Say What Wednesdays

How much is the economy of regional Australia worth?

Australia’s regional workers and their contribution to the economy: Welcome to this week’s ‘Say What Wednesday’ episode!

Our question today comes from Anna …who was actually listening to our podcast while driving her tractor on a farm, which is pretty cool! Anna asks, ‘how much is the economy of regional Australia worth? Is this growing faster or slower than metropolitan areas and what will it look like in the future?’

We’ll define ‘Regional Australia’ as all areas outside of metropolitan areas.

Let’s get started…

Regional Australia – Population breakdown

  1. 69% of Australians live in major cities,
  2. 20% live in inner regional areas
  3. 9% in outer regional areas
  4. 3% live in remote or very remote areas

What is it worth?

  1. Workforce – One third of employment in Australia

  1. Production/output – Regional Australia accounts for around 40% of national economic output

 

  1. Industries

 

According to the National Rural Health Alliance Limited’s online publication, “The little book of rural health numbers” (Nov 2015), “Approximately 67% of the value of Australia’s exports comes from regional, rural and remote areas.”

The publication also cites the following data;

  • Tourism in regional, rural and remote areas contributes about 1% of Australia’s gross domestic product (GDP) ($16 billion) (Regional Australia Institute);
  • agriculture contributes 3% (about $50 billion) to GDP (or 12% (about $150 billion)
    • bring in around $40 billion in export income (around 13% of total export income). (National Farmers Federation);
  • The resources sector (mining, oil and gas production) contributes around 10% of GDP ($150 billion (Minerals Council of Australia)),
    • amount to around 50% of exports.
    • BUT: Wikipedia asserts that mining (excludes oil and gas) contributes about 5.6% of Australia’s GDP and around 35% of Australia’s exports;

You can read more here

It’s all related!

  1. How the economy works – The supply chain and flow of goods and services within the economy
  2. The Multiplier Effect – 1 tonne of Iron Ore; extracted, transported, produced into steel, sold, transported, used to manufacture something else

Again, as referenced by the National Rural Health Alliance Ltd, “Research by the Reserve Bank of Australia has confirmed the extent of positive spill overs from the mining industry to the wider economy. The resources sector as a whole (including resource-related activities) is estimated to account for around 18 per cent of Gross Domestic Product (GDP) in Australia and almost 10 per cent of employment.”

National Rural Health Alliance’s report discusses that in 2010-11 there were 307,000 people employed in agriculture, with 1.6 million jobs across the supply chain agriculture powers. (Data sourced from a previous National Farmers’ Federation report. The most recent version of the report can be found here)

Each Australian farmer produces enough food to feed 600 people, 150 at home and 450 overseas. Australian farmers produce almost 93 per cent of Australia’s daily domestic food supply.

 

Crystal ball – What will it look like in the future?

  1. For growth – For urbanisation – Population shifts
  2. A study by KPMG – mining is stimulating residential population growth
  3. The mining industry is boosting incomes, attracting families and reducing unemployment

 

As always guys….get your questions in! go to https://financeandfury.com.au/contact/

No question is too big or too small.

 

 

 

 

Today’s References

National Farmer’s Federation (2017). Farm Facts | National Farmers’ Federation. [online] Nff.org.au. Available at: http://www.nff.org.au/farm-facts.html [Accessed 20 Apr. 2018].

Minerals Council of Australia (2013). Analysis of the Changing Resident Demographic Profile of Australia’s Mining Communities. [online] Minerals Council of Australia. Available at: http://www.minerals.org.au/file_upload/files/reports/MCA-13-ResidentialProfile0131-MYR.pdf [Accessed 20 Apr. 2018].

Regional Australia Institute (2015). Talking Point: The Economic Contribution of Regions to Australia’s Prosperity. [online] Regional Australia Institute. Available at: http://www.regionalaustralia.org.au/wp-content/uploads/Talking-Point-The-economic-contribution-of-regions-to-Australia’s-prosperity_to-send.pdf [Accessed 20 Apr. 2018].

Ruralhealth.org.au. (2015). Economic contribution of regional, rural and remote Australia | ruralhealth.org.au. [online] Available at: http://ruralhealth.org.au/book/economic-contribution-regional-rural-and-remote-australia [Accessed 20 Apr. 2018].

 

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