Margaret River SuperTown
Combined Report
South West Development
Commission
Final Draft Report
April, 2012
Margaret River SuperTown Economic Development Plan
Final Draft
Document Control
Job ID:
16132
Job Name:
SWDC ED Plans for Three SuperTowns in SW WA
Client:
South West Development Commission
Client Contact:
Richard Oades
Project Manager:
Michael Campbell
Email:
[email protected]
Telephone:
0409 349 256
Document Name:
AECgroup Report - Margaret River SuperTown Combined Report Final Draft
Last Saved:
5/4/2012 3:50 PM
Version
Date
Reviewed
Approved
Draft Report
20 February 2012
MC
SS
Draft Report V2.0
24 February 2012
MC
SS
Final Draft
7 March 2012
MC
SS
Combined Report
5 April 2012
MC
SS
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Margaret River SuperTown Economic Development Plan
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Executive Summary
Introduction
SuperTowns (Regional Centres Development Plan) is a Royalties for Regions initiative to
encourage regional communities in the southern half of the state to plan and prepare for
the future so they can take advantage of opportunities created by Western Australia’s
population growth to 2050. Western Australia's population is predicted to more than
double over the next 40 years to 4.9 million people.
The SuperTowns' vision is to have balanced communities, with lifestyle options and
access to services. They will have affordable, quality housing and a diverse range of job
opportunities. The towns will offer more choices for people to live in regional areas and
an attractive alternative to living in the metropolitan area.
Nine SuperTowns were selected throughout Western Australia to achieve this vision and
accommodate future population growth. Within the South West Development Commission
(SWDC) Region the areas Manjimup, Collie and Margaret River were selected as
SuperTowns under the Royalties for Regions program.
This document provides the Economic Development Plan for the Shire of AugustaMargaret River.
Population & Demographics
Under the SuperTowns growth plan, the aspirational growth target for Margaret River is a
doubling of the town's population by 2031. Figure ES.1 shows Margaret River’s
anticipated growth trend of 3.4% per annum to 11,098 residents by 2031. This is
equivalent to an additional 264 residents each year, significantly more than the 189
residents the town has attracted per year since 2001.
Figure ES.1: Margaret River SuperTown Population Target, 2010-2031
12,000
6.0%
5.0%
9,000
4.0%
7,500
6,000
3.0%
4,500
2.0%
Annual % Change
Margaret River Population
10,500
3,000
1.0%
1,500
0
0.0%
Margaret River Township
Margaret River Township
Source: Shire of Augusta-Margaret River (2011)
Disclaimer:
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Margaret River SuperTown Economic Development Plan
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Augusta-Margaret River has a smaller proportion of families with children and a greater
proportion of families with no children than the SWDC and Western Australian averages,
which is consistent with the relatively fewer number of residents aged 19 and under in
the LGA.
A significantly higher proportion of the Augusta-Margaret River working age population
has completed year 12 relative to the SWDC average. Augusta-Margaret River also has
higher proportions of its residents holding certificates, diplomas and advanced diplomas,
bachelor degrees, graduate diplomas and graduate certificates and postgraduate
degrees, highlighting that the LGA has attracted and retained a more diverse range of
qualified workers than the SWDC average. Subsequently, Augusta-Margaret River has a
proportionally larger white-collar workforce than the SWDC average, although the LGA
workforce is still primarily blue collar.
Augusta-Margaret River is a low-income area, recording lower average incomes across
every occupational category compared to the SWDC region and Western Australian
averages. Housing prices in Augusta-Margaret River are also particularly expensive
relative to the LGA’s median household income compared to the SWDC and Regional WA
ratios.
Employment & Business Activity
Augusta Margaret River had a labour force of 7,127 in the June 2011 quarter and an
unemployment rate of 3.7%. The LGA has had a consistently lower unemployment rate
than both the SWDC and Western Australian averages since the September quarter 2008,
although the LGA’s unemployment rate has been steadily increasing in recent quarters.
The accommodation and food services, retail trade and construction industries were the
largest employers in Augusta-Margaret River, accounting for just under 40% of
employment. A total of 1,736 businesses were in operation in the LGA in 2009, with the
majority of businesses being recorded within the agriculture, forestry and fishing and
construction industries.
Investment & Major Projects
Residential and non-residential approvals have been volatile since the year ended June
2002, with the value of both residential and non-residential approvals peaking in the year
ended June 2010.
Rapids Landing, a residential community located towards the southern end of the
Margaret River, is the most recently developed major project within Augusta-Margaret
River. The community comprises approximately 680 lots and provides educational,
commercial and recreational opportunities for residents.
Economic Growth
Augusta-Margaret River’s estimated Gross Regional Product (GRP) has grown by an
average of 8.4% per annum since 2006-07 to a value of $691.4 million in 2010-11.
Approximately 41.0% of Augusta-Margaret River’s industry value-add is generated by its
construction, manufacturing and agriculture, forestry and fishing industries. The
viticulture and tourism industries are also significant for the region. The opportunity for
the Augusta-Margaret River LGA in the future is diversification.
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Figure ES.2: Industry Structure
Foundation
Industries
Current Leading
Industry
•Tourism &
Viticulture
•Construction
Opportunity
• Leverage strength
in current leading
industry to create a
more diversified
economy
Source: AECgroup
There is a strong relationship between the Augusta-Margaret River’s two foundation
industries, tourism and viticulture. Synergies exist between wine and tourism that allow
for the promotion of wine regions and events through tourism, increased cellar door sales
to tourists, added value to regional production, and new wine tourism business
opportunities. Subsequently, assisting the wine industry through this tourism promises to
return benefits to the tourism industry itself, and the entire regional economy.
The SuperTown Target
Under the SuperTowns’ growth plan, the aspirational growth target for Margaret River is
a doubling of the population by 2031. In the case of Margaret River, achieving this goal
would see a population of 11,098 by 2031 (or 3.4% per annum growth). Figure ES.3
shows this anticipated growth trend versus the historical growth rate. Achieving this
target will require proactive action in order to develop an economy to support this
growth.
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Margaret River SuperTown Economic Development Plan
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12,000
3.4%
10,500
3.3%
9,000
3.2%
7,500
3.1%
6,000
3.0%
4,500
2.9%
3,000
2.8%
0
2.7%
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
1,500
Annual % Change
Margaret River Population
Figure ES.3: Margaret River SuperTown Population Target, 2010-2031
Margaret River Township
Margaret River Towhship SuperTown Growth Rate
Margaret River Township Historical Growth Rate
Source: Shire of Augusta-Margaret River (2011)
Key Economic Drivers
There are five key economic growth drivers for Margaret River:

Global Food Security: By some estimates, global food production will have to
increase 70% to feed the population of the world in 2050. Some parts of the globe,
particularly Southern Asia, have very little land available for future food production.

The Margaret River Brand: Margaret River is fortunate to have a strong existing
brand and is a well-known tourist and wine region. Maintaining (and expanding) the
value of the brand will assist in growing the town and its economy.

Tourism Industry: The tourism sector is important to Margaret River as a key
existing industry. Broadening and deepening the industry to ensure its future growth
and vibrancy will be important.

Wine Industry: Margaret River is a premium wine region and grape growing and
wine manufacturing make up a large part of the economy. The continued growth of
the sector will be important for the future economic growth of the town.

Internet: The internet has changed the way that people work and live as well as the
way in which business is conducted. Ensuring that Margaret River can take advantage
of the internet through broadband technology will be important for the future
economic development of the town.
Issues & Challenges
The area faces several key issues which can constrain local population and economic
growth that will need to be proactively addressed in order to create an environment of
growth and prosperity. Economic diversification is needed to reduce the reliance on
tourism and wine. Importantly, the issue of housing affordability will need to be
addressed if the region is to reach its population target, as will the aforementioned
economic diversification which will bring year-round employment opportunities.
Broadband access will also be critical to unlock the economic potential in Margaret River,
particularly around the creative industries. Additionally, the brand of ‘Margaret River’ will
need to support strong food and agricultural products and assist in penetrating overseas
markets, which can be difficult for small to medium sized businesses.
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Opportunities
Margaret River is fortunate to have a variety of opportunities to build its future economy,
including:

Agriculture and Growing (including niche global exports and food security services)

Food Processing (including fresh made food and local value added)

Creative Industries (including internet/software based, arts and professional services)

Lifestyle Changes (including pre-retirement and post-retirement)

Tourism (including events, business travellers and leisure travellers)

Health & Retirement (including health services, aged care services, allied health
services)

Education (including high quality schooling, industry-oriented tertiary education and
student housing)

Retail (including food retailing and other retailing)
The Economic Development Plan
Clearly defined and targeted action (as identified by the Economic Development
Framework and both Strategic and Economic Development Initiatives) will assist in
attracting new business investment into the region creating new employment
opportunities and greater skills development in Margaret River, benefitting the
community as a whole. The key Strategic Initiatives are transformational projects which
are inextricably linked to the Economic Development Initiatives. These projects will
provide a solid base for future economic and residential growth.
This Economic Development Plan will provide for a long-term foundation on which to
achieve the goals of the SuperTown initiative.
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Figure ES.4: Margaret River Economic Development Plan
SuperTowns Vision:
“To have balanced, well-connected regional communities, with lifestyle options and access to services – SuperTowns
will have affordable, quality housing and a growing and diverse range of job opportunities. They will offer more
choices for people living in regional areas and an attractive alternative to living in the metropolitan area ”
Economic Development Plan
What Does it Take to
Become a SuperTown?
•Diversify the economy.
Strategic Projects
1. Redevelopment of the Margaret River Townsite: Realignment of the
Perimeter Road, creation of a town square and revitalisation of the town
centre.
Outcomes
•Increased economic
prosperity.
•Improved economic capacity.
•Address growing social divide.
2. Surfers Point and Rivermouth: Regeneration and investment in this iconic
tourism precinct.
•Increased retention of
economic benefits in the local
region.
•Improve positioning on the
national and international
stage.
3. Margaret River Foreshores & Gloucester Park: Improvements to the
entry of the town, foreshore precincts and various community infrastructure.
•Increased opportunities.
4. Margaret River Cultural & Events Centre: Major upgrade to cultural and
events centre to facilitate larger business events.
•Improved sustainability.
•Increased service provision.
Economic Development Initiatives
1. Support Existing Business: Develop programs to proactively engage with
and assist the growth of local companies.
2. Market the Shire: Marketing the Shire as a dynamic and creative business
hub.
3. Attract and Facilitate New Investment: through pro-active business
attraction and support.
4. Develop the Local Workforce: Develop and attract new skills in the region.
Source: AECgroup
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Margaret River SuperTown Combined Report
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Economic Growth Influences
Margaret River has an enviable position, given its existing brand and its competitive
position in wine, tourism, food production, agriculture and creative industries. In
particular, its high amenity can be very attractive to future residents and businesses, if
certain requirements are met.
There are some areas of weakness which will need to be addressed in order to support
desired economic and population growth in Margaret River. These include:

Accessibility of the region (for both tourism and business) can be challenging.
Expansion of the Busselton Airport could assist and provide the ability to significantly
increase accessibility of the region, particularly for domestic and international
tourists.

Identifying viable markets for food products, including breaking into overseas export
markets will be important for the agriculture and food sectors in Margaret River.
While there are a number of possible food products in the region, products that can
achieve a premium price and guaranteed volumes are required, which will require
export markets. Entering overseas markets can be expensive and time consuming.

Community perception of development can often be negative and community spirit
can often negatively impact future development. While certain developments do not
align with the brand of Margaret River, some development is required to realise the
future aspirations of the SuperTown initiative.

Cost of living and housing affordability can be issues in Margaret River given the
nature of the location and the attraction for absentee home owners (holiday homes),
which can drive up prices for local residents, who often work in the tourism sector
and receive relatively low wages.

Seasonality of tourism and picking seasons, which causes an issue of providing year
round employment opportunities.

Creation of a society of ‘haves’ and ‘have nots’ based on the reliance on tourism,
which does not always offer long-term, high income employment, and the attraction
of the area to high net worth individuals. These contrasting groups could create a
community of people that can afford to live here and the people that service them.

Reliance on wine and tourism as core industries, which provides a future risk to a
down turn in each industry or both (as they are heavily linked).

Lack of high-speed internet connections, which can discourage many new residents
and businesses from moving to the area.

Lack of sufficient transport links, including a local airport that can handle regular
passenger transport (RPT) from the East Coast and overseas as well as road
infrastructure necessary to grow the town and allow the easy access and transport of
people and goods.
Future Direction of Margaret River Economy
Margaret River must evolve and move beyond wine, agriculture and tourism (and the
inter-related links between these industry clusters) to create a more diversified, deeper
and more sustainable economy. Fortunately, Margaret River has considerable advantages
and opportunities to work with.
The future Margaret River economy will be just as well known for its creative enterprises
and diversity of food products as it is today for wine and tourism. Food and beverage
products of Margaret River contribute significantly to the State’s exports and are sent all
around the world, particularly to discerning customers in Asia. Investments into
infrastructure (including broadband internet, roads and tourism infrastructure) have been
made in a conscious and long-term oriented manner, which has provided the foundation
for considerable growth. Creative industries have thrived, creating a culture that
pervades new and existing industries. This culture has attracted more businesses and a
highly skilled workforce, which has contributed greatly to the diversification of the
economy.
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Traditional industries of agriculture, wine and tourism are still important facets of the
economy and provide considerable value not only through their direct activities by
through the flow-on impacts of continuing to build into the Margaret River brand. The
tourism industry in particular is well known for its ingenuity and innovation, having
developed new products and marketing avenues to drive visitation, length of stay and
spending.
The population has grown as the economy has expanded. The area has attracted not only
creative businesses and people but older, retired Australians. These new arrivals
thoroughly enjoy the area in the summertime, with its natural beauty, events and wine.
To support the population growth, education and health facilities have grown, including
new facilities to support the ageing population. These new facilities continue to contribute
to community wellbeing. Education providers are well linked with local industries, which is
another factor that attracts new business and helps create a steady stream of new
workers.
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Table of Contents
DOCUMENT CONTROL ....................................................................................... I
EXECUTIVE SUMMARY .................................................................................... II
TABLE OF CONTENTS ....................................................................................... X
1.
INTRODUCTION ....................................................................................... 1
1.1
1.2
1.3
BACKGROUND .............................................................................................. 1
PROJECT OVERVIEW ....................................................................................... 1
GEOGRAPHY ................................................................................................ 2
2.
POPULATION AND DEMOGRAPHIC PROFILE.............................................. 3
2.1
2.3
POPULATION & DEMOGRAPHICS .......................................................................... 3
2.1.1 HISTORICAL POPULATION ........................................................................ 3
2.1.2 POPULATION PROJECTIONS ...................................................................... 3
2.1.3 AGE STRUCTURE ................................................................................. 7
2.1.4 FAMILY/HOUSEHOLD TYPES ..................................................................... 9
2.1.5 HOUSEHOLD & DWELLING GROWTH ........................................................... 10
SOCIO-ECONOMIC CHARACTERISTICS ................................................................... 11
2.2.1 EDUCATION/QUALIFICATIONS .................................................................. 11
2.2.2 OCCUPATION .................................................................................... 12
2.2.3 INCOME .......................................................................................... 13
2.2.4 HOUSE PRICES .................................................................................. 13
KEY FINDINGS ............................................................................................ 15
3.
EMPLOYMENT & BUSINESS ACTIVITY ..................................................... 16
3.1
3.2
3.3
LABOUR FORCE & UNEMPLOYMENT ...................................................................... 16
EMPLOYMENT & BUSINESS ............................................................................... 16
3.2.1 EMPLOYMENT BY INDUSTRY ..................................................................... 16
3.2.2 BUSINESS BY INDUSTRY ........................................................................ 17
3.2.3 BUSINESSES BY EMPLOYMENT SIZE ............................................................ 18
3.2.4 BUSINESSES BY TURNOVER ..................................................................... 19
3.2.5 SMALL BUSINESS ............................................................................... 19
KEY FINDINGS ............................................................................................ 20
4.
INVESTMENT & MAJOR PROJECTS .......................................................... 21
4.1
4.2
BUILDING APPROVALS & PROPERTY MARKET ........................................................... 21
4.1.1 RESIDENTIAL APPROVALS ....................................................................... 21
4.1.2 NON-RESIDENTIAL APPROVALS ................................................................ 21
MAJOR PROJECTS ......................................................................................... 22
5.
ECONOMIC GROWTH .............................................................................. 24
5.1
5.2
5.3
CURRENT GROSS REGIONAL PRODUCT .................................................................. 24
FOUNDATION INDUSTRIES – TOURISM & VITICULTURE ................................................ 25
5.2.1 TOURISM VISITATION ........................................................................... 25
5.2.2 TOURIST ATTRACTIONS ......................................................................... 27
5.2.3 TOURISM ACTIVITY .............................................................................. 28
5.2.4 VITICULTURE .................................................................................... 30
5.2.5 RELATIONSHIP BETWEEN FOUNDATION INDUSTRIES .......................................... 33
KEY FINDINGS ............................................................................................ 33
6.
ECONOMIC OUTLOOK ............................................................................. 35
6.1
6.2
6.3
FUTURE ECONOMIC DRIVERS............................................................................. 35
6.1.1 INTERNAL DRIVERS ............................................................................. 35
6.1.2 EXTERNAL DRIVERS ............................................................................. 36
6.1.3 REGIONAL & LOCAL DRIVERS .................................................................. 37
POTENTIAL FUTURE ECONOMIC GROWTH PATH ......................................................... 39
KEY FINDINGS ............................................................................................ 40
7.
REGIONAL GAP ANALYSIS...................................................................... 41
2.2
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Margaret River SuperTown Combined Report
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7.1
7.2
7.3
7.4
7.5
IMPORT & EXPORT ANALYSIS ............................................................................ 41
SUPPLY CHAIN ANALYSIS................................................................................. 43
COMPARATIVE ASSESSMENTS ............................................................................ 50
JOURNEY TO WORK ....................................................................................... 51
KEY FINDINGS ............................................................................................ 52
8.
OPPORTUNITIES ASSESSMENT............................................................... 54
8.1
8.2
8.3
8.4
LOCATION QUOTIENTS.................................................................................... 54
COMPETITIVE ASSESSMENT .............................................................................. 57
8.2.1 COMPETITIVE EDGE ............................................................................. 58
8.2.2 AREAS FOR IMPROVEMENT ...................................................................... 58
CLUSTER MAPPING ........................................................................................ 60
KEY FINDINGS ............................................................................................ 64
9.
INDUSTRIAL LAND ASSESSMENT............................................................ 65
9.1
9.2
9.3
EXISTING DEMAND & SUPPLY ............................................................................ 65
FUTURE DEMAND FOR LAND .............................................................................. 65
KEY FINDINGS ............................................................................................ 66
10.
RETAIL ASSESSMENT ............................................................................. 67
10.1 CATCHMENT ANALYSIS ................................................................................... 67
10.2 POPULATION GROWTH .................................................................................... 67
10.2.1 POPULATION PROJECTIONS ..................................................................... 68
10.3 RETAIL SUPPLY ............................................................................................ 69
10.3.2 RETAIL SUPPLY OUTSIDE THE CATCHMENT .................................................... 71
10.3.3 FUTURE SUPPLY ................................................................................. 72
10.4 RETAIL EXPENDITURE ..................................................................................... 73
10.4.1 AVERAGE HOUSEHOLD RETAIL EXPENDITURE ................................................. 73
10.4.2 FORECAST HOUSEHOLD RETAIL EXPENDITURE POTENTIAL ................................... 73
10.4.3 MARKET SHARE ANALYSIS ...................................................................... 75
10.4.4 ESTIMATED HOUSEHOLD RETAIL EXPENDITURE WITHIN THE CATCHMENT ................... 76
10.4.5 ESTIMATED VISITOR RETAIL EXPENDITURE WITHIN THE CATCHMENT ....................... 77
10.4.6 ESTIMATED TOTAL RETAIL EXPENDITURE WITHIN THE CATCHMENT .......................... 78
10.5 RETAIL DEMAND .......................................................................................... 79
10.6 CURRENT DEMAND VS SUPPLY ........................................................................... 80
10.7 FUTURE DEMAND VS SUPPLY ............................................................................. 81
10.8 KEY FINDINGS ............................................................................................ 82
11.
COMMERCIAL & GOVERNMENT OFFICE ................................................... 83
11.1
11.2
11.3
11.4
11.5
METHODOLOGY ............................................................................................ 83
OFFICE SUPPLY ........................................................................................... 84
OFFICE DEMAND .......................................................................................... 84
OFFICE DEMAND VS SUPPLY ............................................................................. 85
KEY FINDINGS ............................................................................................ 85
12.
FUTURE OPPORTUNITIES FOR GROWTH ................................................. 86
12.1 ECONOMIC OPPORTUNITIES .............................................................................. 86
12.2 POTENTIAL IMPEDIMENTS................................................................................. 89
13.
KEY ECONOMIC DRIVERS & IMPORTANT TRENDS ................................... 90
13.1
13.2
13.3
13.4
13.5
GLOBAL FOOD SECURITY ................................................................................. 90
THE MARGARET RIVER BRAND ........................................................................... 91
TOURISM INDUSTRY ....................................................................................... 91
WINE MARKET ............................................................................................ 91
INTERNET .................................................................................................. 92
14.
ECONOMIC ISSUES & CHALLENGES ........................................................ 93
14.1
14.2
14.3
14.4
14.5
14.6
ECONOMIC RELIANCE ON WINE & TOURISM ............................................................ 93
EMPLOYMENT SEASONALITY .............................................................................. 94
COST OF LIVING & HOUSING AFFORDABILITY .......................................................... 95
HIGH-SPEED INTERNET .................................................................................. 96
ACCESSIBILITY & TRANSPORT LINKS .................................................................... 97
IDENTIFYING MARKETS FOR FOOD PRODUCTS .......................................................... 97
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15.
ECONOMIC DEVELOPMENT PLAN ............................................................ 99
15.1 OVERVIEW ................................................................................................. 99
15.2 STRATEGIC INITIATIVES ................................................................................ 101
15.3 ECONOMIC DEVELOPMENT INITIATIVES................................................................ 103
15.3.1 SUPPORT EXISTING BUSINESS ............................................................... 103
15.3.2 MARKET THE SHIRE ........................................................................... 103
15.3.3 ATTRACT & FACILITATE NEW INVESTMENT .................................................. 103
15.3.4 DEVELOP THE LOCAL WORKFORCE ........................................................... 104
16.
IMPLEMENTATION PLAN ...................................................................... 105
REFERENCES ............................................................................................... 110
APPENDIX A: MODELLING APPROACH .......................................................... 113
APPENDIX B: JOURNEY TO WORK DETAILS .................................................. 115
APPENDIX C: DETAILED LOCATION QUOTIENTS ........................................... 117
APPENDIX D: GRP METHODOLOGY ............................................................... 119
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1.
Introduction
1.1
Background
In recent years, a combination of robust migration-led population growth and
increasingly constrained metropolitan housing markets has led to an increase in median
house prices across the Perth urban area and a significant deterioration in housing
affordability. The lack of population decentralisation in Western Australia limited the
capacity for the State as a whole to accommodate new residents without rapid price
growth, due to limited genuine alternate residential centres outside of the metropolitan
area.
To provide greater levels of residential housing choice for a growing population, capitalise
on existing infrastructure and capture a greater share of increased business investment
in primary industries, the Government of Western Australia, through the Royalties for
Regions program, established the Regional Centres Development Plan. In this Plan, nine
regional centres or “SuperTowns” were identified - one of these being Augusta-Margaret
River.
The SuperTowns’ vision is to have balanced communities, with lifestyle options and
access to services, with affordable, quality housing and a diverse range of job
opportunities, offering an attractive alternative to living in the metropolitan area. Each
SupterTown has a population target to double its population by 2031.
Augusta-Margaret River is one of the twelve LGAs located in the South West
Development Region1 in Western Australia. Collie and Manjimup were also named as
SuperTowns within the South West Development Region.
Augusta-Margaret River is a popular tourist destination within the South West
Development Region that is best known for its wines and vineyards, scenic forests,
national parks, art galleries and coastal scenery. Local industries include beef and dairy
farming, sheep, deer, fishing, timber, market gardens, viticulture, tourism, crafts and
furniture making, arts, cultural and cottage industries.
1.2
Project Overview
Each SuperTown is required to prepare an Economic Development Growth Plan to
assist guide the town during this growth phase.
The Economic Development Growth Plan will build on the existing strategic
framework of each Shire and identify specific opportunities for economic development.
This will complement, stimulate and strengthen the Growths Plans for the region. A key
component of the plans will be an implementation framework comprising strategies and
programs to align delivery partners, attract funding and facilitate action and investment
to achieve a local vision for growth.
In the development of an Economic Development Growth Plan for the Shire of
Augusta-Margaret River, the following reports will be developed:

