News and published articles in 2018 to 2016

  • Inequality growing at a high cost to all

    Tuesday, 24 April, 2018

    Woman-thoughtful

    A recent report by the Committee for Economic Development of Australia (CEDA) shows that 13 per cent of Australians are living below the poverty line. Large pockets of disadvantage still exist across Australia despite 26 years of uninterrupted economic growth.

    CEDA's CEO, Melinda Cilento, will discuss the new report -How unequal? Insights into inequality at the next Hunter Economic breakfast in Newcastle. The CEDA research characterises the economic and social effects of growing levels of inequality in Australia.

    The HRF Centre will explore some of these effects in the local economy at the breakfast. We will use available Census data and our own in-house data to analyse how the Hunter is tracking against other regions in terms of economic disadvantage and well-being. What is happening in our towns and suburbs? Where in the Hunter are disadvantage and its impacts greatest?

    The CEDA report also highlights the challenges that Australia will face in the future. How do we address housing affordability? How do we upskill and transition workers in the face of unprecedented technological change? The HRF Centre will consider the future of employment and training in a Hunter context. How well prepared is our workforce to face growing global competition?

    A panel of expert authors contributed to the CEDA report. They provide insights on measures of inequality and the social impact of such inequality. As of 2014, Australia was slightly above the average among developed countries in terms of income inequality, noted the CEDA report. Other key indicators include educational opportunities, gender pay disparities and post-code disadvantage.

    The evidence shows that widening inequality comes at a high cost to Australia. The costs include foregone earning potential and productivity gains. For instance, persistent disparities in educational attainment, according to CEDA author Associate Professor Laura Perry at Murdoch University, mean that 17 per cent of Australian young people leave secondary school without achieving basic educational skill levels. She says: “Eliminating school underperformance would reap enough fiscal benefits to pay for the country’s entire school system”.

    Also at the economic breakfast is one of Australia’s foremost social researchers - Hugh Mackay. He will offer views on why Australia’s economic growth is failing to deliver a more stable and harmonious society. Twenty-five years after the publication of his landmark social study, Reinventing Australia, Mackay’s new book, Australia Reimagined, offers compelling proposals for a more compassionate and socially cohesive Australia.

    Find out more about the costs of inequality for the Hunter and for your business, or register for the Hunter economic breakfast. 

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  • Containerisation of the Port of Newcastle – potential benefits

    Tuesday, 24 April, 2018

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    This opinion piece appeared in the Newcastle Herald on 24 April 2018. Image courtesy of the Port of Newcastle

    The NSW Government has called for feedback on its 2017 draft NSW Freight and Ports Plan. The plan represents a review aiming to assure that investment in the state’s system of roads, rail, and ports to meet the needs of freight customers by providing efficient and reliable movement of goods. In the Draft Plan, the NSW Government states that freight in Greater Sydney is projected to double over the next 40 years and increase by 25 per cent in regional NSW over the same period.

    Shipping accounts for more than 99 per cent of Australia’s foreign trade by weight. Export of bulk goods, like coal and grain, dominates in the Port of Newcastle.However, containerised trade nationally has been growing faster than Gross Domestic Product (GDP) since the 1990s. Containerised trade will double over the next 20 years according to the Bureau of Transport and Regional Economics.

    The Port of Newcastle is the world’s largest coal export port and is one of Australia’s largest ports. It handled 168 million tonnes in 2016. For the Port of Newcastle, the Draft Plan’s focus is on improving rail and road connections. The Plan avoids directly addressing the issue of potential containerisation or its ability to help diversify and grow the Hunter economy. These possibilities have been raised in the Port of Newcastle’s submission in response to the Draft Plan.

    Any measures in the NSW Freight and Ports Plan relevant to containerisation at the Port of Newcastle need to be based on evidence and must reflect a broad view of potential flow-on impacts.

    A container terminal at the Port of Newcastle appears to offer economic advantages for the Hunter region, for northern NSW and potentially for Sydney. Benefits could include greater access to international markets for the agricultural and manufactured products in the region and to the north, more effective use of rail infrastructure, and relieved congestion in Sydney. However, a more detailed assessment is required to identify where the benefits and potential costs will fall, including flow-on impacts of this option for the Sydney metro region and regional NSW.

    The Upper Hunter, for example, has a number of industries, including agriculture - grains, beef and dairy, that would benefit from greater access to domestic and international markets. Such access could be afforded by port containerisation. The Government has identified opportunities for the development of new commodities - poultry, oil seeds and industrial hemp, among others. Their shipment would be facilitated by the rail network for thermal coal that already connects the Upper Hunter to the Port of Newcastle. Containerisation facilities at the Port would enhance connections to the Asia-Pacific and allow both Hunter and Upper Hunter industries to reach markets around Australia and abroad.

