Mount Alexander Shire Council ECONOMIC DEVELOPMENT STRATEGY AND PROFILE AUGUST 2013 Research for this document was undertaken by Street Ryan and Associates Pty Ltd (Certified AS/NZS ISO 9001) Economic Development Strategy and Profile
CONTENTS
1. INTRODUCTION 2 1.1 Background 2 1.2 Project Objectives and Activities 4 1.3 Key Project Activities 4 1.3 Geographic Boundaries 5 2. FACTORS SHAPING THE MOUNT ALEXANDER COMMUNITY 6 2.1 Economic Development History 6 2.2 National Industry and Employment Trends 14 2.3 Broad Local Trends and the Regional Environment 17 3. COMMUNITY AND ECONOMIC PROFILE 20 3.1 Characteristics of the Residential Community 20 3.2 The Shire’s Smaller Townships 25 3.3 Jobs 27 3.4 Visitors to the Shire 33 3.5 Businesses and Business Turnover 35 4. SECTORAL CHARACTERISTICS AND PERFORMANCE 37 4.1 Techniques for Assessing Performance 38 4.2 Primary Sector of the Mount Alexander Economy 40 4.3 Secondary Sector of the Mount Alexander Economy 44 4.4 Tertiary Sector of the Mount Alexander Economy 49 4.5 Quaternary Sector of the Mount Alexander Economy 57 4.6 Quinary Sector of the Mount Alexander Economy 61 5. BUILDING ON THE PAST AND GUIDING THE FUTURE 71 5.1 Where We Are Now – Key Conclusions 71 5.2 Where We Could Be – Scenarios for the Future 75 5.3 The Policy and Planning Context and New Approaches 77 6. STRATEGY FRAMEWORK 80 6.1 An Economic Development Vision for Mount Alexander 80 6.2 Economic Development Strategies 81 6.3 Council Implementation of the Economic Development Strategy 81 6.4 Mount Alexander Shire’s Economic Development Strategies 82 APPENDIX A: Industries by Sector 88 APPENDIX B: Location Quotients by Industry and Sector, 2011 89 APPENDIX C: Shift and Share Analysis by Industry and Sector, 2006 to 2011 90 APPENDIX D: Target Market Segment Characteristics 91 APPENDIX E: Sectoral Issues 92 1. INTRODUCTION
1.1 BACKGROUND Mount Alexander had a 2011 population of Mount Alexander also supports: 17,803 and is currently ranked 66th for municipal population growth in Victoria. The Shire’s » A well known hot rod/street rod sector, which average annual growth rate over the past decade is manifested in body works, magazines/ has been 0.4%. Castlemaine is the Shire’s main publishing houses, restoration works, urban centre (with a very large manufacturing automotive electricians, and component base and an emerging reputation for both manufacturers throughout the Castlemaine arts and sustainability issues). There are two district. Castlemaine is the self-proclaimed other significant towns in the Shire; Maldon (a Street Rod Capital of Australia. well preserved historic gold mining town) and » Important elements of Victoria’s gold mining Harcourt (a service centre for Victoria’s largest history, including “the diggings” heritage area, pome fruit producing district). which form an integral part of the Goldfields/ Central Victoria’s push to be classified as The major employing industries in Mount Australia’s first national heritage region. Alexander Shire are, in order: » Manufacturing (food processing is by far the largest sector) » Health care and social assistance (hospitals is the biggest sector in this industry) » Retail trade (supermarkets is the largest sector) » Education and training (led by primary and secondary education) » Construction (house construction being the dominant sector).
Mount Alexander Shire Council 4 Economic Development Strategy and Profile August 2013 1. INTRODUCTION 1.1 Background (continued) Mount Alexander Shire has a current Economic Implementation of the Economic Development Development Framework (prepared by Street Framework led to creation of the Economic Ryan in 2006). This is a strategic and policy and Social Development Directorate and the document which identified the role of Council development of Stage Two of the Wesley Hill in the economic development function. Mount Business Park. An Economic Development Officer Alexander’s economic development framework position was jointly funded through Regional was built around three major objectives Development Victoria and Council from 2007 for Council’s involvement in the economic until 2010, whereby the role then became a development (including tourism) area. permanent full time position within Council. In These were: late 2010, the position of Manager Economic Development and Tourism was also created. The Social Objective: Economic Development Unit has used the policies and objectives contained in the Framework to “To facilitate economic development supporting guide their actions over these years. a balanced socio-demographic structure, by The Shire is currently going through • creating adequate job opportunities considerable transformation as a result of factors • maintaining a level of services and commercial such as the ‘tree change’ phenomenon, growth activity commensurate with the Shire’s lifestyle of Bendigo and the Calder corridor, increasing and cultural attributes”. focus on regional tourism, the vastly improved transport links by rail and road and improved Environmental Objective: telecommunications. It was therefore timely for “To create a regional development competitive an economic development strategy for the Shire edge by explicitly targeting environmentally to be formulated in order review the current friendly enterprises and nurturing an environment and guide the role of Council in environmentally conscious workforce and effectively supporting appropriate development community”. over the next five years. Industry and Business Objectives: Consequently, Council commissioned an Economic Development Strategy project “To support continuing improvement and with the aim; efficiency among existing manufacturing businesses and the emergence of a sustainable niche manufacturing industry sector” “To produce an economic “To facilitate collaboration and diversity in the development strategy for Council Shire’s tourism sector”. to work in partnership with relevant “To ensure the long term retention of a prominent proportion of land dedicated to stakeholders to develop the Shire agriculture and the rural environment as a critical asset and a feature of the Shire’s lifestyle as a desirable location for people and amenity attributes”. to work, live and invest”. “To promote a regional service role, improved service outcomes and greater efficiencies for the Shire’s community, business, personal and recreation services”.
Mount Alexander Shire Council Economic Development Strategy and Profile August 2013 5 1. INTRODUCTION (continued)
1.2 PROJECT OBJECTIVES AND » canvassing attitudes and opinions of business ACTIVITIES operators, other members of the community and representatives of government The specified objectives in developing the departments. Structured discussions/ Economic Development Strategy are to: interviews were held with: » Outline the current state of the Shire economy • around 40 individual businesses within the and demographic profile. following sectors ~ Horticultural and agricultural production » Provide an agreed and clear vision for the ~ Food and beverage manufacturing economic development of the Shire that; ~ Machinery and equipment manufacturing • articulates desired economic characteristics ~ Construction and outcomes for the Shire; and ~ Warehousing, transport and distribution • identifies trends and activity that will ~ Professional, technical and scientific influence the Shire’s economy for the services next five years. ~ Retailing and wholesaling ~ Property and financial services » Provide a guide and marketing tool for ~ Art and recreation services prospective businesses and residents of ~ Personal services the Shire. ~ Health services » Ensure consistency with social and ~ Education services environmental objectives of Council. ~ Accommodation and food services, • Taste of Gold Food and Wine Group, » Integrate the strategy with existing Council • Harcourt Valley Fruit Growers, strategies and the functioning of Council. • Mount Alexander Wineries, • Low Food Miles/Growing Abundance Group, » Provide appropriate policies for Council and • Maldon Inc., stakeholders to deliver over the next five years. • Castlemaine Health, » Provide an implementation plan. • Mount Alexander Sustainability Group (MASG), • Castlemaine Art and Historical Trust Committee, 1.3 KEY PROJECT ACTIVITIES • Castlemaine Hot Rod Centre Ltd (CHRC), • Castlemaine and Maldon VICs, This Strategy has been developed within the • Young Entrepreneurs Group, context of Council policies and plans and • Castlemaine Traders Group, broader regional strategic directions, as well • Workspace Castlemaine and Maldon, as national and global economic trends. It has • Goldfields Tourism, involved: • Department of Business and Innovation, » a review of circumstances and events • Department of Planning and Community that have forged the nature and pace of Development, development, changing approaches by • Heritage Victoria. government and other agencies in fostering an extensive process of providing feedback to, economic development, and their impacts on » and seeking input from, the community was the Mount Alexander community, also undertaken. This included workshops and » an assessment of the current structure other forums with: of the Mount Alexander economy and its • the Project Control Group, comparative performance, • The Business and Wider Community (this workshop was attended by 35 an assessment of differing global futures and » representatives of the community), their likely implications for Mount Alexander, • Mount Alexander Shire Councillors, • Mount Alexander Shire Senior Council staff. Input and feedback from the interviews, forums and workshops has been used in formulating the strategy. Mount Alexander Shire Council 6 Economic Development Strategy and Profile August 2013 1. INTRODUCTION (continued)
1.4 GEOGRAPHIC BOUNDARIES The 2011 Census of Population and Housing Mount Alexander Shire encompasses two introduced a new Australian Statistical SA2s, the SA2 of Castlemaine and the SA2 of Geography Standard (ASGS) which, among Castlemaine Region. The Castlemaine Region other things, moves away from the concept of boundary is close to, but does not align exactly Statistical Local Areas (SLAs) as the basis for with, the LGA boundary. A map of Mount providing much of the statistical information Alexander showing the LGA and SA2 boundaries provided by the Australian Bureau of Statistics1. is presented in Figure 1.1. The new system is based on Statistical Areas Wherever possible, data presented in this (SA) levels 1 to 4 with SA1 being the smallest and document relates to the LGA of Mount SA4 the largest and each level being a subset Alexander. However, in places where sub LGA of the next. They do not necessarily correspond comparisons are made and/or where SA2 is with any former geographies, including Local the only source of sub-LGA data, it has been Government Areas (LGAs). While ABS will necessary to use SA2 data. The differences continue to provide data at LGA, sub LGA between the two sets of data are relatively minor information will be based on the SA structure. and do not impact on conclusions or outcomes.
Figure 1.1 Mount Alexander Shire
1 Date from the 2011 Census and other ABS sources is provided at both geography systems for 2011, but data relating to the old geography’s is being progressively phased out.
Mount Alexander Shire Council Economic Development Strategy and Profile August 2013 7 2. FACTORS SHAPING THE MOUNT ALEXANDER COMMUNITY
Mount Alexander’s economy today has been 2.1 ECONOMIC DEVELOPMENT shaped by three inextricably linked factors; HISTORY its natural resources, its history of settlement, and evolving eras of economic development. 2.1.1 The Eras in Economic Development These evolving eras have witnessed changing There have been five broad eras in Australian approaches by government and communities economic development as shown in Figure 2.1; in managing economic development, and all impacted by, and impacting on, the economic have heralded changing priorities. It has also nature of Mount Alexander. They have been: been shaped by national and global economic trends and by the broader Loddon Mallee ERA 1: Balanced Land Management for Hunting/ regional economic development plan. Further Wild Harvesting, background on factors that have shaped Mount ERA 2: Resource Based Economic Development, Alexander thus far is presented below. ERA 3: Top Down Economic Development, ERA 4: Bottom Up Economic Development, ERA 5: Sustainable Economic Development.
Mount Alexander Shire Council 8 Economic Development Strategy 2013-2017 2. FACTORS SHAPING THE MOUNT ALEXANDER COMMUNITY 2.1 Economic Development History (continued)
Figure 2.1: Australian Regional Economic 2.1.2 ERA 1 – Sustainable Land Management Development Eras and Wild Harvest Before the colonisation of Australia, Aboriginal tribal groups populated Mount Alexander, managing available sources of food and water. The region provided sustainable plant and ERA 5 animal foods as well as medicines and tools to Sustainable Regional support the pre-colonial economy. Development: 2000s Aboriginal inhabitancy of the Mount Alexander area was by the Dja Dja Wurrung people, also known as the Jaara people and Loddon River tribe, whose territory extended across the watersheds of the Loddon and Avoca Rivers in Central Victoria. The Dja Dja Wurrung were ERA 4 part of the Kulin alliance of tribes. Communities “Bottom Up” Regional consisted of 16 land-owning groups (clans) that Economic Development: spoke a related language and were connected 1980s and 1990s through cultural and mutual interests, totems, trading initiatives and marriage ties. The clans known to own land in Mount Alexander were the Galgal Gundidj and Liarga Balug2. Access to land and resources by other clans was ERA 3 sometimes restricted depending on the state of “Top Down” Regional the resource in question. For example; if a river Economic Development: or creek had been fished regularly throughout Late 1960s to early the fishing season and fish supplies were down, 1980s fishing was limited or stopped entirely by the clan who owned that resource until fish were given a chance to recover. During this time other resources were utilised for food. This ensured the sustained use of available resources. ERA 2 Resource Based “Long occupation of particular tracts of land Economic Development: is evidenced in the geographically specific 1788 to the 1960’s vocabularies and the ancestral stories of geological events peculiar to that soil. The relatively small size of each nation and language is witness to the ambition to care for a particular region and no other. The negotiation of that ERA 1 decision across an entire continent required Sustainable Land incredibly delicate and respectful diplomacy”3. Management and Wild Harvest: Pre-1788 and Pre-1835 in Victoria
2 A Census taken by Edward Parker (an 1840s grazier) indicated the population of these two clans in 1841 was 67 people. 3 Pascoe B, “How it Starts’’ Chapter 3 of First Australians: An Illustrated History (2008)
Mount Alexander Shire Council Economic Development Strategy and Profile August 2013 9 2. FACTORS SHAPING THE MOUNT ALEXANDER COMMUNITY 2.1 Economic Development History (continued)
Aboriginal land management was consistent, 2.1.3 ERA 2 – Resource Based Economic well planned and sustainable. Aboriginal people Development9 were land managers and they farmed, but were not dependent on farming; mobility was more By the time the gold rushes commenced, important to them4. People grew plants in Mount Aboriginal populations had been severely Alexander that they knew intimately5. People diminished and a range of policies had been cleared forest in areas covering a few hectares implemented with respect to their presence through to small plains along water, crests or on the land. Fences and strange animals of slopes in order to camp, lure or hunt. Early pastoralists were a source of confusion and European explorers were consistently struck by difficulty. Driving indigenous peoples from the ‘park-like’6 appearance of Victoria. Visitor the land, depletion of indigenous fauna and George Haydon observed that, near Mount flora, and abandonment of Aboriginal land Alexander the bush: management practices was hugely significant. There are records of bloody clashes between “was typical of a great portion of the pastoral white settlers and tribal groups. lands in Victoria. It consisted of undulating open forest-land, which has often been compared, “The violent European invasions of New South without exaggeration, to the ordinary park- Wales and Tasmania were followed by an even scenery of an English domain; the only difference more sophisticated war in Victoria. When hopes which strikes the eye being the dead half- of driving the invaders from the soil were dashed burnt trees lying about. To bring it home to the the defeated black warriors retreated to camps comprehension of a Londoner, these open forest- and missions in order to protect the remnants lands have very much the appearance of Hyde of their people. The war and various introduced Park and Kensington Gardens, presenting natural diseases reduced the Victorian population open glades like the east end of the former”7. estimated at 30,000 to 70,000 in 1836 to such a degree that by 1863 only 263 remained of the At Mount Alexander, explorers Thomas Walker Kulin nations”10. and Major Thomas Mitchell found the country a sequence of dense and open forest, and grass. In the resource based economic development “… for a couple of miles we passed through era urban settlements and regions throughout scrubby ranges of very open forest; but just Australia developed around either agricultural where we halted, the country… looked beautiful, or mineral resources, or a transport link and we all exclaimed – ‘there is Australia Felix!’8. (especially rail and ports). An economy built around indigenous plants and animals rapidly gave way to the exploitation of gold, timber, pastures for livestock production. These were the first resources exploited by settlers in Mount Alexander soon after the colonisation of Victoria from 1835. These industries were joined by cereal crops, dairying, fruit and viticulture later in the nineteenth and early twentieth centuries.
4 Gammage, Bill (2011) The Biggest Estate on Earth: How Aborigines Made Australia, Allen and Unwin 5 Several languages had five or six names for a leaf’s life stages. 6 ‘Park’’ meaning ‘’trees planted as if for ornament, alternating wood and grass, a gentleman’s park, an inhabited and improved country, a civilised land’. 7 Mossman, S and Bannister, T (1853) Australia Visited and Revisited 8 Walker, T (1838) A Month in the Bush of Australia 9 Sources for this section include Perrott Lyon Mathieson Pty Ltd; City of Castlemaine Architectural and Historical Survey; City of Castlemaine; January, 1981 Tonkin, Ray et al (2012) National Goldfields Heritage Region Study Department of Conservation Forests and Lands; Maldon Historic Area, Draft Management Plan; 1987. Phil Taylor; Heritage Study of the Shire of Newstead, Stage 2, Environmental History; December, 1998 ,revised May, 2004 10 Pascoe B, ‘How it Starts’’ Chapter 3 of First Australians: An Illustrated History (2008)
Mount Alexander Shire Council 10 Economic Development Strategy and Profile August 2013 2. FACTORS SHAPING THE MOUNT ALEXANDER COMMUNITY 2.1 Economic Development History (continued) The first European settlers in the district were were quickly exhausted, downstream processing pastoralists. But the discovery of gold disrupted of timber, mineral and agricultural products pastoral life and through the early 1850s more brought a healthy manufacturing industry to and more land was given over to the pursuit of the region. For example, Thompson’s Foundry gold. Gold was discovered in the Mt Alexander/ (originally established to service the mines) and Forest Creek area in 1851. This created the hub Castlemaine Woollen Mills became significant of the famous Victorian gold rushes. Castlemaine secondary industries and employers. was the centre of this activity, with the Camp Reserve selected by February 1852. The town By 1854 the rushes had spread to the was surveyed soon after. Tarrengower field at Maldon which, within six months, had a reported population of 18,000 to A notable feature of the goldfields population 20,000. However, this rush was short lived and was its cosmopolitan character. The rushes had by the end of 1854 the population was reported attracted people from all over the globe and the to be 2000. Maldon became better known for survival of such place names as Adelaide Hill, its quartz mining which required fewer people Tipperary Point, Scotchman’s Gully at Chewton, and more financial investment for machinery Yankee Point and Italian Reef at Taradale and to handle the extraction and crushing of the Launceston Gully at Barkers Creek all point to the quartz. The heyday of the Maldon fields was tendency of miners to congregate with others the mid-1860s. Through the last years of the of the same nationality or even of the same nineteenth century mining activity declined region or city. There was a predominance of and Maldon township remained as a relatively Welsh names amongst the miners who worked intact nineteenth century village throughout the the Nimrod Reef and the remains of buildings twentieth century and early twenty first century. nearby are known as the Welsh Village. Chinese also arrived in large numbers and as the 1850s Gold discoveries in the district were extensive progressed, and returns from mining became less, and localities such as Fryers Creek, Campbell’s they were seen as competitors and considerable Creek, Spring Gully, Glenluce, Vaughan, hostility grew towards them. This was so serious Newstead and Guildford became settlements that official Chinese camps were created at Dinah and villages in their own right. Many of these Flat, Adelaide Hill and Golden Point. places became the population centres of specific ethnic groups. Easily obtained alluvial gold was quickly exhausted and miners began sinking shafts into Rail transport opened the Mount Alexander and the old river beds. This created great change broader central Victorian region to economic to the landscape: Diggings quickly became a development opportunities and supported a honeycomb of shallow shafts surrounded by fledgling tourism sector. Development of the heaps of mullock. Puddling machines were railway was a major undertaking by the colonial introduced to the diggings after 1854. The result government and remains as a significant was that vast quantities of earth were scraped inheritance from the gold era. Originally the line from the bedrock, processed through these was to take a direct route from Elphinstone to machines and deposited back into the landscape Sandhurst, but pressure from the prosperous as sludge. This sludge became such a problem and politically influential ensured that it was that by 1861 puddling machines were, for a short diverted via Castlemaine. This in turn required while, banned on the Forest and Campbell’s the construction of the Big Hill Tunnel between Creeks. The use of sluice boxes to strip top Elphinstone and Chewton, which is still regarded soil from promising ground was introduced, as an engineering feat, with the Taradale Viaduct followed by powerful hydraulic sluicing and being another. then dredging. These techniques are largely responsible for the landscape legacy of today, quite different to the descriptions by Thomas Mitchell, George Haydon and Thomas Walker. Although the easily accessible gold deposits
Mount Alexander Shire Council Economic Development Strategy and Profile August 2013 11 2. FACTORS SHAPING THE MOUNT ALEXANDER COMMUNITY 2.1 Economic Development History (continued) Development of water supply and road transport Not only is Australia’s population highly networks were also important outcomes of the urbanised, it is highly metropolitan-ised, with the gold era. The road to Mount Alexander formed majority of resident population located in the the basis of all road transport between Melbourne capital cities of New South Wales, Victoria, South and Bendigo with Cobb and Co commencing Australia and Western Australia. Queensland, coach services in the colony with a service to from its early days as a colony, was the only Mount Alexander in 1854. This was then extended mainland exception. to Bendigo. A little known feature of the road to Melbourne was that there were toll gates The “top down” regional economic development established at Taradale, Harcourt and Chewton. approach concentrated on selected industries and centres often aimed at ‘decentralising’ The Coliban water scheme was a governmental population and industry. Governments offered response to the demand for water on the Mount location incentives to relocating businesses Alexander and Bendigo goldfields. Designed to during this era (such as freight rebates, rates channel water from a reservoir at Malmsbury ‘holidays’, cheap or low cost land and support it was constructed as a complex series of with employment programs). channels, races, reservoirs, flumes and siphons. While initially established to supply water to The relationship between agricultural, the goldfields, it was subsequently extended manufacturing and mining sectors, called the 11 to supply water for sluicing and eventually to ‘basic’ industries , jobs and the rest of the deliver water to the Shire’s agricultural and economy could be measured and targets for horticultural enterprises. growth established. Regional strategic plans or, more correctly, development programs, were then formulated and related to planning, 2.1.4 ERA 3 – “Top Down” Economic marketing, infrastructure, and service provision Development to achieve these targets. This approach was In the 1960’s and 1970s regional economic incorporated in the Australian Growth Centres development and decentralisation policy in program, and state government decentralisation Australia inspired a number of programs aimed policies through the 1970s-1980s. at attracting industries, jobs, and population (in Mount Alexander was not particularly that order) to regional centres. The philosophy targeted as an area for new investment or for was that new or expanded businesses, usually decentralisation incentives during this era. In in the agricultural, manufacturing or mining fact, towards the end of the era (in the early sectors, would bring with them economic, 1980s) Castlemaine was classified as a Strategic employment and population growth, both Centre Type B by the State Government, on directly and through multiplier effects in the the basis that it had a “high concentration services sectors. of employment in one or two slow growth Much of the ‘top down’ policies stemmed from or stagnating industry sectors, and a lack of a perception that Australia’s growing population alternative local employment opportunities.”12 was becoming too urbanised and, more significantly, too concentrated around Australia’s capital cities, and that an interventionist approach was needed in order to ensure balanced development was achieved and that major capital cities were not over-developed.
11 Basic industries were defined as those who brought a net economic benefit to a region because its products or services were not consumed within the region of production. So they brought income into the region which then flowed through the regional economy. 12 Victorian Government State Economic Development Strategy 1984
Mount Alexander Shire Council 12 Economic Development Strategy and Profile August 2013 2. FACTORS SHAPING THE MOUNT ALEXANDER COMMUNITY 2.1 Economic Development History (continued) In some areas of Australia where particular The arrival of the bottom up era also coincided centres have many competitive and location with Australian government policies to phase advantages, diversified natural resources, out all forms of protection for industry and diversified industry mix and substantial to promote a global ‘level playing field’. The government commitment, ‘top down’ rationale was that Australia had a relatively intervention can still be relevant. However, in small domestic market, abundant resources the overwhelming majority of regional areas the and a high standard of living which could only impact of labour market changes and changing be maintained by innovative and competitive economic circumstances has meant that basing industries that could compete on a world scale economic strategies solely on the growth of with competitive Australian exports, therefore production sectors is no longer a sound strategy. more than matching any threats to local More significantly, almost all industry sectors industries from imports. are at least partly ‘basic’ in the 2000s, due to technology, globalisation and mobility. That is, Governments, both Commonwealth and most industries produce income from products Victorian, continued to have a role by supporting and services that are consumed by people from community economic development through outside the region (eg retailing, health services, policies and programs which stimulated and professional, scientific and technical services). facilitated local and regional initiatives. Local Government had the prime role in facilitating and supporting community action. 2.1.5 ERA 4 – “Bottom Up’’ Economic Development During the ‘bottom up’ economic development era, almost all local government authorities The 1980s and 1990s saw an important shift in in Australia began to employ economic the approach to regional development wherein development officers and established economic it became accepted that economic growth development units within their permanent is more effective when it occurs from the organisational structures. During the ‘top down’ “bottom up”, with local communities involved era, economic development had not emerged in planning, investing in, and implementing new as a profession in its own right and people opportunities. working in economic development (within Rationale for the shift towards local community Commonwealth, State, or specific regional based economic development has come from organisations) were employed in teams that the knowledge that (except for totally new had an economic development function in “greenfield” developments, like a new mining combination, but they were trained as marketers, centre13): planners, surveyors, engineers, property managers or economists. » Most new initiatives originate from within regions. During the bottom up era, Mount Alexander » The majority of new employment comes from established regional economic development the growth and diversification of existing boards, which transitioned to Council Economic businesses. Development Units. Within these organisations there was an early focus on investment Most new regional investment comes from » attraction which matured to more balance existing businesses, local public authorities (between investment attraction and developing and existing residents. existing businesses) from the late-1980s. » Most innovation comes from existing local entrepreneurs and skilled residents.
13 Although in recent times mining developments have been organised as fly-in/fly-out or drive-in/drive-out arrangements, and not building the infrastructure for a new town or community
Mount Alexander Shire Council Economic Development Strategy and Profile August 2013 13 2. FACTORS SHAPING THE MOUNT ALEXANDER COMMUNITY. 2.1 Economic Development History (continued)
2.1.6 ERA 5 – Sustainable Economic Therefore, the twenty-first century is bringing Development an integration of economic, environmental and community development policy and The economic climate of the 2000’s, particularly practice (the integrated regional development during the aftermath of the current Global considerations). Financial Crisis, suggests that growth will continue in small to medium enterprises, and “Local economic development refers to the in micro-enterprises. Economic development actions taken by a community to stimulate strategies and the techniques employed to business activity and/or employment”14. analyse and implement them, continue to reflect This definition typifies the investment and the requirement of local communities to develop employment orientation of Era 4’s “bottom up” business initiatives and local employment economic development. The new dimension to meet the needs of existing and expected brought to economic development from a population, rather than to assume that the focus on sustainability and innovation is at the attraction of development from outside will, by core of economic vitality and quality of life. An itself, create the necessary flow-on effects. innovative economy helps to create a healthy community. The significance of investment from within communities has not been dampened by the “Economic growth – meaning a rising standard of fact that knowledge based industries allow living for the majority of residents – more often businesses to locate anywhere. Although than not fosters greater opportunity, tolerance traditional infrastructure and location barriers of diversity, social mobility, commitment to are less important for these businesses, their fairness, and dedication to democracy. In contrast location decisions usually relate to the alliances, when an economy stagnates the resulting family connections or lifestyle considerations frustration generates intolerance, ungenerosity, of the business owner, key employees or and resistance to greater openness of individual entrepreneurs. opportunity.”15 Economic development in the twenty first A summary of the regional economic century is about “creating a climate for development eras and the broad impact on innovation” rather than the traditional objective Mount Alexander is presented in Figure 2.2. of the past “to create a climate for investment”. Unprecedented new issues such as climate change, population ageing and globalisation of production and knowledge industries are dramatically changing the economic landscape and challenging the foundations of economic development theory and practice. For the first time since colonisation regional growth is now actively challenged, and frequently opposed, by local communities who protest that the price of growth is too high if it has a major impact, or even the risk of an impact, on: • Local lifestyles or enjoyment of lifestyles • Environment, cultural or heritage assets • Health, safety and security.
