749 Cape Nelson Road, Portland - Amendment C86 Glenelg Planning Scheme Economic Impact Assessment of proposed livestock assembly depot - Glenelg ...
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749 Cape Nelson Road, Portland
Amendment C86 Glenelg Planning Scheme
Economic Impact Assessment
of proposed livestock assembly depot
July 2016
Privileged and Confidential
MacroPlan Dimasi MELBOURNE SYDNEY Level 16 Level 6 330 Collins Street 39 Martin Place Melbourne VIC 3000 Sydney NSW 2000 (03) 9600 0500 (02) 9221 5211 BRISBANE GOLD COAST Level 15 Level 2 111 Eagle Street 89 -91 Surf Parade Brisbane QLD 4000 Broadbeach QLD 4218 (07) 3221 8166 (07) 3221 8166 ADELAIDE PERTH Ground Floor Level 1 89 King William Street 89 St Georges Terrace Adelaide SA 5000 Perth WA 6000 (08) 8221 6332 (08) 9225 7200 Prepared for: Goolagar Pty Ltd MacroPlan Dimasi staff responsible for this report: Tony Dimasi, Managing Director – Retail Luke Vanderhorst, Analyst – Economics
Table of contents
Executive summary i
Introduction iii
Section 1: The proposal: location and context 1
1.1 Proposed livestock assembly depot 1
1.2 Site context 2
Section 2: The regional economic context 4
2.1 Structure of the Glenelg economy 4
2.2 Regional economic output 6
2.3 Operating business 9
2.4 Tourism 10
2.5 Port of Portland 12
2.6 Alcoa 13
2.7 Great South Coast region 15
Section 3: Population and socio-demographic profile 19
3.1 Population levels and recent trends 19
3.2 Population projections 20
3.3 Age structure 21
3.4 Socio demographic profiles 22
Section 4: Shire of Glenelg and Portland labour forces 24
4.1 Employment & unemployment levels 24
4.2 Employment by occupation 25
4.3 Labour force skills 26
4.4 Labour force mobility 27
Section 5: Economic impacts of proposed livestock assembly depot 28
5.1 The economic need and demand 28
5.2 Economic impacts 30
5.3 Impacts on tourism sector 37
Appendix 40
Executive summary
Population growth in Portland has been stagnant over the last 25 years with very low
population growth forecast in the future.
Portland has an ageing population with a very low proportion of young – independent
aged (20-24) residents, suggesting there is a lack of higher education and employment
options.
Portland has a very high employment self-containment rate, i.e. people living in Portland
also work in Portland. This makes the population highly susceptible to job losses with
large job losses likely to result in people leaving the region.
The latest figures show that economic output of the Glenelg Shire economy has been
declining year on year over the last 3 years.
The Glenelg economy is heavily reliant on the Manufacturing industry, which contributes
47.6% to the overall output. Manufacturing is driven primarily by the presence of the
Alcoa Smelter which currently directly employs 540 workers but supports an estimated
2,000 jobs in total.
Over the last 3 years manufacturing output has declined noticeably, with large production
cuts at Alcoa becoming a significant issue. A range of global manufacturing issues and an
oversupply in the aluminium industry have led to these cuts.
Recent reports indicate that Alcoa is estimated to make losses in the range of $50-
$90 million in 2016. It is widely considered that Alcoa might scale back or even eventually
shut down in the medium term, leading to many of job losses and an exodus of residents
from Portland.
Apart from manufacturing, a key industry in Portland with potential for future growth is
Agriculture, in particular the sub sector of Sheep, Grains, Beef, Dairy and Cattle. This sub
sector is currently the fourth largest sub-sector in the Glenelg economy, with an
estimated $158 million in annual economic output.
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Amendment C86 Glenelg Planning Scheme
Economic Impact Assessment of proposed livestock assembly depot
Executive summary
This industry benefits from the location and proximity of the Port of Portland, which is
one of only four major commercial ports in Victoria, and is the economic focal point of
Glenelg Shire.
The implementation of a new free trade agreement with China, the strategic location of
the port of Portland and an already established cattle export sector mean there is
excellent potential for Portland and Glenelg to increase production and facilitate growth
in this sector. This growth will assist in diversifying the economy away from the
manufacturing sector and ensuring the long term sustainability of the local economy.
While there is future growth potential in other industries in Portland and Glenelg, there is
no clear industry which can help drive the economy. Diversification in a range of
industries, but especially those which can benefit from and further contribute to, the
Port of Portland will be vital to the growth of the Shire of Glenelg and the town of
Portland.
We estimate that the Goolagar proposal will generate, directly and indirectly, at least
40 additional long term jobs for the Glenelg economy, with further shorter term jobs
created from construction activity at the site. These positions will be created directly on
site and in a wide range of supporting industries, including transport, stevedoring,
accommodation facilities, veterinary services, livestock feed producers, and
food & beverage providers.
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Amendment C86 Glenelg Planning Scheme
Economic Impact Assessment of proposed livestock assembly depot
Introduction
This report presents an independent economic impact assessment for a proposed livestock
assembly depot to be situated on a 167 hectares site at 749 Cape Nelson Road, Portland.
The report is set out as follows:
Section 1 details the site location and surrounding context, and also the proposal for a
livestock assembly depot at the site.
Section 2 examines the regional economic context for the Shire of Glenelg, within which
the subject site is located.
Section 3 details the population levels and trends for Portland and Glenelg Shire, as well
as the socio-demographic profile of the population.
Section 4 examines the labour force for both the Shire of Glenelg and the town of
Portland.
Section 5 sets out the economic impacts of the proposed livestock assembly depot,
having regard to all of the above.
Section 6 summarises the key findings, and considers the net community benefit that will
arise from the proposal.
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Amendment C86 Glenelg Planning Scheme
Economic Impact Assessment of proposed livestock assembly depot
Section 1: The proposal: location and context
1.1 Proposed livestock assembly depot
Map 1.1 below shows an aerial photo of the site which is the subject of this report. A
livestock assembly depot is proposed to be developed at the site. The site is 167 hectares in
size, and at present is used for animal husbandry. It also accommodates a number of wind
turbines and a limestone quarry.
A livestock assembly depot is a quarantine facility for holding livestock in preparation for live
export. The animals are assembled to meet the quarantine requirements of the importing
country, ranging from blood testing and various other veterinary tests, to sorting and tagging
into appropriate weight categories.
