1. Wide Bay Burnett – State of the Region Presentation for Regional Development Australia – Wide Bay Burnett Inc Presented by Dr Peter Brain National Institute of Economic and Industry Research 416 Queens Parade, Clifton Hill, Victoria, 3068 Phone: (03) 9488 8444; Fax: (03) 9482 3262; Email: admin@nieir.com.au 10 April 2014

3. The vicious cycle of low growth and ageing

4. The WBBR region: Key features of the 2006 NIEIR report On a current trends basis it is one of Australia’s most rapidly ageing regions: average age increasing by 0.3 years per annum; the share of population aged 65 will increase from 17% in 2006 to 27% by 2020; two-thirds of the population change will be people aged 65 and over. Population growth rates fall from 2.5% in 2006 to less than 1% per annum by 2020. Per capita GDP growth rate: 2006 to 2030: existing trends1% per annum aggressive restructure2% per annum

5. Population indicators

6. 2014: Is WBBR on track with expectations? Demographics Share of population aged 65+ - mid 201422.4 Expected mid 2014 – 2006 report22.7 Rate of 65+ population change to total population change – trend 200630% 200840% 201072% 201295% Expected share 2006 report65% Population growth – trend Early 1990s3.0 20021.5 20062.6 20082.3 20101.3 20121.2 20141.1

7. Region gross product indicator

8. Conclusion: Public sector dependency high.

9. Central themes of the 2006 report (i)Export growth was the key for enhanced productivity growth and overall growth. (ii)The scenarios would be almost totally defined by the per capita growth of exports. Per capita GDP growth Outcomes2006 to 2036 Low scenarios0.8 – 1.2 High scenarios1.7 – 2.5 Per capitaPer capita OutcomesGDP growthexport growth Low scenarios0.8 – 1.20.7 – 1.5 High scenarios1.7 – 2.52.0 – 3.2

10. Exports growth is a driver of both overall growth and productivity growth The reasons are: (i)more than 50% of total gross product; (ii)allows workers to apply skills productivity and efficiency that are not available from domestic demand opportunities; and (iii)allows the generation of economies of scale and scope.

11. SEQ SA2 regions: Gross product growth versus export share growth - 2001 to 2011

12. SEQ SA2 regions: Scale versus export share 2011 – The bigger the scale the higher the productivity

13. Export indicators

14. The adverse trend in unemployment rates is to be expected given the poor economic growth Average annual growth 2006 to 2013 total hours of work Gympie0.4 North Burnett-0.3 South Burnett-0.1 Fraser Coast0.5 Bundaberg0.7 WBBR0.5 Brisbane2.0

15. Unemployment rates are high in WBBR: One of the highest in Australia 20082013 Headline unemployment rates (%)5.68.0 NIEIR unemployment rate (%)11.816.4 Working age social security take-up rate (%)19.223.4

16. Productivity indicators

17. QLD Wide Bay Burnett - Housing

18. For WBBR to attract younger migration: 1.local productivity must be increases; 2.to produce high enough $/hour full time employment, to provide; 3.the income necessary to support the mortgage burden on new dwelling construction. Otherwise: 4.the only migration which can afford new construction will be the older age migrants with capital gain wealth from elsewhere.

19. Examples of necessary export initiatives to lift WBBR economic performance 1.Significantly weaker multiplier than having an actual mine in the region but significantly better than nothing. 2.Make available high income employment. 3.Attract younger age migrants with sufficient income to construct a dwelling. 4.Attract additional population. 5.Generate additional expenditures in transport services and government services.

20. For each additional 100 fly-in/fly-out workers 1.Population increase of between 200 and 300 persons. 2.Total industry employment will increase by 60 from income-expenditure flow-on effects of the fly-in/fly- out workers and the increase in demand for government services and transport services. 3.Total resident increase in employment by 160 persons. 4.Total longer term increase in gross product of $7 million annually. 5.In the short-term, $14 million increase in gross product from construction impacts increasing industry employment and resident employment by a further 75.

21. Fly-in/Fly-out: Conclusion For every 400 additional fly-in/fly-out workers total resident hours of work will: increase by just under 1% in the short-term, allowing for construction effects; and increase by 0.6% to 0.7% over the longer term. Conclusion: It would go a long way towards restoring satisfactory economic performance outcomes.