Client: Townsville Enterprise Limited State: QLD AEC was engaged by Townsville Enterprise Limited to undertake an Economic Impact Assessment of air route services for North Queensland. The analysis included: A review of passenger movements and routes. Cost benchmarking to provide context for understanding the relative air connectivity of North Queensland. Primary research undertaken to understand the travel behavior of local residents and the importance of air connectivity to inbound tourism. Input-Output modelling to estimate the additional economic activity that would be supported in North Queensland through additional tourist visitation given improved air travel affordability The findings were used to support a submission to the Senate inquiry.

Client: North Queensland Bulk Ports Corporation State: QLD AEC were previously engaged by North Queensland Bulk Ports (NQBP) in 2015 to prepare an Industrial Lands Demand Study for the Port of Mackay. However, given the significantly changed market dynamic, NQBP engaged recently AEC to provide an updated report. Aspects of the demand study included: Regional economic profile and outlook. Analysis of Mackay’s current industrial land supply and projected future land demand. Consideration of major projects with the potential to impact industrial land demand. Engagement with estate agents and industry stakeholders to understand key trends in the market. Demand projections and future recommendations for action. The findings of the analysis will be used by NQBP to support future decision making regarding their industrial precinct.

Client: Moreton Bay Regional Council State: QLD AEC was engaged by Moreton Bay Regional Council for a preliminary investigation into the Australian Quarter Horse (AQH) Industry, in particular the events component. For this investigation, AEC undertook desktop research to inform an assessment of the estimated size and value of the AQH Industry, and collated current AQH events and relevant details. This led to the development of an industry and economic profile, including employment generated, visitation and induced visitor spend. Additionally, significant events in the industry were reviewed to ascertain event structure, participant (and attendee) numbers, event facilities and infrastructure overview. Collation of the full report detailed all elements identified throughout the project timeline. Outcomes of this investigation were used for the identification of potential joint events that could be held at the Caboolture Events Precinct.

Client: Livingstone Shire Council State: QLD AEC was engaged by Livingstone Shire Council for collaboration with the Economy and Places Team to deliver a suite of prospectus comprising two core components. The first component represented a summary document that provides information and detail on core regional attributes (inclunding liveability, diversity, major centres, growing economy, high value industries, game changing investments, major projects, etc.). The second represented individual fact sheets (incorporated into the main summary), that provides focus on the identified opportunities (including agriculture, childcare, tourism, construction, defence, mining support services, aged care and retirement living, and food product manufacturing and value-added opportunities). AEC conducted a literature review and drew from the vast material and content available on the region to form the Prospectus. Outcomes of the project will be used to showcase attractiveness and key investment opportunities for the region.

Client: Maranoa Regional Council State: QLD AEC worked with Maranoa Regional Council to guide Council’s actions towards achieving sustainable economic outcomes, through the development of a Business and Industry Development Plan and Implementation Plan. AEC undertook a socio-economic analysis of the region, built on existing Council documents to form a vision and strategic initiatives, and developed actions and target measures for implementation of the strategy. Opportunities identified for Maranoa’s industries include horticulture utilising coal seam gas water, productivity enhancement through innovation and technology, industry linked tourism experiences, coal seam gas and coal mining, alternative power, electrical storage, game meat processing, re-emergence of sheep production, targeted tourism and expanded use of Roma airport and linking services. Key outcomes targeted were the attraction of new business, support of existing business, attraction of people, leveraging of assets, development of skills and building of community partnerships.