Map 1.1: 749 Cape Nelson Road, Portland
Site location
749 Cape Nelson Road, Portland
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Amendment C86 Glenelg Planning Scheme
Economic Impact Assessment of proposed livestock assembly depot
Section 1: The proposal: location and context
1.2 Site context
Map 1.2 shows the location of the subject site within the surrounding context, in particular
the town of Portland and the various features both in Portland and in the surrounding area.
The site is situated some 8 km to the south-west of central Portland, in an area with minimal
residential population. The residential population within 3 km of the site is estimated to be
less than 100.
The immediately surrounding land use predominantly comprises livestock assembly depots.
Overoceans Pty Ltd own land diagonally opposite the amendment land, which is used for a
livestock assembly depot in accordance with the Cape Nelson Livestock Assembly Depot
Incorporated document. The owners of that land are associated with the owners of the
subject site (Goolagar Pty Ltd).
Land immediately south of the amendment land is used for a livestock assembly depot
owned by Bramcote Pty Ltd.
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Amendment C86 Glenelg Planning Scheme
Economic Impact Assessment of proposed livestock assembly depot
Map 1.2: 749 Cape Nelson Road, Portland Local context
Section 2: The regional economic context
2.1 Structure of the Glenelg economy
Glenelg Shire (‘the Shire’) is located within the Great South Coast region of Victoria and
covers an area of 6,218 sq.km. The area is largely comprised of agricultural lands, pine
plantations and national parks (inland and coastal). In addition, the Port of Portland, a key
piece of infrastructure and source of employment, is situated within the Shire.
The estimated resident population of Glenelg Shire was 19,158 at 30 June 2015. More than
half (56%) of the Shire’s population resides in the main urban area of Portland, with the rest
of the population living in the smaller towns of Casterton and Heywood and dispersed
throughout other hamlets, villages and the rural hinterland.
Portland is located approximately 360 km south-west of Melbourne, and approximately
98 km west of Warrnambool. The town is of great historical importance as the first European
settlement in the state of Victoria, and also has a significant historical relationship with
traditional land owners. Portland is also the economic focal point of the Shire.
Agriculture is the dominant land use and is also a major economic driver and employer in the
Glenelg region. The region makes a significant contribution to national agricultural
production.
The main agricultural industry is dairying, with significant forestry in the west and livestock
(meat) and grain in the north. Other major industries in the region include manufacturing
(aluminium smelter and engineering), commercial fishing and service industries. Tourism is
of relatively limited economic relevance at present, but growing steadily.
Glenelg Shire has strong economic links to neighbouring regions, including freight and
business interactions associated with industry and agriculture, driven in large part by the
presence of the Port of Portland. For example, mineral sands and agricultural products from
the north (Wimmera) are exported through Portland, as well as timber from the west.
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Amendment C86 Glenelg Planning Scheme
Economic Impact Assessment of proposed livestock assembly depotSection 2: The regional economic context
Major natural and man-made features and attractions of Glenelg include Discovery Bay
Coastal Park, Lower Glenelg National Park, Mount Richmond National Park, Dergholm State
Park, Cape Nelson State Park, the Great South Walk, Portland Maritime Discovery Centre,
Portland Botanical Gardens, and the Glenelg River.
Portland is an integral part of the economically significant Green Triangle Region, discussed
further below, and is also an important component of the Great South Coast Region, the
economic region which comprises the municipalities of Glenelg, Southern Grampians,
Moyne, Warrnambool, Corangamite and Colac-Otway. As an important regional centre of
Victoria’s west, Portland’s relative economic importance compared to the surrounding
municipality is demonstrated in its 68% share of all jobs within the Shire of Glenelg.
The Green Triangle spans the border area between the states of South Australia and Victoria
and covers southwest Victoria and the south-east of South Australia. It includes
Warrnambool, Horsham and Mt Gambier, and also includes the regional centres of Portland,
Hamilton, Naracoorte, Bordertown, Millicent and Penola, covering an area of around
6 million hectares.
The region has held a long term role as one of Australia’s major forestry regions, with
extensive plantation softwood and hardwood resources. The softwood processing industry in
the region includes pulp and paper manufacturing, sawn timber, wood panels and woodchip
exporting.
Other important sectors for the Green Triangle include aluminium; agribusiness: dairy, beef,
wine grape production, grain, winemaking; low emissions energy; electricity and gas
production; fishing and aquaculture; mineral sands; tourism; and transport and logistics. The
Port of Portland is therefore fundamental to the ongoing success of the regional economy.
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Amendment C86 Glenelg Planning Scheme
Economic Impact Assessment of proposed livestock assembly depotSection 2: The regional economic context
2.2 Regional economic output
Economic output in Glenelg, however, has been in decline over the last 3 years, based on
data available from the independent Regional Economic Modelling & Planning System
(REMPLAN) which utilises national accounts and census data from the ABS to estimate the
economic output by industry for local government areas. This source is widely used by
councils, government departments and private businesses. REMPLAN shows that annual
output across all industry sectors in Glenelg totalled an estimated $2.92 billion at June 2013,
but with the latest figures available (August 2015) showing an estimated $2.59 billion (refer
Table 2.1).
Table 2.1
Glenelg Industry Output
Output $M
Change
Jul-13 Apr-14 Aug-15
Industry (13-15)
Agriculture, Forestry & Fishing 213.7 188.0 207.6 -6
Mining 3.4 3.6 2.4 -1
Manufacturing 1,629.4 1,468.3 1,234.8 -395
Electricity, Gas, Water & Waste Services 24.8 26.7 27.8 3
Construction 144.2 145.2 159.5 15
Wholesale Trade 54.3 52.3 55.4 1
Retail Trade 72.6 77.4 83.4 11
Accommodation & Food Services 70.5 67.1 71.2 1
Transport, Postal & Warehousing 118.9 118.5 121.9 3
Information, Media & Telecommunication 18.5 19.9 18.7 0
Financial & Insurance Services 58.1 58.4 60.8 3
Rental, Hiring & Real Estate Services 160.2 170.2 196.5 36
Professional, Scientific & Technical Services 45.3 43.8 43.6 -2
Administrative & Support Services 27.6 23.8 26.9 -1
Public Administration & Safety 68.8 68.0 74.8 6
Education & Training 60.5 55.9 58.5 -2
Health Care & Social Assistance 107.5 104.8 101.0 -7
Arts & Recreation Services 16.5 17.2 16.6 0
Other Services 29.3 29.9 30.4 1
Total 2,924.1 2,738.8 2,591.8 -332
Source: REMPLAN
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Amendment C86 Glenelg Planning Scheme
Economic Impact Assessment of proposed livestock assembly depotSection 2: The regional economic context
By industry, the largest contributor to Glenelg’s economic output is the manufacturing
sector, which accounts for $1.23 billion or 47.6% of the total. This is driven by the presence
of the Alcoa smelter facility and the Port of Portland.
