AEC Principal Consultant Simon Smith, in partnership with Tammy Marshall, Managing Director of B Hive, has been working with APEC and participating economies on the economic impact of cruise tourism on micro, small and medium enterprises (MSMEs) as well as communities. The Cruise ship sector is considered one of the most rapid growing segments in the tourism industry. Given the rise of the cruise industry activity in the APEC region, data to analyse the economics of cruise tourism is vital, especially data that focuses on communities as the recipients of economic benefits. The project will provide a study on cruise tourism’s effect on local communities, more specifically, MSMEs in local communities in APEC economies and how the income generated from the cruise sector leads to better standards of living for local people. Project outcomes and recommendations will be used to support further strategic sustainable development of cruise tourism and to identify opportunities to increase positive impacts and safeguard the livelihoods of local economies. Whilst the project is working closely with just five economies, the findings and recommendations will have benefits for all 21 APEC members. The workshop in Singapore was attended by representatives from Australia, Chile, Chinese Taipei, Mexico, Papua New Guinea, Peru, Philippines, Singapore and Vietnam as well as a number of expert speakers including: Cruise Line International Association, Royal Caribbean Cruise Lines, Cruise Broome and Genting Cruise Lines. For further information regarding developing the cruise sector please contact simon.smith@aecgroupltd.com

The Reserve Bank of Australia (RBA) lowered the cash rate by 25 basis points to an all-time low of 1.25% in June, the first change in the cash rate in over two years. RBA Governor Phillip Lowe has indicated that further rate cuts are likely to stimulate domestic employment in a continuing low inflation environment. The RBA meets again next week. Markets are currently expecting official interest rates to fall below 1.0%, and some economists are suggesting the central bank will also undertake some form of quantitative easing to prevent a recession. Domestic activity remains very subdued, with the housing sector still in the doldrums and retail trade stagnant. Globally, there are downside risks to the global economic outlook as trade concerns between the US and China intensify. However, the US is experiencing solid economic growth with strong wages growth resulting from very low levels of unemployment. As a consequence, official interest rates in the US have continued to rise and are now notably higher than Australia at 2.25%-2.5% which has placed ongoing pressure on the Australian dollar as international investors seek out higher yields. Official Interest Rates, US and Australia (%) Notes: The neutral interest rate line shows the upper boundary of the RBA’s estimate of the neutral interest rate band. Sources: RBA (2019a), RBA (2017), IFM Investors (2017). The RBA has indicated that it will be closely monitoring Australian labour market conditions in setting interest rates, with an implied target for the unemployment rate of 4.5%-5.0% which is below the current rate of 5.1% and wages growth needing to improve for inflation to increase from current levels to be within the target range of 2%-3%. Considering the balance of recent economic data and forward projections, it is reasonable to conclude there remains spare capacity within the labour market and as such it is highly likely the next move from the RBA will be a further rate cut. The RBA will next meet on 2 July 2019. Financial markets are anticipating up to 2 more 25 basis point rate cuts by the end of the year. Combined with the mooted regime of tax cuts by the Australian Government, this will provide part of the necessary stimulus to keep the economy from deteriorating further although additional action will likely be required.

The gates of the Fraser Coast Sports and Recreation Precinct opened in February 2019. The Precinct is a multi-stage development over 60 hectares initially providing: Eight (8) standard netball courts with acrylic non-slip court surfacing to Netball Australia specification, exceeding 200 lux lighting, and a club house facility; Two (2) premium playing surfaces and two (2) standard playing surfaces, FIFA standard, field lighting of over 200 lux and club house facility; and, Allocation of three (3) standard soccer fields providing six (6) standard Oztag fields. The Business Plan for the Precinct was developed by AEC on behalf of Fraser Coast Regional Council, providing a ‘roadmap’ for the construction of all stages of the development, together with the timing of the transition of local clubs and associations to the Precinct over the next 10 years. For the Business Plan, AEC evaluated the ongoing socio-economic benefits that the Precinct would bring to the local community and economy. These benefits will be generated by providing a high-quality facility that will attract regional, State and National sports competitions together with high profile ‘premier level’ sports events. It is anticipated that the Precinct will bring in more than 27,000 visitors per year to the area once it is completed. The Precinct will also be capable of hosting music and cultural events. The Business Plan was also key to securing millions of dollars in grants for the construction of the Precinct, with the latest grant announcement of a further $900,000 from the State Government’s Work for Queensland grant program being announced in June this year. The success of the Precinct has already attracted the A-League club Brisbane Roar FC to attend the Fraser Coast in September this year to host a series of school clinics, community events and a trial game with a local representative side. If you would like to learn more about how AEC can help you in undertaking feasibility studies and developing business plans for sports and recreation facilities please contact the AEC team.