Socio-Economic Profile

Opportunities and Gap Analysis

Economic Development Plan
All of these reports, which were originally delivered separately, have been combined into
this single report.
1
The South West Development Region is comprised of the LGAs of Bunbury, Augusta-Margaret River, Boyup
Brook, Bridgetown-Greenbushes, Busselton, Capel, Collie, Dardanup, Donnybrook-Balingup, Harvey, Manjimup and
Nannup.
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Margaret River SuperTown Combined Report
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1.3
Geography
Data in this report is presented for the Local Government Area (LGA) of AugustaMargaret River, which primarily comprises the urban areas of the townships of Margaret
River, Augusta and surrounding areas.
In order to compare the area’s profile to other regions, and better understand its key
features and strengths, statistics are benchmarked against Western Australia. In
addition, where relevant, figures are also benchmarked against South West Development
Commission (SWDC), which comprises the LGAs Bunbury, Augusta-Margaret River,
Boyup Brook, Bridgetown-Greenbushes, Busselton, Capel, Collie, Dardanup, DonnybrookBalingup, Harvey, Manjimup and Nannup. This approach recognises the strong
interrelationship that currently exists (and will continue to exist) between AugustaMargaret River and the surrounding South West region and the need for the benefits of
Augusta-Margaret River’s evolution to a SuperTown to flow through to surrounding
townships and areas.
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2.
Population and Demographic Profile
This section provides an overview of historical and current population, demographic and
socio-economic trends in Augusta-Margaret River and the impact of achieving aspirational
population target for Augusta-Margaret River in the future.
2.1
Population & Demographics
2.1.1
Historical Population
Since 2006 the Augusta-Margaret River LGA’s population has grown by 2.9% per annum
(an average of approximately 341 additional residents each year), recording a total of
12,509 residents in 2010. This growth resulted in the expansion of the Margaret River
Town population from 4,943 to 5,549 residents over the period, equating to 44.4% of the
LGA’s population.
The recent growth in the Margaret River Town’s population is below the growth of the
broader SWDC region (average annual growth of 3.2% p.a.) which has been driven in
large by population growth of other coastal regions including Busselton (4.2% p.a.),
Capel (5.6% p.a.), Dardanup (4.7% p.a.) and Harvey (3.0% p.a.).
Figure 2.1: Population Growth Comparison, 2006-2010
14,000
Margaret River Population
12,000
10,000
8,000
6,000
4,000
2,000
0
2006
2007
Margaret River Township
2008
2009
2010
Remainder Margaret River LGA
Source: ABS (2007), ABS (2011)
2.1.2
Population Projections
Population projections for Augusta-Margaret River LGA are presented from three different
sources – the Federal Government Department of Health and Ageing, the Western
Australia Planning Commission and more recently from the Augusta-Margaret River Shire
Council.
Commonwealth Government Department of Health & Ageing
The Commonwealth Government Department of Health and Ageing projections were
published in 2007 and are based on 2006 Census and Estimated Resident Population
(ERP) figures (Figure 2.2). As such, these projections do not take into account the recent
population growth in the Augusta-Margaret River Region (2.9% since 2006) and instead
estimates a steady growth trend of 1.9% per annum to 18,404 by 2031 (a gain of 281
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Margaret River SuperTown Combined Report
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people each year). These projections are based primarily on a consideration of
demographic drivers, reflecting the use of the projections nationally for the purposes of
health and aged care funding.
3.0%
17,500
2.5%
14,000
2.0%
10,500
1.5%
7,000
1.0%
3,500
0.5%
0
0.0%
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
21,000
Annual % Change
Augusta-MR LGA Population
Figure 2.2: Augusta-Margaret River LGA Projections, Federal Government Department of
Health and Ageing, 2010-2031
Augusta-MR (S)
Augusta-MR (S)
SWDC
Perth SD
Western Australia
Source: Federal Government Department of Health and Ageing (2007)
Western Australia Planning Commission
The Western Australia Planning Commission (WAPC) projections were released in 2005
and are also based on older population data, and do not take into account the recent
growth trends of the Augusta-Margaret River LGA. As a result, these projections are also
expected to underestimate future growth. Similar to the Commonwealth Government
Department of Health and Ageing projections, the WAPC projections indicate a growth
trend of 2.1% p.a. to 19,434 persons by 2031 (refer to Figure 2.3).
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3.0%
17,500
2.5%
14,000
2.0%
10,500
1.5%
7,000
1.0%
3,500
0.5%
0
0.0%
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
21,000
Annual % Change
Augusta-Margaret River LGA Population
Figure 2.3: Augusta-Margaret River LGA Projections, Western Australia Planning
Commission 2010-2031
Augusta-MR (S)
Augusta-MR (S)
SWDC
Perth SD
Western Australia
Source: Western Australia Planning Commission (2005)
Margaret River SuperTown Growth Target
Under the SuperTowns growth plan, the aspirational growth target for Margaret River is a
doubling of the population by 2031. Figure 2.4 shows Margaret River’s anticipated growth
trend of 3.4% per annum to 11,098 residents by 2031. This is equivalent to an additional
264 residents each year. This is above the historical and projected growth rates for the
South West Development Region, Perth SD and Western Australia.
In order for the SuperTown population projection target to be achieved in Margaret River
there is an immediate need to continue recent population growth trends at a significantly
higher rate (where Margaret River is currently attracting an average of 189 residents per
year since 2001). Proactive planning schemes, infrastructure and community services will
be required to support population growth. Investment attraction, industry growth and
diversification of the economic base will also be critical to support job creation and the
overarching sustainability of the economy.
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4.0%
10,500
3.5%
9,000
3.0%
7,500
2.5%
6,000
2.0%
4,500
1.5%
3,000
1.0%
1,500
0.5%
0
0.0%
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
12,000
Annual % Change
Margaret River Population
Figure 2.4: Margaret River SuperTown Population Target, 2010-2031
Margaret River Township
Margaret River Township
Source: Shire of Augusta-Margaret River (2011)
Margaret River Service Population
As a popular tourist destination, the Margaret River region needs to consider
infrastructure developments which will not only service the permanent population, but
also the impact of tourists. It is therefore important that the service population is
expanded to include these transient residents of the Margaret River. The service
population has been estimated using annualised projections of visitor nights in the
region. These figures should be used with caution and are provided as guidance only.
Figure 2.5: Margaret River SuperTown Service Population, 2010-2031
18,000
Margaret River Township
16,000
Total Service Population
14,000
12,000
10,000
8,000
6,000
4,000
2,000
2031
2030
2029
2028
2027
2026
2025
2024
2023
2022
2021
2020
2019
2018
2017
2016
2015
2014
2013
2012
2011
2010
0
Source: Shire of Augusta-Margaret River (2011)
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2.1.3
Age Structure
Augusta-Margaret River has an older population than the SWDC and Western Australia.
In 2010, the Augusta-Margaret River average age was estimated to be 37.6 years. The
Augusta-Margaret River population is also ageing at a faster rate than the broader SWDC
Region (up 0.6 years) and the State (up 0.4 years), with the average age of the area
having increased by one year since 2005.
Augusta-Margaret River's higher average age is due to a lower proportion of children
under the age of 19 years (25.1%) compared to the SWDC (27.7%) and Western
Australia (26.3%). Augusta-Margaret River's aged population (over 60 years) is slightly
above that of Western Australia (17.5% compared to 17.3%, respectively) and below
that of the broader SWDC region (18.7%).
Interestingly, Augusta-Margaret River has higher proportions of persons aged between
20 years and 30 years (27.7%) than the SWDC region (25.4%), highlighting that the
region is more attractive to younger to middle age adults than other areas of the SWDC.
However, this is below the average of Western Australia (29.4%).
Figure 2.6: Age Distribution, Augusta-Margaret River LGA, 2005-2010
80 and over
2.7%
70 to 79
5.0%
60 to 69
7.6%
50 to 59
2005
3.1%
2010
5.0%
9.4%
12.9%
13.5%
40 to 49
17.1%
16.3%
30 to 39
17.0%
16.2%
20 to 29
10 to 19
0 to 9
20.0%
11.2%
11.5%
13.5%
12.1%
13.0%
15.0%
13.0%
10.0%
5.0%
0.0%
5.0%
10.0%
Augusta-Margaret River (S)
15.0%
20.0%
Source: ABS (2011)
The Margaret River township had 61.9% of the population aged under 40 in 2006, a
young residential population relative to the Augusta-Margaret River LGA average of
54.3% of residents.
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Figure 2.7: Age Distribution, Margaret River, 2006
80 and over
2.6%
70 to 79
4.0%
60 to 69
4.0%
50 to 59
Female
3.3%
4.3%
11.5%
40 to 49
30 to 39
Male
1.4%
10.9%
18.3%
15.8%
18.9%
18.2%
20 to 29
12.1%
10 to 19
14.3%
0 to 9
14.3%
13.4%
17.1%
15.5%
25.0% 20.0% 15.0% 10.0% 5.0% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0%
Margaret River Township, 2006
Source: ABS (2011)
Figure 2.8 and Figure 2.9 show the age distribution for the SWDC Region and Western
Australia. Comparison of 2005 to 2010 average age changes show that Augusta-Margaret
River has aged at a faster rate than the regional and State trends over the past five
years.
Figure 2.8: Age Distribution, South West Development Region, 2005-2010
80 and over
3.0%
70 to 79
5.5%
60 to 69
2010
5.5%
8.6%
50 to 59
2005
3.3%
9.9%
13.2%
13.5%
40 to 49 15.9%
30 to 39
14.1%
20 to 29
10 to 19
14.9%
13.5%
10.9%
11.9%
15.1%
0 to 9
20.0%
14.1%
13.8%
15.0%
13.5%
10.0%
5.0%
0.0%
5.0%
SWDC Region
10.0%
15.0%
20.0%
Source: ABS (2011)
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Figure 2.9: Age Distribution, Western Australia, 2005-2010
80 and over
2.9%
70 to 79
5.2%
60 to 69
30 to 39
2010
9.0%
12.9%
12.6%
15.1%
14.4%
14.7%
20 to 29
10 to 19
2005
5.1%
8.1%
50 to 59
40 to 49
3.2%
14.3%
13.8%
15.1%
14.3%
0 to 9
13.3%
13.0%
20.0%
12.9%
15.0%
10.0%
5.0%
0.0%
5.0%
10.0%
Western Australia
15.0%
20.0%
Source: ABS (2011)
2.1.4
Family/Household Types
Similar to the SWDC region and Western Australia, Augusta-Margaret River's highest
proportion of family types are couple families with children (42.5%). However, this is
below the proportion for the SWDC region (43.3%) and the State (45.1%).
Augusta-Margaret River has a higher proportion of couples without children (41.8%) than
the SWDC (41.4%) and State (38.3%) averages. This is consistent with AugustaMargaret River’s relatively older population and the presence of "empty-nesters", retiree
households, as well as younger couple families.
Figure 2.10: Family/Household Type, Margaret River Urban Centre, 2006
Margaret River Urban Centre
Other family
Augusta-MR (S)
SWDC
Perth SD
Single Parent Family
Western Australia
Couple Family w/ children
Couple Family w/ no
children
0.0%
10.0%
20.0%
30.0%
40.0%
Margaret River Urban Centre, 2006
50.0%
Source: ABS (2007)
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Household & Dwelling Growth
Future demand for dwellings in the Margaret River Town will be dependent upon the
growth in permanent resident households based upon population growth expectations as
well as the expectation for future dwelling demand to support the local tourism market
(visitor population).
The sections below provide dwelling/household projections for both residents and the
estimated 'permanent visitor' population over the next 20 years.
Resident Population & Household Growth
The total number of dwellings in the Augusta-Margaret River LGA has grown from 1,901
dwellings in 2006 to 2,285 in 2011, an increase of 20.2%. The proportion of these
dwellings that are classified as detached dwellings has fallen slightly over that time
period, down from 89.8% of total dwellings in 2006 to 82.7% of total dwellings in 2011.
The average household size in the Margaret River Town was estimated to be 2.6 persons
per household in 2006. If Margaret River Town's average household size decreases at the
rate of regional WA projections (ABS, 2010) to 2.3 persons per household by 2031, there
would a requirement for an additional 2,605 dwellings to be built between 2010 and 2031
to support the SuperTowns population growth target of 11,097 residents.
Figure 2.11: Forecast Household Growth, Margaret River Township, 2006-2031
5,000
4,500
4,000
No. of Households
3,500
3,000
2,500
2,000
1,500
1,000
500
2031
2030
2029
2028
2027
2026
2025
2024
2023
2022
2021
2020
2019
2018
2017
2016
2015
2014
2013
2012
2011
2010
2009
2008
2007
0
2006
2.1.5
Margaret River Township
Source: ABS (2007, 2010)
Forecast Permanent Tourism Visitor Household Growth
In addition to the permanent resident population, Augusta-Margaret River also attracts a
large visitor population. In 2010, there were approximately 1.5 million visitor nights
spent in the Augusta-Margaret River region or a permanent2 visitor population of 4,108
persons in 2010. The Margaret River Town services the majority of the permanent visitor
population, where the sum of both permanent residents and the estimated permanent
visitors is equal to the total service population in the Town of Margaret River.
In 2010, the Margaret River region had an estimated 2.4 permanent visitors per
household, equating to a total requirement for 1,689 permanent visitor rooms or an
additional 657 rooms on top of the existing supply of hotels, motels and serviced
apartments in the Margaret River Region (1,032 rooms). Figure 2.11 shows that over the
2
The permanent visitor population is calculated based on visitor nights spent and divided by the number of days
per year (365 days). This gives an estimate of the permanent visitor population that the Margaret River Region
services on an annual basis.
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next 20 years there will be a requirement for an additional 1,258 dwellings (or rooms) to
be added to the Margaret River accommodation supply to support growth in the
permanent tourism visitor market - this will be on top of dwelling supply required to
support the permanent resident population identified in Figure 2.10.
Figure 2.12: Forecast Permanent Visitor Dwelling Requirement, Augusta-Margaret River
LGA, 2010-2031
2,500
Dwelling Demand
2,000
1,500
1,000
500
0
Total Existing Rooms
Total Dwellings Required (minus existing rooms)
Source: ABS (2007, 2010)
2.2
Socio-Economic Characteristics
August-Margaret River has a unique set of socio-economic characteristics that
differentiate it from other regional centres. Key indicators presented in this section
include education and qualifications, occupation, income and house price-based wealth
and affordability.
2.2.1
Education/Qualifications
The Augusta-Margaret River region has a higher proportion of its working age population
that have completed year 12 compared to the SWDC region (47.3% compared to 36%,
respectively). This is in line with Western Australia trends which indicate a year 12
completion rate of 47.5%.
The Augusta-Margaret River region is also characterised by higher proportions of postschool qualified workers than the SWDC for certificates, advanced diplomas/diplomas,
bachelor's degrees, graduate diplomas/certificates and post-graduate degrees. This
highlights that Augusta-Margaret River has attracts a diverse range of qualified workers
within the broader context of the SWDC workforce.
Further comparison with Western Australian trends indicates that Augusta-Margaret River
also has higher proportions of its working age population with certificates, advanced
diplomas/diplomas and graduate certificate/diplomas.
The nature of industry in the region is likely to attract workers with these types of
qualifications to Augusta-Margaret River with key industry strengths being in viticulture
and wine making, tourism and agricultural industries. Augusta-Margaret River also has
South West Institute of Technology Campus which offers certificates and diplomas in
other key industry areas.
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Figure 2.13: School & Post-School Qualifications, 2006
% Finished Year 12
Certificate
Advanced Diploma and Diploma
Bachelor Degree
Graduate Diploma and Graduate Certificate
Postgraduate Degree
0.0%
Margaret River Urban Centre
10.0% 20.0% 30.0% 40.0% 50.0% 60.0%
Collie
Augusta-Margaret
River SLA
(S)
SWDC
Perth SD
Western Australia
Source: ABS (2007)
Occupation
Augusta-Margaret River is a predominantly blue-collar area, however, it has a slightly
more balanced representation of blue to white collar workers than the broader SWDC
region - which strongly favours blue collar workers. In 2008-09, 39.8% of AugustaMargaret River's workers were employed in blue-collar jobs, slightly below the SWDC
region average (43.5%), but higher than Western Australia (33.6%). Almost 22% of the
Augusta-Margaret River workforce is employed in labouring work, this is compared to the
Western Australia average of 11.9% of the workforce. This higher representation of
labourers is likely due to the demand for labourers in the local agriculture, horticulture
and wine making industries that are present in the Augusta-Margaret River region.
Figure 2.14: Employment by Occupation, 2008-2009
60.0%
50.0%
% of Workforce
2.2.2
40.0%
30.0%
20.0%
10.0%
0.0%
Blue Collar
Augusta-Margaret River (S)
White Collar
SWDC
Perth SD
Service Workers
Western Australia
Source: ABS (2011a)
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2.2.3
Income
Augusta-Margaret River is a low-income area, recording lower average incomes across
every occupational category compared to the SWDC region and Western Australia
averages.
In 2008-09, the average wage in Augusta-Margaret River was $37,898, well below both
the SWDC ($45,274) and Western Australia ($50,438) average wages. Managers in
Augusta-Margaret River have the greatest level of income disparity, earning almost
$6,000 less than the average across the region and over $20,000 less than the statewide average.
Higher earning occupations in Augusta-Margaret River include:

Machinery operators and drivers ($59,545)

Managers ($53,379)

Technicians and trade workers ($52,538)
Figure 2.15: Average Income by Occupation, 2008-2009
Labourers
Machinery Operators & Drivers
Sales Workers
Clerical & Administrative Workers
Community & Personal Service Workers
Tecnhicians & Trade Workers
Professionals
Managers
$$10,000 $20,000 $30,000 $40,000 $50,000 $60,000 $70,000 $80,000 $90,000
Augusta-Margaret River (S)
SWDC
Perth SD
Western Australia
Source: ABS (2011a)
2.2.4
House Prices
In Australia, household wealth is dominated by the family home. This is particularly the
case for older generations, who have not had the benefits of exposure to long-term
compulsory superannuation.
During the last few years, and especially between 2005 and 2008, Western Australia
generally, and Perth specifically, experienced one of the largest increases in house prices.
Augusta-Margaret River has experienced a volatile housing price market over the past
five years, similar to what the broader SWDC region and Perth markets also experienced.
Median house prices in Augusta-Margaret River are down 10.4% compared to four years
ago, while the SWDC region and Perth median housing prices are up 1.1% and 15.9%,
respectively.
Property in Augusta-Margaret River is some of the least affordable in the SWDC region,
recording a median house price of $430,000 in 2010-11. This is 34.1% higher than the
median prices for the SWDC and 14.7% higher than median prices for regional Western
Australia.
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Figure 2.16: Median Dwelling Prices
Median Dwelling Prices ($)
600,000
500,000
400,000
300,000
200,000
100,000
2006-07
2007-08
Augusta-Margaret River LGA
2008-09
2009-10
Regional WA
2010-11
SWDC
Source: REIWA (2011)
Despite recording lower than average income levels in Augusta-Margaret River relative to
the SWDC average, Augusta-Margaret River has substantially more expensive property
than the average across the region.
Comparison of household incomes to house prices shows that the average household
would require 8.4 years worth of income on average to purchase a house of median price
outright. This is very unaffordable when compared to the SWDC average 3.9 years worth
of household income and 5.5 years worth in regional Western Australia.
Figure 2.17: Ratio of Median House Prices to Median Household Incomes, 2008/2009
9
8
Median Multiple
7
6
5
4
3
2
1
0
Augusta-Margaret River LGA
SWDC
Regional WA
Source: ABS (2011a), REIWA (2011) and AECgroup
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2.3
Key Findings
Augusta-Margaret River population in 2010 was 12,509 having experienced steady
population growth of 2.3% per annum over preceding 10 years, consistent with other
coastal areas within the SWDC region. The area’s population is older relative to both the
region and the State, a result of lower proportions of families with children and higher
proportions of "empty-nesters" and retirees.
Despite being a well educated and qualified population relative to the rest of the SWDC
region, the area is predominantly working class with all occupations receiving less income
per annum relative to SWDC and State averages
Housing and property is also highly unaffordable in Augusta-Margaret River, with the
median house price costing 8.4 years worth of the average household income, twice as
expensive as the rest of the SWDC region.
To reach the SuperTown target of doubling the Margaret River population by 2031,
Margaret River will need to record an average population growth rate of 3.4% per annum
over the next 20 years. Margaret River’s annual population growth rate from 2001 to
2010 was approximately 4.2% however the rate decreased to 2.9% per annum from
2006 to 2010. This suggests that achieving the SuperTown population target is a realistic
stretch target. Achieving this goal will, however, require significant economic
development planning to ensure the town remains attractive to new residents.
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3.
Employment & Business Activity
This section profiles the employment and business characteristics of the Shire of
Augusta-Margaret River including labour force and unemployment trends, employment by
industry and occupation and business size, growth and formation.
3.1
Labour Force & Unemployment
Augusta-Margaret River has had a very low unemployment rate since March Quarter
2009 where it reached a low of 2.3%. Over the past year the Augusta-Margaret River
unemployment rate increased to 3.7%. This increase in the local unemployment rate was
due to the number of unemployed rising by over 20% the past year, as a result of labour
force growth outstripping growth in employment. Unemployment rates in AugustaMargaret River are still low by Western Australian standards which recorded an
unemployment rate of 4.4% in the June Quarter 2011.
Over the past year employment in Augusta-Margaret River has grown by 0.4%, half the
pace of the SWDC region (0.8%) and a fraction of the average growth in employment
across Western Australia (3.2%).
9,000
6.0%
7,500
5.0%
6,000
4.0%
4,500
3.0%
3,000
2.0%
1,500
1.0%
0
0.0%
Augusta-MR (S)
Augusta-MR (S)
SWDC Region
Perth
Unemployment Rate
Labour Force
Figure 3.1: Labour Force & Unemployment Rate, 2006-2011
Western Australia
Source: DEEWR (2011)
3.2
Employment & Business
3.2.1
Employment by Industry
The accommodation and food services, retail trade and construction sectors are AugustaMargaret River's largest employing sectors, employing just over 38% of the local
workforce. This is over 10% more than the proportion of people employed in these
sectors throughout the rest of the region and the State.
Accommodation and food services (13.7%) is a major employer in the area due to the
tourism generated through the Margaret River’s numerous world renowned wineries.
Compared to the State, Augusta-Margaret River also employs higher proportions of
workers in agriculture, forestry and fishing, finance and insurance services, arts and
recreation and rental, hiring and real estate services.
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Figure 3.2: Employment by Industry, 2010-11 (Place of Work)
Accommodation and food services
Retail trade
Construction
Agriculture, forestry and fishing
Education and training
Manufacturing
Other services
Health care and social assistance
Professional, scientific and technical services
Public administration and safety
Wholesale trade
Administrative and support services
Transport, postal and warehousing
Financial and insurance services
Arts and recreation services
Rental, hiring and real estate s ervices
Information media and telecommunications
Electricity, gas, water and waste services
Mining
0.0%
Augusta-Margaret River
3.0%
SWDC
6.0%
Perth SD
9.0%
12.0%
15.0%
Western Australia
Source: AECgroup (2011)
3.2.2
Business by Industry
In June 2009, there were 1,736 registered businesses in Augusta-Margaret River, of
which 22.5% were a part of the agricultural, forestry and fishing industry. This was over
twice the State average and also slightly greater than the proportion found in the
agriculturally intensive SWDC region. The construction industry had the next highest
proportion of businesses in Augusta-Margaret River, accounting for 19.7% of the area’s
businesses, consistent with the proportion found across the state (19.3%). Given that the
agricultural and construction industries are generally made up of many smaller
independent farms and tradesmen, these results are unsurprising and reinforce the LGA’s
reliance on these industries.
Due to the high concentration of businesses in the agricultural and construction
industries, Augusta-Margaret River has a lower proportion of businesses in almost all
other industries than the regional and Western Australia averages.
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Figure 3.3: Business Counts by Industry, % of Total Businesses, June 2007 to June 2009
Agriculture, Forestry and Fishing
Construction
Rental, Hiring and Real Estate Services
Retail Trade
Professional, Scientific and Technical Services
Accommodation and Food Services
Manufacturing
Other Services
Financial and Insurance Services
Health Care and Social Assistance
Administrative and Support Services
Transport, Postal and Warehousing
Wholesale Trade
Education and Training
Arts and Recreation Services
Mining
Information Media and Telecommunications
Electricity, Gas, Water and Waste Services
Public Administration and Safety
Augusta-MR (S)
0.0%
SWDC
5.0%
10.0%
Perth SD
15.0%
20.0%
Western Australia
25.0%
Source: ABS (2011b)
3.2.3
Businesses by Employment Size
Approximately, 65.0% of Augusta-Margaret River’s businesses are non-employing,
greater than the proportion of non-employing businesses in the broader SWDC (62.2%)
and Western Australian economies (61.1%). This is due to rural nature of the region with
a large proportion of businesses being ‘owner operated’ agricultural businesses.
Approximately 83.4% of Augusta-Margaret River businesses employ less than five
people, showing that the local economy is dominated by small business which is
consistent with both regional (82.5%) and state (83.5%) averages.
Figure 3.4: Business Counts by Industry by Number of Employees, June 2007 to June
2009
Augusta-Margaret River (S)
200+
SWDC
Perth SD
100-199
Western Australia
50-99
20-49
5-19
1 to 4
Non employing
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
Source: ABS (2011b)
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3.2.4
Businesses by Turnover
The largest revenue category in Augusta-Margaret River is businesses that earn more
than $200,000 but less than $500,000, with 20.2% of the area’s businesses falling within
this turnover range, slightly greater than the proportion of region (17.6%) and state
(18.1%) businesses.
Augusta-Margaret River also has a higher proportion of businesses that earn between
$25,000 and $150,000 (40.8%) compared to the SWDC (39.0%) and Western Australia
(37.1%). This can be put down to the high proportion of agricultural businesses in the
LGA, a generally low turnover industry.
Figure 3.5: Business Counts by Industry by Turnover Size Ranges, June 2007 to June 2009
$200m or more
Augusta-Margaret River (S)
$50m to less than $200m
SWDC
$20m to less than $50m
Perth SD
$10m to less than $20m
Western Australia
$5m to less than $10m
$2m to less than $5m
$1m to less than $2m
$500k to less than $1m
$200k to less than $500k
$150k to less than $200k
$100k to less than $150k
$75k to less than $100k
$50k to less than $75K
$25k to less than $50k
Zero to less than $25k
0.0%
5.0%
10.0%
15.0%
20.0%
Augusta-Margaret River (S)
25.0%
Source: ABS (2011b)
3.2.5
Small Business
Small business incomes in Augusta-Margaret River were slightly lower than the average
across the SWDC region and much lower than the Western Australian average. In 200809, the average income of small unincorporated businesses in Augusta-Margaret River
was $14,797 relative to the SWDC average of $16,499 and Western Australia average of
$25,857.
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Figure 3.6: Average Unincorporated Small Business Income, 2008-09
$30,000
$25,000
Income ($)
$20,000
$15,000
$10,000
$5,000
$Augusta-Margaret
SWDC
Perth SD
Western Australia
River (S)
Unincorporated Small Business Income
Source: ABS (2011a)
3.3
Key Findings
Despite the unemployment rate trending upwards in Augusta-Margaret River over the
past two years, the unemployment rate is still very low at 3.7%, below both the SWDC
and Western Australian unemployment rates. Labour force and employment growth has
been slow in recent years, growing at a fraction of the rate of the rest of the state, whilst
the number of unemployed has grown over 20% the past year.
Augusta-Margaret River is heavily reliant on the tourism and agricultural industries for
jobs, drawing tourists by virtue of the region’s world renowned vineyards. The
accommodation and food services, construction, retail trade and agricultural sectors
employ the bulk of the area’s workforce.
The majority of businesses in Augusta-Margaret River are non-employing, with a large
proportion turning over less than $500,000 per annum compared to regional and state
averages. Small business incomes are relatively low compared to State and regional
averages.
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4.
Investment & Major Projects
This section profiles activity and investment in the Augusta-Margaret River economy. It
includes review of residential and commercial building approvals, land releases and
development and major proposed investments in the region.
4.1
Building Approvals & Property Market
4.1.1
Residential Approvals
The number and value of residential building approvals recorded in Augusta-Margaret
River have fluctuated over the past 10 years.
The value of approvals grew steadily from 2002 to 2005, however the number of
approvals actually decreased from 262 in 2002 to 158 in 2006 before again building to a
peak of 270 approvals at a total value of $74.5 million in 2010.
320
$80.0
280
$70.0
240
$60.0
200
$50.0
160
$40.0
120
$30.0
80
$20.0
40
$10.0
0
Dwelling Approvals - Houses
Value of Approvals ($'M)
Number of Residential Approvals
Figure 4.1: Residential Approvals (No.) and Value ($ ‘M), Augusta-Margaret River LGA
$-
Dwelling Approvals - Other Residential
Value of Approvals
Source: ABS (2011c)
4.1.2
Non-Residential Approvals
Augusta-Margaret River has seen more consistent non-residential building activity than
other areas within the SWDC region, recording over $5 million of approvals each of the
past 10 years. The 2005 and 2010 financial years were stand outs, recording $18.9
million and $21.7 million dollars, respectively.
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Figure 4.2: Non-Residential Building Approvals ($ ‘M)
Value of Non-Residential Approvals ($'M)
$25.0
$20.0
$15.0
$10.0
$5.0
$0.0
Augusta-Margaret River (S)
Source: ABS (2011c)
4.2
Major Projects
A number of major projects are planned for the Augusta-Margaret River region. Two of
the larger projects include the West Cowaramup Townsite Strategy and the Witchcliffe
Village Strategy.
Cowaramup is a town of 988 people located 12 km north of Margaret River along the
Bussell Highway. Cowaramup has been identified as a town with the potential for a
permanent population between 500 – 2,000 people. In 2003, the Townsite Strategy
identified residential expansion areas within the town capable of accommodating an
additional 200 residential lots on top of the 150 existing lots. The expansion is planned to
be undertaken in stages, with stage one being the development of a lot comprising the
village centre and surrounding residential lots. Further development will be preceded by
separate rezoning proposals (Thompson McRobert Edgeloe, 2003).
Witchcliffe Village has also been identified as a town capable of accommodating future
population growth. Subsequently, a 20 year planning strategy was put in place acting as
a guide for future residential, commercial, and tourism development in the area.
Witchcliffe is a small town of around 400 people located 8km south of Margaret River
along the Bussell Highway.
The strategic plan aims to increase the town’s permanent population to approximately
1,900 residents whilst also aiming to not jeopardise the existing values and
characteristics of the townsite. The following five precincts are planned for the town:

Historic Precinct (2.8ha) comprising retail, tourist accommodation and shops, offices
and a car park.

