15 March 2013:  Australia’s largest regional economy, producing 80% of NSW’s electricity and 40% of the state’s coal resources, is forecast to continue to boost incomes and living standards on Australia’s East Coast, by harnessing the demand from Asia for resources and services, the digital economy and changing settlement patterns, while transitioning to a less carbon intensive economy by 2036.

The Deloitte Access Economics report Prospects and challenges for the Hunter Region – a strategic economic study was commissioned by Regional Development Australia Hunter (RDA Hunter), one of a national network of 55 committees made up of local leaders who work with government, business and community groups to support the development of their regions.

The report estimates a boost of nearly $28 billion by 2036, a growth of almost 75%, to the Hunter Region’s economy. It examined the longer term influences which are likely to shape the Hunter economy over the next two decades building on its strong foundations of mining, agriculture and services.

“What happens in the Hunter Region very much reflects Australia’s national economy,” said the report’s author Deloitte Access Economics Partner Dr Ric Simes. “With its significant exposure to resources, agriculture, energy production, and defence, with service industries, such as education, health and tourism, the prospects and challenges for the Hunter parallel those confronting the nation as a whole.”

The report considers the Hunter Region’s use and development of infrastructure, its current and future industries and their economic contribution to the Australian economy. It also looked at future needs in education, skills, workplace development, and innovation, as well as the need to enrich the environment and continue to create liveable places that attract and retain a growing population.

“The major influences facing the Hunter Region and Australia as whole over the next twenty years include integration with Asia, changing settlement patterns, transitioning to a less carbon intensive economy, and the digitising economy,” said Dr Simes.

Chief Executive of RDA Hunter, Todd Williams pointed out that advancement in the digital economy is rapidly reducing barriers to entry in many markets.  “Digital technologies ensure businesses have greater access to markets with less physical presence, and provide employees with the flexibility to live and telework in different locations.  

“We have successfully lobbied for high speed broadband which has made significant inroads in the Hunter region through the NBN. Groups like Broadband For Business (a collaborative business group), are ensuring businesses can take advantage of the lower commercial rent and other business costs in the Hunter, while remaining in proximity to Sydney.

“In this way we believe we can build on the promise of the growing Asian economies for the modelled period of 2012-2036,” Mr Williams said.

Building a bigger Hunter is a key to the projected growth in the economy, and so incomes and living standards,” said Ms Gaye Hart AM the chair of RDA Hunter Board.  “By taking advantage of our existing strengths and exploring new areas for future competitive advantage in defence, high value manufacturing and premium agriculture for instance, we will actively support innovation, investment and infrastructure growth in the Hunter.”

Other key report findings include: The Hunter region:

• contributed $36.9 billion to make the Hunter Australia’s largest regional economy
• contributed more than 8% of Gross State Product and 2.6% of GDP
• produces 80% of the state’s electricity
• provides 40% of  NSW’s coal resources
• employs 7.2% of the regional workforce (17,700 FTE workers) in coal mining
• employs 25,000 FTE in Health (the single largest employer)
• employs 5.6% of the workforce in education/training

The mining sector is expected to expand over the next 20 years, underpinned by additional coal production and the emerging Coal Seam Gas sector.  The mining sector is also projected to contribute around 24.2% of total regional output in 2036, representing an increase of almost 2% from 2012.

The influence of the mining sector extends to other allied industries, such as

• the construction, transport and wholesale trade industries which currently constitute around 15% of the economy and employ around 37,400 FTE workers. 
• Projections suggest these industries will retain their current share of the Hunter economy to 2036.

Additional Facts: The Hunter region:

• encompasses 11 local government areas
• has the nation’s 7th largest city and 2nd largest non-capital city, Newcastle
• has average annual growth projected at 2.4% p.a. to 2036 - higher than NSW’s 2.1% p.a. over the same period.

Asian influences include:

• Rising Asian income per capita from enormous growth potential of China, India and Indonesia
• In the last decade China has risen from 5th largest trading partner to Australia’s largest trading partner
• By 2020, growth in the  Indian and Indonesian economies is expected to outpace China
• GDP of Asian economies expected to surpass USA by 2017 (IMF)
• Tourism Australia projects that expenditure by Chinese tourists has the potential to double by 2020 to $7b - $9b p.a.
• Destination NSW YE 2012 reports that domestic overnight visitors spent $801million in the Hunter region to YE Sep 11 so potential for $1.6b to the local regional economy.

For more information see www.rdahunter.org.au

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