING APPROVALS Far North Queensland Statistical Division Source: Cummings Economics from ABS data. Number 11

12 WORKFORCE CHANGES CAIRNS SSD-URP Growth Growth Agriculture, forestry & fishing-15.38%-27.04% Mining-23.96%74.35% Manufacturing5.16%0.02% Electricity, gas, water & waste services53.28%21.68% Construction-14.66%71.93% Construction affected Wholesale trade-6.14%-8.48% Retail trade15.23%10.94% Accommodation & food services1.83%-2.44% Transport, postal & warehousing3.34%15.32% Information media & telecommunications-12.11%-3.94% Financial & insurance services-13.77%12.50% Construction affected Rental, hiring & real estate services-6.58%26.06% Construction affected Professional, scientific & technical services0.56%21.68% Administrative & support services4.06%3.65% Public administration & safety9.21%38.48% Education & training19.52%11.93% Health care & social assistance15.14%26.57% Arts & recreation services-6.14%2.40% Other services-12.81%12.45% Total1.21%16.35% Source: Cummings Economics from ABS Census data.

13 ESTIMATED INCOME OF BASE INDUSTRIES EARNING INCOME FROM OUTSIDE THE REGION (1) Estimated 2008/09 Income Tourism$2.5 bn Primary industries$1.7 bn Mining$0.6 bn Other (manufacturing, service industries, regional trade, etc) $1.0 bn Total$5.8 bn (1) Note: ie. approximate regional exports overseas and to the rest of Australia. Source: Cummings Economics from various sources.

YEAR-ON-YEAR GROWTH IN PASSENGER NUMBERS CAIRNS AIRPORT Source: Cummings Economics from ABS data. % 14 PILOTS DISPUTE ASIAN CRISIS ANSETT COLLAPSE

15 ESTIMATED TOURISM EXPENDITURE FNQ DOMESTIC $MINTERNATIONAL $MTOTAL $M 2003/04 $1,424$1,020$2, /05 $1,319$1,106$2, /06 $1,468$1,110$2, /07 $1,545$1,041$2, /08 $1,546$1,030$2, (YE DEC) $1,741$813$2, (YE DEC) $1,440$795$2,235 Source: Cummings Economics from Tourism Research Australia, NVS & IVS data.

GROSS VALUE AGRICULTURAL PRODUCTION (LONG TERM GROWTH 1982/83 TO 2009/10) Source: Cummings Economics from ABS data.

VALUE OF MINING FAR NORTH QUEENSLAND Source: Cummings Economics from Queensland Mines & Energy data (DEEDI). $M 17 SALE VALUESPRODUCTION VALUES

18 WORKFORCE CHANGES CAIRNS Growth Growth Agriculture, forestry & fishing-15.38%-27.04% A AGRICULTURE Mining-23.96%74.35% M MINING Manufacturing5.16%0.02% Electricity, gas, water & waste services53.28%21.68% Construction-14.66%71.93% Wholesale trade-6.14%-8.48% Retail trade15.23%10.94% Accommodation & food services1.83%-2.44% T TOURISM RELATED Transport, postal & warehousing3.34%15.32% Information media & telecommunications-12.11%-3.94% Financial & insurance services-13.77%12.50% Rental, hiring & real estate services-6.58%26.06% Professional, scientific & technical services0.56%21.68% Administrative & support services4.06%3.65% Public administration & safety9.21%38.48% G Education & training19.52%11.93% G GOVERNMENT SERVICES Health care & social assistance15.14%26.57% G Arts & recreation services-6.14%2.40% T TOURISM RELATED Other services-12.81%12.45% Total1.21%16.35% Source: Cummings Economics from ABS Census data.

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22 CONSISTENTLY HIGH UNEMPLOYMENT RATE LOW POPULATION GROWTH LOW PRIVATE CONSTRUCTION LOW CONSUMER SPENDING PROPERTY PRICES DOWN SHARE MARKETS DOWN INTERNATIONAL UNCERTAINTY GROSS REGIONAL PRODUCT $12BN 1% GROWTH NEEDS $120M CURRENT SITUATION

23 MINERALS / ENERGY BASIC AGRICULTURAL COMMODITIES REGIONS POTENTIAL? WORLD ECONOMY CHANGED HIGH DOLLAR SUPPRESSING TOURISM MASSIVE DEMAND CHINA & INDIA

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25 MINERAL SALES 2009/10$900m FIFO Est.$150m NEAR NORTH TRADE Est.$600m MINING

26 REAL LONG TERM GROWTH 2-3% PA TOTAL INCLUDING POST FARM GATE $1.7BN HINTERLAND POPULATION 2010 AGRICULTURE CAIRNS129,000 TOWNSVILLE104,000 Incl. Bowen DARWIN102,000 MACKAY76,000 Excl. Bowen

27 AGRICULTURAL POTENTIAL Source: NTGC University of Montana from Modis Satellite Data. MEASURES OF NET PRIMARY PRODUCTIVITY

28 Source: NTGC University of Montana from Modis Satellite Data. AGRICULTURAL POTENTIAL MEASURES OF NET PRIMARY PRODUCTIVITY

29 Source: NTGC University of Montana from Modis Satellite Data. VALUE OF AGRICULTURAL PRODUCTION (FARM GATE) FAR NORTH$1.2bn VICTORIA$10.3bn SE & SW QLD$4.4bn

30 ROAD RAIL SEAPORTS POWER GRID WATER STORAGE / IRRIGATION INFRASTRUCTURE UPGRADING

31 TURNAROUND FORCES NATIONAL SETTINGS AUD / INTEREST RATES CONSTRUCTION CYCLONE YASI EFFECTS COUNCIL / GOVERNMENT MEASURES TOURISM DIRECT CHINESE FLIGHTS CONFERENCE, SPORT, EDUCATION PNG FLY-IN SERVICES SHIPPING SERVICES MINING FLY-IN CENTRAL QLD / OTHER HINTERLAND MINING COPPERSTRIKE, KAGARA, CONSOLIDATED TIN WEIPA EXPANSION GOVERNMENT CATCHUP UNIVERSITY HOSPITAL (TERTIARY) OTHER MARITIME NAVY, CARGO SUPERYACHT AGRICULTURE SUGAR EXPANSION & NEW PRODUCTS BIOFUELS / OTHER

32 RECOGNITION THAT THE WORLD ECONOMY HAS CHANGED CAIRNS CAN RETURN TO STRONG GROWTH AND PROSPERITY BUT SOME CHANGES IN ATTITUDE NEEDED

Ref: J2478 | August 2011 PRESENTATION TO WS (Bill) Cummings WS (Bill) Cummings MINING, AGRICULTURE, TOURISM, TRANSPORT, CONSTRUCTION, MANUFACTURING, DEFENCE, EDUCATION, ADMINISTRATION, SERVICES ECONOMIC PROSPECTS IN A CHANGED GLOBAL ECONOMY