Since June 2013, however, the output of the manufacturing has declined by 24.2% from
$1.62 billion at 2013 to $1.23 billion at August 2015. A major reason for this decline can be
attributed to the cut in production at Alcoa, as detailed later in this report.
Agriculture and Fishing is Glenelg’s second largest industry with annual output of
$207 million as at August 2015. This is an increase from the figure of $188 million estimated
at April 2014 but a decline from the $214 million at June 2013.
Rental, Hiring & Real Estate Services, Construction and Retail Trade have been the three
growing industry sectors since 2013; however, none has generated the required growth in
industry output to offset the decline in manufacturing and total shire output fell by 11.4%
over the 2013-2015 period.
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Amendment C86 Glenelg Planning Scheme
Economic Impact Assessment of proposed livestock assembly depotSection 2: The regional economic context
Sheep, Grains, Beef and Dairy Cattle, which is part of the broader Agriculture sector, is
currently the fourth largest sub sector in the Glenelg economy, with an output of
$158 million, behind Basic Non-Ferrous Metal Manufacturing, Structural Metal Product
Manufacturing and Ownership of Dwellings (refer Table 2.2). It is also the most important
employment sector, employing 829 people as at August 2015.
Table 2.2
Glenelg Top Sector Output
Output $M
Change
Jul-13 Apr-14 Aug-15
Sectors (13-15)
Basic Non - Ferrous Metal Manufacturing 1,036.1 907.3 680.4 -356
Structural Metal Product Manufacturing 287.3 245.4 257.4 -30
Ownership of Dwellings 129.5 136.4 161.7 32
Sheep, Grains, Beef & Dairy Cattle 168.8 141.4 158.1 -11
Basic Chemical Manufacturing 107.0 110.9 111.2 4
Retail Trade 72.6 77.4 83.4 11
Construction Services 73.7 74.8 82.7 9
Health Care Services 76.3 76.1 72.3 -4
Public Administration & Regulatory Services 59.7 58.9 65.1 5
Wholesale Trade 54.3 52.3 55.4 1
Road Transport 52.2 53.6 54.2 2
Transport Support Services & Storage 48.2 45.4 49.1 1
Source: REMPLAN
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Amendment C86 Glenelg Planning Scheme
Economic Impact Assessment of proposed livestock assembly depotSection 2: The regional economic context
2.3 Operating business
As at January 2016 there were 8,118 operating businesses within the Glenelg Shire – this was
a substantial decline from the 8,706 businesses recorded at January 2014.
Currently 2,703 or 33.3% of all businesses are within the agriculture, forestry and fishing
industry, which accounts for largest proportion of businesses in any industry.
Table 2.3
Glenelg Count of Businesses
Change
2014 2015 2016
Industry (14-16)
Agriculture, Forestry & Fishing 2,895 2,830 2,703 -192
Mining 12 11 10 -2
Manufacturing 191 207 181 -10
Electricity, Gas, Water & Waste Services 15 15 12 -3
Construction 740 742 673 -67
Wholesale Trade 111 108 103 -8
Retail Trade 361 361 345 -16
Accommodation & Food Services 261 264 253 -8
Transport, Postal & Warehousing 278 267 248 -30
Information, Media & Telecommunication 18 19 19 1
Financial & Insurance Services 897 914 915 18
Rental, Hiring & Real Estate Services 666 661 624 -42
Professional, Scientific & Technical Services 345 358 343 -2
Administrative & Support Services 274 288 249 -25
Public Administration & Safety 89 89 88 -1
Education & Training 110 107 94 -16
Health Care & Social Assistance 214 214 204 -10
Arts & Recreation Services 229 224 206 -23
Other Services 1,000 942 848 -152
Total 8,706 8,621 8,118 -588
Source: REMPLAN
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Amendment C86 Glenelg Planning Scheme
Economic Impact Assessment of proposed livestock assembly depotSection 2: The regional economic context
2.4 Tourism
The tourism industry is a still small but growing driver of economic output in Glenelg.
Tourism Research Australia data shows that in 2014 there were 331,000 visitors to the
Glenelg Shire (11,000 international, 150,000 domestic overnight, 170,000 domestic day).
Victoria recorded 66,702,000 visitors in the same year, thus 0.5% of total visitors within the
state visited the Glenelg Shire.
Table 2.4
Key Tourism Metrics for Glenelg, 2014
Domestic Domestic
International Total
Metrics Overnight Day
Visitors ('000) 11 150 170 331
Nights ('000) 40 506 - 546
Average stay (nights) 4 3 - 3
Spend ($m) 4 78 13 95
Average spend per trip ($) 376 523 73 287
Average Spend per night ($) 98 155 - 150
Source: Tourism Research Australia
Between April 2014 and Aug 2015, the importance of tourism, measured as its contribution
to total output of the Glenelg economy, has grown, from $77 million at April 2014 to
$80 million at August 2015, as shown in Table 2.5. Tourism now accounts for an estimated
3% of the Shire’s economic output.
Key tourism attractions in Portland include the Great South West Walk, the
Portland Cable Trams, cruise ship tours, Cape Nelson Lighthouse, Cape Nelson State Park, the
Enchanted Forest, Murrells Beach, and the Portland Maritime Discovery Centre.
