News and published articles in 2019 to 2016
Tuesday, 10 December, 2019Close Article
What factors help Newcastle and the Hunter to realise our best future? How can we cultivate collective effort within the region and investment from outside the region?
Addressing these questions has been at the heart of the Hunter Research Foundation (HRF) Centre’s efforts in research and engagement. For example, our 2019 forums and events have enlisted numerous expert speakers to provide insight on leading practices nationally and globally. We have also shared research insights via this column and various, publicly released reports.
That includes contributions to Australian Community Media’s special publications including Hunter: Our Backyard and future Focus. There is the recently released Gateway Cities report, highlighting the economic potential of Newcastle, Geelong and Wollongong. That work resulted from collaborative research conducted by the HRF Centre in partnership with Deakin University and the University of Wollongong.
The report included a section on population growth as an important enabler of economic growth. The Hunter region has benefitted from trends in Australia’s internal migration, which were outlined by the HRF Centre’s Lead Economist, Dr Anthea Bill, at our November Hunter Economic breakfast. She explained that Newcastle and the Hunter are attracting an increasing share of out-migrants from Greater Sydney. Of the 97,000 residents who left Sydney in 2017-18, 7,000 went to Newcastle and Lake Macquarie, the biggest share moving to regional NSW. A further 5,000 went to the rest of the Hunter.
Dr Bill compared the Hunter’s rate of population growth to that of Geelong, now one of Australia’s fastest growing cities. ABS data show a 2.7 per cent rise in its population between 2017 and 2018, above the 2.5 per cent for Greater Melbourne. Melbourne is considered to be one of the fastest growing cities in the developed world.
“A number of government agencies have re-located to Geelong in recent years,” Dr Bill explained. “It has also developed transport infrastructure to improve its links to Melbourne and further. It has an active Committee for Geelong and secured a City Deal in March of this year. That virtuous cycle of investment and advocacy seems to be paying off for Geelong.”
Development of the Committee for the Hunter has been supported by the HRF Centre with research, advice, facilitation, and engagement over the past two years. The Committee now has 40 members, with commitments of more than $300,000 per year for membership. It is currently finalising selection of its first CEO.
The value of such bodies to foster collaboration was addressed by Lucy Turnbull AO at the Hunter economic breakfast in July. She is a former Chair of the Committee for Sydney and current Chair of the Greater Sydney Commission.
“Organisations like the Committee for Sydney, and the Committee for the Hunter, have a huge role to play in championing and articulating what is important for the city or the region,” she stated. “It is where everyone has a common purpose: to make their city, or their region, work as well as it can. Having that multiplicity of voices is really important.”
The unity of purpose, offered by the Committee for the Hunter and other representative groups including the Hunter Joint Organisation of Councils, has been shown to drive regional development. It has been a common element in the Australian regions awarded City Deals, according to research from Regional Australia Institute.
The need for a multiplicity of voices was reinforced by delegates at the Smaller & Smarter Cities International Symposium organised by the HRF Centre in Newcastle in October. It was one of three priority areas that they identified to strengthen Greater Newcastle and the Hunter as a place to live, work, invest and visit. An Outcomes Workshop at the conclusion of the Symposium identified needs to: experiment and innovate; offer everyone a role and a voice; and bring it all together with clarity about who is doing do what.
The Symposium drew 350 participants to hear from more than 35 speakers and panellists over 30+ sessions. The outcomes build on those from the inaugural Symposium in 2018, such as a need for a clearer identity and positioning of Greater Newcastle. This topic was the focus of workshops in March and November of this year. The effort engaged the HRF Centre with Enigma and Aurecon, with support from state government via the Hunter and Central Coast Development Corporation.
Identity and positioning for the region were taken up by four teams of young professionals in the HunterNet Future Leaders program. The HRF Centre supported the teams with data, connections and insight. The winner made a case for ‘HealthPort’, a regional health and innovation ecosystem emerging from redevelopment of the John Hunter Hospital precinct.
The HRF Centre has been informing conversations and facilitating action by stakeholders on the region’s current challenges and future options. In 2020, we will continue to support the Committee for the Hunter and other collective efforts, while collaborating on research to reveal paths forward for Greater Newcastle and the Hunter region.
