Mr Mike Rayner General Manager Tweed Shire Council PO Box 816
Murwillumbah NSW 2484
Dear Mike,
Attached is a final report reflecting the views of the board of the Tweed Economic Development Corporation Limited (TEDC), which summarises some of TEDC activities, strategies, reports and recommendations which the board believes appropriate, as part of complying with any final obligations to council in accordance with the agreement between TEDC and Council.
The board also wishes to make it very clear that the report is not, and should not be seen as a criticism of any aspects of council, nor should it be seen as being negative. It is simply an honest and factual summary of the facts, figures and opinions of the organisation, expressed with the purpose of assisting council in meeting the challenges of delivering sustainable economic growth into the future.
If you have any questions, either myself or the board are available until November 30th 2010.
For and on behalf of the board.
Yours faithfully,
Tom E J Senti, CEO.
Final Report to Tweed Shire Council
In Accordance with Terms of Agreement which Terminated on September 30th 2010
The following final report is provided by Tweed Economic Development Corporation Ltd (TEDC) in accordance with the terms and conditions of the agreement between (TEDC) and Tweed Shire Council (TSC), which commenced in 1997 and terminated on September 30th 2010; and in accordance with the conditions under which TSC delegated the responsibility to TEDC, for the provision of the “Leadership and Direction
necessary for the identification and development of information, projects, strategies and initiatives to inform and assist council in the development of a sustainable Tweed economy”.
“Local economic development refers to the process in which Local Government or local community based organizations engage to stimulate or maintain business activity and / or employment. The principal goal of local economic development is to develop local employment opportunities in sectors that improve the community using existing human, natural and institutional resources.” (Blakely p xv)
Partnership and leadership are two key components of economic development. No one organization or company can solve the local economic problems alone.
The role of local government has changed and through its increased governance and strategic planning process has become a key stakeholder in the local economy, with the political and economic power to lead, influence and guide the socio-economic growth of its region, with either positive or negative results.
However history has shown that this increase in responsibility has not necessarily been accompanied by an increase in the level of understanding of either the structure of its local economy, or more importantly the ability and or mechanism to be able to measure and monitor the impacts of decisions on the local economy over time.
The following quote is an extract from “Economic Development is a Planning Issue”
written by Ian Sinclair, Principal Consultant - EDGE Land Planning - University of NSW Planning Law and Practice Goes Bush, 1999, and much work has since been done which further substantiates the synergies between economic development and strategic planning at the LGA level.
“Planning policies and decisions, as well as the attitude of Councilors and Council Officers can have a direct impact on the stimulation of economic development.
Both the statutory and strategic planning functions are important and need to recognize that economic development is a planning issue, a fact that needs to be recognized and accepted by local government planners and elected
representatives.”
Many decisions by council are made in response to an initiative or proposal, or
community perceptions, or based on the experience, philosophy or political bias of the elected representatives, rather than in response to a proactive Vision and Strategy, developed, informed and substantiated by the facts which identify and outline the directions necessary to deliver long term sustainable socio-economic growth of the region.
Similarly the process of developing a Vision and Strategy by asking the community
“what it wants” through the community consultation process, whilst democratically appropriate, is fundamentally flawed if the community is not provided with all of the economic, social and demographic facts which apply to the region, and which should be made available so as to assist the community in better understanding the impacts and implications of their recommendations in the development of the Vision and Strategy for the region.
In recognition of the need to better understand the economic structure of the local economy, TSC initiated the establishment of TEDC as an independent, commercially focused organization, operating external to council, with the specific task of
complementing the governance role of council by establishing the facts which best identified, outlined and described the social, economic and environmental sustainability challenges faced by the Tweed; facts which were then used to inform the actions,
strategies and policy development initiatives which would assist council in developing an informed and proactive Vision and Strategy for delivering long term social, economic and environmental sustainability of the Tweed.
The TEDC approach was based on the commercial realities of the need to understand the structure of the local economy before developing the strategies necessary to facilitate growth of the local economy or in commercial terms “the need to know the business before you can grow the business.” To achieve these outcomes TEDC embraced the following strategies: “Where are we now”, “Where are we going”, “Where do we want to be”, and “How do we get there”.
