Economic Affordability issues

The NT needs to look to the future and develop a strategic advantage in relation to the renewables era. The sooner we get the benefits of cheaper energy costs flowing through the economy the sooner we will get some cost relief through the energy impact on most things we consume, including household and business energy costs.  It also sets up a strategic economic advantage to underpin economic growth.

The NT government needs to rapidly increase land availability to encourage the development of affordable housing.  Its policy of staging land releases to maximise returns to government has been a failure.

Cost of living

Energy costs are an essential element of cost of living and are going to become more critical as we deal with a warming climate. We need more affordable energy and you cannot get that with gas, especially gas from the Beetaloo basin.

Plans to a gas based energy system will lead to high living costs and non-viable manufacturing and business energy input costs.

CSIRO analysis[1] shows gas with CCS  is much more expensive that renewable energy .  If we follow this path the NT economy will not reap the benefits of the Renewables era, and our cost of living will remain too high.

Affordable Housing

Housing costs is another major problem in the NT, especially the rental markets as it is flowing through cost of living.

How is it possible that the newest suburbs in Darwin eg Muirhead are the hottest and we have scientific projections that the area will be unliveable within a generation. We need more attention on appropriate housing.

The NT government needs to rapidly increase land availability to encourage the development of affordable housing.  Its policy of staging land releases to maximise returns to government has been a failure. It also needs to increase its investment in the low end of the affordability market and let the industry deal with the supply as best they can.

 

There needs to be a major focus on small business.

Getting 100 small businesses to grow and put on more staff is a quicker, cheaper and better way to build capacity and growth than chasing the mega project dream which do not deliver local economy benefits.

Mega projects are economically risky as they create significant distortions in the local economy and parasitise resources, including people, from other sectors of the economy. An example of this is the damage that the INPEX project build did to the Tourism and Hospitality sector through distorted accommodation prices and other cost increases, especially to the Construction index.

The economy would benefit if support is provided to Small and Medium Enterprises business (SME’s) to accelerate their own and the Northern Territory’s economic growth with the following goals in mind: 

• Assist SME growth and sustainability
• Create sustainable jobs in the near, medium and long term
• Increase the Territory’s Gross State Product (GSP)
• Support current and emerging industries
• Build on the Territory’s competitive advantages 
• Establish a ‘National Export Program’ championing expansion management consultancy to assist businesses looking to expand nationally, thus increasing GSP and new job creation. Statistics clearly show that replication of success (expansion) is very different to starting a new business, which has a very high failure rate. Selling goods or services outside of the NT is not currently counted as export, as the NTG currently uses the AusTrade export metric as only international sales count as export. 
• A case study of Humpty Doo Barramundi is a case in point, starting small and going through a series of expansions as market opportunities were found. 

SME’s can contribute towards the NTG goal of economic growth. SME’s are a part of the solution that has been ignored. This means SME stagnation as NTG resources are allocated into supporting large projects with dubious economic benefits for the Territory.

International research from the World Bank, OECD, G20 and professional consultants agree that SME’s:

• Add significant value in permanent job creation numbers.
• Add significant value in Gross Regional Product (GRP) or Gross State Product-GSP.
• Supporting SME’s growth or scale-up will significantly increase long term GSP growth.
• Globally low and developing regional economies benefit more from SME growth than from large project investment, as large projects have a finite timeline and the majority of SME earnings are kept within the region.

 

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