Project Sea Dragon Stage 1 Legune Grow-Out Facility Draft Environmental Impact Statement
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PROJECT SEA DRAGON STAGE 1 LEGUNE GROW-OUT FACILITY DRAFT ENVIRONMENTAL IMPACT STATEMENT VOLUME 5 - APPENDICES APPENDIX 21 -ECONOMIC IMPACT ASSESSMENT Volume 5 - Appendices Appendix 21 -Economic Impact Assessment 1 REPORT TO SEAFARMS GROUP LIMITED 5 JULY 2016 PROJECT SEA DRAGON SOCIO-ECONOMIC ASSESSMENT STAGE 1 – LEGUNE GROW-OUT FACILITY ACIL ALLEN CONSULTING PTY LTD ABN 68 102 652 148 LEVEL FIFTEEN 127 CREEK STREET BRISBANE QLD 4000 AUSTRALIA T+61 7 3009 8700 F+61 7 3009 8799 LEVEL TWO 33 AINSLIE PLACE CANBERRA ACT 2600 AUSTRALIA T+61 2 6103 8200 F+61 2 6103 8233 LEVEL NINE 60 COLLINS STREET MELBOURNE VIC 3000 AUSTRALIA T+61 3 8650 6000 F+61 3 9654 6363 LEVEL ONE 50 PITT STREET SYDNEY NSW 2000 AUSTRALIA T+61 2 8272 5100 F+61 2 9247 2455 LEVEL TWELVE, BGC CENTRE 28 THE ESPLANADE PERTH WA 6000 AUSTRALIA T+61 8 9449 9600 F+61 8 9322 3955 161 WAKEFIELD STREET ADELAIDE SA 5000 AUSTRALIA T +61 8 8122 4965 ACILALLEN.COM.AU FOR INFORMATION ON THIS REPORT PLEASE CONTACT: CONTRIBUTING TEAM MEMBERS (ALPHABETICAL) Guy Jakeman ANTONIA HODBY E: [email protected] GUY JAKEMAN Office: +61 2 6103 8200 | D: +61 2 6103 8202 | M: 0417 706 522 DR PETER JOHNSON RELIANCE AND DISCLAIMER THE PROFESSIONAL ANALYSIS AND ADVICE IN THIS REPORT HAS BEEN PREPARED BY ACIL ALLEN CONSULTING FOR THE EXCLUSIVE USE OF THE PARTY OR PARTIES TO WHOM IT IS ADDRESSED (THE ADDRESSEE) AND FOR THE PURPOSES SPECIFIED IN IT. THIS REPORT IS SUPPLIED IN GOOD FAITH AND REFLECTS THE KNOWLEDGE, EXPERTISE AND EXPERIENCE OF THE CONSULTANTS INVOLVED. THE REPORT MUST NOT BE PUBLISHED, QUOTED OR DISSEMINATED TO ANY OTHER PARTY WITHOUT ACIL ALLEN CONSULTING’S PRIOR WRITTEN CONSENT. ACIL ALLEN CONSULTING ACCEPTS NO RESPONSIBILITY WHATSOEVER FOR ANY LOSS OCCASIONED BY ANY PERSON ACTING OR REFRAINING FROM ACTION AS A RESULT OF RELIANCE ON THE REPORT, OTHER THAN THE ADDRESSEE. IN CONDUCTING THE ANALYSIS IN THIS REPORT ACIL ALLEN CONSULTING HAS ENDEAVOURED TO USE WHAT IT CONSIDERS IS THE BEST INFORMATION AVAILABLE AT THE DATE OF PUBLICATION, INCLUDING INFORMATION SUPPLIED BY THE ADDRESSEE. UNLESS STATED OTHERWISE, ACIL ALLEN CONSULTING DOES NOT WARRANT THE ACCURACY OF ANY FORECAST OR PROJECTION IN THE REPORT. ALTHOUGH ACIL ALLEN CONSULTING EXERCISES REASONABLE CARE WHEN MAKING FORECASTS OR PROJECTIONS, FACTORS IN THE PROCESS, SUCH AS FUTURE MARKET BEHAVIOUR, ARE INHERENTLY UNCERTAIN AND CANNOT BE FORECAST OR PROJECTED RELIABLY. ACIL ALLEN CONSULTING SHALL NOT BE LIABLE IN RESPECT OF ANY CLAIM ARISING OUT OF THE FAILURE OF A CLIENT INVESTMENT TO PERFORM TO THE ADVANTAGE OF THE CLIENT OR TO THE ADVANTAGE OF THE CLIENT TO THE DEGREE SUGGESTED OR ASSUMED IN ANY ADVICE OR FORECAST GIVEN BY ACIL ALLEN CONSULTING. © ACIL ALLEN CONSULTING 2016 CONTENTS EXECUTIVE SUMMARY I 1 Introduction 1 1.1 Project details 1 1.2 Location 1 1.3 Data sources 2 1.4 Major assumptions 2 1.5 Glossary of key economic terms 3 1.6 Acronyms 4 1.7 Report structure 4 2 Socio Economic Profile 6 2.1 Population 6 2.2 Demography 7 2.3 Overview of the economy 8 2.4 Infrastructure 15 2.5 Businesses 