14 Blakely, Edward J. (1989) “Planning Local Economic Development: Theory and Practice,” Newbury Park: Sage Library of Social Research. 15 Friedman, BM (2005), “The Moral Consequences of Economic Growth” Alfred A. Knopf
Mount Alexander Shire Council 14 Economic Development Strategy and Profile August 2013 2. FACTORS SHAPING THE MOUNT ALEXANDER COMMUNITY. 2.1 Economic Development History (continued) Figure 2.2: Australian Economic Development Eras and Mount Alexander Shire
In this era, Australian regions were defined by Aboriginal tribal groups, on tracts of land which were managed to sustain a population living in balance with the available sources of food and water. Mount Alexander ERA 1 provided this economic base to people from, predominantly, the Dja Pre-Colonial Dja Wurrung tribe which covered the central highlands region, east to Settlement: Kyneton, west to the Pyrenees, north to Boort and south to the Great Land Management for Dividing Range. The region supported plentiful vegetation and landform Sustainable Hunting types. The region provided sustainable plant and animal foods as well as and Wild Harvesting medicines and tools to support the pre-colonial economy. Access to land and resources by clans in the tribe, was sometimes restricted depending on the state of the resource in question.
In this era, urban settlements and regions developed around agricultural ERA 2 or mineral resources, or a transport link (especially rail and ports). Resource Based Significant events impacting on Mount Alexander included: Economic Development: • Pastoral squatting and selection (predominantly grazing sheep) 1788 to the 1960’s from 1835 • The great Victorian gold rush of the 1850s for which Mount Alexander was a major hub • Rail connections linking the Shire with Melbourne and Bendigo • Woollen and foundry production and processing became a major industry in the mid-1800s and food manufacturing by 1905. ERA 3 “Top Down” Regional Economic Development: In this era, government policy and programs were implemented to focus Late 1960s to early on orderly development and to attract industries, jobs, and population 1980s (in that order) to Australian municipal areas. These programs targeted metropolitan-rural corridors and major provincial cities but the policies, incentives and generic programs were relevant to Mount Alexander, and Castlemaine was classified as a Strategic Centre Type B due to its high concentration of employment in slow or no growth sectors.
ERA 4 “Bottom Up” Regional In this era, government policies and programs were re-shaped from Economic Development: “direct intervention into regional economic development”, to “facilitation 1980s and 1990s and leadership in regional development innovation and best practice”. In Mount Alexander this era led to formal strategies, participation in specific economic development initiatives, and local economic development organisations.
This era is building on the “bottom-up” or community driven strategy of ERA 5 the 1980’s and 1990’s by acknowledging that most development comes Sustainable Regional from the existing community expanding and investing, from sensible Development: supply chain links with the existing community and local resources, and 2000s from facilitating/coordinating local groups. However, most importantly this era brings acknowledgement that economic development, social/ community development and the environment need to be integrated to achieve sustainability and balance, and to protect lifestyle and liveability.
Mount Alexander Shire Council Economic Development Strategy 2013-2017 15 2. FACTORS SHAPING THE MOUNT ALEXANDER COMMUNITY (continued)
2.2 NATIONAL INDUSTRY AND EMPLOYMENT TRENDS Corresponding to the evolution of regional » The information age is providing automation economic development ‘’eras’’, Australia’s and intelligence to every aspect of life, industry structures have also changed including agriculture (eg through global considerably. Long gone is the national positioning system, forecasting, environmental dependence on agriculture, mining or sensing) and manufacturing (through manufacturing for most jobs. Nationally, computer numerically controlled equipment, property and business services (12.8%), health robotics, production scheduling, etc). (11.1%) and retailing (10.8%) now top the list of 11.27 million jobs. Over three-quarters (75.8%) Within these ages there have been peaks, are in the service industries. This trend is clear at troughs and cyclical effects. Mining is clearly local and regional levels in Victoria. an industry experiencing boom conditions. Construction is an example of an industry with Many people, organisations and political groups cyclical peaks and troughs, but over the long are concerned at the relative decline in the term is slowly trending down in importance economic importance of agriculture, mining and within the economy. manufacturing to Australia’s economy; believing that the reducing importance of these, once The ‘oldest’ sectors are reducing in relative dominant, industries is a sign that Australia’s importance within the economy: primary sector economy will be weakened and jeopardised in (agriculture and mining) and secondary sector the future. However, the world has progressed (manufacturing, construction and utilities). through four major ages which have transformed The tertiary sector (wholesaling, retailing the economies of nations and the lives of their and transport), has retained its relative share, residents. These, shown in Figure 2.3, have providing support to all other sectors, although been the ‘hunting and gathering age’, the radically affected by technology and consumer ‘agricultural age’, the ‘manufacturing age’ and trends. the ‘information age’, and now the ‘sustainability But the quaternary sector (education, finance, and lifestyle’ age is just emerging. professional, technical and business services, Each new age has, generally, brought an and communications) has more than doubled improved standard of living and greater from 21.3% of gross domestic product to 46.7%, knowledge and understanding, arguably with and the quinary sector of health, hospitality, more complex problems and tensions. And cultural and personal services has risen to 11% of each age has brought the previous age with it. gross domestic product, from 8% at the end of 16 For example: the manufacturing age . » The agricultural age harnessed, and genetically improved, products that were exploited in the hunting and gathering age. » The manufacturing age developed products to add value to agriculture and minerals; giving them greater utility and longer shelf-life, and providing machinery and equipment to make primary production more efficient and less labour intensive.
16 A list of industries within each sector is presented in Appendix A.
Mount Alexander Shire Council 16 Economic Development Strategy and Profile August 2013 2. FACTORS SHAPING THE MOUNT ALEXANDER COMMUNITY. 2.2 National Industry and Employment Trends (continued) Figure 2.3: Dawn of the Lifestyle and Sustainability Age
From the beginnings of the human race for tens of thousands of years, Hunting and hunting and gathering was the way of life. In Australia it continued to Gathering Age dominate until 1788 and in Victoria until 1835.
Australia’s colonisation and settlement patterns throughout the nineteenth century were largely determined by agricultural and Agricultural mining activities and the transport corridors to service these primary Age commodities. Primary sector gross domestic product dominated the economy until the mid to late 1800’s.
Manufacturing, and other secondary industry (transport and construction), much of which related to processing Australia’s primary Manufacturing produce, took over as the engine room of the economy for around a Age century in the second half of the 1800s to the second half of the 1900s. The country ‘rode on the sheep‘s back’ by producing and value adding food and fibre.
Communications and information technology have changed every industry, changed the nature of work, and have created the global Information economy. Service industries now dominate the economy and the Age ‘quaternary’ sector (services that have a common thread of information or finance) contributed 47% of Australian gross domestic product in 2012.
In the 21st century, improving standards of living are penetrating even the world’s most populous nations (China and India) and the mobile technologies delivered through the information age means that the entire globe is informed and connected. Domestic services, healthier Lifestyle and lifestyles, and sustaining the future of the planet (through use of Sustainability renewable resources and reduced pollution) are the hallmarks of the Age new age. Health, personal services, cultural and recreation industry sectors will be among the major growth areas in this age. But, as a major economic driver, commercial and professional sophistication will intensify in these industries.
Mount Alexander Shire Council Economic Development Strategy and Profile August 2013 17 2. FACTORS SHAPING THE MOUNT ALEXANDER COMMUNITY. 2.2 National Industry and Employment Trends (continued) The impact of the changing industrial eras has been even more pronounced in terms of the jobs provided in an advanced economy like Australia. Figure 2.4 reveals that: » In 1901, when Australia’s mining boom (from gold and subsequent exploration) and new areas of land were being cultivated and grazed, primary industries made up 32.18% of all jobs » By 1933, secondary industries had overtaken primary industries as the largest employing industry group, with 32.09% of the employed workforce. » In 2011, the quaternary sector was the largest employing group of industries: to be overtaken by the quinary sector in the near future (also, as the trends are suggesting, in Mount Alexander). By way of example of the magnitude of these percentage changes, there are now more people working in the Art and Recreation Sector in Australia than in Farming. In 1901, there were just 6,192 people employed in Art and Recreation with 423,626 in Agriculture (from a total employed workforce of 1.6 million).
Figure 2.4: Employment by Industry Sector, Australia 1901 to 2011
1901 1933 2011
6.07% 13.79% 11.93% 24.36% 24.02% 32.18% 20.44% 9.80% 9.70%
17.40% 21.82% 25.72% 23.74% 32.09% 26.93%
Primary Secondary Tertiary Quarternary Quinary
Mount Alexander Shire Council 18 Economic Development Strategy and Profile August 2013 2. FACTORS SHAPING THE MOUNT ALEXANDER COMMUNITY (continued)
2.3 BROAD LOCAL TRENDS AND THE REGIONAL ENVIRONMENT
2.3.1 Industry Ages and Employment of Mount The main sector in which there was a significant Alexander Residents difference between national figures and Mount Alexander’s resident workforce was the Tertiary In the first half of the twentieth century, sector; a result of the absence of a regional retail employment in Mount Alexander was dominated centre in the Shire. by primary and secondary sectors, to an even greater extent than the national average Secondary industry is the main industry in which (30.8% of Mount Alexander residents worked jobs available compared with jobs occupied by in primary industries compared with 24.4% the resident workforce is markedly different. nationally, and 37.6% worked in secondary The disparities between jobs available and the industries compared with 32.1% nationally). industries employing the Shire’s residents are Secondary industry employment has remained only an issue if it leads to community division very strong in Mount Alexander ever since and jeopardises the future prosperity of the this time (and above the national average) Shire. Increasingly, Mount Alexander will be part for the resident workforce (and even more so of a larger economic region, and commuting for the commuter population (as discussed in workers, across many industries is an inevitable subsequent chapters of this document). consequence. Figure 2.5 demonstrates that Mount Alexander is a municipal economy “in transition” to a service economy. It is less advanced in this transition than Macedon Ranges and Bendigo to the east and more advanced in the transition than Central Goldfields and Loddon to the west. Employment trends for the resident workforce of Mount Alexander Shire generally reflect those implied by the changing industry ‘’ages’’, discussed in the previous section. As a result, the employment, by industry, of Mount Alexander residents in 2011 was very similar to Australia as a whole, reflecting a healthy and diverse skills base and labour force: » Primary sector employment of residents in 2011 in Mount Alexander was 5.35% and nationally was 6.07%, » Secondary sector employment of residents in 2011 in Mount Alexander was 22.76% and nationally was 20.44%, » Tertiary sector employment of residents in 2011 in Mount Alexander was 17.29% and nationally was 23.74%, » Quaternary sector employment of residents in 2011 in Mount Alexander was 28.65% and nationally was 25.72%, » Quinary sector employment of residents in 2011 in Mount Alexander was 25.95% and nationally was 24.02%.
Mount Alexander Shire Council Economic Development Strategy and Profile August 2013 19 2. FACTORS SHAPING THE MOUNT ALEXANDER COMMUNITY. 2.3 Broad Local Trends and the Regional Environment (continued)
Figure 2.5: Mount Alexander: Trends in Employed 2.3.2 Loddon Mallee South Regional Economic Residents 1947 to 2011 Development Plan
1947 The five municipalities in the Loddon Mallee South region of Victoria (Central Goldfields, 6.54% Greater Bendigo, Loddon, Macedon Ranges, 10.68% 30.79% and Mount Alexander) share many attributes, values and lifestyles and they rely on shared infrastructure. However there is also much, in 14.36% terms of economic characteristics and economic development directions, which separates them. Loddon Mallee South is clearly dominated by Primary the City of Greater Bendigo as the region’s major provincial city. Indeed, Bendigo is one of 37.64% Secondary Victoria’s three most significant provincial cities Tertiary 1976 (together with Geelong and Ballarat), and most Quarternary of the Loddon Mallee South region is within the economic sphere of influence of Bendigo. 16.67% 17.70% Quinary A radius of 100 kilometres around Bendigo, plus the north and southern linkages provided by the Calder Corridor (both road and rail), 12.61% encompasses most of the region. The region is also increasingly linked to the Melbourne metropolitan area, with a large and rapidly 36.48% increasing rate of daily interactions (commuting, 16.54% freight and distribution movements). Bendigo is the leading regional service centre for the Loddon Mallee South region and 2001 beyond: large sections of northern Victoria and 7.65% southern New South Wales. Economic growth, 25.13% driven by expanding population include health and community services, higher education, 24.76% vocational training, secondary education, specific government services, banking, and business and technical services. Rapid population growth and the development of supporting social and physical infrastructure 23.89% will help to drive the economy of Bendigo and 18.57% strengthen its role as a regional centre. Loddon Shire has a long tradition as a broadacre 2011 agricultural Shire and increasing farm size and 5.35% technologies have led to several decades of population decline. But future development is 25.95% expected to be achieved from more intensive 22.76% agriculture, renewable energies and natural resource development, and lifestyle residential (in the southern section of the Shire which is within commuting distance of Bendigo).
17.29% 28.65%
Mount Alexander Shire Council 20 Economic Development Strategy and Profile August 2013 2. FACTORS SHAPING THE MOUNT ALEXANDER COMMUNITY. 2.3 Broad Local Trends and the Regional Environment (continued) Macedon Ranges has a network of thriving The themes, directions and strategies outlined townships, becoming increasingly attractive in the Loddon Mallee South plan strongly reflect to commuter populations, due to improved ‘conventional wisdom’ in Australian regional highway and fast rail services. The Shire retains economic development and its application in an agricultural production base and food and Loddon Mallee South. There are, however, several equipment manufacturing remains the largest topical areas in which the regional plans and employing industry, mixed with retail, transport the municipal plans do not identify strategies and professional and technical service sector nor suggest that policies should be developed. growth, and it is becoming well regarded as a In part, this is because the topical areas are in food and wine and cool-climate destination, their infancy (in terms of recognition at regional attracting new businesses and innovators. level), and in part it is because the topics are too sensitive both politically and among some Central Goldfields has a legacy of dependence industry and community groups. Some may be on Australia’s two most radically transforming considered the domain of regional industries, industries: Manufacturing and agriculture. rather than regional organisations or Councils. Both industries are still strong in the Shire, but globalisation, mergers and acquisitions, Samples of topical areas that are absent from economies of scale, and difficult trading terms the current economic development strategies in continue to erode these local industries. The the Loddon Mallee South region, that are likely Shire has a wealth of heritage and cultural assets to emerge in the next few years for debate and which have the potential to be unlocked with direction/policy setting, and have been partially the development of the region as a goldfields addressed in this Mount Alexander Economic heritage tourism destination. Development Strategy, are: Regional Development Australia’s plan for » The need to establish a hierarchy of towns Loddon Mallee South has seven broad objective and villages throughout the region in order areas: to make best use of resources and to provide cost-efficient infrastructure. » Strengthening and diversifying the regional Regional responses to bio-security breaches economy, and building integrated supply » and disease outbreaks. chains. Agricultural technologies that will sustain the » Managing population growth and settlements » region as a world competitive food producer, (so that it doesn’t overwhelm environmental and the appropriate balance and competitive and social attributes that are attracting the strengths associated with each technology growth). (such as organic farming, biological farming » Strengthening communities, especially the and genetic engineering). small towns. » Land management approaches and policies » Managing the regional ‘two speed economy’ on rights to farm or rights to develop in prime (the growth municipalities of Greater agricultural, heritage or environmentally Bendigo, Macedon Ranges and Mount significant lands. Alexander compared with the no growth and Policy on renewable energy generation (wind, disadvantaged municipalities of Loddon and » solar, biomass conversion) or low carbon Central Goldfields). energy production (clean coal, nuclear, gas) » Improving reticulated and independent and carbon sequestration. infrastructure, especially water, power and The dramatic changes to geographically waste disposal (although transport has » dependent businesses, through competition probably become equally significant). from internet, e-commerce and accessible » Improving education and training outcomes. major centres. » Protecting and enhancing the natural and built » Planning for responses and management of environment. increasingly frequent swings in climate and extreme climatic events.
Mount Alexander Shire Council Economic Development Strategy and Profile August 2013 21 3. COMMUNITY AND ECONOMIC PROFILE
The impact of Mount Alexander’s history and its progression through the eras of economic development within Australia is embedded within the current structure of its community and its economy. Key features are outlined as follows.
3.1 CHARACTERISTICS OF THE RESIDENT COMMUNITY 3.1.1 Population Trends, Age Structure and Population growth within the Shire has been Migration faster in the rural hinterland than in Castlemaine. At June 30, 2011 Mount Alexander Shire had an Projections to 203117 estimate that Mount estimated resident population of 17,803. Around Alexander’s population will increase at a faster 42% live within the Statistical Area 2 (SA2) of rate than has been sustained over the last 10 years Castlemaine. The Shire has sustained an average (0.9% per annum over the next 20 years), but annual rate of growth of 0.4% over the last 10 that Castlemaine’s share of the total will decline years, but has declined slightly (-0.2%) over slightly (to 40.7%). the last year. By way of comparison, population growth in Non Metropolitan Victoria increased at The Shire is characterised by a relatively old age an average annual rate of 0.7% over the last 10 structure as illustrated in Figure 3.1. years and 0.5% in the last year.
17 SOURCE: Department of Planning and Community Development, Victoria in Future, 2012
Mount Alexander Shire Council 22 Economic Development Strategy and Profile August 2013 3. COMMUNITY AND ECONOMIC PROFILE 3.1 Characteristics of the Resident Community (continued) Figure 3.1: Population Age Structure, 201118 Figure 3.2: Population Age Structure. 2031
40.0% 40.0% 35.0% 35.0% 30.0% 30.0% 25.0% 25.0% 20.0% 20.0% 15.0% 15.0% 10.0% 10.0% 5.0% 5.0% 0.0% 0.0% 0–14 15–24 25–49 50–64 65+ 0–14 15–24 25–49 50–64 65+ MOUNT ALEXANDER SHIRE NON METROPOLITAN VICTORIA VICTORIA MOUNT ALEXANDER SHIRE NON METROPOLITAN VICTORIA VICTORIA
Source: ABS, Census of Population and Housing, 2011 Source: Department of Community Development & Planning, Victoria in Future, 2012
Figure 3.1 shows that 45.9% of the population One of the contributing factors to the Shire’s in Mount Alexander is aged 50+ and 20.8% are old age structure is its fertility rate which is aged 65+. This is significantly greater than both amongst the lowest in Non Metropolitan Victoria. the average for the State and Non Metropolitan However, this is offset by relatively high rates Victoria. Conversely, only 26.3% is aged less than of net inwards migration. For example, 21% of 24, compared with 32.2% for Victoria and 31.5% all persons living in Mount Alexander aged 5+ for Non Metropolitan Victoria. in 2011 had moved to the Shire since 2006. Of those aged 5+ moving to Mount Alexander in The SA2 of Castlemaine has the oldest age the last 5 years, 58.8% moved from Melbourne structure with 22.8% aged 65+, compared with (or 9.9% of all persons aged 5+ living in Mount 18.8% in the SA2 of Castlemaine Region. Alexander in 2011). This compares with 17% of all By 2031, the proportion aged 65+ in Mount persons resident in the Shire in 2006 who now Alexander is expected to reach 31.3%, live elsewhere, mostly Melbourne (5.2%) and significantly greater than the average Greater Bendigo (4.2%). throughout the State (19.3%) and throughout Further, new residents in the Shire have a Non Metropolitan Victoria (24.5%). Figure 3.3 younger age structure. For example, of those presents details. aged 5+ who have moved to Mount Alexander since 2006, only 14.6% are aged 65+, compared with 21.7% of those who were resident in the Shire in 2006.
18 NOTE: The Age Structure for Mount Alexander in Figure 3.1 is based on the SA2s of Castlemaine and Castlemaine Region which differ slightly from the LGA boundary.
Mount Alexander Shire Council Economic Development Strategy and Profile August 2013 23 3. COMMUNITY AND ECONOMIC PROFILE 3.1 Characteristics of the Resident Community (continued)
3.1.2 Labourforce Characteristics Within the Shire: In 2011, Mount Alexander Shire had, in • the rate of unemployment is marginally higher comparison with Non Metropolitan Victoria in Castlemaine than in Castlemaine Region and the State: (5.1% compared with 4.8%), • the workforce participation rate is considerably • a relatively low workforce participation rate, lower (53.8% compared with 59.3%), • relatively fewer workers in full time jobs, • marginally fewer workers are in full time jobs • a marginally lower rate of unemployment, (57.1% compared with 57.7%), • relatively fewer unemployed seeking full • significantly fewer unemployed are seeking time work. full time employment (52.9% compared with Figure 3.3 presents details. 57.2%). Figure 3.3: Labourforce Characteristics There are also interesting differences between newer residents and those who lived in the Shire in 2006, as Figure 3.4 illustrates. 70.0% 60.0% Perhaps the most significant differences are 50.0% apparent in the higher rate of unemployment, 40.0% and with both greater participation in full time work and search for full time employment 30.0% amongst unemployed by newer residents to the 20.0% Shire. A surprising aspect, however, is the slightly 10.0% lower workforce participation rate amongst 0.0% newer residents, despite having a significantly % unemployed Workforce % employed with % of unemployed younger age structure. Perhaps this, also, reflects participation rate full time jobs looking for full time work lifestyle decisions by these residents.
MOUNT ALEXANDER SHIRE NON METROPOLITAN VICTORIA VICTORIA Figure 3.4: Labourforce Characteristics, Newer and Longer Term Residents, 2011
Source: ABS, Census of Population and Housing, 2011 70.0% These characteristics are consistent with an 60.0% older age structure but may also reflect a component of the population who have chosen 50.0% to live in Mount Alexander because of lifestyle 40.0% factors. For example, the biggest differential in 30.0% workforce participation rates occurs in the 25 20.0% to 49 year age group where Mount Alexander 10.0% records 75.3% compared with 81.9% for Non 0.0% Metropolitan Victoria and 83.3% for the State. % unemployed Workforce % employed with % of unemployed participation rate full time jobs looking for full time work
RESIDENTS LIVING IN SHIRE IN 2006 RESIDENTS NEW TO SHIRE SINCE 2006
Source: ABS, Census of Population and Housing, 2011
Mount Alexander Shire Council 24 Economic Development Strategy and Profile August 2013 3. COMMUNITY AND ECONOMIC PROFILE 3.1 Characteristics of the Resident Community (continued)
3.1.3 Worker Characteristics and Qualifications The distribution of occupations amongst workers from Mount Alexander Shire is reasonable close The industry of employment and occupations of to the State average, with most employed as workers resident in Mount Alexander Shire are professionals and least as machinery operators summarised in Tables 3.1 and 3.2. and drivers. The Shire also has a relatively Table 3.1 shows that more workers from large proportion of community and personal Mount Alexander Shire are employed in the service workers (consistent with the strong manufacturing industry and in the key quinary representation of quinary industries) and industry sectors of education and training, and labourers, and fewer clerical and administrative health care and social assistance than both workers. Non Metropolitan Victoria and the State overall. Table 3.2: Occupation of Workers, 2011 Public administration and safety also has a relatively larger representation in the Shire. OCCUPATION MOUNT NON VICTORIA ALEXANDER METROPOLITAN % Table 3.1: Industry of Employment, 2011 % VICTORIA % INDUSTRY MOUNT NON VICTORIA ALEXANDER METROPOLITAN % Managers 14.9 15.5 13.5 % VICTORIA Professionals 21.9 17.1 22.8 % 14.2 15.7 14.2 Agriculture, Forestry and 4.6 8.0 2.3 Technicians and Trades Workers Fishing Community and Personal 10.9 10.5 9.5 Mining 0.8 0.8 0.4 Service Workers Manufacturing 13.8 10.6 11.0 Clerical and Administrative 10.8 11.9 14.7 Electricity, Gas, Water and 0.7 1.6 1.1 Workers Waste Services Sales Workers 7.9 9.9 9.9 Construction 7.9 9.1 8.5 Machinery Operators and 5.6 7.0 6.2 Wholesale Trade 2.4 3.1 4.6 Drivers Retail Trade 11.6 11.9 11.1 Labourers 13.7 12.5 9.2 Accommodation and Food 5.3 6.9 6.2 Total 100.0 100.0 100.0 Services Source: ABS, Census of Population and Housing, 2011 Transport, Postal and 3.2 4.2 4.8 Warehousing The distribution of occupations is also reflected Information Media and 1.8 1.1 2.0 in the relatively high representation of post Telecommunications school qualifications amongst Mount Alexander Financial and Insurance 1.3 2.1 4.2 residents. For example, in 2011: Services half the residents (49.8%) in Castlemaine Rental, Hiring and Real 1.0 1.1 1.4 » and Castlemaine Region had a post school Estate Services qualification. This compares with 41.6% for Non Professional, Scientific and 5.3 4.0 7.9 Metropolitan Victoria and 45.6% for Victoria, Technical Services » of those with post school qualifications, 41.6% 2.6 2.6 3.4 Administrative and Support in Castlemaine and Castlemaine Region had Services a bachelor degree or higher, compared with Public Administration and 7.0 6.2 5.5 only 30.9% for Non Metropolitan Victoria and Safety 45.7% for the State, Education and Training 9.8 8.4 8.2 » most (37.7%) had a Certificate III or IV Health Care and Social 15.3 13.4 11.8 (compared with 47.8% and 33.6% respectively). Assistance Arts and Recreation Services 2.2 1.3 1.8 Other Services 3.4 3.6 3.7 The main fields of study for those with non- Total 100.0 100.0 100.0 school qualifications are, in order:
Source: ABS, Census of Population and Housing, 2011 Mount Alexander Shire Council Economic Development Strategy and Profile August 2013 25 3. COMMUNITY AND ECONOMIC PROFILE 3.1 Characteristics of the Resident Community (continued)
• Engineering & Related Technologies, 3.1.4 Income • Society & Culture, • Health, The Shire is characterised by a relatively low • Education, income distribution. For example, in 2011, • Management & Commerce. almost 60% (58.9%) of households had an average weekly income of less than $1,000. It is also interesting to note that a significantly Corresponding results for Non Metropolitan larger proportion of residents that are new to the Victoria and the State were 52.9% and 38.8% Shire since 2006 have a post school qualification respectively. Similarly, only 13.6% of households than those who were living in the Shire in 2006 in Mount Alexander had an average weekly (58.8% compared with 46.6%). Newer residents income of more than $2,000, compared with also have a relatively greater proportion of those 17.7% for Non Metropolitan Victoria and 31.4% for with post school qualifications with higher order Victoria. Figure 3.6 presents details. qualifications, as illustrated in Figure 3.5. Figure 3.6: Average Weekly Household Income For example, Figure 3.5 shows that of those with post school qualifications, 54.8% of residents 45.0% who are new to the Shire since 2006 have a 40.0% bachelor degree or higher, compared with 36.4% 35.0% of those who were living there in 2006. 30.0% 25.0% Figure 3.5: Type of Post School Qualifications 20.0% Held by Residents 15.0% 10.0% 50.0% 5.0% 45.0% 0.0% 40.0% <$400 $400 $1,000 $1,500 $2,000 $3,000+ –$999 –$1,499 –$1,999 –$2,999 35.0% 30.0% MOUNT ALEXANDER SHIRE NON METROPOLITAN VICTORIA VICTORIA 25.0% 20.0% 15.0% Source: ABS, Census of Population and Housing, 2011 10.0% 5.0% A similar pattern is evident for average weekly 0.0% Postgraduate Graduate Diploma Bachelor Degree Advanced Certificate personal incomes. Degree Level & Graduate Level Diploma & Level Certificate Level Diploma Level Interestingly, the income distribution amongst newer residents of the Shire is significantly RESIDENTS LIVING IN SHIRE IN 2006 RESIDENTS NEW TO SHIRE SINCE 2006 higher. For example, 23% of newer residents had an average weekly personal income of more Source: ABS, Census of Population and Housing, 2011 than $1,000 per week, compared with 16.5% of persons who were resident in the Shire in 2006.