AEC recently completed a Detailed Business Case for the establishment of a new Leisure Centre in an inner western Sydney Council. The proposed Leisure Centre is a best in breed facility and will feature: A lap, program and splash pool A fitness centre An indoor basketball/ hard court arena A creche, café and other amenities. The Detailed Business Case was compliant with New South Wales Treasury Guidelines, recognising the importance of having shovel ready proposals readily available to take advantage of unexpected funding opportunities. The council involved also noted the importance of having the Business Case ready to support the use of developer contribution calculations. The Detailed Business Case was a comprehensive study and included an assessment of the communities needs to ensure the facility would meet community expectations while also satisfying broader community objectives. A comprehensive review of the demographics and sporting habits of residents, along with competitor facilities within the catchment area was undertaken, to ensure that the facility would have sufficient demand to support its ongoing operation throughout the asset’s lifespan. Once it was established that demand existed for the facility, concept designs and preliminary costs were developed by our professional architect and quantity surveyor partners. Based on the estimates of capital works costs, operating costs, and forecast revenue, the economic benefits of the facility were modelled, along with the long-term financial implications for Council. This process demonstrated that not only would the expected socio-economic benefits for the local community and economy be achieved from the estimated 500,000 users of the facility, but that it would be financially sustainable (both now and into the future). This key aspect of the Detailed Business Case is how AEC adds value to its clients and differentiates itself from its competitors. Finally, an implementation plan was put in place to guide the council from investment decision through to the commencement of construction. If you would like to learn more about how AEC can help you in undertaking feasibility studies and developing business cases for sports and recreation facilities, please contact the AEC Team.

Prior to Government approving major resource-related development projects, regulatory bodies must be satisfied the potential impacts caused by the project are appropriately assessed and appropriate mitigation measures are in place in order to minimise these impacts and to leverage beneficial outcomes. Many large proposed resource development projects are required to prepare an Environmental Impact Statement (EIS) before an environmental authority can be issued. Economic Analysis is a fundamental component of an EIS and AEC has a strong track record and history of providing economic analysis to support EIS processes. We assist our clients in understanding the potential economic impacts their proposed resource developments will have on a regional, state and national economy level, while ensuring the analysis meets government requirements. AEC provides our clients with: Expert understanding of the Australian resources sector AEC’s inhouse economic modelling capabilities Vast experience in applying the latest EIS guidelines for economic assessment. EIS requirements can vary from state-to-state, but typically include some combination of cost benefit analysis (CBA), local/ regional impact analysis (including modelling using techniques such as Input-Output (I-O) or Computable General Equilibrium (CGE)), and development of mitigation strategies to minimise impacts. Our tailored and flexible approach provides a reliable and robust economic analysis to support the decision-making process that provides detailed analysis around the benefits and impacts on the regional, state and national economy. A list of some of the clients for which AEC has provided economic analysis to support an EIS for a resource project are outlined below. https://www.shell.com.au/ https://www.stanwell.com/ https://www.arrowenergy.com.au/ https://stanmorecoal.com.au/ https://evolutionmining.com.au/ https://www.rml.com.au/ https://www.baralabacoal.com.au/ https://www.sojitz.com/ https://www.waratahcoal.com/ https://www.aquilaresources.com.au/ https://www.mcres.com.au/

Understanding the future scale and demographic composition of the local population is an important component of strategic planning. It is essential infrastructure planning and services provision proactively accommodates the population potential to facilitate and support anticipated growth. Cairns local government area has experienced volatile population growth in recent years due to the strong relationship between economic outcomes and net migration outcomes. In 2008, Cairns was one of the strongest growing local government areas in Queensland (in terms of population growth). However, population growth slowed considerably following the onset of the Global Financial Crisis, as construction and tourism activity in the region softened significantly. State government estimates for Cairns local government area suggest a lower rate of growth in the local population between 2016 and 2041 than had been recorded in the 2006 to 2017 period. AEC was engaged by Cairns Regional Council to develop a detailed set of population projections to sense check these projections. Population projections were developed by age and sex for the five yearly periods between 2016 and 2041. These projections considered future trends in local fertility and mortality rates as well as Carin’s potential future net migration profile. AEC also analysed the potential population impacts associated with planned construction activity for the region in the short to medium term. The resulting projections were in line with those developed by the Queensland Statisticians Office, suggesting the population could increase at an average annual rate of 1.6% between 2016 and 2041.