Future Village Core Precinct (8,000m²) comprising local shopping including post
office, newsagent, general store, shops, cafe, day care centre, offices and car
parking.

Other Commercial Precinct (1.8ha) which will be appropriate for light industry and a
showroom/trade display centre.

Residential Precinct (2.3ha) encouraging home businesses and studios.

Cultural Precinct (4ha) comprising places for interaction, festivals and other events.
In addition six residential cells have been identified totalling approximately 121.4ha and
accommodating 700 new residential lots. These lots are predicted to be able to
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accommodate the desired estate population of 1,900 residents (Shire of AugustaMargaret River, 2007).
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5.
Economic Growth
This section presents estimates of Augusta-Margaret River's Gross Regional Product and
economic activity and also provides a foundation industry profile of Augusta-Margaret
River's leading sectors – tourism and viticulture.
Gross Regional Product (GRP) estimates have been developed using AECgroup's
proprietary GRP model. Estimates were generated for the entire SWDC region and
Augusta-Margaret River to understand the value of the economy, as well as the
contribution of key industries over time. The GRP methodology can be found in
Appendix A.
Current Gross Regional Product
In 2010-11, Augusta-Margaret River had an estimated Gross Regional Product (GRP) of
$691.4 million. This was an average annual growth of 8.4% since 2006-07, behind that
average annual growth of the Western Australia economy (11.9%) over the four year
period. Despite strong growth in both 2007-08 (26.2%) and 2010-11 (11.5%), the
Augusta-Margaret River economy contracted slightly in 2008-09 (-0.8%) and 2009-10 (1.0%).
Figure 5.1: Gross Regional Product (GRP), 2006-07 to 2010-11
$700
30.0%
$600
25.0%
$500
20.0%
$400
15.0%
$300
10.0%
$200
5.0%
$100
0.0%
$0
% Annual Change
Augusta-Margaret River GRP ($M)
5.1
-5.0%
2006-07
2007-08
Augusta-Margaret River GRP
2008-09
2009-10
2010-11
Augus ta-Margaret River GRP % annual change
Western Australia GRP % annual change
Source: AECgroup (2011)
Gross Value Added (GVA) is the measure of the value of goods and services produced in
an industry. Augusta-Margaret River's leading sector (by GVA) in 2010-11 was the
construction sector which generated 21.7% of Augusta-Margaret River's total industry
value-add. Manufacturing and agriculture, forestry and fishing are also leading sectors of
Augusta-Margaret River's economy, generating 10.8% and 8.5% of industry value add
respectively, almost identical to the proportion of value-add provided to the SWDC
economy and over twice the proportion provided to the Western Australian economy.
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Figure 5.2: Augusta-Margaret River GVA by Industry, 2010-11
Construction
Manufacturing
Agriculture, forestry and fishing
Professional, scientific and technical services
Retail trade
Financial and insurance services
Ownership of dwellings
Transport, postal and warehousing
Accommodation and food services
Education and training
Rental, hiring and real estate services
Administrative and support services
Health care and social assistance
Wholesale trade
Public administration and safety
Electricity, gas, water and waste services
Other services
Information media and telecommunications
Arts and recreation services
Mining
0.0%
Augus ta-Margaret River
9.0%
SWDC
Perth SD
18.0%
27.0%
36.0%
Western Australia
Source: AECgroup (2011)
5.2
Foundation Industries – Tourism & Viticulture
The Margaret River region is a highly attractive holiday destination. Visitation, both
domestic and international, to the region is dominated by holiday or leisure tourists (as
compared to the average visitor to WA as a whole). This appears to be due to the
region’s:
5.2.1

Largely mild, Mediterranean-style climate

Breathtaking, diverse and often untouched landscape and scenery

Rich and fascinating history

Variety of activities and events in which to participate
Tourism Visitation
The figure below illustrates domestic overnight and international visitor nights to the
Augusta-Margaret River LGA from the year to June 1999 (this year excludes international
data) to the year to June 2011. Over this period, domestic overnight visitor nights has
undergone significant volatility, fluctuating between a low of just over 1,000,000 in the
year to June 1999, and a high of 2,179,000 in the year to June 2005. However, it
appears to be trending flat since 2006.
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Figure 5.3: Domestic Overnight and International Visitor Nights, 2000-2011, AugustaMargaret River LGA
2,500,000
Visitor Nights
2,000,000
1,500,000
1,000,000
500,000
0
June
2000
June
2001
June
2002
June
2003
June
2004
Domestic
June
2005
June
2006
June
2007
June
2008
June
2009
June
2010
June
2011
International
Source: TRA (2011), and AECgroup
International visitor nights, on the other hand, do have a clear upward trend over the
period, fluctuating between 135,923 in the year to June 2000, and 408,407 in the year to
June 2011. But despite this growth in international visitor nights, domestic visitor nights
were on average almost 5 times higher over this period, reflecting the current reliance on
local visitors by the tourism industry.
Figure 5.4: Total Visitor Nights, by Reason, 2000-2011, Augusta-Margaret River LGA
2,500,000
Total Visitor Nights
2,000,000
1,500,000
1,000,000
500,000
0
June
2000
June
2001
Holiday or leisure
June
2002
June
2003
June
2004
Visiting friends and relatives
June
2005
June
2006
Business
June
2007
Other
June
2008
June
2009
June
2010
June
2011
Purpose of visit not asked
Source: TRA (2011), and AECgroup
Over the past decade, total visitor nights have been dominated by holiday and leisure
visitors, accounting for the majority of visitor nights in every year. Volatility in holiday
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and leisure, particularly past 2005, has been a primary driver of overall visitor night
volatility in recent years. Visiting friends and relatives was the second most common
reason given for visitor Augusta-Margaret River over the past decade, reflecting the
existing critical mass of population in Margaret River. It is expected that this segment of
the market will experience strong growth in the future in line with the targeted doubling
of the population. Business investment has generally been low, with the exception of
large numbers of visitors in 2005 associated with strong conference activity. Business
visitor night numbers since then have average higher levels than earlier in the decade,
suggesting some growth off a very low base.
5.2.2
Tourist Attractions
The Margaret River region is full of “natural wonders, beautiful vineyards, picturesque
rolling farm lands and glorious pristine coastline” (Augusta Margaret River Tourism
Association 2011). Along the coast, one can see the contrasts between large granite
pebbles that have been strewn and smoothed over time by the ocean, reefs and jagged
limestone cliffs protecting the beaches, and the white sandy beaches and blue waters of
places such as Gracetown, Hamelin Bay and Prevelly.
One can also visit the majestic karri and jarrah forests and wildflowers along the Leeuwin
Naturaliste ridge. The trees of Karrinup’s Boranup Forest, once used to pave the streets
of London, now constitute 100 years of regrowth since milling stopped in the late 1800s.
Cape Leeuwin, near the southern town of Augusta, represents the place where the Indian
and Southern Oceans meet. This gives the area a “last frontier” feel and even attracts
whale-watchers to view the migration of Humpback, Southern Right and endangered Blue
Whales between May and December. There are also stunning limestone caves in the area
along the Leeuwin Naturaliste ridge. And the annual Augusta River Festival highlights the
diversity and attraction of Augusta’s Blackwood River. Furthermore, the Leeuwin National
Park has mountain bike trails, exploratory walking trails, and horse riding.
The coastline along the Margaret River region includes some of WA’s best surf and
beaches, including Redgate Beach, and the above-mentioned Gracetown and Hamelin
Bay. Furthermore, they are perfect for swimming, diving, snorkeling, kitesurfing and
windsurfing, sailing and fishing. And naturally, surfing is an integral part of Margaret
River culture, with the region playing host to the annual Margaret River Classic and the
Margaret River Pro (formerly the Masters, held at Prevelly because of its internationally
recognized surf conditions). In fact, Yallingup, with its own ideal surf beaches of Yallingup
Beach, Rabbit Hill, Smiths and Super Tubes, has bred some of the world’s best surfers.
Furthermore, surfing lessons and board hire facilities are available from a number of local
businesses.
The region also is home to the Boranup Maze, plays host to annual concerts such as the
Leeuwin Concert, provides for golf enthusiasts with the Margaret River Golf Course and
the Chilli Waters Super Golf Course, and boasts world class art galleries (e.g. Karrinup).
Much of the Margaret River region is also steeped in historical significance. For example,
Augusta is the third oldest settlement in WA, with the first white settlers arriving in 1830.
Karridale was also the hub of the entire south west during the timber rush at the turn of
the 20th century. But since then (and since a destructive bushfire past through the town
in 1961), it became just a quaint little town. However, the chimney is still visible in
Karridale memorial park on Caves Road, and the Arumvale and old Boranup Mill still
remain.
Hamelin Bay’s wooden jetty still remains as a piece of historically significant
infrastructure, once being used to service sailing ships out of Karridale. Witchcliffe is
home to several gift shops and buildings that date back to early settlement times.
Furthermore, there is a significant timber history in Witchcliffe, including the mill in East
Witchcliffe, and the train line to Busselton that was constructed during the timber boom
times.
And of course, the Margaret River region is home to numerous world-class wineries,
transforming from little more than a struggling dairy industry 30 years ago into a winegrowing “mecca”. The town of Cowaramup, located about five minutes north of Margaret
River, is right in the centre of the Margaret River wine region and as such, is the ideal
location for the annual Margaret River Wine Festival, where local wines can be
showcased. This industry will be discussed in more detail in the following section.
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And to complement the wine industry, the region has many gourmet food and drink
offerings, including fine cheeses, port (The Grove, The Berry Farm), beer (Bootleg
Brewery, Colonial Brewery, Cowaramup Brewery), chocolate (The Margaret River
Chocolate Company), coffee (Yahava KoffeeWorks), and gourmet delicacies and fresh
local produce (Margaret Riviera). In addition to this, the region is home to a number of
award-winning restaurants and cafes, a growing number of which are within wineries
themselves. And within Margaret River town and Busselton, there is plenty of shopping,
retail and facilities.
The region also has a “stunning array of accommodation options (for every traveller,
including) luxury retreats, hip hotels, group or family accommodation, budget lodgings,
bountiful bed and breakfasts, caravan and camping grounds, holiday houses and rentals
and corporate accommodation” (Augusta Margaret River Tourism Association 2011).
Furthermore, the Augusta-Margaret River Tourism Association is made up of 465 tourism
operators, ranging from B&Bs to luxury resorts, tour companies, artisans, wineries,
confectionery outlets, animal exhibitions and specialist shops.
5.2.3
Tourism Activity
The Augusta-Margaret River region is a popular tourism destination. For the past five
years the region has received on average just under 700,000 visitors a year (day,
domestic overnight and international overnight) (DRET, 2011).
Figure 5.5 shows that the Augusta-Margaret River LGA has experienced a small decrease
in its level of tourism activity in recent years. Guest arrivals have decreased 2.9% over
the past year and 3.2% between the year ending September 2007 and the year ending
September 2011. Similarly, room occupancy rates have fallen from 53.5% during the
year ending September 2007 to 51.1% in the most recent year ending September 2011.
The 65% occupancy level is generally considered to be the benchmark for assessing if an
area would be able to sustain new entrants into the tourism accommodation market. The
declining trend in occupancy rates in Augusta-Margaret River over recent years suggests
that the market is currently in oversupply with 11 establishments in the region offering
410 rooms (ABS, 2011). Statistics collected by the Australian Bureau of Statistics refer
solely to establishments of 15 rooms or more. A recent audit of the region suggests
supply of 1,000 rooms in the Augusta-Margaret River region (Augusta-Margaret River
Shire, 2011).
Despite the fall in guest arrivals and occupancy rates within the LGA, takings from
accommodation have risen 19.1% over the past year and 7.0% from the year ending
September 2007 to the year ending September 2011 (ABS, 2011).
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28,000
80.0%
24,500
70.0%
21,000
60.0%
17,500
50.0%
14,000
40.0%
10,500
30.0%
7,000
20.0%
3,500
10.0%
0
Guest Arrivals
Room Occupancy Rate (%)
Guest Arrivals
Figure 5.5: Guest Arrivals and Room Occupancy Rates, December 2006 – September 2011
0.0%
Room Occupancy Rate
Sept YE Occupancy Rates
Source: ABS (2011d)
Figure 5.6 highlights the seasonal nature of tourism employment in the Augusta-Margaret
River LGA. The December and March quarters are traditionally the quarters with the
highest levels of employment, with the December 2008 (216 persons) and March 2009
(213 persons) quarters being the highest employing quarters over the past five years.
The number of persons employed in hotels, motels and serviced apartments with 15 or
more rooms has grown steadily at an average annual rate of 3.3% until the year ending
September 2011 and at 3.4% between September 2010 and September 2011.
Figure 5.6: Quarterly Employment in Hotels, Motels and Serviced Apartments with 15 or
More Rooms, December 2006 – September 2011
Persons Employed (Quarter)
250
200
150
100
50
0
Augusta-Margaret River (S)
Source: ABS (2011d)
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5.2.4
Viticulture
Margaret River’s current reputation as an internationally renowned wine region was not
always envisaged. The following table provides a brief timeline outlining the main events
that established the Margaret River viticulture industry.
Table 5.1: Timeline of the Margaret River Viticulture Industry
Margaret River Viticulture Industry History
Olmo (1956)
 Paper dismissed region as only suitable for table grapes, highlighting problems with Margaret
River’s high rainfall, cloud cover and disease risk relative to existing operations in Pemberton
and Manjimup, and potential areas south and east of Bridgetown, and areas south of Bunbury
Late 1950s1967
 First successful plantings in Mount Barker in 1967 (following Olmo’s recommendations)
 This move came from Charles Court and the Department of Industrial Development, in spite of
(and because of) the State Agricultural Minister’s reluctance to be seen to promote alcohol
 Margaret River’s potential finally promoted in 1965 and 1966 papers by John Gladstones (in
spite of Olmo’s recommendations), highlighting:
o Region’s suitable soils;
o Already-successful stone fruit crops near Karridale;
o Growing and ripening season climate similar to Bordeaux (maybe even warmer) and drier
and more complete than Mount Barker, allowing for varieties with wide range of maturities,
and a lower Spring frost risk; and
o Only potential problem was need for drainage management due to ample rainfall
Spring 1965
 Dr. Kevin Cullen contacted Gladstones for advice on growing lupins in the area, who told Cullen
to dismiss lupins and focus on vines
July 1966
 Cullen organized public meeting in Busselton, generating huge public response, given:
o Region’s depressed economy;
o Its once-booming timber industry was now a distant memory; and
o Its chronically unprofitable butterfat industry
 Despite suitable soils and climate, reaction from Department of Agriculture and WA media was
more guarded, given lack of local winery or outlet
Spring 1966
 Cullens’ first experimental plantings, despite such negative reactions, followed by first main
plantings in 1971
Winter 1967
 Dr. Tom Cullity established Vasse Felix, region’s first commercial winery, after coming across
Gladstones’ papers while growing vines NE of Bunbury in Darling Range
1972
 Vasse Felix brought first Margaret River wine to public notice, winning Gold and Silver medals
at the Perth Royal Show
 Margaret River “brand” being established through its European and coastal characters,
compared to SE Australia, and in spite of relatively inexperienced vignerons and winemakers
 By 1990, vines had matured and equipment and expertise vastly improved, allowing for
penetration of eastern and overseas markets
Late 1970s
 Uniqueness of “brand” gave rise to calls to officially define region’s boundaries
 Gladstones approached by MRWIA for the task, defining the boundaries as everything within
the Margaret River and Busselton shires west of longitude 115o18, including all land east of
Margaret River to the State Forest, and the controversial Carbanup-Jindong area
Source: Gladstones (2005)
The region’s western extent of Cape Leeuwin to Cape Naturalist was obvious enough. It
was the eastern extent that proved more difficult, given the broadly similar landscapes,
soils and climates that exist as far as 15-18km inland. Furthermore, MRWIA had already
accepted vineyards in the northern areas of Carbanup and Jindong (near Busselton) into
the region and therefore, they had to be included. This was a source of dispute, given the
flat alluvial and intermediate soils that occur here as the Cape ridge grades away to the
northeast. Many argued this type of soil was less conducive to quality viticulture
compared to the gravelly soil of the ridge itself. Carbanup and Jindong also had access to
underground water for irrigation, unlike the rest of the region, and experienced slightly
drier winters and warmer summers, resulting in up to four weeks difference in maturity
times.
Even so, these boundaries allowed for diversity within the region because, while fame for
quality, small boutique production was valuable, the region had to be large enough to be
the basis of an entire industry. This is where the Carbanup-Jindong area was useful:
larger-scale commercial production was more common in this area than elsewhere, and
the climate was still suitably comparable to the rest of the region. Also, an effort was
made not to exclude well-located wineries from the region.
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Even so, there is on-going debate as to whether the Carbanup-Jindong area should, in
fact, be included in the neighbouring Geographe area. And since the late 1990s, there
has even been a call for sub-regions to be established to better reflect the varying
characteristics within the Margaret River region (Gladstones suggested six potential subregions: Carbanup, Yallingup, Wilyabrup, Treeton, Wallcliffe and Karridale). Indeed,
northern sub-regions (especially Wilyabrup) have a strong reputation for success in
Bordeaux-style red wine, while the cooler south sub-regions appear to generate better
white wines (at least for the moment; some, including Tom Cullity, believe the south has
great red wine potential, given the longer, milder ripening periods they enjoy). However,
these sub-regions were not officially registered, for fear they would dilute the Margaret
River brand without compelling reason.
More recently, the “arrival of large-scale, investment-driven plantings and steep
increases in production have placed downward pressure on prices” (Gladstones 2005),
causing a significant glut by 2006. This has focused competitive pressures on the midpriced sector of the market. Interestingly, similar gluts had already been experienced in
California and France in earlier years, with Californian viticulture responding by plowing
excess grapes into super-budget brands, and French viticulture (other than complaining
to the government) responding by distilling wine into industry alcohol.
However, some (including the MRWIA) have stated that Margaret River actually
weathered the recent glut quite well because its reputation as a premium and boutique
wine region is its “mainstay rather than the icing on the cake”. In fact, according the
Margaret River Online, while the region accounts for only 3% of the country’s grapes, it
accounts for 20% of its premium wine emphasisng the value-adding nature of local
production. This is as compared to the more dominant bulk, heavily-marketed wine of
South Australia, New South Wales and Victoria, which were more affected by the glut.
This approach is reflected in overall production volumes, with the Eastern States
producing higher tonnages of wine grapes compared to the more boutique production of
Western Australia. This is illustrated in the figure below.
Figure 5.7: Net Total Wine Production, by State
600,000
Net Total Wine Production (000s Litres)
500,000
400,000
300,000
200,000
100,000
NSW/ACT
Vic
SA
WA
Source: ABS (2010)
This is not to say that a region can only produce one of two extremes: branded
commodity wines of anonymous irrigated origin, or high cost “terroir” wines from limited
select sites. This is arguably a false dichotomy, especially given the acceleration of the
industry’s globalisation. Indeed, many believe the industry is more like a continuum
between the two extremes, with regions able to produce wines along the entire extent of
the continuum. And the greatest advantage for Margaret River may actually be in the
middle ground, providing the most profitable part of exports, and a stepping stone for
consumers to higher-priced wines.
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This is where Margaret River (and indeed, Australia) has an advantage over Old World
wines, which are kept above this intermediate area by unpredictable climates,
competition from other land uses, and restrictive practices that stifle innovation. Not only
does Margaret River have the advantages of irrigation (allowing for economies and scale
and mechanisation), a safe and secure water supply, high yields, low disease levels, and
minimal spring frosts or ripening-period rains, it also has the potential to capture this
mid-market without fear that this will trend towards the “featureless, anonymous
commodity wines from anywhere that are hardly likely to inspire further interest or
inquiry” (Gladstones 2005).
Such a continuum is arguably needed to downgrade wines from young vines and the
occasional bad season into cheaper commercial blends (even cross-regional blends), but
not total obscurity. Moreover, the entire continuum can benefit from building on the
location-specific strengths of the high cost terroir wines, modern production technology,
and economies of scale. And the importance of Margaret River’s warmer areas is still
recognized for its ability to allow for reliable ripening and lower frost risk.
The Margaret River wine industry is also responsible, directly and indirectly, for
facilitating the dissemination of research, education and training in the region. For
example, the South West Institute of Technology campus located in the region
contributes to the region’s wine industry, as well as its creative industries, including
tourism and hospitality. The campus, opened in May 2004, is a collaborative initiative
between:

