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Draft Evidence Base – Great South Coast Regional Strategic Plan April 28th 2010

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Part D Supporting Draft Evidence Base

Table of Content

o GSC Economic Analysis o Regional Focus One: Agriculture

o Regional Focus Two: Water Security

o Regional Focus Three: New Energy and Transition to a Low Carbon

Economy

o Regional Focus Four: Connectivity and Essential Infrastructure

o Regional Focus Five: Natural Resources

o Regional Focus Six: Skills Jobs and Education

o Regional Focus Seven: Health and Wellbeing

o Regional Focus Eight: Community Capacity Building

o Regional Focus Nine: Population, Settlements and Land Use Planning GSC Economic Analysis .

The future development of the region will be better informed by the development of a

comprehensive economic evidence base. For example, there is a need to analysis: the cumulative

economic impact of multiple new energy installations, implementation of the Carbon Pollution

Reduction Scheme, opportunistic climate change initiatives and new business investment resulting

from the implementation of the Green Triangle Freight Action Plan. This approach will be

consistent with Infrastructure Australia’s decision making framework which requires a full appraisal

of economic, social and environmental externalities. However at this time, there are several

sources of economic analysis as presented below..

The economy of the Great South Coast region is dominated by agriculture in particular dairy.

Agriculture (including forestry and fishing) accounts for 18% of the regions employment (in

comparison to the agricultural employment state average of 3%). The retail trade, health and

community services and manufacturing are also key employment sectors employing 15%, 12%

and 11% respectively all of which align more closely with state averages.

Agriculture’s total output (total sales or income) is nearly $2 billion, which is second to

manufacturing at nearly $4 billion. It is important to note that 25% of the manufacturing sector’s

output is derived from dairy products. The construction and retail sectors also figure prominently in

total output figures ($1.1 and $.09 billion respectively). Agriculture (particularly dairy) and

manufacturing account for approximately a third of all value adding occurring in the region.


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However agriculture and manufacturing in particular are heavily reliant on the purchase of goods

and services from outside of the region. There is an opportunity for domestic import replacements

(goods and services) across a range of sectors including dairy, sheep, beef, manufacturing and

retail.

The regional economy is highly export orientated with a large proportion of agricultural product sold

to overseas markets. (92% wool, 82% wheat, 77% skim milk powder, 45% beef, and 35% lamb).

The Port of Portland is the region’s gateway to global markets and handles approximately four

million tonnes of cargo each year including grain, livestock, woodchips, logs, aluminium ingots and

mineral sands. The region’s export strengths also exposes the economy to offshore influences

such as fluctuations in international terms of trade, and trading partner competition.

Small business has also been identified as a significant yet under rated component of the regional

economy. Small business plays an important role in maintaining diversity in the economy and

provides an important buffer to negative offshore impacts to the agricultural sector in particular.

Tourism is currently not a significant contributor to the regional economy, being ranked at 7th, 9th

and 12th in relation to regional employment, output and value-adding respectively, however it is an

important component of a number of local economies. Tourism like residential building and

wholesale trade, has significant potential to improve its contribution to the regional economy over

time.

There are a number of ways to build diversity and subsequently resilience into the regional

economy. The trend to agricultural specialisation in some parts of the region constrains

employment growth and exposes the industry sector to sudden downturns. Diversifying farming

functions and income streams will reduce risks associated with offshore influences. Participation in

carbon and eco markets provides the agricultural sector with new income streams. Growing for

niche and local markets is also another means of building resilience into the sector.

The high reliance of the agricultural, and manufacturing sectors on domestic imports provides the

region with an opportunity to develop the local supply of these goods and services. The

development of local supply capacity will increase value-adding, further develop supply chains, and

increase the region’s productivity. There is potential for small business to fill a number of “gaps” in

the local supply chains.

Important future drivers of the region’s economy are changing dietary preferences of increasingly

wealthier Chinese and Indian markets, international trade regimes, regional demographic trends (ie

the ageing of the population and sea change pressures) and the imperative to transition to a low

carbon economy. New energy developments will bring new skill sets into the region and create a

market for a range of support service industries. Intensification of agricultural production will also

drive skills development in water technology, agronomy and transport/ logistics. The ageing of the

population will place significant pressures on the regions work pool and productivity and see the

health and community services sector become a much larger employer in the region in the future.

Transitioning to a low carbon economy will place unprecedented demands on the training and

education sector which like health, is also expected to grow in its employment share.


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Acknowledgement for Economic Analysis preparation: Andrew Paton, Warrnambool City Council 1.2 Access Economics –Regional Economic Outlook for the Great South Coast


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1.3 GSC Economic Snap Shot 2008-SED Consulting


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1.4 Health and Community Sector contribution to the GSC Economic Profile The analysis set out below, verifies our understanding of the health and community service sector's place in the economic profile of the Great South Coast (GSC) region. Note: the analysis does limit the community services sector and excludes for example disability services and public housing program. With the extent of ageing of the GSC population, population growth, high levels of disadvantage in some larger communities and with chronic disease rates on the rise it should be assumed that the Health and Community Sector will continue to grow in size over the next decade.

ECONOMIC PROFILE:GREAT SOUTH COAST

HEALTH AND COMMUNITY SERVICES

6,100 health and community services employees whose place of work is located within the Great South Coast region.

Health and community services contribute 12% to total employment


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6,100 health and community services employees whose place of work is located within the Great South Coast region is split into :

• 75% Health services

• 25% Community services

Health and community services contribute 12% to total employmentin Great South Coast. The figure in this sector for the state of Victoria is 11%.


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Health and community services sector contribute $411 million (14 %) of total wages and salaries for Great South Coast region

Great South Coast Gross Regional Product (GRP) is estimated to be $6.2 billion

Health and Community Services sector contribute $504 million (9%) to value added / GRP of Great South Coast


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$504million in valued added contributed by the health and community services sector is split into :

• 88% Health services

• 12% Community services

Acknowledgement: John Hedditch, Department of Health, Barwon South Western Region Geelong and Andrew Paton Warrnambool City Council.

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