Client: Moree Plains Shire Council State: NSW AEC was engaged by Moree Plains Shire Council for the completion of an Economic Development Strategy (the Strategy); a ten-year strategy providing clear direction for driving economic development and innovation. AEC reviewed literature pertinent to the Strategy; undertook a socio-economic and tourism analysis of the region; undertook an opportunity and competitive assessment; and analysed macro trends and influencing factors to form the background of the strategy. To build upon this, AEC facilitated an escape expenditure study, analysed best practise case studies and undertook stakeholder consultation. This led to the development of an overall vision, game changing initiatives, actions and target measures for implementation of the strategy. Key outcomes targeted were connectivity through rail, road, air and digital; industry diversification; supporting local business and education; realising potential of tourism and supporting population retention and attraction.

Client: Maranoa Regional Council State: QLD AEC worked with Maranoa Regional Council to guide Council’s actions towards achieving sustainable economic outcomes, through the development of a Business and Industry Development Plan and Implementation Plan. AEC undertook a socio-economic analysis of the region, built on existing Council documents to form a vision and strategic initiatives, and developed actions and target measures for implementation of the strategy. Opportunities identified for Maranoa’s industries include horticulture utilising coal seam gas water, productivity enhancement through innovation and technology, industry linked tourism experiences, coal seam gas and coal mining, alternative power, electrical storage, game meat processing, re-emergence of sheep production, targeted tourism and expanded use of Roma airport and linking services. Key outcomes targeted were the attraction of new business, support of existing business, attraction of people, leveraging of assets, development of skills and building of community partnerships.

Client: Livingstone Shire Council State: QLD AEC was engaged by Livingstone Shire Council for collaboration with the Economy and Places Team to deliver a suite of prospectus comprising two core components. The first component represented a summary document that provides information and detail on core regional attributes (including liveability, diversity, major centres, growing economy, high value industries, game changing investments, major projects, etc.). The second represented individual fact sheets (incorporated into the main summary), that provides focus on the identified opportunities (including agriculture, childcare, tourism, construction, defence, mining support services, aged care and retirement living, and food product manufacturing and value-added opportunities). AEC conducted a literature review and drew from the vast material and content available on the region to form the Prospectus. Outcomes of the project will be used to showcase attractiveness and key investment opportunities for the region.

Client: Cloncurry Shire Council State: QLD AEC was engaged by Cloncurry Shire Council to develop a five-year Economic Development Strategy and Implementation Plan, providing support and assistance to develop economic opportunities to deliver jobs growth. AEC’s approach included an initial situational analysis of existing markets, key competitive strengths, product audit and analysis current economic indicators. This was supported by consultation with local, regional and state stakeholders, which resulted in the development of prioritised economic opportunities, strategies and action plans. Key outcomes targeted were addressing challenges, supporting local business, delivering strategic opportunities and attracting new investment. The Economic Development Strategy stands as a public facing document, visually enhanced through graphic design from AEC’s design team.

Client: Moreton Bay Regional Council State: QLD AEC was engaged by Moreton Bay Regional Council for a preliminary investigation into the Australian Quarter Horse (AQH) Industry, in particular the events component. For this investigation, AEC undertook desktop research to inform an assessment of the estimated size and value of the AQH Industry, and collated current AQH events and relevant details. This led to the development of an industry and economic profile, including employment generated, visitation and induced visitor spend. Additionally, significant events in the industry were reviewed to ascertain event structure, participant (and attendee) numbers, event facilities and infrastructure overview. Collation of the full report detailed all elements identified throughout the project timeline. Outcomes of this investigation were used for the identification of potential joint events that could be held at the Caboolture Events Precinct.

Client: North Queensland Bulk Ports Corporation State: QLD AEC were previously engaged by North Queensland Bulk Ports (NQBP) in 2015 to prepare an Industrial Lands Demand Study for the Port of Mackay. However, given the significantly changed market dynamic, NQBP engaged recently AEC to provide an updated report. Aspects of the demand study included: Regional economic profile and outlook. Analysis of Mackay’s current industrial land supply and projected future land demand. Consideration of major projects with the potential to impact industrial land demand. Engagement with estate agents and industry stakeholders to understand key trends in the market. Demand projections and future recommendations for action. The findings of the analysis will be used by NQBP to support future decision making regarding their industrial precinct.