    An initial review of national and international evidence by the HRF Centre has indicated that container ports contribute significantly to their local economy through output, value add, direct and indirect employment, income and taxes. The research also documented expected burdens, such as the cost of infrastructure development and consequences of increased road, rail and sea traffic. Such pros and cons among local impacts accompanying regional and state-wide benefits are typical of the development of large infrastructure.

    The NSW Government needs a better understanding of the State-wide benefits and costs. Also required is a much more sophisticated assessment of the distribution of them within the region. These elements – to assure the greatest good for greatest number - are not present in the Draft Plan. It would be wise to include them before making investment decisions relating to infrastructure that potentially offers widespread benefits.

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  • Fracking can cause social stress in nearby areas: new research

    Article published in The Conversation
    Tuesday, 24 April, 2018

    Conversation-newsletter

    The question of opening the Northern Territory and South Australia to fracking has re-ignited concerns about environmental and health impacts.

    Receiving less attention are the social and economic changes affecting nearby rural communities from this natural gas development and the social stress that can result.

    From 2012, I led a team analysing trends in key social and economic indicators over the past 15 years in Queensland’s largely agricultural Darling Downs, where over A$20 billion has been invested in coal seam gas (CSG) development since 2011. We also interviewed and talked with over 200 residents and business owners. Social stress emerged as the most visible health impact of this coal seam gas development.


    Read more: It's nonsense to say fracking can be made safe, whatever guidelines we come up with


    Social consequences

    Staff in both government and the gas industry agree that stress is an important impact. Our findings are reinforced by studies in the Darling Downs by numerous researchers and research students as well as extensive work in North America on resource boomtowns.

    One resident said that the region had been “hit by three significant events – extended drought, local government amalgamation, and coal seam gas development”.


    Read more: Australian gas: between a fracked rock and a socially hard place


    Residents in community meetings expressed concern about potential effects of coal seam gas development on the amount and quality of groundwater and about possible health impacts.

    Their concerns were compounded by low levels of trust in the oil and gas industry and a mix of distrust and trust in the government regulator’s ability to manage the industry. This lack of confidence can contribute to psycho-social stress.

    Population

    The coal seam gas construction phase in the Darling Downs brought migration and an increased pace of work. That made informal emotional support harder to find as “social capital” had declined.

    We were told of older, stalwart residents selling their homes at the premium prices brought by the development boom. Grandparents who had provided temporary childcare left as more women entered the workforce. At the same time, the number of childcare staff fell when the Commonwealth government boosted the required qualifications.

    Population turnover increased, according to ABS statistics, from 10-15% per year before the CSG boom to 15-20% per year during the boom. The number of nonresident workers peaked in 2014 at over 9,000 for the Western Downs local government area, which has 30,000 residents.

    Arguments about whether the CSG development was good or bad for the community exacerbated a decline in the number and strength of bonds among residents. Interviews suggest that these arguments – both in the gasfield towns and within Aboriginal groups along the gas pipeline route – split neighbours and families.

    Business

    Business and employment opportunities with the resource industry reduced financial stress for some but increased it for others. Tax statistics show that net business income in Chinchilla outside the agricultural sector grew from A$5.8 million in 2011-2012 to A$29 million in 2012-2013. Wage and salary earnings for the town’s 7,000-plus residents rose from A$132 million in 2010-2011 to A$213 million in 2012-2013.

    Many business owners faced longer opening hours, a need to pay higher wages, greater turnover among staff and uncertainties about whether to invest in more capacity.

    Resource sector incomes were seen to be significantly higher than those in agriculture, education, police, health and social services. There is a two-speed economy here, residents noted. Studies in organisations suggest that this sort of sense of unfairness contributes to psycho-social stress.

    Housing costs

    The construction phase for coal seam gas development resulted in a surge in housing costs. Rents rose dramatically in Chinchilla, where 20-30% of residents live in rental housing. Median rent on a three-bedroom house went from A$280 per week in 2011 to A$400 per week in 2013. That is despite most industry staff and tier-one contractors living in camps outside the town. Lower-income families moved away.

    The rate of construction of new housing climbed. Chinchilla had 106 residential building approvals in 2011. That more than doubled to 252 in 2014, just as the CSG construction phase ended.

    Overbuilding caused rents to plummet. Median rent on a three-bedroom house fell below where the historic trend said it should be, to A$200 per week in 2016. Low rents attracted families on government support. Their numbers increased 65% in a two-year period, according to Centrelink statistics.

    Drug arrests

    Drug arrests had bottomed out at 4.3 per thousand population in 2012 during the coal seam gas construction boom. By 2016, this figure climbed to 35 arrests per 1,000, well above the Queensland trend. The number of police on the street heightened concern among Chinchilla’s residents, interviews revealed.