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Amendment C86 Glenelg Planning Scheme
Economic Impact Assessment of proposed livestock assembly depotSection 2: The regional economic context
Table 2.5
Output attributable to tourism, 2014-15
Change
Apr-14 Aug-15
Metrics (2014-15)
Accommodation & Food Services 41.05 42.96 1.91
Transport, Postal & Warehousing 8.51 8.67 0.16
Retail Trade 7.31 7.60 0.29
Ownership of Dwellings 6.10 6.44 0.34
Manufacturing 4.98 5.14 0.16
Arts & Recreation Services 3.14 3.26 0.12
Rental, Hiring & Real Estate Services 1.04 1.02 -0.02
Wholesale Trade 0.97 0.99 0.02
Education & Training 0.96 0.93 -0.03
Administrative & Support Services 0.91 0.93 0.02
Health Care & Social Assistance 0.86 0.89 0.03
Agriculture, Forestry & Fishing 0.77 0.80 0.03
Other Services 0.38 0.36 -0.02
Information Media & Telecommunications 0.28 0.25 -0.03
Financial & Insurance Services 0.06 0.03 -0.03
Professional, Scientific & Technical Services 0.00 0.00 0.00
Public Administration & Safety 0.00 0.00 0.00
Construction 0.00 0.00 0.00
Electricity, Gas, Water & Waste Services 0.00 0.00 0.00
Mining 0.00 0.00 0.00
Total 77.31 80.26 2.95
REMPLAN; MacroPlan Dimasi
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Amendment C86 Glenelg Planning Scheme
Economic Impact Assessment of proposed livestock assembly depotSection 2: The regional economic context
2.5 Port of Portland
The Port of Portland is one of only four major commercial ports in Victoria, the others being
Melbourne, Geelong and Hastings.
The Port is a privately owned deep-water port located between the Ports of Melbourne and
Adelaide. Covering an area of 65 hectares it is considered the international gateway to the
Green Triangle region, and it is the only Victorian port that serves the needs of two states –
Victoria and south-eastern South Australia.
The PoP specialises in bulk commodities, particularly agricultural (mainly grains, cattle and
sheep), forestry, mineral sands and mining products as well as aluminium and fertiliser. The
seven main categories of cargo handled by the Port are:
1. Forestry
2. Mineral sands
3. Aluminium
4. Grain
5. Fertiliser (primarily incoming)
6. Livestock
7. General cargo
The Port also handles cruise ship vessels.
The Port generates substantial benefits across the local, state and national economies. The
Port is a vital asset for the city of Portland and the surrounding Green Triangle Region,
contributing an estimated $1.5 billion to the regional economy. On any one day
approximately 400 people are employed on the Port, 60 of whom work for the Port with the
remainder working on the Port land for other tenants. Its operations service the region’s
agricultural industry (mainly grains and cattle), the mineral sands industry, the forest
products industry, the Portland Aluminium Smelter and the fertiliser industry.
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Amendment C86 Glenelg Planning Scheme
Economic Impact Assessment of proposed livestock assembly depotSection 2: The regional economic context
2.6 Alcoa
The Alcoa facility in Portland is a key local employment driver, accounting for a significant
proportion of both local jobs and economic output. The Alcoa facility in Portland produces
approximately 358,000 tonnes of aluminium per year and is among the state’s largest
exporters with all aluminium produced at Portland exported to Asia.
Total exports are approximately $649 million per annum, while supporting more than
540 local jobs with an additional contracted workforce of 180. This output generates in
excess of $100 million in wages, $45 million in maintenance and contractor services, and
$7 million in council rates, royalties and community contribution to Portland each year.
Alcoa and the Port of Portland are closely linked. The Alcoa smelter receives some
676,000 tons of alumina via ship from Western Australia every year. The smelter then
exports around 85% of its production directly via the Port of Portland (with the remaining
15% being transported by road to the Port of Melbourne)
Alcoa recently announced that it would be closing down its aluminium smelter at Port Henry
(near Geelong), at the expense of 1,000 local jobs. As has been the case with the numerous
manufacturing closures to hit Australia in recent years, the reason was attributed to
escalating competition from overseas, and the high costs of production associated with
operating in Australia.
The future of Alcoa’s Portland facility is also far from certain, as was made evident in a
detailed article in The Age newspaper on 18 February 2016, which is reproduced as an
Appendix to this report.
The article notes that the Alcoa’s Portland smelter which employs 540 workers directly can
support about 2,000 jobs in total is set to lose up to $40 million in the 2015/16 financial year
due to the collapse in aluminium prices.
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Amendment C86 Glenelg Planning Scheme
Economic Impact Assessment of proposed livestock assembly depotSection 2: The regional economic context
Global conditions make it challenging for the Portland facility to thrive, in today’s economy.
The price of aluminium – used largely in the aerospace, construction and automotive sectors
– has nearly halved since 2008 due to a huge global surplus of the metal, forcing loss-making
firms to slash capacity and make savings.
The smelter’s power costs are estimated by analysts to rise between $50 million and
$90 million as a government subsidy is removed during the latter part of 2016, and a new
power contract commences with AGL. As a consequence, the Portland smelter could
potentially lose more than $100 million a year under current conditions.
This news comes off the back of Alcoa’s global business making a large loss at the end of
2015 and shutting or part closing smelters around the world due to weak prices and over
supply. Alcoa has already cut production at its Portland facility.
Company documents filed in the US in January 2016 by Alcoa list Portland along with 6 other
plans with idled production. This was next to the 14 other plants that have been closed or
sold by Alcoa since 2007.
Clearly, any reduction in output at the Alcoa facility, let alone closure of the smelter all
together, would be a significant blow to the Glenelg regional economy.
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Amendment C86 Glenelg Planning Scheme
Economic Impact Assessment of proposed livestock assembly depotSection 2: The regional economic context
2.7 Great South Coast region
The Great South Coast Region comprises the municipalities of Corangamite, Glenelg, Moyne,
Southern Grampians, Warrnambool and Colac-Otway. The region has a population of
approximately 101,628, and is expected to grow to approximately 124,798 by 2031.
The economic development of the Great South Coast will be guided by the Great South Coast
Regional Plan (2014), produced in accordance with Plan Melbourne. A key focus of the
document is to leverage key industries of strength and a connected transport network to
enhance opportunities for key local infrastructure, such as the Port of Portland.
Employment drivers
Key employment drivers within the Great South Coast Region include:
Health care - 15%
Retail Trade - 12%
Agriculture, Forestry and Fishing - 12%
Manufacturing - 11%
Construction - 9%
Agriculture is the most significant sector within the Great South Coast: dairy in south,
forestry in west and grains in north. 22% of Australia’s dairy production worth $1 billion
annually originates within the Great South Coast. It also supports approximately $2 billion in
annual value of trade through the Port of Portland. The key regional industry of forestry
produces 17% of hardwood and softwood in Australia through forestry plantations, with an
additional 1.2 million tonnes of woodchips exported annually through the Port of Portland.