Mount Alexander Shire Council 26 Economic Development Strategy and Profile August 2013 3. COMMUNITY AND ECONOMIC PROFILE (continued)
3.2 THE SHIRE’S SMALLER TOWNSHIPS The key smaller townships in Mount Alexander The meat and meat processing industry employs include: most workers from each of the townships except Maldon (where school education is the largest » Campbell’s Creek, on Castlemaine’s outskirts employer) and Elphinstone (sheep, beef cattle (and part of the Castlemaine SA2), founded and grain farming). during the gold rush of the 1850s, » Maldon an historic gold mining town around A comparison of median monthly mortgage 18 kilometres north west of Castlemaine and repayments as a proportion of median monthly designated Australia’s first notable town for its household income for each of the townships is 19th century appearance, presented in Figure 3.7. » Elphinstone, around 13 kilometres west of It shows that residents of Maldon and Castlemaine and just outside the Castlemaine Castlemaine pay relatively more of their SA2 boundary, and well known for its diverse household income in mortgage repayments (41% flora and fauna, and 37% respectively), whilst Elphinstone and » Newstead, around 17 kilometres south west Campbell’s Creek pay the least (30% and 33% of Castlemaine and home to a number of respectively). festivals and events, Figure 3.7: Median Monthly Mortgage » Harcourt, set at the foot of Mount Alexander Repayments as a % of Median Monthly around 10 kilometres north of Castlemaine, Household Income and the apple centre of Victoria with a growing reputation for wine and cider. 45.0% The size and characteristics of these townships 40.0% 41.3 35.0% 36.9 is summarised in Table 3.3. The urban centre of 35.5 34.4 30.0% 32.6 Castlemaine (Castlemaine UCL – an area smaller 30.1 than the Castlemaine SA2) is also included in 25.0% 20.0% this Table for purposes of comparison. 15.0% Table 3.3 shows that the townships range in 10.0% population from just under 500 for Harcourt to 5.0% 0.0% 9,124 for Castlemaine. Castlemaine Campbells Maldon Elphinstone Newstead Harcourt Creek Maldon has the oldest age structure with a median age of 54 and 28.2% of people aged Source: ABS, Census of Population and Housing 2011 65+. It also has the highest unemployment rate, the lowest proportion of employed people in full time positions, and amongst the lowest income structures of all the townships. Campbell’s Creek, on the other hand, has a relatively young age structure, high workforce participation rate, low unemployment rate and high income structure, as do Harcourt and Elphinstone. The Table also shows that most workers in all townships (except Harcourt) are in the professionals occupation group and that labourers, and technicians and trade workers are also prevalent.
Mount Alexander Shire Council Economic Development Strategy and Profile August 2013 27 3. COMMUNITY AND ECONOMIC PROFILE 3.2 The Shire’s Smaller Townships (continued) Table 3.3: Select Characteristics of residents of Mount Alexander’s Main Townships
CASTLEMAINE CAMPBELL’S CREEK MALDON ELPHINSTONE NEWSTEAD HARCOURT (UCL) (SS) (UCL) (SS) (UCL) (UCL) Population 9,124 1,410 1,236 670 512 479 % Aged 65+ 22.8% 13.5% 28.2% 14.8% 20.2% 15.0% Median Age 45 40 54 49 50 40 WORKFORCE Workforce 41.7% 62.4% 46.6% 59.5% 51.6% 61.0% Participation Unemployed 5.1% 2.9% 6.9% 2.6% 6.6% 4.3% % of Employed 53.7% 52.5% 50.1% 56.3% 54.9% 60.0% Working Full Time % of Employed 27.0% 23.7% 34.4% 24.8% 25.3% 21.9% Working less than 24 hrs per week Top Occupation Professionals Professionals Professionals Professionals Professionals Labourers (27.0%) (18.0%) (20.1%) (19.3%) (20.8%) (22.7%) 2nd Occupation Labourers Technicians & Technicians & Managers Managers Technicians & (13.8%) Trade Workers Trade Workers (16.3%) (13.9%) Trade Workers (17.7%) (17.8%) (20.0%) Top Industry Meat & Meat Meat & Meat School Education Sheep, Beef Cattle Meat & Meat Meat & Meat Processing Processing (6.1%) & Grain Farming Processing Processing (7.4%) (7.3%) (6.7%) (9.3%) (6.8%) 2nd Industry School Education Medical Services Hospitals School Education Supermarkets & School Education (5.8%) (6.1%) (5.0%) (5.2%) Grocery Stores (4.5%) (6.0%) INCOME & OUTGOINGS Median Weekly $471 $504 $441 $470 $396 $511 Personal Income Median Weekly $811 $1,025 $710 $995 $675 $870 Household Income Median Monthly $1,300 $1,451 $1,275 $1,300 $1,040 $1,300 Mortgage Repayments Median Weekly $200 $210 $150 $250 $166 $200 Rent
NOTES: UCL refers to Urban Centre/Locality. In the case of Castlemaine it covers a smaller area than the Castlemaine SA2 (which includes Castlemaine, Campbell’s Creek, McKenzie Hill and Chewton) SS refers to State Suburb and is used where there is no UCL. The SS may cover more than the township/village boundary.
SOURCE: ABS, Census of Population and Housing, 2011
Mount Alexander Shire Council 28 Economic Development Strategy and Profile August 2013 3. COMMUNITY AND ECONOMIC PROFILE (continued)
3.3 JOBS Overall, 71% of jobs in the Shire are held by workers who live in Mount Alexander, and 60% 3.3.1 Jobs and Worker Migration of workers who live in the Shire have a job in the The estimated total number of jobs in Mount Shire, as Figure 3.8 illustrates. 19 Alexander Shire in 2011 is 6,856 , an increase of Most of the workers living in Mount Alexander 7.7% since 2006. Almost 80% (78.7%) of these who work elsewhere have jobs in Bendigo, and jobs are in the Castlemaine SA2. most of the workers who commute to Mount The total number of jobs indicates there Alexander commute from Bendigo. Figures are 0.779 jobs in Mount Alexander for every 3.9 and 3.10 illustrate the percentage of Mount employed resident of the Shire. Table 3.4 Alexander workers who commute outside summarises some key changes from 2006 the Shire and the percentage of workers who to 2011. live outside the Shire and commute to Mount Alexander. Table 3.4: Summary of Key Changes in Jobs, Workers and Population, 2006 to 2011 In total, there is a net out-migration of workers from Mount Alexander. The ratio of workers who 2006 2011 % CHANGE leave Mount Alexander for their job to workers who commute to the Shire is 1.74:1; ie for every % of Jobs Full Time 57.4% 53.9% -6.1% 10 workers who leave the Shire for work, 7.4 workers commute to the Shire. However, there Jobs/Workers 78.7% 77.9% -1.0% is a net in-migration from Bendigo, Hepburn and Central Goldfields of 0.84, 0.85 and 0.67 Jobs/Population 33.3% 34.9% 4.8% respectively; ie there are more workers coming Workers/Population 42.3% 44.8% 5.9% from those LGAs to work in Mount Alexander, than there are workers in Mount Alexander with Source: ABS, Census of Population and Housing, 2006 and 2011 jobs in those LGAs.
Table 3.4 shows that Figure 3.8: Local Workers and Local Jobs » the ratio of jobs to workers resident in the 100.0% Shire has dropped slightly, despite there being 90.0% an increase in the ratio of jobs to population. 80.0% 70.0% This reflects stronger growth in the number of 70.9 workers in the Shire than total population 60.0% 50.0% 60.0 there has been quite a marked drop in the » 40.0% proportion of jobs that are full time. 30.0% 20.0% 10.0% 0.0% % of workers living in Mount % of jobs in Mount Alexander held Alexander with jobs in the Shire by workers living in the Shire
Source: ABS, Census of Population and Housing, 2011
19 This estimate is based on the Census Working Population Profile with adjustments for labourforce not stated, job destination not stated and to reflect the difference between Census by Place of Usual Residence and Estimated Resident Population. It is likely that this estimate is conservative as it is based on Census respondents’ main job the week the Census was taken and does not make any allowance for persons who hold more than one job. It is also based on the SA2s of Castlemaine and Castlemaine Region which differ slightly from the Mount Alexander LGA boundary. Where SA2 data has been used for jobs, corresponding population related data is also based on SA2 boundaries.
Mount Alexander Shire Council Economic Development Strategy and Profile August 2013 29 3. COMMUNITY AND ECONOMIC PROFILE 3.3 Jobs (continued) Figure 3.9: Destination of Mount Alexander Most workers who commute to Mount Alexander Workers with Jobs Outside the Shire for their job are employed in the: • meat and meat processing industry (33% of imported workers), • public order and safety industry (6%), BENDIGO 12% • school education industry (6%), CENTRAL GOLDFIELDS • medical services industry (4%). The major industry sectors in Mount Alexander MACEDON RANGES 5% with the greatest proportion of imported HEPBURN 1% workers are:
MELBOURNE 9% • manufacturing, with 48% of jobs occupied by imported workers, • public administration and safety, 47%, • administrative and support services, 33%. Most workers who live in Mount Alexander but work elsewhere are employed in: • school education (6.4% of workers with jobs outside the Shire,) Figure 3.10: Jobs in Mount Alexander Shire held • tertiary education (5.5%), by Workers from Outside the Shire • hospitals (5.5%), • other social assistance (3.6%). The occupations of most out-migration workers are: BENDIGO 18% • school teachers (7.4%), CENTRAL GOLDFIELDS 3% • social and welfare professionals (5.5%), • midwifery and nursing professionals (5.4%), MACEDON RANGES 2% • tertiary education professionals (4.8%), HEPBURN 2% • sales persons and sales assistants (4.0%).
MELBOURNE 2%
Source: ABS, Census of Population and Housing, 2011
Mount Alexander Shire Council 30 Economic Development Strategy and Profile August 2013 3. COMMUNITY AND ECONOMIC PROFILE 3.3 Jobs (continued) 3.3.2 Jobs by Sector and Industry Figure 3.11: Jobs by Sector
The distribution of jobs by industry sector Primary within Mount Alexander is impacted by a small number of large manufacturers who Secondary contribute to a much larger manufacturing and Tertiary Mount Alexander Shire secondary industry sector overall than is evident Quarternary throughout Non Metropolitan Victoria and the 5.8% State in total. Figure 3.11 presents details. Such Quinary is the dominance of manufacturing that Mount 23.9% Alexander has a smaller percentage of jobs in most other sectors (except quinary and primary 30.6% compared to the State as a whole). A list of industries within each sector is presented in Appendix A.
22.4%
17.3%
Non Metropolitan Victoria
9.0%
26.7% 19.4%
25.6% 19.3%
Victoria
2.6%
23.5% 20.4%
20.5%
33.0%
SOURCE: ABS, Census of Population and Housing, 2011
Mount Alexander Shire Council Economic Development Strategy and Profile August 2013 31 3. COMMUNITY AND ECONOMIC PROFILE 3.3 Jobs (continued) The distribution of jobs by industry in 2011 and percentage change from 2006 for Mount Alexander, Non Metropolitan Victoria and Victoria is presented in Table 3.5.
Table 3.5: Distribution of Jobs by Industry 2011 and % Change from 2006
DISTRIBUTION OF JOBS IN 2011 (%) % CHANGE FROM 2006 INDUSTRY MOUNT NON VICTORIA MOUNT NON VICTORIA ALEXANDER METROPOLITAN % ALEXANDER METROPOLITAN % % VICTORIA % VICTORIA % % Agriculture, Forestry and Fishing 5.6 9.1 2.3 -18.0 -14.9 -9.3 Mining 0.5 0.7 0.3 -11.8 17.6 34.2 Manufacturing 35.0 13.5 12.5 12.6 -10.2 -3.8 Electricity, Gas, Water and Waste Services 0.4 2.0 1.3 -23.8 15.2 41.1 Construction 3.5 4.0 4.6 3.3 9.7 26.9 Wholesale Trade 1.4 1.8 2.7 16.2 -7.0 2.7 Retail Trade 8.3 8.0 6.8 4.5 -5.1 6.0 Accommodation and Food Services 3.8 4.8 3.9 15.9% 7.2 19.7 Transport, Postal and Warehousing 1.8 2.5 3.1 2.6 2.0 17.3 Information Media and Telecommunications 0.7 0.7 1.4 0.0 -19.8 1.6 Financial and Insurance Services 0.7 1.4 2.9 9.1 3.9 14.6 Rental, Hiring and Real Estate Services 0.6 0.8 1.0 -7.1 -3.7 15.0 Professional, Scientific and Technical Services 3.0 2.9 5.8 36.6 11.0 22.2 Administrative and Support Services 1.6 1.6 2.5 51.2 -4.0 14.3 Public Administration and Safety 5.3 4.8 4.3 8.3 8.2 17.3 Education and Training 5.6 7.5 6.9 -2.1 6.4 17.5 Health Care and Social Assistance 13.0 13.5 11.0 18.8 18.5 25.4 Arts and Recreation Services 1.7 1.2 1.7 -9.2 9.4 25.3 Other Services 2.8 3.6 3.6 -3.8 2.8 12.9 TOTAL 100.0 100.0 100.0 7.8 1.4 13.5
Source: ABS, Census of Population and Housing, 2006 and 2011
Mount Alexander Shire Council 32 Economic Development Strategy and Profile August 2013 3. COMMUNITY AND ECONOMIC PROFILE 3.3 Jobs (continued) Table 3.5 shows that Mount Alexander has Figure 3.12 shows that Mount Alexander almost three times the proportion of jobs in outperformed Non Metropolitan Victoria in manufacturing as Victoria and Non Metropolitan the quaternary sector between 2006 and 2011, Victoria. Further, it experienced strong growth in although lags performance of the State overall the number of manufacturing jobs from 2006 to in both of the key growth sectors (quaternary 2011, whilst Non Metropolitan Victoria and Victoria and quinary). It has also had a more significant both had a decline. Almost two thirds of all decline in the number of jobs in the primary manufacturing jobs (64.9%) and 16% of all jobs in industry sector. the Shire are in meat and meat processing. Meat and meat processing was entirely responsible for 3.3.3 Jobs by Occupation the growth in manufacturing jobs since 2006. The dominant occupation groups for jobs in Other industries that show a different trend in Mount Alexander Shire are: Mount Alexander include: » labourers (accounting for 20.6% of all jobs » arts and recreation services, and other within the Shire), mostly services both of which have had a decrease • food process workers (7.2%) in jobs since 2006 whilst Victoria experienced • packers and product assemblers (4.3%) strong growth and Non Metropolitan Victoria • cleaners and laundry workers (2.9%), experienced modest growth, professionals (accounting for 17.5% of all jobs), wholesale trade which experienced strong » » mostly growth in Mount Alexander but a drop in Non • midwifery and nursing professionals (3.9%) Metropolitan Victoria and Victoria, • school teachers (3.7%) » accommodation and food services which had • social and welfare professionals (1.0%), just over double the rate of growth of Non Metropolitan Victoria but slightly less than » managers (accounting for 15% of all jobs), Victoria, mostly » professional, scientific and technical services • farmers and farm managers (4.5%) which had significantly higher growth in • retail managers (3%) Mount Alexander, • construction, distribution and process managers (2.6%). » administrative and support services where jobs in Mount Alexander grew by 50% Strongest growth in jobs in the Shire has compared with a decline in Non Metropolitan occurred for: Victoria and 14% growth throughout the State. » community and personal service workers, up The change in jobs by sector is illustrated in 25.1% from 2006, Figure 3.12. » labourers, up 21.6%, professionals, up 10.9%. Figure 3.12: % Change in Jobs by Sector, 2006 » to 2011 Jobs for machinery operators and drivers, and 25.0% for sales workers both dropped over the 5 year 20.0% period (-19.4% and -5.2% respectively). 15.0% Mount Alexander has a significantly higher 10.0% proportion of jobs for labourers than both 5.0% Non Metropolitan Victoria and Victoria (20.6% compared with 11.8% and 9%) but a similar 0.0% PRIMARY SECONDARY TERTIARY QUARTERNARY QUINARY TOTAL distribution across other occupation groups, -5.0% with a slightly higher representation of -10.0% community and personal service occupations. -15.0% -20.0%
MOUNT ALEXANDER SHIRE NON METROPOLITAN VICTORIA VICTORIA
Source: ABS, Census of Population and Housing, 2006 and 2011 Mount Alexander Shire Council Economic Development Strategy and Profile August 2013 33 3. COMMUNITY AND ECONOMIC PROFILE 3.3 Jobs (continued) 3.3.4 Jobs by Income Figure 3.14: % of Jobs by Industry Earning less than $400 per week, Mount Alexander Shire The average weekly income of jobs in the two SA2s in Mount Alexander is summarised in Other Services Figure 3.13 Arts & Recreation Services Figure 3.13: Jobs by Average Weekly Income, Health care & Social... Castlemaine and Castlemaine Region, 2011 Education & Training Public Administration & ... 60.0% Administrative & ... 50.0% Professional, Scientific & ... Rental, Hiring & Real ... 40.0% Financial & Insurance 30.0% Information Media & ... 20.0% Transport, Postal & ... Accommodation & Food ... 10.0% Retail Trade 0.0% <$400 $400–$999 $1,000–$1,499 $1,500–$1,999 $2,000+ Wholesale Trade Construction MOUNT ALEXANDER SHIRE NON METROPOLITAN VICTORIA VICTORIA Electricity, Gas, Water & ... Manufacturing Source: ABS, Census of Population and Housing, 2011 Mining Figure 3.13 shows there are relatively more jobs Agriculture, Forestry & ... in the rural part of the Shire with incomes of less than $400 per week than in Castlemaine, but 0% 5% 10% 15% 20% 25% little discernible difference in the proportions earning more than $1,500 per week. Figure 3.15: % of Jobs by Industry Earning more The industries with the most jobs earning than $1,500 per week, Mount Alexander Shire low and high weekly incomes in the Shire are presented in Figures 3.14 and 3.15. They show Other Services that a significantly greater proportion of jobs Arts & Recreation Services in retail and, to a lesser extent, accommodation Health care & Social... and food services and manufacturing have Education & Training average weekly incomes of less than $400 Public Administration & ... than all other industries. For retail and Administrative & ... accommodation and food services this most Professional, Scientific & ... likely reflects the greater proportion of part time Rental, Hiring & Real ... and casual jobs in those industries. Financial & Insurance Figure 3.15 shows that the manufacturing and, to Information Media & ... a lesser extent, health care and social assistance, Transport, Postal & ... public administration and safety, and education Accommodation & Food ... and training industries have a substantially Retail Trade greater proportion of jobs earning more than Wholesale Trade $1,500. Construction The fact that manufacturing has a reasonably Electricity, Gas, Water & ... high proportion of jobs on low incomes and Manufacturing a significant proportion on high incomes Mining demonstrates the range of positions that are Agriculture, Forestry & ... available in that industry and the range of skill sets required. 0% 5% 10% 15% 20% 25%
Source: ABS, Census of Population and Housing, 2011
Mount Alexander Shire Council 34 Economic Development Strategy and Profile August 2013 3. COMMUNITY AND ECONOMIC PROFILE (continued)
3.4 VISITORS TO THE SHIRE Mount Alexander is part of the Bendigo Loddon The characteristics of visitors to the Shire is sub-region of the Goldfields Tourism Campaign summarised in Table 3.6. Some of the interesting Region. In the year ended June 201220, Mount features of the characteristics of visitors include: Alexander attracted: » the average length of stay is greater for older • 411,000 day visitors, visitors and greatest (for domestic overnight • 149,000 domestic overnight visitors staying visitors) for those aged 65+, 373,000 visitor nights at an average of 2.5 » the average length of stay is greater for nights per visitor, domestic overnight visitors for those travelling • an estimated 3,200 international overnight for holiday/leisure and staying in “other” visitors staying an average of 25,500 visitor accommodation (caravan parks, camping nights21. grounds, private cottages, B&Bs etc), » the average length of stay for international Castlemaine is the second most visited SA2 in overnight visitors is substantially greater for the Bendigo Loddon sub-region (behind East those staying with friends/relatives, Bendigo-Kennington). » domestic overnight visitors from regional The estimated total number of visitor nights in Victoria stay longer, on average, than those the Shire is the equivalent of an increase in the from Melbourne. resident population of 5.9% (or an additional 1,092 permanent residents in the Shire). Total tourist expenditure22 in Mount Alexander in 2012 is estimated at $78.9 million, of which $78.7 million is derived from domestic visitors. Estimated total tourism expenditure is based on the visitor number profile described above and an estimated expenditure of $98 per day for day visitors (to Bendigo Loddon) $103 per night for domestic overnight visitors (in Bendigo Loddon) and $63 per night for international overnight visitors (in Bendigo Loddon). Of the expenditure made by domestic visitors, it is estimated that: • $25.6 million is spent on food and drink, • $9 million is spent on accommodation, • $16.9 million is spent on shopping, • $3.4 million is spent on entertainment.
20 SOURCE: Tourism Research Australia, Special Data Request 21 Data on international visitation is not available for Mount Alexander. Estimates are based on share of visitors to the remainder of the Bendigo Loddon sub-region (assumed to be the same as Mount Alexander’s share of domestic overnight visitors to the remainder of the Bendigo Loddon sub-region). 22 SOURCE: Tourism Research Australia, Regional Tourism Profiles, 2011-12
Mount Alexander Shire Council Economic Development Strategy and Profile August 2013 35 3. COMMUNITY AND ECONOMIC PROFILE 3.4 Visitors to the Shire (continued) Table 3.6: Summary of Characteristics of Visitors to Mount Alexander Shire, Year ended June 2012
DOMESTIC DAY DOMESTIC DOMESTIC INTERNATIONAL INTERNATIONAL TRIPS OVERNIGHT OVERNIGHT OVERNIGHT OVERNIGHT % VISITORS VISITOR NIGHTS VISITORS VISITOR NIGHTS % % % % AGE OF VISITORS 25-44 36.0 38.7 31.4 28.4 22.3 45-64 36.5 21.8 19.6 51.1 55.4 ORIGIN OF VISITORS Melbourne 49.3 70.0 63.3 UK & Europe UK & Europe (46.2) (30.4) Victoria 100.0 90.6 89.0 Purpose of Visit Holiday/Leisure 73.7 47.0 35.4 44.5 19.0 Visiting Friends/Relatives 22.4 43.0 30.6 42.0 75.0 Accommodation Used Hotel/Motel/Resort na 12.0 6.2 31.7 8.8 Friends/Relatives na 48.6 46.6 42.4 67.3
NOTES: Characteristics of international visitors and international visitor nights relates to visits to Bendigo Loddon Some characteristics of domestic day visitors, domestic overnight visitors and domestic overnight visitor nights have been estimated using data for the Bendigo Loddon region in total and the Bendigo Loddon region excluding Mount Alexander
SOURCE: Tourism Research Australia, Consultancy Data Street Ryan estimates
There are also some interesting differences between the characteristics of domestic overnight visitors to Mount Alexander and those visiting the Bendigo Loddon sub-region overall. In particular: » a significantly smaller proportion of overnight visitors to Mount Alexander stay in hotels, motels or resorts (around 12% compared with 30% for Bendigo Loddon) and, of those who do, they have a shorter average length of stay (1.3 nights compared with 1.6), » relatively more visit for holiday/leisure (47% compared with 35%) and the holiday/leisure visitors stay longer in Mount Alexander (3.0 nights compared with 2.6). Relatively more day trippers also visit for holiday/leisure (74% compared with 54%), » a significantly smaller proportion travel alone (15% compared with 26%), » relatively more undertake arts/heritage/festival activities whist in Mount Alexander (27% compared with 20%) and, of those who do, they stay longer (3.1 nights compared with 2.5).
Mount Alexander Shire Council 36 Economic Development Strategy and Profile August 2013 3. COMMUNITY AND ECONOMIC PROFILE (continued)
3.5 BUSINESSES AND BUSINESS TURNOVER At June 30, 2011 there were 1,511 actively trading The contribution by sector is summarised as private sector businesses within Castlemaine and follows. Castlemaine Region SA2s. Of these: SECTOR ECONOMIC % OF TOTAL • 47.5% were in Castlemaine and 52.5% were in CONTRIBUTION, Castlemaine Region, 2011 • 19.2% (34% in Castlemaine Region and 3.1% in ($ MILLION) Castlemaine) were in the Agriculture, Forestry and Fishing industry, Primary Sector 84.5 5.7 • 15% (16.7% in Castlemaine and 13.5% in Secondary Sector 712.0 47.9 Castlemaine Region) were in the Construction Tertiary Sector 311.6 21.0 industry, • 10.9% (13.2% in Castlemaine and 8.7% in Quaternary 148.0 10.0 Castlemaine Region) were in the Professional, Quinary 229.4 15.4 Scientific and Technical Services industry, • 9.8% (14.1% in Castlemaine and 5.9% in TOTAL 1,485.5 100.0 Castlemaine Region were in Retail Trade, It is also worth noting that there have been some • 33.6% (28.4% in Castlemaine and 38.2% in significant recent (post 2011) developments Castlemaine Region) had an annual business which will impact on total turnover in the Shire. turnover of less than $50,000. In particular, Octagonal Resources (located in Table 3.7 summarises the number of businesses Castlemaine Region SA2) had only commenced by industry and turnover range and estimated operations in December 2010 and turnover in total business turnover by industry in the two 2010/2011 was substantially below current levels. SA2s. Estimates of turnover for public sector The industries making the largest economic agencies in industries with a high public sector contribution in the Shire are: representation have also been included. • Manufacturing ($603 million or 40.6%), Results suggest a total economic contribution • Retail Trade ($249.4 million or 16.8%), (enterprise turnover) of $1.49 billion in 2011. • Health Care and Social Assistance ($172.5 million or 11.6%), • Construction ($104.7 or 7.0%), • Public Administration and Safety ($83.0 million or 5.6%). All other industries contribute less than 4% each to total economic contribution.
Mount Alexander Shire Council Economic Development Strategy and Profile August 2013 37 3. COMMUNITY AND ECONOMIC PROFILE 3.5 Business and Business Turnover (continued) Table 3.7: No. of Actively Trading Private Sector Businesses by Industry and Turnover, Castlemaine and Castlemaine Region SA2s, 2011
NO. OF PRIVATE EST. TOTAL SECTOR BUSINESSES TURNOVER Zero $50k $100k $200k $500k $2m Total % of ($m) % of to to less to less to less to less or Total Total $50k than than than than more $100k $200K $500k $2m Agriculture, Forestry and Fishing 137 48 53 38 13 3 292 19.3 54.0 3.6 Mining 6 0 3 0 0 6 15 1.0 30.5 2.1 Manufacturing 17 15 19 19 9 0 79 5.2 603.0 40.6 Electricity, Gas, Water and Waste 0 0 0 0 3 0 3 0.2 4.3 0.3 Services Construction 41 53 48 56 19 10 227 15.0 104.7 7.0 Wholesale Trade 11 8 3 9 9 3 43 2.8 30.5 2.1 Retail Trade 30 10 28 30 31 19 148 9.8 249.4 16.8 Accommodation and Food Services 15 3 11 24 14 0 67 4.4 27.9 1.9 Transport, Postal and Warehousing 25 6 14 13 6 3 67 4.4 31.7 2.1 Information Media and 8 3 0 3 0 0 14 0.9 1.8 0.1 Telecommunications Financial and Insurance Services 36 7 4 3 3 0 53 3.5 6.1 0.4 Rental, Hiring and Real Estate 43 18 14 16 7 0 98 6.5 18.0 1.2 Services Professional, Scientific and Technical 71 32 38 17 6 0 164 10.9 21.9 1.5 Services Administrative and Support Services 7 10 3 3 0 0 23 1.5 2.3 0.2 Public Administration and Safety 3 3 0 0 0 3 9 0.6 83.0 5.6 Education and Training 10 3 3 3 0 0 19 1.3 14.9 1.0 Health Care and Social Assistance 13 9 6 12 4 0 44 2.9 172.5 11.6 Arts and Recreation Services 21 16 15 3 3 0 58 3.8 9.9 0.7 Other Services 11 14 13 10 10 0 58 3.8 19.1 1.3 Not Classified 1 3 12 9 3 0 3 30 2.0 Total 508 270 284 262 137 50 1,511 100.0 1,485.5 100.0 % 33.6 17.9 18.8 17.3 9.1 3.3 100.0
NOTES: Total turnover has been estimated using mid points in the turnover range (except $5k for the 0 to $50k range, $5 million for the $2 million + turnover range). In a number of instances interview data, annual reports and/or local knowledge has been used to override the $5m estimate for the upper turnover range and to estimate public sector turnover for Public Administration and Safety, Education and Training and Health Care and Social Assistance industries.
