Hudson Howells | May 2014 Page 1 - Mount Barker District

Hudson Howells | May 2014 Page 1

TABLE OF CONTENTS

EXECUTIVE SUMMARY ....................................................................................................................... 2

1. SECTION 1 INTRODUCTION, PROJECT OBJECTIVES AND ECONOMIC DEVELOPMENT STRATEGIES…………………………………………………………………………………………………………………………………………………………....7

1.1 DEVELOPING THE ECONOMIC DEVELOPMENT STRATEGY ........................................................................... 9 1.2 COUNCIL’S ROLE IN ECONOMIC DEVELOPMENT ..................................................................................... 9 1.3 COMPETITIVE ADVANTAGE ............................................................................................................. 11 1.4 ECONOMIC DEVELOPMENT VISION, MISSION AND KEY OBJECTIVES ........................................................ 12 1.5 ECONOMIC DEVELOPMENT STRATEGIES ............................................................................................ 15 1.6 IMPLEMENTING THE EDS IN TOWNSHIPS ACROSS THE DISTRICT ................................................................ 20 1.7 THE ROLE FOR COUNCIL STAFF ........................................................................................................ 20 1.8 BIG IDEAS ................................................................................................................................... 20

2. SECTION 2 BRANDING AND POSITIONING STRATEGY ............................................................. 22

2.1 INTRODUCTION ............................................................................................................................. 22 2.2 MOUNT BARKER COMMUNITY BRAND ............................................................................................. 22 2.3 POSITIONING ............................................................................................................................... 22 2.4 BRAND MANAGEMENT ................................................................................................................. 23 2.5 SUSTAINABLE COMPETITIVE ADVANTAGE ......................................................................................... 23

3. SECTION 3 IMPLEMENTATION ACTION PLAN .................................................................. 24

APPENDIX 1

1. REGIONAL ANALYSIS AN- ECONOMIC AUDIT .................................................................................. 1

1.1 BACKGROUND .............................................................................................................................. 1 1.2 LOCAL GOVERNMENT AND ECONOMIC DEVELOPMENT .................................................................. 1 1.3 THE ROLE OF LOCAL GOVERNMENT .............................................................................................. 3 1.4 The ECONOMIC PROFILE OF MOUNT MOUNT BARKER .......................................................................... 6

1.4.1 BACKGROUND ...................................................................................................................... 6 1.4.2 DEMOGRAPHICS .................................................................................................................... 7 1.4.3 RESIDENTIAL BUILDING APPROVALS ........................................................................................ 11 1.4.4 MIGRATION ........................................................................................................................ 12 1.4.5 PLACE OF EMPLOYMENT ....................................................................................................... 14 1.4.6 INDUSTRY OF EMPLOYMENT BY OCCUPATION ........................................................................... 18 1.4.7 LITERATURE REVIEW ............................................................................................................ 19

1.5 STRATEGY DEVELOPMENT CHALLENGES ..................................................................................... 21 1.6 SUMMARY OF STRENGTHS AND WEAKNESSES ............................................................................. 22

2. EXTERNAL ANALYSIS .................................................................................................................... 23

2.1 GLOBAL ....................................................................................................................................... 24 2.2 NATIONAL ................................................................................................................................... 27 2.3 STATE AND REGIONAL ................................................................................................................... 27

3. MAJOR INVESTMENT PROJECTS ................................................................................................. 32

4. EXTERNAL ANALYSIS .................................................................................................................... 35

4.1 SUMMARY AND CONCLUSIONS ........................................................................................................ 35 4.2 PURPOSE OF THE ANALYSIS ............................................................................................................. 39 4.3 SUMMARY OF METHODOLOGY ........................................................................................................ 41 4.4 MODELLING THE MEDIUM SCENARIO ................................................................................................ 43 4.5 MODELLING THE LOW SCENARIO ..................................................................................................... 46 4.6 MODELLING THE HIGH SCENARIO ................................................................................................... 48 4.7 METHODOLOGY: ECONOMY WIDE MODELLING FRAMEWORK ............................................................... 50 4.8 MODELLING THE PROJECT SPECIFIC IMPACTS ..................................................................................... 51 4.9 SOCIAL BENEFITS .......................................................................................................................... 54


EXECUTIVE SUMMARY

Introduction and Objectives

This Economic Development Strategy for the District Council of Mount Barker (DCMB) is a key corporate document supporting the strategic directions of Council which aims to ensure that Mount Barker continues to be an economically prosperous and functional City. It forms a significant component of Council’s sustainability program and ambition to have sufficient local employment and the ability of its residents to do business, work, shop and recreate in the district. Council is experiencing significant population growth which is expected to continue over the next 20 years, resulting in a doubling of the district population. As at March 2013, approximately 15,591 people, or 96.1% of the District’s labour force, were employed (Small Area Labour Markets: Department of Employment and Workplace Relations). The unemployment rate of 3.9% is significantly lower than the State average. However, 42% of all employed people commute outside of the District to work and as population increases there is significant risk that the ratio of people commuting out of the district will increase and exacerbate negative social, environmental and economic impacts. Council therefore commissioned this Economic Development Strategy (EDS) in order to consider and plan for its role in achieving the following broad objectives:

• Encouraging and facilitating a vibrant and sustainable local economy • Maintaining a low unemployment rate • Increasing the number of local jobs thereby reducing the need for residents to

commute outside of the District for work • Increasing employment opportunities for young people

Internal and External Analysis In the context of economic development, an analysis of strengths and weaknesses, opportunities and challenges was undertaken. The analysis showed that there are significant strengths for the district to build on including its location, natural environment and strong community. Weaknesses include the lack of a clearly defined town and regional vision and poorly defined branding and positioning. Opportunities include building on the ‘clean and green’ reputation of the region, reuse of treated waste water, increasing tourism and the myriad of benefits that could come from increased focus on value adding to food and wine.

Investment and Economic Modelling

A range of assumptions have been made in order to estimate potential new investment in the Mount Barker region over the next 20 years required to support expected population growth. Key assumptions include a population increase of 20,000 people and the construction of approximately 7,500 houses over 20 years. Cost and timing assumptions are


based on evenly spaced development over the 20 year timeframe. Anticipated major new investment and infrastructure projects, and costs estimates, are detailed in the EDS. This is investment that could be expected regardless of this Economic Development Strategy and is provided as the basis for the economic planning required to measure economic outcomes and to determine the new investment required in order to increase the percentage of jobs provided within the region to Mount Barker residents. The Economic Development Strategy presents an economic modelling perspective of the socio-economic futures for the District of Mount Barker based on the projects and key issues identified. The costing detail is contained in appendix 1 of this EDS, with the total estimated values of investment over 20 years. Note that these figures are broad estimates only for modelling purposes and to show how employment outcomes will be affected relative to the level of investment expected under various scenarios. Level of investment expected is summarised below:

• External Infrastructure (Roads, Water, etc.) - $372.5 million • Internal Infrastructure (Subdivision, etc.) - $300 million • Housing Investment (Construction) - $1,875 million • Other Town Investments (Commercial, Industrial, Retail, etc.) based on $2,400

m2) - $252 million • Total - $2.8 billion (or an average of $140 million per annum over 20 years)

Employment in the District has grown at an average of 3.6% per annum over the last decade – well in excess of the rates in the CBD of 1.5%. This growth has been experienced across a wide range of industries and has differed to trends in the Adelaide metropolitan and broader State areas. Scenarios Alternative scenarios for the District of Mount Barker have been based on the targeted level of population growth rate for the area of 20,000 over 20 years. Specific projects have been identified in the strategy development phase to support this level of population growth. The potential investment projects and their associated estimated investment values have been analysed, and modelled within the framework of an economic planning model to estimate their impact on annual turnover by industry for the region, with low, medium and high growth scenarios developed. The alternative scenarios show the magnitude of the outcomes that could be achieved with the expected population growth with a 20 year timeframe, and the implications for the major projects around additional activity required to support them. Such quantification enhances the strategic approach by understanding how individual outcomes translate through to a whole of economy impact.


The core conclusion is that under the low scenario, while the population growth itself will generate some economic stimulus, there is insufficient exogenous demand (regional exports) growth to sustain a balanced economy. This would result in under-utilisation of the major projects, and very importantly, the proportion of local residents who will need to travel outside the area for employment will increase significantly with consequent costs related to community wellbeing, freeway congestion, time travel costs, the environment etc.

The medium scenario indicates the level of exogenous demand to support a more balanced

growth with employment and population growth more in sync (whilst still resulting in a

decrease in the ratio of local jobs).

The high scenario presents a more ambitious target to internalise the extent of local employment opportunities for the resident population. The scenario analysis shows (over 2011) the expected case, based on an increase in population of 20,000, a parallel increase in Gross Regional Product (value added) of $0.9 billion and an increase in employment of over 5,000 jobs (this is a 60% increase, relative to a 70% increase in GRP). This combination of activity involves a tripling of exports from the region, and a combination of $2.8 billion of investments in housing and major projects – with an additional $0.2 billion of other investment to support additional export growth.

By 2036 the estimated annual value of Council rate revenue is $44 million higher in the medium scenario than under the do nothing scenario, while State Government revenue from activity in the region will be $81 million higher. Role of Council in Economic Development

The primary constraints on Council are resources (human and financial) and exposure to risk in economic development transactions. Council administration has expressed a preference that during the life of this Economic Development Strategy that it will minimise resource demands and its risk exposure by:

In conclusion, the core implication of the modelling is that the expected or medium scenario maintains approximately the current ratio of local jobs to population growth and as such requires at least 42% (rising to 46% over 20 years) of the local resident working population to travel out of the region for work. Note this requires trend regional export growth of 2.25% per annum to achieve this, and to be matched by new growth exports. The low scenario sees employment growth lagging population growth (1% annual growth in trend exports plus the same in new exports) while the high scenario sees it above (3.5% trend export growth, and the same in new export projects). Obviously the greater the ratio of employment opportunities to population provides a range of benefits, particularly in the pressure on transport infrastructure and in terms of benefits for residents.


• Focussing on improving the physical and business environment for economic

development and identifying areas where support can be provided or increased.

• Adding value to and participating in regional, State and Commonwealth Government economic development initiatives.

• Collaborating with contiguous economic development regions (e.g. Adelaide Hills,

Murray Bridge, Alexandrina Councils and RDAs).

In adopting this role, Council administration is specifically excluding the following economic development strategies:

• The pursuit of commercial economic development initiatives, either individually or in joint venture with the private sector (e.g. sole or partnership participation in residential, commercial or industrial developments) should be minimised, unless Council has expressed a desired outcome that aligns with its Strategic Plan.

• National or international promotion of Mount Barker and its economic development opportunities other than by value adding to or collaborating with other regional, State and Commonwealth Government initiatives.

Based on the region’s competitive advantage (or unique selling proposition), the Economic Development Strategy must complement these and add value without exposing Council to unreasonable resource demands and financial risk. The Economic Development Vision, Mission, Objectives and Strategies are therefore somewhat conservative in approach and seek to transition Council over time to a greater role in economic development. Economic Development Strategy The research and consultation for this project clearly identified that the Mount Barker District has, over time, developed a major strength and competitive advantage as:

A unique and natural hills location that provides a welcoming, supportive and unpretentious environment for residents and businesses and an exceptional experience for visitors. Mount Barker combines a natural rural setting with urban amenity all within easy reach of the Adelaide CBD.

Vision and Mission statements have been developed to support the Economic Development Strategy, which in turn is supported by the research and consultation undertaken for this project. The following Economic Development Vision is recommended for the District Council of Mount Barker:

Council envisages a district where clean and sustainable businesses thrive in an attractive and vibrant hills setting. Over the next five years Mount Barker will


become the preferred South Australian destination for large and small businesses that are seeking to establish and/or expand in a supportive environment that offers access to a stable and skilled workforce, excellent physical and social infrastructure and appropriately zoned commercial and industrial land.

Consistent with the vision statement developed and the recommended role of Council in economic development, the District Council of Mount Barker will collaborate with and add value to State and other regional initiatives to not only grow Mount Barker’s economy, but also to grow the broader regional economy and jobs in proximity to Mount Barker. This will contribute to Mount Barker strengthening its position as a major regional City and great place to live, work and grow a business, and will extend outside the Council region especially to the Mount Barker/Murray Bridge Corridor region (incorporating Monarto). In order to achieve the vision, Key Objectives have been developed for Council to pursue between 2014 and 2019: The objectives are:

• Objective #1 - Branding and Promotion - Development and promotion of a contemporary community brand and associated imagery for Mount Barker

• Objective #2 – Investment Attraction - Attraction of a minimum of $2.8 billion of new infrastructure and business investment by 2036 to support the increased population (i.e. medium scenario)

• Objective #3 - Demand Growth – Generation of demand growth by attracting 20,0001 additional visitors to Mount Barker by 2019

• Objective #4 - Export Growth - Increasing exports out of the Mount Barker region from $648 million (current) to $1.9 billion by 2019 (medium scenario by 2036) and to $4 billion by 2036 (high scenario by 2036)

Detailed Strategies and Action Plans designed to achieve the above four Key Objectives are contained in the body of this report.

1 Based on SATC data of total visits to the Adelaide Hills region in 2012 of 112,000. Assumes Mount Barker has a 20% market share and doubling this over the next 5 years


SECTION 1

1. INTRODUCTION, PROJECT OBJECTIVES and ECONOMIC

DEVELOPMENT STRATEGIES

Hudson Howells was engaged in 2014 to prepare an Economic Development Strategy for the District Council of Mount Barker. Council is experiencing significant population growth which is expected to continue over the next 20 years, resulting in a doubling of the district population. In 2012 Council adopted a new Strategic Plan which identified Economic Development as one of six Strategic Imperatives for the Council to pursue. One of the key objectives under this goal area is to develop an economic development and local employment strategy.

As at March 2013, approximately 15,591 people, or 96.1% of the District’s labour force were employed (Small Area Labour Markets: Department of Employment and Workplace Relations). The unemployment rate of 3.9% is significantly lower than the State average. However, over 42% of all employed people commute outside of the District to work. Council therefore commissioned this Economic Development Strategy (EDS) in order to consider and plan for its role in achieving the following broad objectives:

• Encouraging and facilitating a vibrant and sustainable local economy. • Maintaining a low unemployment rate. • Increasing the number of local jobs thereby reducing the need for residents to

commute outside of the District for work.

Structure of the Economic Development Strategy This Economic Development Strategy has 3 main sections. SECTION 1, including this introduction, sets out the main elements of the strategy, Council’s role, Vision statement and Strategies to pursue. SECTION 2 discusses a suggested branding and positioning strategy. SECTION 3 provides an implementation action plan for Council to pursue over the next 5 years. APPENDIX 1 provides the background and modelling to which the strategy is set. This includes:

• regional and external analyses • major investment projects that will influence the regional economy and • future economic scenarios that will be influenced by the level of investment

which will ultimately determine gross regional product and local employment options.


• Increasing employment opportunities for young people.

As population increases, the need for local economic development and employment opportunities will play a critical role in the sustainability of our district into the future. This economic development strategy, among other things, is designed to encourage business and investment that is suitable and appropriate for the district and that builds on its strengths of a clean and picturesque environment, strong and cohesive community and accessible and vibrant public places.

The specific objectives of the EDS include:

• To identify Council’s role in economic development and priority directions to pursue. • To provide prioritised initiatives and actions that are justified and achievable with

clearly defined steps for implementation. • To engage with key stakeholders (government, business and community) to develop

the strategy and to establish focal points, protocols and opportunities for ongoing engagement throughout the implementation of the strategy.

• To explore key opportunities and potential partnerships (Local, Regional, National and International) that will lead to the development of innovative ideas and initiatives.

• To make recommendations on which opportunities to pursue and pathways to implementation.

In addition to the above specific objectives the EDS should also include recognition of Council’s strategic objectives and current or future projects such as:

• The Mount Barker Town Centre Strategy. • The proposal to list the Mount Lofty Ranges under UNESCO’s World Heritage

program • The proposed new freeway interchange at Bald Hills Road, Mount Barker. • Treated wastewater reuse opportunities. • A proposed Regional recreation and sports hub on Springs Road, Mount Barker. • Nairne Masterplan and Retail Study. • Expansion of tertiary educational facilities. • The role of the Creative Sector in economic development • The NBN and/or the provision of high speed broadband and Wi-Fi free zones in

business and shopping areas • Consideration of the unique and distinct strengths of the District relative to other

similar growth areas in the Greater Adelaide region. • Synergies and alignment with regional initiatives such as the Monarto South

Enterprise Precinct and wastewater reuse opportunities. • Gaps and opportunities for the development of niche small to medium enterprises.


• Relevant potential opportunities as identified in National and State strategies such as the Federal Government’s ‘Australia in the Asian Century White Paper’ and the SA Government’s China and India strategies.

• Papers and submissions of the National Growth Areas Alliance of which Council is a member.

The following objectives identified in Council’s Strategic Plan are also relevant to the EDS:

• The role of the NBN in facilitating business development, in particular small to medium enterprises.

• Available land for industrial/commercial development and the potential to develop business precincts and ‘Smart Parks’ in the district.

• Potential cluster development building on regional strengths. • The concept of a regional tertiary education precinct and development

opportunities. • The potential to attract a Government agency to Mount Barker. • The role for Council in promoting the growing and showcasing of, and adding value

to, local food, wine and associated industries. • Council’s role in enhancing and developing the regional tourism product.