Manufacturing and health care are key industries second only to agriculture, largely due to
the presence of a key regional industrial asset (the Alcoa smelter in Portland), and an aging
population necessitating growth in health care and social services.
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Amendment C86 Glenelg Planning Scheme
Economic Impact Assessment of proposed livestock assembly depotSection 2: The regional economic context
Aquaculture and fishing are key regional strengths. The commercial fishing industry
contributes strongly to the regional economic, with in excess of $1 million in King crabs and
$4 million in lobsters exported annually.
Future economic drivers
Future economic directions to achieve these changes, as per the Great South Coast Regional
Plan, are listed below. A number of these initiatives, which are particularly relevant to the
subject proposal at 749 Cape Nelson Road, are highlighted in bold type.
Sustainably manage areas of high quality agricultural land to support growth in food
production.
Support higher value-adding and diversification of existing industries and land uses
including the forestry, dairy, meat, grain, mineral sands, energy and tourism sectors,
where they build on existing infrastructure and do not compromise the region’s
agricultural, environmental and cultural heritage significance.
Foster opportunities for investment, infrastructure, innovation and research that
support and strengthen the rural economy.
Maintain and enhance key infrastructure including the Port of Portland and direct
transport links to and from production, processing and markets.
Utilise natural resources and environmental assets sustainably, including secure,
competitively priced water and high quality soils, to underpin economic development and
liveability within the region, ensuring protection from incompatible land use and
development.
Identify and source construction materials and manufactured products close to their
location of use.
Identify potential economic opportunities and risks resulting from climate change to
strengthen the rural economy.
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Amendment C86 Glenelg Planning Scheme
Economic Impact Assessment of proposed livestock assembly depotSection 2: The regional economic context
Attract, develop and retain a skilled workforce, particularly young people, and improve
school retention and educational attainment levels.
Support population in rural areas to provide a workforce for agricultural production and
major projects.
Support industrial development that takes advantage of the region’s natural resources
and infrastructure and direct development to towns, or other appropriate places where
the industry is dependent on a rural location or it has significant amenity impacts.
Support existing and new industrial areas that build on existing assets, infrastructure
and proximity to towns and the growth corridors.
Encourage local energy production, ‘smart’ electricity distribution systems, and across the
eastern part of the region encourage investment in natural gas infrastructure.
Strengthen distributed health and service centres throughout the region.
Support appropriate development and investment to strengthen the role and economy of
towns including small towns facing economic and population challenges
Facilitate the development of the Port of Portland, through investment in
infrastructure, planning controls, access to land and new opportunities and markets
including cruise ships.
Support the sustainable development of the region’s marine environment and
infrastructure to support industry and recreational uses.
Encourage the sustainable development of the tourism sector including investment in
infrastructure to improve access to regional tourism assets and linkages with surrounding
regions to develop integrated tourism experiences.
Sustainably manage and enhance existing and new tourist attractions throughout the
region, including the Great Ocean Road, attractive townships and villages, unique
environmental and cultural heritage assets, the Grampians National Park and the Great
Southern Touring Route.
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Amendment C86 Glenelg Planning Scheme
Economic Impact Assessment of proposed livestock assembly depotSection 2: The regional economic context
The importance of Portland in the Great South Coast Regional Plan
The GSCRP recognises Portland as a regional centre within the Shire of Glenelg, and states, at
page 54, a direction to:
“Support Portland to service the region’s south west and for the Port of Portland to
be a national and international gateway for exports”.
The GSCRP recognises the need to develop primary growth corridors, and has identified two
key areas in which to promote business and industry growth in primary industries.
The first corridor spans between Cobden and Camperdown and extends through
Warrnambool to the west, continuing further west to encompass Portland.
The second corridor commences to the north of Hamilton and Dunkeld, and then proceeds
south via Heywood to also encompass Portland.
Portland is thus the only regional centre encompassed by both primary growth corridors
within the Great South Coast Region.
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Amendment C86 Glenelg Planning Scheme
Economic Impact Assessment of proposed livestock assembly depotSection 3: Population and socio-demographic profile
3.1 Population levels and recent trends
The population levels of both Glenelg Shire and Portland have remained flat or have fallen
over the last 10 years. The resident population of Portland at 2015 was 10,744, 24 people
fewer than in 2005 (10,768).
Over the same time period, the population of the Shire of Glenelg has decreased noticeably,
from 20,051 at 2005 to 19,158 at 2015, at an average annual rate of 0.5%. The population of
Victoria overall has increased over the same period from 4.98 million to 5.93 million, at an
average annual rate of 1.8%.
As previously detailed, the Portland economy is heavily reliant on traditional (industrial)
industry sectors. As these are in decline, people are most likely leaving Glenelg Shire to find
employment opportunities elsewhere.
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Amendment C86 Glenelg Planning Scheme
Economic Impact Assessment of proposed livestock assembly depotSection 3: Population and socio-demographic profile
3.2 Population projections
The latest State Government Victoria in Future (VIF) population projections were released in
May 2015. These projections supersede the previous VIF 2012 and VIF 2014 projections.
VIF 2015 projections show strong growth generally for Victoria’s regional cities. Projected
growth in 10 of Victoria’s largest regional cities is driven by natural increases (more births
than deaths) and inward migration. VIF 2015 assumes more people will relocate outside
Greater Melbourne, leading to a higher projected population in Victoria's regions.
However, VIF2015 projects that the population of the Shire of Glenelg will increase only
marginally, from 19,158 at 2011 to 19,578 at 2031 at an average annual rate of 0.10% (refer
Table 3.1). In the absence of new job creation, though, these projections would most likely
prove to be optimistic, particularly if Alcoa scales back or eventually closes its facility at
Portland.
Table 3.1
Glenelg (S) Population
Estimated population Forecast population
Area 2005 2011 2015 2021 2026 2031
Glenelg (S) 20,051 19,848 19,158 19,262 19,365 19,578
Victoria 4,989,246 5,537,817 5,937,481 6,598,360 7,147,978 7,701,109
Average annual growth (no.)