SOURCE: ABS, Counts of Australian Businesses by Turnover Range, 2011, Agricultural Census, 2011; ABS, Agricultural Census, 2011; IBISWorld Industry Reports 2012/13; Street Ryan estimates and interview notes
Mount Alexander Shire Council 38 Economic Development Strategy and Profile August 2013 4. SECTORAL CHARACTERISTICS AND PERFORMANCE
Analysis thus far has focussed on identifying factors that have shaped Mount Alexander, and the community and economic structure that has resulted. This chapter looks at measuring the size of economic contributions made by each sector, characteristics that have contributed to those contributions, and applies objective measures of performance. It also looks at the medium term outlook for key industries. As such, it provides a basis for identifying issues, challenges and opportunities as well as priorities for future action, whether they be intervention to change the characteristics and structure of the economy, or initiatives to support current industries that are key to achieving desirable economic outcomes.
Mount Alexander Shire Council Economic Development Strategy and Profile August 2013 39 4. SECTORAL CHARACTERISTICS AND PERFORMANCE (continued)
4.1 TECHNIQUES FOR ASSESSING PERFORMANCE There are a range of techniques that can be Based on results of the shift and share analysis, applied to measure industry/sector performance. sectors and industries are divided into four Those that are used in this document are: groups: LOCATION QUOTIENT analysis which compares » Type I – those where local businesses within the relative concentration of employment in a specific industry or sector are growing at a a specific industry/sector in Mount Alexander faster rate than the industry Statewide which, Shire at a specific point in time compared with a themselves, are showing above average broader region (in this case, Victoria). A location growth (ie local businesses outperforming in quotient less than 1 indicates less than expected high growth sectors/industries); employment and suggests the industry is not meeting local demand. A location quotient » Type II – those where local businesses are greater than 1 indicates a greater than expected underperforming in high growth sectors/ concentration of employment, suggesting industries; it is an “export” industry/sector (ie meeting » Type III – those where local businesses demand over and above that of the local region). are showing higher employment growth in Industries/sectors with location quotients the local area, despite lower than average greater than 1 have some form of comparative employment growth in the sector/industry advantage in the local economy; throughout the State (ie local businesses outperforming in a low growth sector/ SHIFT AND SHARE analysis. Shift and share industry); and uses changes in employment as a measure of performance, and separates outcomes into » Type IV – those where local businesses are changes resulting from: underperforming relative to the State in low growth sector/industries. » the State economy; ie the extent to which growth in the State economy overall Sectors and industries are grouped into influences employment growth in the local these categories because they usually reflect economy; different characteristics and require differing » the industry mix in the local economy; ie the strategies and initiatives to assist in improving impact that the relative representation of performance and/or maintaining a competitive typically faster and slower growing industries edge. For example, has on employment changes in the local » Type I industries are in a rapid growth economy; environment. While results for some industries » local conditions or the relative performance of in this group may be driven primarily by organisations in the region compared with the population growth rather than a genuine State average. Such differences may occur as comparative advantage, rapid growth may lead a result of, for example to bottlenecks in production, skill shortages, • competitive advantage of the local industry inadequate infrastructure and/or difficulties • access to resources or infrastructure with support services. Support initiatives • attractiveness of the local economic should typically focus on, for example environment, etc. • attracting investment to address blockages/ shortages • improving infrastructure provision and capacity • risk management strategies/initiatives • collaborative arrangements to mobilise local resources and support services.
Mount Alexander Shire Council 40 Economic Development Strategy and Profile August 2013 4. SECTORAL CHARACTERISTICS AND PERFORMANCE 4.1 Techniques for Assessing Performance (continued)
» Type II industries suggest under performance Whilst useful tools, LOCATION QUOTIENT and in a rapid growth environment. Reasons for SHIFT AND SHARE analyses both have some underperformance may relate to natural limitations which should be born in mind when resource distribution and/or State or Federal interpreting outcomes. For example; government policies with respect to industry employment may not be the best indicator representation and/or service delivery. » of performance for all industries, and/or all However, where this is not the case, there regions, should be a focus on initiatives aimed at improving business performance through, for » they do not offer a definitive explanation of example why various changes are positive or negative, • networking or clustering » the analysis is based on changes which • improving access to information have occurred in, or are results of, the past • management advice and counselling and these may not necessarily be a reliable • skills development indicator of future employment performance. • assistance with new product and/or new market development, etc Outcomes of Location Quotient analysis and Shift and Share analysis for all industries in » Type III industries show better performance Mount Alexander are presented in Appendices B locally, but in a slow growth environment. and C and are summarised on a sector by sector Below average growth Statewide may reflect basis in the following sections of this report. mature industries, industries in decline and/ or industries facing significant technological change. Better performance locally may reflect genuine competitive advantage, possibly as a result of natural resources, and/ or higher than average population growth. The suggested focus of initiatives aimed at maintaining and/or improving performance include, for example • recognising the significance of the industry locally in various policies, plans and strategies, and protecting its operating environment • facilitating access to investment and skills • providing required infrastructure to support ongoing growth and development. » Type IV industries are underperforming in a slow growth environment. Below average growth Statewide may reflect mature industries, industries in decline and/or industries facing significant technological change resulting in sizeable labour productivity gains. Poorer performance locally suggests limited opportunities for growth without new product and/or new market development, efforts to improve skills and business acumen and/or improve take-up of technological advances.
Mount Alexander Shire Council Economic Development Strategy and Profile August 2013 41 4. SECTORAL CHARACTERISTICS AND PERFORMANCE (continued)
4.2 PRIMARY SECTOR OF THE MOUNT ALEXANDER ECONOMY 4.2.1 Primary Sector Characteristics and Most jobs in the sector are in Agriculture (91.5% Performance of total primary sector jobs) and all the decline in jobs is in Agriculture. Industries within the primary sector include: Despite the decline, the primary sector had a » Agriculture, Forestry and Fishing. In Mount location quotient in 2011 of 2.24 indicating it Alexander these are primarily sheep and retains a higher than average concentration beef cattle, grain farming and apple growing, of employment and is an exporting sector for with some pear, stonefruit and other fruits. the Shire. Both industries within the sector had There is also some value adding in the location quotients greater than 1. form of processing, particularly cider and wine manufacture, which contributes to the Shift and Share analysis, on the other hand, Manufacturing industry within the Shire, indicates the primary sector falls within the Type » Mining, primarily construction material and IV category, (ie the local sector underperforms gold ore mining. the State, in a slow growth (or negative growth) environment). It also indicates that, despite Agriculture in the Shire is characterised by a having a location quotient greater than 1 in 2011, relatively large number of smaller operators the change in jobs from 2006 to 2011 suggest many of whom are concentrated in the a local location disadvantage in this sector. Harcourt/Elphinstone area. The main mining The seemingly differing results from the two company is Octagonal Resources just outside assessment techniques suggest that, whatever Maldon; although in 2011 this company had only competitive advantage the primary sector has just commenced its operations at this location. enjoyed in Mount Alexander, it has deteriorated between 2006 and 2011. It should be noted, The size and contribution made by the primary however, that developments since 2011, sector is summarised in Table 4.1. particularly in the gold ore mining industry may Table 4.1: Summary of Size and Contribution of change the industry categorisation, particularly the Primary Sector in Mount Alexander Shire for the mining industry. Results of the Shift and Share analysis are Mount % of Total summarised in Table 4.2 and the gross value of Alexander agricultural production in 2011 is presented in Shire Table 4.3. No. of Private Sector Businesses 307 20.3% Total Jobs 398 5.8% % Change in Jobs 2006 to 2011 -17.5% -16.7% Total Turnover ($ million) $84.5 5.7%
Table 4.1 shows that the sector is made up of many smaller enterprises and makes a relatively minor contribution to total jobs and total enterprise turnover in the Shire, despite accounting for around one fifth of all private sector enterprises. Further, it shows that jobs within the sector have declined markedly since 2006.
Mount Alexander Shire Council 42 Economic Development Strategy and Profile August 2013 4. SECTORAL CHARACTERISTICS AND PERFORMANCE 4.2 Primary Sector of the Mount Alexander Economy (continued) Table 4.2: Shift and Share Analysis, Mount Alexander Primary Sector
Change in Jobs Due to Change in Jobs Due to Change in Jobs Due Total Change in Jobs Industry Type State-wide Economic Relative Representation to Local Conditions 2006 to 2011 Growth of High Growth & Low (Local Advantages/ Growth Industries (Local Disadvantages) Industry Mix) Agriculture 53 -90 -34 -71 IV Mining 5 7 -16 -4 II Primary Sector 58 -81 -52 -75 IV
SOURCE: ABS, Census of Population and Housing 2006 and 2011; Street Ryan analysis
Table 4.3 Gross Value of Agricultural Production in Statistical Areas of Mount Alexander Shire, 2011
GROSS VALUE ($ MILLION) Castlemaine SA2 Castlemaine District SA2 Total BROADACRE CROPS Hay 0.0 1.0 1.0 Wheat 0.4 1.8 2.2 Oats 0.0 0.6 0.6 Barley 0.0 0.6 0.6 Canola 0.0 1.1 1.1 Total Broadacre Crops 0.4 5.1 5.5 HORTICULTURE Vegetables 0.0 0.3 0.3 Pome Fruit 9.3 7.7 17.0 Grapes for wine 0.0 0.5 0.5 Stone Fruit 0.0 0.1 0.1 Total Horticulture 9.3 8.6 17.9 LIVESTOCK Sheep and lambs 0.8 15.1 15.9 Cattle and calves 0.3 3.5 3.8 Pigs 0.0 0.4 0.4 Goats 0.0 0.2 0.2 Poultry 0.0 0.1 0.1 Total Livestock 1.1 19.3 20.4 LIVESTOCK PRODUCTS Wool 0.3 9.2 9.5 Milk 0.0 0.3 0.3 Total Livestock Products 0.3 9.5 9.8 Total Agriculture 11.1 42.5 53.6
SOURCE: Australian Bureau of Statistics 2012, Value of Agricultural Commodities Produced 2010-11
Mount Alexander Shire Council Economic Development Strategy and Profile August 2013 43 4. SECTORAL CHARACTERISTICS AND PERFORMANCE 4.2 Primary Sector of the Mount Alexander Economy (continued)
4.2.2 Characteristics and Outlook On a national scale, most businesses in the apple and pear growing industry are located in About 80,000 hectares, or 22% of the total land Victoria (27.2%) and New South Wales (21.3%). area, is dedicated to agricultural production. Apples dominate industry output, and generate While there is a diversity of activity within the over 80% of industry revenue. The four major primary sector in Mount Alexander, industries segments in the industry are that are most represented and/or are currently key to the Shire include pome fruit, sheep/wool • fresh market apples (accounting for 69.2% of and, in the mining industry, gold mining23. A brief total revenue) overview of these industries and their outlook is • fresh market pears (12.7%) presented as follows. • apples for processing (12.5%) • pears for processing (5.6%). APPLE AND PEAR GROWING Traditional varieties of apple such as Red The Harcourt district of Central Victoria has a Delicious and Granny Smith dominate long history as one of Victoria’s significant fruit production, but the extent of their dominance production regions. Harcourt has a reputation has been decreasing with the introduction of as Victoria’s ‘apple centre’ and, even though new varieties such as Pink Lady (prominent in production has decreased considerably over past Mount Alexander), Fuji and Gala. These new decades, the district still produces around 40% varieties have been instrumental in generating of Victoria’s apples. The region also produces new revenue, particularly in export markets such pears and stone fruit and, more recently, wine as Singapore and Britain. grapes, olives and quinces. Total industry revenue is estimated at $720 Manufacturing activities to value add to the fruit million, having increased at an average annual produce are also present in the region, including rate of 3.1% over the last 5 years, and export • Grading, waxing and packing facilities revenue is around $15 million. • Controlled atmosphere (CA) and cool stores Key drivers of demand are (including the use of new technologies such as ‘smart fresh’ – to slow the ripening process • the level and timing of annual rainfall and extend shelf life) • demand from supermarkets and grocery stores • Cider manufacturing (wholesale sales typically account for around • Juice manufacturing 64% of fresh produce) • Wine manufacturing • the value of the Australian Dollar • Other by-product processing (eg vinegar, pulp • international trade and biosecurity and stockfeed). • fruit consumption expenditure. Due to drought, diversification and the While consumption has been fuelled by increasing scale of viable operations, the number increased concern about nutrition and diet of pome fruit (apple and pear) growers in the in recent years and the introduction of new immediate Harcourt district has declined to varieties, it now appears to have stabilised. less than 20. This has partly been offset by new production in wine grapes and stone fruit. At the same time, the quality of fruit has continued to improve. Major apple varieties grown in Harcourt are Granny Smith, Gala, Cripps Pink (Pink Lady™), Fuji and Cripps Red (Sundowner™). Pear varieties are Packham, Williams (WBC) and Beurre Bosc. Australia’s two largest pome fruit production companies (Montague Fresh and Geoffrey Thompson Fruit Packing Company) both have apple orchards in Harcourt.
23 The Shire also supports beef production, wine grapes, pigs and some cropping.
Mount Alexander Shire Council 44 Economic Development Strategy and Profile August 2013 4. SECTORAL CHARACTERISTICS AND PERFORMANCE 4.2 Primary Sector of the Mount Alexander Economy (continued) The outlook is for ongoing challenges associated The outlook is for an increase in flock size and with increased imports, difficult growing production over the next 5 years, and for an conditions as a result of volatile weather patterns average annual increase in revenue of 2.4% to and lack of access to irrigation water, and lack of reach $3.36 billion by 2017/18. Strong overseas strong export markets, particularly as a result of demand for sheep meat is expected to continue competition from China. As a result, IBISWorld to support prices. One of the major problems the estimates that industry revenue will decline at an industry will face is the ability of wool to position average annual rate of 2.0% to 2017/18 to $652.2 itself relative to other fibres, particularly as wool million. This decline in revenue is projected no longer boasts unique properties. Research even though domestic consumption is expected and development has been, and continues to to grow modestly (at 1.9% pa) as a result of be, key to improving the qualities of manmade healthier eating trends and the ageing of fibres. The Australian wool industry spends less Australia’s population (with older people having on research than other fabrics industries. a higher propensity for fruit consumption). There are also issues associated with growing Opportunities for growers are likely to be public concern to the traditional practice of associated with product innovation, particularly mulesing and animal welfare concerns with live processed fresh fruit as time poor consumers exports. boost demand for peeled, segmented and other ready to eat fruit, and in the rapidly growing GOLD ORE MINING organics market which demands premium prices. Industry revenue for gold ore mining in Australia SHEEP FARMING is $13.4 billion, having grown at the phenomenal rate of 10.8% per annum over the last 5 years The Australian sheep industry includes about due to strong rises in the price of gold resulting 68 million sheep (although these numbers have from uncertainty in global financial markets. The been consistently declining to this low point), industry generates export revenue of $17.1 billion. and generates a total revenue of $3.0 billion per annum which has grown at an average annual The industry is dominated by Western Australia rate of 1.8% over the last 5 years. Most sheep which generates 70% of output. Victoria farms are in New South Wales (38.7%) and generates 2%. There are 252 gold mines Victoria (31.2%). operated by 76 companies, most of which are very small. 80% of industry revenue is derived Key products and services in the industry include from open cut production and 20% from underground production. • wool, generating 40.1% of industry revenue. Australian wool is predominantly fine to Gold ore production in Australia is estimated medium micron and used mainly in garments at 265 tonnes in 2012/13, up from 227 tonnes • slaughter lambs (34.3%) in 2007/08. Virtually all gold is refined locally • slaughter sheep (14.5%) before being exported. As well, bullion from • live sheep exports (11.2%). other countries is imported to Australia for refining before being re-exported, and used Demand for wool and slaughter meat is gold (local and imported) is re-refined and impacted by re-exported. • the price and characteristics of wool relative Key market segments are to other fibres, and the price of sheep meat relative to other meats • the jewellery sector, accounting for 42,5% of • consumer tastes and preferences industry revenue • household disposable income • the investment sector (35.5%) • the value of the Australian Dollar • official sector (11.7%) • population growth. • electronics sector (7.3%) • other industries (2%) • dentistry sector (1%).
Mount Alexander Shire Council Economic Development Strategy and Profile August 2013 45 4. SECTORAL CHARACTERISTICS AND PERFORMANCE 4.2 Primary Sector of the Mount Alexander Economy (continued) Major players in the industry are 4.3 SECONDARY SECTOR OF THE MOUNT ALEXANDER ECONOMY • Newmont Australia Holdings with a market share of 20.5% 4.3.1 Trends and Performance • Barrick (PD) Australia Ltd (17%) • Newcrest Mining Ltd (13%) Industries within the secondary sector in Mount Gold Fields Australia Ltd (8.1%). Alexander include The outlook is for gold production to increase as » Manufacturing, primarily meat and meat new mines come on stream and as gold prices product manufacturing, professional and rise in both $US and $A. High gold prices both scientific equipment manufacturing, bakery underpin new developments and provide an product manufacturing and textile product incentive to lift production at existing operations manufacturing and provide a buffer against expected rises » Electricity, Gas, Water and Waste Services, in costs as mines become deeper (or move with very small representation in Mount from open cut to underground operations) and Alexander encounter harder ores. » Construction, primarily building installation services, land development and site Overall, industry revenue is expected to grow by preparations services, and building completion 6.8% per annum to reach $18.5 billion by 2017/18. services. The Shire has a proud history of manufacturing with a number nationally and internationally significant businesses.
Mount Alexander Shire Council 46 Economic Development Strategy and Profile August 2013 4. SECTORAL CHARACTERISTICS AND PERFORMANCE 4.3 Secondary Sector of the Mount Alexander Economy (continued) Key businesses within the sector include: Table 4.4 shows that the secondary sector is the largest sector in the Shire and makes the biggest » Food Investments Pty Ltd (George Weston economic contribution. Most private sector Foods – formerly KR Castlemaine), a wholly businesses within the sector are in Construction owned subsidiary of Associated British Foods (73.5%), but most jobs are in Manufacturing and Mount Alexander’s largest employer, (81% of all secondary sector jobs), and most manufacturing smallgoods. Food Investments turnover within the sector (84.7%) is generated Pty Ltd is estimated to have a 17.8% share of by Manufacturing. the Australian bacon, ham and smallgoods industry and all its smallgoods products are It should be noted, however, that results manufactured at Castlemaine, for Manufacturing are favourably affected » Flowserve Solutions Group, a leading by national restructuring within the Food manufacturer of centrifugal pumps and Investments Pty Ltd (George Weston Foods) railway track components. The Flowserve group and consolidation of its national small Group throughout Australia is estimated goods manufacture at its Castlemaine plant. This to have a 5.5% share of the pump and restructuring required a $150 million investment compressor manufacturing industry, in building a new plant and expanding capacity. It also attracted a $3 million grant from the » Diecrest Engineering, manufacturing custom Victorian Government to support investment in gears and gear cutting for the automotive developing energy and water saving projects at industry and manufacture and supply of the new plant. The new plant resulted in a once specialised parts for the food industry, off shift in the local employment market (an » a range of other motor vehicle modification increase of around 200) that is unlikely to be businesses that are part of a cluster of hot rod repeated in the future. Without this shift, jobs industry specialists in the Shire, within the secondary sector in Mount Alexander » Leech Earthmoving providing earthmoving, would have declined from 2006 to 2011. drainage, subdivision and roadworks services, The location quotient for the secondary sector » Victoria Carpet Company Pty Ltd in Mount Alexander in 2011 is 1.50, despite a manufacturing carpet yarn. The company less than expected concentration of jobs in nationally has an estimated 5.5% share of Electricity, Gas, Water and Waste Services (with the (much diminished) Australian carpet a location quotient of 0.23) and Construction manufacturing industry. (0.68). Manufacturing, on the other hand, has A summary of the size and contribution made by the second highest location quotient of all the secondary sector is presented in Table 4.4. industries in the Shire (2.25). Table 4.4: Summary of Size of, and Contribution Results of Shift and Share analysis suggest made by, the Secondary Sector in Mount that the secondary sector overall is Type II (out Alexander Shire performing in a slow growth environment). However, this is due entirely to the performance Mount % of Total of the Shire’s Manufacturing industry and to Alexander the investment in, and expansion of, Food Shire Investments Pty Ltd’s plant at Castlemaine. Electricity, Gas, Water and Waste Services and No. of Private Sector Businesses 309 20.5% Construction both underperform locally, the Total Jobs 2,098 30.6% former in a slow growth industry and the latter in a high growth industry. % Change in Jobs 2006 to 2011 10.3% 38.8% Results also suggest that the Construction Total Turnover ($ million) $712.0 47.9% industry has a location advantage in Mount Alexander. Table 4.5 presents details.
Mount Alexander Shire Council Economic Development Strategy and Profile August 2013 47 4. SECTORAL CHARACTERISTICS AND PERFORMANCE 4.3 Secondary Sector of the Mount Alexander Economy (continued) Table 4.5: Shift and Share Analysis, Mount Alexander Secondary Sector
Change in Jobs Change in Jobs Change in Jobs Due Total Change in Jobs Industry Type Due to Statewide Due to Relative to Local Conditions 2006 to 2011 Economic Growth Representation of (Local Advantages/ High Growth & Low Disadvantages) Growth Industries (Local Industry Mix) Manufacturing 179 -229 218 168 III Electricity, Gas, Water 3 6 -14 -5 IV and Waste Services Construction 45 45 -79 11 II Secondary Sector 227 -77 24 174 III
SOURCE: ABS, Census of Population and Housing 2006 and 2011; Street Ryan analysis
4.3.2 Characteristics and Outlook The last few years has seen the industry challenged by volatile feed costs, climatic BACON, HAM AND SMALLGOODS vagaries and nutritional concerns regarding MANUFACTURING consumption of high fat foods. However, The Bacon, Ham and Smallgoods manufacturing product innovation associated with low fat industry has a total turnover in Australia of $3.4 alternatives, modified atmosphere packaging, billion, having grown at an average annual rate multiple servings of pre-packaged products, of 1.6% over the last 5 years. Exports are valued gluten free products and increased nutritional at $22.7 million. information, along with increased availability of pig meat imports have seen a slight turnaround The largest segment of the industry is bacon in demand. (41.9% of turnover), other sliced meats (22.9%) and ham (16.1%). The major markets are Key external drivers of the industry are: wholesalers (59.3%), grocery retailers (25%) and • demand from supermarkets and other food service industries (15%). grocery stores, The two major players in the industry are • domestic prices of pig meat, Primo Meats Pty Ltd, with a market share of • pig meat consumption, 42.6% and Food Investments Pty Ltd (17.8%). domestic prices of poultry and lamb. The takeover of KR Castlemaine Pty Ltd by Over the next 5 years, IBISWorld estimates that Food Investments Pty Ltd in 2008 effectively industry revenue will increase at an average merged the third and fourth largest players annual rate of 2.6% to reach $3.88 billion. at the time. Another of the key players (Hans Growth in demand is expected to be driven Continental Smallgoods) has since been sold to by continued product innovation and the Primo Meats, essentially reducing the market to development of higher value added products two large national players and a host of small that cater for the consumer demands for manufacturers. The next five years should see convenience and healthy eating. As well, prices the two largest players reap the benefits of of pigmeat are expected to decline. greater economies of scale resulting from the consolidation initiatives already undertaken, one of which is the modernisation and expansion of the Castlemaine plant.
Mount Alexander Shire Council 48 Economic Development Strategy and Profile August 2013 4. SECTORAL CHARACTERISTICS AND PERFORMANCE 4.3 Secondary Sector of the Mount Alexander Economy (continued)
PUMP AND COMPRESSOR MANUFACTURING AUTOMOTIVE PARTS MANUFACTURE The pump and compressor manufacturing The automotive parts manufacturing industry industry has an industry revenue of $1.4 billion comprises a range of enterprises engaged in car and exports of $482.9 million. Growth in industry accessory manufacturing, child seat restraint revenue over the last 5 years has been modest manufacturing, gear box manufacturing, (0.6%), but the outlook for the next 5 years is for transmission and clutch manufacturing, muffler strong growth of 2.1% pa to reach $1.56 billion. and radiator manufacturing etc. It generates a total business turnover of $5.5 billion, but total The largest segment of the industry is centrifugal turnover has dropped at an average annual rate pumps (51% of total revenue), followed by air of 3.9% over the last five years. and gas compressors (16%), rotary pumps (14%) and reciprocating pumps (12%). Major markets The biggest products and services segments include the water supply and treatment sector within the industry are: (23% of revenue), the mining sector (17%), the agriculture sector (15%) the oil and gas sector • exhaust systems and other parts and accessories, (12%) and the construction sector (11%). accounting for 39.4% of total revenue, • transmissions and parts (18.6%), Key players in the industry are: • motor reconditioning (14.9%), • seats and interior components (9.8%), • Weir Group – Warman, Multiflow, Geho, Cavex, • brakes and parts (6.5%), Isogate, Floway (with a market share of 24.8%), • steering and suspension parts (6.2%). • Danahar Australia Holding Pty Ltd – Gilbarco Veeder-Root and Leica Microsystems (8.7%) The key market segments for the industry are • GUD Holdings – Davey products (7.2%), motor vehicle manufacturers (59.1% of industry • Flowserve Australia Pty Ltd (5.5%). revenue), automotive parts dealers (28.1%) and export markets (12.8%). Key drivers of the industry are: As evidenced by declining revenue, the industry • total capital expenditure by private companies has faced a range of challenges in recent years and local government, due mainly to increased competition from • demand from downstream industries, cheaper imports, weaker economic conditions • value of the Australian Dollar, and the strong dollar. As well, changing • world price of steel. consumer preferences for smaller, more fuel The industry produced mixed results over efficient and more greenhouse gas friendly the last 5 years with fluctuating demand in vehicles hit the domestic car manufacturing downstream mining, water supply treatment, oil market hard. This had a flow on impact on and gas, and construction markets, as well as special component producers. weaker demand in agricultural and household Automotive parts dealers which service the sectors. However, all sectors are expected to aftermarket fared better and are expected to gain recover and support strong demand over the market share as consumers return to repairing next 5 years. The industry is also expected to and upgrading their vehicles. However, the benefit from the shift towards higher margin, demand for aftermarket car accessories tends to niche products. be sluggish during times of economic uncertainty. The outlook for the industry is for a continuation of downward pressure on revenue, due mainly to weakening demand from domestic motor vehicle manufacturers. There are, however, opportunities associated with the shift to more environmentally friendly vehicles, particularly for transmissions systems with more gears that generate better fuel economy. Overall, however, turnover is expected to drop by 3.0% per annum to 2017/18.