This opinion piece by Professor Will Rifkin, HRF Centre Director, was published in the Newcastle Herald on 7 November, 2019
Monday, 25 November, 2019Close Article
Employment grew more strongly in the Hunter than in NSW over the year to September 2019. The Hunter rate grew by 4.7 per cent compared to 3.1 per cent growth in the State, for a three-month moving average. This positive finding was part of an economic presentation by Dr Anthea Bill, HRF Centre lead economist, at the Hunter Economic breakfast on 15 November.
Over the last six months, the number of full-time jobs in the Hunter rose more than the number of part-time jobs, Dr Bill stated. NSW employment growth followed a similar trend, but full-time jobs did not grow as strongly in the State as in the Hunter.
“Despite poor business performance for the June quarter, there is not yet evidence in the September data that the Hunter labour market is slowing,” Dr Bill explained. “Labour market conditions had also remained strong at the national level. That is despite a slowing in economic growth that has produced GDP growth rates similar to those experienced during the Global Financial Crisis.”
Strong jobs growth in the region corresponded with a fall in the unemployment rate, from 4.7 per cent to 4.1 per cent (three-month moving average) from May to September 2019. The NSW rate is slightly higher at 4.3 per cent. These unemployment rates are low compared with history, especially for NSW and Victoria.
“The rate has not been this low in the region since December 2013. That is just before impacts of the end of the mining investment boom began to be felt in the labour market,” Dr Bill said.
The region has seen some strong increases in labour supply over the year. That is despite labour force participation rates softening slightly in the September quarter. These figures are consistent with the national picture. There has been a rise in labour force participation, particularly among women and older Australians, according to the Reserve Bank.
So, more people are working in the region even though business performance has not strengthened.
Download Dr Bill’s presentation to see more results for the regional economy.
Monday, 25 November, 2019Close Article
Greater Sydney lost nearly 100,000 residents in 2017-18, with 12,000 coming to Newcastle and the Hunter. Trends and scenarios for population movement and growth were the focus of the HRF Centre’s Hunter Economic breakfast in Newcastle on 15 November.
Dr Anthea Bill, HRF Centre’s lead economist, shared her analysis for a report on ‘gateway cities’ – Newcastle, Geelong, and Wollongong – which was launched on Monday, 25 November, in Canberra. The report represents a collaboration among the three cities and their respective universities.
The initiative is timely, with increased attention to regional population and government investment being called for by several national bodies. The Regional Australia Institute, for example, sent its co-CEO to present at the economic breakfast on regional population scenarios. Infrastructure Australia refers to, in its recent infrastructure audit, ‘satellite cities’. The Business Council of Australia’s Jennifer Westacott in an address this week at the Press Club in Sydney called for attention to Australia’s ten largest ‘regional towns’.
These national bodies acknowledge that, for Australia, immigration and population growth have enabled consistent economic growth, a point underlined by Dr Bill in her breakfast presentation. Treasury have highlighted the economic and fiscal benefits migrants have brought to Australia, undoubtedly playing a part in the country's now 28 years of positive GDP growth.
There were 97,000 out-migrants from Greater Sydney in 2017-18, as noted above. Nearly 7,000 came to Newcastle and Lake Macquarie, the biggest share of regional NSW. A further 5,000 went to the rest of the Hunter.
“The number of people moving to the Hunter from Greater Sydney jumped last year,” Dr Bill stated. “There were 2,500 more people moving to the Hunter from Greater Sydney in 2017-18 than in 2016-17.”
Greater Geelong and other Victorian regions have benefited from out-migration from metropolitan Melbourne. Of the 76,600 out-migrants from Greater Melbourne, half went to regional Victoria. Eleven per cent, or 8,500, landed in Geelong, which is now one of Australia’s fastest growing cities.
Data from the Australian Bureau of Statistics (ABS) show a 2.7 per cent rise in population in Geelong from 2017 to 2018, mostly from internal migration. Greater Melbourne grew less, 2.5 per cent, and it is considered one of the fastest growing cities in the developed world.
“A number of government agencies have re-located to Geelong in recent years,” Dr Bill noted. “It has also developed transport infrastructure to improve its links to Melbourne and further. It has an active Committee for Geelong and secured a City Deal from the federal government in March of this year. That virtuous cycle of investment and advocacy seems to be paying off for Geelong.”
Dr Bill questioned whether there was potential to use mechanisms, such as a faster rail connection to Sydney, to accelerate growth in the Hunter region’s population and economy.