1. “Where are we now” - established a base line of facts which outlined the
economic, demographic and statistical data which defined the macro status of the Tweed.
2. “Where are we going” – an outline of the no change scenario, which identified the consequences of pursuing similar policy direction and initiatives as in the past which has resulted in the current unsustainable, population driven serviced based economy.
3. “Where do we want to be” – identified projects and initiatives, informed and substantiated by facts, which would assist in informing the development of the Vision and Strategies necessary to deliver long term social and economic sustainability, and
4. How do we get there” – the development of projects, policies, initiatives and tools which would assist council to facilitate and promote employment generating growth of the Tweed economy.
Following is a brief history, outline and summary of the findings and outcomes of the above approach by TEDC;
1. Where are we now?
Early research confirmed that historically the Tweed economy was predominantly a rural based economy; complemented by an emerging tourism sector - driven principally by the recreational club industry and hinterland and coastal attractions; and population driven residential growth.
In 2002/03 TEDC in partnership with the University of Queensland, School of
Economics and Economic Policy Modeling, developed the now highly recognized and National Award Winning “Tweed and Northern Rivers Economic Modeling Tool”. This tool was initially developed for the all councils in the Northern Rivers Region, and was based on economic data collected from a broad range of local businesses in the Tweed and Northern Rivers region.
The tool initially established the facts on the structure of the economies of each
participating LGA, and in the case of the Tweed in particular, established a baseline of understanding of the structure of the Tweed economy, which confirmed earlier
demographic and statistical research by TEDC, suggesting that there were some serious structural problems with the local economy, which would continue to impact on future economic and social sustainability of the Tweed unless actions were initiated to rectify the imbalance.
The initial economic modeling data complemented the findings of earlier research conducted by TEDC and the University Of Queensland School Of Tourism, with both reports providing facts which dispelled some of the long held myths that major drivers of the Tweed economy were agriculture, tourism, and population driven residential
development.
Regular updates of the modeling tool by TEDC since 2003, supported by other
Demographic and statistical data confirm the fact that the Tweed economy is dominated by the services sector which contributes 90.7% to GRP, with agriculture contributing only 3.2% to GRP, and Manufacturing 6.1%. All confirming the fact that the Tweed economy is a population driven, serviced based economy; driven by a higher than average aging demographic cohort; suffering at the impact of higher than average unemployment; lower than average disposable incomes; and a tourism industry which only contributes 5.4% to GRP, and suffers from a lack of real tourism product.
Population projections also confirm future sustainability challenges for council in providing the type of infrastructure, transport and the health and ageing services
necessary to support the predictions that more than 38% of Tweeds future population will be over 65 years of age by 2026, not to mention the dramatic flow on effect from of the population demographics projections on the broader Tweed economy, and indirectly on local government sustainability and capacity to deliver essential infrastructure.
2. Where are we going?
Following is a summary of the Facts which outline where the Tweed is at present and as such provides a baseline for determining where the Tweed will we be unless we embrace and address the challenges as identified, confirmed and outlined by the following;
The TEDC National Award Winning Economic Modeling Tool updates of the Tweed economy since 2003 have consistently recorded and confirmed the Tweed, as being a 90.7% population driven, serviced based economy, which has simply responded to the needs of population growth, with manufacturing contributing 6.1%
and agriculture at 3.2% to GRP (& employing only 4.2% of the Tweed work force)
Agriculture is no longer the major economic driver of the Tweed economy and in fact is declining at 7.2% pa - a rate greater than the national average.
Research by TEDC in 2009 confirmed that tourism in the Tweed had an annual growth rate of 1.4% over the last two years; in comparison, NSW had an annual growth rate of 3.5%. And that tourism’s contribution to the Tweed economy was 5.4%. with an average stay in Hotels/Motels at 2.2nights (Gold Coast 4 nights), low occupancy rates of 50%, and low average expenditure of $94 per night compared to
$183 per night on Gold Coast and $214 per night for NSW.