Mount Alexander Shire Council Economic Development Strategy and Profile August 2013 49 4. SECTORAL CHARACTERISTICS AND PERFORMANCE 4.3 Secondary Sector of the Mount Alexander Economy (continued) CARPET MANUFACTURING INDUSTRY CONSTRUCTION INDUSTRY The carpet manufacturing industry in Australia The construction industry in Australia generates a total revenue of $1.2 billion but has generates a total revenue of $332.8 billion and declined quite significantly in recent years (-2.4% encompasses some 350,416 businesses. Revenue per annum). The industry is predominantly has grown at an average annual rate of 1.7% over based in Victoria (37.4% of all businesses). the last 5 years, driven most by heavy industry Its major products include tufted carpet and other non-building construction. (accounting for 86% of total revenue), woven carpet (5%), true and needle felts (4%). The The major products and services segments in major markets for its products are residential the industry are: buildings (52.4% of turnover), non residential • heavy industry and non-building construction buildings (34.5%) and other manufacturing (generating 27% of revenue), industries (8.7%). • residential construction (21.6%), Key players in the industry are: • commercial, industrial and institutional building (18.7%), • Godfrey Hirst Australia Pty Ltd, with a range of • building completion services such as plumbing brands including Feltex Carpets, Fibremakers and electrical services, tiling, carpeting, Australia, Hycraft Carpets, Riverside Textiles painting, glazing, decorating etc (14.5%), etc. Godfrey Hirst has a market share of 27.7%, • structural services such as concreting, • Beaulieu of Australia Pty Ltd with a market bricklaying, structural steel and carpentry share of 12.3%, services (9.1%), • Victoria Carpet Company Pty Ltd with a market • installation services such as air conditioning share of 5.5%. and heating, security, plastering and ceiling installation etc (5.3%), The local market is flooded with a large volume • site works services such as site preparation and of low grade, cheaper imported products which scaffolding (3.8%). has challenged local producers. Producers also operate in an environment where carpet’s share The major market segments are: of the floor covering market is declining, largely due to the rising popularity of hardwood flooring. » non building infrastructure construction, including infrastructure projects such as roads, Those that have succeeded have been able to airports, dams, power stations, pipelines adapt quickly to changing conditions and provide and mining facilities. This segment accounts substantial diversity and flexibility, particularly for 53.6% of revenue and has recorded by having the capability of switching between accelerated growth since the early 2000s as a synthetic and wool carpet production and result of strong public and private investment switching between large and small production in transport infrastructure and the surge of runs to enable them to target niche markets. investment in the mining sector, residential building sector, including new The outlook over the next five years is for a » housing, other dwellings (flats, apartments continued decline in industry revenues (-1.8% etc) and the residential alterations and per annum) with the biggest threat being the additions market. It accounts for 26.3% of declining preference of carpet as the floor industry revenue and has experienced volatile covering of choice. The industry’s outlook is also conditions as a result of an under supply of threatened by ongoing consolidation of its client total residential property, an excess supply retail base and the growth of giant chains which of inner urban apartments and deterioration weakens the negotiating strength of key players. of housing affordability. The total value of It is also weakened by the trend for buyers to housing construction is around $51 billion and purchase from companies who can meet their growth over the last five years has been flat nationwide needs, rather than purchasing on a (0.9% per annum), regional basis.
Mount Alexander Shire Council 50 Economic Development Strategy and Profile August 2013 4. SECTORAL CHARACTERISTICS AND PERFORMANCE 4.3 Secondary Sector of the Mount Alexander Economy (continued)
» non-residential building sector, which 4.4 TERTIARY SECTOR OF THE MOUNT comprises 20.1% of revenue and has been ALEXANDER ECONOMY boosted over the last five years by federal 4.4.1 Trends and Performance stimulus on school refurbishments (Building the Education Revolution) and strong public The tertiary sector includes the following investment in new health care facilities. industries. Investment in commercial and industrial building, however, has been soft. » Wholesale Trade. In Mount Alexander Shire these are primarily metal and mineral The outlook for the industry is for subdued wholesaling, meat poultry and smallgoods growth over the next 5 years, with a likely wholesaling and other groceries wholesaling increase in revenue of 2.2% per annum. Pent » Retail Trade, primarily supermarket and up demand for new housing coupled with grocery stores, pharmaceutical, cosmetic and continuing population growth will underpin toiletry goods retailing, and hardware and improved levels of housing construction activity. building supplies retailing IbisWorld estimates that the value of total residential construction will grow by 2.8% per » Transport, Postal and Warehousing, primarily annum over the next 5 years, and that this will road freight transport and postal and courier support growth across most special construction pick-up and delivery services. trades, particularly building completions Prominent businesses within the sector include: services and structural services. Non-residential building is likely to experience stronger growth • Maxi Supa IGA, in revenue (3.4% per annum) and infrastructure • Cassidy’s Furniture and Electrical, construction is expected to decline by 0.8% per • Target Department Store, annum after a strong rise in 2013/14 driven by • Thompson’s Transport, large scale projects currently underway. • Castlemaine Bus Lines, Key success factors for businesses within the • JJ Leech and Son. construction industry include: A summary of the size and contribution of the • having strategic alliances and relationships Tertiary sector is presented in Table 4.6. with building and construction companies, • development of new products (eg smart roads) Table 4.6: Summary of Size of, and Contribution and the ability to pre-sell these products, made by, the Tertiary Sector in Mount Alexander • excellent project management skills, Shire • having a reputation for being able to deliver on time and to specifications, Mount % of Total • having the ability to expand and curtail Alexander operations quickly in line with market demand. Shire
No. of Private Sector Businesses 258 17.1%
Total Jobs 1,186 17.3%
% Change in Jobs 2006 to 2011 5.6% 12.5%
Total Turnover ($ million) $311.6 21.0%
Mount Alexander Shire Council Economic Development Strategy and Profile August 2013 51 4. SECTORAL CHARACTERISTICS AND PERFORMANCE 4.4 Tertiary Sector of the Mount Alexander Economy (continued) Most businesses (57.4%) and most jobs (72.3%) Trade industry has a location quotient greater within the sector in Mount Alexander are in than 1 (1.12). Retail Trade and the greatest contribution to sector turnover (80%) is also made by Retail. Shift and Share analysis suggests the sector The dominant type of Retailing in the Shire is is Type IV (underperforming in a slow growth food retailing. environment), although Wholesale Trade enjoys a local competitive advantage. Retail Trade The location quotient for the tertiary sector and Transport, Postal and Warehousing, on in Mount Alexander in 2011 is 0.84 the second the other hand, both a show local competitive lowest of all five sectors, although the Retail disadvantage. Table 4.7 presents details. Table 4.7: Shift and Share Analysis, Mount Alexander Tertiary Sector
Change in Jobs Change in Jobs Change in Jobs Total Change in Industry Type Due to Statewide Due to Relative Due to Local Jobs 2006 to Economic Representation Conditions (Local 2011 Growth of High Growth Advantages/ & Low Growth Disadvantages) Industries (Local Industry Mix) Wholesale Trade 16 -13 16 19 III Retail Trade 98 -54 -11 33 IV Transport, Postal & Warehousing 20 6 -22 4 II Tertiary Sector 134 -58 -20 56 IV
SOURCE: ABS, Census of Population and Housing 2006 and 2011; Street Ryan analysis
Mount Alexander Shire Council 52 Economic Development Strategy and Profile August 2013 4. SECTORAL CHARACTERISTICS AND PERFORMANCE 4.4 Tertiary Sector of the Mount Alexander Economy (continued)
4.4.2 Characteristics and Outlook » There has been enormous growth in franchised and specialty store chains, which RETAIL TRADE can support business owners and operators General Trends in the Industry through proven systems and measured business risk. In the past, retailing has been considered a “non- basic” industry (i.e. an industry which services » E-commerce and importing are having a local residents and does not generate ‘export’ greater role in retailing of larger and higher earnings). However, this has changed in recent value retail items (such as electronics and decades as retailing has become increasingly equipment) as well as apparel and smaller important as a tourism product and as a net- personal items. contributor to local economies. » Online purchasing, including online purchasing Retailing has undergone radical changes in the from overseas web sites, is continuing to grow last two decades which have had a major impact at a phenomenal rate. It is estimated that 5% on marketing and in developing and determining of Australian retail sales are now made online opportunities. In particular: but only 3% of them from local websites. The NAB Online Retail Sales Index valued » Retail shopping has become acknowledged online sales in Australia in 2011 at $10.5 billion, as an ‘experience’, with people combining up 29% on the year before. In order to be shopping, cafe/restaurant and specialty shop competitive, retailers need to take advantage visits as part of both regular and occasional on the online opportunity and re-think their social activities. approach to in store retailing to make it more » Integrated shopping centres have become about experience and less about a transaction. huge centres for business of all types, while » Mobile/internet marketing, mobile commerce smaller strip centres have differentiated and social media are all becoming increasingly themselves on themes, ambience, or retail important marketing tools for retailers. and service specialities. This trend has seen a Examples include: resurgence of strip shopping. • using mobile phone contacts to build » ‘Food-service’ both complements and customer databases, competes with retail more than ever before, as • using text messages/emails to alert people spend more time and money at food- customers to new products, special deals service outlets compared with consumption and promotional offers etc, in the home. For example, Australian full • enabling customers to use their mobile service retail turnover of food and beverages phone (and/or computer) to check the is now of the order of $61 billion per annum, status of an order, while food service turnover has reached • enabling customers to use their mobile approximately $40 billion and is growing phone or computer to design their own gift more rapidly. (Specialty store turnover is $16 card for a store, billion, which is also significant)24. • using Facebook and Twitter, store blogs » In the 12 months to February 2011, total retail and video feeds to form and interact with turnover in Victoria grew by 2.6%25. Liquor communities of consumers and to direct retailing and specialty food retailing, however, them to either physical or virtual spaces grew by 15.3% and 12.8% respectively. The such as stores or websites. other big mover for the 12 month period was hardware, building and garden supplies which increased by 19.8%.
24 DAFF Food Map 2009 25 ABS Retail Turnover by State and Industry Sub-Group Time Series.
Mount Alexander Shire Council Economic Development Strategy and Profile August 2013 53 4. SECTORAL CHARACTERISTICS AND PERFORMANCE 4.4 Tertiary Sector of the Mount Alexander Economy (continued)
» The take-up of new technology has Retailing in the future is likely to see even more accelerated. This has largely been driven “blurring” as the process of making transactions by the demand for convenience and the moves increasingly online and the retail store customers’ increasing desire for information. focuses on providing a valued experience for Examples include: shoppers. This has implications for the design of • interactive technologies such as digital retail outlets, the technology it uses and for the screens and self service kiosks, skill sets needed by their staff. • self scan terminals, Outlook for Retail Sub-Sectors • portable scanners that enable customers to scan items before they reach checkout. A brief overview of the outlook for a range of retail sectors represented in Mount Alexander is » There is an increasing focus on sustainability presented as follows. driven by the rise in social responsibility on shoppers’ purchasing criteria. » Supermarkets and other grocery stores. Overall, sales in supermarkets and other » There is a growing focus on health and grocery stores are expected to rise by 2.9% wellbeing and a commensurate need to per annum over the next three to five years. demonstrate with scientific evidence that There is likely to be increasing competition natural products will perform with equal between branded and home label merchandise effectiveness to artificial products. with home brand labels expected to expand, » There is a focus on less costly ways of entering particularly in Coles and Woolworths. The a market or extending market reach through, expansion of Aldi and Costco in Victorian retail for example, the use of “pop-up” or temporary centres has intensified price competition. stores in unconventional locations or in vacant Strong growth is expected in organic produce. conventional locations. Major consumer and economic trends impacting on the supermarket market include: » Increasing reliance on home brands among major supermarkets (which are now up to • changing demographics (households getting 22% of supermarket sales) and the drive smaller, an ageing population, working by independent/regional supermarkets to families), differentiate themselves from the majors. • more complex wants and desires (greater consciousness of wellness, greater need for time and individual control), Partly as a result of these trends there has • advances in technology (growth in devices been a blurring of what is regarded as retail. which support leisure and communications). Traditionally, retail has included: Consequently, the supermarket industry is • Food, likely to experience increasing demand for • household goods and furniture, convenience through quicker shopping times, • clothing and soft goods, better access to stores and a reduction in meal • department stores, preparation time. • sporting goods, • personal and other goods (music, books, gifts, jewellery, cosmetics etc). Now, other related industries operate in a retail environment and are commonly regarded as part of the retail scene, particularly: • the food service industry (cafes, restaurants and catering), • wholesale trade, • arts, recreation and personal services (e.g. hairdressing, beauticians, galleries etc).
Mount Alexander Shire Council 54 Economic Development Strategy and Profile August 2013 4. SECTORAL CHARACTERISTICS AND PERFORMANCE 4.4 Tertiary Sector of the Mount Alexander Economy (continued)
» Fast Food. The fast food industry has » Footwear . Industry revenue for footwear is undergone a shift to healthy eating which projected to increase at an average annual has driving its revenue growth over the last 5 rate of 1.3% over the next 3 to 5 years, but years of 3.7% pa. Future growth is expected the industry will need to overcome a poor to be around 2.5% pa. This growth is likely to economic climate in the short term. Strong be spurred by the rising popularity of ‘iFast’, price competition is expected to continue. a fast food application for iPhone, iPod and While shoes are not an ideal product for iPad users. This is expected to revolutionise online shopping, increased internet purchases the industry and boost the convenience with from retailers based overseas is expected. which food can be ordered. Increases in real By 2014/15, 12.1 million adults are expected household disposable income and changes in to purchase goods online. Consequently, the the age distribution of the population are also number of Australian retailers who open an likely to drive growth. However, competition online store is expected to increase as they from major supermarket chains will continue attempt to capture online spending and offer to pose a threat, and the industry will better service to time-poor customers. continue to be affected by consumer concerns regarding the fat content of fast food. » Furniture. Sales are expected to increase by » Clothing . The clothing industry has faced 2.9% pa over the next 3 to 5 years, driven several tough years with revenue driven down largely by the housing construction market. by cautious consumer spending, lower prices, The competitive nature of the industry is higher rents and the global financial crisis. expected to intensify, placing greater onus on However, IBISWorld forecasts that revenue targeting the right type of customer. is likely to grow moderately (at around 1.1% Store layout and design will remain an pa) over the next 5 years. The entrance of a important way of providing customers with an number of international players and increased impression of how furniture may look in their acceptance of online shopping, as well as the home. The overall performance of the retail strong Australian dollar is likely to change furniture market will also be influenced (at least the landscape of the industry. In particular, it to some extent) by the success and demand is expected that chain stores and franchises, for an online portal that provides retailers a who are able to use their buying power to virtual avenue to showcase their products. generate economies of scale making them The industry may also experience an more resilient to downturns, are expected to increase in the number of retailers offering continue to encroach on independent stores’ loyalty programs with a strong emphasis on market share. Department stores are also rewarding each customer purchase regardless likely to be able to use their buying power and of the amount spent. efficiencies to squeeze independent operators. Domestic appliance retailing. IBISWorld Technology is expected to play a major role » maintains that the single largest phenomenon in shaping stock control, industry profitability to impact on the domestic appliance market and customer service experiences over the of the future will be the ability to produce next 3 to 5 years, particularly through radio ‘connected’ homes, where consumers will frequency identification, automatic check be able to operate ovens, dishwashers, outs, interactive displays etc. washing machines dryers etc remotely using either the latest smartphone or table computer technology. Products that work with smart meters and smart appliances to help homeowners reduce their electricity consumption will also be highly sought after. Blu-ray technology will continue to fuel demand for home theatre goods. E-readers are expected to be an emerging product, as will IPTV which is likely to outshine 3-D TV in popularity.
Mount Alexander Shire Council Economic Development Strategy and Profile August 2013 55 4. SECTORAL CHARACTERISTICS AND PERFORMANCE 4.4 Tertiary Sector of the Mount Alexander Economy (continued)
» Hardware. Woolworths and its US joint- » Newspaper, book and stationery retailing. venture partner, Lowe’s, has entered the Industry sales are expected to rise by 1.9% hardware market in 2010 through the pa over the next 3 to 5 years with a need for acquisition of Danks, and plans to secure operators to place a renewed focus on their approximately 150 retail sites over the next 3 product mix and promotional deals in a bid to to 5 years. Its new ‘Masters’ branded hardware attract customers. The most significant effect stores are beginning to make a presence in the on industry sales will stem from the digital market. The acquisition of the Mitre 10 group economy and the anticipated vertical rise in by Metcash means that all three domestic the sale of e-books. Predictions suggest that supermarket corporations now have a retail e-books could account for 50% of all book hardware chain. This, plus greater demand sales over the next decade. stemming from building and construction Newspaper sales are forecast to remain expansion, is expected to boost establishment steady, magazine sales to rise and stationery numbers by approximately 2.2% per annum product sales to rise as a result of continued between 2013 and 2017. innovation in product design and functionality. Overall, industry turnover is expected to grow Online sales are expected to continue to grow by approximately 3.0% pa over the next 3 to in popularity. 5 years. The ability to provide more technically specific and specialised products, and having » Flower retailing. Revenue growth over the next the knowledge base to back them up, is 3 to 5 years is expected to be slightly less than expected to be the strongest base of growth over the last 5 years. In an attempt to stem for the traditional hardware stores in the competition from supermarkets, greengrocers long term. and roadside stalls, the product profile of the industry is expected to orient more to a wider » Sport and camping equipment. IBISWorld array of gift products such as wine, chocolates estimates that sales of sport and camping and soft toys. Upstream technological advances equipment will increase at an annual rate in the flower growing industry resulting in of 1.9% over the next 3 to 5 years, and improved life expectancy, colour and size of establishment numbers will increase at roughly flowers will also benefit the industry. the same rate. In general, small operators Profitability could be enhanced through are likely to find it difficult to compete with improved ordering and inventory handling category killers, large franchise stores and systems which reduce waste, and through chains that are able to spread the costs of better grower-retailer relationships and holding a large range of stock across a number communication. of stores. As well, sports stores are likely to continue facing strong competition from » Fabric retailing. Fabric retailers are likely to specialist athletic stores such as Athletes Foot experience a difficult operating environment and Footlocker, as well as from department over the next 3 to 5 years due to aggressive stores. Further competition is also likely from pricing, an expansion of product lines and the clothing stores specialising in sportswear. availability of more exclusive merchandise at It is expected that retailers will need to turn department stores. IBISworld believes that, increasingly to specialisation as a means while the small independent operator will find of differentiating themselves by offering it increasingly difficult to compete against the knowledgeable advice, attentive customer larger chain stores and franchise operators, service and an extensive range of merchandise the exception will be those who capture a to meet all price brackets. middle to up-market niche where higher margins are earned. Operators in the curtains and blinds segment will find that firms that are vertically integrated will perform better due to their ability to control costs, quality, buying power, flexibility and schedules.
Mount Alexander Shire Council 56 Economic Development Strategy and Profile August 2013 4. SECTORAL CHARACTERISTICS AND PERFORMANCE 4.4 Tertiary Sector of the Mount Alexander Economy (continued)
» Computer and software retailing. Industry Nevertheless, pharmacies are expected to revenue is likely to grow by approximately contend with declining margins over the 4% pa over the next 3 to 5 years, driven next 5 years, resulting from the combination largely by strong growth in tablet computers of the fallout effects associated with the and internet connections. Competition from Pharmaceutical Benefits Scheme (PBS) external players such as department stores price disclosure and growth in competitive and mass merchandisers will remain intense. pressures. Regulatory changes, including While industry operators are expected to generic drug pricing schemes and any further offer competitive prices and bundle packages, PBS reforms, combined with rising input external players (particularly online retailers costs will also exert downward pressures on and auction websites) are likely to become a industry margins. To combat this, pharmacies notable force. may increasingly seek to differentiate themselves from low cost competitors on the » Cosmetic and toiletry retailing. Industry basis of professional value adding (such as revenue is anticipated to grow by professional healthcare advice). approximately 3.4% pa over the next 3 to 5 years, driven largely by an ageing » Franchising. Future growth in franchising is population, changing attitudes to skin care likely to be fuelled primarily by growth in and holistic wellness, and various other service-based franchises, driven by wealthy, psychological motivations. Continued time-poor consumers who opt to pay for product development in new fusion products a service rather than doing it themselves. (such as cosmeceuticals, nutricosmetics Mobile pet services are likely to continue to and nutraceuticals), as well as eco friendly thrive as are franchises involving teaching products will also help stimulate demand. or entertaining children, and home services The growing use of the internet will continue franchises are likely to continue to diversify. to change the profile of the industry as both Growth in health care and community services participants and external competitors make franchising also represents an opportunity, the online move. Consequently, competition fuelled by government funding pressures and levels will remain strong. However, other ownership restrictions. niche markets (such as green products that The location of franchisees will provide may well become second mainstream) are another avenue for growth with an increase expected to experience relatively strong in franchises that launch stores in airports, growth in line with changing consumer railway stations, inside supermarkets and next demand and changing fashion trends. to other franchises to create mini hubs. » Pharmacies. The same factors that bode well for the cosmetics industry also bode well The common threads underlying the outlook for for pharmacies. However, the competitive each of the retail sectors reviewed are: landscape of the pharmacy industry is expected to continue to change as » increasing competition from online sales, competition among various pharmacy chains including competition from overseas retailers, intensifies with some relying on aggressive » the need for in-store retailers to focus on pricing strategies to attract customers. offering the customer an experience, either Some industry sources believe that internal through the range of products and services it competition amongst the pharmacy segment provides, ability to value add with knowledge, represents more of a threat than external advice or support, or other more personalised factors, including supermarkets keen to enter service options, rather than focusing on “the or expand their share of the health and transaction”, beauty market. » the growing influence of technology in Despite continued calls to allow supermarkets making transactions, providing information to enter the pharmacy arena, it is not likely to to customers, engaging customers in the occur over the next 3 to 5 years. shopping experience, displays and promotions etc.
Mount Alexander Shire Council Economic Development Strategy and Profile August 2013 57 4. SECTORAL CHARACTERISTICS AND PERFORMANCE 4.4 Tertiary Sector of the Mount Alexander Economy (continued)
ROAD FREIGHT TRANSPORT Overall, industry performance has been impacted by the limited introduction of new The road freight transport industry generates products into the market, the very slow rate a total revenue of $48.3 billion and has grown of adoption of new technology and the large at an average annual rate of 2.4% per annum number of mergers that have taken place. over the last five years. Most of this revenue is generated by long distance intrastate services Key success factors include: (39.7%) and long distance interstate services (39.6%), both using predominantly rigid and • market research and understanding of client articulated vehicles. Articulated trucks represent needs, only 2.3% of registered trucks but carry 12% of • access to quality personnel, freight by billion-tonne kilometre. They also have • long term contracts, the highest utilisation rate, running laden 72.3% • optimum capacity utilisation, of the time. • effective cost control. The major markets for the industry are: The outlook for the next 5 years is for an increase in revenue of 3.6% per annum, but with • manufacturers, particularly in Victoria and New increasing wages and rising diesel prices, profit South Wales, generating 59% of the revenue, margins are expected to decline. The industry • retailers, often requiring specialised services is likely to become dependent upon structural such as refrigerated trucks, (19%), change to drive productivity with larger • construction industries (12%), operators better placed to take advantages of • agricultural industries (11%), new supply chain technology which enable them • mining industries (8%). to be more competitive. The Road Safety Remuneration Bill, which puts explicit pressure on subcontractors to take responsibility for the effect their rates have on the supply chain, passed through parliament in March 2012. It focuses on the mechanisms that often put owner-drivers at the bottom of the industry food chain at risk. The Transport Workers Union has reached agreement with major players such as Toll Holdings, TNT and Linfox, but supermarkets remain targets of criticism. It is expected that the Bill coupled with identified skill shortages for local delivery, B-double drivers and general freight drivers (particularly interstate and tanker drivers) will result in an increase of wages in the industry. IbisWorld forecasts that wages will rise by 1.7% per annum over the next 5 years.
Mount Alexander Shire Council 58 Economic Development Strategy and Profile August 2013 4. SECTORAL CHARACTERISTICS AND PERFORMANCE (continued)
4.5 QUATERNARY SECTOR OF THE MOUNT ALEXANDER ECONOMY 4.5.1 Trends and Performance Many of the industries within the Quaternary sector have a significant public enterprise The quaternary sector is a large and typically component, particularly Government growing sector incorporating: Administration and Safety and Education » Information, Media and Telecommunications and Training, and these industries dominate Services, dominated by newspaper, the contribution from the quaternary sector. periodical, book and directory publishing in Public Administration and Safety, for example, Mount Alexander, contributes 56.1% of sector turnover and 18.9% of jobs, (these are mostly associated with Local Finance and Insurance Services, mainly » Government and the Loddon Prison), while banking in Mount Alexander, Education and Training contributes 10.0% of » Rental, Hiring and Real Estate Services, turnover and 30.0% of jobs. dominated by real estate services in Mount Alexander, The sector has a location quotient of 0.68, with » Professional, Scientific and Technical Services, Public Administration and Safety being the predominantly architectural, engineering only industry within the sector to have location and technical services, as well as legal and quotients greater than 1 (1.2). The location accounting services and management and quotient for Finance and Insurance Services is related consulting services, the equal lowest (with Electricity, Gas, Water and Waste Services) across all industry sectors. » Administrative and Support Services, primarily building and other industrial cleaning services, Shift and Share analysis suggests the quaternary labour supply services and gardening services, sector in Mount Alexander is classified as » Public Administration and Safety, primarily Type II, underperforming in a high growth correctional and detention services, local and sector. Each of the industries within the sector, state government, and police services, with the exception of Administrative and » Education and Training, mainly primary Support Services and Professional, Scientific and secondary education, and pre-school and Technical Services, shows a competitive education. disadvantage in Mount Alexander, with the extent of that disadvantage most significant for A summary of the size and contribution of the the Education and Training industry. sector in Mount Alexander is presented in Table 4.8. The Professional, Scientific and Technical Services industry is another example of an Table 4.8: Summary of Size of, and Contribution industry with a low location quotient but made by, the Quaternary Sector in Mount showing a local competitive advantage, Alexander Shire suggesting that growth from 2006 to 2011 has been positive (and out stripped Statewide Mount % of Total growth) but that the industry remains under Alexander represented in the Shire. It is the only industry in Shire the quinary sector to show a local competitive advantage. No. of Private Sector Businesses 380 25.1% Table 4.9 presents details. Total Jobs 1,539 22.4%
% Change in Jobs 2006 to 2011 10.9% 29.8%
Total Turnover ($ million) $148.0 10.0%
Mount Alexander Shire Council Economic Development Strategy and Profile August 2013 59 4. SECTORAL CHARACTERISTICS AND PERFORMANCE 4.5 Quarternary Sector of the Mount Alexander Economy (continued) Table 4.9: Shift and Share Analysis, Mount Alexander Quaternary Sector
Change in Jobs Change in Jobs Change in Jobs Total Change in Industry Type Due to Statewide Due to Relative Due to Local Jobs 2006 to 2011 Economic Growth Representation Conditions (Local of High Growth Advantages/ & Low Growth Disadvantages) Industries (Local Industry Mix) Information media & telecommunications 8 -7 -1 0 IV Financial & Insurance Services 7 1 -3 5 II Rental, Hiring & Real Estate Services 8 1 -12 -4 II Administrative & Support Services 12 1 32 44 I Professional, scientific & technical services 25 16 26 67 I Public Administration & Safety 50 14 -34 31 II Education & Training 56 17 -83 -9 II Quaternary Sector 166 39 -71 134 II
SOURCE: ABS, Census of Population and Housing 2006 and 2011; Street Ryan analysis
4.5.2 Characteristics and Outlook Clearly, government policies have a major impact on the education industry and there have been EDUCATION significant changes in recent years. For example, The education industry encompasses education the Federal Government has: services from pre-school to higher and other » pushed schools to adopt a uniform national education. It has a total revenue of $102.3 billion, structure which includes uniform starting which grown at an average annual rate of 2.1% and leaving ages, plain English report cards, over the last 5 years. NAPLAN numeracy and literacy tests at The industry is largely government funded and years 3, 5, 7, and 9, as well as a series of domestically oriented, but private providers performance benchmarks, and export markets (particularly international » encouraged Universities to become more students in TAFE colleges and strong growth in financially independent of government English language courses) have been significant funding by introducing, amongst other things, contributors to growth. In the post school demand-driven funding in 2012, education sector, the introduction of FEE- » introduced ‘User-Choice’ in VET which has HELP from 2005 for full fee paying students at made commonwealth and state government accredited providers lead to an expansion in the funding between public and private providers private provider market. more contestable and resulted in an expansion in the private provider training market. As well, the industry is one of the few that benefit from the slowdown in economic activity spurring higher enrolments in vocational training programs and universities, as well as higher retention rates in post compulsory school years.