The overall EDS challenge is to position and promote Mount Barker as a place for business and investment in industries that leverage its strengths, geographical position and socio-economic structure while providing local jobs thereby reducing the need for residents to commute outside of the District for work. As the District grows, organic investment will occur in construction, industrial, commercial, retail, education, health and other community support industries. However it will be the investment in new and emerging industries along with value adding to existing industries, including the agricultural sector and tourism, and export growth that will define the region’s future economic structure and contribution to the South Australian economy and its overall wellbeing and viability.

1.1 DEVELOPING THE ECONOMIC DEVELOPMENT STRATEGY This section of the report details the recommended Economic Development Strategy for the District Council of Mount Barker. The strategy is based on the research set out in Appendix 1 to this document and consultation undertaken in its development. Council’s other strategies and plans have also been considered as well as discussions with Council and its executive on Council’s role in economic development.

1.2 Council’s Role in Economic Development Council’s role options in economic development must be considered and incorporated into the EDS. Options include:


Supporter (Low Risk) – Council focuses on infrastructure (e.g. roads, industry parks and tourism assets such as walking trails and tourism environments, etc.) and the business environment (e.g. policy, regulations, zoning, etc.). Value Adder (Medium Risk) – Council adds value to State and Commonwealth programs (e.g. provides funds to complement Tourism SA funded programs or provides funding to complement funds available in government programs for export promotion for local businesses or new private investment incentives). Economic Developer (High Risk) – Council (for example) takes equity positions in projects based on potential financial and economic development returns.

Adoption of these alternative roles, or transition across these roles over time, could lead to Council (for example) giving the following undertakings as part of its commitment to the EDS:

Supporter (Low Risk) – Council invests in improving road access to major industry parks and business operators. Council rezoning of land to accelerate residential, commercial and tourism development. Value Adder (Medium Risk) – Matching or contributing to government funds, Council allocates funds for an ‘export program’ to assist local businesses access interstate and overseas export markets, or allocates funds to assist the attraction of new businesses or new investment in target industry sectors. Economic Developer (High Risk) – Council (for example) allocates reserves or borrows funds from the Local Government Financing Authority to purchase land for joint venture industrial development to accommodate/accelerate the development of new industries consistent with the EDS. These alternative roles are illustrated in the following diagram:

Figure1


One of the challenges for Council is to define its role in economic development so that it can decide how it should address the many strengths, weaknesses, opportunities and threats (key issues) identified in the research and consultation. The primary constraints on Council are resources (human and financial) and exposure to risk in economic development transactions. Council administration has expressed a preference that during the life of this Economic Development Strategy that it will minimise resource demands and its risk exposure by:

• Focussing on improving the physical and business environment for economic development and identifying areas where support can be provided or increased.

• Adding value to and participating in regional, State and Commonwealth Government economic development initiatives.

• Collaborating with contiguous economic development regions (e.g. Adelaide Hills,

Murray Bridge and Alexandrina Councils).

In adopting this role, Council administration is specifically excluding the following economic development strategies:

• The pursuit of commercial economic development initiatives, either individually or in joint venture with the private sector (e.g. sole or partnership participation in residential, commercial or industrial developments) should be minimised, unless Council has expressed a desired outcome that aligns with its Strategic Plan.

• National or international promotion of Mount Barker and its economic development

opportunities other than by value adding to, or collaborating with other regional, State and Commonwealth Government initiatives.

Based on the region’s competitive advantage (or unique selling proposition), the Economic Development Strategy must complement these and add value without exposing Council to unreasonable resource demands and financial risk. The Economic Development Vision, Objectives and Strategies that follow are therefore somewhat conservative in approach and seek to transition Council over time to a greater role in economic development.

1.3 Competitive Advantage The research and consultation for this project clearly identified that the Mount Barker Council region has, over time, developed a major strength and competitive advantage as:

A unique and natural hills location that provides a welcoming, supportive and unpretentious environment for residents and businesses and an exceptional


experience for visitors. Mount Barker combines a natural rural setting with urban amenity all within easy reach of the Adelaide CBD.

1.4 Economic Development Vision, Mission and Key Objectives The purpose of this Economic Development Strategy is to implement strategies that create jobs and regional wealth (increased Gross Regional Product or GRP per capita) that meet the needs of Mount Barker’s expanding population, and especially generates sufficient jobs to increase the percentage of jobs supplied by the regional economy whilst not compromising the district’s natural and scenic qualities. A thriving local economy is an essential part of achieving long term sustainability and to this end the Strategy forms an essential part of Council’s sustainability agenda. The District Council of Mount Barker has a natural economic advantage in having premium quality rural land in close proximity to the Adelaide CBD. This land supports agricultural activity, provides opportunities for tourism related uses and enhances local employment opportunities. As part of the economic development strategy Council will consider opportunities to optimise this advantage through the sale of farm produce, encourage greater tourism activity and support for complementary business activities. The district is also home to a strong creative sector, for example art, craft and music activities conducive to the hills environment and proximity to Adelaide. There are opportunities for this sector to expand. While this Economic Development Strategy has a strong investment attraction and export development focus, it is recognised that up to 95% of regional economies are comprised of small to medium sized businesses (SMEs) that generally employ between 1 and 100 people. The objectives, strategies and action plans recommended in this Strategy therefore apply equally to the Mount Barker SME business community as this sector is the driver of regional economic growth. Council has determined that infrastructure development and economic growth is essential to support the needs of the 20,000 additional people expected to reside in the region over the next 20 years. Key opportunities for jobs and economic growth are driven by:

– Investment attraction. – Export promotion. – Tourism development.

Within the EDS the term ‘exports’ is defined as being income that is derived from outside of

the region. This could be from increasing visitor numbers or the amount of money they

spend in the district or by increasing the value of sales outside the region of products and

services produced in the district. This could be elsewhere in SA, nationally or

internationally.


– Population growth. – Branding and marketing.

These are supported by infrastructure development including:

– Infrastructure provision. – Administrative and business support.

Supported by the research and consultation undertaken for this project, the following Economic Development Vision is recommended for the District Council of Mount Barker:

This economic vision will be supported by the follow Economic Development Mission:

The District Council of Mount Barker will achieve the above vision by adding value and working in collaboration with its community, contiguous Councils and the State Government to create a positive environment for business creation, growth of the regional economy and jobs for its residents.

Consistent with the recommended role of Council in economic development, the District Council of Mount Barker will collaborate with and add value to State and other regional initiatives to not only grow Mount Barker’s economy, but also to grow the broader regional economy and jobs in proximity to Mount Barker. This will contribute to Mount Barker strengthening its position as a major regional City and great place to live, work and grow a business and will extend outside the Council region especially to the Mount Barker/Murray Bridge Corridor region (incorporating Monarto) as shown in map 1:

Map 1 Mount Barker/Murray Bridge Economic Corridor

Council envisages a district where clean and sustainable businesses thrive in an attractive

and vibrant hills setting. Over the next five years Mount Barker will become the preferred

South Australian destination for large and small businesses that are seeking to establish

and/or expand in a supportive environment that offers access to a stable and skilled

workforce, excellent physical and social infrastructure and appropriately zoned commercial

and industrial land.


Achievement of this Vision and Mission will:

• Contribute to social cohesion and community wellbeing • Reduce Freeway congestion between Mount Barker and Adelaide. • Reduce travel time to work. • Prevent and reduce carbon emissions.

This will be achieved by increasing the number and percentage of jobs available regionally for Mount Barker residents. Council will facilitate this vision through pursuit of the following four Key Objectives between 2014 and 2019:

• Objective #1 - Branding and Promotion - Development and promotion of a contemporary community brand and associated imagery for Mount Barker (this will become integrated with a revised brand for the District of Mount Barker) which supports economic development in its broadest sense.

• Objective #2 – Investment Attraction - Attraction of a minimum of $2.8 billion of

new infrastructure and business investment by 2036 to support the increased population (i.e. medium scenario) plus an additional $2.5 billion of new business investment (making a total of $5.3 billion) to support the export growth required to increase the number of jobs available in Mount Barker for Mount Barker residents from 58% to 77% of employment needs, with a focus on the following industry sectors:

o Retail and Hospitality o Food Value Adding o Education and Training o Health, Retirement and Aged Care o Tourism o Creativity and the arts

• Objective #3 - Demand Growth – Generation of demand growth by attracting

20,0002 additional visitors to Mount Barker by 2019 with a focus on:

o Population Growth (including business and other migrants) o Tourism o Students o Retail

2 Based on SATC data of total visits to the Adelaide Hills region in 2012 of 112,000. Assumes Mount Barker has a 20% market share and doubling this over the next 5 years


• Objective #4 - Export Growth - Increasing exports out of the Mount Barker region from $648 million (current) to $1.9 billion by 2019 (medium scenario by 2036) and to $4 billion by 2036 (high scenario by 2036) with a focus on:

o Food Value Adding o Education and Training o Tourism o Small to medium enterprises

1.5 Economic Development Strategies The following Economic Development Strategies are recommended based on the preceding Economic Development Vision, Mission and Objectives:

Recommended Strategies

• Build, Develop and implement an economic development brand and associated marketing strategy and imagery around focusing on Mount Barker’s strengths and competitive advantage with a focus highlight on key industries including:

o Retail and Hospitality o The agricultural sector and Food Value Adding o Education and Training o Tourism o Water treatment and reuse o Environmental sustainability

• Build an Economic Development Portal on Council’s website for communicating the Economic Development Strategy, promoting major initiatives and receiving feedback from the community on the strategy and its implementation.

• Develop communication materials that highlight the strengths of the region and investment opportunities

• Promote investment, export, education and tourism opportunities in collaboration with State and Commonwealth Government initiatives in priority markets including3:

o China o India o The ASEAN region.

3 The Australian Government’s Australia in the Asian Century White Paper has now been released. This document is a roadmap to guide Australia to become a more prosperous and resilient nation, fully part of the Asian region and open to the world. It notes the ASEAN region’s potential to become a global economic powerhouse and is included as a priority to complement the State Government’s China and India Engagement Strategies.

Objective #1 - Branding and Promotion - Development and promotion of a contemporary community brand and associated imagery for Mount Barker (this will become integrated with a revised brand for the District of Mount Barker) which supports economic development in its broadest sense.


• Meet with relevant State and Commonwealth Government agencies in order to implement the Strategy – DMITRE, PIRSA, Premier and Cabinet, Austrade, etc.

• Continue to pursue World Heritage listing for the Mount Lofty Ranges with regional partners

Recommended Strategies • Set target dates for the realisation of the $2.8 billion of underlying infrastructure and

housing investment projects as these projects underpin the organic economic growth of the region.

• Set target investment values for the priority industry sectors to collectively achieve an additional $2.5 billion in new investment by 2036.

• Consult with regional businesses and establish private sector led taskforces for major industries/precincts to identify and initiate infrastructure upgrades and new investment attraction as above that support the economic development vision and mission including:

o A Retail and Hospitality Precinct with a focus on Gawler Street and the Mount Barker town centre.

o Using the Town Centre Strategy to drive investment in Mount Barker including projects associated with a new Council administration building. Promotion of the Town Centre Strategy to prospective investors and new businesses.

o Establishing and Promoting Central Main Street Precincts – Gawler Street; Dutton Road; Walker Street; Stephen Street; Hutchinson Street and main streets in other towns.

o An Education and Training Precinct with a focus on attracting new tertiary education campuses (especially universities and TAFE) and student accommodation.

o A Health, Retirement and Aged Care Precinct around Mount Barker Hospital and Super Clinic on Wellington Road.

o A new Advanced Manufacturing Precinct (high value added) in the Mount Barker – Monarto - Murray Bridge corridor with a focus on one or a combination of Food Value Adding, Defence and Mining Industries.

Objective #2 – Investment Attraction - Attraction of a minimum of $2.8 billion of new infrastructure and business investment by 2036 (to support the increased population i.e. medium scenario) plus an additional $2.5 billion of new business investment (making a total of $5.3 billion) to support the export growth required to increase the number of jobs available in Mount Barker for Mount Barker residents from 58% to 77% of employment needs, with a focus on the following industry sectors:

• Retail and Hospitality • Food Value Adding • Education and Training • Health, Retirement and Aged Care • Tourism • Creativity and the arts


o In collaboration with the Rural City of Murray Bridge and the Murraylands RDA, consult with Food SA on opportunities for food value adding investment in the region with a focus on premium food and wine.

o In collaboration with the Rural City of Murray Bridge and the Murraylands RDA, consult with the Defence Teaming Centre, Defence SA and DMITRE on opportunities to establish dedicated defence and mining related manufacturing precincts in the Mount Barker – Murray Bridge Corridor.

o Establish Major Entry Statements to Mount Barker at Adelaide, Wellington and Flaxley Roads.

• Advocate for the establishment of a ‘Food Council’ or similar to help unify the region’s food producers to pursue value adding and investment opportunities

• Work with the State Government to secure improved public transport infrastructure to key City access points and event, tourism and employment nodes.

• Consider the role of the Creative economy and opportunities for support and expansion

• Ensure timely residential development approvals to meet the program of 7,500 additional housing units over 20 years to 2036.

• Ensure that Council planning policies accommodate the changing needs of business, especially small to medium sized businesses that seek flexible work environments from commercial premises to home office.

Recommended Strategies

• Identify major State, national and international business, tourism, sporting and other events that could be attracted to Mount Barker and, in collaboration with the State Government where appropriate (Major Events), market Mount Barker to national and international event organisers.

• Prepare and implement a Marketing Strategy for the Mount Barker region specifically targeting new residents, tourists, students, retail and hospitality (an extension of the Branding and Promotion Strategy).

• Utilise the internet, including social media (Facebook, Twitter, etc.) to promote Mount Barker to target audiences including regional and State visitors (retail and hospitality), tourists, students, investors, consumers and businesses.

• Investigate ways to attract visitors to the Mount Barker town centre to take advantage of extended trading hours.

• Participate in State and regional conferences, tradeshows, trade missions, etc. especially those with a focus on collaborative marketing and business attraction.

Objective #3 - Demand Growth – Generation of demand growth by attracting 20,0001 additional visitors to Mount Barker by 2019 with a focus on:

• Population Growth (including business and other migrants) • Tourism • Students • Retail


Recommended Strategies • Provide support to small and medium enterprises to establish or expand their

business in the district by helping identify suitable land, assisting with planning and regulatory processes, networking and promotional assistance.

• Consult with Education SA on opportunities to promote Mount Barker and its educational institutions to international students.

• Promote Austrade advisory services and the Export Market Development Grant Scheme (EMDG) to regional businesses.

• Consult with DMITRE and Business SA on targeted trade missions and participate with regional business on those missions consistent with regional strengths and relevant target markets.

• In collaboration with contiguous Council regions and RDAs, prepare a broad syndicated export marketing strategy for qualifying regional businesses focussed on specific trade regions consistent with the State Government strategy (e.g. ASEAN region, China, India). Seek collaborative funding for the strategy from Councils, RDAs and the State and Commonwealth Governments.

• Ensure there is suitable and sufficient quantity of appropriately zoned industrial and commercial land to accommodate the export growth targets.

Recommended Multi-Objective Strategies

• Establish a Regional Business Leaders Group. The Regional Business Leaders Group to have responsibility for:

o Development, funding and implementation of the regional branding and positioning strategy.

o Conduct of regular economic development and networking functions. o Providing advice to Council on economic and industry development.

• Investigate Sister City/Region relationships with international city/region consistent

with the City’s strengths/competitive advantages and State Government priorities in

Objective #4 - Export Growth - Increasing exports out of the Mount Barker region from $648 million (current) to $1.9 billion by 2019 (medium scenario by 2036) and to $4 billion by 2036 (high scenario by 2036) with a focus on:

• Food Value Adding

• Education and Training

• Health, Retirement and Aged Care

• Tourism

• Growth of Small to medium enterprises

• Defence


China, India or the ASEAN region (reference the State Government’s China and India Engagement Strategies 2012).

• Contribute funding and human resource support to major State and Commonwealth Government investment attraction and export promotion initiatives.

• Promote and coordinate access to State and Commonwealth Government grant funding for regional businesses. Particular attention should be given to coordinating applications for regional funding and assistance from:

o The Commonwealth Government’s Asian Century Business Engagement Plan.

o AusIndustry. o Austrade (including promotion of the Export Market Development Grant

Scheme). o Planned State Government initiatives in China, India and the ASEAN region.

