December 2011 e-brief 18/2011 The Illawarra: An Economic Profile by John Wilkinson 1 INTRODUCTION currently consists of the following Statistical Sub-Divisions: The last decade or so has been a time of substantial economic readjustment Wollongong (Wollongong, for the Illawarra region. The closure of Shellharbour and Kiama LGAs); BHP in 1999 was one major shift in the Nowra-Bomaderry (Shoalhaven region's economic landscape, the LGA) recent announcement by BlueScope Illawarra SD Balance Steel of around 800 redundancies (Wingecarribee)3 amongst its Port Kembla workforce is another.1 This appears to be consistent with the approach taken by the NSW Responding to these challenges, the Department of Local Government, region has focused on diversification, whose website defines the Illawarra as towards a more service oriented follows: economy, in which knowledge and information and communication The Illawarra region contains the technologies play a key role. While urban areas of Wollongong and Nowra, and the Minnamurra and unemployment has trended above the 4 State average, it is now only slightly Shoalhaven river valleys. higher at 6% in September 2011.2 On the other hand, a less expansive This e-brief offers a survey of the definition is adopted by Regional Illawarra region with a focus on the Development Australia (RDA) Illawarra areas of activity that are now the main in its Regional Plan 2010-2015, which sources of employment. states that: "The Illawarra region…includes the three LGAs of Wollongong, Shellharbour and 2 THE REGION – URBAN AND 5 REGIONAL PROFILE Kiama." This definitional variance needs to be borne in mind when reference is made in this e-brief to the 2.1 Defining the Illawarra RDA Illawarra Regional Plan. The Illawarra is defined differently in different contexts. The definition 2.2 Urban adopted in this e-brief is the ABS The three urban LGAs in the Illawarra Illawarra Statistical Division. This Region are Wollongong (the regional Page 1 of 16 NSW Parliamentary Library Research Service Illawarra Statistical Division Source: ABS, Regional Statistics, New South Wales, 1362.1, 2004 centre) Shellharbour and Shoalhaven. 2.4 Geographical and Commercial Wollongong has 46.3% of the region's Features population; Shellharbour 23.2%; and The geographical and commercial Shoalhaven 22.4%. features of the five local government areas in the region are as follows: Wollongong, Shellharbour and 6 Wollongong: Wollongong LGA covers Shoalhaven: Population (2010) an area of 714 square kilometres, from Wollongong 203,487 Helensburgh (to the north) to Lake Shoalhaven 96,967 Illawarra (to the south). Wollongong Shellharbour 67,797 LGA accounts for 86% of total manufacturing turnover in the Illawarra 2.3 Non-Metropolitan region.8 In 2007 there were 12,123 The non-metropolitan LGAs in the businesses in the Wollongong LGA.9 region are Wingecarribee and Kiama. The majority of the region's largest In 2010, Wingecarribee had 10.8% of employers (such as BlueScope Steel, the region's population, and Kiama had the University of Wollongong and 4.8%. Wollongong City Council) are all in located in Wollongong.10 Wingecarribee and Kiama: Population (2010)7 Wingecarribee 46,960 Shellharbour: Shellharbour LGA Kiama 20,906 spans an area of 154 square kilometres, from Albion Park Rail (to the north), west to Macquarie Pass Page 2 of 16 E-Brief The Illawarra: An Economic Profile and south to Dunmore. In 2007 there Planning the Greater Metropolitan were 2,952 businesses in the Region. The paper foreshadowed the Shellharbour LGA.11 The major integration of Newcastle and employers (such as Coles, Wollongong into a Great Metropolitan Shellharbour Council and Woolworths) Region, declaring that: are smaller than their counterparts in Wollongong.12 Newcastle and Wollongong, as a result of improvements to transport Shoalhaven: The Shoalhaven LGA links over the last twenty years, and covers an area of 4,660 square generally closer economic kilometres, from Berry in the north integration, now have a much closer functional interrelationship with almost to Bateman's Bay in the south. Sydney…It is no longer appropriate The main centres are Nowra and to plan for Sydney as the only focus Ulladulla. Nowra is the home of HMAS of the region.19 13 Albatross, the RAN Fleet Air Arm. In 2007 there were 6,780 businesses in The growing integration of the the Shoalhaaven LGA.14 Illawarra, with the Sydney region, is clearly illustrated by the number of Wingecarribee: The Wingecarribee people that commute from the LGA covers an area of 2,700 square Illawarra to Sydney. In 2006, 15.8% of kilometres, usually referred to as the the Illawarra's workforce commuted to "Southern Highlands". There are three Sydney.20 principal towns in the Wingecarribee: Moss Vale is the location of the 3 ECONOMIC HISTORY OF THE Wingecarribee local government ILLAWARRA REGION administration; Bowral is the