• In 2006, 22% of Tweeds population was over 65 years and 35% over 55 years of age. Population projections suggest that by 2031, 38% of the Tweeds population will be over 65 years which equates to 45,600 people (with 8,700 will be over 85 years of age).
These facts raise the question of:
o What is the likely impact of this increase in age demographic cohort going to have on the TSC rate base, health and community services, and ransport and telecommunications infrastructure, and of course the Tweed
economy?
o What will be the economic impact on the local economy? and o How is council going to provide the vision and leadership necessary
address these challenges?
In 2009/10 49.14% of Tweed Shire ratepayers are on the minimum ordinary rate?
Population growth predictions, particularly in the high age demographic, suggest that this trend will continue which raises the question of, “what will be the economic impact on the ability of council to provide essential infrastructure to support sustainable socio-economic growth; and what will be the impact on the financial stability and sustainability of the Council?
The minimum residential rate in Tweed Shire for 2009/10 was $747.10 The general residential rate including water, sewer, garbage was $1593.90 The Tweed shire has a total of 38,004 rate payers of which 21% or 8,107 are
pensioners. This fact again raises the question of the impact of population growth particularly in the high age demographic on the ability of council to provide essential infrastructure to support sustainable socio-economic growth; and the financial stability and sustainability of the Council?
The total Pensioner discount in 2009 was $3,040,618 for which the Tweed shire council receives a 55% or ($1,672,339.00) NSW government pensioner rate subsidy which means the net cost to council in 2009/10 was $1,368,279.
The current unemployment rate in Tweed Shire is 5.81% compared to NSW 4.76%.
The Tweed currently has - by state and national standards - one of the very lowest work participation rates (WPR) at 42%, when compared to NSW at 62%, SEQ at 62.7% and the Northern Rivers at 55%.
This WPR equates to only 30,522 people in full time equivalents actually earning and income and living in Tweed Shire, with 11,000 of the 30,522 leaving the shire each day to work in other places. This equates to only 19,294 self employed and employees in full time equivalents actually living and earning an income in Tweed shire. The current WPR has enormous implications on the future economic sustainability of the Tweed Business Community as well as Local Government, but also has implications on other social sustainability aspects of the structure of the broader Tweed community.
Rural Land Use Report 2002 conducted by TEDC specifically identified farm lot sizes as an issue when it was confirmed that there were only 12 properties over 200 hectares, 22 properties over 100 hectares, 700 properties between 40 and 100 hectares and over 700 properties between 1 and 40 hectares.
The research also found that not only are the farms/properties in the Tweed obviously fragmented small holdings, but due to the diverse biophysical attributes of the land are not productive, bringing into question whether economies of scale can be achieved.
Weekly Individual Incomes Tweed LGA 2006 Census data ; 65.8% (Tweed) earn less than $599.00 per week – NSW 54.5%; 81.4% (Tweed) earn less than $1,000 per week – NSW 72.1%.
Weekly Household Incomes Tweed LGA 2006 Census Data; 57.2% (Tweed) have household income of less than $1,000 per week – NSW 42.6%
These figures confirm the fact that if the Tweed is to achieve a moderate 50%
work participation rate by 2031, then there is a need to generate some 25,000 additional new jobs by 2031.
3. Where Do We Want to Be?
The above facts confirm that the Tweed cannot continue to pursue and promote strategies which simply respond to the need and demands of a population driven- high average age demographic- economy.
Population driven residential development and associated construction in its various forms simply accommodates population growth and provides short term economic stimulus during the construction phases, and ultimately delivers a serviced based
economy resulting in lower than average disposable incomes and limited job choices, as outlined in the facts above.
A serviced based economy is one that simply responds to the needs and demands of the population and delivers growth in retail and professional services sector including health, and ageing, and transport services, but does not deliver jobs that are in the high average disposable income bracket, which in term impacts on the cost of service delivery and the viability of small business.
Similarly the preservation of agriculture land through the zoning process, whilst on the surface protects the land from further subdivision, does not address the issues associated with agricultural productivity, sustainability, viability and the economies of scale
necessary to underpin future agricultural sustainability, not to mention the increasing age of the farmers, or the impact of an increasingly emerging and competitive global
economy.
