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PORT STEPHENS COUNCIL Committee Secretary Senate Finance and Public Administration Committees PO Box 6100 Parliament House Canberra ACT 2600 Dear Committee Secretary, Re: Australian Senate Inquiry on the Relocation of Government Bodies to Regional Areas Port Stephens Council has a long standing history of serving a regional-rural area located on the east coast of Australia and two hours north of Sydney. Established in 1843, the Raymond Terrace and Dungog District Council was first amalgamated with Port Stephens Council in 1937. Since this time Port Stephens Council has represented the community from an economic, environmental and social perspective. Sound decision making and forward planning has allowed Port Stephens Council to provide and maintain assets to serve the local community, whilst at the same time preserving the integrity of the natural environment and maintaining social cohesiveness across distinct and unique communities in the local government area. (LGA). Importantly, Port Stephens Council recognises the significance of the Australian Senate's inquiry into the relocation of government bodies to regional areas such as Port Stephens. The benefits to regional communities from relocating these entities stems from both an employment generating perspective, as well as the impacts and efficiencies obtained for Corporate Commonwealth Entities in aligning these entities from the agricultural and fishery sectors, in regional areas with associated industry and supply chains; as detailed in the folllowing submission. Submission Port Stephens - A Regional Economy of NSW Strategically located in the Hunter Region, the Port Stephens local government area is considered a regional-rural economy with an estimated residential population of 70,447 people, as at June 2015. I Page 1 PORT STEPHENS COUNCIL 116 Adelaide Street PO Box 42 Phone: 02 4980 0255 I www.portstephens.nsw.gov.au Raymond Terrace NSW 2324 Raymond Terrace NSW 2324 Email: [email protected] I The diverse industry base in Port Stephens is built around the natural environment, its well established defence and aviation facilities, and both its proximity and access to markets in Sydney and throughout the Hunter and regional NSW. The latest Small Area Labour Markets (SALM) data for the September quarter 2016 indicates a labour force of 33,883 people with 32,007 (94.5%) employed and 1,876 unemployed (5.5%). This unemployment rate in Port Stephens of 5.5% is slightly higher when compared with the NSW State figure of 4.9% for the same period. Unemployment rates vary significantly across the LGA with Raymond Terrace exhibiting a much higher unemployment rate than areas within the Tomaree Peninsula, Seaham­ Woodville, and Williamtown-Medowie-Karuah areas. The following table shows unemployment rates for the September quarter 2016. Within the LGA of Port Stephens (SA2 level) Unemployment Rate (%) Anna Bay 5.2 Lemon Tree Passage - Tanilba Bay 6.7 Nelson Bay Peninsula 4.9 Raymond Terrace 9.2 Seaham - Woodville 1.9 Williamtown - Medowie - Karuah 4.1 56 Source: Department of Employment, SALM, SA2 data tables, September quarter 2016 • Of the 22,689 people actually working in Port Stephens, Manufacturing is the largest employment sector with 4,322 jobs (19%); followed by Public Administration & Safety (including defence) 3,825 jobs (16.9%) and Retail Trade 2,500 jobs (11%). Employment self-containment (ESC) measures the proportion of local residents who work locally, which may change over time as the population changes and businesses evolve. High self-containment implies there are many jobs in the local area which employ local people, contributing positively to the local economy compared with a transient population whereby workers typically use the infrastructure and services in the area, but proceed to spend the majority of their wages at their place of residence. Employment self-containment in Port Stephens is at 60.9% (or 13,814 people) of the 22,689 workers, with Retail Trade the largest employer of the resident population (15.1 % or 2,083 jobs). Conversely, a total of 8,875 people work in Port Stephens but live elsewhere, coming predominantly from Newcastle (3,417 people), which equates to 15% of all jobs in Port Stephens. Of these 8,875 people, the Manufacturing sector employs the largest number of non-residents (34% or 3,014 jobs). In terms of income, 39.18% of the population in Port Stephens earn a low income ($400 or less per week) compared to 9.19% earning $1,500 or more per week. This higher­ than-average proportion of low income earners can be attributed to an ageing I Page 2 population, with the older population in segments of the community accessing government pensions and allowances; the workforce age profile showing a higher proportion (17.1 %) of workers in the younger age groups (15-24 years) and predominantly working in retail, accommodation and food services whereby low wage rates and/or reduced