“Further policy interventions may build the region’s capacity to attract people,” she said. “Public investment in the development of infrastructure can enhance the attraction of the Hunter region and draw population from the capitals.”
Greater Newcastle has an opportunity to trade on its position to attract population, she said. It has advantages of a capital city, including its size, population density, high-performing industry clusters, anchor institutions and lifestyle. It lacks some of the negative impacts of congestion, housing unaffordability and crowded infrastructure.
Monday, 25 November, 2019Close Article
Changing the narrative on Australia’s regions - in terms of jobs, the ability to absorb population growth and the affordability of housing - is the aim of new research from Regional Australia Institute (RAI), a Newcastle audience heard from Liz Ritchie.
Ritchie, co-CEO of RAI, was guest speaker at the HRF Centre’s Hunter Economic breakfast on 15 November. She said that the RAI are moving from a focus on research to greater regional engagement and ‘activation’, that is, stimulating action as a result of the research findings.
Part of the new focus is the Future of Jobs research released by RAI in August this year. Ritchie says this study aims to ‘bust myths’ about a lack of opportunities in regions. RAI have started a jobs campaign to highlight opportunities for employment in regions, highlighting the 48,000 current job vacancies. That figure should be doubled to give a more realistic assessment of jobs, Ritchie said.
“The dominant narrative had been that there are no regional opportunities,” Ritchie stated. “That is not the case. There is immense opportunity.”
The RAI has also examined the rapidly changing nature of work. Knowledge sector jobs in health and education are by far the fastest growing segments around Australia. Of the 13,000 jobs vacant in NSW, the highest number is in professions. This story is emulated across the country, Ritchie explained.
RAI has created a Regional Jobs Vacancy Map, an interactive online tool using publicly available data. The RAI tool shows nearly 3,700 jobs available in Newcastle and the Hunter region. The job numbers broadly correlate with population growth figures, Ritchie said. The impact of population changes on job vacancies have been more pronounced in inland and other regions than in the Hunter.
“The Hunter is ahead of curve,” Ritchie told the 260-strong breakfast audience. “You are quite unique in that the Hunter’s trend shift, from technical and trades to professional, occurred 10 years ago. This shift has put you in a better position, as you were able to pivot earlier and plan for some of the changes befalling the region.”
Other regions, for example Riverina/Murray, had seen the shift from labouring to professional employment occurring only in the last five years. It has been more difficult for them to transition their workforce capabilities and fill those jobs. Some regions are experiencing 10 to 20 per cent growth in vacancies while unemployment continues to rise. So, there is a mismatch between capabilities in the workforce and the skills required. Many regional localities are also experiencing population loss.
“Regional job vacancies are growing faster than metropolitan vacancies,” Ritchie stated. “There are distinct challenges in regional Australia that are not well understood. It is RAI’s role to help people understand those issues.”
Ritchie also discussed the RAI’s recently released report, Regional population growth, are we ready?
The report addresses predictions by the Australian Bureau of Statistics (ABS) that Australia’s population could increase by 75 per cent by 2056. The RAI had modelled different scenarios of settlement. Under their business as usual case – the ABS predictions currently relied upon by NSW Government and other planners – the majority of growth will occur in the outer suburbs of capital cities. Congestion in Sydney would increase by 60 per cent, Ritchie said. She invited the audience to consider the implications for liveability in Australia’s cities.
The RAI report offers alternative scenarios for population growth, with settlement distributed to regional Australia. They explored where the five-million people predicted to flood into Sydney’s west could reside in future if a significant percentage were dispersed to the regions. One scenario would see the Hunter’s population swell to 1.9 million.
The research modelled the impact on incomes, house prices, unemployment, and commute distances. House prices and commute distances would be better in Sydney using the distributed population model. For the regions, incomes would be slightly higher, and there would be a slight increase in house prices. This outcome scenario would retain regional advantage over the cities in terms of the ratio of house price to income.
“All in all, the economic impacts [of dispersal] are not too damaging,” Ritchie said. “From an economic perspective, the outer suburbs of our capital cities resemble regional centres. There are many similarities, and those similarities are not well understood.”
Average income levels are comparable, with a difference of less than 10 per cent between outer Sydney and the Hunter region, the research shows. Employment rates are identical, and there is only a small differential in productivity.
Employment is a compelling reason for people to move to regions, Ritchie stated. The reasons they stay, however, are quality of life and the cultural identity of regional Australia.