Understanding the future scale and demographic composition of the local population is an important component of strategic planning. It is essential infrastructure planning and services provision proactively accommodates the population potential to facilitate and support anticipated growth. Cairns local government area has experienced volatile population growth in recent years due to the strong relationship between economic outcomes and net migration outcomes. In 2008, Cairns was one of the strongest growing local government areas in Queensland (in terms of population growth). However, population growth slowed considerably following the onset of the Global Financial Crisis, as construction and tourism activity in the region softened significantly. State government estimates for Cairns local government area suggest a lower rate of growth in the local population between 2016 and 2041 than had been recorded in the 2006 to 2017 period. AEC was engaged by Cairns Regional Council to develop a detailed set of population projections to sense check these projections. Population projections were developed by age and sex for the five yearly periods between 2016 and 2041. These projections considered future trends in local fertility and mortality rates as well as Carin’s potential future net migration profile. AEC also analysed the potential population impacts associated with planned construction activity for the region in the short to medium term. The resulting projections were in line with those developed by the Queensland Statisticians Office, suggesting the population could increase at an average annual rate of 1.6% between 2016 and 2041.

Prior to Government approving major resource-related development projects, regulatory bodies must be satisfied the potential impacts caused by the project are appropriately assessed and appropriate mitigation measures are in place in order to minimise these impacts and to leverage beneficial outcomes. Many large proposed resource development projects are required to prepare an Environmental Impact Statement (EIS) before an environmental authority can be issued. Economic Analysis is a fundamental component of an EIS and AEC has a strong track record and history of providing economic analysis to support EIS processes. We assist our clients in understanding the potential economic impacts their proposed resource developments will have on a regional, state and national economy level, while ensuring the analysis meets government requirements. AEC provides our clients with: Expert understanding of the Australian resources sector AEC’s inhouse economic modelling capabilities Vast experience in applying the latest EIS guidelines for economic assessment. EIS requirements can vary from state-to-state, but typically include some combination of cost benefit analysis (CBA), local/ regional impact analysis (including modelling using techniques such as Input-Output (I-O) or Computable General Equilibrium (CGE)), and development of mitigation strategies to minimise impacts. Our tailored and flexible approach provides a reliable and robust economic analysis to support the decision-making process that provides detailed analysis around the benefits and impacts on the regional, state and national economy. A list of some of the clients for which AEC has provided economic analysis to support an EIS for a resource project are outlined below. https://www.shell.com.au/ https://www.stanwell.com/ https://www.arrowenergy.com.au/ https://stanmorecoal.com.au/ https://evolutionmining.com.au/ https://www.rml.com.au/ https://www.baralabacoal.com.au/ https://www.sojitz.com/ https://www.waratahcoal.com/ https://www.aquilaresources.com.au/ https://www.mcres.com.au/

The gates of the Fraser Coast Sports and Recreation Precinct opened in February 2019. The Precinct is a multi-stage development over 60 hectares initially providing: Eight (8) standard netball courts with acrylic non-slip court surfacing to Netball Australia specification, exceeding 200 lux lighting, and a club house facility; Two (2) premium playing surfaces and two (2) standard playing surfaces, FIFA standard, field lighting of over 200 lux and club house facility; and, Allocation of three (3) standard soccer fields providing six (6) standard Oztag fields. The Business Plan for the Precinct was developed by AEC on behalf of Fraser Coast Regional Council, providing a ‘roadmap’ for the construction of all stages of the development, together with the timing of the transition of local clubs and associations to the Precinct over the next 10 years. For the Business Plan, AEC evaluated the ongoing socio-economic benefits that the Precinct would bring to the local community and economy. These benefits will be generated by providing a high-quality facility that will attract regional, State and National sports competitions together with high profile ‘premier level’ sports events. It is anticipated that the Precinct will bring in more than 27,000 visitors per year to the area once it is completed. The Precinct will also be capable of hosting music and cultural events. The Business Plan was also key to securing millions of dollars in grants for the construction of the Precinct, with the latest grant announcement of a further $900,000 from the State Government’s Work for Queensland grant program being announced in June this year. The success of the Precinct has already attracted the A-League club Brisbane Roar FC to attend the Fraser Coast in September this year to host a series of school clinics, community events and a trial game with a local representative side. If you would like to learn more about how AEC can help you in undertaking feasibility studies and developing business plans for sports and recreation facilities please contact the AEC team.