• Prepare an Implementation Program for the Economic Development Strategy

encompassing the Implementation Plan that forms part of this document and which includes:

o Allocation of sufficient human and other resources. o An account management model for prospective investors (existing business

and new investors). o Spatial representation of appropriately zoned land and sites for business

investment. o An information package for use in investment attraction, trade development

initiatives etc. o Export advice on specific industries and markets for Mount Barker

businesses seeking export development. 1.6 Implementing the EDS in townships across the District Much of the future growth of the district will occur in Mount Barker, Littlehampton and Nairne however implementation of this Strategy will require pursuing opportunities across all urban and rural areas of the district. The types of economic development opportunities are likely to vary considerably between major settlements like Mount Barker and Nairne where population growth will be a major influence and townships like Hahndorf, Macclesfield and Meadows where tourism and activities based round the agricultural sector can prosper and expand. More specific, town based opportunities will be explored in the implementation phase of this strategy including around main street precincts and growth of, and support to Small and Medium enterprises. 1.7 The role for Council staff In implementing this strategy, Council will need to engage effectively with business, all levels of Government and the broader community. Appendix 1 includes discussion on the role of local government in economic development and this strategy suggests there are many things


that Council can do to increase investment and local employment. Council staff will have an important role and some examples are included below:

• Planning staff facilitating efficient and supportive planning approval processes • Environmental health officers working with SMEs to interpret and facilitate

compliance with requirements of the Public Health and Food Acts • Strategic and policy staff ensuring that future investment potential and

opportunities are considered and incorporated in strategic planning • Community development officers facilitating and enabling small scale start-ups and

community enterprise • Environment, open space and field services staff developing and maintaining

excellent open space assets for wide community use and an attractive urban and rural aesthetic

• Senior staff developing relationships and partnerships with regional stakeholders and the business community to pursue economic development opportunities

1.8 Big Ideas The intention of this EDS is not to try and ‘pick winners’ but rather to provide Council with a broad direction strategy and to communicate its intention to encourage and facilitate investment in the district. Nonetheless, when consulting with business leaders and Council on the development of this EDS a number of ‘big ideas’ were floated that are worthy of consideration. Some of these ideas are listed here for future consideration either by Council or by potential investors:

• The district becomes a hub for regional food and wine incorporating education and training, food and wine trails, high end restaurants

• The district hosts a campus of an international university • The district becomes part of the ‘learning cities network’ • The district becomes a centre for the design and construction of sustainable housing • The district hosts a centre for peri-urban research • An adventure style facility is established for teenagers and adults incorporating

climbing walls, zip lines, mountain bike and road bike circuits as a way to attract young people and tourists to the district.

• A precinct for high end, locally specific retail outlet stores is established in the district, potentially in Hahndorf


SECTION 2 BRANDING AND POSITION STRATEGY 2. BRANDING AND POSITIONING STRATEGY

2.1 Introduction The objective of the branding and positioning strategy is to create an integrated, community-wide Mount Barker brand that supports economic development in its broadest sense. It is in a real sense a ‘community brand’ which positions Mount Barker as a highly attractive place for not just existing and new businesses but also existing and new residents and visitors. The Mount Barker brand will therefore have strong alignment with business entrepreneurs seeking to invest, families looking for an ideal location to live and visitors in search of a destination that is within easy reach of Adelaide yet providing a unique hills ambience.

2.2 Mount Barker Community Brand It is important to note that the Mount Barker brand addresses the entire local government area, not just the township of Mount Barker. The brand therefore reflects the Council and its respective business and residential communities. The brand has a number of dimensions:

• The collective voice of the communities. • The sense of the places in which the communities live. • The character and environment of these places and the people who live and operate

businesses there. • The rich heritage of the places which constitute the Council area. • The values shared by the communities. • The collective shared vision for the future.

Council has an important leadership role in the development and implementation of the Mount Barker brand. In particular Council must ensure that the brand reflects the different communities while at the same time providing a cohesive positioning.

2.3 Positioning The Mount Barker local government area offers an outstanding environment for the following reasons:

• It offers urban amenity in a beautiful rural setting.


• It is more affordable than other hills towns such as Stirling, Aldgate and Crafers yet offers excellent accessibility via the South Eastern Freeway.

• It has an authentic character. It has not been built up in the way the northern and southern suburbs have, the environment is refreshingly natural and there is a sense of relaxed informality and approachability.

• It is safe, comfortable and offers a sense of belonging which is particularly important for families.

• It also has a rich heritage, a well developed cultural offering, lots of parks and open space and places for sport and general recreation.

• It is business friendly but not at the expense of the broader community’s best interests.

2.4 Brand Management The Mount Barker brand must be managed across a series of core attributes as follows:

• Community – celebrate and reinforce Mount Barker’s unique hills’ lifestyle. • Visitors – express Mount Barker’s character so visitors are not only attracted but are

so impressed with their experience that they want to return. • Business – support business growth that enhances the quality of life of the Mount

Barker community. • Development – ensure future development complements and does not undermine

the positioning of Mount Barker. • Rural land – preserve and protect the rural land that adds so much to the Mount

Barker character and brand and assist boutique farmers to grow and prosper. • Environment – respect and protect the hills biodiversity, clean air and water. • Heritage – preserve and protect the heritage that adds so much to the Mount Barker

character and brand. • Culture – encourage cultural activities that enhance the quality of life for residents

and visitors. Council is the custodian of the Mount Barker brand and therefore has a responsibility to ensure that the brand is managed in such a way that reinforces its positioning. It is also suggested that in line with this responsibility Council considers changing its name and updates its logo to reflect its broader character.

2.5 Sustainable Competitive Advantage This then translates into a sustainable competitive advantage for Mount Barker as follows: Mount Barker is a unique and natural hills location that provides a welcoming, supportive and unpretentious environment for residents and businesses and an exceptional experience for visitors. Mount Barker combines a natural rural setting with urban amenity all within easy reach of the Adelaide CBD.


SECTION 3 – IMPLEMENTATION ACTION PLAN The following Implementation Action Plan is provided as guidance for Council’s

implementation of the Economic Development Strategy. The implementation plan is

organised under 2 sections. Section 1 focuses on internal Council actions while section 2

focuses on actions that Council will pursue that are more of a regional nature.

Implementation Action Plan

Council focussed actions

No. Action Commence by Complete

by

1. Produce a summary document of the EDS to be used to communicate and promote Council’s Economic Development program and to help engage with partners and stakeholders

2014 End 2014

2. Prepare an Information Pack (adaptable for print, electronic and online media) to promote investment opportunities in the district and to support trade and investment missions, trade exhibitions, etc. The Information Pack to be adaptable for target markets.

2014 Mid 2015

3. Develop a branding and associated marketing strategy to underpin the economic development strategy. This work will incorporate a Marketing Strategy for the Mount Barker region targeting key audiences in the consumer and business sectors with a strong emphasis on digital media.

2014 Mid 2015

4. Establish a periodic review process for ensuring implementation of the EDS remains on track.

Every 3 months in conjunction with Department reporting cycles

Ongoing

5. Establish and implement an internal Council case management model for prospective investors (existing business and new investors) to ensure a consistent and coordinated response from Council

2015 Ongoing

6. Develop an internal staff guide for ways in which business can be supported and encouraged to set up or expand in the district.

2014 Mid 2015

7. Ensure an efficient system for timely residential development approvals to meet the program of 7,500 additional housing units over 20 years to 2036.

Ongoing Ongoing

8. Identify and document additional land required to accommodate the employment forecast by the EDS and incorporate within investor information packs.

End 2014 Mid 2015


9. Ensure that Council planning policies accommodate the changing needs of business, e.g. value adding businesses in the rural sector and small to medium sized businesses that seek flexible work environments from commercial premises to home office.

Ongoing Ongoing

10. Develop an action plan that explores and develops Council’s role in encouraging ‘creative sector’ industries within the district

Mid 2015 End 2015

11. Identify major State, national and international business, tourism, sporting and other events that could be attracted to Mount Barker and, market Mount Barker to national and international event organisers.

2014 Ongoing

12. Identify and map zones within the Mount Barker town centre where fibre optic cable exists or will be rolled out through the NBN. Investigate the potential for free WIFI zones.

2015 End 2015

13. Pursue major initiatives through the Mount Barker Town Centre Strategy to increase day time activity, promote walkability and safety and increase visitation.

Ongoing Ongoing

14. Engage with the State Government on this Economic Development Strategy

2015 Ongoing

Regional initiatives and collaboration

15. Work with regional partners and stakeholders to develop the Mount Lofty Ranges Agrarian Landscape World Heritage Bid.

2014 Ongoing

16. Work with the Rural City of Murray Bridge and RDAs to progress the Monarto South Enterprise Precinct Master Plan

2014 Mid 2017

17. Continue to pursue opportunities to use treated wastewater and stormwater to encourage investment in related industries

Ongoing Ongoing

18. Establish a Regional Business Leaders Group with the Group having responsibility for:

• Development, funding and implementation of the regional branding and positioning strategy.

• Conducting regular economic development and networking functions.

• Providing advice to Council on economic and industry development.

2014 2015 then ongoing

19. Consult with regional businesses and establish private sector led taskforces for major industries/precincts to identify and initiate infrastructure upgrades and new investment attraction.

End 2014 End 2015


20. Identify, prioritise and participate in high priority state and regional conferences, tradeshows, trade missions, etc., especially those with a focus on collaborative marketing and business attraction in collaboration with DMITRE and Business SA.

2015 Ongoing

21. Identify and prioritise investment, export, education, and tourism opportunities in collaboration with State and Commonwealth Government initiatives in predetermined priority markets (including China, India, ASEAN region).

2015 Ongoing

22. Collaborate with contiguous Council regions, RDAs and the private sector on export marketing and implementation strategies for regional businesses

2015 Ongoing

23. Consult with Education SA and education institutions on opportunities to promote Mount Barker and its educational institutions to international students and the potential to expand tertiary education facilities.

2015 Ongoing

24. Investigate potential Sister City/Region relationship with international cities/regions consistent with the City’s strengths/competitive advantages.

2015 Ongoing


APPENDIX 1

ANALYISIS AND BACKGROUND INFORMATION TO THE ECONOMIC DEVELOPMENT STRATEGY The following information provides the detail and data to which this economic development strategy has been developed. It includes a regional economic audit, external analysis, the role of local government in economic development, economic profile and demographics of Mount Barker, relevant plans and strategies and a SWOT analysis. It discusses future economic scenarios that will be influenced by the level of investment which will ultimately determine gross regional product and local employment options.

1. REGIONAL ANALYSIS - ECONOMIC AUDIT

1.1 Background The objective of this component of the economic development strategy is to ensure an understanding of the political and economic environment in which the strategy for Mount Barker is being developed.

1.2 Local Government and Economic Development The development of this strategy is framed around some core propositions with respect to the role of Local Government in economic development. These are as follows: Proposition 1: Markets left alone will not lead to optimal economic outcomes from a regional perspective There are many varying opinions about the roles that government could and should take in terms of economic development. The arguments for involvement are based on recognition of market failures (imperfect competition, economies of scale, public goods, including information). Many of these arguments focus on national level policy (e.g. infant industry arguments, critical mass). At the regional level the core aspects4 include:

• Entrepreneurs and investors have incomplete access to and use of information about the nature of a region in terms of opportunities that exist, or issues such as regional planning constraints. Put bluntly – unless informed, many potential investors will not even know a particular region exists as on option for establishing their business.

• Individual entrepreneurs and investors ignore externalities in considering their

investment. While discussion around externalities often focuses on the ‘negatives’, the benefits created by change processes within a region will not necessarily be

4 Timothy J. Bartik, The Market Failure Approach to Regional Economic Development Policy, Economic Development Quarterly, November 1990


understood in the context of individual projects unless it has some controlling or influencing factor. Clearly local government has systems in place (planning) to effectively manage the ‘negatives’ but also such systems can create good outcomes.

Proposition 2: Local Government does not have a role in controlling macro-economic drivers Core drivers of investment are to be found in the macro-economic environment. Factors such as exchange rates, interest rates, wage rates, cost structures and inflation determine the competitiveness of a business and its ability to be profitable. These are clearly in the main national arena – particularly the first two aspects. Local government can have an impact on local costs (e.g. land costs, service costs, and even wage costs) but usually at a minor level. Demand will be a local aspect in locally focussed businesses, but is also heavily impacted by national factors. Therefore, it is suggested that Local Government economic development roles will be about influencing and informing other levels of government on the macro-economic factors, but focussing on the issues they can impact. It should be noted that in recent years, there has been a tendency for regional and local projects to be driven by centralised processes – national programs around school and community buildings, and other items of infrastructure. There are many advantages of using the local knowledge and local influence of local government in directing the investments being made. Proposition 3: Local Government can/should influence local factors The contention is that Local Government should pay attention to economic development in the region, and take active steps to encourage development. At the short end, issues such as the regional environment, planning regulation, and synergies between land uses are all factors that need to be considered. The core question is what else can be influenced and how far does a particular council go? There are those who argue against governments (at any level) having any involvement in correcting market failures, based on a position that government failures will be worse than market failures. This is certainly possible, and calls for a balanced approach. It means actions need to be informed and set within an informed strategy. It reinforces the importance of the process for formulation of this economic development strategy. It is noted that one of the arguments against, for example, state government’s active involvement in economic development is that in the end it simply becomes a benefit to the business rather than the creation of activity – as businesses play one region off against another. This again points to the need to ensure that actions provide real benefits that will increase the level of activity across all regions rather than just pull activity from one region to another. Strategies to support regional development should be locally owned and developed, with central government to provide overall national or state goals and funding support.


Much of the literature on the role of Local Government focuses on Regional Economic Development - and usually emphasises non-metropolitan regions. Rural areas do have somewhat different issues (mainly that travel costs in journey to work tend to emphasise the imperative of locally supplied employment, and less leakage in purchases of lower valued goods). However many of the arguments about the positioning regarding economic development remains similar for metropolitan regions. O’Neil and Walsh in ‘Rethinking the Approach to Regional Development in South Australia’, SACES, University of Adelaide (2010) strongly state that “South Australia’s economic progress, its social cohesion and the development of its natural resources depend entirely on the economic performance , social vitality and natural resource of all its regions” (p1). They argue that regions should develop aspirations and plans for themselves in economic, social and environmental development, arguing that this endogenous approach is that advocated by the OECD and employed commonly across OECD countries - that is that economic development opportunities are not something to be imposed from outside, but to be developed from within. Dr. Paul Collits of the Page Research Centre notes the difficulty in this proposition in a discussion paper Regional Development: Future Policy Options that “Regional policy is notoriously open to multiple and confused objectives and to claimed ownership by many and varied players who include Ministers, Mayors, practitioners and ‘communities’. Regional policy by its very nature lends itself to politically selective largesse. Moreover, any form of regional policy intervention will necessarily be controversial, since:

• There is disagreement over what ultimately drives regional performance, hence there will also be disagreement about the efficacy of any intervention;

• There is disagreement about which regions/projects should be assisted by government;

• It is difficult to know whether (and to what extent) any intervention has ‘worked’;

• As governments know, and most have admitted, there is no ‘silver bullet’ solution to

regional growth and decline;

• It will always be hard to separate ‘regional policy’ from ‘policies that benefit regions’; and

• There is disagreement over regional policy objectives.”

1.3 The Role of Local Government The proposition above is that, despite the difficulties and controversy, Local Government should take an active role in economic development. The arguments focus around the benefits of active participation, though of course the benefits are dependent on results rather than activities per se – effectiveness is paramount. The benefits from a regional


perspective of having stronger economic growth (and it needs to be considered whether this growth be in employment or in income per employee or both) include:

• Providing local employment opportunities for residents reduces journey to work times, and as such provides benefits in terms of access and travel time – with associated social and environmental benefits.

• Local business failures bring significant community costs (underutilised resources, falls in land value, etc.).

• The possibility of reducing access costs for local residents by having locally supplied

products and services – having more activity within the region gives local residents the chance to buy locally, with less in the way of search costs.

• Economic growth generates rates revenue (in excess of costs) through an increase in

the number of commercial and industrial properties, and if industry profitability is enhanced, increased value of properties – with such revenue increases underpinning council operations5.

• Growth in the economic base provides potential sources of other revenue for the

council, improving financial sustainability including, for example, revenue from customers and suppliers (parking fees, use of local facilities by business customers and suppliers). The SA Local Government Association has recognised this by including an economic development project in their Excellence Project.

• Local businesses will consider corporate sponsorships and supports as part of their

community contribution and as such potentially provide inputs for local social infrastructure and initiatives.

• Additional activity provides critical mass for hard infrastructure that also benefits the

broader community (e.g. underlying market scope for transport improvements, for broadband and other communications).

The second question is with respect to focussing on what economic development factors local government should concentrate on. In addressing this issue the literature focuses on the following targets.

• The provision of locally oriented infrastructure (or working with other councils in improving regional infrastructure). This includes transport (roads, rail), communication (broadband), provision of quality residential facilities, social and community services (for use by workforce).

5 Deborah A. Carroll, Tax Increment Financing and Property Value, An Examination of Business Property Using Panel Data, Urban Affairs Review, March 2008


• Local Government has particularly been focused on the importance of or need for

business operating and development skills, which are seen as key for the effective development of small businesses in an area, and that local businesses have access to skilled workers.

• The provision of information about the nature of the area, and of how to manage

the local planning regulatory system is (business advisory). The third question that must be addressed by local government decision makers is about the nature of the activities that Local Government should be involved in, which overlaps the above question of focus, but with an emphasis on programs and activities. One dimension in which this can be looked at here is by type of activity. Options include:

• Effective regulations and planning systems (ensure the negative impacts or planning controls and regulations are effectively managed, and cost impacts minimised).

• Subsidies - the provision of direct and indirect subsidies to businesses to improve cost competitiveness – such as rate discounts.

• Service provision – providing direct input into business activity, not only in the

standard Local Governments services of rates, road and rubbish, but in services to business such as information exchange, development project facilitation, etc.

A second dimension is to consider how far the Council is prepared to go in terms of the risk involved.

• The lowest risk type of activities will be those that focus on local infrastructure provision and the local business environment (i.e. regulations, local services).

• The second level of risk is to look at activities that complement or add value to

activities being undertaken by state and commonwealth government (examples might include training programs or overseas trade missions).

• Lastly there are the higher risk activities of more innovative and directly impacting or

contributing to projects – this might include taking on commercial activities. The third aspect around which the Council needs to decide is with respect to the geographical reach of programs in which they get involved. They can focus on local businesses and local activities or can reach outside to provide information on or get involved in national and international activities – such as trade missions, targeting international investors or national companies (e.g. investment attraction programs).