16 2.6 Workforce 16 2.7 Summary 20 3 Economic Impact Assessment 21 3.1 Project assumptions 21 3.2 Project’s economic feasibility 24 3.3 Real economic output and real income 26 3.4 Employment creation 28 3.5 Contribution to government revenue 31 3.6 Opportunities for regional centres 31 3.7 Contribution to business development 31 3.8 R&D capability 32 3.9 Sustainable development and community well being 32 4 Bibliography 37 A Overview of Tasman Global A–1 A.1 Overview A–1 A.2 A dynamic model A–1 A.3 The database A–2 A.4 Model structure A–5 A.5 Population growth and labour supply A–7 A.6 References A–11 CONTENTS FIGURES FIGURE ES 1 EMPLOYMENT CREATION: CONSTRUCTION AND OPERATION – STAGE 1 IV FIGURE ES 2 PROJECTED EMPLOYMENT BY OCCUPATION, TOTAL AUSTRALIA – STAGE 1 V FIGURE 1.1 PROJECT SEA DRAGON STAGE 1 LOCATION 2 FIGURE.2.1 ESTIMATED RESIDENT POPULATION: NORTHERN TERRITORY, VICTORIA DALY REGION AND LOCAL REGION (2004 – 2025) 7 FIGURE.2.2 AGE AND GENDER PROFILE: INDIGENOUS AND NON INDIGENOUS PEOPLE: NORTHERN TERRITORY AND VICTORIA RIVER SA2 8 FIGURE 2.3 VALUE OF GROSS STATE PRODUCT BY STATE (JUNE 30) 9 FIGURE 2.4 GROSS STATE PRODUCT: AVERAGE ANNUAL GROWTH 10 FIGURE 2.5 NORTHERN TERRITORY MINING PRODUCTION BY MINERAL GROUP 11 FIGURE 2.6 VALUE OF FISHERIES PRODUCTION: NORTHERN TERRITORY 13 FIGURE 2.7 TOTAL HISTORIC AND PROJECTED VISITOR NIGHT GROWTH: NORTHERN TERRITORY 14 FIGURE 2.8 MEDIAN HOUSE PRICE AND RENTAL PRICE: GREATER DARWIN 15 FIGURE 2.9 UNEMPLOYMENT RATE AND WORKFORCE: LOCAL REGION 17 FIGURE 2.10 INDUSTRY OF EMPLOYMENT: NORTHERN TERRITORY AND LOCAL REGION (% OF TOTAL EMPLOYED PERSONS AGED 15+) 18 FIGURE.2.11 NON SCHOOL QUALIFICATION NORTHERN TERRITORY AND LOCAL REGION (% OF TOTAL PERSONS WITH A QUALIFICATION AGED 15+) 19 FIGURE.2.12 PERSONAL WEEKLY INCOME: NORTHERN TERRITORY AND LOCAL REGION (% OF TOTAL PERSONS AGED 15+) 20 FIGURE 3.1 ESTIMATED CAPITAL AND OPERATING EXPENDITURE BY YEAR: STAGE 1 OF PROJECT SEA DRAGON 22 FIGURE 3.2 ESTIMATED REVENUE BY YEAR: STAGE 1 OF PROJECT SEA DRAGON 23 FIGURE 3.3 DIRECT WORKFORCE: STAGE 1 PROJECT SEA DRAGON: CONSTRUCTION AND OPERATION 23 FIGURE 3.4 PROJECTED CHANGE IN REAL ECONOMIC OUTPUT AND REAL INCOME AS A RESULT OF STAGE 1, RELATIVE TO THE REFERENCE CASE 26 FIGURE 3.5 EMPLOYMENT CREATION: CONSTRUCTION AND OPERATION – STAGE 1 29 FIGURE 3.6 PROJECTED EMPLOYMENT BY OCCUPATION, TOTAL AUSTRALIA – STAGE 1 30 FIGURE 3.7 OCCUPATIONAL CLASSIFICATION: STAGE 1 OF PROJECT SEA DRAGON 34 FIGURE 3.8 LEVEL OF SKILLS REQUIRED: STAGE 1 OF PROJECT SEA DRAGON: LEGUNE SITE 35 FIGURE A.1 ILLUSTRATIVE SCENARIO ANALYSIS USING TASMAN GLOBAL A–2 TABLES TABLE ES 1 PROJECT FINANCIAL ASSUMPTIONS: STAGE 1 OF PROJECT SEA DRAGON II TABLE 1.1 LIST OF ACRONYMS 4 TABLE 2.1 POPULATION ESTIMATES (2014) 6 TABLE 3.1 PROJECT FINANCIAL ASSUMPTIONS: STAGE 1 OF PROJECT SEA DRAGON 21 TABLE 3.2 PROJECTED CUMULATIVE CHANGE IN REAL ECONOMIC OUTPUT AND REAL INCOME IN EACH REGION AS A RESULT OF STAGE 1, RELATIVE TO THE REFERENCE CASE (IN 2015-16 TERMS) 27 TABLE 3.3 LABOUR MARKET SENSITIVITY ANALYSIS – MACROECONOMIC IMPACTS 30 TABLE 3.4 LABOUR MARKET SENSITIVITY ANALYSIS – EMPLOYMENT IMPACTS 31 TABLE A.1 SECTORS IN THE TASMAN