South West Institute of Technology

Curtin University of Technology

Edith Cowan University

Margaret River Senior High School

Department of Education and Training
It incorporates a Centre of Wine Excellence that provides world-class training for the
practical and theoretical elements of wine grape growing, cellar operations, cellar door
sales, and wine tourism industries. Furthermore, the teaching winery, chemistry,
computer and research laboratories, sensory evaluation, and resource centre “makes this
the premier provider of wine industry training for the cultivation, manufacture and
bottling, as well as the promotion of wine sales at the cellar door” (Curtin University
2011).
Figure 5.8: South West Institute of Technology
Source: Curtin University (2011)
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5.2.5
Relationship between Foundation Industries
There is a curious relationship between tourism and the wine industry. Wine tourism
includes the areas of wine, food, tourism and the arts, extending beyond merely the
cellar door to virtually the entire regional economy. Wine tourism destinations have the
potential to provide “wine tourists” with extraordinary lifestyle packages and experiences
that they seek from enjoying wine at its source. This includes wine, food, landscape and
cultural activities. Synergies exist between wine and tourism that allow for the promotion
of wine regions and events through tourism, increased cellar door sales to tourists, added
value to regional production, and new wine tourism business opportunities.
A large number of micro and small-to-medium wine producers stand to benefit greatly
from increased cellar door sales generated by wine tourism. This is especially true given
the massive increases in recent wine production, increase global competition, and tighter
retail margins as a result of the greater bargaining power of distributors and retail
organisations. And subsequently, assisting the wine industry through this tourism
promises to return benefits to the tourism industry itself, and the entire regional
economy.
However, as shown in the below figure, wine and tourism are actually at opposite ends of
the industrial spectrum. Wine is a primary industry led by supply factors, occupied by
price-taking, cost-minimising producers, producing a homogenous product, and growing
through capital accumulation. Tourism, on the other hand, is a tertiary industry driven by
demand factors, occupied by price-making, profit maximizing producers, producing
heterogeneous products, and growing through profit-generation.
Table 5.2: A framework for wine tourism research
Primary Industry
Secondary Industry
Wine Industry
Tertiary Industry
Tourism Industry
Supply-led – subject to seasonal, temporal, global,
technical and agricultural factors that set the supply of
grapes and wine.
Demand-driven – subject to economic, consumptionled, competitive, demonstrative and demographic
forces that determine demand for wine tourism.
Price takers – single price is determined by wine
producers, global wine prices, price of other alcoholic
beverages (substitutes).
Price-makers – price range is determined by nature of
product/service offered, seasonal demand, valueadding to experiences.
Homogenous product – highest quality standard
varietals or blends, long lead times for changes in
production, consistent over time.
Heterogeneous product/service – a range of options
and offerings and short lead times to develop new
products, changing over time.
Cost Minimisers – seek more efficient production
methods, technology intensive, innovate to maximize
yield.
Profit maximisers – seek maximum returns through
extensive marketing, labour intensive, imitate, renovate
or renew rather than innovate.
Wealth creation through capital growth in value of land
and buildings in the long-term.
Wealth creation through profits and return on
investment in the short-term.
Source: Carlsen (2004)
Furthermore, there are concerns that tourism operators would actually benefit more than
the wine industry, through “mobile drunks” and large tour buses crowding out desirable
wine tasters in small cellar door settings. There is also the potential for conflicting land
use options that could subsume vineyard land with tourism developments. And the notion
that a discrete wine tourism market exists is questionable, given the fact that only a part
of most holidays in and around wine regions actually constitutes visiting wineries.
Moreover, wine tourists tend to be within older generations, limiting the extent of the
tourism market into which the wine industry can tap.
But one final area of convergence exists in the ease of entry and exit that producers have
in both industries. This has resulted in intense local and international competition in both.
As a result, recognizing more synergies between the two industries could be the key to
transitioning Margaret River from a service economy to an experience economy.
5.3
Key Findings
The Augusta-Margaret River economy grew by 11.5% for the 2010-11 financial year,
after contracting slightly over the two preceding years. Since 2006-07, the area’s
economy has expanded by 8.4% per annum, in line with the SWDC average and slightly
below the average across Western Australia (11.9%).
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The leading sectors in the Augusta-Margaret River economy are the construction,
manufacturing and agricultural sectors, responsible for over 40% of the area’s Gross
Regional Product.
Tourism and viticulture are defining characteristics of the Margaret River economy and
area.
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6.
Economic Outlook
The economic outlook for Augusta-Margaret River is an integral component to identifying
future growth opportunities and industries for development. Though the future is
uncertain, socio-demographic changes and other macro-influences (positive and
negative) can, to some extent, be planned for in order to stabilise local economic
dynamics.
This chapter examines the key economic drivers of the local region and as provides an
overview of the expected path for the local economy under a range of population-growth
scenarios over the next 20 years.
6.1
Future Economic Drivers
Future economic drivers are sourced internally and externally. Internal factors are, to
some extent, able to be influenced and manipulated by the Shire of Augusta-Margaret
River. External factors, however, tend to be of a macro nature and are outside of the
control of the Shire. Whilst external drivers are outside of their control, strategic planning
ahead of these potential opportunities and challenges can assist in amplifying or reducing
their impact on the local economy.
6.1.1
Internal Drivers
6.1.1.1
Population Growth
Population growth provides support for infrastructure and services demand. Australia's
population increased by an average 0.3% per quarter between June 1981 and March
2011. The State of Western Australia has also experienced solid population growth over
this time frame, of an average 0.7% per quarter (ABS, 2011). Western Australia has
benefited from both natural population growth (i.e. more births than deaths) and interState and overseas inward migration. Since March 2004, two thirds of Western Australia's
population growth (65.8%) has been sourced from inter-state and overseas migration.
Several factors have contributed to this performance, including the strong performance of
the Western Australian mining industry.
Augusta-Margaret River population has grown by 2.3% per annum since 2001, recording
a total of 12,509 residents in 2010 (ABS, 2011). This growth is below the growth of the
broader South West Development Commission (SWDC) region (average annual growth of
2.5% p.a.), however, is above that of Western Australia (2.1%).
Augusta-Margaret River has benefited from a population migration trend over the past 10
years toward coastal regions of Western Australia, consistent with population growth
seen in other coastal regions within the SWDC region including Busselton (3.6% p.a.),
Capel (7.3% p.a.), Dardanup (4.3% p.a.) and Harvey (3.0% p.a.).
As a Supertown, it is anticipated that the town of Margaret River will double in size by
2031. This will present a significant change for the region and will need to be adequately
planned for. Through the achievement of this goal, demand for key services and sectors
of the economy are expected to increase substantially.
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Population growth is a key factor in supporting the local economy. Population growth
tends to support several sectors of the economy, including:

Retail trade

Construction

Education

Health Care and Social Assistance
6.1.2
External Drivers
6.1.2.1
Ageing Population
The Australian population is ageing. According to the 2006 Census, the number of
persons aged over 65 had increased by 11% between 2001 and 2006 (ABS, 2007). The
impact of an ageing population is felt in various sectors of the economy, particularly by
increased strain on the health sector and a fall in the labour market participation rate.
According to the Australian Government in the 2010 edition of the Inter-Generational
Report, in 1970 “…there were 7.5 people of working age to support every person aged 65
and over. By 2010 this has fallen to an estimated 5 people of working age for every
person aged 65 and over. By 2050 the number is projected to decline to 2.7 people of
working age to support every person aged 65 and over”.
To some extent, the impact of the “baby boomers” leaving the work force has been
delayed because of the negative impact on superannuation balances caused by the Global
Financial Crisis. But this is only a short-term abatement of an acute pressure, with labour
and skills shortages anticipated over the coming 20 years. Whilst Australia has
experienced strong population growth over the past decade, due to increased life
expectancy and immigration, the increase in the population is likely to be insufficient to
reverse the trend of an ageing population.
Augusta-Margaret River has an older population than the SWDC region and Western
Australia. In 2010, the Augusta-Margaret River average age was estimated to be 37.6
years. The Augusta-Margaret River population is also ageing at a faster rate than the
broader SWDC region (up 0.6 years) and the State (up 0.4 years), with the average age
of the area having increased by one year since 2005.
The ageing of the population is expected to create some economic opportunities for
Augusta-Margaret River LGA. Increased demand for health services is projected by
Commonwealth and State governments over the next two decades which has already
seen health and social assistance overtake retail as the largest employing industry in
Australia. Demand for age specific housing is also expected to grow, with retirement
villages and aged care facilities expected to play a greater role in accommodating and
caring for older Australians.
An ageing population tends to result in:
6.1.2.2

Lower labour force participation rates

Higher economic dependency on those in the labour force

Lower disposable incomes

Lower taxation revenues

Growth in demand for healthcare and social assistance services

Increased requirement for retirement villages and aged care facilities
State & National Growth Outlook
Economic activity is contagious. Economic growth from one sector or geographical area
tends to infiltrate other areas of the economy. The broader economic outlook is,
therefore, often important in determining future growth sectors in smaller regions.
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On a national scale, economic growth in Australia was estimated by the Commonwealth
Department of Treasury (2011) in December to plateau over the coming years. The
unemployment rate was expected to remain low, fuelling wages price growth. In recent
months, the Reserve Bank of Australia has lowered interest rates - towards neutral
settings - and highlighted the worsening in global economic sentiment and outcomes
could, through trade relations, impact on the Australian economy (RBA, 2011). Concerns
about inflation have eased also.
Table 6.1: Australian Economic Indicators, Estimates
Indicator
2011-12
2012-13
2013-14
Real GDP
3.25%
3.00%
3.00%
Unemployment rate
5.50%
5.00%
5.00%
CPI
3.25%
2.50%
2.50%
Wages Price Index
3.75%
3.75%
nf
Note: Estimates are percentage change on preceding year. nf = not forecast
Source: Department of Treasury (2011)
The Western Australia Department of Treasury (2011) is also bullish on the economy,
expecting firm economic growth outcomes and low unemployment. These economic
outcomes are likely to fuel further growth in the State's regions, including AugustaMargaret River.
Table 6.2: Western Australian Economic Indicators, Estimates
Indicator
2010-11
2011-12
2012-13
GSP
4.00%
4.50%
4.00%
Unemployment rate
4.50%
4.50%
4.25%
CPI
2.75%
3.00%
3.25%
Wages Price Index
4.00%
4.25%
4.50%
Note: percentages are annual grow over the year.
Source: Western Australia Department of Treasury (2011)
Economic developments at the State and National level are outside of the control of local
economic development teams. However, planning for and accommodating expected shifts
in the state and national economies could assist in stabilising the economic cycle.
6.1.3
Regional & Local Drivers
6.1.3.1
Demand for Tourism
Margaret River is a key tourism destination for Western Australia. In 2010, the region
benefited from over 1.5 million visitor nights, which provide significant economic benefits
to the region (in terms of expenditure). The majority of visitors to the Margaret River
region visit the area for holiday or leisure. In particular, the Margaret River area is an
internationally-recognised surfing destination and the host of the annual Telstra Drug
Aware pro championships which attracts professional surfers from around the world. The
annual competition is one the largest and best well known events in the South West
region. Margaret River is one of the iconic surfing locations and attracts tourists from
around the world. Due to the iconic nature of surfing, many tourists and the flow-on
impacts in retail and accommodation come to the area.
The tourism industry is currently experiencing difficult times as the high Australian dollar
dissuades both domestic and international visitors from visiting the region and global
economic conditions remain uncertain. Key forecasters for the tourism industry have
been revising down their estimates for future visitation, nationally (Tourism Research
Australia, 2011).
According to Tourism Research Australia (2011) annual growth in holiday visitors (the
core visitor group to the Margaret River region) to Western Australia is estimated to grow
by an annual rate of 0.9% between 2010 and 2020, providing some support to the local
tourism industry. Numerous planned infrastructure projects for the Margaret River,
including the enhancements to the main street, are expected to be transformational
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projects, providing support to the future tourism and retail industries, as well as
improving amenity and attractiveness to visitors.
Diversifying the economy and developing strategies to smooth the fluctuations in
visitation to the Augusta-Margaret River region will be essential to managing economic
growth into the future. Tourism visitation can provide a vast number of economic benefits
to the region and capturing the growth in the number of holiday visitors to the State is
likely to also provide positive influences on the local economic outlook. Broadening the
base of visitors to the Margaret River area can also assist in stabilising the local
economy. Expansion of the brand to include conferences and business events could assist
in this manner, attracting business travellers who (on average) tend to have higher
expenditure than holiday visitors. Attracting investment for accommodation
developments which will meet the demands of business travellers will be important in the
realisation of this goal.
6.1.3.2
Viticulture Outlook
Margaret River is a well-established wine region with a history dating back to the mid
20th century. Experts have noted the region has withstood a reported glut in the wine
market better than similar regions globally because its reputation as a premium and
boutique wine region that is “mainstay rather than the icing on the cake”.
Forecasters (IBISWorld, 2011) estimate that employment in wine manufacturing,
nationally, will ease in excess of 10% over the coming five years but that total industry
value add will increase by 11% over the same time frame (reflecting prices).
Maintaining the Margaret River's resilience to global and national wine industry
fluctuations will be essential to ensuring the longevity of the region's industry. The focus
on premium wines and export markets will be key to achieving this goal.
The Augusta-Margaret River benefits from a well-regarded and sophisticated high-level
brand which encompasses its viticulture and wine manufacturing industry. This brand is
essential to the region and must be further established and developed. this brand
supports underlying demand for local produce and its continued promotion will assist in
providing support to the local economy into the future.
6.1.3.3
Broadband Internet Infrastructure
Beyond core industries locally, internet infrastructure and access to broadband internet
will be critical for the future. Use of the internet has infiltrated most aspects of day to day
living as well as business operations.
Currently, ADSL services are provided over the existing Telstra copper network, which
does not offer the same speed as a broadband connection over fibre optics. Speeds and
availability also vary with the existing 3G mobile network. Given that Telstra has a
current monopoly, there is no competition and incentive to invest in new infrastructure
and offer better services at lower costs.
Access to broadband internet will be a key infrastructure development that will drive
economic growth and increasing residential amenity across the LGA. A recent report
commissioned by the South West Development Commission3 identified that the National
Broadband Network (NBN) would have a significant economic impact on the region,
including:

Increased average industry revenue of 21%.

Increased average industry employment of 5%.

Increased average industry productivity of 6.3%.
3
Impact Assessment of the National Broadband Network in the South West Region (April 2011)
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Modelling of the NBN in the South West region suggests between 2010 and 2030 the
economy will benefits from (on average):
6.1.3.4

Increased output growth by 0.9 percentage points per annum.

Increased Gross Value Add growth by 0.8 percentage points per annum.

Increased wages and salaries growth by 0.5 percentage points per annum.

Increased employment growth by 0.6 percentage points per annum.
Busselton Airport Upgrade
The Busselton Airport is currently undergoing an upgrade in line with Commonwealth
regulations to allow for regular passenger traffic (RPT) and the continuation of fly-in/flyout (FIFO) operations. As the airport grows, it provides easier access to and from the
region (including the Shire of Augusta-Margaret River).
6.2
Potential Future Economic Growth Path
The potential future growth path of the Augusta-Margaret River LGA has been estimated
using AECgroup's proprietary economic growth model (see Appendix A). Three growth
scenarios have been developed for comparison. These scenarios are based on population
growth in the region, specifically:

Low: Assumes population growth aligns with estimates from the Department of
Health and Ageing for average annual growth in the population of 1.8% per annum to
2031.

Medium: Assumes population growth aligns with the estimates from the Western
Australian Planning Commission for average annual growth in the population of 2.1%
per annum to 2031.

High: Assumes population growth aligns with the Supertowns target of a doubling in
the population of Margaret River Town and continued historical trends for the
remainder of the LGA, resulting in an average annual 2.8% expansion of the
population.
Employment in Augusta-Margaret River LGA is expected to expand under each scenario,
supporting the LGA's ability to attract new residents. Employment in the LGA is estimated
to range between 12,000 and 19,000 across the population-based scenarios. Key sectors
of the economy which are estimated to generate significant employment growth over the
forecast horizon include mining (FIFO), health care and social assistance, and financial
and insurance services.
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Figure 6.1: Estimated Employment, 2011 to 2031, Augusta-Margaret River LGA
25,000
Low
Medium
High
Employment
20,000
15,000
10,000
5,000
0
2011
2016
2021
2026
2031
Source: ABS (2010a, 2010b, 2011g, 2011h, 2011i), DHA (2007), WAPC (2005), AEC group
The Augusta-Margaret River economy recorded an estimated Gross Regional Product
(GRP) of $694 million in 2010-11. Over the coming 20 years, it is estimated that the local
economy could expand to between $1.7 billion and $2.7 billion. Key sectors of economic
growth are estimated to include mining, information, media and telecommunications and
financial and insurance services. The tourism and viticulture industries will continue to
play an important role in the future Augusta-Margaret River economy as will the premium
status of the Margaret River brand.
Figure 6.2: Estimated Real GRP, 2011 to 2031, Augusta-Margaret River LGA ($M)
2031
2026
2021
High
2016
Medium
Low
2011
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$M
Source: ABS (2010a, 2010b, 2011g, 2011h, 2011i), DHA (2007), WAPC (2005), AEC group
6.3
Key Findings
The Augusta-Margaret River economy is expected to grow over the coming 20 years. The
extent to which it will expand will depend on a range of factors, some of which the Shire
will be able to influence, and others which the Shire will need to proactively plan for and
accommodate. The extent to which the region attracts the desired population growth will
have fundamental impacts on its expected growth path. Strategically guiding the
economy through proactive economic development is likely to assist the region in
reaching the SuperTown target and stronger economic outcomes.
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7.
Regional Gap Analysis
Gap analysis provides an understanding of where existing services and infrastructure are
short of estimated demand. This may be apparent in the high level of imports into a
region or in the underperformance of a region against benchmarking regions. In order to
develop an understanding of the gaps in the Augusta-Margaret River LGA, the gap
analysis undertaken involved:
7.1

Import and Export Analysis: Understanding which products and services are
imported into the region (suggesting a lack of local supply) and which products or
services are exported out of the region (after having met local supply).

Supply Chain Analysis: Understanding where in the supply chain the AugustaMargaret River LGA lies and which local industries add significant value.

Comparative Assessments: Analysing the composition of Augusta-Margaret River
LGA in comparison with three key benchmarking regions.

Journey to Work: Analysing where local residents work and where local workers are
sourced from.
Import & Export Analysis
Prominent imports into a region can represent opportunities, where skills and labour can
be easily sourced. This could improve local industry supply chains and provide additional
job opportunities for locals. Prominent imports into the Augusta-Margaret River LGA
include:

Professional, scientific and technical services ($23.6 million or 8.7% of total imports).

Other agriculture ($13.7 million or 5.1%).

Wholesales trade ($13.7 million or 5.1%).

Oil and gas extraction ($12.4 million or 4.6%).
Key imports into the region are support services for the viticulture industry and also
reflect some lack of skilled labour in the region (in terms of professional, scientific and
technical services). As demand for local wine production increases into the future, it is
essential that key support industries (both manufacturing and services) are available
locally to encourage growth and retail local economic incomes.
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Figure 7.1: Key Imports into Augusta-Margaret River LGA, 2007-08
Professional, Scientific and Technical Services
Other Agriculture
Wholesale Trade
Oil and gas extraction
Basic Chemical Manufacturing
Auxiliary Finance and Insurance Services
Polymer Product Manufacturing
Telecommunication Services
Finance
Rental and Hiring Services (except Real Estate)
Road Transport
Paper Stationery and Other Converted Paper Product…
Insurance and Superannuation Funds
Other Repair and Maintenance
Building Cleaning, Pest Control, Administrative and Other…
Other Food Product Manufacturing
Petroleum and Coal Product Manufacturing
Transport Support services and storage
Electricity Generation
Professional, Scientific, Computer and Electronic…
Construction Services
Structural Metal Product Manufacturing
Soft Drinks, Cordials and Syrup Manufacturing
Motor Vehicles and Parts; Other Transport Equipment…
Other Wood Product Manufacturing
Specialised and other Machinery and Equipment…
Sheep, Grains, Beef and Dairy Cattle
Air and Space Transport
Publishing (except Internet and Music Publishing)
Other Fabricated Metal Product manufacturing
$23.6
$13.7
$13.7
$12.4
$11.8
$10.2
$9.5
$9.0
$8.8
$7.0
$6.3
$6.3
$5.6
$5.3
$5.0
$4.7
$4.5
$4.2
$4.0
$4.0
$3.9
$3.8
$3.6
$3.4
$3.3
$3.2
$3.2
$3.2
$3.2
$3.1
$0
$5
$10
$15
$20
$25
Imports of Goods and Services by Industry ($M)
Source: ABS (2010a, 2011h), AECgroup
Key exports out of a region tend to be reflective of its competitive advantage and can
represent opportunities for further growth and expansion.
Prominent exports from the Augusta-Margaret River LGA include:

Wine ($139.5 million or 33.5% of all exports).

Accommodation ($32.5 million or 7.8%).

Sheep and Dairy Cattle ($32.2 million or 7.7%).

Other agriculture ($22.5 million or 5.4%).
Key exports from Augusta-Margaret River reflect the strength of the region's viticulture,
tourism (wine and accommodation) and agriculture industries. These industries are the
region's competitive advantages and will be instrumental in its economic development
going forward.
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Figure 7.2: Key Exports out of Augusta-Margaret River LGA, 2007-08
Wine, Spirits and Tobacco
Accommodation
Sheep, Grains, Beef and Dairy Cattle
Other Agriculture
Residential Building Construction
Construction Services
Non-Residential Property Operators and Real Estate…
Retail Trade
Heavy and Civil Engineering Construction
Dairy Product Manufacturing
Building Cleaning, Pest Control, Administrative and Other…
Beer Manufacturing
Wholesale Trade
Food and Beverage Services
Agriculture, Forestry and Fishing Support Services
Non Metallic Mineral Mining
Fishing, hunting and trapping
Basic Non-Ferrous Metal Manufacturing
Professional, Scientific and Technical Services
Petroleum and Coal Product Manufacturing
Non-Residential Building Construction
Oils and Fats Manufacturing
Electricity Transmission, Distribution, On Selling and…
Road Transport
Education and Training
Rental and Hiring Services (except Real Estate)
Meat and Meat product Manufacturing
Clothing Manufacturing
Finance
Transport Support services and storage
$0
$139.5
$32.5
$32.2
$22.5
$22.1
$22.0
$20.2
$14.5
$12.2
$9.7
$8.5
$8.0
$4.5
$4.4
$4.4
$3.6
$3.3
$3.3
$3.1
$2.9
$2.9
$2.8
$2.7
$2.7
$2.5
$2.4
$2.1
$1.9
$1.9
$1.8
$50
$100
$150
Exports of Goods and Services by Industry ($M)
Source: ABS (2010a, 2011h), AECgroup
7.2
Supply Chain Analysis
The following tables provide a summary of the key upstream (imports and local
purchases) and downstream (local sales to industry and consumption, as well as exports)
markets for each industry. Care should be taken in interpreting these results as
the values presented in the tables are indicative estimates only, and are designed
to broadly identify the key inputs for each industry and potential targets for regional
development rather than the specific quantum of each component.
The supply chain assessment has been conducted using Input Output transaction tables
developed specifically for the Augusta-Margaret River LGA, based on the 2007-08
National Input Output Tables developed by the Australian Bureau of Statistics (2011g)
and employment by industry estimates provided by the Australian Bureau of Statistics
(2010a). The method used for regionalising the national tables to the Augusta-Margaret
River LGA economy is consistent with the approach outlined in West (1993).
Key points of note:

Each of the key local industries (presented below) has a relatively even distribution of
locally-sourced and imported inputs.

Overall, the economy imports less than half of total inputs (41.7%), with the
remainder being sourced from local producers.

The wine, spirits and tobacco industry provides essential down-stream supply chain
activity to key exports sectors of the Augusta-Margaret River.
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Interpreting the Supply Chain Assessment Flow Diagram
The supply chain assessment identifies both the upstream and downstream activities
engaged in by an industry, which can be classified as:

Upstream inputs to production:
o Sourced locally, or
o Imported to the region.

Downstream sales of product:
o Sold direct to local industry (and used elsewhere in value adding production)
o Consumed by the local economy (population based consumption), or
o Exported from the region.
The following diagrams show the supply chain for three key sectors in the AugustaMargaret River economy: Agriculture, Forestry and Fishing, Food and Beverage
Manufacturing and Accommodation, Cafes and Restaurants.
Agriculture, Forestry and Fishing

More than half of all inputs into the agriculture, forestry and fishing inputs are
sourced locally. Over 15% of imports are business services (wholesale trade and
professional, scientific and technical services). Import replacement could assist in
diversifying the economy and providing key support to this major industry in the LGA,
particularly from manufacturing support and services industries.
Food and Beverage Manufacturing

Wine is the primary export for the region at 139.5 million (33.5% of all exports).
Though the majority of grapes used in the wine industry are sourced locally (58%)
the remainder are imported.
Accommodation, Cafes and Restaurants