1.4 The Economic Profile of Mount Barker This economic development strategy is being prepared at a time of significant regional economic stress and uncertainty. The following analysis has been undertaken utilising information sourced from the following sources:

• District Council of Mount Barker 2011 Census Results - Community Profile (ABS).

• District Council of Mount Barker - Population & Household Forecasts 2011-2036 (Prepared for District Council of Mt Barker by Profile id).

1.4.1 Background European settlement dates from 1839, with land used mainly for grazing and crop farming. Growth took place in the 1850s and 1860s, spurred by gold mining. Expansion continued during the late 1800s, aided by the construction of the railway line. The most significant development occurred from the 1950s. The population of the Council area increased substantially from the early 1990s, rising from under 18,000 in 1991 to about 29,000 in 2011. Much of the recent growth has been in Mount Barker, Littlehampton and Nairne, due to improved access to the Adelaide CBD. The District Council of Mount Barker area is predominantly rural, with rural-residential areas and rapidly growing urban areas. The major township is Mount Barker, with Littlehampton and Nairne in close proximity. The area is characterised by historic townships and farming areas located in the Mount Lofty Ranges. Many of the towns in the district are noted for their collection of historic buildings, most notably Hahndorf. The District Council encompasses a total land area of nearly 600 square kilometres. The rural lands of the Mount Barker district comprise some of the most fertile and productive land in SA, primarily due to good soils and high rainfall. The rural areas are quite diverse and vary significantly in nature across the district, from the heavily vegetated and picturesque watershed areas in the west, to the dry-land farming areas in the east. Rural lands cover approximately 90% of the area and are used mainly for grazing with some cropping , viticulture, horticulture and forestry. Major features of the Council area include the Mount Barker Central Business District, the historic town of Hahndorf, Steam Ranger Heritage Railway, TAFE SA (Mount Barker Campus), Mt Barker-Hahndorf Golf Club, Laratinga Wetlands, Mount Barker, Totness Recreation Park and various wineries and vineyards. Mount Barker has three primary schools, the Mount Barker South Primary School, Mount Barker Primary School, and St Marks Primary School which is a Lutheran school. Both St Francis and Waldorf have a primary school as well as a high school which share the same


campus. There are also public primary schools in Callington, Echunga, Hahndorf, Littlehampton and Meadows and a Lutheran primary school in Hahndorf. Mount Barker has a single public high school, Mount Barker High, as well as three private high schools: Cornerstone College, which is run by the Lutheran Church of Australia, St Francis de Sales College which is Catholic and Mount Barker Waldorf School. All of these schools are co-educational. Overall about 1500 - 2000 school students, from Mount Barker, as well as many of the surrounding towns such as Nairne, Littlehampton and Strathalbyn, are serviced by these high schools. 1.4.2 Demographics Map 2 - District Council of Mount Barker

As highlighted in map 2, the District Council of Mount Barker is located between 25 and 40 kilometres southeast of Adelaide, and is separated from the state capital by the Mount Lofty Ranges. The area is semirural in nature, and its settlement pattern consists of a cluster of towns – focussed on Mount Barker but also including the nearby settlements of Littlehampton and Nairne – as well as the smaller townships of Echunga, Meadows and Macclesfield in the south, and Hahndorf in the north. The remainder of the District Council consists of rural areas and smaller localities. Proximity to Adelaide means that the rural areas are under increasing pressure for lifestyle properties, though there are still farming and grazing activities undertaken. The semi-rural environment, good transport links to Adelaide and relatively affordable housing have acted as significant drivers for growth in recent years. Since 2001 population growth rates have been well above the average for South Australia – sometimes recording rates three times the amount for the entire state.


As at 2014, the District Council of Mount Barker (Council) has an estimated population of 31,887 which is projected to grow to 50,719 by 2036 which equates to a change of + 59.06%. Population highlights (2011 Census) are noted in the following table. Figures lower than the Council are highlighted with a green background with higher figures being highlighted with a red background. Table 1 - District Council of Mount Barker Population Highlights DCMB Greater

Adelaide South Australia Australia

Median age 38 39 39 37 Median weekly household income

$1,254 $1,106 $1,044 $1,234

Couples with children

35% 28% 28% 31%

Older couples without children

9% 10% 10% 9%

Medium & high density housing

7% 24% 20% 25%

Households with a mortgage

45% 35% 34% 33%

Median weekly rent

$266 $250 $220 $285

Households renting

23% 28% 27% 29%

Bachelor or higher degree

16% 18% 16% 19%

Public transport to work

4% 8% 7% 10%

In summary, the Council tends to have higher household incomes, more couples with children, fewer older couples without children, much less medium and high density housing, more households with a mortgage, higher median weekly rents than Greater Adelaide or South Australia but lower than Australia, fewer households renting and fewer people who use public transport to get to work. Analysis of the five year age groups of the District Council of Mount Barker in 2011 compared to Greater Adelaide shows that there was a higher proportion of people in the younger age groups (under 15) and a lower proportion of people in the older age groups (65+).

Overall, 21.9% of the population was aged between 0 and 15, and 12.2% were aged 65 years and over, compared with 17.7% and 15.5% respectively for Greater Adelaide.


The major differences between the age structure of the District Council of Mount Barker and Greater Adelaide were:

• A larger percentage of persons aged 10 to 14 (7.6% compared to 6.0%) • A larger percentage of persons aged 5 to 9 (7.1% compared to 5.7%) • A larger percentage of persons aged 0 to 4 (7.1% compared to 6.0%) • A larger percentage of persons aged 40 to 44 (8.0% compared to 7.1%)

From 2006 to 2011, the District Council of Mount Barker's population increased by 3,330 people (12.6%). This represents an average annual population change of 2.4% per year over the period. The largest changes in age structure in this area between 2006 and 2011 were in the age groups:

• 60 to 64 (+531 persons) • 65 to 69 (+486 persons) • 50 to 54 (+307 persons) • 40 to 44 (+301 persons)

An analysis of the jobs held by the resident population in the District Council of Mount Barker in 2011 shows the three most popular occupations were:

• Professionals (2,859 people or 18.9%) • Technicians and Trades Workers (2,329 people or 15.4%) • Clerical and Administrative Workers (2,231 people or 14.7%)

In combination these three occupations accounted for 7,419 people in total or 49.0% of the employed resident population. In comparison, Greater Adelaide employed 21.6% in Professionals; 14.0% in Technicians and Trades Workers; and 15.4% in Clerical and Administrative Workers.

The major differences between the jobs held by the population of the District Council of Mount Barker and Greater Adelaide were:

• A larger percentage of persons employed as Managers (13.5% compared to 11.1%) • A larger percentage of persons employed as Technicians and Trades Workers (15.4%

compared to 14.0%) • A smaller percentage of persons employed as Professionals (18.9% compared to

21.6%)

The number of employed people in the District Council of Mount Barker increased by 2,126 between 2006 and 2011. The largest changes in the occupations of residents between 2006 and 2011 in the District Council of Mount Barker were for those employed as:


• Professionals (+566 persons) • Clerical and Administrative Workers (+367 persons) • Community and Personal Service Workers (+342 persons) • Technicians and Trades Workers (+288 persons)

In 2011, there were 647 people who caught public transport to work (train, bus, tram or ferry) in the District Council of Mount Barker, compared with 10,842 who drove in private vehicles (car – as driver, car – as passenger, motorbike, or truck). Analysis of the method of travel to work of the residents in the District Council of Mount Barker in 2011 compared to Greater Adelaide shows that 4.4% used public transport, while 73.4% used a private vehicle, compared with 8.3% and 70.9% respectively in Greater Adelaide. The major differences between the method of travel to work of the District Council of Mount Barker and Greater Adelaide were:

• A larger percentage of persons who worked at home (5.6% compared to 3.2%) • A larger percentage of persons who travelled by car (as driver) (66.7% compared to

64.4%) • A smaller percentage of persons who travelled by train (0.1% compared to 2.1%) • A smaller percentage of persons who travelled by bus (4.3% compared to 5.9%)

The largest changes in the method of travel to work by resident population in the District Council of Mount Barker between 2006 and 2011 were for those nominated:

• Car - as driver (+1,619 persons) • Did not go to work (+233 persons) • Bus (+148 persons) • Worked at home (+78 persons)

Analysis of individual income levels in the District Council of Mount Barker in 2011 compared to Greater Adelaide shows that there was a higher proportion of persons earning a high income (those earning $1,500 per week or more) and a lower proportion of low income persons (those earning less than $400 per week).

Overall, 11.1% of the population earned a high income, and 34.5% earned a low income, compared with 10.2% and 37.3% respectively for Greater Adelaide. The major differences between the District Council of Mount Barker's individual incomes and Greater Adelaide's individual incomes were:

• A larger percentage of persons who earned $1250-$1499 (6.4% compared to 5.4%) • A larger percentage of persons who earned $600-$799 (12.0% compared to 11.1%)


• A larger percentage of persons who earned $400-$599 (13.1% compared to 12.3%) • A smaller percentage of persons who earned $200-$299 (9.6% compared to 11.3%)

Analysis of household income levels in the District Council of Mount Barker in 2011 compared to Greater Adelaide shows that there was a similar proportion of high income households (those earning $2,500 per week or more) and a lower proportion of low income households (those earning less than $600 per week). Overall, 13.8% of the households earned a high income, and 19.5% were low income households, compared with 13.5% and 23.7% respectively for Greater Adelaide. The major differences between the household incomes of the District Council of Mount Barker and Greater Adelaide were:

• A larger percentage of households who earned $1500-$1999 (13.2% compared to 11.3%)

• A larger percentage of households who earned $2000-$2499 (9.8% compared to 8.1%)

• A smaller percentage of households who earned $300-$399 (5.5% compared to 7.4%)

• A smaller percentage of households who earned $200-$299 (2.1% compared to 3.1%)

1.4.3 Residential Building Approvals The District Council of Mount Barkerbuilding approvals are used as a leading indicator of the general level of residential development, economic activity, employment and investment. Residential building activity depends on many factors that vary with the state of the economy including interest rates, availability of mortgage funds, government spending and business investment. Large financial changes or shocks, such as the Global Financial Crisis of 2008/09 can be observed in the data. However, as highlighted by the following table, the number of building approvals can fluctuate substantially from year to year simply as a result of the short-term nature of many construction projects, and the cyclical nature of the industry.


Table 2 - Residential Building Approvals District Council of Mount Barker Number Annual change Year (ending June 30) Houses Other Total Houses Other Total 2012-13 218 0 218 -28 -1 -29 2011-12 246 1 247 -54 +1 -53 2010-11 300 0 300 -87 -170 -257 2009-10 387 170 557 +124 +165 +289 2008-09 263 5 268 -35 -55 -90 2007-08 298 60 358 +31 +40 +71 2006-07 267 20 287 +17 +20 +37 2005-06 250 0 250 -14 -40 -54 2004-05 264 40 304 -160 +40 -120 2003-04 424 0 424 +43 -10 +33 2002-03 381 10 391 +12 +6 +18 2001-02 369 4 373 +206 -6 +200 2000-01 163 10 173 -142 +4 -138 1999-00 305 6 311 +82 +6 +88 1998-99 223 0 223 Source: Australian Bureau of Statistics, Building Approvals, Australia (8731.0). Compiled and presented in profile.id by .id the population experts (Usual residence data) 1.4.4 Migration The semirural environment, good transport links to Adelaide and relatively affordable housing have acted as significant drivers for growth in recent years. Since 2001 population growth rates have been well above the average for South Australia – sometimes recording rates three times the amount for the entire state. An understanding of migration trends is important in determining where markets are coming from for a given area. The following map and associated tables highlights that, between 2006 and 2011, this area gained residents from overseas, the Adelaide Hills (DC), Tea Tree Gully, Mitcham, Marion and Onkaparinga council areas and lost residents to Alexandrina (DC).

http://home.id.com.au/about-us/what-does-id-do


Map 3 - Net Migration

Note: the figure shown on the above map for Adelaide Hills (DC) of +1,400 net migration does not align with the net migration figure of +690 shown in the table below. It is assumed that the figure of +690 is correct. Table 3 - Migration into and out of the area, 2006 to 2011 District Council of Mount Barker Number Current residents who moved at least once between 2006 and 2011 11,454 Residents who had moved within the District Council of Mount Barker 3,853 Migration from other parts of South Australia 5,421 Migration to other parts of South Australia 3,840 Net Migration from other parts of South Australia 1,581 Migration from other parts of Australia 1,304 Migration to other parts of Australia 1,061 Net Migration from other parts of Australia 243 Migration from other countries 739 Migration to other countries Net Migration from other countries 739


Table 4 - Migration between the area and other States/Territories District Council of Mount Barker State / Territory In migration Out migration Net migration New South Wales 268 175 93 Victoria 320 282 38 Queensland 298 311 -13 South Australia 5,421 3,840 1,581 Western Australia 142 148 -6 Tasmania 62 42 20 Northern Territory 167 89 78 Australian Capital Territory 47 14 33 Table 5 - Top 10 LGAs ranked by net loss to the area District Council of Mount Barker LGA In migration Out migration Net migration Alexandrina (DC) 278 680 -402 Murray Bridge (RC) 213 282 -69 Victor Harbor (C) 23 85 -62 Cairns (R) 6 45 -39 Sunshine Coast (R) 16 39 -23 Greater Geelong (C) 0 19 -19 Moreton Bay (R) 19 37 -18 Light (RegC) 4 21 -17 Yankalilla (DC) 20 36 -16 Horsham (RC) 0 15 -15 Table 6 - Top 10 LGAs ranked by net gain to the area District Council of Mount Barker LGA In migration Out migration Net migration Adelaide Hills (DC) 1,251 561 +690 Onkaparinga (C) 527 296 +231 Mitcham (C) 314 140 +174 Tea Tree Gully (C) 205 75 +130 Marion (C) 230 121 +109 Salisbury (C) 179 108 +71 Charles Sturt (C) 183 116 +67 Unley (C) 180 117 +63 Burnside (C) 190 130 +60 Port Adelaide Enfield (C) 173 119 +54

1.4.5 Place of Employment Journey to Work data show how many residents work locally and how many commute out of the area and where they commute to. Some areas consist mainly of dormitory suburbs and the majority of the residents commute out to work. Other areas have large employment centres which attract a local workforce. Understanding where the District Council of Mount Barker residents go to work assists in understanding the degree of employment self-containment within the Council area.


The following table highlights that the majority of residents work within the Council area followed by the City of Adelaide and the Adelaide Hills (DC) with 3.4% employed in the Rural City of Murray Bridge. The next table shows the place of usual residence for people working in the District Council of Mount Barker with workers being drawn externally from the Alexandrina, Adelaide Hills and Murray Bridge council areas.

Table 7 - Place of Employment - Mount Barker (SLA) Residents

LGA of Employment Residents

(no.) (%) Mount Barker (DC) - Central 4,652 30.7 Adelaide (C) 1,807 11.9 Mount Barker (DC) Bal 1,089 7.2 POW No Fixed Address (SA) 759 5.0 Adelaide Hills (DC) Bal 527 3.5 Murray Bridge (RC) 514 3.4 POW not stated 469 3.1 Adelaide Hills (DC) - Central 442 2.9 West Torrens (C) - East 376 2.5 Alexandrina (DC) - Strathalbyn 360 2.4 Burnside (C) - South-West 295 1.9 POW Capital city undefined (Greater Adelaide) 278 1.8 Norw. P'ham St Ptrs (C) - West 270 1.8 Unley (C) - East 239 1.6 Mitcham (C) - Hills 182 1.2 Port Adel. Enfield (C) - Park 166 1.1 West Torrens (C) - West 162 1.1 Mitcham (C) - West 157 1.0 POW State/Territory undefined (SA) 145 1.0 Marion (C) - Central 122 0.8 Unley (C) - West 120 0.8 Onkaparinga (C) - North Coast 117 0.8 Adelaide Hills (DC) - Ranges 116 0.8 Charles Sturt (C) - Inner East 110 0.7 Port Adel. Enfield (C) - Inner 92 0.6 Mitcham (C) - North-East 91 0.6 Salisbury (C) Bal 88 0.6 Charles Sturt (C) - North-East 87 0.6 Marion (C) - North 85 0.6 Port Adel. Enfield (C) - East 66 0.4 Onkaparinga (C) - Hills 66 0.4 Burnside (C) - North-East 58 0.4 Norw. P'ham St Ptrs (C) - East 54 0.4


LGA of Employment Residents

(no.) (%) Port Adel. Enfield (C) - Port 53 0.4 Unincorporated SA - Unincorp. Far North 51 0.3 Port Adel. Enfield (C) - Coast 50 0.3 Campbelltown (C) - West 48 0.3 Charles Sturt (C) - Inner West 46 0.3 Holdfast Bay (C) - North 41 0.3 Adelaide Hills (DC) - North 41 0.3 Prospect (C) 26 0.2 Campbelltown (C) - East 20 0.1 Salisbury (C) - South-East 19 0.1 Onkaparinga (C) - Woodcroft 18 0.1 Onkaparinga (C) - South Coast 15 0.1 Playford (C) - Elizabeth 15 0.1 Walkerville (M) 14 0.1 Onkaparinga (C) - Reservoir 14 0.1 Tea Tree Gully (C) - South 12 0.1 Salisbury (C) - Central 11 0.1