Area 2005-11 2011-15 2015-21 2021-26 2026-31
Glenelg (S) -34 -173 17 21 43
Victoria 91,429 99,916 110,147 109,924 110,626
Average annual growth (%)
Area 2005-11 2011-15 2015-21 2021-26 2026-31
Glenelg (S) -0.2% -0.9% 0.1% 0.1% 0.2%
Victoria 1.8% 1.8% 1.8% 1.6% 1.5%
ABS Estimated Resident Population, Victoria in Futures 2015; MacroPlan Dimasi
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Amendment C86 Glenelg Planning Scheme
Economic Impact Assessment of proposed livestock assembly depotSection 3: Population and socio-demographic profile
3.3 Age structure
The population of Glenelg is ageing. In 2011, 31.8% of Glenelg’s population was aged
55 years and over, compared to 24.1% in 2001. Overall, the median age of Glenelg residents
increased from 37 in 2001 to 43 in 2011. The median age for Victorians as a whole
experienced a smaller increase, from 35 to 37.
This may reflect the strong presence of traditional manufacturing and agricultural industry
within the region, or may be evidence of lifestyle-related retirement.
Contrasting, there are a low proportion of young, independent-aged residents. Only 3.8% of
the resident population falls within the 20-24 cohort, with access to higher education and
employment opportunities being key drivers promoting re-location.
VIF2015 projections illustrate that the ageing of the Glenelg Shire population is set to
continue through to 2031. The proportion of Shire residents aged 54 and under is projected
to decrease from 75.9% at 2011 to 57.7% in 2031. Conversely, the proportion of residents
aged 55 and over is projected to increase from 24.1% to 42.3% (refer Table 3.2).
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Amendment C86 Glenelg Planning Scheme
Economic Impact Assessment of proposed livestock assembly depotSection 3: Population and socio-demographic profile
Table: 3.2
Population projections by age, Glenelg
Age Group 2011 2015 2021 2026 2031
0-14 years 21.2% 19.1% 16.1% 15.5% 15.3%
15-24 years 11.3% 10.7% 11.2% 10.1% 9.5%
25-54 years 41.5% 38.4% 33.6% 33.1% 32.8%
55-74 years 19.9% 23.9% 29.2% 29.2% 27.9%
75+ years 7.7% 7.9% 9.8% 12.1% 14.5%
Source: ABS Estimated Resident Population, Victoria in Futures 2015; MacroPlan Dimasi
3.4 Socio demographic profiles
Per capita income in Glenelg is $28,594, 0.7% higher than the non metro Victoria average,
but well below the Australian average of $34,467.
Glenelg has high proportions of of couple families without dependent children and also lone
person households.
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Amendment C86 Glenelg Planning Scheme
Economic Impact Assessment of proposed livestock assembly depotSection 3: Population and socio-demographic profile
Table: 3.3
Glenelg & Portland socio-demographic profile, 2011
Portland Glenelg Non-metro Vic Aust.
Census item SA2 LGA avg. avg.
Per capita income $29,961 $28,594 $28,382 $34,467
Var. from Non-metro Vic benchmark 5.6% 0.7%
Avg. household income $68,748 $66,467 $68,117 $88,205
Var. from Non-metro Vic benchmark 0.9% -2.4%
Avg. household size 2.3 2.3 2.4 2.6
Housing status (% of households)
Owner (total) 71.2% 76.7% 74.0% 68.7%
• Owner (outright) 35.5% 42.4% 39.6% 32.9%
• Owner (with mortgage) 35.7% 34.3% 34.3% 35.8%
Renter 28.7% 22.8% 25.2% 30.4%
Other 0.1% 0.5% 0.8% 0.9%
Birthplace (% of population)
Australian born 91.3% 92.1% 89.0% 74.0%
Overseas born 8.7% 7.9% 11.0% 26.0%
• Asia 1.5% 1.0% 1.8% 8.6%
• Europe 4.8% 4.8% 7.1% 10.5%
• Other 2.4% 2.1% 2.1% 7.0%
Family type (% of households)
Couple with dep't children 39.4% 40.5% 41.9% 45.3%
Couple with non-dep't child. 6.0% 6.3% 6.5% 7.7%
Couple without children 24.9% 26.9% 25.6% 23.0%
One parent with dep't child. 12.2% 9.7% 9.8% 9.2%
One parent w non-dep't child. 2.8% 2.6% 3.1% 3.5%
Other family 0.6% 0.7% 0.8% 1.1%
Lone person 14.1% 13.4% 12.3% 10.2%
Source: ABS Census of Population & Housing, 2011; MacroPlan Dimasi
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Amendment C86 Glenelg Planning Scheme
Economic Impact Assessment of proposed livestock assembly depotSection 4: Shire of Glenelg and Portland labour forces
4.1 Employment & unemployment levels
Over most of the last 5 years Portland’s unemployment rate has been relatively high,
reaching a peak of 10.3% in mid-2014. The unemployment rate in Glenelg has been
consistently lower than in Portland, whilst following the same trend (refer Chart 4.1 below).
Chart 4.1
Historical unemployment rates for Glenelg (S) and Portland 2010 - 2015
11.0%
Glenelg (S) Portland Victoria
10.0%
9.0%
8.0%
7.0%
6.0%
5.0%
4.0%
3.0%
2.0%
Dec-10 Jun-11 Dec-11 Jun-12 Dec-12 Jun-13 Dec-13 Jun-14 Dec-14 Jun-15 Dec-15
Source: Department of Employment (SALM); MacroPlan Dimasi
Unemployment rates throughout the region have been traditionally well above the Victoria
average, however, a recent decline over the last 6 months has seen unemployment rates in
both Glenelg and Portland dip below the Victorian average of 6.1% in late 2015. According to
the Developer Liaison Co-ordinator of the Glenelg Shire, Mr Daniel Peck, the recent dip can
be attributed to a range of factors. These include an increase in exports from the port,
additional employment of approximately 80 jobs from Keppel Prince Engineering due to
boosted confidence in the renewable energy sector, and an increase in timber plantation
production within the Green Triangle, creating jobs for harvesters and within the freight and
logistics sector.
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Amendment C86 Glenelg Planning Scheme
Economic Impact Assessment of proposed livestock assembly depotSection 4: Shire of Glenelg and Portland labour forces
As Chart 4.1 above shows, the unemployment rates in both the Shire of Glenelg and the
town of Portland are cyclical, and generally run at noticeably higher levels than the Victorian
state average. Some particular initiatives over the past year or so have succeeded in reducing
the local unemployment rates, however, the medium and longer term threat of potential
substantial job losses at Alcoa, as well as the cyclical nature of many of the region’s
industries (in particular agriculture) mean that the Glenelg region remains susceptible to high
unemployment rates in the future.