AEC Principal Consultant Simon Smith, in partnership with Tammy Marshall, Managing Director of B Hive, has been working with APEC and participating economies on the economic impact of cruise tourism on micro, small and medium enterprises (MSMEs) as well as communities. The Cruise ship sector is considered one of the most rapid growing segments in the tourism industry. Given the rise of the cruise industry activity in the APEC region, data to analyse the economics of cruise tourism is vital, especially data that focuses on communities as the recipients of economic benefits. The project will provide a study on cruise tourism’s effect on local communities, more specifically, MSMEs in local communities in APEC economies and how the income generated from the cruise sector leads to better standards of living for local people. Project outcomes and recommendations will be used to support further strategic sustainable development of cruise tourism and to identify opportunities to increase positive impacts and safeguard the livelihoods of local economies. Whilst the project is working closely with just five economies, the findings and recommendations will have benefits for all 21 APEC members. The workshop in Singapore was attended by representatives from Australia, Chile, Chinese Taipei, Mexico, Papua New Guinea, Peru, Philippines, Singapore and Vietnam as well as a number of expert speakers including: Cruise Line International Association, Royal Caribbean Cruise Lines, Cruise Broome and Genting Cruise Lines. For further information regarding developing the cruise sector please contact simon.smith@aecgroupltd.com

The Australasia cruise tourism sector continues to grow and as cruise ships get larger so does the demand for dedicated port infrastructure for handling them increase. The largest cruise ship currently operating in Australia and New Zealand is Royal Caribbean’s Ovation of the Seas. At 348m in length and carrying 4,900 passengers and 1,500 crew, Ovation presents a berthing and logistical challenge for many ports. Indeed, New Zealand’s marque port Auckland can not berth Ovation at its cruise ship terminal on Queens Wharf right in the city centre. The current solution is for Ovation to hold position using dynamic positioning in Auckland’s Harbour whilst passengers are tendered ashore using the ship’s lifeboats. This approach, which can only be permitted in winds of less than 25kts, takes up to three hours for passengers to disembark and thereby vastly reduces the time passengers spend ashore and therefore the potential economic impact. Whilst the Port of Auckland has a long-term plan to extend Captain Cook Wharf (currently a car unloading facility) to become a new cruise terminal this planning is ten to fifteen years into the future. In the interim, it has been proposed to install two mooring dolphins at the end of Queens Wharf along with strengthening the mooring bollards to enable cruise ships the size of Ovation to berth. Berthing of such a ship will increase its economic impact by 6-7 times and also permit turnarounds. Without such infrastructure future visits by ships, the size of Ovation is put at risk as well as the likelihood that these ships will continue on a New Zealand itinerary visiting 5-6 more regional New Zealand ports. The resource consent application (development application) to construct the dolphins has been the subject of much opposition by elements of the Auckland Economy. A resource consent approval process presided over by three independent commissioners has been established to decide if the development should go ahead. A decision on the outcome of the resource consent application is due in March/April. AEC has been working with the Australian cruise industry for almost 15 years and this experience led us to be appointed by the Cruise Lines International Association (CLIA) to prepare and present independent expert economic evidence in support of the resource application. This process required an assessment of the economic case that accompanied the resource consent application, of the Auckland Council’s response to the resource consent application, of the submissions for and against the application and other expert economic peer assessments and opinion. No less than five economists have been involved in this exercise. AEC was invited to present our economic evidence at the commissioner’s hearings in Auckland. It's been a huge process and even if the commission recommends approval it may be subject to legal challenge. In the meantime, cruise itinerary planners continue to monitor the situation and make future port visitation decisions with this uncertainty in mind.