Mount Alexander Shire Council 60 Economic Development Strategy and Profile August 2013 4. SECTORAL CHARACTERISTICS AND PERFORMANCE 4.5 Quarternary Sector of the Mount Alexander Economy (continued)
The end result is that education providers » Tertiary Education are expected to rely more heavily on private The tertiary sector includes TAFE, university, funding over the next 5 years through improved private colleges and other higher education fund raising and leveraging off public-private institutions. TAFE and private colleges have partnerships. enjoyed strong growth as a result of an influx of oversees students. However, the high Preschools. » Australian dollar and problems with private Preschools and kindergartens are expected to colleges resulting from the link between experience the fastest growth in the education education courses and permanent residency industry as the Federal Government injects have significantly slowed this growth and, in $500 million into the industry to support fact, international student enrolments have the universal access agenda (which provides declined in recent years. for all four year olds having access to 15 hours of preschool education for 40 weeks). Demand for university places and increased However, there are also initiatives to raise the income from private sources have fuelled qualifications requirements of the workforce modest growth for university and other higher and increase the staff to child ratio which may education providers. Higher education is place burdens on the industry. Further, higher also expected to benefit from government female workforce participation rates is likely efforts to boost the number of graduates by to result in a growing preference for long day 2025, and by adoption of recommendations care centres that offer a preschool option. from the Knight Review on the Student Visa This, and the trend to integrate preschools Program to lower barriers for international into the school system, may threaten the student entry. dominance of standalone preschool providers. » Language and Other Education However, it is expected that the greater The language and other education sector flexibility provided in hours and type of care encompasses English Language Intensive will benefit the industry overall. Courses for Overseas Students (ELICOS) » School Education schools, tutoring and a broad range of The Government schools industry has the education services including ballet classes, largest share of total education revenue at 41%. driving schools, business coaching and The private school education sector accounts computer training. for less than half of this (15.8%) but has steadily Tutoring and ELICOS schools have shown the outstripped government schools in enrolment most significant growth, although ELICOS growth, aided by federal government policy enrolments are now in decline. to expand parental choice. Over the 10 year Growth in tutoring is largely the result of period to 2011, private school enrolments expanding the target market from struggling have grown at an average of 1.8% per annum, students to students of all skills levels and compared with only 0.15% per annum for providing specialist services targeting government schools. There are now 2.3 million scholarships and entry to selective schools etc students attending government schools and 1.2 as well as preparation for exams. Such growth million attending private schools. is expected to continue. It is expected that future school enrolments will be boosted by an increase in the birth rate from 2001 and by a steady trend upwards in the secondary school retention rate. Government funding for school education, however, remains uncertain pending the outcome of implementation of the Gonski Review and Federal State funding agreements being reached. It is expected, however, that funding for schools will grow by around 3.1% per annum over the next 5 years.
Mount Alexander Shire Council Economic Development Strategy and Profile August 2013 61 4. SECTORAL CHARACTERISTICS AND PERFORMANCE 4.5 Quarternary Sector of the Mount Alexander Economy (continued)
BUSINESS SERVICES The outlook for the next 5 years is for an average annual growth in revenue of 3.1%, boosted by The business services industry includes a wide improved access to credit over the longer term, array of industries that provide services to improved business confidence and an increased business including engineering and design appetite for technology. Marketing, recruitment, services, scientific services, information scientific research and environmental science technology services, marketing services, services are forecast to perform strongly, as legal and accounting services, employment are businesses involved with cloud technology. services and a range of administrative support However, weaker performance is expected services. Representation in Mount Alexander is amongst engineering consultancy services and mostly through accounting and legal services, surveying services. engineering services and architectural services. Success factors for businesses in the industry Revenue from the Business Services industry include: is estimated at $152.2 billion, having grown by 0.7% per annum over the last 5 years. • access to highly skilled workers, • ability to compete on tender, The major products and services in the industry • well developed internal processes, are: • market research and understanding. • accounting and legal services (23% of industry revenue), • construction related services (22%), • IT services (18%), • human resource and recruitment services (12%), • marketing and management consulting services (5% each). Prior to the global financial crisis there was strong demand for a wide range of business services. This was driven by a generally strong economy, the continued evolution of information technology and the trend towards outsourcing (although outsourcing is now well established and some business services industries are moving into the mature stage of their lifecycle). Amongst the biggest contributors to growth prior to 2009 were the construction related services segment and the legal and accounting services segment. However, when the global financial crisis hit, expansion plans were shelved and non-essential spending was cut back. Some of the worst hit areas were marketing and recruitment services, as well as surveying and architectural services.
Mount Alexander Shire Council 62 Economic Development Strategy and Profile August 2013 4. SECTORAL CHARACTERISTICS AND PERFORMANCE (continued)
4.6 QUINARY SECTOR OF THE MOUNT ALEXANDER ECONOMY 4.6.1 Trends and Performance The quinary sector in Mount Alexander has a location quotient on 1.02. The Health Care The quinary sector is another large and rapidly and Social Assistance industry has a location growing sector and encompasses the industries quotient of 1.16 (indicating it is an “exporting” of: industry) and Arts and Recreation Services has a » Health Care and Social Assistance, mostly location quotient is 1.0 indicating the industry is hospitals, general medical practices and allied just meeting demand from the local region and health services, neither importing or exporting. The remaining industries in the sector have location quotients Accommodation and Food Services, » of less than 1. predominantly cafes and restaurants, take away food services, and clubs, taverns and bars, Like the quaternary sector, the quinary sector in » Arts and Recreation Services, mainly creative Mount Alexander is classified as Type II, under arts, musicians, writers and performers, and performing in a high growth environment. Shift sporting venue operations, and Share analysis indicates that all industries » Other Services, mainly automotive repairs and within the sector under perform. maintenance, and hairdressing and beauty Table 4.11 presents details. services. A summary of the size and contribution of the Quinary sector is presented in Table 4.10. Table 4.10: Summary of Size of, and Contribution made by, the Quaternary Sector in Mount Alexander Shire
Mount % of Total Alexander Shire
No. of Private Sector Businesses 227 15.0%
Total Jobs 1,639 11.1%
% Change in Jobs 2006 to 2011 4.3% 23.9%
Total Turnover ($ million) $229.4 15.4%
The industries within the sector that make the most significant contribution are Health Care and Social Assistance (75.2% of sector turnover and 61.2% of jobs) and Accommodation, Cafes and Restaurants (47.5% of sector turnover and 49.6% of sector jobs).
Mount Alexander Shire Council Economic Development Strategy and Profile August 2013 63 4. SECTORAL CHARACTERISTICS AND PERFORMANCE 4.6 Quinary Sector of the Mount Alexander Economy (continued) Table 4.11: Shift and Share Analysis, Mount Alexander Quinary Sector
Change in Jobs Change in Jobs Change in Jobs Total Change in Industry Type Due to Statewide Due to Relative Due to Local Jobs 2006 to 2011 Economic Growth Representation of Conditions (Local High Growth & Low Advantages/ Growth Industries Disadvantages) (Local Industry Mix) Health care & social assistance 95 84 -47 132 II Accommodation & food services 39 18 -11 46 II Arts & recreation services 16 14 -41 -11 II Other services 24 -1 -31 -7 IV Quinary Sector 174 108 -122 160 II
SOURCE: ABS, Census of Population and Housing 2006 and 2011; Street Ryan analysis
4.6.2 Characteristics and Outlook Government healthcare reforms coming into full effect over the next five years influence how HEALTH CARE AND SOCIAL ASSISTANCE health care is funded, managed and coordinated. Demand for health services is growing in The Federal Government has assumed full response to an ageing population, lifestyle- responsibility for GP and primary healthcare related diseases and new healthcare services, and is placing greater emphasis on technologies. There are high expectations primary health care to free up resources in in the community about health services and the hospital system. The Federal Government outcomes, and spending on healthcare has has also assumed greater responsibility for consistently grown faster than GDP. As a result, public hospital funding, and public hospitals Commonwealth and State governments have will need to manage resources more efficiently. introduced measures to make public-funded Furthermore, the Federal Government will healthcare more effective and efficient. Revenue require nursing home residents to meet a greater in the sector is estimated to total $116.5 billion in proportion of the cost of their care. 2012-13, up 4.1% for the year. The sector employs The Commonwealth Government’s National almost 780,000 people, or about 6.8% of total Primary Health Care Strategy aims to build a employment in Australia. stronger primary care system. This includes a Over the five years through 2012-13, sector greater focus on keeping patients out of hospital revenue grew by 4.2% per annum. Rising and providing multidisciplinary care, after-hours demand for subsidised healthcare services led primary care (including via telephone) and more the Federal Government to keep a tight rein on services in areas where there are high levels public spending per service. The demand for of unmet health needs. The Commonwealth privately funded healthcare also grew, aided by Government has rolled out a nationwide network an increase in private health insurance coverage. of primary care organisations (called Medicare Locals). Medicare Locals are expected to Health Services revenue is projected to grow facilitate the delivery of services in accordance by 4.2% per annum in the five years to 2017-18, with community needs assessments and annual reaching $143 billion. service delivery plans.
Mount Alexander Shire Council 64 Economic Development Strategy and Profile August 2013 4. SECTORAL CHARACTERISTICS AND PERFORMANCE 4.6 Quinary Sector of the Mount Alexander Economy (continued)
» General Practitioners government regulations and programs can The number of full-time workload equivalent be overwhelming. Some smaller practices will GPs is expected to grow by 1.8% annually find it increasingly difficult to compete due in the five years through 2012-13, compared to the inability to provide convenience and with population growth of about 1.4% per a wide range of services. The new National year. Governments have sought to address Health Call Centre Network, which will be any current and future GP shortages through able to refer callers to an after-hours service, additional funding of training places and could potentially cause small practices to lose through incentives for GPs to practise in business. certain areas (such as rural areas). In addition, Some smaller practices will likely find it harder Commonwealth and state governments have to generate satisfactory income levels unless encouraged the recruitment of international they can focus on areas of expertise where medical graduates and have allowed them they can command fees above the Medicare to practise on concessional terms, as long as schedule fee. Some areas of expertise may they do so in districts of workforce shortage. include asthma, diabetes management or A recent report by the Centre for Population women’s health. Smaller practices could also and Urban Research, Monash University, promote their ability to provide continuity of claimed that Australia now has too many practitioner and thus better understanding of doctors aspiring to become GPs and that the a patient’s health history. government international recruitment policy Large diversified health companies have been has exceeded its target. acquiring medical practices. There have been General Practice Medical Services are concerns expressed by the public and by expected to generate revenue of $10.6 some medical practitioners about this trend. billion in 2012-13 (up 4.2% on 2011-12) and Particular concerns relate to intra-group account for 7.0% of total health expenditure referrals (e.g. to a group-owned pathology, in Australia. About 130.1 million services will radiology service or hospital), the potential be provided under Medicare for non-referred for over-servicing, and subsidisation of the attendances in 2012-13, representing about 5.7 medical practice from related services. services per capita. The number of Medicare According to the AMA, corporations that non-referred attendances is forecast to support bulk-billing by their GPs to attract grow by an annualised 2.6% in the five years pathology and diagnostic imaging referrals will through 2012-13. GP revenue is expected to indirectly pressure other GPs to accept bulk- grow by 3.6% per annum in the five years billing rebates. GPs in their own practices who through 2012-13. This has been promoted do not receive indirect benefits from pathology by growth in the number of services, partly and diagnostic imaging referrals may be offset by a decrease in the average fee per worse off financially than rapid-turnover service. There has been significant growth in doctors in medical centres, which are indirectly after-hours GP attendances, mental health subsidised by profit from such referrals. services, multidisciplinary care plans and case An expanded role for practice nurses and conference services. There has also been a allied health practitioners (including the decrease in Medicare rebates per service. In relatively new Medicare Benefits Schedule addition, a greater percentage of services are items for services provided by nurses and being bulk-billed, meaning that more doctors allied health practitioners) could potentially are accepting the Medicare rebate as full contribute to slower growth in the provision payment (and not charging a co-payment). of services by GPs themselves. It may also Revenue growth came despite a real decline allow some medical practices to use GPs more in average Medicare benefits per service, and in a managerial role and leverage off lower was mainly due to growth in patient volumes. cost health services employees (i.e. boosting Small practices tend to have high costs overall returns). per consultation. The administrative and compliance costs associated with
Mount Alexander Shire Council Economic Development Strategy and Profile August 2013 65 4. SECTORAL CHARACTERISTICS AND PERFORMANCE 4.6 Quinary Sector of the Mount Alexander Economy (continued)
» General Hospitals ACCOMMODATION AND FOOD SERVICES General hospitals account for about 46.2% of The Accommodation and Food Services industry Medical Services revenue. General hospital in Mount Alexander is comprised mainly of revenue is expected to grow by 4.2% per accommodation providers (principally motels, annum over the five years through 2012-13 due and some caravan parks and camping grounds, to growth in the numbers of admitted patient B&Bs, cottages and serviced apartments), separations and non-admitted patients, partly many cafes and restaurants and some catering offset by the impact of a decline in patients’ enterprises, as well as hotels, bars and taverns. average length of stay. Private hospitals have benefited from an increase in the proportion Characteristics and outlook for these segments of the population covered by private health are summarised as follows. insurance (which has promoted demand). Accommodation Services » Nursing Homes Nursing homes account for about 9.9% of » Motels. The motel industry includes motels, Medical Services revenue, will post growth in private hotels and guest houses with 15 or revenue of about 5.5% per annum due to an more rooms, ranging from 1 star to 5 star. The increase in resident numbers (at about 1.7% industry has a total revenue of $2.8 billion but per annum) and in the care requirements revenue has decreased at an average annual for residents (who are tending to be older rate of 1.3% over the last five years. The bulk and sicker). Nursing home profitability has of motel revenue (66.1%) is derived from 3 star suffered from slow growth in government accommodation establishments with a further funding, which has not kept up with cost 31.1% from 4 star establishments. inflation. Its main market segments are: • domestic travellers, travelling for holiday or » Dental Services are projected to grow at about leisure (50.4% of revenue), 3.7% per annum due to both volumes and • domestic travellers, travelling for business prices. (23.2%), » Allied health services, which include • international visitors, travelling for holiday or physiotherapy, chiropractic services, podiatry leisure (16.4%). and natural therapy, will grow at a solid pace The industry has lost significant market share (over 5.0% per annum). This performance to other forms of accommodation (particularly will mainly be due to fast growth in volumes serviced apartments) over the last 10 years as a result of population ageing, an increase and has been hampered by domestic and in private health insurance coverage and the international economic conditions, rising fuel growing popularity of drug-free and surgery- prices and the high Australian dollar. Despite free treatments. this, and despite its declining revenue, the motel industry has maintained relatively » Pathology and diagnostic imaging providers stable profit margins in recent years, due will post slow growth in revenue, despite substantially to wage cuts. Profit margins of strong growth in volumes, due to government regional motels, however, have suffered due initiatives aimed at slowing growth in to a large disparity between room occupancy government outlays on these services. rates in the city and those in regional areas.
Mount Alexander Shire Council 66 Economic Development Strategy and Profile August 2013 4. SECTORAL CHARACTERISTICS AND PERFORMANCE 4.6 Quinary Sector of the Mount Alexander Economy (continued) Motels operate in a very competitive The outlook is for improved rates of growth over environment, both within the industry and from the next 5 years (2.1% per annum), supported by other forms of accommodation. It is positioned strong growth in business travel. Critical success in the middle of the accommodation market factors for businesses within the industry and, therefore, faces competition from above include: and below – from hotels, serviced apartments, • a loyal customer base, bed and breakfast establishments, and from • access to multi skilled and flexible workforce, cabins in caravan parks. It is difficult for motels • a good location in a major tourist/travel area to overcome consumer perceptions that effective product promotion, they are all of the same standard with similar • being part of a buying, promotion and fittings, facilities and layouts. marketing scheme, The outlook is for a continued decline in • having a clear market position, revenue (-0.5% per annum over the next 5 • understanding and managing seasonality by years), due to a continuation of the same varying tariffs and generating other markets factors that have impacted on its revenue in low seasons. over the last 5 years. » Caravan Parks and Camping Grounds. The » Serviced Apartments. The serviced apartment caravan parks and camping grounds industry industry generates a total revenue of $2.8 has a total revenue of $1.4 billion which has billion which has grown at an average annual grown at an average annual rate of 1.6% over rate of 1.0% over the last 5 years. Most revenue the last five years. Most of this revenue is is derived from 4 star accommodation (61.6%), generated from short term powered sites followed by 3 star (17.7%) and food and (54.9%), followed by short term unpowered beverages (8.1%). sites (14.3%) and short term cabins, flats, units and villas (12.6%). Its main market segments are similar to that for motels, namely: Its main market segments are: • domestic travellers, travelling for holiday or • domestic families (52.1%), leisure (50.2% of revenue), • domestic seniors (26.5%), • domestic travellers, travelling for business • domestic aged between 20 and 29 years (28%), (11.7%). • international visitors, travelling for holiday A major change in the industry over the last or leisure (11.5%). 5 years has been systematic improvements to The industry is in the growth phase of its life facilities. Operators have upgraded unpowered cycle despite slower growth over the last 5 sites to powered sites, or replaced them with years (due mainly to external factors). The cabins and flats, and have upgraded amenities industry’s development has been facilitated and recreational facilities to meet rising by favourable strata scheme laws and the expectations of campers. Improved facilities at relatively low development cost of serviced higher tariffs and higher occupancy rates have apartments compared with hotels. contributed to greater industry revenue over the past 5 years despite there being fewer site numbers. The outlook for the next 5 years is for increasing demand, particularly for higher end camping ground and caravan park accommodation. Industry revenue is expected to grow by 2.3% per annum to 2017/18 despite continued park closures.
Mount Alexander Shire Council Economic Development Strategy and Profile August 2013 67 4. SECTORAL CHARACTERISTICS AND PERFORMANCE 4.6 Quinary Sector of the Mount Alexander Economy (continued)
Food Related Services » Restaurants. The restaurant industry includes outlets that sell food and beverages on Cafes and Coffee Shops. The cafes and coffee » the premises. It has a total revenue of shops industry includes licensed cafes, BYO $13.9 billion which has grown at a modest cafes, and unlicensed cafes. It has a total average annual growth of 0.4% over the industry revenue of $5.1 billion and has grown last five years. Low cost restaurants make at an average annual rate of 2.2% over the up 66% of all establishments but only last 5 years. Around 61% of its revenue is generate 28% of industry revenue, whereas derived from cafes and its two largest market premium restaurants comprise only 9% of segments are middle 40% of household establishments, but generate 40% of industry incomes (50.7% of revenue) and highest 20% revenue. Its major market segments are the of household incomes (42.5%). highest income quintile (42.5% of revenue) The industry owes its success to the nation’s and the fourth lowest income quintile (22.4%). love for gourmet coffee and the experience The restaurant industry has faced challenging that coffee shops offer. Success is often conditions over the last five years as a determined the level of customer service, result of the global financial crisis, rising price, the quality of the coffee brand and unemployment and consumer deleveraging how well they make a cup of coffee from (preferring to eat at home or purchase the texture, temperature and taste, down cheaper and/or takeaway options). Restaurant to the amount of cream in espressos. The services are discretionary in nature and are presence of international players and coffee not only affected by changes in disposable franchises is expected to increase, but the income and consumer confidence, but also prevalence of small specialty operators and must fight for their share of discretionary intense competition driven by the nation’s household expenditure with other entrenched coffee culture are likely to remain discretionary pursuits such as entertainment, the underlying tenets of the industry’s success gambling, and other recreational and cultural and vibrancy. The industry has also benefitted pursuits. from recent social trends such as longer working hours However, rising concern over However, it is expected that the industry’s the nutritional value of cafe meals is also likely performance will be lifted by positive flow-on to influence demand and have an impact on effects from reality TV cooking shows that the offer available at cafes. reconnect people with “the joys associated with the total meal experience”, incorporating The outlook is for revenue growth of 3.6% the package of well presented quality meals per annum over the next 5 years with and the ambience associated with dining out. particular opportunities in niche markets There will also be opportunities resulting from such as organics, eco consumerism and ethical consumerism. The internet and online • busier lifestyles and greater demands for marketing is also likely to become more convenience fundamental to success. • rising health consciousness causing Training will be critical to ensure appropriate consumers to factor health and nutrition into standards are maintained, as will the their food purchases and enabling operators continued monitoring of the wants and to target niche markets with premium needs and changing tastes of customers, products that command higher returns and minimising costs through maintaining • improving economic conditions. excellent supplier relations. Overall, industry revenue is projected to grow by 2.3% per annum over the next five years.
Mount Alexander Shire Council 68 Economic Development Strategy and Profile August 2013 4. SECTORAL CHARACTERISTICS AND PERFORMANCE 4.6 Quinary Sector of the Mount Alexander Economy (continued)
» Pubs, Taverns and Bars. The pubs, bars and ARTS AND CULTURAL SERVICES tavern industry generates a revenue of $15.9 Mount Alexander Shire has long been recognised billion and has grown by 1.0% per annum as a vibrant centre for the arts. Council’s Arts over the last five years. Its key products and Strategy 2011-2015 highlights the Shire’s arts and service are: cultural offerings as including the Castlemaine • liquor for consumption on the premises Art Gallery and Historical Museum, the biennial which accounts for 32.4% of industry Castlemaine State Festival, the Theatre Royal, a revenue, number of private and community operated art • liquor for off-premises consumption (27.9%), galleries, several theatre groups and individual • providing gaming and wagering facilities performers, musicians, and a wide range of (24.3%), visual artists. It is also home to the highest • meals (10.3%). concentration of print makers in Australia, with The key market segments are: many in the Maldon area. • older age groups (generating 55% of revenue), Arts and culture cannot be so narrowly defined, • families with dependent children (25%), however, and the Shire’s culture is also expressed • young singles (20%). in its heritage architecture, a large number of very active arts and cultural organisations, a Since the mid 1990s the industry has busy calendar of arts and cultural events, and segmented into two groups: many other attributes that express its history • the small (and declining) traditional hotel, and contemporary life. pub or bar usually without gambling facilities, • venues with gaming machines. This is a It is understood that arts and culture brings a much larger segment of the industry, usually broad range of community and social benefits to comprises larger establishments and is local residents that are often of sufficient value estimated to generate about $12.8 billion in in themselves to warrant further nurturing and revenue. development of the sector. While growth is much stronger amongst However, arts and culture in Mount Alexander the second segment, some of the smaller Shire has become a competitive strength traditional hotels have had success through that can contribute to a positive economic offering a targeted customer experience, often environment in a number of ways. associated with a quality licensed restaurant and/or a cocktail bar. Nevertheless, gaming Most importantly, arts and culture can enhance machines are becoming increasingly important the ‘liveability’ of the Shire by providing to the viability of the venues in this industry. interesting, entertaining and inspiring activities The industry is also facing challenges for local residents to enjoy. A healthy arts scene associated with changing patterns of can indicate the presence of tolerance, diversity consumption of alcohol (a general downward and openness to difference that appeals to other trend and away from beer), and the impact of creative individuals. This, in turn, can encourage regulations associated with smoking and drink more creatively-inclined people to move to the driving. Such challenges are forcing change in Shire, who can bring a range of professional the industry landscape. skills to the local economy, from architecture, The outlook is for modest growth in revenue to landscape gardening, IT development and (1.7% per annum over the next 5 years), driven sustainable agricultural production. ‘Creative mainly by improving economic conditions and communities’ are well-known for economic growth in gourmet pubs and small bars. vibrancy brought about by their capacity to innovate, adapt to, or overcome challenges, and respond to opportunities.
Mount Alexander Shire Council Economic Development Strategy and Profile August 2013 69 4. SECTORAL CHARACTERISTICS AND PERFORMANCE 4.6 Quinary Sector of the Mount Alexander Economy (continued) According to Richard Florida26, “The creative The arts and cultural sector can also, of itself, class is a fast-growing, highly educated, generate employment and economic impact. and well-paid segment of the workforce on While information about the economic whose efforts corporate profits and economic contribution of specific cultural facilities and growth increasingly depend. Members of the events in the Mount Alexander Shire is limited, creative class do a wide variety of work in a some insights are gained from the credentials wide variety of industries — from technology of the Castlemaine State Festival. Research to entertainment, journalism to finance, high- indicates that it makes a very significant end manufacturing to the arts. They do not contribution to the local economy28: consciously think of themselves as a class. Yet they share a common ethos that values » The economic impact of the festival increased creativity, individuality, difference, and merit.” from $1.064 million in 2007 to $2.55 million in 2011. “The key to economic growth lies not just in » Income to the festival increased from the ability to attract the creative class, but to $760,000 in 2007 to $959,000 in 2011, translate that underlying advantage into creative showing solid growth. economic outcomes in the form of new ideas, new high-tech businesses and regional growth.” The festival also produces an extensive media campaign that brands and promotes Of course, a creative ‘class’ generated from Castlemaine and the broader region as a cultural within a community is just as valuable to the tourism destination and a desirable place to health of the economy as attracting creative live. In 2011, it generated editorial content that individuals from outside a region. A strong reached 15.9 million people, including 23 hours arts and cultural scene can help a community of radio / television airtime. to retain its young people providing the next generation of business owners, developers and Industry consultation suggests that there innovators. is a high concentration of artists who have developed significant recognition and a strong In the same way it can attract residents and new market following within Australia and overseas. businesses, a creative community can create a There is also a strong sense amongst the artists highly desirable location to visit. The significance and business people consulted that the sector of Mount Alexander Shire’s arts and culture has a great future in the Shire, in part due to sector to its tourism industry is highlighted in the extensive support it receives from the local Section 3.4, with some of the most popular community through their contributions as tourism activities in the Shire involving arts/ voluntary organisers and audience members. heritage/festival activities (27% of overnight visitors). Those who engage in these activities stay longer (3.1 nights) compared to the Bendigo-Loddon regional average of 2.5 nights27, indicating they are a higher yield segment.