The accommodation, cafes and restaurants industry appears to have solid up and
down stream supply chains. The majority of inputs are sourced locally (55.9%),
leveraging the local wine industry and meat products.
44
Margaret River SuperTown Combined Report
Final Draft
Figure 7.3: Supply Chain, Agriculture, Forestry and Fishing (part A), 2007-08
UPSTREAM INPUTS TO PRODUCTION
IMPORTS
DOWNSTREAM SALES OF PRODUCT
LOCAL PURCHASES
SECTOR OF INTEREST
SALES TO LOCAL INDUSTRY
Industry
$M
Industry
$M
Industry
$M
Basic Chemical Manufacturing
$6.1
$11.6
Wine, Spirits and Tobacco
$22.1
Wholesale Trade
$3.1
Agriculture, Forestry and Fishing
Support Services
Other Agriculture
$6.8
$10.8
Other Food Product
Manufacturing
Professional, Scientific and
Technical Services
Petroleum and Coal Product
Manufacturing
$2.9
Sheep, Grains, Beef and Dairy
Cattle
Wholesale Trade
$4.2
Sheep, Grains, Beef and Dairy
Cattle
Other Agriculture
Dairy Product Manufacturing
$6.3
$2.2
Petroleum and Coal Product
Manufacturing
$2.1
Meat and Meat product
Manufacturing
$5.1
Other industries
$19.9
Other industries
$11.7
Other industries
$8.5
Total
$36.6
Total
$38.6
Total
$62.7
Veterinary Pharmaceutical and
Medicinal Product Manufacturing
Basic Chemical Manufacturing
$1.7
$4.3
Dairy Product Manufacturing
$6.2
$1.1
Wholesale Trade
$0.8
Meat and Meat product
Manufacturing
Sheep, Grains, Beef and Dairy
Cattle
Wine, Spirits and Tobacco
$3.8
$1.5
Agriculture, Forestry and Fishing
Support Services
Sheep, Grains, Beef and Dairy
Cattle
Other Agriculture
Other industries
$6.4
Other industries
$4.9
Other industries
$2.8
Total
$12.3
Total
$16.3
Total
$19.7
Other Food Product
Manufacturing
Professional, Scientific and
Technical Services
Veterinary Pharmaceutical and
Medicinal Product Manufacturing
Transport Support services and
storage
$0.4
Poultry and Other Livestock
$0.3
$1.2
$0.1
Agriculture, Forestry and Fishing
Support Services
Transport Support services and
storage
Sheep, Grains, Beef and Dairy
Cattle
$0.1
Meat and Meat product
Manufacturing
Poultry and Other Livestock
Other Agriculture
$0.2
$0.1
Retail Trade
$0.1
Other industries
$0.4
Other industries
$0.4
Other industries
$0.4
Total
$1.0
Total
$1.0
Total
$2.2
Basic Chemical Manufacturing
Wholesale Trade
Petroleum and Coal Product
Manufacturing
Finance
$3.2
$1.4
$1.2
$5.9
$3.4
$1.1
Wine, Spirits and Tobacco
Other Agriculture
Sheep, Grains, Beef and Dairy
Cattle
Agriculture, Forestry and Fishing
$18.9
$3.4
$2.8
$1.1
Agriculture, Forestry and Fishing
Support
Services
Other
Agriculture
Petroleum and Coal Product
Manufacturing
Wholesale Trade
Other industries
$9.0
Other industries
$4.5
Other industries
$2.2
Total
$15.7
Total
$27.9
Other Food Product
Manufacturing
Professional, Scientific and
Technical Services
$2.5
$1.7
$0.1
$0.1
Total
$15.8
Source: ABS (2010a, 2011h), AECgroup
$2.1
AGRICULTURE,
FORESTRY AND
FISHING
$3.6
$2.8
$0.1
$0.9
Sheep, Grains,
Beef and Dairy
Cattle
Poultry and
Other Livestock
Other
Agriculture
LOCAL
EXPORTS
CONSUMPTION
$M
$M
$10.0
$3.6
$3.6
$65.3
$0.1
$32.2
$0.3
$1.8
$2.6
$22.5
$3.2
$0.3
$0.7
45
Margaret River SuperTown Combined Report
Final Draft
Figure 7.4: Supply Chain, Agriculture, Forestry and Fishing (part B), 2007-08
UPSTREAM INPUTS TO PRODUCTION
IMPORTS
DOWNSTREAM SALES OF PRODUCT
LOCAL PURCHASES
SECTOR OF INTEREST
SALES TO LOCAL INDUSTRY
Industry
$M
Industry
$M
Industry
$M
Specialised and other Machinery
and
BasicEquipment
Chemical Manufacturing
$0.2
$0.1
$0.2
$0.1
$0.1
Petroleum and Coal Product
$0.1
$0.1
Sawmill Product Manufacturing
Agriculture, Forestry and Fishing
Support Services
Other Wood Product
Manufacturing
Forestry and Logging
$0.4
$0.1
Other Repair and Maintenance
Agriculture, Forestry and Fishing
Support
Petroleum
andServices
Coal Product
Manufacturing
Automotive Repair and
Maintenance
Wholesale Trade
Other industries
$0.3
Other industries
$0.2
Other industries
$0.1
Total
$0.6
Total
$0.7
Total
$0.8
Specialised and other Machinery
and
Equipment
Petroleum
andManufacturing
Coal Product
Manufacturing
Wholesale Trade
Finance
$0.2
$0.1
$0.2
$0.1
Food and Beverage Services
Accommodation
$0.2
$0.1
$0.1
$0.1
Agriculture, Forestry and Fishing
Support
Petroleum
andServices
Coal Product
Manufacturing
Wholesale Trade
Finance
Retail Trade
Other Agriculture
$0.0
$0.0
Other industries
$0.6
Other industries
$0.2
Other industries
$0.0
Total
$1.0
Total
$0.6
Total
$0.5
Basic Chemical Manufacturing
Rental and Hiring Services (except
Real Estate)
Wholesale Trade
Professional, Scientific and
$1.1
$1.0
Agriculture, Forestry and Fishing
Other Agriculture
$0.8
$0.7
$5.9
$4.3
$0.5
$0.4
Rental and Hiring Services (except
Wholesale Trade
$0.5
$0.3
Other Agriculture
Sheep, Grains, Beef and Dairy
Cattle
Agriculture, Forestry and Fishing
Forestry and Logging
Other industries
$2.8
Other industries
$1.8
Total
$4.1
Total
$5.7
Source: ABS (2010a, 2011h), AECgroup
$0.1
$0.1
$0.0
Forestry and
Logging
Fishing, Hunting
and Trapping
Agriculture,
Forestry and
Fishing Support
Services
$0.1
LOCAL
EXPORTS
CONSUMPTION
$M
$M
$0.1
$1.1
$0.2
$3.3
$0.2
$4.4
$0.0
$0.8
$0.2
Other industries
$0.4
Total
$11.6
46
Margaret River SuperTown Combined Report
Final Draft
Figure 7.5: Supply Chain, Food and Beverage Manufacturing (part A), 2007-08
UPSTREAM INPUTS TO PRODUCTION
IMPORTS
DOWNSTREAM SALES OF PRODUCT
LOCAL PURCHASES
SECTOR OF INTEREST
SALES TO LOCAL INDUSTRY
Industry
$M
Industry
$M
Industry
$M
Other Agriculture
Paper Stationery and Other
Converted Paper Product
Manufacturing
Wholesale Trade
Soft Drinks, Cordials and Syrup
Manufacturing
Professional, Scientific and
Technical Services
$13.5
$4.5
Other Agriculture
Sheep, Grains, Beef and Dairy
Cattle
$19.4
$15.0
Wine, Spirits and Tobacco
Food and Beverage Services
$11.5
$4.7
$3.8
$3.4
Wine, Spirits and Tobacco
Food and Beverage Services
$10.3
$3.0
Retail Trade
Accommodation
$2.3
$2.3
$3.1
Dairy Product Manufacturing
$2.8
Dairy Product Manufacturing
$1.9
Other industries
$33.1
Other industries
$19.3
Other industries
$4.2
Total
$61.4
Total
$69.7
Total
$26.9
Road Transport
$0.1
$3.8
Retail Trade
$1.7
Paper Stationery and Other
Converted Paper Product
Manufacturing
Wholesale Trade
$0.1
Sheep, Grains, Beef and Dairy
Cattle
Poultry and Other Livestock
$1.2
Food and Beverage Services
$1.2
$0.6
Accommodation
$0.7
Electricity Generation
$0.0
Meat and Meat product
Manufacturing
Road Transport
Meat and Meat product
Manufacturing
$0.6
Other industries
$0.3
Other industries
$0.6
Other industries
$0.8
Total
$0.6
Total
$6.8
Total
$5.0
Polymer Product Manufacturing
$0.9
$6.2
Dairy Product Manufacturing
$1.8
Paper Stationery and Other
Converted Paper Product
Wholesale Trade
Road Transport
$0.4
Sheep, Grains, Beef and Dairy
Cattle
Dairy Product Manufacturing
Food and Beverage Services
$0.7
$0.3
$0.3
Road Transport
Wholesale Trade
$0.3
$0.3
Wine, Spirits and Tobacco
Accommodation
$0.4
$0.3
Other industries
$1.6
Other industries
$0.8
Other industries
$1.2
Total
$3.5
Total
$9.4
Total
$4.4
Oils and Fats Manufacturing
Wholesale Trade
$0.2
$0.2
$0.7
$0.6
Oils and Fats Manufacturing
Food and Beverage Services
$0.7
$0.3
Polymer Product Manufacturing
Road Transport
$0.1
$0.1
Oils and Fats Manufacturing
Sheep, Grains, Beef and Dairy
Cattle
Dairy Product Manufacturing
Wholesale Trade
Bakery Product Manufacturing
Accommodation
$0.0
$0.0
Other industries
$0.6
Other industries
$0.4
Other industries
$0.1
Total
$2.0
Total
$1.2
$0.1
Total
$1.1
Source: ABS (2010a, 2011h), AECgroup
$0.5
$1.8
$0.2
$0.1
FOOD AND
BEVERAGE
MANUFACTURING
Meat and Meat
product
Manufacturing
Dairy Product
Manufacturing
Oils and Fats
Manufacturing
LOCAL
EXPORTS
CONSUMPTION
$M
$M
$12.2
$163.4
$2.2
$2.1
$2.5
$9.7
$0.4
$2.8
47
Margaret River SuperTown Combined Report
Final Draft
Figure 7.6: Supply Chain, Food and Beverage Manufacturing (part B), 2007-08
UPSTREAM INPUTS TO PRODUCTION
IMPORTS
DOWNSTREAM SALES OF PRODUCT
LOCAL PURCHASES
SECTOR OF INTEREST
SALES TO LOCAL INDUSTRY
Industry
$M
Industry
$M
Industry
$M
Grain Mill and Cereal Product
Manufacturing
Other Food Product
Manufacturing
Fruit and Vegetable Product
Manufacturing
Wholesale Trade
$0.4
$0.3
Food and Beverage Services
$0.4
$0.2
Meat and Meat product
Manufacturing
Wholesale Trade
$0.1
Retail Trade
$0.2
$0.2
Dairy Product Manufacturing
$0.1
Accommodation
$0.1
$0.1
Sugar and Confectionery
Manufacturing
$0.1
Dairy Product Manufacturing
$0.1
Other industries
$0.5
Other industries
$0.5
Other industries
$0.2
Total
$1.3
Total
$1.1
Total
$1.0
Other Food Product
Manufacturing
Polymer Product
Manufacturing
Sugar and Confectionery
Manufacturing
Wholesale Trade
$0.1
$0.1
$0.1
$0.3
$0.2
$0.2
Wine, Spirits and Tobacco
Food and Beverage Services
Sugar and Confectionery
Manufacturing
Bakery Product Manufacturing
$0.3
$0.2
$0.2
$0.1
Other Agriculture
Dairy Product Manufacturing
Sugar and Confectionery
Manufacturing
Wholesale Trade
Other industries
$0.3
Other industries
$0.4
Other industries
$0.2
Total
$0.6
Total
$1.3
Total
$0.9
Polymer Product Manufacturing
Metal Containers and Other Sheet
Metal Product manufacturing
Paper Stationery and Other
Converted Paper Product
Manufacturing
Soft Drinks, Cordials and Syrup
$0.3
$0.1
Soft Drinks, Cordials and Syrup
Manufacturing
Food and
Beverage Services
$0.2
$0.2
Wine, Spirits and Tobacco
Food and Beverage Services
$0.7
$0.2
$0.1
$0.1
Soft Drinks, Cordials and Syrup
Manufacturing
$0.2
$0.1
Building Cleaning, Pest Control,
Administrative and Other Support
Services
Wholesale Trade
Other industries
$0.5
Other industries
$0.4
Total
$1.1
Total
Grain Mill and Cereal Product
Manufacturing
Paper Stationery
and Other
Converted Paper Product
Manufacturing
Metal Containers and Other Sheet
Metal Product manufacturing
$0.5
$0.4
Sheep, Grains, Beef and Dairy
Cattle Services
Food and Beverage
$0.3
Finance
$0.2
$0.1
$0.1
Bakery Product
Manufacturing
Sugar and
Confectionery
Manufacturing
Soft Drinks,
Cordials and
Syrup
Manufacturing
Retail Trade
$0.1
$0.1
$0.9
Total
$1.1
$1.1
$0.3
Food and Beverage Services
Accommodation
$0.7
$0.5
Sports and Recreation
$0.0
Finance
$0.3
Road Transport
$0.2
Beer Manufacturing
$0.0
Other industries
$2.1
Other industries
$0.8
Other industries
$0.0
Total
$3.6
Total
$2.6
Total
$1.2
Other Agriculture
Paper Stationery and Other
Converted Paper Product
Soft Drinks, Cordials and Syrup
Wholesale Trade
$13.5
$3.5
Other Agriculture
Wine, Spirits and Tobacco
$18.9
$10.2
Wine, Spirits and Tobacco
Food and Beverage Services
$10.2
$1.0
$3.3
$2.9
Sheep, Grains, Beef and Dairy
Food and Beverage Services
$3.2
$2.5
Accommodation
Other Agriculture
$0.5
$0.1
Other industries
$26.3
Other industries
$10.8
Other industries
$0.2
Total
$45.7
Total
$12.0
Total
$49.5
Source: ABS (2010a, 2011h), AECgroup
Wine, Spirits and
Tobacco
$2.1
$0.6
$1.0
$0.4
$1.8
$0.3
$1.1
$8.0
$1.1
$139.5
$0.1
Other industries
Beer
Manufacturing
LOCAL
EXPORTS
CONSUMPTION
$M
$M
48
Margaret River SuperTown Combined Report
Final Draft
Figure 7.7: Supply Chain, Accommodation and Food Services, 2007-08
UPSTREAM INPUTS TO PRODUCTION
IMPORTS
DOWNSTREAM SALES OF PRODUCT
LOCAL PURCHASES
SECTOR OF INTEREST
SALES TO LOCAL INDUSTRY
Industry
$M
Industry
$M
Industry
$M
Building Cleaning, Pest Control,
Administrative and Other Support
Services
Wholesale Trade
$2.0
Building Cleaning, Pest Control,
Administrative and Other Support
Services
Meat and Meat product
Manufacturing
$4.1
Wine, Spirits and Tobacco
$2.7
$1.9
$0.6
Professional, Scientific and
Technical Services
Broadcasting (except Internet)
$0.9
Wine, Spirits and Tobacco
$1.5
$0.8
$1.3
Meat and Meat product
Manufacturing
$0.8
Non-Residential Property
Operators and Real Estate
Services
Wholesale Trade
Building Cleaning, Pest Control,
Administrative and Other Support
Services
Professional, Scientific and
Technical Services
Wholesale Trade
$1.2
Retail Trade
$0.3
Other industries
$10.6
Other industries
$10.8
Other industries
$2.8
Total
$16.4
Total
$20.8
Total
$7.4
Building Cleaning, Pest Control,
Administrative and Other Support
Services
Wholesale Trade
$2.0
$3.0
Wholesale Trade
$0.2
$0.7
$0.5
Sheep, Grains, Beef and Dairy
Cattle
Wine, Spirits and Tobacco
$0.1
Meat and Meat product
Manufacturing
Professional, Scientific and
Technical Services
Building Cleaning, Pest Control,
Administrative and Other Support
Services
Meat and Meat product
Manufacturing
Wine, Spirits and Tobacco
$0.5
Beer Manufacturing
$0.5
Retail Trade
$0.1
Other industries
$5.6
Other industries
$4.3
Other industries
$0.9
Total
$9.2
Total
$9.0
Total
$1.5
Wholesale Trade
Processed Seafood Manufacturing
$0.6
$0.5
$1.2
$1.1
$0.5
$0.5
Wine, Spirits and Tobacco
Building Cleaning, Pest Control,
Administrative and Other Support
Professional, Scientific and
Beer Manufacturing
$2.5
$0.5
Grain Mill and Cereal Product
Fruit and Vegetable Product
Meat and Meat product
Building Cleaning, Pest Control,
Administrative and Other Support
Wine, Spirits and Tobacco
Non-Residential Property
Other industries
$5.2
Other industries
$7.6
Other industries
$2.0
Total
$11.8
Total
$5.9
$1.3
$0.7
Total
$7.2
Source: ABS (2010a, 2011h), AECgroup
$0.5
$1.0
$0.9
ACCOMMODATION
AND FOOD
SERVICES
Accommodation
Food and
Beverage Services
$0.6
LOCAL
EXPORTS
CONSUMPTION
$M
$M
$25.0
$36.9
$3.2
$32.5
$21.8
$4.4
$0.4
$0.1
$0.5
$0.3
49
Margaret River SuperTown Combined Report
Final Draft
7.3
Comparative Assessments
The comparative assessment is a benchmarking approach which compares the AugustaMargaret River LGA to three regions of similar nature:

Sunshine Coast (Sunshine Coast Regional Council): Comprised of the major coastal
centres of Mooloolaba, Caloundra, Maroochydore and Noosa and an agricultural and
tourism oriented hinterland region, Sunshine Coast located approximately 113km, or
1 hour and 27 minutes drive, north of Brisbane. Major population region in its own
right, the Sunshine Coast is home to 330,934 people in 2010. It has a well
established tertiary education and health care systems, and increasingly diversified
economy and is a popular day-trip and overnight tourism destination in South East
Queensland.

Barossa (Barossa DC): Regional centre in South Australia, located approximately
83km, or one hour and 23 minutes drive, north west of Adelaide. One of Australia’s
largest wine producing regions, with strong national and international recognition.
Established tourism visitation trends linked to wine and lifestyle attractors. Population
of 22,908 in 2010.

Surf Coast (Shire of Surf Coast): Comprised of coastal centres of Torquay, Anglesa,
Lorne and Apollo Bay, the Surf Coast region is located 141km or one hour and fiftyfour minutes drive south-west of Melbourne and 64.4km or one hour drive south west
of Geelong. Surfing and coastal lifestyle tourism destinations population with intra
and interstate visitors. Population of 26,173 in 2010.
These locations were selected as they represent examples of the potential growth profile
of Margaret River as it becomes a SuperTown and continues to grow beyond 2031. As
such, this comparative assessment analyses potential gaps in the current Margaret River
community and economy that must be addressed if future growth is to be facilitated.
The comparative assessment works by comparing Augusta-Margaret River LGA to each of
the selected benchmark regions across the following key indicators:

GRP per capita

Number of businesses per capita

Unemployment rates

Average house price as a proportion of household income

Average income

Proportion of workers in white collar employment

Proportion of residents aged over 15 years with University qualifications

Percentage of households that are young families

Percentage of population aged 65+

Average annual population growth
These indicators cover population, demographic, socio-economic, investment,
employment and economic characteristics of Margaret River, as summarised in the
Socio-Economic Profile.
For each of these indicators, Margaret River is compared to the average across all four
regions, thereby helping to address issues of the relative size of each region’s population
and economy and local specific variable being smoothed, allowing for more fundamental
gaps to be identified. As such, a result above 0% means that Augusta-Margaret River
LGA is currently performing better than the average of its peers, while a result below 0%
means it is worse than its peers.
The outcomes of the assessment are outlined in the figure below.
50
Margaret River SuperTown Combined Report
Final Draft
Figure 7.8: Comparative Assessment, Augusta-Margaret River LGA
GRP per capita (2009-10)
Number of Businesses per Capita (2009)
Unemployment Rate (September Q 2011)
Housing Affordability - Median Multiple (2008-09)
Average Individual Income (2008-09)
Share of Workers in White Collar employment (2009)
Share of Residents (15+) with a University Degree (2006)
Share of Families with young children (2006)
Share of Population Aged 65+ (2010)
Annual Population Growth Rate (2001 to 2011)
-30%
-20%
-10%
0%
10%
Difference to Average
20%
30%
Source: ABS (2007, 2011, 2011a, 2011f, 2011i), realestate.com.au (2011), Homepriceguide.com.au (2011), NSW Housing (2011),
Department of Employment, Education and Workplace Relations (2011)
Figure 7.8 reveals a mixture of positive and negative scores for Margaret River when
compared with the benchmarked regions. Areas of underperformance include:

Margaret River has an underrepresentation of white collar workers.

Income levels in Margaret River are lower than comparison regions.

Population growth is slower.
However, Margaret River performed well against the benchmarked regions attractive to
residents over time:

Number of businesses per capita is significantly higher than the comparison region
average, suggesting a more entrepreneurial and supportive business environment.

Population aged 65+ is lower, meaning the negative implications of the ageing of the
baby boomer generation are unlikely to impact Margaret River as significantly as the
benchmarked regions. However, this means that the benefits of this ageing in terms
of health and social assistance employment growth are also likely to be less
significant.

The Margaret River economy also has a marginally lower unemployment rate,
highlighting that there could be existing unmet skilled labour demand in the
economy. Existing unmet demand in the Margaret River labour market could provide
job opportunities for new skilled residents over the short term, incentivising
migration.

Housing affordability, while poor in the context of the South West, is marginally
favourable in comparison to other tourism-dominated regions in Australia.
Overall, Margaret River’s performance in the comparative assessment against potential
benchmarks of its future growth profile reinforces key messages from other assessments
in this gap analysis.
7.4
Journey to Work
In 2006, the Augusta-Margaret River LGA was a marginal exporter of labour (on a net
basis). Key regions which attract workers out of Augusta-Margaret River LGA include
51
Margaret River SuperTown Combined Report
Final Draft
Busselton LGA, Bunbury LGA and Collie LGA. However, Some workers are attracted into
the Augusta-Margaret River LGA from Harvey, Nannup and Manjimup.
Table 7.1: Journey to Work Movements by LGA, 2006
LGAs
Lives in AugustaMargaret River and
works in...
Works in AugustaMargaret River and
Lives in...
Difference
42
19
-23
4,003
4,003
0
0
0
0
Bunbury
Augusta-Margaret River
Boyup Brook
Bridgetown-Greenbushes
0
0
0
545
294
-251
Capel
3
11
8
Collie
3
0
-3
Dardanup
0
0
0
Donnybrook-Balingup
0
0
0
Harvey
0
3
3
Manjimup
0
6
6
Busselton
Nannup
3
22
19
Other
329
120
-209
Total
4,929
4,478
-451
Source: ABS (2007), AECgroup
Residents of Augusta-Margaret River leave the LGA each day to work in a large number
of industries. Further development of these industries in the Augusta-Margaret River,
through economic expansion and diversification could assist in bringing about greater
labour retention in the region. Industries for which Augusta-Margaret River attracts
workers include wholesale trade, finance and insurance and transport and storage.
Table 7.2: Journey to Work Movements by Industry, 2006
Industry
Agriculture, Forestry and Fishing
Mining
Manufacturing
Electricity, Gas and Water Supply
Lives in AugustaMargaret Rivers
Works in Margaret
River
Difference
592
555
-37
79
11
-68
650
612
-37
27
24
-3
Construction
590
386
-204
Wholesale Trade
125
145
21
Retail Trade
730
726
-4
Accommodation, Cafes and Restaurants
544
529
-15
Transport and Storage
138
142
5
Communication Services
25
25
0
Finance and Insurance
62
71
9
Property and Business Services
368
338
-30
Government Administration & Defence
150
150
0
Education
318
282
-36
Health and Community Services
316
276
-40
81
79
-2
Cultural and Recreational Services
Personal and Other Services
Total
133
124
-8
4,929
4,478
-451
Source: ABS (2007), AECgroup
7.5
Key Findings
The Margaret River economy is dominated by viticulture, agriculture and tourism-related
economic activity, which is reflected in the region’s export profile. These industry sectors
play a critical role to play in establishing, maintaining and reinforcing Margaret River’s
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national and international profile and supports strong residential construction and real
estate activity. Augusta-Margaret River and Busselton form a labour supply chain for
each other.
Compared to other peer regions, Augusta-Margaret River has lower incomes and slower
population growth while having an older population. These factors indicate that the
region is likely even more favoured by older, retirement aged people and that the
economy lacks sufficient jobs in various industries outside of wine, agriculture and
tourism to drive wage and income increases.
Addressing these factors will be a goal of the Economic Development Growth Plan.
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8.
Opportunities Assessment
Industry growth opportunities for Augusta-Margaret River LGA have been identified by
undertaking a desktop economic development opportunity assessment (refer to
Appendix C for the detailed assessments). This assessment employs a number of
analytical tools to draw out the economic strengths, strategic assets and opportunities for
a region in the context of national industry growth trends in order to determine specific
industry sector targets for future economic development activities.
The desktop assessment tools used include:

Location Quotient Analysis: Assesses the degree of labour specialisation in an
economy (a competitive advantage) and is used to identify industry areas of relative
strengths and weaknesses.

Competitive Assessment: Utilising a diamond assessment framework4, strengths
and weakness of the Augusta-Margaret River economy are considered.

Cluster Mapping Analysis: Allows for the identification of growth opportunities in
specific industry sectors, where a natural competitive advantage already exists.
The outcome of the assessment is a list of identified target areas for economic
development activities. These target areas focus on high value-adding, knowledge based
activities that will drive and deliver real economic benefits to the community for the
future and provide for sustainable economic development and employment growth over
time.
When identifying key industry sectors for growth, it is important to keep in mind the need
for high value development (i.e. business activities that bring a high degree of knowledge
and generate products and services of a high value). At the same time, it is important
that future development results in sustainable business, both in terms of their
environmental responsibilities but also in terms of the competitiveness and feasibility of
their operations in the long term. By focusing on these areas, economic development can
generate greater economic returns for the community.
8.1
Location Quotients
In order to demonstrate the specialisation of the economy, location quotients based on
employment have been calculated. The location quotients demonstrate the degree to
which a local or regional economy is specialised by examining the proportion of
employment (by industry sub-sector) compared to a larger economy (Australian
economy). Location quotients can be used to indicate the relative strengths or
weaknesses of a local or regional economy (i.e., a natural competitive advantage or
disadvantage).
For the analysis, Augusta-Margaret River LGA, the SWDC region, Perth SD and Western
Australia were compared against employment for Australia. Depictions of the Location
Quotients for Augusta-Margaret River LGA, Barossa, Byron and Upper Hunter Shire are
contained in Appendix C. A location quotient of “1” means that the economies being
compared have an equal share of employment (compared to Australia) for a specific
industry sector, thus no potential advantage or disadvantage. A location quotient above
“1” indicates a specialisation of labour and therefore an area of potential competitive
advantage. If the location quotient is below “1”, the area is under-represented compared
to the national economic structure in this particular industry sector.
Figure 14.1 shows the Location Quotients across the 19 sectors of the economy. Figure
8.2, Figure 8.3 and Figure 8.4 provide a detailed assessment of the agriculture forestry
and fishing, mining, manufacturing and business and professional services sectors,
respectively.
4
As opposed to a traditional SWOT assessment, AECgroup has modified the diamond assessment framework,
originally developed by Dr. Michael Porter, Harvard University, for examining the competitiveness (strengths and
weaknesses) of nations. Dr. Porter has used this framework in advising numerous national and state government
agencies and has won numerous awards for his contribution to economic development.
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Figure 8.1: Location Quotients, 2006, 1-Digit ANZSIC
Agriculture, forestry and fishing
Accommodation and food services
Rental, hiring and real estate services
Manufacturing
Retail trade
Construction
Administrative and support services
Arts and recreation services
Education and training
Other services
Electricity, gas, water and waste services
Wholesale trade
Health care and social assistance
Public administration and safety
Professional, scientific and technical services
Transport, postal and warehousing
Financial and insurance services
Information media and telecommunications
Mining
Augusta-Margaret
River
SWDC
Perth SD
WA
0.0
1.0
2.0
3.0
4.0
Source: ABS (2007), AECgroup
Figure 8.2: Location Quotients, 2006, 2-Digit ANZSIC, Agriculture, Forestry and Fishing,
and Mining
Agriculture
Agriculture, Forestry and Fishing
Support Services
Fishing, Hunting and Trapping
Augusta-Margaret River
SWDC
Perth SD
Non-Metallic Mineral Mining and
Quarrying
WA
Forestry and Logging
0.0
1.0
2.0
3.0
4.0
5.0
Source: ABS (2007), AECgroup
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Figure 8.3: Location Quotients, 2006, 2-Digit ANZSIC, Manufacturing
Beverage and Tobacco Product…
(25.8)
Furniture and Other Manufacturing
Non-Metallic Mineral Product…
Food Product Manufacturing
Petroleum and Coal Product Manufacturing
Textile, Leather, Clothing and Footwear …
Wood Product Manufacturing
Primary Metal and Metal Product…
Augusta-Margaret
River
Printing (including the Reproduction of …
Fabricated Metal Product Manufacturing
SWDC
Pulp, Paper and Converted Paper Product…
Basic Chemical and Chemical Product…
Perth SD
Machinery & Equipment Manufacturing
WA
Transport Equipment Manufacturing
Polymer Product and Rubber Product …
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
Note :Beverage and Tobacco Product manufacturing includes wine.
Source: ABS (2007), AECgroup
Figure 8.4: Location Quotients, 2006, 2-Digit ANZSIC, Business and Professional Services
Real Estate Services
Building Cleaning, Pest Control and Other …
Rental and Hiring Services (except Real Estate)
Administrative Services
Motion Picture and Sound Recording Activities
Finance
Library and Other Information Services
Professional, Scientific and Technical Services …
Broadcasting (except Internet)
Computer System Design and Related Services
Auxiliary Finance and Insurance Services
Publishing (except Internet and Music …
Telecommunications Services
Insurance and Superannuation Funds
Internet Service Providers, Web Search …
Internet Publishing and Broadcasting
0.0
Augusta-Margaret River
SWDC
Perth SD
WA
0.5
1.0
1.5
2.0
Note: Includes Professional Scientific Services, Financial and Insurance Services, Information Media and Telecommunications,
Administration and Support Services.
Source: ABS (2007), AECgroup
Key findings:

Alongside the expected industries of labour specialisation (agriculture, forestry and
fishing, accommodation and food services and manufacturing), the LGA also holds
labour specialisations in rental, hiring and real estate services, retail trade and
construction, reflecting relatively strong population growth in the region.