hours of work may be prevalent in comparison to other industry sectors; and lower individual incomes as a result of residents predominantly holding Certificate level qualifications. It is evident Port Stephens relies heavily on its natural asset base together with local employment opportunities to sustain population, housing and development in the area. Diversification and intensification of supply chains within industry together with local job opportunities from decentralisation of larger government bodies, is a good catalyst to sustain employment opportunities within the local community. Relocation of Government Bodies to Regional Areas Similar to other advanced economies around the world, the Hunter region has been experiencing economic restructuring with ·a shift away from traditional goods-producing sectors like mining and manufacturing to high value-added knowledge-based service sectors. The changing nature of industry throughout the region inevitably placing . pressure on the availability of employment together with the necessary skills required to diversify and/or intensify business. The changing nature of the workforce and industry in regional areas stresses the importance of relocating government bodies to regional areas to help provide diversification and further employment opportunities. It is these local employment opportunities that ensure the ongoing economic prosperity of local communities, such that larger Corporate Commonwealth Entities support future generations, skill development and linkages between people, industry and business in regional Australia. Improvements in human capital, particularly education and skills can enhance the innovation and productive capacity of a workforce. Developing a highly skilled and educated workforce assists with building resilience, as individuals with greater education and skills cah pursue a wider range of employment opportunities and adapt to new processes and technologies, which improves productivity and the standard of living. Changes in income can affect the amount of goods and services consumers will demand or purchase, with higher incomes typically increasing the demand for goods and services in the local economy. The NSW Department of Industry recognises that Regional NSW is the largest and most diverse regional economy in Australia. The region has large agriculture and mining sectors as it is rich in natural resources. It also has strong manufacturing, energy, visitor economy and services sectors. Regional NSW is also home to approximately 2. 7 million people, which represents 40% of the NSW population and contributing around a third of the Gross State Product (Regional Opportunities, <www.industry.nsw.gov.au/invest-in­ nsw/regional-opportunities>. Retrieved 8 March 2017). I Page 3 Regional NSW, of which Port Stephens is part thereof, offer efficiencies for Corporate Commonwealth Entities by aligning entities from the agricultural and fishery sectors in regional areas with associated industry and supply chains. Together this brings expertise, synergies and long-lasting financial, economic, environmental and social outcomes. The direct impact of jobs in the local economy alone provides positive multiplier effects from an economic perspective in terms associated flow-on industrial effects with local purchases of goods and services anticipated, and these indirect impacts resulting in a further increase to output. The increase in direct and indirect output and the corresponding creation of jobs in the economy can result in an increase in the wages and salaries paid to employees. A proportion of these wages and salaries are then typically spent on consumption and a proportion of this expenditure is captured in the local economy. From a policy perspective, when referencing the operation, effectiveness and consequences of the Public Governance, Performance and Accountability (Location of Corporate Commonwealth Entities) Order 2016 - the identity of corporate Commonwealth entities would not be affected given the strategic location of Port Stephens, the significance of the Hunter region as the largest regional economy in Australia, and/or similarly the Corporate Commonwealth entitie$ ability to perform their functions. Typically, economic, environmental and capability implications may be extended with the co-location of government bodies in agriculture and fisheries sectors, similar to those located within Port Stephens and other regional LGAs. Summary As a leading regional Council in NSW in terms of financial sustainability and economic stability, Port Stephens Council welcomes the opportunity for consultation in Port Stephens for the relocation of government bodies to regional areas. Please note Port Stephens Council would prefer this submission is not made available publicly and/or on the website. For further information please do not hesitate to Wayne Wallis, General Manager 1O March 2017 I Page 4 .
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