26 Richard Florida is a Professor of Regional Economic Development at Carnegie Mellon University, USA. The excerpts are adapted from his book, ‘The Rise of the Creative Class: and How It’s Transforming Work’, 2002 27 Tourism Research Australia, Consultancy Data, year ending 2012 28 ‘Castlemaine State Festival: Sponsorship Opportunities’ document, 2012
Mount Alexander Shire Council 70 Economic Development Strategy and Profile August 2013 4. SECTORAL CHARACTERISTICS AND PERFORMANCE 4.6 Quinary Sector of the Mount Alexander Economy (continued)
TOURISM Many of the Shire’s accommodation establishments are located in beautifully Whilst not an operations specific industry, maintained heritage buildings or natural settings. tourism cuts across and contributes to most The accommodation sector is characterised by industries within any community, but particularly a relatively large number of small businesses, those in the quinary sector. particularly bed and breakfasts, hotels, motels Visitors to Mount Alexander Shire make a very and guesthouses, as well as self-contained important contribution to the local economy, accommodation and caravan parks. as well as supporting the viability of a large The Shire is not widely recognised for its nature- range of businesses that are patronised by based attractions but they include the Goldfields local residents. These businesses include cafes, Track, a walking and cycling track that forms restaurants, galleries, performance venues and part of the Great Dividing Trail and traverses wineries. Visitors also support businesses within the Shire north to south passing though the broader retail industry, medical services, fuel Castlemaine; and the Castlemaine Diggings outlets, and the health and well-being sector, to National Heritage Park. name a few. Community-managed activities and services such as festivals, heritage attractions Visitor information centres are located in and museums also benefit from tourist visitation. Castlemaine and Maldon which are operated by Mount Alexander Shire Council with the support Key drawcards to the Shire include its goldfields of local volunteers. heritage, the culinary, arts and cultural attractions and events of Castlemaine, as well as Mount Alexander Shire is a member of the newly the ‘village’ offerings of Maldon, Guildford and formed Bendigo Regional Tourism (BRT), an Newstead. Much lauded wineries and cideries affiliation between Greater Bendigo City Council, are located in the Harcourt Valley, supported by Loddon Shire Council, Central Goldfield Shire several annual events that celebrate the area’s Council and Mount Alexander Shire Council, local produce. There are also heritage features, to actively develop and promote tourism to bushwalks and other visitor experiences in the intrastate, interstate and international markets. ‘hamlets’ of Taradale, Vaughan, Fryerstown BRT is a part of the Goldfields Tourism Alliance and others. Events are an important source of Inc., the tourism association charged with the visitors for all of the Shire’s communities. strategic development of tourism for the broader Goldfields Region. A less overtly recognised tourism asset for Mount Alexander Shire is its people. The Mount Alexander’s target market segments are: diversity, ingenuity, and community-mindedness of the locals is evident in the lively café scene, • socially aware, extensive calendar of small and large community • visible achievers, events, the innovative use of space and design • traditional family life. in the built environment, and a passion for Further information on the characteristics of these sustainability that has seen the Shire become market segments is presented in Appendix C. a leader in community-based initiatives to address climate change. As one business owner Its visitors are mostly from Melbourne and interviewed for the study expressed, “Our caring other locations within 2 hours drive, particularly community is a real strength, and makes for an Bendigo, Ballarat and Geelong. authentic experience for visitors.” Visitors to the Shire typically travel as couples, families, groups of families or friends, or as social/recreational groups.
Mount Alexander Shire Council Economic Development Strategy and Profile August 2013 71 4. SECTORAL CHARACTERISTICS AND PERFORMANCE 4.6 Quinary Sector of the Mount Alexander Economy (continued) Industry consultation has indicated that the In summary, there is an opportunity to revise tourism sector is performing reasonably well the brand for each destination within Mount overall, but it is experiencing some challenges: Alexander Shire, and the Shire as a whole, to reflect the concept of “a rich tapestry of » Seasonality is a major issue, with turnover very activities and events related to the arts, culture, quiet in the winter months, particularly July food and wine, and environmental sustainability, and August. February is also often very quiet. couched within an historic Goldfields setting » There is generally a strong weekend trade but and supported by an active and engaged mid-week visitation is significantly reduced. community.” The brand should be expressed » A surge in the number of eateries in using a more edgy marketing message and Castlemaine over the last few years has made graphic design style. a significant improvement to culinary offerings but failed to generate additional visitation to reflect the wider dispersal of the tourism dollar. » Businesses which are performing the best seem to have a very loyal repeat visitor base which is cultivated through direct marketing activities. » Some retail businesses have experienced a very challenging few years, which is consistent with general State and national trends. While the branding of Mount Alexander Shire as a tourism destination has shifted in recent years from a dedicated Goldfields focus to a stronger arts, food and wine focus, there is a concern amongst some tourism operators that Goldfields heritage is still being pushed as the dominant theme. Goldfields heritage is considered by some to be a product offering focused on the past rather than a reflection of the vibrant, creative and contemporary experiences of the businesses, events and attractions available today. Goldfields features are also part of the product offering of all destinations within the Goldfields Tourism Region, making it critical to differentiate Mount Alexander Shire’s product offerings within the broader Goldfields Tourism region context. The Shire also has a strong culture of environmental sustainability which is demonstrated through a wide range of small events focused on opportunities to learn more about sustainable housing, gardening, agriculture, etc. While these activities are of interest to local residents, this focus is also a competitive strength and would appeal to some of the visitor markets attracted to the Shire.
Mount Alexander Shire Council 72 Economic Development Strategy and Profile August 2013 5. BUILDING ON THE PAST AND GUIDING THE FUTURE
5.1 WHERE WE ARE NOW – KEY CONCLUSIONS A range of issues and key conclusions have • Organic and bio-dynamic practices. emerged from research and consultation that • Design (graphic, architectural and suggest broad priorities for the future. They have landscape). been grouped into seven strategic challenges • Various branches of the arts (visual, and are summarised below. A more detailed list music, film). of issues and challenges associated with each of • Heritage and history. Mount Alexander’s activity sectors is presented • Health and wellbeing. in Appendix E. These are all consistent with the emergence of the era of lifestyle and sustainability, yet analysis 1. Finding effective ways of harnessing the suggests that such skills and interests are yet to skills and passions that exist within the translate to an economic competitive advantage community to promote desirable, sustainable in these areas. development. Mount Alexander has become a residential location of choice for talented and passionate people from diverse backgrounds and experiences. This has stimulated several specialised and skilled organisations with a keen interest in one or more economic development areas, such as: • Sustainability. • Renewable energies. • Food and beverage production. • Automotive trades and modified vehicles.
Mount Alexander Shire Council Economic Development Strategy and Profile August 2013 73 5. BUILDING ON THE PAST AND GUIDING THE FUTURE 5.1 Where We Are Now – Key Conclusions (continued) 2. Creating a better understanding of the era There is a need to both support those of lifestyle and sustainability and achieving businesses and industries that are already a balance between maintenance of lifestyles making a significant contribution to the local and acceptable economic development economy, while also assisting to develop new opportunities. businesses in new industries, and encouraging a smooth transition to a service based There are distinct groups of businesses and economy. residents in the Shire. To generalise, there are: Gold mining is one of the traditional industries, • Those who have retired or semi-retired and with a likely resurgence over the next decade who have moved to Mount Alexander for and beyond, based around deep-lead deposits lifestyle reasons. Generally these people and new investment. This may have potential like the way the Shire is and do not want to provide a modern connection to the Shire’s it to change, particularly with respect to (alluvial) goldfields heritage. attracting big, mainstream businesses and investment (including supermarkets and 4. Having a legislative and planning process franchise stores). that provides clear direction for, and • Those who have lived locally for a long supports, desirable development. time and feel the Shire is missing out on Long-established industry sectors have opportunities and investment (including big expressed a perceived lack of investment supermarkets and franchise stores). opportunity and perceived intransigence • Those who perceive Council policies and within planning and other legislative regulations could be more flexible to expand processes, leading to missed opportunities in the ability to grow businesses and economic automation, cost-efficiencies, value-adding, opportunities. investment and physical business expansion. • Business operators who are predominantly ‘life-stylers’, operating an enterprise but The flow-on issues from frustration at lack of not at a sufficient capacity to effectively investment opportunities highlight the need to collaborate or assist in developing new consider: skills and jobs, building critical mass or new • Suitable industrial and commercial sites and competitive strengths. premises. The attitudinal and cultural divisions between • Addressing limitations of the existing power some businesses and some residents relate network. A balance between renewables and to differing values, different recreational achieving capacity needs does not appear to interests and other lifestyle priorities. These be a short-term prospect. divisions have the potential to be manifested • Water treatment and water supply. This by impacting on economic development relates to both the capacity to handle waste opportunities and investment decisions due water and the future return on investment to community resistance, legislative delays, from irrigation modernisation works. and the potential to create insecurity for • Potential conflicts in land use between investment and future expansion. farming, mining, public conservation and 3. Building a more diverse and robust economy. rural residential. • Suitability of roads. The Shire has a large percentage of total jobs • Ageing and uncompetitive community based in a few large businesses. Further, local infrastructure including sport and recreation. job creation is lagging population and worker growth. This is resulting in increasing levels of commuting; a situation at odds with the desire to address issues like ‘local food and low food miles’ and ‘minimising the carbon footprint’.
Mount Alexander Shire Council 74 Economic Development Strategy and Profile August 2013 5. BUILDING ON THE PAST AND GUIDING THE FUTURE 5.1 Where We Are Now – Key Conclusions (continued)
Inadequate supply, range and choice of 5. Providing for an ageing community industrial land is also perceived by many in the business community as an impediment to By 2031, the Shire is expected to have a both expansion of existing operations and new 91.7% increase in people aged 65 years and business establishment. However, industrial over (over 3,200 more people in these age marketing in a relatively small regional area groups). Conversely, it is expected to have involves much more than provision of suitable a 2.0% decrease in people aged less than land and services. Creation of new industrial 15 years (around 65 fewer children in these estates and precincts is an enormous task. age groups). It is also likely that Mount Alexander will have a slightly smaller share Rapid technological improvements and of the Loddon Mallee South region’s total globalisation of trade mean that businesses population, due to more rapid growth in can locate anywhere. Traditional industries Bendigo and Macedon Ranges. around Australia are being lost to overseas locations because the cost of doing business Mount Alexander already has a significant is much cheaper, unless there is a critical Health Care and Social Assistance industry supply or market reason for remaining in that is delivering strong economic outcomes. Australia. Business location decisions in the The expanding aged population presents 21st century are about a complex mix of: further opportunities within this industry for new business development particularly • Lifestyle factors associated with active aging, creating jobs • Existing networks and relationships and enhancing liveability. • Supply chain connections • Market and logistics considerations. 6. Strengthening the Shire’s tourism potential and more effectively leveraging economic The nature of demand for industrial land and benefits from the industry. premises in Mount Alexander is also changing, consistent with trends around Victoria. There Events are a significant and important is demand for industrial land by businesses drawcard for visitors for all the Shire’s towns which have not been considered as industrial and villages. However, there are limited tourism land users, in the past. The sectors which have products that appeal to the family visitor become accepted consumers of industrial land market in Castlemaine and Maldon, and a lack now include of ‘higher rated’ accommodation and meeting/ workshop facilities for the business market, • Agribusiness value adding recreational groups, and special interest groups • Manufacturing despite opportunities created by the relative • Construction (including trades) proximity to Melbourne and Bendigo. • Wholesale trade • Electricity, gas, water and waste (utilities) As well, recent growth in tourism-focussed • Wholesale trade (especially bulky items) businesses such as restaurants, cafes, and ‘bed • Transport, postal and warehousing and breakfasts’, has not necessarily ‘grown the • Information and communications technology pie’. Rather, it appears that a similar number • Arts and recreation services (particularly of visitors are being spread more thinly sports centres, gyms and galleries). among the larger number of businesses.
Mount Alexander Shire Council Economic Development Strategy and Profile August 2013 75 5. BUILDING ON THE PAST AND GUIDING THE FUTURE 5.1 Where We Are Now – Key Conclusions (continued) 7. Encouraging regional collaboration and new •“A bright and prosperous future” approaches. Some Victorian regions have recently had their confidence shaken by a combination of There are some common strategic themes the Global Financial Crisis, high Australian in economic development among the other currency exchange rates impacting on Loddon Mallee South Councils (Bendigo, exports, natural disasters in the region, Loddon, Central Goldfields, and Macedon predicted impacts of climate change/ Ranges) many of which are compelling. climate variability and the pricing of carbon These are: emissions. This is not the case at all in •“Environment and social considerations Loddon Mallee South, where there remains taking centre stage”. a confident expectation of growth. For some time there has been an •“Non-traditional industry sectors are now acknowledgement that economic embedded in the economic development development should be cognisant of function”. environmental and social issues. This acknowledgement has moved to a new level in the Loddon Mallee South region to the point where the economic development strategies in the region are as equally focused on environmental protection, or opportunities, and social development and lifestyle protection, as they are focused on traditional economic development outcomes such as population growth, jobs, and investment. •“Towards a Bendigo economic region” Bendigo is the fifth largest inland Australian city. The RDA Regional Plan and some of the municipal economic development strategies recognise the economic sphere of influence of Bendigo, and there is a clear indication that considering Loddon Mallee South as the ‘best fit’ for a Bendigo economic region will enable future planning and economic development initiatives to be implemented in a more holistic and collaborative manner. Bendigo’s significance to the Mount Alexander economy is also evident in the extent and pattern of commuting for work.
Mount Alexander Shire Council 76 Economic Development Strategy and Profile August 2013 5. BUILDING ON THE PAST AND GUIDING THE FUTURE (continued)
5.2 WHERE WE COULD BE – SCENARIOS FOR THE FUTURE This economic development strategy has The following sections briefly describe key extended beyond the “traditional approach” in elements of the macro-economic outlook for considering demographic and economic trends each of four scenarios. and the existing situation by developing a range of possible scenarios for the future. This process Scenario 1: An Economic Downturn was been driven by a need to create a balanced Synopsis understanding of the broader economic environment which could confront Mount » The mining boom slows. Alexander Shire and the consequences for local » Regional and local disasters occur (fire, economic development strategies and actions. drought, floods and/or storms), reducing commodity production and viability. “Looking at the past alone is not enough to allow » Government funds at all levels are under us to imagine the future. The future is buried in pressure from reduced trade balances and the the fringes of the present, which means it can pay need for reconstruction. dividends to… examine the world around us now. Elements of the Macro Scene: We all have different views about the future, what we hope to achieve, and the direction in » Victoria returns to drought in 2013 and which we are heading; but we are all susceptible throughout the 5 year economic strategy to being hugely misled, not only about what period. is happening right now, but also about what is » By 2015 the Commonwealth Government, and likely to happen next. Yet unless we can think other national governments around the world, coherently about the future, it is likely that have forgotten the Global Financial Crisis we will be held hostage to a world not of our of 2008-13 after rapidly increasing climatic choosing, and that our current choices will be disasters (tsunamis, cyclones, floods and restrained by events and situations that are either fires) and extinction of dozens of endangered untrue or have not happened. species, and are pouring all available resources into carbon abatement measures. … we cannot hedge against all the variables or consistently distinguish truth from fiction – not » The mining boom becomes a distant memory, precisely. But we can, nevertheless… analyse in food exports have plummeted, tourism is some detail what our reactions to certain events down and the standard of living is in decline. might be. This won’t always work of course. We » Australian services are in demand and, to will still get caught out, but it’s better than not some extent, have offset losses in other export thinking about the future at all. The process of revenue. Australia’s chief scientist said in 2014: engaging with the future allows us to heighten “We may not be able to feed either Asia or our peripheral vision, so that the content of some the world, but our know-how has the potential new events no longer surprises – even though the to contribute to healthy lives for hundreds timing may be unexpected”29. of millions around the globe”. Services in greatest demand include: • Health care • Agricultural technologies • Sports science and fitness • GPS and RFID technologies • Meteorology and climatology • Waste re-use • Recycling of all types • Education and industry training • Renewable energy systems.
29 Watson, R and Freeman, O (2012), Futurevision: Scenarios for the world in 2040
Mount Alexander Shire Council Economic Development Strategy and Profile August 2013 77 5. BUILDING ON THE PAST AND GUIDING THE FUTURE 5.2 Where We Could Be – Scenarios for the Future (continued)
Scenario 2: A Strong and Buoyant Economy Scenario 3: Insecurity Synopsis Synopsis » A return to economic growth in Europe and » National conflicts and terrorism in many the United States and strong growth and world hot-spots. development in Asia and Africa. » Continuing woes in the European Union » Attention turns to attracting skills and labour, and USA rather than limiting immigration. » Slowing down of growth in China and India. » New Technologies give greater confidence in investing in Australia in automated Elements of the Macro Scene: traditional industries (agrifood, mining, and » National conflicts create greater uncertainties manufacturing) as well as the emerging many world hot-spots (Middle East, Eastern service sectors. Europe, North Asia, South America, and the Elements of the Macro Scene: Pacific). » Terrorism, the demise of the European » The world outlook is buoyed by a return to Union as an economic force, continuing USA economic growth in Europe and the United economic woes, and slowing down of growth States and development in Asia and Africa. in China and India means that short-term » New projections for World population survival strategies drive government policies suggest it will peak at 8.5 billion by 2025 and corporate decisions. and then begin to decline. Attention turns to » International tourism declines significantly, attracting skills and labour, rather than limiting giving a healthy boost to domestic tourism immigration. This completes the globalisation » The Australian government bolsters defence process, which to date has embraced global and national security spending (including communications and global trade but not coastal surveillance for the increasing number residential mobility. of asylum seeker boats) Geo-engineering and revised modelling keep » » Fossil fuel costs escalate as many oil climate change low on the agenda. producing countries are embroiled in conflict » Technological successes give greater - sparking new nuclear and renewable energy confidence in investing in new technologies generating projects. to overcome all obstacles. In Australia, this » Mining demand continues including uranium, includes development of: coal, metallic minerals and fertiliser substrates. • RFID scanning and monitoring across all industries. • GMO food production solutions enabling large-scale farming to be world competitive again. • Intensive aquaculture and food production systems. • Cancer and other health research measures, leading to some new cures and average life expectancy reaching 90+ years. • Fully automated manufacturing with CNC and robotics. • Health, education, recreation, art, personal and domestic services as the overwhelmingly largest employers.
Mount Alexander Shire Council 78 Economic Development Strategy and Profile August 2013 5. BUILDING ON THE PAST AND GUIDING THE FUTURE 5.2 Where We Could Be – Scenarios for the Future (continued) Scenario 4: More Globalisation 5.3 THE POLICY AND PLANNING CONTEXT AND NEW APPROACHES Synopsis The policy and planning environment, broader » Regional hubs become growth areas in an regional strategic plans and new approaches increasingly connected global village. to doing business also provide guidance in » “Collaborating to compete” becomes critical determining future directions. and supply-chain to supply-chain competition replaces business-to-business. 5.3.1 Policies and Plans » New collaborative mechanisms: Aerotropolises Mount Alexander Shire Council’s Plan 2013-2017 and business-ecosystems are introduced states a vision of with regional, interstate, and international connections. “Mount Alexander Shire – a special place with an active community growing the Macro Scene future together”. » Regional hubs, where the regions often extend Its goals are: from across state and national boundaries, become growth areas in an increasingly » a vibrant healthy community who encourage connected global village. and support activities that advance the Shire’s heritage, sport, culture and the arts, » Clusters and networks continue as key » better community services and facilities, Australian economic development strategies » a thriving local economy, in a world where “collaborating to compete” » building sustainable communities. is critical and supply-chain to supply-chain competition replaces business-to-business. Within the goal of a thriving economy it identifies priorities of: » Aerotropolises are the new growth centres. Historically Australian urban settlement » promoting and supporting local businesses patterns and networks have been a direct and produce, result of available forms of transport. In the » advocating for more training and 1800’s sea and rail transport determined opportunities for young people, the location and growth prospects for many » encouraging investment in new local towns and cities, and in the 1900’s road industries, transport networks added to the settlement » building on liveability and cultural heritage to patterns already created by sea and rail. Now, attract tourists. air transport is becoming a major determinant These are consistent with the directions for urban growth, world-wide. “Cities grow established in the broader Loddon Mallee fastest at the points where access maximises Strategic Plan which also embraces concepts the flow of people, products, capital and of managing growth, protecting and enhancing knowledge, and the ones with the highest the natural environment, stronger communities, degree of connectivity become the hubs”30. stronger and more diverse economies, improved Air travel and internet are the state of the art infrastructure, and improved education and in 21st century networks; linking cities, regions training outcomes. and countries into a single system. This has enabled globalisation. » Business-ecosystems become the new regional collaboration structures (more holistic than clusters, hubs and networks) mostly formed from local firms but with some real and virtual connections at both ends of the supply chain.
30 Kasarda, J and Lindsay, G (2011), Aerotropolis – The Way We’ll Live Next.
Mount Alexander Shire Council Economic Development Strategy and Profile August 2013 79 5. BUILDING ON THE PAST AND GUIDING THE FUTURE 5.2 Where We Could Be – Scenarios for the Future (continued)
Other Council Strategies 5.3.2 Collaboration, Clusters and Hubs The Economic Development Strategy has also Rapid technological improvements and the been written to take into account a number emergence of the global village mean that of complementary Council strategies that also businesses can locate anywhere. Many “basic” contribute to positive economic development. industries in Australia are being lost to overseas These include: locations because the cost of doing business is much cheaper, unless there is a critical supply » The Castlemaine Commercial Centre Study or market reason for remaining in Australia. (2012) Business location decisions in the 21st century » Heritage Strategy 2012-2016 are about a complex mix of lifestyle factors, » Arts Strategy 2011-2015 existing networks and relationships, supply » Investing In Sport - A Strategic Plan for chain connections and market and logistics Council’s Investments in Sport (2011) considerations. » Walking and Cycling Strategy (2010). At least two (and perhaps all) of these Strategic land use planning decision areas potentially involve business Council’s strategic land use planning and the collaboration. Strategies involving businesses review of the Municipal Strategic Statement will cooperating for legitimate commercial and 31 be consistent with the objectives and strategies business development benefit have increased in the Economic Development Strategy. in momentum over the past two decades; the philosophy of “co-operating to compete” has Community Plans gained widespread recognition and, in many sectors, acceptance. Forming networked Council is also undertaking a community or collaborative business arrangements are planning process with nine towns in the Shire. promoted as mechanisms to give, particularly These plans will not be Council adopted plans small to medium, stakeholders the ability to be but they will articulate local aspirations that competitive without bearing all the risks, costs may be able to be considered as the Economic and resource commitments of ‘going it alone’. Development Strategy is implemented. Reasons for collaborating usually revolve around It is important that the common themes improved opportunities for: emerging from these plans are reflected in Council’s Economic Development Strategy. •Productivity, • Efficiencies, • Innovation, • Competitiveness. A host of collaborative initiatives have emerged that contribute to an improved ability to meet customer needs, ability to achieve more leverage in the marketplace, the prospect of gaining access to improved technology and/or more resources and equipment reducing costs, an enhanced ability to target niche markets, to add value to products, and to differentiate or brand products.
31 Legal collaboration does not include cooperation that involves price collusion or market manipulation practices
Mount Alexander Shire Council 80 Economic Development Strategy and Profile August 2013 5. BUILDING ON THE PAST AND GUIDING THE FUTURE 5.2 Where We Could Be – Scenarios for the Future (continued) Modern notions of competition are built around the supply or value chain and cooperation between chain partners to create value for customers. Competition now is increasingly between chains: A major departure from the traditional approach of competition between individual businesses which is usually seen in a win-lose context. The move from an adversarial relationship between chain partners to one of cooperation is based on the assumption that cooperative relationships are more effective and efficient for delivering value to consumers. Customers who believe they are getting a better product, better service or a better deal, give a positive stimulus and benefit to all levels of the chain. By working together individuals can take advantage of greater economies and of the knowledge, skills and experience of others in the supply chain. State and Commonwealth Governments have taken leadership approaches in encouraging supply chain collaboration through successive programs in business networking, supply chain partnerships, value chains and, more recently, industry clusters. In some cases local government authorities have been the auspice or facilitation body for these supply chain collaboration initiatives (such as the City of Whittlesea with the ‘Plenty Food Group’, the City of Greater Geelong with the ‘BioGeelong Cluster’, and both the City of Greater Bendigo and Loddon Shire Council with the ‘Northern Poultry Cluster’). Mount Alexander Shire Council’s Economic Development Unit has a facilitation role in exploring linkages between businesses and further potential collaborative initiatives and in fostering partnerships between industry groups and education providers etc.
Mount Alexander Shire Council Economic Development Strategy and Profile August 2013 81 6. STRATEGY FRAMEWORK
6.1 AN ECONOMIC DEVELOPMENT VISION FOR MOUNT ALEXANDER “Mount Alexander will be one of regional Victoria’s most attractive places to live, work, and visit with sustainable growth and investment in a local economy increasingly structured around innovative, highly skilled, and service oriented businesses”. Economic development strategies have been Council recognises the ongoing need to predicated on creating a climate for investment interact with the business community in order in production oriented industries such as to provide both a proactive and responsive agriculture, mining and manufacturing. Mount range of economic development services. Alexander’s new economic development Council also understands that the majority of strategy has departed from this principle and new investment and job creation is likely to be is structured around creating a climate for generated from within the existing community. innovation across all industries. Investment in While the attraction of appropriate new business capital and technology often generates routine activity from outside the municipality will be jobs and a need for high volume outputs, evaluated as opportunities arise, the allocation whereas innovation demands responsiveness of resources to attract external investment is and competitiveness. A passionate, driven and not a priority. In evaluating the suitability of innovative community is already a distinguishing economic development initiatives, the protection feature of the Mount Alexander economy. and enhancement of the character of the Shire (including its liveability attributes, cultural and heritage assets and physical environment) are fundamental to all of Council’s plans.
Mount Alexander Shire Council 82 Economic Development Strategy and Profile August 2013 6. STRATEGY FRAMEWORK (continued)
6.2 ECONOMIC DEVELOPMENT 6.3 COUNCIL IMPLEMENTATION OF OBJECTIVES THE ECONOMIC DEVELOPMENT Objective 1: STRATEGY Ensure that Council’s planning and policies Economic, social and environmental factors all support economic development. contribute to the community’s overall wellbeing Objective 2: and prosperity. Council’s support for the Promote collaboration and innovation. economy is intertwined with its operations right Objective 3: across the organisation and delivering on the Provide targeted learning, skill development and Strategy is a cross organisation responsibility. business support. Numerous Council strategies and plans, such as the Environment Strategy, Walking and Cycling Objective 4: Strategy, Arts Strategy and Disability Action Plan Ensure that resources and infrastructure support for example, contain objectives and actions that business growth and innovation. contribute to Council’s support for the economy Objective 5: and enable Council to deliver on many of the Improve factors that impact on liveability actions in this Strategy. The suite of strategies Objective 6: contained in the following section reflects Promote Mount Alexander Shire as a desirable this, with Council playing a varying role – from place to live or visit. providing in principle support through to direct intervention. Council will guide the implementation of this strategy by taking whole of Council approach. An annual priority list will be developed so that Council’s activities can be flexible and responsive to the changing economic environment over the five year period. Business units across Council will be responsible for relevant strategies and will provide regular reporting on progress with implementation. Council will also establish a mechanism to work with external partners to progress the Economic Development Strategy.
Mount Alexander Shire Council Economic Development Strategy and Profile August 2013 83 6. STRATEGY FRAMEWORK (continued)
6.4 MOUNT ALEXANDER SHIRE’S ECONOMIC DEVELOPMENT STRATEGIES
Objective 1: Ensure that Council’s planning and policies support economic development. IMPLEMENTATION COUNCIL RESPONSIBILITY ROLE LAND-USE STRATEGIES 1.1 Ensure Council policy and the Municipal Strategic Statement Council (through MSS Policy, recognise the value associated with the Shire’s rural land and the review and Rural Land Legislation areas which should be retained indefinitely to support agricultural study) production and flora and fauna ecosystems, protect heritage sites State Government and to safeguard lifestyle and tourism attributes. 1.2 Ensure adequate provision of appropriate zoned land for Council, Community Policy, the development of a range of aged care facilities providing Organisations, Legislation, independent, supported and full care residential facilities and Health Sector support services to meet longer term demand. Facilitation Organisations, Private Sector. 1.3 Provide adequate industrially zoned areas and serviced industrial Council (by an annual stock Policy, land to support efficient secondary sector businesses. take of industrial land), Legislation, Direct Property Developers and Intervention Industrialists 1.4 Provide adequate commercially zoned areas and serviced sites in Council (through Policy, Castlemaine to support efficient tertiary sector businesses, without Castlemaine Commercial Legislation, losing the ‘strip centre’’ ambiance of the central business district. Centre Strategies 1,2,4 and Direct 6), Land developers and Intervention Commercial Operators 1.5 Encourage new housing sub-divisions to be developed using Council Policy environmentally sustainable design guidelines, including demonstration benefits of new and innovative renewable energy options. BUSINESS AND INDUSTRY SUPPORT STRATEGIES 1.6 Support the Harcourt irrigation area with policy and planning Council (through Rural Land Policy provisions for the long term security for commercial pome fruit, Study), Horticultural and stone fruit, viticulture and vegetable production food businesses 1.7 Promote and advocate for increased take-up of renewable energies Council (through Policy in the Shire, with Council providing leadership through its policies Greenhouse Action Plan and practices. and Procurement Policy).
