New frontiers for the Top End: Deloitte report
Growth hotspots that will drive the Territory beyond the resources boomDOWNLOAD
24 March 2014: New research has shown that while the Northern Territory is well positioned to continue growing as it capitalises on a coming wave of five super-growth sectors linked to Asia’s evolving boom - gas, agribusiness, tourism, international education and wealth management, it can further boost its growth prospects in a range of domestic sectors at the heart of the collision of megatrends such as rising life expectancies, rising relative health care costs and tightening public sector health budgets. More importantly, these growth pockets are mainly in high job creating areas of the economy.
Professional services firm Deloitte has identified 25 sectoral hotspots, the ‘Deloitte Growth 25’ (DG25), with the biggest potential to lift Australia’s growth trajectory over the next 20 years.
The NT’s announced 3-Hub strategy focusing on mining and energy, tourism and education, and food exports shows that the economy is already preparing for the coming shift.
The successful completion and operation of Darwin LNG, the construction underway at Ichthys and the potential for the Sunrise FLNG and Bonaparte FLNG projects to get underway ensures that the NT will cash in on Asia’s demand for clean burning gas.
Similarly, the continuing rise of Darwin and surrounding national parks as international tourist destinations, the falling Australian dollar and an expansion to the Darwin airport will ensure that tourism revenue continues to rise in the NT.
Moreover, global food demand is set to soar in coming decades, and that points to particular potential for NT agribusiness. Additionally, the construction of AACo’s meat processing facility in Livingston would add the missing ingredient to beef exports out of the region.
Northern Territory Managing Partner of Deloitte, Hendri Mentz, noted: “The Top End is enjoying some of the benefits of strong growth in Asia, but we also have a range of ‘local heroes’ that will also help drive growth in the Territory in the years ahead.”
In particular, the Deloitte report identifies a growth cluster at the heart of the collision of megatrends such as rising life expectancies, rising relative health care costs and tightening public sector health budgets. This group contains the biggest commercial opportunities – both nationally and for the NT.
Moreover, some of the best opportunities are in lower-risk niches where the Territory can build on some of its existing strengths, rather than develop new industries from scratch.
Its population may be younger than the national average, but the challenges of indigenous health mean the Territory will experience the impact of ‘ageing’ – or at least the health conditions associated with it – earlier than some other parts of Australia. This will result in a number of sectors leading the pack in terms of the NT’s growth, including the likes of residential aged care, retirement living and leisure, community and personal care, and preventative health and wellness.
These developments will also generate exciting new possibilities in the digital delivery of health, where the potential benefits to the Territory are huge, and could fundamentally change the way services are delivered in remote communities. This mix of new technologies with new markets could also lead to new opportunities for the Top End’s economy.
Other opportunities among the DG25 include hotspots that can extend the benefits of the resources boom.
For example, the ongoing boom in gas has seen massive investment in new capacity – with the value of the NT’s Ichthys LNG development itself worth almost twice the value of the Territory’s annual economic output.
Yet there will be more to come. As is already evident, the boom in NT gas brings with it further opportunities for gas transport and infrastructure – the building and maintaining of pipelines, processing facilities and ports that will support the export of gas to emerging Asian markets.
Deloitte has also identified smaller sectors where the ability to sell into world markets has the potential to turbocharge future Territory growth. These are the sectors with the most to gain from new approaches and new technologies and include new ways of making the most of ocean resources – ranging from farming algae tomake so called ‘green oil’ to harnessing the power of wind and waves to generate electricity.
There are also opportunities emerging in Central Australia, with potential to use next generation technologies to open new next-generation solar energy production and storage.
While these sectors aren’t a big part of the NT economy today, they could emerge over the next 20 years as world markets search for cleaner and greener energy sources.
“As we look to extend the benefits of the resources boom, it is important that the Territory is ready to seize the opportunities presented by the growth hotspots and pioneer the new technologies of the future,” said Hendri Mentz.
The full release of Positioning for Prosperity? Catching the next wave, the third in Deloitte’s Building the Lucky Country series, analyses growth prospects across all major parts of Australia’s economy and highlights several growth hotspots for the Top End.
A companion media release considers the national impacts of the DG25. However, Deloitte has also extended the analysis to each state and territory. The initial findings from Deloitte’s report, which focussed on the growth potential in export-oriented sectors, found that the Northern Territory is well positioned to continue growing as it capitalises on a coming wave of five super-growth sectors linked to Asia’s evolving boom – the ‘Fantastic Five’ of gas, agribusiness, tourism, international education and wealth management.
NB: See our media releases and research at www.deloitte.com.au.
Follow us – @DeloitteNewsAU