“There has never been a national campaign to promote the opportunities that exist in regional Australia,” she explained. “At the RAI, we want to create one. Think about that national campaign and the opportunity to change the narrative on regional Australia and why it is so important.”
Monday, 18 November, 2019Close Article
Australia is on track for substantial population growth in the coming decades. How much of that growth will be seen by Greater Newcastle and the Hunter region?
The country will add 19 million people by 2056, a 75 per cent increase in the population forecast by the Australian Bureau of Statistics. Current trends and current policy will turn the major capital cities into megacities, says the Regional Australia Institute (RAI) in their recently released, National Population Plan for Regional Australia.
There are options, though, according to the RAI’s co-CEO Liz Ritchie. She will be the guest speaker sharing results of RAI’s research at the HRF Centre’s Hunter Economic breakfast on 15 November.
Under the ‘business as usual’ scenario, the RAI estimates that an additional 270,000 people will call Greater Newcastle home by 2056. This figure is in line with the growth forecast seen in the NSW government’s Greater Newcastle Metropolitan Plan.
What is the ideal size for the city and the region? What if Greater Newcastle became home to two-million people - one scenario modelled in the RAI’s report?
The RAI’s national study examined alternative patterns of population growth in Sydney and NSW in terms of three scenarios:
- ‘Business as usual’ – a continuation of current policies and trends;
- Growth concentrated not just in Sydney but also in Greater Newcastle, Shoalhaven and Wollongong; and
- Growth dispersed across the regional centres of Greater Newcastle, Wollongong, Shoalhaven, Canberra, Port Macquarie-Hastings, Tamworth Regional, and Wagga Wagga.
Under the RAI’s business-as-usual base case, commute distances in outer Sydney – a proxy measure for urban congestion – will increase by about 60 per cent by 2056.
Those figures would rise by just 15 per cent under the ‘alternative distributed’ population scenario (option 2 above), where growth was distributed to Greater Newcastle, Wollongong and the Shoalhaven.
A compelling vision for a single economic powerhouse region – incorporating Wollongong, Sydney and Newcastle – is offered in the Committee for Sydney’s 2018 Sandstone Megaregion report. The report recommends a network of rail connections coupled with a coherent strategy that promotes complementary economic roles for each of the centres.
There is no significant economic penalty for such strategies that distribute population growth, according to the RAI analysis. Only small differences are forecast in the unemployment rate, income and house prices across the two alternative scenarios. However, policies to maximise education and employment opportunities in regions would be needed, the report explains.
That is due to a chicken-and-egg question in relation to population growth in a city or region. Which comes first, the higher population – which can provide a skilled workforce - or the jobs to attract people? Either way, education and training must assure that employees are suited to future market needs and modes of working.
Population growth was addressed in the recent Smaller & Smarter Cities: International Symposium, held in Newcastle in October. This second annual symposium was organisedby the HRF Centre with lead partners - the City of Newcastle, Hunter and Central Coast Development Corporation, Hunter Water and AECOM.
Regional development expert, the University of South Australia’s Professor Andrew Beer, shed light on the drivers of economic growth, based on research for the RAI. He found that economic diversification succeeded where it occurred within a region’s general areas of specialisation. For example, underlying strengths in steelmaking have enabled growth in Whyalla, South Australia, he noted. This success in specialisation was also highlighted in examples provided by Dr Stefan Hajkowicz, a specialist in megatrends and Director of CSIRO’s Data61.
In a symposium keynote, Hajkowicz described megatrends related to health, business, technology, and climate. He related a tale of two US cities – Pittsburgh and Detroit – that had very different outcomes in transitioning their economies from heavy industry bases.
Pittsburgh made what is recognised as a successful transition. Pittsburgh was supported by government programs and internal initiatives to shift from manufacturing and selling steel to selling steel know-how. Over a 20-year period, the city attracted two academic and eight corporate centres for steel-related research.
Detroit appeared to have no coherent Plan B beyond car manufacturing. Changing markets and international competition led to huge job losses. The City of Detroit filed for bankruptcy with a $US24 billion debt. Recovery of Detroit’s economy, now beginning, will be based in reinvention, Hajkowicz argued.