In addition to beverage and tobacco manufacturing, the Augusta-Margaret River LGA
holds labour specialisations in the manufacturing sectors of furniture and other
manufacturing and non-metallic mineral product manufacturing (such as glass and
ceramics).

Key business services, such as finance and professional, scientific and technical
services are underrepresented in the region.
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8.2
Competitive Assessment
A diamond assessment framework was used to assess the competitiveness of AugustaMargaret River LGA (HBS, 2010).
The diagram below highlights the four key points (factor conditions, demand conditions,
supporting industry and firm strategy and rivalry) that form the basis for the diamond,
with each one of these factors influencing and relying on the other and providing the
foundation for a region’s competitiveness. The role of government is to influence all of
these points and is represented by the ring around the diamond.
Innovation has been placed at the centre of the diamond to demonstrate its importance
for economic development and the impact it can have on the four key points and the
overall competitiveness of a region.
Figure 8.5: Competitive Assessment (Diamond) Framework
Firm Strategy & Rivalry
- Vigorous competition between
locally based rivals
- A local context that encourages
sustained investment in
upgrading
Factor Conditions
-High quality specialised inputs such as:
- Workforce
- Education
- Knowledge
- Capital
- Physical infrastructure
Innovation
- Presence of specialised
-Research centres
-Talent base
-Training and education
institutions
Supporting & Related
Industry
- A critical mass of capable local
suppliers
- Clusters instead of isolated
industries
Demand Conditions
- A core group of demanding local customers
- Unusual local demand in specialised
segments that can be served globally
- Customers whose needs anticipate those
elsewhere.
Role of Government
- Encourage companies to raise their
performance
- Stimulate early demand for advanced
products
- Focus on specialised factor creation; and
- Stimulate local rivalry by limiting direct
cooperation of firms
Source: NCC (2010)
The main components of the diamond model are listed and explained below.

Factor (input) Conditions: High quality specialised inputs to the economy such as
workforce, education, capital and physical infrastructure. Factor inputs are
characterised by their dynamic nature and their ability to become continuously
upgraded and specialised.

Demand Conditions: Level of local demand for specific products and/or services.
Demand influences the process of creating and improving products and services
through the presence of sophisticated customers that demand the improvement of
products.

Supporting & Related Industry: A critical mass of capable local suppliers and
clusters instead of isolated industries to support key industry (supply chain). This
element also includes the important role of clusters for economic development.

Firm Strategy & Rivalry: Economic environments which promote vigorous
competition among locally based rivals and a local context that encourages sustained
investment and upgrade of product and resources.

Role of Innovation: Innovation is influenced mainly by the presence of institutions
that are often sought by business and industry for collaboration such as Universities,
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TAFE’s, research institutes and other education and training providers. Partnerships
with these institutions facilitate creative flow of knowledge and information which
facilitate research and development investment, create new products or services and
generally allow a region to generate knowledge. Innovation is critical to the
successful development of sustainable industry clusters.

Role of Government: Within the Diamond Model the role of government is to:
o
Encourage companies to raise their performance
o
Stimulate early demand for advanced products
o
Focus on specialised factor creation (i.e. specific infrastructure, workforce
programs, investments)
o
Stimulate local rivalry by limiting direct cooperation and enforcing antitrust
relationships
The results of a high level SWOT analysis have been analysed against the elements of the
Diamond Framework. The results are outlined in Figure 8.6.
8.2.1
Competitive Edge
The Augusta-Margaret River LGA has a number of competitive strengths which will need
to be leveraged in order to generate meaningful economic development and employment
outcomes. These include:
8.2.2

Advantageous location, climate and national economic conditions, with relatively
strong water security supporting its agricultural and timber activities.

Potential for international market access and exploitation.

Strong existing brand recognition and established wine and tourism destination.

Ageing population and FIFO workers could drive local health care, education and
other population-serving sectors.

Educational institutions support agricultural diversification.
Areas for Improvement
The competitive assessment also highlights some relative weaknesses, where
improvement could increase the Margaret River’s overall competitiveness. These include:

A lack of labour force critical mass is driving shortages in skills and professional
service workers, and undermining tertiary education viability.

Limited local competition and a high exchange rate that undermines international
market access.

LGA hindered by flat/negative recent population growth, strong competition in the
South West, and a risk-averse community.

Lack of internet connectivity capacity.

Access and transportation issues (for business and tourism), including expanded air
services from Busselton Airport.

Seasonality of tourism industry and associated impacts on local population (i.e.
housing affordability, 12 month employment and limited career pathways).
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Figure 8.6: Competitive Assessment of Augusta-Margaret River LGA
Competitive Element
Competitive Edge
Regional Issues
• High amenity location with temperate climate and coastal access
• Service–oriented workforce due to tourism sector prominence in
industry structure.
• Low unemployment presenting opportunities for existing and new
workers
• Improved connectivity to Perth through Forrest Highway development
• Existing labour force lacks critical mass and experiencing skills
shortages.
• Lack of population undermines full-spectrum tertiary education
viability.
• Lack of affordable housing supply will impact residential attraction,
particularly for service workers
• Lack of intra-regional transport options
Firm Strategy & Rivalry
• Strong economic climate (Australia)
• Existing and well-established viticulture and tourism sectors with
State, national and international profiles
• Existing opportunities to service growth industries are emerging and
taking place.
• Little competition between firms due to limited supply (small market)
• Local business should seek to transition supply to national and global
markets
• High exchange rates are impacting international competitiveness of
Australia in foreign markets (impacts on tourism and wine industries).
Demand
• Comparatively strong population growth in recent years accelerating
demand for education, health care and personal services.
• Aging population, lifestyle residents and young families increasing
health care demands and education (at all levels).
• Increased business and international visitor exposure in tourism
reducing impact of depressed domestic tourism market.
• Economically demonstrated mining resources exist within broader
region.
• Currently lacking critical mass of population to attract diverse
services, such as childcare and school options.
• Strong competition from major centres of Busselton and Bunbury in
providing regional services to South West.
• Need to further diversify tourism visitation to business , interstate and
international visitors
• Negative perception of the Carbon Tax and its implications for the
regional domestic tourism activity
• Leveraging of agricultural sciences from university and TAFE
institutions with local agricultural and viticulture industries.
• Environment/climate attractive for semi-retirement/lifestyle workers
in professional services sectors.
• Strong existing industry clusters in agriculture, food, wine and tourism.
• Below average proportion of professional services industry (property
and business, finance, insurance, etc.)
• Supply chain opportunities in agriculture
• Need to control “Margaret River” brand in national and global markets
• Strong international expertise and innovation in viticulture with South
West Institute of Technology and premium wine production status.
• Existing industry-specific higher education facilities
• Limited scope of tertiary education and research offering undermines
whole-of-economy innovative.
• Internet connectivity lacks capacity and can negatively impact
future growth of business and population.
Factor Conditions
Supporting & Related
Industry
Innovation
Source: AECgroup
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8.3
Cluster Mapping
Cluster mapping builds on the location quotient analysis by portraying the regional
location quotients against national industry estimated employment growth over time
(from 2011 to 2016). By incorporating industry growth, cluster mapping allows for the
identification of growth opportunities in specific industry sectors, where a natural
competitive advantage already exists against a backdrop of an expanding sector
nationally.
Industry clusters located above the “1” on the vertical axis indicate an existing industry
concentration (strength or competitive advantage, as discussed previously) within the
region being examined. The national industry employment growth estimate for 2011-12
to 2016-17 (IBIS World, 2011) is plotted along the horizontal axis, with 0% growth over
the five years creating a midline. The further to the right of this central horizontal axis,
the faster the industry is expected to expand. Similarly, the farther to the left of the zero
percent midline, the faster it is expected to shed jobs during this five year period. The
size of the cluster in the map demonstrates the size of the local workforce in that
industry sector.
The key industries of labour specialisation for Augusta-Margaret River, agriculture,
forestry and fishing and beverage and tobacco manufacturing, are expected to grow
minimally (in terms of employment) over the coming five years, at the national level.
However, these competitive advantages of the region have the potential to outperform
the national trend as has been experience in the region in previous years. The LGA also
holds labour specialisation in key industries of growth, such as accommodation and food
services, retail trade and construction. Industries which are currently underrepresented in
the Augusta-Margaret River LGA and are expected to experience solid growth rates over
the coming five years include:

Health care and social assistance

Transport, postal and warehousing

Professional, scientific and technical services

Education and training
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Figure 8.7: Augusta-Margaret River Cluster Map, 1-Digit ANZSIC & Selected 2-Digit Manufacturing
Cluster Concentration 2006 (Comparison with Australia)
30.0
25.0
Well-represented/Low Growth
Well-represented/High Growth
Beverage and Tobacco Product
Manufacturing
= 100 employees
20.0
15.0
10.0
5.0
0.0
Manufacturing
Arts and recreation services
Under-represented/Low Growth
-5.0
-10.0%
-5.0%
Note:
Agriculture, forestry and fishing
Construction
Accommodation and food services
Retail trade
Wholesale trade
Information media and
telecommunications
Education and training
Transport, postal and warehousing
Professional, scientific
andhiring
technical
Rental,
and real estate services
services
Flour Mill and Oil and Fat
Cereal Food Manufacturing
Manufacturing
0.0%
Public administration and safety
Under-represented/High Growth
5.0%
10.0%
15.0%
% Estimated Industry Employment Growth 2011-12 to 2016-17
Please
Mining
20.0%
25.0%
refer
to
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Figure 8.8 for details on the boxed area.
Source: ABS (2007, 2010a), IBIS World (2011), AECgroup
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Figure 8.8: Augusta-Margaret River Cluster Map, 1-Digit ANZSIC & Selected 2-Digit Manufacturing (Zoomed In)
5.0
Cluster Concentration 2006 (Comparison with Australia)
Well-represented/Low Growth
Well-represented/High Growth
= 100 employees
Agriculture, forestry and fishing
4.0
3.0
Accommodation and food services
Rental, hiring and real estate services
Manufacturing
2.0
Construction
Retail trade
Education and training
Transport, postal and warehousing
1.0
Health care and social assistance
Arts and recreation services
0.0
Information media and
telecommunications
Other services
Wholesale trade
Oil and Fat
Manufacturing
Mining
Financial and insurance services
Public administration and safety
Professional, scientific and technical
services
-1.0
-2.0
-5.0%
Under-represented/Low Growth
0.0%
Under-represented/High Growth
5.0%
10.0%
15.0%
20.0%
25.0%
% Estimated Industry Employment Growth 2011-12 to 2016-17
Source: ABS (2007, 2010a), IBIS World (2011), AECgroup
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8.4
Key Findings
Location quotients in the Augusta-Margaret River region unsurprisingly reveal the
prominence of the viticulture, tourism (displayed through high representations of
employment in accommodation and food services and retail trade) and food and
beverage manufacturing industries (predominantly wine) in the region. However, the
region also shows high representation in business services, such as rental, hiring and real
estate services and population-driven services such as construction. These are areas of
specialisation and competitive advantages can contribute to future growth.
The competitive assessment of the Augusta-Margaret River region reinforces the strength
of the region in the industries of agriculture (particularly viticulture) and food and
beverage manufacturing (which is primarily wine manufacturing). Whilst these industries
are expected to remain important in Augusta-Margaret River, it is important that
economic diversification leverages these strengths to provide a range of employment
opportunities for local residents and to minimise the volatility of the local business cycle.
Cluster mapping has assisted in identifying industries of future growth which could be
leveraged in the region, including food manufacturing, agriculture and professional
services (creative industries). Additionally, the results support future growth of the
tourism sector (through retail trade and accommodation sectors), through deepening and
diversifying the market (i.e. business travellers, conferences and events).
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9.
Industrial Land Assessment
Industrial Land estimates have been developed using the GRP model and based on
employment per hectare estimates for the industries of manufacturing, wholesale trade
and transport and logistics (see Appendix A). This chapter provides an overview of the
findings.
9.1
Existing Demand & Supply
In 2006, an audit of existing industrial lands was conducted for the South West region,
including Augusta-Margaret River. Key assumptions of the study included mild population
growth in Augusta-Margaret River and an assumption of greater intensity of jobs per
hectare by 30% to 2030.
The audit found a total of 47ha of industrial land in Augusta-Margaret River, spread
across six separate industrial land estates. Almost half (18.6ha) of this land is located in
the town of Margaret River.
Figure 9.1: Industrial Land Supply, Augusta-Margaret River, 2006
20
Total Occupied
Total Vacant Land
Industrial Land (Ha)
15
10
5
0
Augusta
Industrial
Cowaramup 1 Cowaramup 2 Margaret River
Stweart St
Witchcliffe
Source: Syme Marmion & Co. (2010)
9.2
Future Demand for Land
Estimates of future industrial land demand have been developed assuming Augusta
Margaret River achieves its population target and pursues the industries of opportunity.
The land demand results are aligned with the GRP and Employment estimates outlined in
Section 6.2. The figure below assumes vacant industrial land is unchanged from 2006
and demonstrates a total net new demand for industrial land of 41ha. Demand for
industrial land is expected to be sourced from the wholesale trade and transport sectors.
It should be noted that supplies of industrial land should always exceed demand in order
to offer investors choice and flexibility.
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Figure 9.2: Industrial Land Supply and Demand (ha), Augusta-Margaret River LGA, 2011
to 2031
90
Industrial Demand for Land
Supply
80
70
60
50
40
30
20
10
0
2011
2016
2021
2026
2031
Source: AECgroup
9.3
Key Findings
Expanded economic activity in Augusta-Margaret River is expected to result in increased
industrial land demand, to 84ha by 2031. Current supply industrial land is estimated to
be insufficient to meet the needs and requirements of future industry and excess demand
is estimated to take effect before 2016. Identifying new industrial land precincts to meet
future demand is required to ensure the region has adequate industrial land to support
and attract future economic activity.
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10. Retail Assessment
This section identifies potential retail gaps and future retail needs by assessing current
and future demand for retail floorspace and reconciling it with current and future supply.
10.1
Catchment Analysis
The Township of Margaret River is located approximately 270km south of Perth and is
Margaret River Shire’s (Margaret River LGA) population, services and administrative
centre. Retail services and facilities within the Township primarily cater for households
within the LGA.
The retail catchment has been defined taking into consideration the following:

Current and future depth of retail offering within the Township

Location and distance of competing centres

Retail offering available at competing centres

Typical travel flows of local households

Likely expenditure trends of local households.
The retail catchment has been defined as the following:

Primary catchment – Margaret River Township

Secondary catchment – Remainder of Margaret River LGA
Margaret River, however, is also an important tourism region, with numerous domestic
and international tourists visiting the region each year, attracted by the region’s natural
beauty and its famous wining and dining scene. Margaret River Township represents a
key getaway for visitors to the region, and it is also an important retail centre for visitors
to the region.
Therefore, visitor expenditure has also been taken into account to determine overall retail
expenditure, and hence supportable floorspace.
10.2
Population Growth
Margaret River LGA, and in particular Margaret River Township, experienced significant
growth over the 1996 to 2010 period, with an average annual growth rate of 2.3% and
4.3% respectively, although population growth has somewhat slowed over the period. In
comparison, the broader Vasse SSD grew at an annual rate of 3.8%, while WA’s annual
growth was significantly lower (1.9%). As such, the catchment’s growth rate largely
exceeded that of WA in general over the last 15 years.
Population in the LGA increased from approximately 8,100 people in 1996 to
approximately 12,500 people in 2010. Most of this growth occurred within Margaret River
Township, where population increased by nearly 2,500 people over the same period to
reach approximately 5,500 people in 2010 (Figure 5.1).
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Figure 5.10.1: Catchment Population Growth, 1996-2010
14,000
6.0%
12,000
10,000
Population Growth
4.0%
8,000
3.0%
6,000
2.0%
4,000
Annual Growth Rate (%)
5.0%
1.0%
2,000
0
0.0%
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
Margaret River Township
Remainder Margaret River LGA
Vasse SSD Annual Growth (%)
WA Annual Growth (%)
2006
2007
2008
2009
2010
Margaret River LGA Annual Growth (%)
Source: ABS (2011i)
10.2.1
Population Projections
In forecasting population projections (Table 5.1), it has been assumed that:

Margaret River Township’s population will double between 2010 and 2031.

Remainder of Margaret River LGA’s population will increase at the average annual
growth rate that was recorded across Margaret River LGA recently (2000 to 2010
period) between 2010 and 2031.
This yields an annual growth rate of 3.4% for Margaret River Township and 2.4% for
Remainder Margaret River LGA between 2010 and 2031, or a combined rate of 2.8% for
the LGA over the 20 year period. Such growth rate is comparable (although slightly
lower) to the annual growth rate for the LGA (3.1%) over the 1996 to 2010 period.
Therefore, it is assumed that Margaret River LGA will reach approximately 22,500 people
by 2031, nearly double its 2010 population level, with a population approximately equally
distributed between the two catchments (Figure 5.2). Given the growth rate differential,
the proportion of people living within Margaret River Township itself is expected to
increase substantially from its 2010 levels.
Table 5.1: Catchment Population Projections
Indicator
2011
2016
2021
2026
2031
Margaret River Township
5,735
6,764
Remainder Margaret River LGA
7,127
8,021
7,978
9,409
11,097
9,028
10,161
12,862
11,436
14,785
17,005
19,570
22,533
Margaret River Township
Remainder Margaret River LGA
2.46
2.44
2.42
2.40
2.38
2.38
2.36
2.34
2.32
2.30
Margaret River Township
2,331
2,772
3,296
3,920
4,663
Remainder Margaret River LGA
2,995
3,399
3,858
4,380
4,972
Margaret River LGA
5,326
6,171
7,155
8,300
9,635
Population
Margaret River LGA
Average Household Size
Households
Source: ABS (2011i), AECgroup
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Figure 5.2: Catchment Population Projections
25,000
5.0%
22,500
20,000
4.0%
15,000
3.0%
12,500
10,000
2.0%
7,500
5,000
Annual Growth Rate (%)
Population Growth
17,500
1.0%
2,500
0
Margaret River Township
0.0%
Remainder Margaret River LGA
Margaret River LGA - Average Annual Growth Rate
Source: ABS (2011i), AECgroup
10.3
Retail Supply
The Property Council of Australia classifies retail centres according to the following retail
hierarchy (PCA, 2010):

Super Regional Centre: A major shopping centre incorporating two full line
department stores, one or more full line discount department stores (DDS), two
supermarkets and around 250 or more specialty shops, with a total Gross Lettable
Area (GLA) of more than 85,000m2. Super Regional Centres provide a comprehensive
coverage of the full range of retail needs, including a number of entertainment and
leisure attractions.

Major Regional Centre: A major shopping centre comprising at least one full line
department store, one or more full line DDS, one or more supermarkets and around
150 specialty shops, with a total GLA between 50,000-85,000m2. Such centres
provide an extensive coverage of the full range of retail needs.

Regional Centre: A shopping centre comprising one full line department store, a full
line DDS, one or more supermarkets and around 100 or more specialty shops, with a
GLA between 30,000-50,000m2. Such centres provide a broad range of shopper
facilities and amenities.

Sub-Regional Centre: A medium-sized centre with at least one full line DDS, a
major supermarket and approximately 40 or more specialty shops, with a GLA
between 10,000 and 30,000m2.

Neighbourhood Centre: A local centre comprising a supermarket and up to 35
specialty shops, with a GLA typically under 10,000m 2. Neighbourhood centres are
generally located in residential areas and cater for day-to-day retail needs.
The Department of Planning and Infrastructure conducted a Commercial Land Use Survey
in 2006. AECgroup reviewed the survey, and adjusted it to include only tenancies and
retailers that were deemed to be within one of the retail categories described below. In
particular, tenancies occupied by other activities, such as light industrial businesses, were
excluded given that such floorspace would generally not be suited for retail tenancies.
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Margaret River Township comprises a neighbourhood centre: The Margaret River
Shopping Centre. It is a 3,000m2 neighbourhood centre anchored by a full-line Coles
supermarket and comprising 6 specialty shops (PCA, 2010).
In addition, there are approximately 120 retail tenancies, as identified by the survey.
Some of the largest tenancies include an IGA (1,000m 2), a Mitre 10 (1,200m2), a Home
Hardware store (975m2), a furniture store, and a Target Country.
Margaret River Township comprises a broad retail offering that caters for local residents
and visitors alike, with retail specialty shops ranging from music stores to antique shops,
clothing and apparel stores, galleries and groceries shops.
10.3.1.1 Summary Existing Retail Supply
Total catchment retail supply floorspace has been grouped into the following categories:

Groceries and Specialty Food – includes food expenditure at supermarkets, delis,
bottle shops, butchers, bakers, convenience stores and greengrocers, and tobacco
products.

Food and Liquor Catering – includes expenditure on alcoholic beverages and meals
in restaurants, hotels, clubs, fast foods, taverns and bottle shops.

Clothing and Accessories – includes expenditure on clothing, footwear and clothing
and footwear services.

Furniture, Housewares and Appliances – includes expenditure on furniture, floor
and household coverings, appliances, glassware and tableware.

Recreation and Entertainment Equipment – includes expenditure on recreational
equipment such as audio-visual, home computer equipment, books and newspapers,
and other equipment such as cameras, toys and camping equipment.

Garden and Hardware Goods – includes expenditure on gardening tools,
accessories and products, hand and power tools, hardware products and cleaning
products.

Other Goods Personal and Services– includes expenditure on personal care
services (such as hair services, manicure services), stationary equipment, animal
products, medicines, lottery tickets, and miscellaneous goods.
Retail expenditure can be generally grouped into two broad categories: food expenditure
and non-food expenditure. Food expenditure comprises spending within the groceries and
specialty food and food and liquor catering categories, while non-food expenditure is
included in the remainder categories.
It is estimated that there is approximately 23,900m2 of retail floorspace, with 36.0%
taken up by food retailers. The majority of this is taken up by food and liquor catering
(4,500m2). This is not surprising given the significant number of visitors to the region,
and that many retailers within this category cater primarily for visitors.
A floorspace of 15,400m2 (64.5% of total retail floorspace) was identified across non-food
retailers, the majority of it distributed across the categories of: clothing and accessories;
furniture, houseware and appliances and other goods and personal services. Similarly, it
is expected that a significant proportion of retailers within these categories cater
primarily for visitors to the region.
Non-food expenditure is typically spread across specialty shops, department stores,
discount department stores and bulky goods retailers. In particular, bulky goods retailers
account for a large proportion of spending within the furniture, houseware and
appliances, and garden and hardware goods categories. As such, the approximate
quantum of supportable bulky goods floorspace within a specific location can be
estimated by analysing overall retail spending within the latter two categories. A total
supply of approximately 5,900m2 is identified across these two categories.
The audit also identified a total of 8 vacant premises, totalling approximately 2,500m 2. It
is expected that only a portion of these vacant premises were previously tenanted by
retailers, while others were previously occupied by other tenancies, such as office, or
light industrial businesses. As such, it is expected that only a portion of these vacant
premises would be tenanted by retailers in the future. Nonetheless, this equates to a
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potential retail vacancy rate of up to 9% (if including all vacancies), indicating that the
local market has the capacity to absorb additional future retail floorspace demand.
Table 5.2: Summary of Existing Retail Supply, Catchment
Lots (no)
Floorspace (m2)
Floorspace (%)
7
3,985
16.7%
Food and Liquor Catering
33
4,500
18.8%
Clothing & Accessories
28
3,430
14.3%
Furniture, Houseware & Appliances
13
3,775
15.8%
Recreation & Entertainment Equipment
15
2,615
10.9%
2
2,175
9.1%
Retail Type
Groceries & Specialty Food
Garden & Hardware Goods
Other Goods & Personal Services
Total
Vacant
26
3,440
14.4%
124
23,920
100.0%
8
2,475
Source: AECgroup, Department of Planning and Infrastructure (2006)
10.3.2
Retail Supply Outside the Catchment
Larger population centres outside the catchment, comprising larger shopping centres and
a broader variety of goods and stores compared to what is available in the catchment,
also service local households’ retail needs.
In particular, such centres appeal for non-food shopping or comparison shopping, for
which households typically visit a number of stores before committing to a purchase. This
is particularly the case for more expensive goods (i.e. white goods and electronics).
The closest major retail centres outside the catchment include Bunbury, Busselton and
Mandurah.
10.3.2.1 Bunbury
Bunbury, approximately 100km north of Margaret River Township, is the closest major
retail, business and services centre to catchment households, and comprises two subregional centres and three neighbourhood centres.
The Bunbury Forum Shopping Centre, a sub-regional shopping centre of
approximately 21,700m2, is located within Bunbury. It is anchored by a Discount
Department Stores (DDS): Big W (8,300m2). It also comprises two full-line
Supermarkets, Woolworths (3,800m2) and a SUPA IGA (3,000m2), in addition to over 50
specialty stores.
The other sub-regional shopping centre in Bunbury is the Bunbury Centrepoint
Shopping Centre, which comprises a floorspace of approximately 16,800m2. It is
anchored by Target (7,100m2) and a Coles supermarket (4,100m2) and includes
approximately 50 retail specialty shops.
Other smaller retail centres, or neighbourhood centres include5:

Parks Centre – 10,000m2 centre anchored by Kmart (3,900m2) and Coles
(2,900m2), with around 20 specialty shops.