    Read more: Fracking and earthquakes: weighing up the dangers in South Africa


    So, one can see a distribution of economic benefits but also a distribution of social stresses accompanying development of this resource infrastructure. Psycho-social stress can accumulate when changes cause a drop in “social capital”, reducing informal support, and when there is less access to, or use of, mental health services. Prolonged stress can contribute to cardiovascular disease and decreased immune function.

    Further investigation can identify how best to provide the needed duty of care for rural communities near such resource development.

    Will Rifkin, Chair in Applied Regional Economics and Director, Hunter Research Foundation Centre, University of Newcastle

    This article was originally published on The Conversation. Read the original article.

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  • Engaged research in action at events

    Monday, 26 March, 2018

    CPA-group-shot

    The HRF Centre is committed to an engaged research model. This involves us seeking opportunities to strategically engage with Hunter stakeholders to inform important conversations about our future.
    The Centre's lead economist, Dr Anthea Bill, presented at two key external events in recent weeks:

    • CPA Australia breakfast
      Dr Bill set the scene for a panel discussion on the future of Newcastle at this sold-out CPA Australia event in February. She provided an evidence base on the city's economy and its development pipeline. She also referred to international best practice in relation to urban renewal.
    • National Surveying Congress
      Dr Bill presented at this congress, which was entitled Implications for Development – Major Economic Transitions: Examples from Resource Boom and Bust Towns. She covered key economic trends within the Hunter region, a long-term view of the regional business and employment cycle, with commentary on the importance of mining sector for the region.

      Dr Bill also compared key indicators with other resource-dependent towns/communities, e.g. in Queensland. She provided evidence based on Professor Will Rifkin's previous experience developing the University of Queensland's Boomtown Indicators. Dr Bill also offered analysis of the Hunter's energy transition, placed in a national context. Download her presentation

    Contact the HRF Centre to engage our researchers (or identify another University researcher) in your strategic regional event.

    CPA Australia breakfast – Dr Bill provided evidence and analysis: (L-R) Bernadette Smyth (CPA Australia - Newcastle), Jeremy Bath (City of Newcastle), Chad Stead (CPA Newcastle), Dr Anthea Bill (HRF Centre), Will Creedon (Alloggio / Tourism Hunter), Jarret Muller (CPA Newcastle) and Hannicke Nortje (CPA Newcastle)

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  • Mental health in the Upper Hunter

    Monday, 26 March, 2018

    UH-breakfast-panel-low-res

    Mental health and wellbeing were a focus of the HRF Centre’s recent Upper Hunter economic breakfast. Professor Alan Hayes, Director of the University’s Family Action Centre, spoke about a new initiative to address social disadvantage in Muswellbrook.

    The Muswellbrook Strong Families–Capable Communities initiative aims to address significant child and adolescent challenges. Obesity, behavioural and wellbeing problems are substantially higher in Muswellbrook than the State average. These problems have long-term negative impacts on development, health and wellbeing. They require a coordinated, collaborative approach, combined with early intervention.

    One of several projects piloted last year as part of the initiative is the placement of four Occupational Therapy (OT) students in three Muswellbrook schools in Term 4. Professor Hayes said one in 10 students at the trial schools had seen an OT student, who received supervision from accredited practitioners. All the schools wanted to continue the program throughout 2018.

    The OT placement is intended to be the forerunner for a more ambitious plan to expand student placements in schools using a poly-clinic model, Professor Hayes said. He sees the opportunity for multiple student placements from allied health and medicine disciplines to address obesity, behavioural and wellbeing problems. In addition to occupational therapy, he proposed adding nutrition and dietetics, and physiotherapy students. A second stage could see students from medicine, speech therapy and psychology added to the model. 

    There may also be potential to add other disciplines, such as community nursing and social work, in subsequent stages of development, Professor Hayes said of the school-based polyclinic model. The initiative could also be extended to other communities.

    Professor Hayes joined Andrew McMahon, CEO of MATES in Mining and Pauline Carrigan, Founder of Where There’s a Will Foundation, in a panel discussion on mental health and suicide.

    Pauline Carrigan says one in four young Australians aged 16–24 years has a mental health issue. Suicide is the leading cause of death in 15 to 44 year olds and someone dies from suicide every 4 hours in Australia. The World Health Organisation predicts that by 2030, depression will be the leading health burden globally. 

    Mrs Carrigan established Where There's a Will in 2016 to address significant mental health issues facing the Upper Hunter community. They do this by supporting schools to build positive learning communities that embed the teaching of resilience and wellbeing in their curriculum and in their schools.

    One of initiatives funded by Where there’s a Will is the roll-out of the Visible Wellbeing program to 19 Upper Hunter schools. Professor Lea Waters from the University of Melbourne said the initiative will see more than 400 teachers engaged in a journey over the next two years. They will learn wellbeing practices that can be integrated into every lesson and every project from pre-school through to Year 12.