4.2 Employment by occupation
Portland is a predominantly ‘blue collar’ city with approximately 44.6% of residents in the
labour force performing manual labour.
Making up 18% of the total workforce, technicians and trades workers are ‘over-
represented’ in Portland (14.2% across Victoria). Portland also has noticeably higher
proportions of labourers (14.4% compared to 9.2% across Victoria), as well as machinery
operators and drivers (12.2% compared to 6.2% across Victoria).
By contrast, white collar occupations such as managers, professionals and clerical and
administrative workers are significantly underrepresented in Portland, making up a
combined 34% of all workers compared to 51.0% across Victoria.
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Amendment C86 Glenelg Planning Scheme
Economic Impact Assessment of proposed livestock assembly depotSection 4: Shire of Glenelg and Portland labour forces
4.3 Labour force skills
Portland’s labour force is characterised by a heavy reliance on traditionally rural activities
such as manufacturing and agriculture. An examination of levels of education and
qualifications has enabled an assessment of labour force skills for the regional workforce.
Levels of qualification
Of the 7,944 residents in Portland aged 20 or above at Census date 2011, only 3,167 had a
non-school qualification, representing 39.9% of the adult population. Of these, 24.4% held a
Certificate level qualification and only 7.6% held a Bachelor Degree.
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Amendment C86 Glenelg Planning Scheme
Economic Impact Assessment of proposed livestock assembly depotSection 4: Shire of Glenelg and Portland labour forces
4.4 Labour force mobility
Journey to work data analyses the level of employee self-containment (the percentage of
employed Portland residents who work in Portland), and employee self-sufficiency (the
proportion of jobs in Portland that are filled by residents of Portland).
The data reveals that self-containment within Portland is 91.3% with the vast majority of
Portland residents not leaving the town to access their place of employment. Of those that
do, 4.9% work elsewhere in the Shire of Glenelg, while only 3.8% travel to other
municipalities.
Analysis of employment self-sufficiency data for workers across all industries in Portland
reveals that 75.4% of Portland jobs are filled by residents of the town. Almost one in five
work in Portland but live elsewhere in the Shire of Glenelg, and only 4.7% of Portland’s
workers live in a municipality other than the Shire of Glenelg.
Table 4.1
Labour Force Mobility
Employment self containment Number Share
Stay in Portland for work 3,932 91.3%
Work elsewhere in Glenelg 210 4.9%
Work outside of Glenelg 162 3.8%
Total 4,306
Employee self sufficiency Number Share
Stay in Portland for work 3,932 75.4%
Work elsewhere in Glenelg 1,040 19.9%
Work outside of Glenelg 243 4.7%
Total 5,215
ABS Census of Population and Housing; MacroPlan Dimasi
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Amendment C86 Glenelg Planning Scheme
Economic Impact Assessment of proposed livestock assembly depotSection 5: Economic impacts of proposed livestock
assembly depot
5.1 The economic need and demand
The Goolagar proposal at 749 Cape Nelson Road is a direct response to new export
opportunities which have arisen as a result of the China-Australia Free Trade Agreement
(CAFTA).
China is Australia largest agriculture, forestry and fishing export market, worth $9 billion in
2014/15, up from $5 billion in 2010/11. China’s demand for high quality agriculture and food
products is growing rapidly. The Australia Bureau of Agriculture and Resources Economies
and Sciences (ABARES) predicts China will account for 43% of global growth in agricultural
demand by 2050.
Until now, the absence of a bilateral FTA with China has meant Australian producers and
exporters have faced significant tariffs on agricultural products, and have been at a
competitive disadvantage to countries that have an FTA with China – including New Zealand,
Chile and ASEAN.
The CAFTA addresses this issue, and also gives Australia a significant advantage over larger
players, such as the US, EU and Canada. CAFTA, which came into force on 20 December
2015, also provides a base for further liberalisation through a commitment to review
outcomes three years after entry.
China’s demand for high-quality beef is growing rapidly, driven by a growing middle class.
The OECD assesses that beef will be the fastest-growing import sector in China. In 2014/15
Australian beef exports to China totalled 128,700 tonnes, worth $758 million. Australia –
already China’s key imported beef supplier with 40 per cent of the import market and with
an outstanding reputation for quality – will be ideally placed to capitalise on this growing
demand, with CAFTA delivering a competitive advantage over other large beef exporters.
Key outcomes include:
Elimination of tariffs on beef imports (currently ranging from 12-25 per cent) by 1 January
2024.
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Amendment C86 Glenelg Planning Scheme
Economic Impact Assessment of proposed livestock assembly depotSection 5: Economic impacts of proposed livestock assembly depot
Elimination of the 12 per cent tariff on beef offal by 1 January 2022.
Overoceans Pty Ltd, which operates the Kobo assembly depot situated on Cape Nelson Road
close to the subject site, is an associated company of Goolagar Pty Ltd. The Kobo assembly
depot was established in 1982, thus Goolagar is highly experienced in the preparation of
cattle for export.
China has only recently started to import beef cattle, and Kobo is actively engaged in this
operation. In 2009, Kobo commenced preparing dairy heifers for export to China, primarily
for the purpose of herd improvement. It is now preparing some 30,000 – 35,000 head of
cattle per year for live export. In 2013/14 total live cattle exports from Victoria were
124,217 head, valued at $253 million. Exports from Portland accounted for the majority of
this total, with 105,257 head, and exports to China similarly accounted for the bulk of the
total, with 94,211 head.
As a result of the recent China-Australia Free Trade Agreement, China has announced that it
will open the market to Australian producers for feeder and slaughter cattle, with some
reports suggesting that as many as 1 million cattle could be required under this
arrangement. The Goolagar proposal for the subject site will therefore assist in meeting the
readily available growth in this industry, and at the same time creating substantial additional
local employment in Portland and stimulating further economic activity through the Port of
Portland.