Areas of strength for the Hunter were identified by symposium participants. The list includes the natural environment, infrastructure, energy, technology, medical and health research, education and advanced manufacturing. In these areas, job clusters could stimulate and support the population growth that the RAI says is possible. Steps toward such growth or to pursue alternatives,the experts and international examples suggest, can be realised through collaboration and vision - the HRF Centre’s theme for 2019.
This opinion piece was published in the Newcastle Herald on 9 November, 2019.
Thursday, 3 October, 2019Close Article
Small businesses aren’t just decoration - they’re essential to creating a thriving city.
What makes a city great? We don’t fully know all the ingredients, and assembling them together in a way that makes the urban environment buzz is an inexact art.
But we do know some of the things we can’t do without.
Coffee to start the day. Hairdressers. Pharmacists. That cute little bespoke clothing shop. Quirky new restaurants. Second hand bookshops. Novelties and necessities, made available by people who are prepared to put their own money, their own effort and their own ideas on the line.
These, and so many more things, are some of the tangible benefits that a vibrant small business sector provides us with.
It’s something that big corporations aren’t going to do. Ever been into a Coles, a Woolworths, a Bunnings, or any other large-scale retailer and felt that you were just part of an increasingly commoditised business model?
There are other, less obvious, functions that small firms also perform for a city. Jobs. Wealth creation. A spirit of entrepreneurialism. New ideas. The sense of ’giving it a go’. They even create the next generation of successful big businesses. Without these, small cities have little vibrancy and little hope of a better future.
Our small and medium-sized enterprise (SME) businesses are an important part of any successful local economy. Newcastle has a long and proud history of great local firms that have gone on to become leading national brands.
Yet there are many things that most of us don’t realise about SMEs. They may be small, but collectively they carry significant weight. More than 97 per cent of businesses in Australia are small or medium sized. In fact, the most common type of business is one that employs very few, if any, people besides the owner(s).
A surprisingly large number are also based out of peoples’ homes. Most of them make only modest amounts of money. The typical business turns over less than $200,000 a year, and profits are even smaller again. They have short life spans and only a handful last more than 10-15 years. Success is rarely guaranteed, and failure an ever-present threat.
Many of these businesses are surprisingly fragile. It takes clever policy to encourage them, and only a few thoughtless government decisions to destroy many entrepreneurial ventures.
What do we need to do to make this work?
First of all, we need to avoid over-relying on the ’white knight syndrome‘ - where bringing in one or two large companies is seen as the solution to all of a region’s economic uncertainties. Cities can’t base themselves, or be anchored, on just a handful of big corporations. Such enterprises are important, but these solutions make us dangerously over-reliant on introducing big businesses whose primary loyalties are rarely to the local town, and who will leave once the cost-benefit equation shifts against the local community.
We also need to regulate our local businesses carefully and cleverly. Many local governments, for example, have encouraged a thriving micro-business and self-employment culture by making it easy to operate a business from home. They’ve made sure that their zoning and planning rules are easy to understand, reliable and stable, backed up by decision-making processes that are prompt and predictable.
Policy makers in smart cities also recognise that new innovative businesses aren’t just found in the technology sector. Whilst the latest app-based business may grab the most media profile, they know that most small businesses are found in much less glamorous, but equally important, fields. They also ensure that there are advisory support services available to all of these SMEs.
We need to constantly look at the latest tools being used elsewhere to encourage SMEs, and be prepared to adopt them quickly if they have shown their worth. Business incubators, shared workstations, free access to business start-up advice, mentoring and help to grow are all innovative tools local regions around the world have used.
In short, there’s a world of difference between communities that regard local businesses as something to be nurtured and valued, and those cities that treat SMEs as a nuisance that must be tolerated at best, regulated at all times, and charged the highest possible fees.
Finally, there’s the invisible but crucially important issue of attitudes towards entrepreneurs. Do our community and government leaders celebrate our local small businesses in their words and actions? Do we foster a conducive climate that encourages people to take the risks and try their hand at being their own boss?
Building a successful, vibrant city that provides plenty of jobs, great retail and customer experiences, and creates a new generation of entrepreneurs isn’t easy. But if we don’t try, we’re all going to be much poorer.
Dr Michael Schaper is CEO of the Canberra Business Chamber and former deputy chairman of the Australian Competition & Consumer Commission. He is hosting a panel discussion - Can SMEs save small cities? - at the Smaller & Smarter Cities International Symposium in Newcastle on 10 October. This opinion piece was published in the Newcastle Herald on Saturday, 5 October 2019