Australind Shopping Centre – 6,200m2 centre located in Australind, approximately
8km north of Bunbury and anchored by Coles (3,300m2), with approximately 30
specialty shops.

Bunbury City Plaza Shopping Centre – neighbourhood centre of approximately
4,300m2, anchored by Woolworths (2,000m2) and comprising 18 specialty shops.
Various bulky goods retailers and a broad range of retail specialty, community and
commercial services are dispersed throughout Bunbury.
Bunbury therefore is the closest major retail centre for catchment residents, providing a
broad retail offering, including tree major DDS. Accordingly, Bunbury is expected to
5
Source: Property Council of Australia, Australian Shopping Centre Database, 2010
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attract the largest proportion of catchment households’ retail expenditure outside the
catchment, and in particular non-food expenditure.
10.3.2.2 Busselton
Busselton is located approximately 50km north of Margaret River Township, or
approximately halfway to Bunbury, and has a somewhat broader retail offering compared
to the catchment.
It comprises a few neighbourhood centres, which include Busselton Central Shopping
Centre (7,300m2), anchored by a SUPA IGA (4,500m2); Busselton Shopping Centre
(5,000m2), anchored by Woolworths (2,800m2) and Busselton Boulevard (4,800m2),
anchored by Coles (3,100m2).
Even though Busselton is located at half the distance of Bunbury, it is not expected to
attract as much retail expenditure from catchment households as Bunbury, given the
broader retail offering, and in particular non-food offering, available in Bunbury.
10.3.2.3 Mandurah
Mandurah is located 200km north of Margaret River Township, and is a major population
and services centre, with a regional centre (Centro Mandurah) and various smaller
centres. Mandurah is the closest regional centre to catchment households and provides a
larger retail offering than Bunbury.
Centro Mandurah is a 34,000m2 regional centre anchored by two DDS stores, Kmart
(7,000m2), Big W (6,500m2) and two supermarkets, Woolworths (4,000m2) and Coles
(3,200m2). In addition, the centre comprises over 100 retail specialty shops.
There are also other smaller centres within Mandurah and its vicinity, such as Meadow
Springs Boulevard (9,700m2), which is anchored by a Target (3,300m2) and Coles
(3,000m2); Centro Halls Head (6,000m2); Erskine Central Shopping Centre
(5,000m2); Smart Street Mall (3,100m2).
Aside from the presence of three major DDS (such as Bunbury), Mandurah is home to an
even larger number and variety of retailers, including bulky goods stores than Bunbury.
Therefore, a proportion of catchment households’ retail expenditure, and non-food
expenditure in particular, is expected to escape to Mandurah.
Nonetheless, despite a broader retail offering, the overall catchment households’ retail
expenditure that escapes to Mandurah is not expected to be as large as that escaping to
Bunbury. This is primarily related to Mandurah’s larger distance from the Township
(200km).
10.3.2.4 Perth CBD & Perth Metropolitan Area
The Perth CBD and Perth Metropolitan Area draw residents from a broad catchment,
including Margaret River, despite the Perth CBD being located at approximately a three
hour driving distance from Margaret River Township.
The Perth CBD and Perth Metropolitan Area will continue to attract a proportion of
catchment households’ retail expenditure as a result of the numerous specialty shops,
unique retail shops, the presence of major regional centres, in addition to the
entertainment, tourism and leisure attractions that are available.
However, Bunbury is expected to retain the largest proportion of catchment households’
retail expenditure that escapes outside the catchment, thanks to a significantly broader
and more diverse retail offering compared to Margaret River Township, and its convenient
location, at a relatively short driving distance from the Township.
10.3.3
Future Supply
A supermarket based centre of approximately 5,800m2 is currently under construction in
the Township of Margaret River. It is to comprise a full-line Woolworths supermarket
(3,800m2), and a number of specialty shops, including approximately 530m2 of
commercial/non-retail floorspace.
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With the addition of the Woolworths supermarket, Margaret River Township households
will avail themselves of two full line supermarkets, therefore further limiting food
expenditure leakage to outside the catchment.
10.4
Retail Expenditure
10.4.1
Average Household Retail Expenditure
Average household expenditure for catchment households was derived using AECgroup’s
Retail model based on data from the 2006 Census and the ABS 2009-10 Household
Expenditure Survey (ABS, 2011e).
Household retail expenditure has been grouped into the following categories:

Groceries and Specialty Food –food expenditure at supermarkets, delis, bottle
shops, butchers, bakers, convenience stores and greengrocers, and tobacco products.

Food and Liquor Catering –expenditure on alcoholic beverages and meals in
restaurants, hotels, clubs, fast foods, taverns and bottle shops.

Clothing and Accessories –expenditure on clothing, footwear and clothing and
footwear services.

Furniture, Housewares and Appliances –expenditure on furniture, floor and
household coverings, appliances, glassware and tableware.

Recreation and Entertainment Equipment –expenditure on recreational
equipment such as audio-visual, home computer equipment, books and newspapers,
and other equipment such as cameras, toys and camping equipment.

Garden and Hardware Goods –expenditure on gardening tools, accessories and
products, hand and power tools, hardware products and cleaning products.

Other Goods Personal and Services–expenditure on personal care services (such
as hair services, manicure services), stationary equipment, animal products,
medicines, lottery tickets, and miscellaneous goods.
Average weekly household retail expenditure of catchment households was compiled for
each of the abovementioned categories (Table 5.3), with Regional WA and WA figures
also included for comparison. Estimates are expressed in 2011 dollar values.
It is estimated that the average weekly household retail expenditure within Margaret
River Township is $490, which is equivalent to that within the Remainder of Margaret
River LGA. Average retail expenditure figures for the catchment are approximately 5%
below those of regional WA ($513) and WA ($523).
Table 5.3: Weekly Household Retail Expenditure 2011, Catchment ($2011)
Margaret
River
Township
Remainder
Margaret
River LGA
Regional
WA
WA
$187
$187
$188
$182
Food and Liquor Catering
$75
$76
$79
$84
Clothing & Accessories
$47
$47
$51
$52
Furniture, Houseware & Appliances
$57
$57
$62
$57
Recreation & Entertainment Equipment
$47
$47
$50
$62
Garden & Hardware Goods
$21
$21
$22
$23
Other Goods & Personal Services
$56
$56
$61
$62
$490
$490
$513
$523
Expenditure Type
Groceries & Specialty Food
Total Weekly Expenditure
Source: AECgroup Retail Model
10.4.2
Forecast Household Retail Expenditure Potential
It is estimated that at June 2011 catchment households generated approximately $135.7
million in retail sales potential, with groceries and specialty food comprising the largest
expenditure category ($51.9 million). The majority of retail expenditure potential is
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generated by households within the remainder Margaret River LGA, given its overall
larger population share.
It has been conservatively assumed that real household retail expenditure will increase
by 1.0% per annum between 2011 and 2031.
Total catchment retail expenditure potential is forecast to increase to over $200 million
by 2021 (2011 dollar values) and to approximately $300 million by 2031 (Table 5.4).
More than half of the increase in retail expenditure potential is generated by increase in
food expenditure, and groceries and specialty food expenditure in particular.
Margaret River Township households are forecast to account for the majority of the
increase in retail expenditure potential for the 2011-2031 period, given the higher
population growth rate assumed for the Township compared to the remainder of the LGA.
Table 5.4: Total Retail Expenditure Potential, Catchment Households (2011 $ values)
Margaret
River
Township
Remainder
Margaret
River LGA
Total
$22.7
$29.2
$51.9
Food and Liquor Catering
$9.2
$11.8
$20.9
Clothing & Accessories
$5.6
$7.3
$12.9
Furniture, Houseware & Appliances
$6.9
$8.8
$15.7
Recreation & Entertainment Equipment
$5.7
$7.3
$12.9
Garden & Hardware Goods
$2.5
$3.3
$5.8
Other Goods & Personal Services
$6.8
$8.8
$15.6
$59.4
$76.4
$135.8
Groceries & Specialty Food
$28.4
$34.8
$63.2
Food and Liquor Catering
$11.4
$14.0
$25.5
Clothing & Accessories
$7.1
$8.7
$15.7
Furniture, Houseware & Appliances
$8.6
$10.5
$19.1
Recreation & Entertainment Equipment
$7.1
$8.7
$15.8
Garden & Hardware Goods
$3.2
$3.9
$7.1
Other Goods & Personal Services
$8.5
$10.5
$19.0
$74.2
$91.1
$165.3
Groceries & Specialty Food
$35.5
$41.5
$77.0
Food and Liquor Catering
$14.3
$16.7
$31.0
$8.8
$10.3
$19.2
$10.7
$12.6
$23.3
Recreation & Entertainment Equipment
$8.8
$10.4
$19.2
Garden & Hardware Goods
$4.0
$4.6
$8.6
$10.7
$12.5
$23.2
$92.8
$108.7
$201.5
Groceries & Specialty Food
$44.3
$49.5
$93.9
Food and Liquor Catering
$17.9
$20.0
$37.8
Clothing & Accessories
$11.0
$12.3
$23.4
Furniture, Houseware & Appliances
$13.4
$15.0
$28.4
Recreation & Entertainment Equipment
$11.0
$12.4
$23.4
$5.0
$5.5
$10.5
$13.3
$14.9
$28.3
$116.0
$129.7
$245.6
$55.4
$59.1
$114.6
Expenditure Type
2011
Groceries & Specialty Food
Total
2016
Total
2021
Clothing & Accessories
Furniture, Houseware & Appliances
Other Goods & Personal Services
Total
2026
Garden & Hardware Goods
Other Goods & Personal Services
Total
2031
Groceries & Specialty Food
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Margaret
River
Township
Remainder
Margaret
River LGA
Total
Food and Liquor Catering
$22.3
$23.8
$46.2
Clothing & Accessories
$13.8
$14.7
$28.5
Furniture, Houseware & Appliances
$16.7
$17.9
$34.6
Recreation & Entertainment Equipment
$13.8
$14.7
$28.6
$6.2
$6.6
$12.8
$16.7
$17.8
$34.5
$145.0
$154.7
$299.7
Groceries & Specialty Food
$32.7
$29.9
$62.7
Food and Liquor Catering
$13.2
$12.1
$25.3
Clothing & Accessories
$8.1
$7.5
$15.6
Furniture, Houseware & Appliances
$9.9
$9.1
$18.9
Recreation & Entertainment Equipment
$8.1
$7.5
$15.6
Garden & Hardware Goods
$3.7
$3.3
$7.0
Expenditure Type
Garden & Hardware Goods
Other Goods & Personal Services
Total
Increase 2011-2031
Other Goods & Personal Services
Total
$9.8
$9.0
$18.9
$85.6
$78.4
$163.9
Source: AECgroup Retail Model
10.4.3
Market Share Analysis
Relevant market shares have been assigned for each retail category to estimate the
proportion of total retail expenditure potential that is retained within the catchment.
Market shares have been estimated based on a number of factors, such as: the existing
supply and range of retail shops and services within the catchment, the location and
function of competing centres, their distance from catchment households, and their retail
offering. Typical shopping and travel patterns have also been taken into account, such as
the propensity for local residents to travel to larger centres outside the catchment for
larger purchases, especially non-food shopping (Table 5.5).
Table 5.5: Estimated Catchment Market Shares by Category
Margaret
River
Township
Remainder
Margaret
River LGA
Total
Groceries & Specialty Food
90%
75%
82%
Food and Liquor Catering
85%
80%
82%
Clothing & Accessories
30%
25%
27%
Furniture, Houseware & Appliances
20%
20%
20%
Recreation & Entertainment Equipment
40%
30%
34%
Garden & Hardware Goods
40%
35%
37%
Other Goods & Personal Services
80%
70%
74%
67%
58%
62%
Market Share
Total
Source: AECgroup
Market share of overall retail expenditure potential that is retained within the catchment
is estimated at approximately 62%. The market share is expected to be higher for
Margaret River Township households (67%). The smaller overall market share captured
from remainder Margaret River LGA households (58%) is expected to be a function of
households located further away from the Township having a larger propensity to travel
outside the catchment.
Market shares however vary considerably between retail categories, and in particular are
estimated to be significantly higher for food categories compared to non-food categories.
Over 80% of catchment households’ food expenditure potential is expected to be retained
within the catchment itself, given that there are two full-line supermarkets within
Margaret River (once the Woolworths centre is completed). However, centres outside the
catchment, are still expected to capture a small proportion of catchment households’
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Margaret River SuperTown Combined Report
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expenditure potential within this category, as local residents often combine food shopping
with non-food shopping when travelling to larger centres such as Bunbury.
With comparatively limited non-food retail offering within the catchment, local residents
travel to centres outside the catchment for most non-food retail expenditure, where a
larger variety and depth of goods and services is available. Therefore, a significant
proportion of catchment households’ expenditure within clothing and accessories,
furniture, housewares and appliances and recreation and entertainment equipment is
expected to escape to centres outside the catchment.
Non-food expenditure market share is expected to be approximately 39%, implying that
approximately 61 cents out of every dollar that is spent by catchment households on
non-food retail items is spent in centres outside the catchment. Bunbury in particular is
expected to attract a significant proportion of such expenditure.
10.4.4
Estimated Household Retail Expenditure within the Catchment
Multiplying the estimated market shares with the available retail expenditure potential of
catchment households yields the estimated household retail expenditure that is captured
within the catchment (Table 5.6).
Table 5.6: Estimated Household Retail Expenditure Captured within the Catchment (2011
$ values)
Expenditure Type
Margaret River
Township
Remainder
Margaret
River LGA
Total
2011
Groceries & Specialty Food
$20.4
$21.9
$42.3
Food and Liquor Catering
$7.8
$9.4
$17.2
Clothing & Accessories
$1.7
$1.8
$3.5
Furniture, Houseware & Appliances
$1.4
$1.8
$3.1
Recreation & Entertainment Equipment
$2.3
$2.2
$4.4
Garden & Hardware Goods
$1.0
$1.1
$2.2
Other Goods & Personal Services
$5.5
$6.2
$11.6
$40.0
$44.4
$84.4
Total
2016
Groceries & Specialty Food
$25.5
$26.1
$51.7
Food and Liquor Catering
$9.7
$11.2
$20.9
Clothing & Accessories
$2.1
$2.2
$4.3
Furniture, Houseware & Appliances
$1.7
$2.1
$3.8
Recreation & Entertainment Equipment
$2.8
$2.6
$5.4
Garden & Hardware Goods
$1.3
$1.4
$2.6
Other Goods & Personal Services
$6.8
$7.3
$14.2
$50.0
$52.9
$102.9
Groceries & Specialty Food
$31.9
$31.1
$63.1
Food and Liquor Catering
$12.1
$13.4
$25.5
Clothing & Accessories
$2.6
$2.6
$5.2
Furniture, Houseware & Appliances
$2.1
$2.5
$4.7
Recreation & Entertainment Equipment
$3.5
$3.1
$6.6
Garden & Hardware Goods
$1.6
$1.6
$3.2
Other Goods & Personal Services
$8.5
$8.8
$17.3
$62.5
$63.1
$125.7
Groceries & Specialty Food
$39.9
$37.2
$77.1
Food and Liquor Catering
$15.2
$16.0
$31.2
Clothing & Accessories
$3.3
$3.1
$6.4
Furniture, Houseware & Appliances
$2.7
$3.0
$5.7
Total
2021
Total
2026
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Margaret River
Township
Remainder
Margaret
River LGA
Total
Recreation & Entertainment Equipment
$4.4
$3.7
$8.1
Garden & Hardware Goods
$2.0
$1.9
$3.9
Expenditure Type
Other Goods & Personal Services
$10.7
$10.4
$21.1
$78.2
$75.3
$153.5
Groceries & Specialty Food
$49.9
$44.3
$94.2
Food and Liquor Catering
Total
2031
$19.0
$19.1
$38.0
Clothing & Accessories
$4.1
$3.7
$7.8
Furniture, Houseware & Appliances
$3.3
$3.6
$6.9
Recreation & Entertainment Equipment
$5.5
$4.4
$9.9
Garden & Hardware Goods
$2.5
$2.3
$4.8
$13.3
$12.5
$25.8
$97.7
$89.9
$187.6
Other Goods & Personal Services
Total
Source: AECgroup Retail Model
It is estimated that total household retail expenditure retained within the catchment is
$84.4 million (2011 dollar values) in 2011, approximately equally distributed between
Margaret River Township households and Remainder Margaret River LGA households.
Retail expenditure is expected to increase to over $125 million by 2021 (2011 dollar
values) and approximately $187 million in 2031.
By 2031, Margaret River Township households will account for the majority of retail
expenditure retained within the catchment, given the relatively higher assumed annual
growth rate for the Township.
10.4.5
Estimated Visitor Retail Expenditure within the Catchment
Margaret River is an important tourism destination, attracting a large number of visitors
annually. As such, alongside locally generated expenditure, comprehensive retail
expenditure is also generated by domestic and international visitors alike that come to
the region.
Considerable visitor retail expenditure is generated within the Township itself, with
Margaret River Township being the key gateway centre to the Margaret River Tourism
Region.
To accurately determine total current and future supportable retail floorspace within the
catchment, it is important to incorporate current and future visitor expenditure into
overall retail expenditure levels. Data has been sourced from Tourism Research Australia
publications.
It is estimated that there were approximately 1.7 million visitor nights in the catchment
in 2011, which is forecast to increase to approximately 2.1 million visitor nights by 2031,
with international visitor nights accounting for the great majority of growth over the
period (Table 5.7).
Table 5.7: Forecast Visitor Nights, Catchment
Indicator
Domestic Visitor Nights
International Visitor Nights
Total Visitor Nights
Increase
2011-2031
2011
2016
2021
2026
2031
1,355,000
1,369,300
1,378,100
1,390,000
1,402,000
47,000
408,400
466,600
518,900
585,000
661,000
252,600
1,763,400
1,835,900
1,897,000
1,975,000
2,063,000
299,600
Source: AECgroup, TRA (2011a), TRA (2011b)
It is estimated that in 2011 visitors generated approximately $80.5 million in retail
expenditure in the catchment.
Future visitor retail expenditure has been calculated by multiplying forecast visitor nights
by the average retail expenditure per visitor night. In doing so, it has been assumed that
the average real retail expenditure per visitor night will increase by 1.0% per annum
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between 2011 and 2031, in line with growth in real household retail expenditure over the
period.
Forecast visitor retail expenditure is expected to increase to $92.0 million by 2021 and
$105.7 million by 2031.
As such, visitors generate considerable retail expenditure in the catchment, with such
expenditure ‘supporting’ a significant proportion of retail floorspace within Margaret River
Township and the overall catchment. This is especially the case for food related
floorspace - with food and liquor catering comprising 58% of visitor retail expenditure,
followed by groceries and specialty food (24% of visitor retail expenditure).
Table 5.8: Estimated Visitor Retail Expenditure, Catchment (2011 $ values)
Expenditure Type
2011
2016
2021
2026
2031
Groceries & Specialty Food
$19.8
$20.8
$21.8
$23.0
$24.3
Food and Liquor Catering
$46.2
$48.6
$51.0
$53.7
$56.7
Clothing & Accessories
$8.7
$10.1
$11.5
$13.1
$14.8
Furniture, Houseware & Appliances
$1.1
$1.3
$1.4
$1.6
$1.9
Recreation & Entertainment Equipment
$1.4
$1.7
$1.9
$2.2
$2.5
Garden & Hardware Goods
$1.1
$1.3
$1.4
$1.6
$1.9
Other Goods & Personal Services
$2.2
$2.5
$2.9
$3.3
$3.7
$80.5
$86.3
$92.0
$98.5
$105.7
Total
Source: AECgroup, TRA (2011a), TRA (2011b), TRA (2011c)
10.4.6
Estimated Total Retail Expenditure within the Catchment
Total retail expenditure is the sum of household expenditure that is retained within the
catchment and visitor expenditure (Table 5.9).
Total retail expenditure within the catchment is expected to nearly double over the 2011
to 2031 period, to reach approximately $293 million in 2031 from $164 million in 2011,
as a result of the significant population growth that is forecast over the period (and hence
growth in household retail expenditure), as well as the forecast increase in visitor
numbers to the region (and hence growth in visitor retail expenditure).
Visitor retail expenditure is estimated to account for approximately half of the overall
retail expenditure within the catchment in 2011. However, it reduces to approximately
36% of retail expenditure by 2031, given the relatively higher growth in population
compared to growth in visitation numbers over the period.
Therefore, visitor expenditure is a major component of retail expenditure within the
catchment, and a key determinant of the overall quantum of supportable retail floorspace
within the catchment.
Not surprisingly, visitor expenditure within food and liquor catering comprises nearly 73%
of total retail expenditure within the category.
Table 5.9: Estimated Total Retail Expenditure within the Catchment (2011 $ values)
Margaret
River
Township
Remainder
Margaret
River LGA
Visitor
Expenditure
Total
$20.4
$21.9
$19.8
$62.1
Food and Liquor Catering
$7.8
$9.4
$46.2
$63.4
Clothing & Accessories
$1.7
$1.8
$8.7
$12.2
Furniture, Houseware & Appliances
$1.4
$1.8
$1.1
$4.2
Recreation & Entertainment Equipment
$2.3
$2.2
$1.4
$5.9
Garden & Hardware Goods
$1.0
$1.1
$1.1
$3.2
Other Goods & Personal Services
$5.5
$6.2
$2.2
$13.8
$40.0
$44.4
$80.5
$164.9
$25.5
$26.1
$20.8
$72.5
Expenditure Type
2011
Groceries & Specialty Food
Total
2016
Groceries & Specialty Food
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Margaret
River
Township
Remainder
Margaret
River LGA
Visitor
Expenditure
Total
Food and Liquor Catering
$9.7
$11.2
$48.6
$69.6
Clothing & Accessories
$2.1
$2.2
$10.1
$14.4
Furniture, Houseware & Appliances
$1.7
$2.1
$1.3
$5.1
Recreation & Entertainment Equipment
$2.8
$2.6
$1.7
$7.1
Garden & Hardware Goods
$1.3
$1.4
$1.3
$3.9
Other Goods & Personal Services
$6.8
$7.3
$2.5
$16.7
$50.0
$52.9
$86.3
$189.2
Groceries & Specialty Food
$31.9
$31.1
$21.8
$84.9
Food and Liquor Catering
$12.1
$13.4
$51.0
$76.5
Clothing & Accessories
$2.6
$2.6
$11.5
$16.7
Furniture, Houseware & Appliances
$2.1
$2.5
$1.4
$6.1
Recreation & Entertainment Equipment
$3.5
$3.1
$1.9
$8.6
Garden & Hardware Goods
$1.6
$1.6
$1.4
$4.6
Expenditure Type
Total
2021
Other Goods & Personal Services
$8.5
$8.8
$2.9
$20.2
$62.5
$63.1
$92.0
$217.6
Groceries & Specialty Food
$39.9
$37.2
$23.0
$100.1
Food and Liquor Catering
$15.2
$16.0
$53.7
$84.9
Clothing & Accessories
$3.3
$3.1
$13.1
$19.5
Furniture, Houseware & Appliances
$2.7
$3.0
$1.6
$7.3
Recreation & Entertainment Equipment
$4.4
$3.7
$2.2
$10.3
Garden & Hardware Goods
$2.0
$1.9
$1.6
$5.6
Total
2026
Other Goods & Personal Services
$10.7
$10.4
$3.3
$24.4
$78.2
$75.3
$98.5
$252.0
Groceries & Specialty Food
$49.9
$44.3
$24.3
$118.5
Food and Liquor Catering
Total
2031
$19.0
$19.1
$56.7
$94.7
Clothing & Accessories
$4.1
$3.7
$14.8
$22.6
Furniture, Houseware & Appliances
$3.3
$3.6
$1.9
$8.8
Recreation & Entertainment Equipment
$5.5
$4.4
$2.5
$12.4
Garden & Hardware Goods
Other Goods & Personal Services
Total
$2.5
$2.3
$1.9
$6.6
$13.3
$12.5
$3.7
$29.5
$97.7
$89.9
$105.7
$293.2
Source: AECgroup Retail Model
10.5
Retail Demand
Demand for retail floorspace within the catchment has been calculated by applying
benchmark turnover rates (Table 5.10) to expenditure captured within the catchment for
each retail category (Table 5.9).
Table 5.10: Benchmark Turnover Rates - $/m2 (2011 $ values)
Category
$/m2
Groceries & Specialty Food
$9,125
Food and Liquor Catering
$8,000
Clothing & Accessories
$6,500
Furniture, Houseware & Appliances
$5,500
Recreation & Entertainment Equipment
$5,500
Garden & Hardware Goods
$4,500
Other Goods & Personal Services
$7,000
Source: AECgroup
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There is an estimated demand for approximately 21,100m 2 of retail floorspace within the
catchment (Table 5.11), with the majority of supportable floorspace (approximately
14,700m2) in food categories, and in particular in food and liquor catering (approximately
7,900m2).
Therefore, food and liquor catering is estimated to comprise over 37% of supportable
retail floorspace within the catchment. Nearly the entire quantum of supportable
floorspace within food and liquoring catering is attributable to visitor expenditure.
Visitor expenditure also supports a significant proportion of retail floorspace within the
groceries and specialty food category as well as the clothing and accessories category.
Demand for retail floorspace is expected to nearly double by 2031, in line with significant
retail expenditure growth, reaching approximately 28,000m2 by 2021 and 37,800m2 by
2031. The largest growth in floorspace requirements is expected to be within the food
categories, and groceries and specialty food in particular.
Assuming that the majority of bulky goods floorspace is contained within the categories
of furniture, houseware and appliances and garden and hardware goods, it is estimated
that there is demand for approximately 1,500m2 of bulky goods floorspace in 2011. This
is expected to increase to approximately 3,100m2 by 2031.
However, retail demand modelling has been based on household expenditure, and as
such, does not include business to business transactions, which can make up a relatively
large proportion of trade in the Garden and Hardware category. As such, bulky goods
floorspace requirements are expected to be underestimated.
Bulky goods retailers typically have different storage, locational, parking and accessibility
requirements compared to traditional retailers. For example, they often demand large
storage areas, premises with sufficient load access, adequate car parking. They also
differ from traditional retailers as they are often located in clusters, either within
homemaker centres or in out-of-centre developments, allowing customers the
opportunity to easily compare prices and products in one location. As such, when
planning for the future provision of bulky goods within the catchment, it is important to
take into account such requirements.
Table 5.11: Demand for Retail Floorspace (m2), Catchment
Category
2011
2016
2021
2026
2031
Increase
2011-2031
Groceries & Specialty Food
6,808
7,945
9,306
10,968
12,988
6,180
Food and Liquor Catering
7,923
8,698
9,564
10,606
11,841
3,917
Clothing & Accessories
1,878
2,210
2,574
2,996
3,482
1,603
768
923
1,108
1,329
1,595
827
1,072
1,293
1,556
1,874
2,258
1,185
721
865
1,033
1,235
1,477
755
1,970
2,384
2,881
3,483
4,215
2,245
21,142
24,318
28,022
32,491
37,855
16,713
Furniture, Houseware & Appliances
Recreation & Entertainment Equipment
Garden & Hardware Goods
Other Goods & Personal Services
Total
Source: AECgroup
10.6
Current Demand Vs Supply
The catchment is currently well served by existing retailers, with approximately 2,700m2
of retail floorspace supply above the estimated retail floorspace requirements.
However, this figure should be read with caution as it does not necessarily imply an
oversupply of retail floorspace within the catchment. In particular, such surplus may be
overstated for a number of reasons, such as:

A number of stores are likely to operate at lower than expected productivity levels.
There are a number of reasons for this: some shops may not open every day, others
may not open throughout the whole year; rents can also be relatively inexpensive,
allowing tenants to have below average productivity levels. This is particularly the
case for regions with significant visitor patronage, such as Margaret River, where a
number of shopkeepers may operate a shop as a ‘lifestyle choice’ rather than as a
profit maximizing activity.
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
A number of retailers are located in non-traditional retail premises i.e. industrial areas
or sheds, which would not be suitable for other retail tenancies. Such floorspace
therefore should not be technically included in the retail inventory, hence lowering
potential retail floorspace surplus within the catchment once these tenancies are
excluded. This is particularly the case for some of the larger non-food retailers.