Table 8 - Place of Usual Residence - Mount Barker (SLA) Employees

LGA of Residents Employees

(no.) (%) Mount Barker (DC) - Central 3,954 43.1 Mount Barker (DC) Bal 1,787 19.5 Alexandrina (DC) - Strathalbyn 607 6.6 Adelaide Hills (DC) Bal 488 5.3 Adelaide Hills (DC) - Central 397 4.3 Murray Bridge (RC) 225 2.5 Adelaide Hills (DC) - Ranges 193 2.1 Mitcham (C) - Hills 108 1.2 Adelaide Hills (DC) - North 69 0.8 Onkaparinga (C) - Reservoir 66 0.7 Onkaparinga (C) - Woodcroft 60 0.7 Onkaparinga (C) - South Coast 57 0.6 Onkaparinga (C) - Hills 53 0.6 Alexandrina (DC) - Coastal 50 0.5 Burnside (C) - South-West 49 0.5 Marion (C) - Central 48 0.5 Unley (C) - East 39 0.4 Mitcham (C) - West 38 0.4 Mitcham (C) - North-East 35 0.4 Marion (C) - North 33 0.4 Burnside (C) - North-East 33 0.4 Norw. P'ham St Ptrs (C) - West 29 0.3 West Torrens (C) - East 28 0.3 Unley (C) - West 27 0.3 Victor Harbor (C) 26 0.3 Tea Tree Gully (C) - South 25 0.3 Prospect (C) 24 0.3 Campbelltown (C) - East 23 0.3 Norw. P'ham St Ptrs (C) - East 23 0.3 Marion (C) - South 22 0.2 Adelaide (C) 21 0.2 Campbelltown (C) - West 20 0.2 Holdfast Bay (C) - North 19 0.2 Port Adel. Enfield (C) - Inner 19 0.2 Mid Murray (DC) 19 0.2 Onkaparinga (C) - Hackham 17 0.2 Barossa (DC) - Barossa 17 0.2 Port Adel. Enfield (C) - East 16 0.2 West Torrens (C) - West 15 0.2 Tea Tree Gully (C) - Hills 14 0.2 Charles Sturt (C) - Inner West 12 0.1 Onkaparinga (C) - Morphett 11 0.1

1.4.6 Industry of Employment by Occupation


The following table highlights the industry of employment by occupation. This highlights that the major industry sectors (more than 400 persons) in Mount Barker are:

Table 9 – Industry of Employment by Occupation (400 persons or more)

Industry Sector Number of Persons Retail trade 1,642 Health care and social assistance 1,085 Education and training 879 Manufacturing 791 Accommodation and food services 777 Construction 630 Agriculture, forestry and fishing 464 Professional, scientific and technical services 429 Public administration and safety 422 This is summarised in the following chart. Chart 1 - Industry of Employment by Occupation

86

103

110

131

133

156

175

249

254

264

386

422

429

464

630

777

791

879

1,085

1,642

Inadequately described/Not stated

Arts and recreation services

Information media and telecommunications

Electricity, gas, water and waste services

Financial and insurance services

Rental, hiring and real estate services

Mining

Administrative and support services

Transport, postal and warehousing

Wholesale trade

Other services

Public administration and safety

Professional, scientific and technical services

Agriculture, forestry and fishing

Construction

Accommodation and food services

Manufacturing

Education and training

Health care and social assistance

Retail trade

Mount Barker LGAIndustry of Employment by Occupation

(Number of persons aged 15 years & over)Source:AUSTRALIAN BUREAU OF STATISTICS 2011 Census of Population and Housing


1.4.7 Literature Review This section provides a summary of information sourced from a review of relevant literature sources.

Table 10 – Literature Review Summary

Document

Key Points

Economic Impacts Associated with Population Growth in the Mt Barker District, CEGA and EconSearch July 2010

Report examines the impact on the regional economy from population growth in the Mt Barker district over the next 15 years. Report notes that with a target of 40% of employed residents working locally: • Population growth of 2.7% pa would equate to 2,730 new jobs. • Population growth of 4.3% pa would equate to 4,940 new jobs. • Population growth of 5.8% pa would equate to 7,580 new jobs.

DCMB Strategic Plan 2012-2017

Plan states that the strategic imperative for economic development is to: Pursue initiatives and opportunities for economic development, regional employment and tourism. The stated outcome is: New employment opportunities created in the region. The performance measures are: 1. Number of new jobs created in the District and regionally. 2. Percentage of working population employed within the

District/region. 3. Number of jobs in the District filled by District residents. 4. Increased visitation, tourism spend and number of sustainable

tourism operations within the District. DCMB State of the District Report, URPS December 2013

Report was commissioned to underpin the development and implementation of Council’s Strategic Plan and draws together research into the key determinants of environmental, social and economic sustainability. The report contains a section on the economy which is largely statistical and has been sourced from ABS data.

DCMB Towards an Economic Sustainability Strategy for Mt Barker, Workshop Summary Paper October 2011

Workshop undertaken to assist in the development of an economic sustainability strategy. The paper notes that Mt Barker does not have a coherent image or identity and this will present a challenge in attracting business investment and the interest of new homebuyers. It also notes that the Town Centre lacks a sense of arrival, that there are few working opportunities for youth and that Council must develop a clear and integrated plan that builds a vision for the town. The paper also states that the economic strengths (primary production, mining and tourism) should be built upon while seeking new areas of focus that are complementary. Areas of potential economic development identified were:

• Education precinct – especially tertiary education and international students.

• Campus-style office park. • Bio-tech precinct. • Stop-off point for semi-trailers. • New hotel and tourist accommodation.


• Centre of excellence in sport and recreation. • Aged care and retirement living. • New industrial park. • Home based businesses especially on-line based

businesses. Mt Barker, Littlehampton & Nairne Structure Plan

The Plan recognises that a growing and diverse economy is vital if we are to attract and retain people. It is intended that greater flexibility in land use will enhance industries of strategic importance to the State’s future. Ensuring there is an adequate supply of employment land, which is well located and protected from incompatible land uses, is a precondition for maximising economic growth. The Structure Plan will promote a range of local employment and business activities. Regard has been given to the following design principles in the sector plans:

• providing sufficient land for employment (including centres) with effective access to freight networks,

• infrastructure and employment bases • providing education and vocational training within easy

access (including in shopping/activity centres) of the • community • encouraging local employment self-sufficiency – within the

desired range of 40-60% • promoting the importance of existing retail and

commercial strips • promoting the area as a local/regional tourist destination.

Regional Development Australia Adelaide Hills Fleurieu and Kangaroo Island 2013 – 2016 Regional Roadmap

The report notes that the Mt Barker LGA is strong across most capital groups with the exception of social capital where voluntary work and community strength are lower than the median for LGAs in South Australia. Standouts include a diverse economy, relatively lower proportions of persons 65 years of age and over and lower levels of lone person households. The Adelaide Hills and Mt Barker LGAs have particular strengths in:

• good health, high levels of post school qualifications and good levels of technological readiness such as access to the internet

• an efficient labour market with relatively low unemployment rates, high participation rates and low rates of welfare dependence and

• market advantages in the size of the economy and its population.

Economic Impact Projections for UNESCO World Heritage Site Listing of the Mount Loft Ranges Agrarian Landscape – Econsearch 2011

The report analyses the value of agriculture and related industries to the regional economy. It examines the potential economic impact to be gained from World Heritage Listing. Council is supporting the World Heritage because it will:

• result in significant economic development opportunities for the region, primarily in the agriculture and tourism sectors

• put the region on the ‘world stage’ and give it global prestige

• strengthen the branding and marketing of local produce


and products which will benefit farmers and tourism operators within the region

• result in increased investment, new business opportunities and potential ‘provenance premiums’ for local products.

1.5 Strategy Development Challenges While the proposition has been made above that there is a need for Local Government to be involved in facilitating economic development, there are some significant challenges present to ensure that it is a wise use of scarce Council resources. The challenges include: 1. There is no right answer as to what is a good strategy. There are aspects of what will make a strategy a good strategy. These basic factors include:

• It will be well grounded – understanding the environment, the opportunities and the challenges, and in this context will be region specific.

• It needs to be implementable – it needs to have actions that can be identified and

outcomes that are measurable.

• It needs to be targeted – to identify core actions that can deliver value.

• It needs to be flexible – to consider responses to the changing environment. However, as noted above, there are many choices that must be made that will inform the structure of the strategy, and different choices (which are not right or wrong) will lead to different directions within the strategy. In short, it is impossible to look at other Councils and say that strategy is a good one, and that strategy is a bad one. It must be region specific and be based on the decisions the region is prepared to make. More aggressive strategies have the potential to create greater outcomes, but at greater risk and cost – and so they need to be well defined and well argued. 2. The strategy and commitment must be long-term, but this will be required in the face of

short term (and unprecedented) uncertainty.

3. The public sector is facing significant financial limitations and expenditure to support economic development activities faces many competing needs.

There are many activities challenging for the limited pool of public sector funds, and this is especially difficult for local government due to limited funding sources (heavily dependent on rate revenues and on commonwealth grants). Implementing anything other than a basic economic development strategy will carry some costs, and as identified above will also carry some risk. In this context, it is critical that the economic development strategy has


acknowledged targets and that the impact back on the financial sustainability of Council is clearly understood. Growth in the number of businesses and increasing the economic output of local businesses will be one of the most effective strategies to expand and secure the rate base of the District. It will also provide residents with a greater number and diversity of jobs and opportunities for education and training.

1.6 Summary of Strengths and Weaknesses Following is a summary of Mount Barker’s major strengths and weaknesses as identified in this internal analysis of the region:

Major Strengths

• Location – geographical position and access in relation to Adelaide/Murray Bridge/Goolwa.

• Natural environment and high quality of life. • Main street potential. • Strategically located on the Adelaide – Melbourne transport corridor. • 30 minutes from CBD with freeway access. • Active business culture. • Highly attractive residential location. • Hub of premium wine and regional food producers/providers e.g. Longview,

Beerenberg, Petaluma.

Major Weaknesses

• Lack of a clearly defined town and regional vision. • Poorly defined branding and positioning. • Lack of regional job opportunities. • Lack of major long term business drivers. • Poor sense of arrival. • Need for improved public transport.

2. EXTERNAL ANALYSIS The Mount Barker Economic Development Strategy (EDS) must identify and implement key economic strategies that will increase employment and the Gross Regional Product (incomes) per capita in the Mount Barker Council region and contiguous economic areas.

Through the EDS, Council is seeking to stimulate economic activity in the region by encouraging the growth of specific local industries, as well as attracting and supporting new


complimentary industries and individual businesses from elsewhere in Australia or from overseas. In order to deliver such outcomes, it is necessary to understand and consider:

• Global, national and State drivers of economic growth.

• Global, national and State opportunities and challenges for regional economic development.

The following External Audit has been undertaken in order to identify opportunities and challenges associated with current and recent global, national, state and regional trends that are relevant to the Mount Barker EDS.

2.1 Global The 21st century commenced with an acceleration of Asian economic development and population growth, especially in China, India and Indonesia, largely in response to economic strategies designed to avoid the economic and political crises experience during the 1990s. As Asian economies developed, global urbanisation moved from western to Asian cities as large populations sought to take advantage of urban employment and lifestyle opportunities. This was accompanied by rapid growth in commodity demand and prices, especially from China and India, fuelling recent ‘mining booms’ in Australian states, including South Australia, along with increasing oil prices driven by increased global demand. By 2008 however, a global credit crisis and associated share market crash resulted in global economic turbulence from which world economies have yet to fully recover – the Global Financial Crisis (GFC). Despite Australia faring better than most western economies, the GFC has had severe consequences for Australian and regional economies including, for example:

• A decline in business confidence. • Subdued demand and prices for residential, commercial and industrial property. • A loss of retail confidence (combined with the impacts of shopping on-line). • Rising unemployment and lower incomes.

Today there is still a certain amount of global economic uncertainty as recovery from the GFC has been globally inconsistent and Asian demand for resources has started to recede. While Australia has to date weathered the GFC somewhat better than most western economies, mounting government debt problems in the USA and Europe are still causing global concern. The downgrading of the USA’s credit rating in 2011 from AAA to AA+ was accompanied by another global share market crisis (August 2011) and another period of global economic uncertainty that remains today.


Other important global trends important in the context of the Mount Barker EDS include:

Sustainability Governments, businesses and consumers are being more highly driven by the need for environmentally and financially sustainable practices. There has been an emergence of ‘eco-firms’ and higher values attached to eco-friendly products and services. In Australia, the recent Carbon Tax announcement reflects global environmental concern but has been accompanied by widespread community debate and now the imminent demise of the tax. Commoditisation of Water and Carbon Water and carbon are rapidly becoming commodities, which is leading to new industries in areas such as water management, green energy production, hybrid vehicles, nano-technology and carbon control. By way of example, CSIRO is supporting a Green Car Innovation Fund that is working on new industries in battery technology, light metals, composite materials, efficient and compact electric motors, and electronics for integrating these systems in advanced vehicles. Also, the Wakefield Group, a combination of northern Adelaide Councils, has initiated a public/private water capture and reuse scheme which could be replicated by other Councils including Mount Barker. Food, Water and Energy Security Global population growth and climate change are elevating the importance of food, water and energy security in the policies of nations, especially in Asia. The Mount Barker EDS must have sustainable food, water and energy security as high priority infrastructure requirements to support a world class economic structure along with associated market opportunities for investment and export development. Biomass and Biofuels It is predicted that E10 fuel (10 per cent ethanol) will increase to 25 per cent of all fuel needs by 2030. The successful uptake of E10 will depend on the ability of biofuel industries to deliver cost effective product in a sustainable way that does not compete with food security. Fuels derived from non-food feed stocks such as Arundo Donax (giant reeds), algae, the woody part of plants, grasses, sawdust, etc. appear to have good prospects for biofuel industry development. Asia’s Urbanisation and Economic Resurgence The global financial crisis has emphasised the long-term trend and re-emerging dominance of Asia in terms of economic development and population growth, especially China, India and Indonesia. Western economic dominance, temporarily achieved via the industrial revolution, colonisation and world wars, is being eroded by Asia’s economic development resurgence driven by abundant and cheap labour and aspirations for improved standards of living. International trade is starting to recover, but more particularly it is China, India, Indonesia and Asia generally that are moving back to pre-GFC levels the quickest. Major developments associated with


this long-term trend, which the short-term shock of the GFC has accelerated, include:

• The loss of manufacturing capacity and jobs in western economies, including Australia, as manufacturing gravitates to Asia.

• Strong Asian demand for Australian resources, especially mining and energy.

• Strong growth in Asian trade with Australia.

• Growth of the Asian middle class with aspirations for higher living standards including high quality, clean food and beverage products.

• Strong growth in Chinese tourism with a focus on wine, gambling and golf.

• A focus in western economies on higher value added manufacturing

afforded some protection by innovation and research.

• A resurgent Australian services sector (in terms of economic growth and employment) especially in sectors afforded some protection from import competition. This includes health, education, transport and business and financial services.

It is therefore asserted that demand for Australian resources and services will surge in coming years on the back of population growth (Asian and Australian) and sustained demand increase from Asia for Australian mining, energy and agricultural exports. Global Urban Migration Global populations are migrating to urban areas at an unprecedented rate. More than half the world’s population (3.3 billion) now live in urban areas. By 2030 this is expected to increase to five billion. This will place enormous demands on urban infrastructure to deliver daily food and water, remove waste, provide transport and maintain sustainable living environments. Ageing Populations Ageing of populations in industrialised countries, including Australia, will have important demand implications for human services including the delivery of government and commercial services. Internet Revolution From globalisation to global participation. There has been rapid transition from Internet consumption to creation via uploading video, music and podcasts, to blogs and personal sites. Companies and consumers have much greater expectations today when seeking information.


Financial Globalisation Financial globalisation and a rapid increase in international capital flows will result in higher risks associated with global financial trends.

2.2 National Australia was considered somewhat fortunate to have escaped a technical recession during the global financial crisis compared with western counterparts in the USA and Europe. This was attributable to several factors including:

• Strong economic ties to powerhouse Asian economies – China and India. • A strong banking sector. • Low levels of government debt. • Strong population growth. • The Government’s economic stimulus package.

In Australia, there have been some particular developments in recent times that have had important consequences for State and regional economies. These include:

• Notwithstanding the recent fall below US$ parity, substantial appreciation of the Australian dollar and its consequent impact on exports, imports and tourism trends.

• GDP growth has slowed significantly – leading to higher savings rates.

• Conclusion of the economic stimulus projects which contributed to Australia’s post-GFC performance.

• Retail slide reflecting consumer uncertainty.

• Climate change and unpredictable weather patterns. • Commencement of the National Broadband Network (NBN).

• Breaking of the drought.

2.3 State and Regional Population and Economic Growth South Australia’s economic growth rate historically lags and is generally lower than the Australian average. In many studies and reports on the State’s economy this is attributed to South Australia having a lower population growth rate than other mainland States as shown in the table below.


Table 11 Population Growth

Population at end September Quarter 2012

Change On Previous Year

Change On Previous Year

'000 '000 %

New South Wales 7 314.1 86.0 1.2 Victoria 5 649.1 94.8 1.7 Queensland 4 584.6 91.4 2.0 South Australia 1 658.1 16.4 1.0 Western Australia 2 451.4 81.7 3.4 Tasmania 512.2 0.5 0.1 Northern Territory 236.3 4.2 1.8 Australian Capital Territory 376.5 7.4 2.0

Australia(a) 22 785.5 382.5 1.7 Source: ABS Cat 3101.0 (Preliminary Data) - Includes Other Territories.