    "Visible Wellbeing is about creating an environment in schools where everyone feels welcome,” Carrigan said. “Too much money is being put into treatment in Australia and not enough into schools, where we have an opportunity to intervene at the start.”

    While prevention is their primary focus, Where there’s a Will has also introduced broader community education initiatives such as Youth Mental Health First Aid. Carrigan advocated at the breakfast for a nation-wide positive advertising campaign to raise awareness about mental health.

    “I remember the Slip, Slop, Slap sun-safe campaign of the 80s,” she said. “Now, as a result of those messages, Australians have changed their behaviour. We are all aware of the dangers and how to protect ourselves and our children from the sun.”

    At the moment, most Australians don’t think they need to learn mental health first aid, because it isn’t their problem, she said.

    “I didn’t think my family would be impacted by mental ill health until it knocked on our door,” she said. “The figures show it affects all of us. We need to increase awareness about the need to learn about mental health.”

    MATES in Mining was modelled on MATES in Construction, a Queensland initiative that has been addressing high suicide rates in the Construction industry since 2008. Suicide has a significant impact on workers in these industries. It is the leading cause of death for Australian males aged 25-44 years and females aged 25-34 years. World Health Organisation estimates that for every death by suicide three suicide survivors will suffer permanent full incapacity and 12 will require time off work.

    Research has shown that men in semi-skilled occupations are at high risk of suicide. For example, suicide rates amongst male operators and labourers in the Australian construction industry is very high. McMahon said that although suicide data for the Australian mining industry is not readily available, the workforce is predominantly male, aged 25-44 years, and many are employed as operators and in manual labour occupations.

    “Australian men are terrible at asking for help,” he said. “We are teaching people what to look out for in their mates at work. We need to overcome the stigma that exists around talking about mental health.”

    MATES in Mining trained over 2,000 mine workers in mental health awareness in 2017. They have conducted training at four Hunter coal mines, with more Upper Hunter sites set to roll out this year. McMahon said they plan to create more communities of ‘MATES who look out for MATES’ throughout the Upper Hunter.

    The breakfast was held at Muswellbrook RSL on Wednesday, 14 March. View Professor Hayes’ presentation.

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  • Economic recovery sustained in the Upper Hunter

    Monday, 26 March, 2018

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    Household and business confidence are signalling a sustained economic recovery in the Upper Hunter. These measures improved in the December quarter, according to our latest Upper Hunter Region Economic Indicators.

    In the six months to January, the ABS Labour Force survey indicates that employment numbers increased by approximately 5,900 in the Hunter Balance (the region leaving out Newcastle and Lake Macquarie)*, with total employment exceeding the peak of September 2013.

    Improvements in the fortunes of the region’s mining operations, sustained over the second half of 2017, are likely to have benefited the region in direct employment. This will enable additional benefits to flow directly and indirectly to the local business sector, via local supply chains and local household expenditure by employees.

    However, household spending remains subdued over the longer-term, given high household debt and low wage growth. Australia-wide the average household mortgage debt-to-income ratio rose from around 120 per cent in 2012 to around 140 per cent at the end of 2017.

    Commonly cited reasons for Australia’s low wage growth include the remaining spare capacity (such as higher than desirable unemployment and under-employment) in the labour market. This is seen to be partly a result of the unwinding of the mining investment boom and the continuing shift from mining to non-mining investment. Other culprits cited have included lower inflationary expectations and changes in employer-employee bargaining relationships. The Reserve Bank is among others who have been overly optimistic in their wage growth predictions for a number of years. They have surmised that technological change and globilisation are key causal factors, increasing competition between firms and job-insecurity for workers.

    However, we are perhaps seeing evidence of reductions in spare capacity within the Hunter Balance labour market. Hiring intentions over the next year trended up in the Upper Hunter since late 2015, consistent with publicly available labour market data. There has also been an increase in the share of firms citing finding suitable labour as the main constraint on their business, both in the Hunter and Upper Hunter in late 2017. This was accompanied by a decline in the share of firms citing a lack of sales and orders as their main business constraint.

    Improved business performance and outlook can be attributed in the Upper Hunter to sustained higher coal prices. However improved conditions have also been witnessed across the state and nation as a result of historically low interest rates and improvements in the national and global economy. Business confidence in the Upper Hunter for the coming quarter is the best it has been since 2005.

    However, the Pulse survey suggests a greater improvement in confidence in the short-term regional outlook than for the long-term. That appears to reflect a degree of uncertainty around whether global prices for coal will remain high over the longer-term.

    *Comprises Upper Hunter, Muswellbrook, Singleton, Cessnock, Maitland, Port Stephens and Dungog Local Government Areas.
    This Opinion Piece was published in the Newcastle Herald on 27 March, 2018. Image courtesy of Muswellbrook Chronicle

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