Fostering sustainable regional development in the Pilbara

Weathering the booms and busts

Minerals and Energy Projects: • Reduced construction activity; • Transition to operations; • Fewer FIFO workers

Proposition 1: The heavy reliance of the Pilbara on minerals and

energy industries carries many areas of vulnerability

• Technology changes

• The vagaries of commodity prices

• Changes in the project lifecycle

• Competing supply for both gas and ore products from

other global locations, often with a lower cost base.

• Over the very long term resources have a lifespan

Proposition 2: The resources industry is a good base but it will not

support the population size of the Pilbara cities vision

Proposition 3: Move beyond resources to resilience

Build on the strong resource base but do not rely on it:

• A diversified economy – more economic resilience;

• Services and life-style features to support a large and more diverse population.

Factors that influence individual decisions to live in or leave a community:

• Economic opportunity and employment prospects, for all members of the family;

• Education services;

• Health services, particularly access to a reasonable range of specialist services;

• Access to a reasonable range of cultural and recreation activities.

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Access to allied health services

Access to technical or further…

Access to GP services

Access to hospital services

Access to tertiary education services

Police services

Relative Strengths: Essential Services

Relative Strength

Pilbara Region Relative Ranking (Regional Australia Institute: Insight Competiveness Index)

Pilbara Region Relative Ranking (Regional Australia Institute: Insight Competiveness Index)

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English proficiency

Early childhood performance

School performance - Primary

School performance - Secondary

University qualifications

Technical qualifications

Lifelong learning participation

Health

Early school leavers

Relative Strengths: Human Capital

Relative Strength

Pilbara Region Relative Ranking (Regional Australia Institute: Insight Competiveness Index)

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Skilled labour: (% managers andprofessionals)

Participation rate

Welfare dependence

Unemployment rate

Young unemployment

Relative Strengths: Labour Market Efficiency

Relative Strength

Pilbara Region Relative Ranking (Regional Australia Institute: Insight Competiveness Index)

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Businesses in technology and relatedindustries

Households with internet connection

Workers in ICT and electronics

Households and businesses with broadbandinternet

Relative Strengths: Technological Readiness

Relative Strength

Pilbara Region Relative Ranking (Regional Australia Institute: Insight Competiveness Index)

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Dominance of large employers

Exporters, importers, wholesalers: %employed

Access to local finance: Number ofbanks/lending institutions as a share of…

Economic diversification

Income source - Own business

Exports: % business sales revenue earnedfrom exports

Relative Strengths: Business Sophistication

Relative Strength

RDA Report : COST OF DOING BUSINESS IN THE PILBARA

• The price indexes for the Pilbara are the highest of any region in WA and in Australia;

• In 2012 in the Pilbara the level of remuneration for employees would need to be a minimum of 37% higher than that in Perth;

• There is often a need to provide subsidised or free accommodation to attract or retain employees.

• Costs of operating a business is up to 120% higher than in Perth.

• Faced with such substantial costs and with a small market size, some businesses are struggling to survive, while NGOs continually deal with considerable programme funding challenges.

• Businesses and NGOs face high costs for staff training, staff recruitment and turnover, travel, professional services and consumables.

• The cost of doing business in the Pilbara for SMEs and NGOs has risen primarily as a result of the high demand for labour, accommodation and other services by the resources sector.

RDA Report : MAP AND GAP ANALYSIS: PILBARA NON GOVERNMENT ORGANISATIONS 2012

The cost levels particularly affect NGOs:

• Escalating costs faced by NGOs in the Pilbara are not taken into account in providing adequate and secure funding.

• Numerous NGOs based in Perth have very little on the ground presence in the Pilbara due to the affordability and staffing challenges of the region.

• NGOs have difficulties in attracting and retaining staff unless they make significant contributions to their accommodation costs.

• Staff and volunteers – Difficulties in recruiting and retaining staff due to wages competition from the resource and government sectors

• Governance – Small pool of people willing to volunteer on Boards resulting in concurrency in board membership and potential conflicts of interest

NGOs: Possible Measures A coordinated approach to planning services for the Region:

• Development of a 10 year Pilbara Region Community Plan and a 10 year NGO Accommodation and facilities Plan;

• Allocation of NGO office and service delivery accommodation;

• Allocation of government funding for services that reflect the real cost of doing business in the Pilbara with contracts aligned to the Regional Price Index;

• Development of sustainable organisational models, including potential streamlining or merging of services;

• Communications strategy to raise the profile of the NGO sector, highlighting its value and contribution;

• Action research to evaluate and implement ICT, potentially for virtual board membership and for professional supervision and/or development;

• Mixed model of housing and security of tenure; and

• Expansion of PANGO's role and resourcing

Possible Diversification Projects

Project:

Prospective Employment (operations)

Skilled professional Skilled technical and semi-

skilled

Bio-fuels Project 5 - 10 20 - 30

Hi-Tech Greenhouse 5 - 10 20 - 30

Aquaculture fish farm 4 10

Fish processing factory 2 10 - 20

Algae Farm 200

Other possibilities: • Education

• Tourism

Summary: towards resilience • Greater diversity in the economy

• Education services at a high level to keep people in place longer:

– better quality secondary school education;

– More diversity, including private secondary schools:

– Much upgraded tertiary education and development of research specialities.

• Health services that meet all of the health needs of all the community.

• A richer cultural life, with cultural activities more than pubs and movie downloads

• Well supported and vibrant community groups

• An wide range of formal and informal sporting and recreation opportunities;

• Places for people to meet – this means paying attention to the liveability of the major centres (This is where the population expansion will occur):

• Attending to cost issues – lowering the cost base for accommodation and key services.

More specifically: • Regional governance and coordination

– more local autonomy and regional decision making ,

– better coordination between three tiers of government,

– specific assistance to the local governments as primary providers of services and facilities;

– locating more government agencies in the region.

• Reducing the cost structure, starting with the costs of both residential and commercial accommodation.

• Education – establishment of a substantial full-service tertiary education capacity and improved secondary school education with a wider choice and variety.

• Upgraded services infrastructure, including a move to international capability at Karratha airport and a common user facility to service extra-regional projects.

• Formulating a digital strategy for the region to enable:

– Remote and tele-working

– Improved viability of basing regional services and administration in Karratha

– Improved e-health and e-education services

• Health: further expansion of health services; incorporation of areas of specialisation; Promoting the expansion of aged care services and facilities.

And finally: • Actively supporting the NGO sector.

• Promoting the SME sector:

– Fostering the further development of SMEs in mining and resources support services and the resources value chain;

– Support to small business development programs;

– Fostering incubation projects and support services;

– Fostering the development of SMEs in agri-business support services.

• Tourism: Formulate a comprehensive tourism strategy addressing:

– Product;

– Accommodation;

– Marketing.

• Promoting cultural activities and facilities.

• Upgrading the urban environment of key population centres; completing the Karratha town centre upgrade project.

• Investigate the creation of a Special Economic Zone (SEZ) for the Pilbara in order to reduce costs and increase required investments in the non-resources sector.

• Making FIFO internal to the Pilbara, with the growth of the major centres as a residential base for FIFO workers working on remote projects.