However, these assessments ignore the significant structural differences between the economies of South Australian and the other States which must also contribute significantly to differences in economic performance. South Australia, historically more heavily reliant on manufacturing and substantially under-represented in services sector activity (business services, transport, etc.), has in the past not been well placed to take advantage of emerging new global opportunities. Also, business downturns bite much deeper in South Australia with much larger negative economic growth rates during recessions. In the 10 years to 2008, South Australia’s average annual economic growth rate (Gross State Product) was the lowest of all mainland states and well below the national average. However, and significantly in the 3 years between 2008 and 2011 in the post GFC period, South Australia’s average annual economic growth rate (3.1%) exceeded the national average (2.5%) and ranked only second behind Western Australia (4.2%). This can be largely attributed to the State’s mining boom founded on global demand and increased exploration activities (stimulated by the State Government’s PACE program).


Table 12 Gross State Product

Average Annual Growth Rates (%) 2008 - 2011

Australia (GDP) 2.5% Queensland 2.0% Victoria 2.2% ACT 1.8% New South Wales 2.1% Western Australia 4.2% South Australia 3.1% Tasmania 2.7%

(Source: ABS Cat No. 5220.0)

However, in 2011-12 South Australia’s economic performance returned to pre-GFC levels and once again became the lowest of all mainland states and well below the national average (the previous 3 years keeping the 10 year average at a higher level) as shown in Table 13 below.

Table 13

GSP 2011 - 2012

Annual growth

Average Annual Compound Growth Rate (2000-01 to 2011-12)

2011-12

New South Wales 2.4 2.2 Victoria 2.3 2.9 Queensland 4.0 4.0 South Australia 2.1 2.5 Western Australia 6.7 4.8 Tasmania 0.5 2.1 Northern Territory 4.4 3.6

Australian Capital Territory 3.5 3.2

Australia(a) 3.4 3.1

The State's Economic Development Board (www.southaustralia.biz ) notes that South Australia is an economy in transition - evolving from its traditional manufacturing and agricultural base to include new, advanced industries and knowledge-intensive services. Expansion in mining, defence and education and the emergence of clean and renewable technologies are positioning South Australia for a prosperous future.

Investment Climate Following a period of sustained investment in public and private sector infrastructure and productive capacity, South Australia should be in a position to offer investors an attractive

http://www.southaustralia.biz/


and competitive environment for business and industrial investment for the following reasons:

Public Sector Investment The State has had strong growth in public sector infrastructure investment. Annual investment has more than doubled since 2002, reaching a total of $3.8 billion in 2010, laying a strong foundation for future private investment. Private Sector Investment Public sector infrastructure investment has provided the confidence for private sector investment in productive capacity for sustained economic growth. Economic Diversification - Along with the recent mining boom, increased economic diversification will provide further stimulus to the South Australian economy including major defence and community infrastructure projects. Population Growth Population growth, an important element of demand sustainability and long term investor confidence, is a key element of the State Government’s Strategic Plan which is targeting a population of 2 million people by 2027. The State’s aggressive population growth strategy is reflected in recent growth rate trends and a substantial narrowing of the gap between the South Australian and national growth rates. Cost Competitive South Australia is the second least costly State to set up and do business in Australia and is the most cost-competitive State in Australia for Research and Development and the Corporate Services industries.

Along with mining investment, increased economic diversification is expected to provide further stimulus to the South Australian economy including:

• Defence (e.g. Air Warfare Destroyer Contract) • Ongoing investment in transport infrastructure (e.g. South Road Superway) • Health (e.g. Royal Adelaide Hospital) • Adelaide Oval Redevelopment


A preliminary assessment of opportunities and challenge for the Mount Barker EDS based on the above analysis is included in table 14.

Table 14 Major Opportunities

1. Development of a Biofuels Industry

2. Provide Services for Ageing Populations

3. Export of Food and Water Technology

4. Use of the National Broadband Network

5. Strengthening and promotion of the agriculture sector through improved policy,

value adding and marketing

6. Expansion of creative industries including art, music and technology

7. Environmentally Sustainable/Clean Industry Branding

8. Sustainable Business Parks – Especially Based on Food Value Adding and

Technologies

9. Establish Commercial Links to Asia

10. Attraction of High Value Added and Sustainable Industries, Especially in

Agribusiness, Knowledge and Service Industries

11. Integration of the Mount Barker region into Global/Asian Supply Chains

12. Attraction of Industries Based on Clean and Renewable Technologies

13. Promotion and Use of Renewable Energies

14. Attraction of Chinese Tourists Associated with Increasing Visitation to Adelaide

15. Establish Sister City Relationships with Targeted Asian Cities

16. Increased demand for retirement living in lower cost urban areas

17. Transport infrastructure improving access to Mount Barker with opportunities for

workforce commuting and increased tourism

18. Continued information technology infrastructure improvements increasing

opportunities to work from home

19. Sustainable Population Growth

20. Development of Traditional and New Service Industries

21. Development and Attraction of Hospitality Industries to Support Tourism

22. Identification and Attraction of Major Events

23. Development and Attraction of Education and Training Industries

24. Identify and Attract Grant Funds into Major Economic Development Initiatives


Table 15 Major Challenges

1. $A Appreciation and Impact on Exports and Tourism

2. Climate Change

3. Return of Drought Conditions

4. Another Global Financial Crisis

5. Over Development and poor quality development

6. Over Population

7. Polluting Industries

8. Cost of Infrastructure Augmentation

9. Loss of Agricultural Land to Urban and Commercial/Industrial Development

3. MAJOR INVESTMENT PROJECTS A range of assumptions has been made in order to estimate potential new investment in the Mount Barker region over the next 20 years required to support expected population growth. Key assumptions include a population increase of 20,000 people and the creation of approximately 7,500 houses over 20 years. Cost and timing assumptions are based on evenly spaced development over the 20 year timeframe. This analysis is based on a supply schedule and does consider the underlying demand for the properties. Obviously, population growth requires there to be a demand for the properties that are completed. This demand is implied by the extent of economic development in the State as a whole and in the Adelaide Hills region more generally, and as such will be critically dependent on aligned economic development strategies for Mount Barker. The area as a whole is targeted for significant population growth. The 30 Year Plan for Greater Adelaide has a target/prediction of an increase of 560,000 people in the greater metropolitan area over a thirty year period, and while there is a considerable emphasis on infill and greater density, the bulk of this growth will be in the fringe. Anticipated major new investment and infrastructure projects, and costs estimates, are detailed below. Note that much of this investment could be expected regardless of this Economic Development Strategy and is provided as the basis for the economic planning required to measure economic outcomes and to determine the new investment required in order to increase the percentage of jobs provided within the region to Mount Barker residents. Note also that a number of the projects in Table 16 are at the conceptual stage only and therefore may not happen and/or the $ figures allocated against may vary substantially.


External Infrastructure - External Road Upgrades, Recycled Water, etc.

Table 16

Project $M

Waste Water $100.0

Tourist Park Relocation $15.0

Local Govt Centre $15.0

New Freeway Interchange $42.0

Hahndorf Academy Lift & Improvements $0.5

Polo Field Redevelopment $30.0

Stephenson Recreation Sports Hub $50.0

RCMB/DCMB Water Independence $100.0

Environmental Services Centre $10.0

Deck Car Park Town Centre $10.0

Sub Total $372.5

Source: The District Council of Mount Barker

Internal Infrastructure New Land Division The internal infrastructure is assumed to proceed proportionally with housing construction and is estimated to cost $40,000 per allotment or $300 million for 7,500 new allotments catering for:

• Roads • Footpaths • Power • Water, Stormwater & Sewer • Telecommunications

Housing Housing construction investment is estimated at an average of $250,000 per house for 7,500 houses, or $1,875 million investment over 20 years. Other Town Investment Other town investment estimates are based on the following assumptions related to the floor space that could potentially be constructed and per square metre costs by construction type6.

6 These estimates are based solely on Hudson Howells experience in other residential development projects and are only meant to be a guide as to possible investment levels over the 20 year period.


Table 17 - Additional Floor Space Estimates

Employment Type Additional Floor Space

Retail 40,000 m²

Bulky Goods 20,000 m²

Education 5,000 m²

Commercial/Office/Community 20,000 m²

Light Industry/Industry/Services/Trades 20,000 m²

Table 18 – Estimated Construction Costs (Including Fitout)

Component Establishment Costs (m2)

Commercial office space – above ground $2,400 m²

Bulky goods retailing/showrooms – include

landscaping and car parking

$2,000 m²

Industrial sheds–

include landscaping and car parking

$2,000 m²

Factory units–

include landscaping and car parking

$2,000 m²

Primary schools (buildings only) $3,050 m²

High schools (building only) $3,050 m²

Retail shops in a small centre $2,400 m²

While the costing detail is contained in the Excel model (and may vary considerably as alluded to earlier), the total estimated values of investment over 20 years are summarised below:

• External Infrastructure - $372.5 million • Internal Infrastructure - $300 million • Housing Investment - $1,875 million • Other Town Investments (based on $2,400 m2) - $252 million • Total - $2.8 billion (or an average of $140 million per annum over 20 years)



4. FUTURE ECONOMIC SCENARIOS AND KPI’s This section of the report quantifies the expected impact that implementation of the recommended Economic Development Strategy will have on the District Council of Mount Barker expressed as jobs and Gross Regional Product (or incomes). These forecast outcomes can be used by Council as Key Performance Indicators to assess the effectiveness of the EDS implementation.

4.1 Summary and Conclusions This section of the Economic Development Strategy presents an economic modelling perspective of the socio-economic futures for the District of Mount Barker based on the projects and key issues identified. Employment in the District has grown at an average of 3.6% per annum over the last decade – well in excess of the rates in the CBD of 1.5%. This growth has been experienced across a wide range of industries and has differed to trends in the Adelaide metropolitan and broader State areas. This historical outcome is set against a backdrop of the State’s poor economic performance internationally - which is expected to continue. Alternative scenarios for the District of Mount Barker have been based on the targeted level of population growth rate for the area with residential development targeting an increased population of 20,000 over 20 years. Specific projects have been identified in the strategy development phase to support this level of population growth. The potential investment projects and their associated estimated investment values have been analysed, and modelled within the framework of an economic planning model to estimate their impact on annual turnover by industry for the region, with low, medium and high growth scenarios developed. All scenarios have as an underpinning as follows:

• The medium scenario has been modelled with the population growth and target projects as described that will be required to support them – with required regional exports needing an estimated 2.3% growth rate per annum broadly across all industry sectors

• The low scenario incorporates the major projects, but includes a situation where

there are limited outcomes for the other economic drivers – and specifically that regional exports grow at only 1% per annum.

• The high scenario adds in some longer term targets for industry development outside the core projects – adding an additional 1% per annum growth rate to regional exports above the medium scenario.


The following figures illustrate the projected outcomes for population, employment and Gross Regional Product in the District of Mount Barker over the next 20 years for each scenario. The alternative scenarios show the magnitude of the outcomes that could be achieved around the population growth with a 20 year timeframe, and the implications for the major projects around additional activity required to support them. Such quantification enhances the strategic approach by understanding how individual outcomes translate through to a whole of economy impact. The core conclusion is that under the low scenario, while the population growth itself will generate some economic stimulus, there is insufficient exogenous demand (regional exports) growth to sustain a balanced economy. It would result in under-utilisation of the major projects, and very importantly, the proportion of local residents who will need to travel outside the area for employment will increase significantly with consequent costs related to freeway congestion, time travel costs, etc. The medium scenario indicates the level of exogenous demand to support a more balanced growth with employment and population growth in sync. The high scenario presents a more ambitious target to internalise the extent of local employment opportunities for the resident population. Table 19 illustrates the core outcomes in terms of the comparison to the current level of activity. It indicates (over 2011) for the expected case an increase in population of 21,000, an increase in Gross Regional Product (value added) of $0.9 billion and an increase in employment of over 5,000 (this is a 60% increase, relative to a 70% increase in GRP). This combination of activity involves a tripling of exports from the region, and a combination of $2.8 billion of investments in housing and major projects – with an additional $0.2 billion of other investment to support additional export growth. Table 19: Summary of Outcomes Increase Over No Economic Growth - 2011 to 2036

Low Expected High Increase in Population 20954 20954 20954 Increase in Gross Regional Product ($ M) 419 905 1833 Increase in Regional Employment (Total Jobs) 2082 5301 11133

Agriculture and Mining 148 627 1436 Manufacturing 180 678 1550 Education 272 296 392 Other Community Services 366 581 982 Entertainment, recreation and personal 100 254 530 Other 1016 2865 6243

%age increase in Regional Exports 64% 201% 443% New Investment Required ($ million) 1849 2994 5298


By 2036 the estimated annual value of Council rate revenue is $44 million higher in the medium scenario than under the do nothing scenario, while State Government revenue from activity in the region will be $81 million higher. In conclusion, the core implication of the modelling is that the expected or medium scenario maintains approximately the current ratio of local jobs to population growth and as such requires at least 42% (rising to 46%) of the local resident working population to travel out of the region for work. Note this requires trend regional export growth of 2.25% per annum to achieve this, and to be matched by new growth exports. The low scenario sees employment growth lagging population growth (1% annual growth in trend exports plus the same in new exports) while the high scenario sees it above (3.5% trend export growth, and the same in new export projects). Obviously the greater the ratio of employment opportunities to population provides a range of benefits, particularly in the pressure on transport infrastructure and in terms of benefits for residents. The summary of the core model outcomes relative to the 2011 position in graph form are as follows. Figure 3: Projections of Population Outcomes for the District of Mount Barker

Figure 4: Projections of Employment Outcomes for the District of Mount Barker –

Alternative Development Scenarios


Figure 5: Projections of Gross Regional Product Outcomes ($ million, 2014) for the District

of Mount Barker – Alternative Development Scenarios


4.2 Purpose of the Analysis This analysis is undertaken to assist in determining priorities for the Economic Development Strategy. A formal model has been developed that projects forward the outcomes for the region based on differing assumptions. The model allows the acknowledgement of core interactions in the local economy to ensure that the outcomes are assessed in a systems context. The table below summarises the potential major projects within the Economic Development Strategy and their associated priorities and timeframes. Note that value is estimate only, may vary considerably and may contain a mix of public and private sector investment. Table 20

Base Economic Structure Table 21 provides a summary of employment trends by industry within Mount Barker (and jobs held by a combination of Mount Barker residents, and people who reside outside the LGA). The region provides employment for around 1% of the state, but is relatively more important in retail trade. Employment in the region has been growing at well over double the rate of employment in the state as a whole, and the contribution to growth is broadly spread.

Value $m 0-5 YRS 5-10 YRS 10-20 YearsMajorProjectWaste Water $100.0 $100.00Tourist Park Relocation $15.0 $15.0Local Govt Centre $15.0 $15.0Freeway $42.0 $42.0Hahndorf Academy Lift & Improvements $0.5 $0.5Polo Field Redevelopment $30.0 $30.0Stephenson Recreation Sports Hub $50.0 $25.0 $25.0RCMB/DCMB Water Independence $100.0 $50.0 $50.00Environmental Services Centre $10.0 $10.0Deck Car Park Town Centre $10.0 $10.0Sub Total $372.5 $147.5 $75.0 $150.00Residential Development: = $1,875.0 $468.8 $468.8 $937.5

20,000 people over 20 years: 7,500 houses @ $250,000 Land Division Costs: $300.0 $75.0 $75.0 $150.0

7,500 @ $40,000Other Town Investments $252.0 $63.0 $63.0 $126.0

Commercial/Retail/Industrial/Education/Community/Trades/Bulky Goods etc Total $2,800 $754 $682 $1,364


Table 21: Employment Trends – Mount Barker – Employment in Region (i.e. Place of Work)

Source: ABS 2011 Census

Table 22 provides a summary of employment trends by industry for Mount Barker residents. The principle conclusion is that the region has more employment demand than it does have employment opportunities, which mean large numbers of residents need to look outside the region for their employment. The growth rate of local employment available has been consistent with the growth rate or employment demand. The industry of employment for local residents is similarly distributed to that of the state as a whole.