GLOBAL DATABASE A–4 TABLE A.2 OCCUPATIONS IN THE TASMAN GLOBAL DATABASE, ANZSCO 3-DIGIT LEVEL (MINOR GROUPS) A–9 E X E C U T I V E SUMMARY Key findings Development of Stage 1 of Project Sea Dragon, located at Legune Station in the Northern Territory, would have significant net positive economic benefits at the state and national levels. This study finds that Stage 1 of the Project, over the period 2017 to 2032, would result in direct impacts of: — capital investment of an estimated $411 million — recurrent operating expenditure, including a significant level of local spending on support services, averaging $125 million per year at full production — prawn production valued at an average $195 million per year at full production — a construction workforce of 444 FTE employee years over the two year construction period (385 sourced from the Northern Territory and 59 sourced from the Kununurra region) — an operating workforce of 334 FTE workers (206 sourced from Northern Territory and 88 from the Kununurra region) — tax revenues to Australian governments totalling $50 million in nominal terms over the period to 2032. Compared to the Reference Case (“No Project”), Stage 1 of Project Sea Dragon would result in total direct and indirect impacts measured by Computable General Equilibrium modelling of: — an increase in Northern Territory’s real GSP by a cumulative total (to 2032) of $502 million — an increase in Northern Territory’s real income totalling $350 million over the period to 2032 — an average annual increase in employment of around 161 FTE jobs a year. For Australia as a whole, over the period to 2032 the Project would result in: — an increase the real GDP of Australia totalling of $903 million — an increase in real incomes of Australia totalling $1,478 million — an average annual increase in employment of around 284 FTE jobs a year. The diversification in industry and employment opportunities has the potential to underpin other economically and socially beneficial investments in the broader region, leading to improved outcomes for local residents. These outcomes are important for the area which is economically and socially isolated. They include such benefits as new and expanded prospects for local businesses, a range of skilled and less skilled employment opportunities, diversification of the economy, training and education opportunities, and improvements to local road infrastructure which will benefit a range of industries including the pastoral, tourism, recreational fishing industries as well as local residents. Note that this report focuses on the benefits of Stage 1 of Project Sea Dragon to the Northern Territory and as such has a focus on the benefits to the local town of Timber Creek and the Territory. The location of Stage 1 in proximity to Kununurra in Western Australia, the existing road transport links i PROJECT SEA DRAGON SOCIO-ECONOMIC ASSESSMENT associated with the Project, and the home base of the Traditional Owners of the land on which Stage 1 is located means that many of the benefits of Stage 1 will accrue to Western Australia. The benefits to Western Australia have been noted in this report but not described.