These facts confirm the need for the development of a Vision and Strategy by council, which encourages and facilitates the broadening and diversification of the Tweed Economy, as distinct from continuing to pursue a policy of accommodating population growth through rural and residential land subdivisions in the belief that these activities would deliver sustainable, employment driven socio-economic growth.
The current process of inviting the community to have input into the future Vision and Strategy direction of the Tweed is commendable except for the fact that the community should be given the benefit of being informed by the facts which clearly outline the challenges the region faces, as outlined briefly above, and which reinforce the need for a more informed and proactive approach to the development of a Vision and Strategy, which can deliver sustainable social and economic growth for the Tweed.
4. How do we get there?
It is not the intention, nor is it necessary for this final report to provide detail of all of the research, projects, reports or initiatives developed and promoted by TEDC as all of these actions have been forwarded to Council in various forms and are all part of public record.
However whilst the following list is a brief summary of TEDC projects and initiatives, TEDC has provided further detail on a number of initiatives, which in the broader context of achieving visionary sustainable economic strategic planning, we believe have been or are fundamental to the future growth and sustainability of the Tweed economy.
Initiated the Tweed Heads CBD Master Planning process. The master plan has now resulted in some $650 million of new investment in the Tweed CBD which includes the Tweed Ultima, Wharf Central, Serenity and others in various stages of completion and or planning. The plan is a classic example of the vision and leadership necessary to encourage new employment generating investment to the region.
Conducted the Tweed Rural Land Use Study 2002. Subsequent follow up research by TEDC was not supported by council. (See additional summary).
Initiated Research into the Tweed and Gold Coast Cross Border Region with the view to addressing significant impediments to cross border inter regional;
business growth and activity.
Initiated the construction of the Condong Boat launching facility as part of growing the Marine Manufacturing Industry.
Managed the refurbishment of the Tweed Heads Slipway as part of a program of encouraging marine related industries in the Tweed as well as developing management plans for the Southern Boat Harbor and Tweed River.
Established the Tweed Marine Industry Association.
Participated in the Joint Gold Coast and Tweed Marine Supply Chain Project.
Promoted the need for Marina Type facilities on the Tweed River.
Promoted the need for a Plan of Management for the Tweed Southern Boat Harbour.
Developed the Tweed River Nature Link tourism product proposal/concept, which was rejected by council. (See additional summary).
Initiated and facilitated the establishment of the Industry Central development at Murwillumbah.
Produced the Master Planning – An Approach to Employment Generating Lands Report in 2009. (See additional summary).
Developed the National Award Winning Tweed and Northern Rivers Economic Modelling Tool.
Initiated the $700,000 Seamless Borders Project as part of addressing cross borders issues.
Established a Tweed Specific Online Industry Data Base and Yellow Pages Directory.
Developed a concept for the establishment of an Environmental, Educational, Interpretive Pre-feasibility report 2008.
Developed and Tweed Marketing and Investment Strategy specifically aimed at attracting new employment generating investment to the Tweed.
Produced a Research Report on the Impacts of an Aging Population in the Tweed 2009
Conducted a Tweed Business and retention Survey of all 4,864 ABN registered Tweed Businesses 2010.
Produced the Tweed Telecommunications Infrastructure Action Plan 2010 for TSC.
Facilitated the development of the Innovation at Wardrop, 475 hectares Master Planned Concept deferred by council.
Produce the bi-annual publication “Tweed Pulse”.
Produce other “Tweed Specific” publications including – The Thinking Growing Smarter Monthly Newsletter – Tweed Prospectus and Tweed Regional Profiles.
Other activities include promotion of the Tweed at State, Inter-State & National level through events, conferences and marketing and promotional activities.
Promote events which assist business growth and activity at the small business level.
Additional Information:
1. The Need for a Totally Integrated Master Planning Approach.
In the broader context of visionary sustainable economic strategic planning, the issue of land use planning and zoning practices need to be changed to reflect changing times and uses, based again on identified employment needs and the need to adopt a proactive and facilitating approach to employment generating, investment attraction.