Townsville was hit by the worst flooding event in the city’s history, the one in five-hundred year event inundated thousands of homes and businesses with the impact extended across Northern and North West Queensland. More than a year’s worth of rainfall in a few days caused the Ross River Dam levels to a peak at 250%, leading to an emergency automated opening of the spillway gates and the worst of the flooding impacts. Although the long-term economic toll will never be fully known, there are fears that Townsville’s recent economic improvement may be severely set back with a 1 to 2 year clean up and recovery period projected. The city has already endured a severe economic downturn in recent years, following the closure of the Yabulu Nickel Refinery in early 2016, with the loss of 800 direct jobs. The city has endured significant social impacts associated with the downturn, including financial and family stress, increased property crime rates and a general strain on people’s mental health. Only in recent months has Townsville’s unemployment rate and broader economy begun to show signs of recovery, on the back of significant infrastructure projects including the $250 million North Queensland Stadium, $225 million Haughton Pipeline duplication (somewhat ironically established to secure Townsville long term water supply), and recent private sector investments such as the $300 million Sun Metals Zinc refinery expansion. The human cost of the flooding has been extensive, with more than 3,000 homes damaged[1], thousands of people displaced, many businesses lost, and over 20,000 homes left for significant periods without power. The loss of housing stock has seen a major tightening in the previously soft property market, with an acute shortage of rental properties currently being experienced across the city. Three deaths have occurred during the flooding and post due to melioidosis arising from soil-based bacteria. However, the resilience of the Townsville community should not be underestimated, with numerous examples of mateship and heroism throughout and post the event, with the rescue and recovery efforts of Townsville’s emergency services and particularly our armed forces a source of immense pride for Australia’s largest garrison city. It is known from previous disaster recovery efforts across Australia and internationally that tragic circumstances such as experienced in Townsville can become significant drivers of economic activity. There has been a complete change in Townsville’s economic positioning, with a surge in demand for trade labour, including plumbers, builders, carpenters, painters and plasterers, electricians, and even mechanics with many vehicles damaged and destroyed. Townsville’s building industry has gone from multi-year lows in activity to fully booked for at least the next 6-12 months. Hotels and restaurants are now full due to the influx of southern trade labour, and retail businesses which have been able to reopen are very busy with residents seeking to repair, rebuild and restock. To help understand the scale of reconstruction efforts, AEC has applied Input-Output (IO) modelling to estimate the direct and flow on effects felt throughout the Townsville region. The Insurance Council of Australia’s (ICA) currently estimates the insurance claims at $606 million, with 90% of claims residential and 10% commercial. These impacts were modelled through AEC’s IO model as follows: 50% of insurance costs ($303 million) represents residential building construction (for repair and rebuilding of homes). 30% of costs ($182 million) represents retail trade (for replacement of damaged household and business items etc.). 10% of costs ($61 million) represents non-residential building construction (for replacement and repairs of commercial premises etc.). 5% of costs ($30 million) represents construction services (for associated trade services and minor earthworks/landscaping etc.). 5% of costs ($30 million) represents professional, scientific and technical services (for design works, legal works and associated services). Only the construction activity expected to be undertaken within Townsville has been included in the assessment, and for the purposes of modelling, 70% local content has been assumed[2]. Based on these modelling assumptions, recovery efforts are estimated to generate the following economic impacts within the Townsville economy (in total during the recovery period): $1.0 billion in output (including $424 million in direct output). $450 million contribution to Gross Regional Product (including $146 million directly). $271 million generated in wages (including $116 million in direct incomes). 3,535 FTE jobs (1,548 direct FTE jobs). Table: 1. Insurance Reconstruction Economic Impact Estimates (Townsville Local Government Area) It is clear that reconstruction efforts will provide a large one-off economic stimulus to the Townsville economy. However, the longer-term impacts are more challenging to quantify. Many businesses have expressed difficulties in realising their insurance claims due to a lack of flood cover, fine print definitions of storm vs. floodwater and some policies limiting business flood cover to 20% or insured amounts[1]. Even where insurance claims are obtained, years of weak economic conditions and declining home values mean many businesses and families will have to make tough decisions about whether to stay and rebuild/reopen or to relocate elsewhere. Ongoing implications for insurance availability and costs will be another key factor in Townsville’s recovery. Many inundated areas were identified as being outside of 1 in 100 year flood zones in the city’s flood mapping, and many landholders now face at least a temporary drop in property values and a potential further rise in insurance premiums. The challenge for Townsville will be to ensure the broader economic momentum is maintained throughout the recovery efforts, with key industries such as tourism at risk of a drop in demand due to the perceived risks of travelling to the city during the rebuild. Maintaining momentum regarding the city’s large economic development opportunities will also be critical to underpin confidence and ensure that families stay in the region and businesses reopen. Current opportunities include a renewal of minerals processing and manufacturing (the potential reopening of the Yabulu Nickel Refinery, a proposed new adjacent nickel-cobalt refinery proposed by ASX listed Pure Minerals, a $2 billion lithium-ion battery plant proposed to be located at Woodstock), and the controversial Adani Carmichael coal mine for which Townsville is the regional headquarters and a key proposed centre for Fly In/Fly Out (FIFO) labour. It is also hoped that the current State Government’s review into the disaster will identify ways to better protect the community in any future events and that reconstruction efforts will not only rebuild but work to improve the city as it recovers. Matthew Kelly has been an Economist with the AEC Group based in Townsville since 2011 and has led AEC’s Townsville office since 2014. [1] Smee, B (2019). We're not insured': Townsville Flood Leaves Policyholders Stranded. Available from: https://www.theguardian.com/australia-news/2019/feb/14/were-not-insured-townsville-flood-leaves-policyholders-stranded. [2] It has also been assumed that construction companies and sub-contractors working that will work on site but are sourced from outside the catchment will contribute approximately one quarter (25%) of the level of Type I (production induced) and 5% of Type II (consumption induced) flow-on activity within the economy that a locally sourced company does. This reflects that construction companies working on site but sourced from outside the catchment region will contribute to local supply chains in terms of sourcing some goods and services they require locally. [3] Raggat, T. (2019). Townsville Business Shocked to find 20% Limit to Flood Cover. Available from: https://www.townsvillebulletin.com.au/business/townsville-business-shocked-to-find-20-limit-to-flood-cover/news-story/b767fcfdc1b56a0fc941173f3608b127.