Table 22: Employment Trends – Mount Barker – Employment of Local Residents

Source: ABS 2011 Census

2001 2006 2011 Mt Barker

SA Mt Barker

SA 2001 2006 2011

Agriculture, forestry and fishing 617 530 463 5.1% 3.9% -2.8% -2.5% 1.7% 1.7% 1.6%Mining 25 43 176 1.9% 1.3% 21.6% 9.4% 0.6% 0.7% 1.8%Manufacturing 853 864 792 8.6% 10.6% -0.7% -1.7% 0.9% 1.0% 1.0%Electricity, gas, water and waste services 40 66 131 1.4% 1.4% 12.6% 5.3% 0.7% 0.9% 1.3%Construction 334 484 630 6.9% 7.5% 6.6% 4.6% 1.0% 1.1% 1.1%Wholesale trade 313 269 263 2.9% 3.5% -1.7% -1.6% 1.0% 1.1% 1.0%Retail trade 1,260 1,436 1,643 17.9% 11.2% 2.7% 1.5% 1.8% 1.8% 2.0%Accommodation and food services 367 559 778 8.5% 6.2% 7.8% 1.8% 1.0% 1.4% 1.7%Transport, postal and warehousing 140 190 254 2.8% 4.1% 6.1% 1.4% 0.5% 0.7% 0.8%Information media and telecommunications 49 160 110 1.2% 1.4% 8.4% -1.6% 0.4% 1.5% 1.0%Financial and insurance services 100 131 133 1.5% 3.0% 2.9% 1.0% 0.5% 0.6% 0.6%Rental, hiring and real estate services 110 137 157 1.7% 1.3% 3.6% 0.3% 1.2% 1.4% 1.7%Professional, scientific and technical services 229 338 429 4.7% 5.5% 6.5% 2.3% 0.7% 0.9% 1.1%Administrative and support services 135 256 250 2.7% 3.4% 6.4% 1.2% 0.6% 1.1% 1.0%Public administration and safety 143 307 421 4.6% 7.1% 11.4% 3.9% 0.4% 0.7% 0.8%Education and training 550 742 879 9.6% 7.9% 4.8% 2.1% 1.2% 1.4% 1.5%Health care and social assistance 639 947 1,082 11.8% 13.6% 5.4% 3.4% 0.9% 1.1% 1.1%Arts and recreation services 124 78 105 1.1% 1.3% -1.6% 2.1% 1.7% 1.0% 1.1%Other services 320 357 385 4.2% 3.9% 1.9% 1.1% 1.2% 1.4% 1.3%Inadequately described/Not stated 59 95 83 0.9% 1.9% 3.5% 1.5% 0.5% 0.7% 0.6%Total 6,407 7,989 9,164 100.0% 100.0% 3.6% 1.5% 1.0% 1.2% 1.2%

Propn of Total Employment

Annual %age Change

Employment - Mount Barker Mount Barker - proportion of total state employment

2001 2006 2011Mt

BarkerSA

Mt Barker

SA 2001 2006 2011

Agriculture, forestry and fishing 791 560 535 3.6% 3.9% -3.8% -2.5% 2.1% 1.8% 1.9%Mining 46 114 201 1.4% 1.3% 15.9% 9.4% 1.2% 1.9% 2.1%Manufacturing 1,372 1,343 1,256 8.5% 10.6% -0.9% -1.7% 1.5% 1.5% 1.6%Electricity, gas, water and waste services 89 137 204 1.4% 1.4% 8.6% 5.3% 1.5% 1.9% 2.1%Construction 708 1,012 1,320 8.9% 7.5% 6.4% 4.6% 2.0% 2.2% 2.4%Wholesale trade 520 481 533 3.6% 3.5% 0.2% -1.6% 1.7% 1.9% 2.1%Retail trade 1,194 1,622 1,831 12.4% 11.2% 4.4% 1.5% 1.7% 2.0% 2.2%Accommodation and food services 540 667 836 5.7% 6.2% 4.5% 1.8% 1.4% 1.7% 1.8%Transport, postal and warehousing 425 484 566 3.8% 4.1% 2.9% 1.4% 1.6% 1.7% 1.9%Information media and telecommunications 174 256 217 1.5% 1.4% 2.2% -1.6% 1.4% 2.4% 2.1%Financial and insurance services 287 360 394 2.7% 3.0% 3.2% 1.0% 1.4% 1.6% 1.8%Rental, hiring and real estate services 179 201 205 1.4% 1.3% 1.4% 0.3% 2.0% 2.1% 2.2%Professional, scientific and technical services 560 655 868 5.9% 5.5% 4.5% 2.3% 1.7% 1.8% 2.2%Administrative and support services 402 495 511 3.5% 3.4% 2.4% 1.2% 1.8% 2.1% 2.0%Public administration and safety 615 834 1,158 7.8% 7.1% 6.5% 3.9% 1.7% 1.9% 2.2%Education and training 795 950 1,208 8.2% 7.9% 4.3% 2.1% 1.7% 1.8% 2.1%Health care and social assistance 1,062 1,564 1,873 12.7% 13.6% 5.8% 3.4% 1.5% 1.8% 1.9%Arts and recreation services 138 136 209 1.4% 1.3% 4.2% 2.1% 1.8% 1.7% 2.3%Other services 491 526 623 4.2% 3.9% 2.4% 1.1% 1.9% 2.0% 2.2%Inadequately described/Not stated 211 291 236 1.6% 1.9% 1.1% 1.5% 1.8% 2.1% 1.7%Total 10,599 12,688 14,784 100.0% 100.0% 3.4% 1.5% 1.7% 1.9% 2.0%

Employment - Mount BarkerPropn of Total Employment

Annual %age Change

Mount Barker - proportion of total state employment


4.3 Summary of Methodology Summary of the Economic Planning Model The economic planning model developed for this project involves shocking an input output table of the region with varying assumptions about exogenous variables to trace the impact in terms of employment across industries, value added outcomes and population outcomes. The model is based on a general equilibrium overlay applied to an input output table of the Mt Barker LGA built specifically for this project using as its underlying starting point the input output table for the Adelaide Hills region compiled on behalf of the State Government by Econsearch (called the RISE Model and reported in Econsearch, Input-Output Tables for South Australia and its Regions 2011/12 Update: Technical Report, A Report for the Department of Premier and Cabinet, November 2013). As indicated by this recent update, the State Government supports the use of economic modelling based on the RISE model for economic analysis purposes. The model has been structured based on 19 industry sectors and is dynamic in the sense that it adjusts overtime for import penetration and for labour productivity shifts. The core exogenous variables are:

• Population growth – based on continuation of historic growth rates and resulting in 50,000 people in the LGA by 2036.

• Labour productivity improvements of 0.5-1% per year depending on industry sector (and higher and lower based on scenarios).

• Investment spend – linked to core projects and to growth rates of other exogenous

variables.

• Growth rate in regional exports – based on expected, high and low scenario. The model internalises most of the other inter-relationships, within a whole of economy model. Economic Planning Model Details The process employed to develop projections for the District of Mount Barker economy involves ‘shocking’ the underlying economic structure of the regional economy with the exogenous factors that underpin the economy, acknowledging the trends in underlying exports and other macroeconomic drivers, along with the strategy targets.


This IO model depicts the economy at any particular point in time. The model is shocked by a forecast of ‘exogenous’ demand7 to trace the economy wide impacts that these events have on employment by industry. There are two levels of demand involved in the projections:

• Demand at an aggregate or macro level including: o Population – it is assumed that population will grow at 2.15% per annum in all

the scenarios – to achieve the 20,000 increase population target. It is assumed the over 65 population will grow at a slightly greater rate than the under 65 age groups.

o Capital expenditure – the ratio of capital expenditure to exogenous final demand in the District of Mount Barker economy is approximately 18% (estimated from the District of Mount Barker Input-Output table) and it is assumed that this ratio is maintained over time.

o Government consumption – it is assumed that government consumption grows

at the same rate as overall population growth rate for the District. This consumption is distributed over the sectors of consumption consistent with the 2011 Input-Output table.

o Labour productivity - it is assumed that there is an ongoing and underlying

improvement in labour productivity (value of production relative to employment input) and that this continued improvement will be necessary to maintain regional competitiveness. This productivity growth is assumed in the base case to be 0.5% per annum for secondary industries (manufacturing and agriculture) and 0.3% per annum for service industries.

o Import penetration – this is assumed to increase at a similar rate to labour

productivity growth. This assumption has been varied in the case of food manufacturing, where especially in the alternative scenarios the development of value added opportunities is assumed to increase the proportional supply from local agriculture.

o Non-salary incomes – this is the balance of spending linked to residents who are

not in the labour force, and do not have employment opportunities within the region.

• Demand at an industry sector level – the key independent element of demand at an

industry sector level is Exports out of the Region. The projects imply demand for services through general industry, through tourism projects, through recreation

7 The elements of exogenous demand are considered to be based on items independent of what is happening elsewhere in the regional economy. Generally this includes exports, consumption from savings and some government expenditure.


projects etc. and at least some of this needs to be provided through demand external to the region. Internal demand will feedback from population growth, but also independently in response to industry development outcomes linked to this export outcome. The core differential between the scenarios is the level of export demand that occurs (which depends on the types of industries attracted etc.).

The linkages in the model are summarised in the following diagram.

ABS Census employment data underpins the analysis, and the recent trends have been outlined earlier in this report. It should be understood that this is a planning model, and not a benefit cost assessment of the projects involved, although the context of local job creation does carry benefits. A full cost benefit assessment would also incorporate the consumer surplus value to users of the infrastructure, and quantify implications for travel time savings for commuters in journey to work etc.

4.4 Modelling the Medium Scenario Table 23 below indicates the projections for exogenous demand based on the above assumptions. These projections are used to shock the Input Output model of the Mount Barker economy adjusted for import penetration and changing productivity. It is assumed that increased labour productivity is reflected in increased real wages.

Matrix of Industry Inter-Relationships

Trends in Exports out of the Region without Intervention

Policy Targets from Strategy

Projections of Value Added and Employment by Industry Sector

Implications for Population and Wealth Outcomes

Labour Productivity Shifts

Import Penetration

Other Macro Economic Drivers (Population not in Labour Force)


The core assumptions in the medium scenario include:

• Population growth of 2.15% per annum (to reach a target population increase of 20,000 over 20 years)

• Export growth across all sectors with a base of 2.25% underlying trend – but doubled due to new economic development initiatives (or a total of 4.5% per annum).

This results in the following estimates of exogenous final demand by industry.

Table 23: Projections of Exogenous Demand in the District of Mount Barker - Medium

Scenario (Constant 2014 Dollars $ million)

Economic Activity by Industry Forecast Tables 24 and 25 indicate the impact on economic activity (GRP and employment) as a result of shocking the model with the assumptions as outlined above.

2011 2016 2021 2026 2031 2036Ave Ann

growth (2011-2036)

Agriculture, Forestry and Fishing 71.7 88.5 109.4 135.4 168.0 208.6 4.4%Mining 37.7 46.6 57.7 71.7 89.0 110.8 4.4%Manufacturing 253.4 308.4 377.0 462.6 569.3 702.6 4.2%Electricity, Gas, Water and Waste Services 39.6 47.2 56.7 68.5 83.2 101.5 3.8%Construction 206.1 237.4 276.2 324.2 383.7 457.5 3.2%Wholesale Trade 66.7 79.5 95.5 115.4 140.2 171.2 3.8%Retail Trade 83.9 96.5 112.2 131.6 155.8 185.8 3.2%Accommodation and Food Services 46.4 50.1 54.5 59.6 65.6 72.7 1.8%Transport, Postal and Warehousing 27.7 31.7 36.6 42.5 49.7 58.4 3.0%Information Media and Telecommunications 25.6 31.0 37.7 46.2 56.7 69.7 4.1%Financial and Insurance Services 22.6 25.8 29.8 34.8 41.1 48.8 3.1%Rental, Hiring and Real Estate Services 23.9 29.3 36.0 44.3 54.6 67.5 4.2%Ownership of Dwellings 74.9 75.5 76.0 76.5 77.1 77.6 0.1%Professional, Scientific and Technical Services 23.0 26.8 31.4 37.2 44.4 53.3 3.4%Administrative and Support Services 7.8 9.2 10.9 13.0 15.6 18.9 3.6%Public Administration and Safety 81.3 90.9 101.7 114.0 127.8 143.6 2.3%Education and Training 60.2 64.8 70.1 76.0 82.7 90.3 1.6%Health Care and Social Assistance 69.3 77.9 88.0 100.0 114.3 131.3 2.6%Arts and Recreation Services 12.1 13.8 15.9 18.4 21.5 25.2 3.0%Other Services 18.9 20.9 23.3 26.3 30.0 34.5 2.4%Total 1252.6 1452 1697 1998 2370 2830 3.3%Annual Growth 3.0% 3.2% 3.3% 3.5% 3.6%


Table 24: Projections of Gross Regional Product for the District of Mount Barker – Medium

Scenario (Constant 2014 Dollars Million)

Table 25: Projections of Employment Outcomes for the District of Mount Barker – Medium

Scenario (FTE’s)

2011 2016 2021 2026 2031 2036

Annual Change

2011-2036

Agriculture, Forestry and Fishing 54.0 64.1 76.3 91.1 109.0 130.6 3.6%

Mining 22.5 27.4 33.6 41.2 50.5 62.1 4.2%Manufacturing 106.1 125.9 150.2 180.2 217.1 262.6 3.7%Electricity, Gas, Water and Waste Services 30.6 37.2 45.8 57.0 71.8 91.6 4.6%Construction 74.0 84.1 96.4 111.6 130.3 153.3 3.1%Wholesale Trade 51.8 59.9 69.8 81.8 96.5 114.4 3.3%Retail Trade 83.0 94.0 107.5 123.8 143.7 167.9 2.9%Accommodation and Food Services 36.5 39.9 43.7 48.3 53.5 59.7 2.0%Transport, Postal and Warehousing 29.3 32.7 36.6 41.2 46.4 52.4 2.4%Information Media and Telecommunications 16.8 19.8 23.6 28.2 33.9 41.0 3.7%Financial and Insurance Services 48.1 53.0 58.9 66.1 75.0 85.9 2.4%Rental, Hiring and Real Estate Services 21.4 24.4 28.1 32.4 37.6 43.9 3.0%Ownership of Dwellings 104.3 110.1 116.8 124.7 134.0 144.8 1.4%Professional, Scientific and Technical Services 38.8 43.0 47.9 53.7 60.4 68.4 2.3%Administrative and Support Services 19.5 21.5 23.7 26.3 29.2 32.5 2.1%Public Administration and Safety 48.3 53.8 60.1 67.2 75.3 84.4 2.3%Education and Training 62.1 67.5 73.6 80.7 88.8 98.1 1.9%Health Care and Social Assistance 56.1 62.9 71.0 80.6 92.0 105.5 2.6%Arts and Recreation Services 7.0 7.9 9.0 10.3 11.9 13.8 2.8%Other Services 21.1 23.3 25.9 28.9 32.5 36.8 2.3%

Total 931 1052 1199 1375 1590 1850 2.9%

2011 2016 2021 2026 2031 2036

Annual Change

2011-2036

Agriculture, Forestry and Fishing 476 538 609 692 788 898 3.2%

Mining 275 320 372 434 507 593 3.9%Manufacturing 808 911 1035 1181 1354 1558 3.3%Electricity, Gas, Water and Waste Services 144 166 194 230 276 335 4.3%Construction 674 729 796 876 973 1090 2.4%Wholesale Trade 253 279 309 344 386 436 2.8%Retail Trade 1131 1220 1326 1454 1605 1784 2.3%Accommodation and Food Services 491 509 532 559 590 625 1.2%Transport, Postal and Warehousing 260 276 295 315 338 363 1.7%Information Media and Telecommunications 93 105 119 135 154 177 3.3%Financial and Insurance Services 107 112 119 127 137 149 1.7%Rental, Hiring and Real Estate Services 136 147 161 177 196 217 2.4%Ownership of Dwellings 0 0 0 0 0 0 0.0%Professional, Scientific and Technical Services 368 388 411 438 470 506 1.6%Administrative and Support Services 174 186 200 215 232 250 1.8%Public Administration and Safety 488 528 572 621 675 734 2.1%Education and Training 766 807 855 909 971 1041 1.6%Health Care and Social Assistance 702 765 838 923 1022 1137 2.4%Arts and Recreation Services 81 89 98 109 122 138 2.7%Other Services 334 358 385 418 456 501 2.0%

Total 7761 8432 9225 10157 11252 12534 2.4%


These estimates of employment and Gross Regional Product outcomes are linked to population, labour force participation, the ratio of jobs demand and supply, and revenue outcomes for State and Local Government which are summarised in Table 26 below. The modelling reinforces that incomes per employed person increase with productivity increases. Under this scenario, the ratio of jobs demanded by residents of the region, and jobs supplied within the region remain relatively in balance.