commercial hub; and Mittagong is the 15 3.1 Coal Mining and Dairy in the centre for industry. In 2007 there 19th Century were 4,842 businesses in the Wingecarribee LGA.16 Like the Hunter region, during the nineteenth century two of the Kiama: Kiama LGA covers an area of Illawarra's major industries were coal 256 square kilometres, from the mining and dairying. Coal mining was Minnamurra River (to the north), west slow to start. According to Terry Kass, to Knights Hill and south to a point just this was because of "the monopoly the north of Gerroa. In 2007 there were Australian Agricultural Company [AAC] 1,587 businesses in the Kiama LGA.17 had on coal production for its The handful of major employers in the Newcastle mines." Kiama LGA (such as Kiama Council which, in 2005, employed 330 people) In 1848, however, the colonial are smaller than their equivalents in government ended the AAC's either Wollongong or Shellharbour.18 monopoly and coal production began in the Illawarra, with James Shoobert 2.3 The Illawarra and the Sydney opening a small mine in 1849. From Greater Metropolitan Area then on, coal mining gradually expanded. Terry Kass writes that: For planning purposes, the three LGAs in the Illawarra are part of the Sydney Booming conditions from the 1870s Greater Metropolitan Area. In 1993 the to the 1890s, and strong demand for Fahey Government released Sydney's coal, ensured the opening of a Future: A Discussion Paper on number of collieries in the Illawarra. Page 3 of 16 NSW Parliamentary Library Research Service By the 1880s and 1890s the district electric steel plant and in 1941 it was split just south of Wollongong. installed six open-hearth furnaces. It To the north, coal mining was the made…ammunition, vessels, marine main economic activity and to the engines and aircraft.23 south it remained dairying country.21 After the war, production accelerated at BHP and this changed the 3.2 Metal Manufacturing and employment landscape in the Shipping in the Twentieth Illawarra. Yasmin Rittau explains: Century Metal manufacturing in the Illawarra By the end of the war, the changes initially developed during the First to Wollongong's economy were World War. Copper products, distinctive…Between the censuses of 1921 and 1947 farming's share in previously imported from Germany, the workforce was reduced from 8 became unavailable. In response, per cent to 3 per cent. British Insulated and Helsby Cables, Manufacturing surpassed mining as together with a group of Australian the dominant industrial activity, with companies, formed Metal 43 per cent of the workforce Manufactures (MM) which opened a employed in manufacturing and 14 plant at Port Kembla in 1918 to per cent employed in mining and manufacture copper tubes, wires and quarrying…BHP's share of this 22 [manufacturing] workforce…[was] 49 electrical conductors. 24 per cent by 1949. Manufacturing expanded during the 1920s when George Hoskins decided A worldwide recession in the early to relocate the Esk Bank iron and steel 1980s, however, reduced the works (first opened in Lithgow in 1874) prominence of manufacturing in the to Port Kembla, to take advantage of region. By the mid 1990s, the Port the harbour. Hoskins started to build a Kembla steel works employed around blast furnace in 1927 but could not on 14,000 fewer workers than at the his own raise enough money for the beginning of the 1980s, as the venture. The following year he merged accompanying table shows. with two British companies, Baldwins and Dorman Long (then building the Workers Employed at BHP Wollongong: 1980s-1990s25 Sydney Harbour Bridge) to form 1981 20,305 Australian Iron and Steel (AI&S). In 1993 7,700 August 1928, AI&S completed the 1996 6,000 blast furnace and began operations. In the same year, Metal Manufactures With the decline in steel production, acquired Austral Bronze. activity in coal mining declined as well. Employment levels were nearly With the onset of the 1930s halved, between the 1980s and the depression, in 1935, AI&S was taken early 1990s, as shown in the following over by BHP. During the Second table: World War production at BHP Wollongong expanded rapidly. In Workers Employed at in the Illawarra Yasmin's Rittau's words, Coalfields: 1981-199126 1981 5,720 Port Kembla…became an important 1991 2,953 industrial site for Australian armaments…[in] 1940 [BHP] built an Page 4 of 16 E-Brief The Illawarra: An Economic Profile 3.3 Government Assistance for the million by the State; and $5 million by Illawarra since the 1990s BlueScope. The package contains As a means of assisting employment provisions enabling workers to gain in the Illawarra during the 1980s, the immediate access to the services of Wran Government transferred the Job Services Australia and to gain State's major bulk grain export facility assistance with relocation to other 31 from Glebe Island to Port Kembla.27 employment.