One of the key challenges of regional communities is the attraction and retention of population. Whilst our main cities continue to grow and increasingly groan under the weight of both domestic and international migration, regional and remote Australian townships are often faced with very low or negative population growth that impacts upon the ability for these communities to prosper, which, in turn can magnify the population leakage to larger centres. The Federal Government, as part of its upcoming Population Policy is set to unveil plans to introduce mandatory settlement for some new skilled migrants into regional areas for periods of up to five years – albeit part of an effort to ease the burden of population pressure on Sydney and Melbourne, with the benefit of producing a direct skilled worker injection for regional communities. Whether seeking to attract, encourage or in this case legislate population increases into regional Australia or simply trying to retain existing population, the core challenge remains the same – people (generally) are attracted to larger centres because of what they offer – amenity and opportunity. The factors that encourage residents to remain in regional communities are broadly the same, whether they be long term residents or recently arrived migrants – employment, access to appropriate health and education facilities, infrastructure and support services and an adequate level of retail and leisure opportunities. In other words, a good level of liveability. The catch – in many/most cases the level of amenity and supporting infrastructure available to a community is directly determined by their size, which in turn determines the level of upper level government funding. AEC Group work with regional communities across Australia to assist in developing applied programs that address how to keep people living and prospering in our regional townships. We believe the key outcome to be targeted from regional development initiatives is the creation of new investment opportunities and jobs. AEC are able to provide support and Strategy Development across: Economic & Tourism Development Investment Attraction Advocacy Planning International Relations Workforce Development In addition to strategy development, assistance is also available to provide research and analysis that supports funding applications that can assist in delivering outcomes for communities by way of upgrading infrastructure, supporting community development and providing sporting and leisure facilities. For any regional development enquires, please contact the AEC team.