The Goolagar proposal is a separate business opportunity to the existing Kobo, and is a direct
response to the signing of the China-Australia Free Trade Agreement. A crucial element of
the Goolagar proposal is the requirement for accuracy of shipping. The proposal involves an
end user abattoir based in China which must have certainty of supply, and it is for that
reason that the new livestock assembly depot proposed by Goolagar will be developed. The
target opportunity for the Goolagar proposal is for up to 140,000 head of cattle to be
exported annually, expected to be delivered via 10 – 20 shipments ranging between 7,000 –
14,000 head per vessel.
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Amendment C86 Glenelg Planning Scheme
Economic Impact Assessment of proposed livestock assembly depotSection 5: Economic impacts of proposed livestock assembly depot
5.2 Economic impacts
A detailed independent assessment of the value of the livestock export industry to the
national economy was prepared in January 2004 by Hassal & Associates Pty Ltd for Meat and
Livestock Australia (MLA). The report was titled ‘A quantitative and qualitative assessment of
the value of the livestock export industry to the national economy’.
The report presents a detailed analysis of the Australian livestock export industry, including
value added, multiplier effects, employment and the impact of the industry on participating
businesses and regional towns. As well as examining the national picture, the report also
includes a number of case study analyses, for Wongan Hills in Western Australia, Hamilton
and Portland in Victoria, Katherine and Darwin Port in the Northern Territory, North
Queensland and Broome/West Kimberley in Western Australia.
Amongst the key findings of the MLA report were the following:
The livestock industry value chain has been shown to be complex and relatively long. Up
to 25 separate business types, each generating value added in employing people in both
urban and regional Australia, were identified.
The value chain for live cattle shows that producers, transporters (road and sea) and
fodder suppliers are the major recipients of revenue from the trade.
The case study analyses provide an understanding of the contributions of the live sheep and
cattle industries to regional Australia. Regional economic impact modelling was undertaken
to demonstrate the contribution which each industry makes to total economic activity in
each region, as well as the revenue created by the industry, industry value added and
employment. The following multipliers were estimated for each of the case study locations.
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Amendment C86 Glenelg Planning Scheme
Economic Impact Assessment of proposed livestock assembly depotSection 5: Economic impacts of proposed livestock assembly depot
Table 5.1
Mutliplier Effect of the livestock export industry
Value Added Employment
Region
Fremantle/Southern Perth 1.8 2.8
Wongan Hills, WA 1.3 2.1
Hamilton & Portland 1.6 3.3
Katherine & Darwin 1.6 2.7
North Queensland 1.5 2.4
Broome West-Kimberley 1.3 2.3
Regional Average 1.5 2.6
Source: Meat & Livestock Australia, JL.433i, 2004
The MLA report estimated that at that time the live export industry in the Hamilton and
Portland region generated some 320 jobs. Since that date, the live export industry has grown
substantially in cattle, but has reduced dramatically in sheep. Live cattle exports through
Portland have approximately doubled from some 50,000 at the time that the MLA report
was prepared, to in excess of 105,000 at 2013/14.
Sheep exports on the other hand have declined considerably, apparently due in large part to
the refusal of Saudi Arabia to accept the inspection requirement as demanded by Australia.
Continued growth in cattle exports will therefore be an important component of
employment sustainability and additional employment creation for Portland and the Port of
Portland.
In this regard, the proposed livestock assembly depot at 749 Cape Nelson Road, will create
an estimated 12 new ongoing employment positions, including permanent and casual
employees, and pay an estimated $400,000 per year in additional wages and salaries.
Payments to suppliers and contractors are expected to total approximately $400,000
annually, over and above wages and salaries paid for the depot’s operation.
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Amendment C86 Glenelg Planning Scheme
Economic Impact Assessment of proposed livestock assembly depotSection 5: Economic impacts of proposed livestock assembly depot
In addition to the ongoing employment generated by the facility’s long term operation there
would be an initial employment stimulus, both direct and indirect, through some
construction activities which would be required to build fencing, portable amenity building, a
number of sheds, and also laying of water pipes. The construction cost is expected to total in
the order of $1 million, and as a result would create approximately 4 jobs directly and a
further 7 jobs indirectly through multiplier/spin-off effects.
Amongst the key suppliers and contractors which will benefit from the proposed
development are the following:
Transport providers, at a cost of approximately $500 per load with each load carrying
around 1,000 head.
Fodder suppliers – as a rule of thumb, each of the cattle will require approximately 10 kg
of fodder per day. Thus, for a shipment of 4,000 head, one B double of hay would be
required.
Veterinarian Services – all cattle have to be inspected by a vet at least once.
Port facilities, including stevedoring.
Accommodation facilities in Portland – exporters are expected to have up to 30 staff,
including their own veterinarians and importers, for each shipment. Typically those staff
will spend 2 – 3 weeks in Portland for each shipment.
Supporting retail facilities, particularly food and beverage.
For the purposes of this assessment, detailed discussions were held directly with a number
of related businesses within Glenelg and the surrounding region, to assess and estimate the
likely multiplier benefits directly for the Glenelg region. Discussions were conducted with:
The Port of Portland
Qube Stevedores
Boyles Transport, based at Naringal
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Amendment C86 Glenelg Planning Scheme
Economic Impact Assessment of proposed livestock assembly depotSection 5: Economic impacts of proposed livestock assembly depot
Quest Hotel Portland
Heywood Stockfeeds
The results of those discussions are summarised below:
Port of Portland
At present the Port of Portland, which directly employs around 80 people, services in the
order of 300 ships per year, with charges levied on a tonnage basis. An increase of
potentially 10 – 20 additional ship movements would be a significant boost to port business.
At present livestock accounts for approximately 12% of the port’s ship movements, slightly
higher than the long term average due to the fact that the impacts of the current drought in
north-western Victoria have meant that there is minimal activity in the grain sector through
the port.
The port stresses that diversity is essential to its long term success and sustainability. As
previously noted, there are seven main categories of cargo which travel through the port,
and each of those is important to the port’s future success. An increase in the livestock trade
would be welcome, particularly given the current minimal business in grain trade due to the
drought, and also in view of the medium and longer term threat hanging over the Alcoa
smelter business.
Qube Stevedores
At present Qube Stevedores, which is based at the Port of Portland, employs approximately
100 people. Qube provides a range of services for each livestock shipment, including forklift
operators, cattle musterers, riggers, blowers (who transport the feed onto the ship), and
various others.
The livestock business is a very important component of Qube’s business, with an average of
3 – 4 vessels serviced by Qube per month.
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Amendment C86 Glenelg Planning Scheme
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