Mount Alexander Shire Council 84 Economic Development Strategy and Profile August 2013 6. STRATEGY FRAMEWORK 6.4 Mount Alexander Shire’s Economic Development Strategies (continued)
Objective 2: Promote collaboration and innovation. IMPLEMENTATION COUNCIL RESPONSIBILITY ROLE BUSINESS AND INDUSTRY SUPPORT STRATEGIES 2.1 Develop a small scale grower collaborative food production system Community Groups, Facilitation as a demonstration model for locally grown food. Council, Primary Producers, Retailers 2.2 Encourage agricultural production systems which involve low or no Community Groups, In Principle chemical applications, efficient water utilisation, soil conservation, Agricultural Enterprises Support biological soil management and bio-security to preserve longer term sustainability. 2.3 Encourage product development action among lamb and wool Agricultural Enterprises In Principle producers in the Shire to develop value added products through Support supply chain alliances. 2.4 Promote the modified vehicle industry as a cross-industry model for Businesses in the Facilitation sustainable industry, education, tourism and events. Automotive and Specialised Vehicles Sector 2.5 Promote the Shire as a centre of sustainability excellence, involving: Council (through its MOU Facilitation, with MASG, Sustainable Community, Council or private owned and operated renewable Direct Regions Australia, and energy business ventures (wind, solar and/or bio-energy) Intervention Greenhouse Action Support for the creation of social enterprises in the utilities industry Plan), Mount Alexander rather than external contractors Sustainability Group, Trades and other Construction Sector Businesses 2.6 Develop a digital strategy encompassing strategic directions for take NBN for Loddon Mallee, Facilitation up of national broadband, e-commerce, mobile and online marketing Council, Regional Digital opportunities, consistent with the broader Loddon Mallee plan. Organisations 2.7 Establish a Shire wide business development organisation with a Council, Businesses Facilitation focus on research and the development of technologies and systems for efficiency and sustainability, embracing areas as diverse as energy generation, conservation farming, waste conversion, modified vehicle components, computer aided design and new software. 2.8 Collaborate with Loddon Mallee South municipalities in building Council, Facilitation, integrated supply chains across the region to strengthen the Advocacy Other Loddon Mallee South business services sector to supply to the agriculture, manufacturing, Councils mining, construction and retail sectors. 2.9 Extend local opportunities for networking and developmental Central Victorian Health Facilitation activities among health professionals. Alliance, Mount Alexander Health and Wellbeing Forum, Council
Mount Alexander Shire Council Economic Development Strategy and Profile August 2013 85 6. STRATEGY FRAMEWORK 6.4 Mount Alexander Shire’s Economic Development Strategies (continued)
Objective 3: Provide targeted learning, skill development and business support. IMPLEMENTATION COUNCIL RESPONSIBILITY ROLE BUSINESS AND INDUSTRY SUPPORT STRATEGIES 3.1 Establish a programme to encourage young people starting a Education Providers, Facilitation, business and provide them with practical insights into business Council, Local Businesses Direct trends (particularly in information technology and newly emerging Intervention practices for successful enterprises) 3.2 Continue to develop the relationship between all levels of education Education Providers, Advocacy providers across the Southern Loddon Mallee region. Connect Central Castlemaine and Youth Partnership Initiatives 3.3 Encourage local course and program development between Education Providers, Advocacy education providers, local businesses and business groups Businesses (especially in trade and services training) including training and job opportunities for disadvantaged, Indigenous and disabled residents. 3.4 Establish a retired professions business network to give peer support, Council, Community Facilitation generate critical mass and provide the opportunity for employment Representatives and skills sharing. 3.5 Enhance business and enterprise development opportunities for local Council, Artists and the Facilitation arts and culture organisations and individuals in order to attract new Arts Community markets. 3.6 Support volunteer committees involved in arts and cultural events to Event Organisers, Direct develop the necessary skills and resources to ensure events are viable Intervention Council and sustainable. 3.7 Encourage innovation and outstanding performance through a public Business and Community Facilitation, recognition program and regular media promotion. Groups, Direct Intervention Council
Mount Alexander Shire Council 86 Economic Development Strategy and Profile August 2013 6. STRATEGY FRAMEWORK 6.4 Mount Alexander Shire’s Economic Development Strategies (continued)
Objective 4: Ensure that resources and infrastructure support business growth and innovation. IMPLEMENTATION COUNCIL RESPONSIBILITY ROLE BUSINESS AND INDUSTRY SUPPORT STRATEGIES 4.1 Promote and manage the water allocation process through the Coliban Water In principle recently completed Harcourt Irrigation Network modernisation, in support order to support commercial horticulture. 4.2 Adopt a regional approach to water usage, waste management and Council, Coliban Direct recycling in collaboration with other Shires in the Southern Loddon Water, Regional Waste intervention Mallee. Management Group (in partnership with regional Councils) 4.3 Improve the access and condition of the Shire’s road network in order Council, VicRoads Direct to support business operations, particularly for manufacturers and Intervention mining companies. 4.4 Advocate for improved passenger and freight rail infrastructures and V/Line Advocacy services. 4.5 Investigate the business case for an innovative business centre Council, Property Policy, themed around collaboration and cost-efficiencies for small and Developers Legislation micro businesses, to improve the supply of flexible commercial premises.
Mount Alexander Shire Council Economic Development Strategy and Profile August 2013 87 6. STRATEGY FRAMEWORK 6.4 Mount Alexander Shire’s Economic Development Strategies (continued)
Objective 5: Improve factors that impact on liveability IMPLEMENTATION COUNCIL RESPONSIBILITY ROLE BUSINESS AND INDUSTRY SUPPORT STRATEGIES 5.1 Continue the implementation of the Investing in Sport Strategic Plan Council, sporting Direct to develop the supply and quality of the Shire’s recreational facilities organisations. Intervention and activities. 5.2 Extend and improve the walking and cycling trail network within the Council, Parks Victoria, Direct Shire, in order to cater for the growing local and visitor demand for Goldfields Track Intervention nature based experiences. Committee, Community Facilitation User Groups 5.3 Develop a housing strategy to support adequate future housing Council, State Government, Facilitation supply. Housing Associations and Advocacy providers 5.4 Advocate for convenient, efficient and accessible public transport Council, State Government Advocacy from both a local and regional perspective. 5.5 Actively respond to local initiatives identified in the range of Council, Local Community Advocacy community plans established through Council’s Community Facilitation Planning Project 2012-2014. Direct intervention
Mount Alexander Shire Council 88 Economic Development Strategy and Profile August 2013 6. STRATEGY FRAMEWORK 6.4 Mount Alexander Shire’s Economic Development Strategies (continued)
Objective 6: Promote Mount Alexander Shire as a desirable place to live or visit. IMPLEMENTATION COUNCIL RESPONSIBILITY ROLE BUSINESS AND INDUSTRY SUPPORT STRATEGIES 6.1 Develop partnerships with neighbouring and regional tourism Council, Victorian Direct bodies in order to collectively market the greater region and provide Goldfields Tourism Intervention, initiatives to increase the standard of tourism experiences. Executive, Bendigo Advocacy Regional Tourism, Tourism Victoria
6.2 Review the brand, and the marketing elements used to express the Council, Direct brand, for each of the Shire’s main tourism destinations to ensure Intervention Tourism Industry it appeals to the markets most likely to enjoy each destination’s offerings.
6.3 Enhance the historic retail precinct in Maldon as a platform for Maldon Inc., Council Facilitation ongoing events and collaborative initiatives among retail, food (through Maldon Retail service and accommodation providers. strategy)
6.4 Support collaborative marketing among retail and food service Traders Groups, Council Facilitation businesses, including support for events, in the Shire.
6.5 Identify gaps in the current tourism product offer that are hindering Council, Advocacy overnight and longer stay visitation and establish business cases Investors for addressing these gaps. In particular, the lack of larger, quality accommodation and conference facilities.
6.6 Establish and support mechanisms to reinforce the Shire as a Council Direct destination for the arts and reflect this by supporting Public Art Intervention Local artists initiatives and incorporating creative elements into works such as town branding, entry signs, street furniture and artist designed public Local community spaces.
6.7 Review and improve visitor information services in Castlemaine. Council Direct Intervention
6.8 Support existing initiatives that target key markets and raise the Council, Victorian Advocacy profile of the Shire, particularly: Goldfields Tourism Facilitation Executive, Heritage Progress the World Heritage listing bid for the Castlemaine Diggings Victoria, Goldfields Direct National Heritage Park Track Committee, Event Intervention Support the development of the Goldfields Track and associated Organisers mountain bike and walking experiences Support events that drive significant visitation, such as the Castlemaine State Festival.
6.9 Work with the Victorian Goldfields Railway, Buda Historic Heritage Attraction Advocacy Homestead, Castlemaine Art Gallery and other attractions to Operators, Council strengthen their business models and encourage cross promotional activities and joint initiatives.
Mount Alexander Shire Council Economic Development Strategy and Profile August 2013 89 APPENDIX A: INDUSTRIES BY SECTOR
AGRICULTURE PRIMARY SECTOR MINING
MANUFACTURING
SECONDARY ELECTRICITY, GAS, WATER AND WASTE SERVICES SECTOR CONSTRUCTION
WHOLESALE TRADE TERTIARY RETAIL TRADE SECTOR TRANSPORT, POSTAL AND WAREHOUSING
INFORMATION, MEDIA AND TELECOMMUNICATIONS
FINANCIAL AND INSURANCE SERVICES
RENTAL, HIRING AND REAL ESTATE SERVICES
QUATERNARY ADMINISTRATION AND SUPPORT SERVICES SECTOR PROFESSIONAL, SCIENTIFIC AND TECHNICAL SERVICES
PUBLIC ADMINISTRATION AND SAFETY
EDUCATION AND TRAINING
HEALTH CARE AND SOCIAL ASSISTANCE
QUINARY ACCOMMODATION AND FOOD SERVICES SECTOR ARTS AND RECREATION SERVICES
OTHER SERVICES
Mount Alexander Shire Council 90 Economic Development Strategy and Profile August 2013 APPENDIX B: LOCATION QUOTIENTS BY INDUSTRY AND SECTOR, 2011
INDUSTRY/SECTOR LOCATION QUOTIENT
Agriculture, forestry & fishing 2.34
Mining 1.54
Sub Total Primary Sector 2.24
Manufacturing 2.25
Electricity, Gas, Water & Waste Services 0.23
Construction 0.68
Sub Total Secondary Sector 1.50
Wholesale Trade 0.48
Retail Trade 1.12
Transport, Postal and Warehousing 0.54
Sub Total Tertiary Sector 0.84
Information Media & Telecommunications 0.47
Financial & Insurance Services 0.23
Rental, Hiring & Real Estate Services 0.60
Administrative & Support Services 0.63
Professional, Scientific & Technical Services 0.51
Public Administration & Safety 1.21
Education & Training 0.81
Sub Total Quaternary Sector 0.68
Health Care & Social Assistance 1.16
Accommodation & Food Services 0.90
Arts & Recreation Services 1.00
Other Services 0.78
Sub Total Quinary Sector 1.02
SOURCE: ABS, Census of Population and Housing 2006 and 2011; Street Ryan analysis
Mount Alexander Shire Council Economic Development Strategy and Profile August 2013 91 APPENDIX C: SHIFT AND SHARE ANALYSIS BY INDUSTRY AND SECTOR, 2006 T0 2011 Change in Jobs Change in Jobs Change in Jobs Total Change in Industry Type Due to State-wide Due to Relative Due to Local Jobs 2006 to 2011 Economic Growth Representation of Conditions (Local High Growth & Low Advantages/ Growth Industries Disadvantages) (Local Industry Mix) Agriculture, forestry & fishing 53 -90 -34 -71 IV Mining 5 7 -16 -4 II Total Primary Sector 58 -81 -52 -75 IV Manufacturing 179 -229 218 168 III Electricity, Gas, Water & Waste Services 3 6 -14 -5 IV Construction 45 45 -79 11 II Total Secondary Sector 227 -77 24 174 III Wholesale Trade 16 -13 16 19 III Retail Trade 98 -54 -11 33 IV Transport, Postal and Warehousinh 20 6 -22 4 II Total Tertiary Sector 134 -58 -20 56 IV Information Media & Telecommunications 8 -7 -1 0 IV Financial & Insurance Services 7 1 -3 5 II Rental, Hiring & Real Estate Services 8 1 -12 -4 II Administrative & Support Services 12 1 32 44 I Professional, Scientific & Technical Services 25 16 26 67 I Public Administration & Safety 50 14 -34 31 II Education & Training 56 17 -83 -9 II Total Quaternary Sector 166 39 -71 134 II Health Care & Social Assistance 95 84 -47 132 II Accommodation & Food Services 39 18 -11 46 II Arts & Recreation Services 16 14 -41 -11 II Other Services 24 -1 -31 -7 IV Total Quinary Sector 174 108 -122 160 II
NOTES: Type I Industry: Local industry out performing in a high growth industry Statewide Type II Industry: Local Industry under performing in a high growth industry Statewide Type III Industry: Local industry out performing in a slow growth industry Statewide Type IV Industry: Local industry under performing in a slow growth industry Statewide
SOURCE: ABS, Census of Population and Housing 2006 and 2011; Street Ryan analysis
Mount Alexander Shire Council 92 Economic Development Strategy and Profile August 2013 APPENDIX D: MARKET SEGMENT CHARACTERISTICS The Socially Aware, Visible Achiever and Traditional Family Life psychographic market segments offer the best potential for visitation to the Mount Alexander Shire. Below is an outline of some of the characteristics of these markets.
TARGET DEMOGRAPHIC PSYCHOGRAPHIC HOLIDAY PREFERENCES MARKETS32 Visible • 35-49 years; • Success and • Quality and value for money; Achievers • Good family career driven; • Consistency & no surprises in planning; living; • Recognition and • Spend time together on family holiday; status seekers. • Wealth creators. • Boutique • Hotels; • Weekend getaways; • One or two destination break; • Enjoy arts/ cultural/sports events, golf, national parks, restaurants, wineries, children’s activities. Socially • 35-49 years; • Social issues • Flexibility; Aware • Up market oriented; • Use information & planning guides; professionals; • Politically/ • Boutique 4-5 star hotels; community • Wealth • Short break retreat; fly-drive/touring break; managers. active. • Enjoy exploring & experiencing new & different; • Enjoy cultural events, bushwalking, art galleries, wineries, nature, wildlife, heritage Traditional • Retired, middle • Family focused • Budgeted holiday; Family Life aged – seniors lives; • Security, safety and reliability; • Passive income • Cautious of new • Hotels/motels; earners. things. • Advanced planning; • Require detailed information on routes and accommodation; • Increase knowledge; • Doing things haven’t had a chance to do so far; • Relive the past; • Interpretive; • Touring holiday - self drive or coach; • Special Interest; • Coach tours; • Nature; • Gourmet food trails; • Fishing.
32 As per Roy Morgan market segments, Tourism Victoria
Mount Alexander Shire Council Economic Development Strategy and Profile August 2013 93 APPENDIX E: SECTORAL ISSUES
D1. PRIMARY SECTOR ISSUES » Even though the need for economies of scale, » There are opportunities to integrate prolonged drought and other climatic events agricultural activities with tourism. If have impacted on the viability of small and this is to prosper, the Planning Scheme medium agriculturalists (as well as their often needs to support the integration of value undifferentiated position in the commodity adding activities, including provision for supply chain) the district is strategically some boutique accommodation options and (still) climatically suited to horticultural (such as cottages and B&Bs, Farm Stay production and is highly regarded as a prime accommodation etc) on agricultural land and growing district. enable development of trails and possibly other low impact activities in appropriate » Risks of drought, fire, flood and damage to locations. infrastructure are all reducing the ability of small to medium producers to remain viable, » There is an active gold mining operation with across the Shire. a relatively large lease area near Maldon. This operation is in an expansion phase and, » Intensive agriculture (other than horticulture) over time, will need additional tailings dams. such as poultry, pigs, and lot feeding is not It is important that appropriate buffers are considered desirable by many segments of the maintained around its operations to provide Mount Alexander community. In some respects long term security for the gold mining sector this is a plus for other Shires in the region and to ensure conflicts do not emerge over (particularly Central Goldfields and Loddon) the longer term with issues associated with which have targeted intensive livestock noise and/or access to haulage routes. production in their economic development strategies. An absence of intensive livestock in Mount Alexander will add to bio-security in the west of the Southern Loddon Mallee region and will reduce any potential for extended urban-rural development conflict in the Central Victorian corridor which has occurred in the past in various zones beyond Australian metropolitan areas, for example in the Mornington Peninsula. » Small landholdings and dwindling agricultural output means the Shire is no longer a target for broadacre farming, but proximity to Bendigo and Melbourne is creating interest in intensive horticultural activities (horticulture expansion, greenhouse products, aquaponics and hydroponics), and there are also many passionate small growers who are committed to biological, organic and/or other sustainable agricultural practices.
Mount Alexander Shire Council 94 Economic Development Strategy and Profile August 2013 APPENDIX E: SECTORAL ISSUES (continued)
D2. SECNDARY SECTOR ISSUES » Large manufacturers (KR Castlemaine and » Water and power supply presents challenges Flowserve) have difficulty in filling vacancies for heavy users (such as KR Castlemaine from the local workforce, including many with and Octagonal Resources) which sometimes higher and specialist skills requirements. require a change in their operating arrangements to ensure supply to the » The reputation and status of food processing community is not affected by the peaks in jobs is not well respected among large industrial usage. sections of the community. » Access to lower cost power (either through » Mount Alexander’s economy is transitioning further cogeneration opportunities, continuity towards service sectors, but it remains an of supply permitting more streamlined excellent location for highly efficient food process arrangements and/or, for some heavy manufacturing operations. users, through access to natural gas) would » Mount Alexander Shire is the self-proclaimed significantly reduce costs of operation and Street Rod Capital of Australia and it has enhance long term viability. an impressive diversity of businesses in » There is a perception that some Council the ‘’specialised vehicles’’ sector. There is a procurement processes disadvantage local strong supply chain of vehicle businesses operators, due to the conditions imposed and enthusiasts in Castlemaine, with 23 on contracts particularly, but not exclusively, businesses employing over 120 staff directly in the construction industry. This may be a associated with the industry and an additional communications issue, or a standard approach 15 businesses employing over 50 people that to Council contracts that could be modified supply outsourced products and services to allow local suppliers to bid for some of the to the industry. This group of businesses contractual work. has been instrumental in the relocation of like minded businesses to Castlemaine. » Mount Alexander Sustainability Group The economic contribution of the specialty notes that there are opportunities for a vehicle sector to Mount Alexander Shire is transformational change in the approach to estimated to be over $60 million annually. economic development in Mount Alexander For the past seven years, stakeholders in the Shire based on: industry have been progressively forming the “Castlemaine Hot Rod Centre Ltd” (CHRC). • Emerging opportunities in the area of The aim of the Castlemaine Hot Rod Centre the green economy including; energy (CHRC) is to develop a unique and integrated production (and supply), IT related services, set of facilities primarily targeting hot rod consultancies enthusiasts, hot rod businesses and the • Merging local growth in sustainability broader ‘modified vehicle’ sector. At present services the CHRC is developing slowly through • Leveraging triple bottom line principles – incremental alliances, and requires external including matching costs with gains across support to accelerate its master plan. social, economic and environmental spheres » Mount Alexander is considered a good location • Recognising and building on the role of for trade skills, which are offered as early the Council as a major stakeholder – as an as secondary college through Castlemaine employer, spender and owner of assets that Secondary’s trade training school, and the can be leveraged for development. Shire does not have an issue with supply of construction or general trades businesses. There were 227 registered construction businesses in 2011; mostly trades related.
Mount Alexander Shire Council Economic Development Strategy and Profile August 2013 95 APPENDIX E: SECTORAL ISSUES (continued)
D3. TERTIARY SECTOR ISSUES D4. QUATERNARY SECTOR ISSUES » There are relatively few retail franchise » Advice suggests a resistance to change businesses and branches of major retail among many business operators and a chains, particularly in Castlemaine. This is seen reluctance to embrace different ways of as a positive situation by some segments of doing things (especially in business services), the community and a negative by others. It although some noted that this is slowly does have some impacts on retail trade within starting to change, largely as a result of in- the Shire. For example: migration of business operators. • Lack of a major regional shopping facility » There are few examples of collaborative including the major supermarket chains ventures or joint initiatives among business results in some travelling to Bendigo for operators. shopping trips. This contributes to retail expenditure leakage from the Shire. » The community is relatively highly educated Comments during consultation also suggest and has a broad cross section of people from that, for some at least, the relatively differing skills and work backgrounds, many of limited local retail offer (combined with whom are retired or participating in “lifestyle” higher real estate prices) detracts from the ventures. Their skills and experience could be attractiveness of the Shire as a place to live. used to support young people (and others) starting a new business venture. • Franchises are a growth segment of the retail industry and provide a business owner » There is widespread support for heritage a supportive and competitive environment in overlays, but most heritage listed buildings which to operate. are not suited to modern office designs and can be expensive to heat and cool, and Associated with the range of retail and » the overlays restrict new developments. commercial businesses in the Shire, heritage Overall this means that there is a shortage of overlays impact on the type of building commercial space to accommodate demand modifications that are permissible and, in in Castlemaine. some circumstances, prevent compliance with business premises design requirements. » The rate of take up of e-commerce and online marketing and use of social media for marketing is slow, yet these aspects of retail operations are generating enormous growth. » There are limited avenues for facilitating networking and collaboration amongst retailers, and for recognising and promoting achievements. » The standard of the road network is not optimal for supporting heavy loads and/or larger vehicles. » Climatic variations have reduced the quality and increased the maintenance costs and outlook for roads, bridges and other transport infrastructure in many parts of the Shire. Many are concerned that reliability of transport routes and services, and business continuity, could be impacted by future climate extremes.
Mount Alexander Shire Council 96 Economic Development Strategy and Profile August 2013 APPENDIX E: SECTORAL ISSUES (continued)
D5. QUINARY SECTOR ISSUES » There are some major professional communications initiatives underway » There has been some growth in the number that promote the Shire’s arts and cultural of residents of Mount Alexander working in experiences to residents and visitors, which the Arts and Recreation industry over the are conducted almost completely on a past 5 years, but growth in jobs available in voluntary basis. For example, the Mass this industry in the Shire has been minimal Culture website promotes around 90 local and significantly less than Non Metropolitan artists and attracted 30,000 new visitors Victoria and the State. in the six months to December 2012. Some » Jobs in Arts and Recreation are concentrated of these communications initiatives require in the lower income brackets and have a financial support. relatively high proportion of part time or » There is a lack of product and promotion casual positions. to encourage the family market to visit » The Arts and Recreation business sector is Castlemaine and Maldon. Some businesses amongst the lowest earning sectors in Mount with the capacity to cater for family markets Alexander Shire, with the sector more highly are very quiet in school holidays suggesting represented in the lower three turnover the area is not widely regarded as a family brackets, and under-represented in the higher destination. brackets. » There is need for more targeted promotion of » The livelihoods of some arts practitioners niche products and niche markets generally. are hampered by a lack of access to markets » Given that Mount Alexander Shire has outside the Shire, and possibly a lack of a competitive strength in its strong arts knowledge about how to reach these markets. community, lively arts culture and well- Some artists require assistance to further known arts festival, there is an opportunity to identify and develop markets. Increasing increase the profile of the arts to visitors year- visitation to the Shire by people interested round. This may include developing additional in arts and culture also has the potential to street art and artistic street furniture, and increase the market base. evolving year-round programming for the » As towns in Mount Alexander Shire have Castlemaine State Festival. become more desirable places to live, real » A significant proportion of accommodation estate values have increased making it properties appear to be operated as ‘lifestyle’ more difficult for artists to afford to rent or businesses, with very modest targets for buy studio space in the area. Castlemaine occupancy and low levels of investment in Contemporary Arts Space (CASPA) has a long marketing and professional development. waiting list for studio space and currently receives around five requests from artists per » the Goldfields Steam Railway currently month. Other arts studios consulted for this attracts around 20,000 visitors a year through study also indicated high levels of occupancy events and train trips, making it possibly the and demand. Shire’s most visited attraction. However, its future is quite vulnerable given the aging of » The arts events sector is heavily reliant on its primarily voluntary workforce and a lack voluntary labour and is very demanding of of apparent successors. Some other heritage people’s time. This can cause a high turnover attractions in the Shire (such as Buda Historic of event organisers resulting in a loss of Home and Gardens) are also experiencing a intellectual capacity that can be disruptive to similar issue. ongoing success.
Mount Alexander Shire Council Economic Development Strategy and Profile August 2013 97 APPENDIX E: SECTORAL ISSUES (continued) » Mount Alexander Shire is part of a » During the consultation for the project, a collaboration of 13 Councils who are seeking number of business operators in Castlemaine recognition of the Goldfields Region as commented on the lack of a retail and tourism Australia’s first National Heritage Region (part traders group to bring business owners of Australia’s National Heritage List). The aim together to network, discuss and address any of this initiative is to become a world class issues, and to provide learning opportunities tourist destination, as well as to pursue World in an informal setting. Any initiative needs to Heritage listing for the Castlemaine Diggings be able to engage younger members of the National Heritage Park. If this is successful, business community. it may generate increased visitation to the Shire which could sustain a range of new » Several business owners and investors enterprises, such as a tour guiding business in commented on the extensive delays caused by the Castlemaine Diggings National Heritage Council’s planning department when applying Park, etc. for permits which can result in missed opportunities to invest and significantly » The timing of staging events is not particularly increased costs for investors. The planning well co-ordinated in the Shire with frequent department also needs to ensure it has strong double-ups on weekends, then gaps in the mediation skills to respond to community year where nothing is held. concerns about development proposals and to facilitate a more rapid and effective resolution » There is potential to improve environmental to objections. outcomes of tourism activity in the Shire through working with event organisers and » Anecdotal evidence suggests there is a V/Line to develop packages that encourage lack of capacity and appropriate/modern travel by train. infrastructure at a range of sporting facilities. » Given the diverse range of activities, events and businesses in the Mount Alexander Shire’s tourism and arts community, a key promotional activity should be to attain regular editorial in the media. » There is an abundance of interesting, specialised organisations and individuals providing a range of learning and interactive activities on subjects related to the arts, culture, environmental sustainability, and food and wine that are readily promoted to local residents, but less so to visitors. » Efforts are needed to convert day trips into overnight stays through, for example, promoting touring itineraries which link food, wine, heritage, arts and accommodation product between Melbourne, Bendigo, Ballarat and Maryborough. These could be tailored to different target markets, eg. retirees touring market, younger family market and could be promoted via visitor information centres, regional and state websites, visitor guides, maps, apps, public relations, etc.
Mount Alexander Shire Council 98 Economic Development Strategy and Profile August 2013
Civic Centre, Cnr Lyttleton & Lloyd Sts t (03) 5471 1700 PO Box 185 Castlemaine VIC 3450 e [email protected] Office hours: 8.30am-5.00pm weekdays w www.mountalexander.vic.gov.au