Table 26: Aggregate Employment/ Population Projection Outcomes – Medium Scenario

4.5 Modelling of Low Scenario Table 27 provides the core outcomes under the low scenario. The core population growth rate is maintained, as for the medium scenario. The major difference is that trend export growth rates are halved to 1% as are exports from new initiatives (so total export growth of 2% per annum). Table 27: Aggregate Employment/ Population Projection Outcomes – Low Scenario

2011 2016 2021 2026 2031 2036

OutcomesPopulation

<15 6513 7028 7584 8184 8832 953015-65 19628 21932 24495 27345 30512 34030>65 3624 4153 4758 5452 6248 7159

Total 29765 33113 36838 40981 45591 50719Employment (jobs) 8765 9523 10418 11471 12706 14155Ratio of Jobs - inside to resident needs 58% 57% 56% 55% 54% 54%Gross Regional Product ($ million) 931 1052 1199 1375 1590 1850Average GRP per empl person ($ 2014 '000) 106.3 110.5 115.1 119.9 125.1 130.7Average GRP per capita ($ 2014 '000) 31.3 31.8 32.5 33.6 34.9 36.5Annual State Govt Taxes ($ 2014 m) 41.0 46.3 52.7 60.5 69.9 81.4Annual Local Govt Rates ($ 2014 m) 26 29 31.9 35.4 39.4 43.8

2011 2016 2021 2026 2031 2036

OutcomesPopulation

<15 6513 7028 7584 8184 8832 953015-65 19628 21932 24495 27345 30512 34030>65 3624 4153 4758 5452 6248 7159



These projections indicate that achieving the low export targets would fail to match population growth with a decreasing ratio of locally available employment and Gross Regional Product. Table 28 provides the industry distribution of Gross Regional Product related to these outcomes, while Table 29 gives the employment outcomes. Table 28: Projections of Gross Regional Product for the District of Mount Barker – Low Scenario (Constant 2014 Dollars Million)

2011 2016 2021 2026 2031 2036

Annual Change

2011-2036



Total 931 1007 1089 1178 1276 1382 1.6%


Table 29: Projections of Employment Outcomes for District of Mount Barker – Low

Scenario (FTE’s)

4.6 Modelling of High Scenario Table 30 provides quantified targets under the high scenario, with again the major projects and population growth as in the other scenarios, but with export growth rates doubled from the medium scenario. Table 30: Aggregate Employment/ Population Projection Outcomes – High Scenario

2011 2016 2021 2026 2031 2036

Annual Change

2011-2036



Total 7761 8124 8508 8913 9341 9797 1.2%

2011 2016 2021 2026 2031 2036

OutcomesPopulation<15 6513 7028 7584 8184 8832 953015-65 19628 21932 24495 27345 30512 34030>65 3624 4153 4758 5452 6248 7159



With this higher assumption of export growth, the employment outcomes are significantly enhanced – meaning that the ratio of jobs supplied locally improves substantially, with benefits to the local population. Tables 31 and 32 provide the industry distribution of employment and Gross regional product related to these outcomes. Table 31: Projections of Gross Regional Product for the District of Mount Barker – High Scenario (Constant 2014 Dollars Million)

2011 2016 2021 2026 2031 2036

Annual Change

2011-2036



Total 931 1104 1347 1681 2141 2771 4.7%


Table 32: Projections of Employment Outcomes for District of Mount Barker – High

Scenario – FTE’s

4.7 Methodology: Economy Wide Modelling Framework The economy wide modelling in this project is undertaken by shocking an Input Output table with an overlaid set of macroeconomic general equilibrium relationships and assumptions to forecast demand shocks. The production function by industry in the underlying Input Output table is adjusted across time to allow for increased labour productivity and increased import penetration. An Input Output table is a representation of the structure of an economy over a particular period of time for a particular geographical extent. This can be at the local, District of Mount Barker or national geographic level. The economy is categorised into a number of industry sectors and linkages between sectors are identified. The linkages between sectors are specified as flows of goods and services between sectors, for example, some of the outputs of the primary sector are used as inputs by the manufacturing sector. While Input Output (IO) models have been widely applied and the use of multipliers is widespread in estimating economic impacts, it is generally accepted that it is a relatively simple modelling framework and there are potentially significant economic relationships that it does not incorporate. In the main, the core assumption that is implicit in the use of Input Output tables and multipliers is that output can be expanded indefinitely within an economy without any capacity constraint. The IO framework is focused on demand shifts

2011 2016 2021 2026 2031 2036

Annual Change

2011-2036



Total 7761 8771 10162 12021 14468 17662 4.2%


rather than supply constraints. Given this, and other simplifying assumptions and limitations, alternative frameworks have developed, in particular the Computable General Equilibrium (CGE) framework. Like IO models, CGE models are also economy-wide models based on an underlying Input Output framework. Though more advanced theoretically in many ways, the critical difference is that CGE models incorporate supply side constraints (IO models assume perfectly elastic supply curves) and a broader range of macro-economic linkages (based on a general equilibrium theory). Therefore CGE models are more theoretically robust than IO, but it must be noted that they still have some limitations in term of their capacity to capture complex implications of projects that increase economic activity (such the effects of economies of scale, the extent of macro-economic interactions and the fact that key economic parameters such as elasticity must be estimated and is often based on limited historical data). CGE models, like IO models or any other modelling framework, are also highly dependent on the assumptions that are used, for example, what is an external input into the model and what is determined from within the modelling framework. Another extension of basic modelling approaches is multi-region modelling. Multi-region models can assess the impact of a shock on a regional economy and simultaneously model the impact at both a City of Mount Barker and national level (including feed-back effects). There are also econometric-linked models where time series and econometric based macro-economic relationships are distributed across industry sectors by use of an underlying IO framework. All are based on underlying IO tables that are historical in nature and generally assume constant returns to scale (i.e. doubling inputs leads to doubling of outputs). All models ignore or simplify some linkages, such as the dynamic profit and investment linkage - the way in which increased profits generate increased investment, thereby changing the technical structure of the economy.

4.8 Modelling the Project Specific Impacts As an alternative to the economic planning model as discussed above, we have also modelled the specific impacts of the projects identified in the Economic Development Strategy in terms of construction and activity and operational outcomes. This represents a bottoms up approach to modelling the impacts of the project – and looks at the activity directly associated with them. Table 33 identifies the construction spend on projects – with an assumption that once completed there would be an annual maintenance cost of 2% of the underling construction cost.


Table 33: Distribution of construction works spend for identified projects, and indicative time distribution

Table 34 provides estimates of direct new or net operational employment based on the projects above. These estimates are based on assumptions of $2,400 spend per square metre, and land use averages of employment per 100 square meters for different land uses. It is assumed that some of these projects will involve upgrade or replacement of existing activity, and as such it is assumed that the new component represents 50% of the gross employment impacts.

Table 34: Estimated net operational levels associated with identified projects

Tables 35 and Tables 36 are the results of shocking the regional economic model (Input Output) with the construction spend, and the turnover implied by these levels of net employment for these activities (derived from the ratio of turnover to employment in the regional input output table). Construction impacts remain relatively constant, but the growth in direct and induced operational led activity is clear, steadily growing to a contribution of the order of 3,500 jobs over 20 years – and Gross Regional Product of $500 million. These results, produced from a totally different methodology confirm that the major projects are consistent with the medium scenario, with the projects directly contributing about 75% of the macro level outcomes, from around 80% of the investment.

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034Major Projects

Waste Water 50 50 2 2 2 2 2 2 2 2Tourist Park Relocation 15 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3Local Govt Centre 15 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3Freeway 42 0.84 0.84 0.84 0.84 0.84 0.84 0.84 0.84 0.84 0.84 0.84 0.84 0.84 0.84 0.84 0.84 0.84Hahndorf Academy Lift & Improvements 0.5 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01Polo Field Redevelopment 30 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6Stephenson Recreation Sports Hub 50 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1RCMB/DCMB Water Independence 50 1 1 1 1 1 50 2 2 2 2 2 2Environmental Services Centre 10 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2Deck Car Park Town Centre 10 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2

Total Major Projects 30.0 73.1 52.1 23.1 3.5 3.5 53.5 4.5 4.5 54.5 54.5 6.5 55.5 7.5 7.5 7.5 7.5 7.5 7.5Residential Development 109 109 109 109 109 109 109 109 109 109 109 109 109 109 109 109 109 109 109 109General Projects

Retail 5.1 5.2 5.3 5.4 5.5 5.6 5.7 5.8 5.9 6.0 6.2 6.3 6.4 6.5 6.7 6.8 6.9 7.1 7.2Bulky Goods 2.5 2.6 2.6 2.7 2.7 2.8 2.8 2.9 3.0 3.0 3.1 3.1 3.2 3.3 3.3 3.4 3.5 3.5 3.6Education 0.6 0.6 0.7 0.7 0.7 0.7 0.7 0.7 0.7 0.8 0.8 0.8 0.8 0.8 0.8 0.9 0.9 0.9 0.9Commercial/Office/Community 2.5 2.6 2.6 2.7 2.7 2.8 2.8 2.9 3.0 3.0 3.1 3.1 3.2 3.3 3.3 3.4 3.5 3.5 3.6Light Industry/Industry/Services/Trades 2.5 2.6 2.6 2.7 2.7 2.8 2.8 2.9 3.0 3.0 3.1 3.1 3.2 3.3 3.3 3.4 3.5 3.5 3.6

Total General Projects 0 13.3 13.5 13.8 14.1 14.4 14.6 14.9 15.2 15.5 15.9 16.2 16.5 16.8 17.2 17.5 17.9 18.2 18.6 18.9Total All Projects 108.8 152.0 195.4 174.6 145.9 126.6 126.8 177.1 128.4 128.7 179.1 179.4 131.7 181.0 133.4 133.7 134.1 134.4 134.8 135.1

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034Public administration 94 96 98 99 101 103 105 107 109 173 238 242 246 251 255 259 264 268 273General Business Services 0 0 0 22 23 23 68 69 71 72 73 75 120 122 124 126 129 131 133Accomodation and hospitality 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Recreation and Entertainment 0 129 340 347 354 360 367 374 381 387 394 401 408 414 421 428 435 441 448

Total Major Projects 94 225 438 468 478 487 540 550 560 633 705 718 774 787 800 814 827 840 854Retail 37 74 113 152 192 232 274 316 359 403 448 494 541 588 637 687 737 789Bulky Goods 13 27 40 54 69 83 98 113 129 144 160 177 193 211 228 246 264 282Education 10 20 30 40 51 62 73 84 96 107 119 132 144 157 170 183 196 210Commercial/Office/Community 16 32 48 65 82 100 117 136 154 173 192 212 232 252 273 294 316 338Light Industry/Industry/Services/Trades 6 11 17 23 29 35 42 48 55 62 68 75 83 90 97 105 113 120

Total General Projects 81 164 249 335 423 513 604 697 793 890 989 1090 1193 1298 1405 1514 1626 1740Total All Projects 94 306 602 717 812 909 1053 1154 1257 1425 1595 1706 1863 1980 2098 2219 2341 2466 2593


Export growth (from the region) is required to support operational employment demand for the projects themselves, and generate the remainder of the activity. Table 35: Estimated Net levels (Direct Construction, Operational and Induced or Multiplier) Employment Associated with Identified Projects

Table 36: Estimated Net levels (Direct Construction, Operational and Induced or Multiplier)

of Gross Regional Product associated with Identified Projects

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034Agriculture, Forestry and Fishing 5 6 11 15 16 17 16 19 19 21 24 22 22 25 26 27 24 26 27 28Mining 1 2 2 3 3 3 3 3 3 4 4 4 4 5 5 5 4 4 5 5Manufacturing 22 29 48 58 61 66 67 84 85 93 110 110 112 127 129 138 135 144 152 161Electricity, Gas, Water and Waste Services 4 6 8 9 9 9 9 11 10 11 13 13 12 15 14 15 14 15 15 16Construction 328 433 558 500 420 365 345 480 351 352 488 460 341 466 347 348 328 329 331 332Wholesale Trade 9 11 31 47 60 73 82 100 112 127 146 152 165 183 196 212 215 230 247 263Retail Trade 34 48 110 163 199 238 263 322 354 398 460 477 511 570 607 655 660 707 755 804Accommodation and Food Services 14 20 34 43 44 45 44 55 53 57 67 65 64 74 73 77 72 75 79 82Transport, Postal and Warehousing 12 16 24 28 28 28 26 33 31 33 40 37 36 42 40 42 38 40 42 44Information Media and Telecommunications 1 2 4 5 6 6 6 7 7 8 9 8 8 10 10 10 9 10 10 11Financial and Insurance Services 8 10 15 16 15 15 14 18 16 17 21 19 18 21 20 21 19 19 20 21Rental, Hiring and Real Estate Services 7 9 14 17 17 17 16 20 19 20 24 22 22 25 24 26 23 24 25 26Ownership of Dwellings 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Professional, Scientific and Technical Services 21 30 65 92 133 153 161 236 252 276 310 312 329 401 420 446 437 462 487 512Administrative and Support Services 14 18 31 39 40 40 38 47 44 47 55 52 51 58 57 59 55 57 59 62Public Administration and Safety 3 96 100 104 106 108 107 111 112 115 178 231 235 241 245 250 246 250 255 259Education and Training 16 24 50 71 82 93 101 124 132 146 169 177 186 208 218 234 238 253 269 285Health Care and Social Assistance 8 12 19 24 24 24 24 30 29 30 37 36 35 41 40 42 41 42 44 46Arts and Recreation Services 1 2 131 341 348 355 351 358 365 371 379 374 380 387 393 400 394 400 407 413Other Services 13 18 29 35 35 36 35 44 42 44 53 52 50 58 57 60 56 59 61 64Total 521 794 1284 1610 1644 1690 1709 2101 2034 2169 2587 2624 2581 2957 2920 3065 3007 3147 3290 3435

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034Agriculture, Forestry and Fishing 0.6 0.9 1.5 2.0 2.1 2.2 2.4 2.9 2.9 3.1 3.7 4.0 4.0 4.5 4.5 4.8 5.1 5.3 5.6 5.9Mining 0.1 0.1 0.2 0.3 0.3 0.3 0.3 0.4 0.4 0.4 0.5 0.5 0.5 0.6 0.6 0.6 0.7 0.7 0.7 0.8Manufacturing 2.9 4.3 7.1 8.4 8.9 9.5 10.7 13.4 13.3 14.6 17.4 18.9 18.9 21.7 21.9 23.3 24.8 26.2 27.7 29.3Electricity, Gas, Water and Waste Services 0.9 1.3 2.0 2.2 2.1 2.1 2.2 2.8 2.6 2.7 3.3 3.6 3.3 4.0 3.7 3.9 4.1 4.2 4.4 4.6Construction 36.0 50.5 65.1 58.4 49.0 42.7 42.9 59.7 43.6 43.8 60.7 61.0 45.3 61.8 46.2 46.4 46.6 46.9 47.1 47.3Wholesale Trade 1.7 2.7 6.9 10.5 13.2 16.0 19.3 23.5 26.1 29.6 34.0 37.8 40.6 45.3 48.3 52.2 56.2 60.2 64.3 68.5Retail Trade 2.5 3.9 8.9 13.0 15.8 18.7 22.2 27.2 29.7 33.4 38.6 42.7 45.5 50.9 53.9 58.1 62.3 66.7 71.1 75.6Accommodation and Food Services 1.0 1.7 2.8 3.5 3.6 3.7 4.0 5.0 4.9 5.2 6.2 6.7 6.6 7.6 7.5 7.8 8.2 8.6 9.0 9.4Transport, Postal and Warehousing 1.3 2.0 3.1 3.6 3.5 3.6 3.9 4.8 4.5 4.9 5.9 6.3 6.1 7.1 6.8 7.2 7.5 7.9 8.2 8.6Information Media and Telecommunications 0.3 0.4 0.8 1.1 1.2 1.2 1.3 1.6 1.6 1.7 2.0 2.2 2.2 2.5 2.5 2.6 2.7 2.9 3.0 3.1Financial and Insurance Services 3.4 5.1 7.4 8.0 7.7 7.5 7.9 10.2 9.1 9.6 11.9 12.6 11.6 14.0 13.0 13.5 14.1 14.6 15.2 15.8Rental, Hiring and Real Estate Services 1.1 1.7 2.6 3.0 3.0 3.1 3.3 4.1 3.9 4.1 5.0 5.3 5.1 6.0 5.8 6.1 6.4 6.6 6.9 7.2Ownership of Dwellings 3.7 5.9 9.4 11.4 11.5 11.7 12.5 15.6 14.8 15.7 18.9 20.3 19.7 22.8 22.2 23.3 24.3 25.4 26.5 27.7Professional, Scientific and Technical Services 2.2 3.7 7.6 10.8 15.4 17.5 20.1 29.2 31.0 33.9 38.2 41.5 43.6 53.0 55.3 58.6 62.0 65.4 68.9 72.5Administrative and Support Services 1.5 2.3 3.8 4.9 4.9 4.9 5.3 6.5 6.1 6.5 7.7 8.1 7.8 9.1 8.8 9.2 9.6 10.0 10.4 10.8Public Administration and Safety 0.3 9.8 10.3 10.7 10.9 11.1 11.4 11.8 12.0 12.2 18.9 25.5 25.8 26.6 27.0 27.5 28.0 28.6 29.1 29.6Education and Training 1.3 2.1 4.3 6.2 7.1 8.0 9.2 11.2 11.9 13.2 15.3 16.8 17.6 19.7 20.6 22.0 23.5 25.0 26.5 28.1Health Care and Social Assistance 0.7 1.1 1.7 2.0 2.1 2.1 2.3 2.8 2.7 2.8 3.4 3.7 3.6 4.1 4.0 4.2 4.4 4.6 4.8 5.0Arts and Recreation Services 0.1 0.1 11.7 30.4 31.0 31.6 32.2 32.9 33.5 34.1 34.8 35.5 36.1 36.8 37.4 38.0 38.6 39.3 39.9 40.5Other Services 0.8 1.3 2.0 2.4 2.4 2.5 2.7 3.4 3.2 3.4 4.1 4.4 4.3 5.0 4.8 5.1 5.3 5.6 5.8 6.1Total 62.5 101.2 159.1 192.7 195.4 199.9 216.0 269.1 257.8 274.9 330.3 357.3 348.2 402.9 394.7 414.3 434.3 454.7 475.4 496.6


4.9 Social Benefits Economic growth can lead to an enhanced quality of life for the community in areas such as health, safety, recreation, aesthetics and leisure time. As an example better access to local jobs and public transport can improve the air quality by reducing the number of vehicles on the road, and an improved road network can reduce the number of vehicle accidents and reduce transit time. A strong and vibrant local economy also helps with community safety and wellbeing. For example shorter commuting times for parents means they have more time to spend with their family or in the local community. Local employment brings people into town centres and public precincts thereby increasing safety and the interest and vibrancy of these places. Desired social outcomes of the Mount Barker Economic Development Strategy include:

• Improved access to local jobs. • Improved access to services and amenities such as health and education services. • Improved access to a more diverse range of retail and hospitality options. • A safer and more engaged and active community. • Better employment opportunities. • Better housing options, both rental and owner occupied.

Human capital is reflected in the levels of knowledge, expertise and abilities of a population that enables them to participate in the economy. Developing human capital is an effective way to boost productivity and increase the level of participation in the economy. This can include:

• Increasing the skills and qualifications of the workforce, including through investment in post-secondary and tertiary education.

• Lifting workforce participation rates such as supporting the re-skilling of mature-age workers.

• Ensuring skills in the region match industry need, including through creating training pathways.

Documents

Hudson Howells | May 2014 Page 1 - Mount Barker District