The traditional approach to simply zoning land to accommodate historic and traditional uses needs to be expanded to embrace the integrated master planned community approach, and incorporating specific precincts including work, live, learn and play principles. In other words it’s not just about accommodating population growth, but more
about promoting and facilitating initiatives which influence the demographic structure of increased population by providing investment driven, employment opportunities.
The historic traditional approach (in the Tweed at least) is to restrict retail opportunities to identified business centers, similarly to restrict commercial development growth to existing business centers and to accommodate other industry type activities to land zoned industrial.
The TEDC Master Planning – An Approach to Employment Generating Lands 2009 report suggests that the traditional approach is fundamentally flawed and out dated, in that the historic industry sectors which initially demanded this type of zoning approach, (Large scale polluting manufacturing type industries) are no longer seen as having the capacity for the growth required to deliver the spread of jobs to grow and underpin a sustainable economy.
This historic approach also leads to, “long lead-in times and costly development
application approval processes” because of the need to avoid conflicting and sometimes non-compatible uses. For example; the location of a fibre glass boat manufacturer in close proximity to or adjoining a food manufacturer or processor. (Note the emergence of China and India has resulted in an increase in imported products typically located
previously on land in Australia zoned industrial).
The master planned approach with specific use precincts is designed to deliver better outcomes in terms of approval processes, and is broadened to accommodate commercial office development precincts, with the view to encouraging major office relocations to regional growth centers, and as such improving regional employment opportunities and capacity fundamental to addressing the issues associated with low WPR, low disposable incomes and an economy which is 90% serviced based.
In association with the master planned approach is the need to change the development approval processes by adopting specific precincts, and specific precinct approval planning processes such as code assessable, impact assessable and self assessable processes.
It is interesting to note that feedback from the NSW Country and Regional Relocation Expo held in Sydney, reflected a strong expression of interest from young professionals extremely interested in relocating from Sydney to regional areas like the Tweed, for family and lifestyle reasons.
This is a trend which has been experienced throughout the world and in the case of the Tweed, presents an opportunity to attract highly paid professionals to the region by encouraging the relocation of larger professional/commercial operations from metropolitan areas who would be attracted to the Tweed through an adoption of the master planning process, complemented by access to advanced telecommunications and the attractions of Gold Coast Airports and the sea and Airports of Brisbane.
2. Telecommunications Infrastructure Action Plan
Telecommunications and especially broadband communications, is a key enabling technology that successful countries provide as part of the infrastructure necessary to encourage and assist business and investment growth across a broad range of industry sectors, enabling business to develop a competitive advantage in an increasingly competitive global economy.
Broadband technology also enriches community life by providing greater access to a wider range of information and services, readily accessible and delivered with unprecedented convenience and flexibility.
The importance of the Telecommunications Infrastructure Action Plan developed by TEDC in collaboration with TSC cannot be over emphasized and is seen as fundamental to employment generation through the broadening and diversification of the Tweed economy in collaboration with a master planning approach.
3. Agricultural Production – Rural Land Use Study 2002
This project established the facts as they relate to agricultural production in the Tweed and was forwarded to council as part of a process of informing future policy development and sustainable management of agricultural production and future use and activities on land zoned rural.
The report recommended an urgent need for local, state and federal government action and intervention to address small lot sizes and lack of economies of scale which was impacting on agricultural viability and sustainability and the pressure of land subdivision and urban encroachment on land zoned rural in the Tweed. Recommendations included the possibility of a range of farm subsidies to facilitate continued agricultural production in the Tweed.
Council ignored the recommendations of the report and now eight years later the lack of a proactive approach at the local level has seen a continued decline in agricultures
contribution to the Tweeds economy.
Again the importance of future Rural Land use actions cannot be over emphasized and we would like to suggest that further actions should be seen as a priority for TSC as part of any future Vision and Strategy for the region.
4. Tourism in the Tweed
Tourism is the temporary short-term movement of people to destinations outside the places where they normally live and work, and which together with their activities and experiences during these trips which include pleasure, entertainment, culture, business, conferences, visiting friends and relatives, adventure, shopping, dining, challenge and
self development or a combination of these, contribute substantially to the economies of the destination visited.
Tourism and associated industries will continue to play a key part in the growth of the local economy and the development of the Tweed Shire. The contribution of Tourism and related industries to the Tweed economy in the 2007/8 attracted about 1.261 million visitors and, had a significant impact on the economy of the Tweed. The net tourism expenditure in 2007/08 of $144 million represents about 5.83% of overall Tweed local industry output. Similarly, the value added and income (wages & salaries) by tourism expenditure were about 5.98% and 6.63% respectively of the overall Tweed economy.
However TEDC research suggests that whilst tourism will continue to play a significant role in the growth of the Tweed economy, it is important that Council does not place an over exaggerated importance or emphasis on tourism as the major driver of the Tweed economy. Council has to look no further than SEQ, who are not only our major competitors and will continue to be so into the future, but who were also smart enough to realize that an over reliance on tourism was bad policy, with the result that several decades ago they embraced the specific strategy of broadening and diversifying their economy away from an over reliance on tourism through the promotion of the lifestyle, beaches, conferences and conventions destination, to encouraging growth in education, commercial and industry development.
TEDC research suggests that there is an urgent need to develop real tourism product in the Tweed rather than to continue to rely on natural attractions, festivals and events to drive the tourism sector, as the facts clearly demonstrate that this approach does not deliver appropriate economic benefits in terms of average dollar spend as outlined in the previous facts on tourism.
The TEDC proposed Tweed River Nature Link concept proposal is one such project that has the potential to stimulate and or act as a catalyst for other tourism opportunities, as has the concept for the development of an Environmental Education Resource Centre for the Tweed.
Finally the board directors of TEDC would like it placed on record that it is their opinion that the recent tender process - which come about by the failure of Council to comply with the relevant Local Government Act - was not about “Economic Development” but about marketing and promotion generally, and the promotion of growth of the tourism sector. This approach is completely at odds with the identified and substantiated need to broaden and diversify the economic base of the Tweed economy, identified by TEDC as part of the process of delivering long term employment generating, visionary socio- economic sustainability.
The tender document focused on; ‘tourism”, “management of tourism services”,
“development of tourism product” and “the promotion of the Tweed as a tourism
destination”, “demographic and statistical research” and “the promotion and marketing of the Tweed for Business and Investment Attraction”.
It is the board’s opinion that the tender approach adopted by TSC was very narrow and limited and is a distinct move away from the TEDC approach which was based on identifying the problem at the broader macro level, substantiated and supported by the facts, and the development and promotion of solutions which were measurable over time, in terms of their capacity to provide the type of vision and direction which would attract, encourage, accommodate and facilitate sustainable socio economic growth at the broader macro economic level.
Marketing and promotion of the Tweed for tourism or business growth will only be successful if supported by deliverable product which creates the opportunity.
Demographic and statistical research only has value as an economic driver if it is interpreted, measurable and applied in a way where it is used to inform policy
development, and underpins the creation of initiatives that are substantiated by fact and are therefore of interest to the broader investment industry.
There is an urgent need in the Tweed to develop a Vision for the Future which recognizes and takes into account the challenges as outlines previously, and which provide a
platform for sustainable economic activity and growth.
Finally the objective and purpose of this report is to place the facts before council as identified by TEDC since inception in 1997 and based on 13 years experience in the field of economic development.
It is important that this report is not seen as a criticism of any aspect of local government, nor should it be seen as negative or of any expression of disappointment as a result of the recent decision by council.
The report is a considered and professional comment by the board reflecting their commitment, dedication and considerations as part of the responsibility entrusted to the board by council since 1997. Comments which represent the facts which the board believes reflect the current status of the Tweed economy, based on the commercial and professional experience, knowledge and intellect in the field of economic development developed and promoted by TEDC, and which the board believe are both critical and fundamental to the future growth, development and sustainability of the Tweed economy for all current and future generations.