The retail demand model has been based on household expenditure, and as such,
does not include business to business transactions, which can make up a relatively
large proportion of trade in certain retail categories. This is particularly the case for
the Garden and Hardware category, where household trade only comprises a
relatively small component of their overall trade. As such, overall retail floorspace
demand in this category in particular, and other non-food categories as well, are
expected to be understated.
The audit undertaken by the Department of Infrastructure and Planning did not take into
account the numerous restaurants, wineries, food retailers and food specialty shops that
are dispersed throughout the region, hence the large discrepancy between demand and
supply across food categories.
Nonetheless, figures overall indicate that the market is currently well supplied and has
the capacity to absorb additional retail floorspace requirements, which are to be
generated by the population growth that is forecast within the catchment.
The analysis above did not take into account vacant floorspace (2,500m 2), some of which
is likely to be taken up by retailers in the future. However, the impact of vacant space is
likely to be minimal, as not all vacant floorspace is expected to be tenanted by retailers.
For example, premises may be vacant as they are of below-average standard; are too
large for retail specialties; or are better suited for other uses (commercial/light industrial)
given their location and exposure.
Table 5.9: Current Retail Floorspace (m2) Variance, Catchment
Category
2011
Groceries & Specialty Food
-2,823
Food and Liquor Catering
-3,423
Clothing & Accessories
1,552
Furniture, Houseware & Appliances
3,007
Recreation & Entertainment Equipment
1,543
Garden & Hardware Goods
1,454
Other Goods & Personal Services
Total
1,470
2,778
Source: AECgroup
10.7
Future Demand Vs Supply
Future retail floorspace demand has been reconciled with retail supply to provide an
indication of future retail floorspace requirements within the catchment. In doing so, the
Woolworths centre that is under construction has been included in future retail supply.
The analysis, however, did not take into account existing vacant floorspace.
The Woolworths centre will provide significant additional retail floorspace within the
Township (comprising over 20% of existing supply). Such centre will therefore meet
some of the forecast retail floorspace requirements.
Taking into account the construction of the Woolworths centre, it is forecast that there
will be an overall shortage of retail floorspace after 2021. Given significant population
growth that is forecast for the catchment, and hence growth in floorspace demand, by
2031, an estimated retail floorspace deficit of approximately 8,600m2 is forecast.
Nearly all of the floorspace deficit by 2031 is expected to occur in food categories.
However, the audit undertaken by the Department of Infrastructure and Planning did not
take into account the numerous restaurants, wineries, food retailers and food specialty
shops that are dispersed throughout the region. Therefore, such deficit is likely to be
overstated, and in particular for the food and liquor catering category.
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The expected surplus of floorspace in non-food categories is to be interpreted with
caution, for the reasons outlined above. In particular, this figure is likely to
underestimate demand (i.e. no business to business transactions included in the demand
model) and overestimate supply (some large tenancies were included in the retail supply
even though the premises would likely better suit other uses, such as light industrial).
As such, a potential retail floorspace deficit may occur by 2031 across non-food
categories. However, as the great majority of future floorspace demand is to be
generated by food retailers, as indicated in Section 5.5, no major floorspace deficit is
forecast across non-food retailers.
Table 5.10: Future Retail Floorspace (m2) Variance, Catchment
Category
2011
2016
2021
2026
2031
Groceries & Specialty Food
-2,823
262
-1,099
-2,761
-4,781
Food and Liquor Catering
-3,423
-3,584
-4,450
-5,492
-6,727
Clothing & Accessories
1,552
1,220
856
434
-52
Furniture, Houseware & Appliances
3,007
2,852
2,667
2,446
2,180
Recreation & Entertainment Equipment
1,543
1,522
1,259
941
557
Garden & Hardware Goods
1,454
1,310
1,142
940
698
Other Goods & Personal Services
1,470
1,325
828
226
-506
2,778
4,907
1,203
-3,266
-8,630
Total
Source: AECgroup
10.8
Key Findings
The audit identified a total of 23,900m2 of retail floorspace in Margaret River (and
3,300m2 of commercial office space), with a retail offering that includes a Coles, IGA,
Target Country and a couple of larger format hardware stores. The Margaret River
Shopping Centre is a 3,000m2 neighbourhood centre anchored by a Coles, while a new
shopping centre under construction (5,800m2) is to comprise a full-line Woolworths
supermarket and numerous specialty shops. The vacancy rate for the combined retail and
commercial premises is 8% (2,400m2).
Future demand for retail floorspace has been modelled against a doubling of Margaret
River Township’s population and a continuation of recent annual growth for the remainder
of the Shire to 2031. These figures indicate that there is a current oversupply of retail
space of 2,800m2. This likely explains the high vacancy rate, and is a result of the
seasonality of the tourism sector, which is a large part of the retail expenditure.
Additionally, Margaret River is a lifestyle location, with many business owners potentially
forgoing profit in order to facilitate living in the area.
In view of this, as well as the delivery of the new shopping centre in 2012, there is likely
to be sufficient supply to cater for growth over the next ten years (to 2021), with an
anticipated retail floorspace oversupply of 1,200m2 in 2021. As a result of a significant
increase in forecast retail demand (resulting from population growth) it is anticipated that
an additional 8,600m2 of retail floorspace will be needed by 2031. This figures should be
used as a guide only as some retail users require specific types of space (i.e. bulky goods
retailers), which may not be available as part of the existing supply.
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11. Commercial & Government Office
This chapter assesses the market for commercial and Government office floorspace in
Augusta-Margaret River over the next 20 years. It uses a labour force-based
methodology to estimate the amount office floorspace required to accommodate current
and future office workers.
11.1
Methodology
In this assessment, future commercial and government office floorspace demand over
the next 20 years is forecasted. The methodology utilised for projecting commercial
floorspace demand is comprised of the following steps.
Figure 11.1: Commercial Office Demand Methodology
Population
•Estimates of population based on various sources.
Working Age Population
•Estimate of Local Working Age Population (15+) based on population
estimates and assumed ageing profile
Labour Force Size
•Application of a labour force participation rate to working age population
based on historical labour force participation rates for the area
Office-Based Workers
•Application of assumed share of labour force in core office-based occupation
based on previous census data
Office-Based Jobs
•Adjustment of local office labour force to office jobs through application of
assumed office-specific employment self-sufficiency ratio
Core Office Floorspace
•Conversion of office empoyment to floorspace based on assumed workspace
ratio (sqm per worker) of 20sqm
Source: AECgroup
Note that this methodology applies only to commercial office floorspace and does not
take into consideration office demand for Government tenants.
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The methodology for projecting government floorspace demand is comprised of the
following steps.
Figure 11.2: Government Office Demand Methodology
Population
•Estimates of population based on various sources.
Government Employment
•Estimate the number of government sector employees based on previous census data
Office-Based Workers
•Application of assumed share of government workers in core office-based occupation
based on previous census data
Total Office Floorspace
•Sum of Core Office Floorspace
Core Office Floorspace
•Conversion of office empoyment to floorspace based on assumed workspace ratio (sqm
per worker) of 15sqm
Source: AECgroup
Two separate methodologies have been used to gauge commercial and Government
office floorspace requirements as the factors driving demand for each are assumed to be
quite different. The major variation lies behind the lack of application of a labour force
participation rate to calculate demand for Government office space. This is based on the
idea that the demand for Government office space, and hence demand for Government
employment grows more directly in-line with population. This is assumed to be the case
due to the need for Government employment to act as a service to the population.
11.2
Office Supply
The commercial survey undertaken by the Department of Planning and Infrastructure
indicates that there are 25 commercial office tenancies in Margaret River, totalling
approximately 3,300m2. No survey of government offices was undertaken in Margaret
River but the Shire is likely to be the single largest government tenant.
Table 6.1: Office Floorspace Supply
Floorspace Supply (GFA m2)
2011
Commercial Office
3,270
Government Office
Total Office
N/A
3,270
Source: AECgroup, Department of Planning and Infrastructure (2006)
11.3
Office Demand
Demand for commercial space in Augusta-Margaret River is estimated at 10,060 m2 and
is estimated to treble over the coming 20 years to 30,806m2 as economic activity in
Augusta-Margaret River expands.
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Table 6.2: Office Floorspace Demand
Floorspace Demand (GFA m2)
2011
2016
2021
2026
2031
Commercial Office
8,393
11,392
15,277
20,523
27,579
Government Office
Total Office
1,667
1,966
2,319
2,735
3,226
10,060
13,358
17,596
23,259
30,806
Source: AECgroup
11.4
Office Demand vs Supply
Reconciling current commercial office demand with current supply indicates that there is
a significant undersupply of office floorspace, with demand largely exceeding supply. Part
of the undersupply could be explained through many professionals working from home as
opposed to in traditional office space. Given the nature of Margaret River, home offices
are likely to be prominent with many professionals that have made to the move to the
area for lifestyle reasons.
It is forecast that there is a requirement for an additional 27,000m2 of office space by
2031 in Margaret River (taking into account the 530m2 of office space as part of the
Woolworths centre under construction).
Table 6.3: Future Office Floorspace Variance (m2)
Floorspace Supply (GFA Sqm)
2011
2016
2021
2026
2031
Commercial Office
-5,123
-7,592
-11,477
-16,723
-23,779
Government Office
-1,667
-1,966
-2,319
-2,735
-3,226
Total Office
-6,790
-9,558
-13,796
-19,459
-27,006
Source: AECgroup, Department of Planning and Infrastructure (2006)
11.5
Key Findings
There is estimated to be existing undersupply of commercial space in Augusta-Margaret
River. Retail and commercial activities can occupy similar spaces, suggesting that
commercial activities may be currently occupying retail space (currently in over supply)
in the area. However, estimated existing oversupply of retail space in the area is
insufficient to total absorb excess demand of office space. Over the coming 20 years,
undersupply of commercial space is expected to intensify. Accommodating current and
future commercial space demand is essential to achieving the SuperTowns growth target.
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12. Future Opportunities for Growth
This chapter outlines the opportunities for growth in Margaret River, to support its
transformation into a SuperTown over the next two decades as well as the associated
impediments that must be managed.
12.1
Economic Opportunities
Findings from each stage of the opportunities assessment have informed the
identification of economic opportunities for Augusta-Margaret River. These opportunities
enable the LGA to grow and support existing industries whilst also diversifying into new
industries. These opportunities are outlined in Error! Reference source not found..
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Table 12.1: Economic Opportunities for Augusta-Margaret River
Opportunity/Growth
Sector
High Value-Adding Activity
Point of Differentiation
Why Augusta-Margaret River?
Agriculture and
Growing
 Niche global exports (with focus on South East
Asian markets and higher value products)
 Food security services (providing market and
logistical support for overseas and domestic
buyers).
 General security of production
within global environment of
increased food uncertainty.
 Proximity to South East Asia
 Strong water security: compared to other national agricultural
locations
 Increased diversity of production: increased emergence of niche
products and growth of fruit and other more sustainable plantationbased crops
 Demonstrated international focus: with exports to South East Asian
markets already occurring.
 Existing Brand: Margaret River has an established and well respected
brand that provides for product differentiation and premium pricing.
Food Processing
 Fresh made food (packed fresh produce, packed
snacks, prepared foods)
 Local value added (conversion of local
production)
 Existing brand
 Strong existing cluster: Augusta-Margaret River already has an
established food processing cluster providing an existing workforce,
supply chains and specialised services.
 Existing Brand: Margaret River has an established and well respected
brand that provides for product differentiation and premium pricing.
 Proximity to Asia: compared to eastern states, the South West has
greater proximity to Asian markets.
Creative Industries
 Internet/software based (games development,
animation, media production)
 Arts (sculpture, graphic arts, crafts, fine furniture)
 Professional services (architecture, graphic
design, fashion)
 Amenity and natural
environment as well as existing
creative industries help to build
existing environment, which is
conducive to creative industries
 High Amenity: Margaret River has high amenity for residents,
including many natural elements that inspire creative minds
 Existing Creative Industries: there is an existing creative industries
cluster in Margaret River, which helps to build conducive environment
 Residential Attraction: Margaret River is a destination that can
attract creative professionals that are not tied to a specific location for
the purposes of their work (if sufficient internet speeds exist)
Lifestyle Changes
 Pre-Retirement (professionals in Bunbury or
Perth that can run their business from Margaret
River and plan to retire in the short-term)
 Post-Retirement (active retirees that seek a
residential location with amenity to spend part of
the year in)
 Amenity and natural
environment
 High Amenity: Margaret River has high amenity for residents
 New Demographic: there is a new demographic emerging in Australia
that includes 55-70 year olds with high disposable incomes that are very
active and tend to travel between residential areas
Tourism
 Events (focus on key events to extend traditional
tourism season and draw consideration visitation
over a short time period)
 Business travellers (business events,
conferences, corporate retreats)
 Leisure travellers (product diversification to
extend length of stay and increase expenditure)
 Existing brand and wine/food
tourism products
 Existing Brand: Margaret River is a well-known tourism destination
that can assist in attracting participants for events and business
conferences
 Existing Infrastructure: Margaret River has an existing stock of hotel
rooms and various dining facilities to cater for events and business
conferences
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Opportunity/Growth
Sector
High Value-Adding Activity
Point of Differentiation
Why Augusta-Margaret River?
Health & Retirement
 Health services (public and private hospitals,
general practitioners (GPs))
 Aged care services (retirement villages, respite
and hospice care, in-home care services)
 Allied health services (physiotherapy, general
practitioners, diagnostic facilities, occupational
therapy, dentists, mental health care)
 Existing and future population
growth.
 Existing facilities.
 Ageing demographic: The ageing population trend will result in
increased demand for health services, particularly aged care. In
addition, the ageing of existing healthcare practitioners is expected to
leave a gap in the provision of services.
 Affordable Housing: providing prospective retirees with the ability to
cash-out of the family home in metropolitan Perth or other major cities.
 Critical mass: As the population of Augusta-Margaret River LGA
increases, demand for additional healthcare services will increase,
resulting in a shift of demand away from Bunbury to the town.
Education
 High quality secondary schooling (including
student accommodation)
 Industry-oriented tertiary education (including
further investment into the existing facilities)
 Existing and future population
growth.
 Growing population base: The Augusta-Margaret River LGA
population is expected to increase over time, supporting demand for
local education facilities.
 Growing demand for skilled workers: As the structure of the
economy changes, demand for new skills will be required, supporting
demand for higher education in the region.
 Collocation with Major Industries: opportunities to support
agriculture, hospitality and viticulture.
Retail
 Food retailing (supermarkets, greengrocers,
farmers markets)
 Other Retailing (clothes, outlets for local art,
local shops, etc)
 Existing and future population
growth.
 Large tourism sector
 Growing population base: The Augusta-Margaret River LGA
population is expected to increase over time and visitor numbers are
expected to increase, supporting demand for all retailed goods.
 Consumerism: Consumerism remains strong in Australia, supporting
the long-term trends in retail sales growth.
 Centralised Catchment: Margaret River is located sufficient far from
major regional centres for significant expenditure to be captured locally.
 Extended Trading Hours: recent approval of extended trading hours
in Margaret River will support its role as a major retail centre.
Source: AECgroup
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12.2
Potential Impediments
As identified in the analysis contained in this report, there are numerous potential
impediments that could prevent Margaret River from achieving the aspirations of the
SuperTown initiative. Effectively managing and overcoming these impediments or
economic gaps will assist Margaret River in leveraging the identified economic
opportunities.
The identified impediments or gaps include:

Accessibility of the region (for both tourism and business) can be challenging.
Expansion of the Busselton Airport could assist and provide the ability to significantly
increase accessibility of the region, particularly for domestic and international
tourists.

Identifying viable markets for food products, including breaking into overseas export
markets will be important for the agriculture and food sectors in Margaret River.
While there are a number of possible food products in the region, products that can
achieve a premium price and guaranteed volumes are required, which will require
export markets and entering overseas markets can be expensive and time
consuming.

Community perception of development can often be negative and community spirit
can often negatively impact future development. While certain developments do not
align with the brand of Margaret River, some development is required to realise the
future aspirations of the SuperTown initiative and community acceptance of change
can be difficult.

Cost of living and housing affordability can be issues in Margaret River given the
nature of the location and the attraction for absentee home owners (holiday homes),
which can drive up prices for local residents, who often work in the tourism sector
and receive relatively low wages.

Seasonality of tourism and picking seasons, which causes an issue of providing year
round employment opportunities.

Creation of a society of ‘haves’ and ‘have nots’ based on the reliance on tourism,
which does not always offer long-term, high income employment, and the attraction
of the area to high net worth individuals. These contrasting groups could create a
community of people that can afford to live here and the people that service them.

Reliance on wine and tourism as core industries, which provides a future risk to a
down turn in each industry or both (as they are heavily linked).

Lack of high-speed internet connections, which can discourage many new residents
and businesses from moving to the area.

Lack of sufficient transport links, including a local airport that can handle RPT from
the East Coast and overseas as well as road infrastructure necessary to grow the
town and allow the easy access and transport of people and goods.
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13. Key Economic Drivers & Important
Trends
Key economic trends are expected to have an impact on the economic development of
Augusta-Margaret River. This chapter outlines these key trends and their potential
implications for the economic development of Augusta-Margaret river. Key trends
analysed include:
13.1

Global Food Security

The Margaret River Brand

Diversification of the Tourism industry

Wine Market Fluctuations

The National Broadband Network
Global Food Security
Global food security is a prominent and developing trend in the global economy. Two
primary factors influence global food consumption: global population growth and global
incomes growth. Research suggests that as individuals earn greater wealth, their food
consumption patterns shift (and tend to increase). This is particularly prominent as
populations shift from poverty into middle class. In 2012, Bayer Australia identified the
need for a 70% increase in global food production to feed the population of 2050.
Compounding the impact of growing food consumption, is the reducing capacity for
increased food growing. As the population grows, the amount of vacant land for
agricultural production reduces. In 2011, the United Nation's Food and Agriculture
Organisation found that the provision of adequate arable lands, particularly in South Asia
and East Asia is limited (UN, 2011).
Figure 13.1: Potential For World Cropland Expansion
1200
1000
800
600
400
200
0
Latin
America
Sub-Saharan
Near
South Asia
East Asia
Industrial
Transition
Africa
East/North
Countries Countries
Africa
Additional land with rainfed crop production potential
Arable land in use, 2005
Source: FAO (2009)
As an existing food-growing region of Australia, Augusta-Margaret River has the
ability to play a key role in global food production into the future. As a result,
global food security will be a fundamental economic driver for AugustaMargaret River into the future.
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13.2
The Margaret River Brand
Margaret River has a broadly recognised brand both nationally and internationally (in
niche markets). This brand attracts national and international oenophiles to the region as
well as travellers. Protecting the brand ‘Margaret River’ and ensuring brand value will be
essential for the town to achieve the goals of the SuperTown initiative. Increasing brand
awareness in new markets as well as ensuring a sophistication that can increase the
brand value will pay large dividends to the town over the long-term and contribute
positively to its economic development. The brand will be intrinsically linked between
wine, tourism, creating industries and retail. The brand ‘Margaret River’ will hold a
significant role in the attraction of new residents and economic growth of the
area over the coming 20 years.
What is a brand?
A brand identity is a name, term, sign, symbol or design, or a combination of them
intended to identify the goods and services of a client and differentiate them from
competitors and others. Strong brands evoke an emotional or psychological impact on
consumers. Ensuring strong brand value can increase marketing penetration, product
value and maintain a strong reputation.
13.3
Tourism industry
Tourism is a foundation industry in Augusta-Margaret River, attracting, on average, just
under 700,000 visitors per year. The region benefits from a well-established brand.
Employment in retail sales and accommodation and food services (two of the industries
most aligned with the tourism sector) forms over 25% of total employment in the area.
Similarly, economic activity in these two sectors forms over 10% of total economic
activity. As such, the tourism industry is fundamentally important to the local economy
and is expected to remain so over the coming 20 years.
The future for the local industry will be built on diversification, into broadening and
deepening its markets. Activities to attract business travellers with events and
conferences and increasing visitation from international visitors (with strong linkages into
the wine industry) are avenues Augusta-Margaret River should explore.
On a national level, tourism conditions are expected to recover (Tourism Research
Australia, 2011) as economies in Asia (particularly China and India) continue to expand
and eventual stabilisation the European economy and a return of the Australian dollar to
normal levels. The tourism industry will be a key driver of the Augusta-Margaret
River economy going forward.
13.4
Wine Market
Augusta-Margaret River is a renowned wine region of Australia. Wine manufacturing and
grape growing in Augusta-Margaret River employ 12% of the local labour force. As
outlined in section Error! Reference source not found., the local viticulture industry is
a prominent tourism attraction for the region as well as a primary contributor to the
national wine production market. Whilst there has been a global glut in the wine market
in recent years, the local wine industry has managed to outperform this trend due to its
position as a premium wine brand. Estimates from ABARES (2011) suggest that the
tonnage of grape production in the South West Australia region (including AugustaMargaret River) is expected to maintain steady growth over the coming years, despite
some greater volatility in the Australian market.
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62,000
15%
61,000
12%
60,000
8%
59,000
5%
58,000
2%
57,000
-2%
56,000
Annual Growth
Grape Production (t)
Figure 13.2: Grape Production, Estimates, 2010-2013
-5%
2009-10
2001-11
2011-12
2012-13
South West Premium
South West Total
South West Total Growth
Australia Total Growth
Source: ABARES (2011)
Forecasts (IBISWorld, 2011) estimate that employment in wine manufacturing,
nationally, will ease in excess of 10% over the coming five years but that total industry
value add will increase by 11% over the same time frame (reflecting prices). With
Margaret River’s strong existing premium brand, the wine industry will continue
to drive economic growth.
13.5
Internet
The internet has changed the way we live, work and play. The internet has changed how
we communicate with others, how we purchase goods and services and how we conduct
our business. The influences of the internet are expected to continue to infiltrate our
every-day lives into the future, providing greater amounts of information at faster
speeds. The internet has already enabled businesses to growth their product target
market exponentially. As highlighted in the table below (Table 13.1), the pace at which
the internet has infiltrated all aspects of our lives is tremendous. Accessing this
technology will be important for future economic growth.
Table 13.1: Technology Adoption Timelines Comparison
Technology/Application
Years to Reach
50 Million Users
Electricity
50
Telephone
50
Radio
38
Personal Computers
16
Televisions
13
Sony Walkmans
10
Video Cassette Recorders
10
Digital Cameras
9
eBay
6
DVD players
5
iPods
5
Internet
4
Skype
2
MySpace
1
Source: Pollen Strategy (2006)
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14. Economic Issues & Challenges
There are numerous issues and challenges that must be addressed in order achieve a
vibrant economy that supports the SuperTown initiative.
The identified impediments or gaps include:
14.1

Accessibility of the region (for both tourism and business) can be challenging.
Expansion of the Busselton Airport could assist and provide the ability to significantly
increase accessibility of the region, particularly for domestic and international
tourists.

Identifying viable markets for food products, including breaking into overseas export
markets will be important for the agriculture and food sectors in Margaret River.
While there are a number of possible food products in the region, products that can
achieve a premium price and guaranteed volumes are required, which will require
export markets and entering overseas markets can be expensive and time
consuming.

Community perception of development can often be negative and community spirit
can often negatively impact future development. While certain developments do not
align with the brand of Margaret River, some development is required to realise the
future aspirations of the SuperTown initiative and community acceptance of change
can be difficult.

Cost of living and housing affordability can be issues in Margaret River given the
nature of the location and the attraction for absentee home owners (holiday homes),
which can drive up prices for local residents, who often work in the tourism sector
and receive relatively low wages.

Seasonality of tourism and picking seasons, which causes an issue of providing year
round employment opportunities.

Creation of a society of ‘haves’ and ‘have nots’ based on the reliance on tourism,
which does not always offer long-term, high income employment, and the attraction
of the area to high net worth individuals. These contrasting groups could create a
community of people that can afford to live here and the people that service them.

Reliance on wine and tourism as core industries, which provides a future risk to a
down turn in each industry or both (as they are heavily linked).

Lack of high-speed internet connections, which can discourage many new residents
and businesses from moving to the area.

Lack of sufficient transport links, including a local airport that can handle RPT from
the East Coast and overseas as well as road infrastructure necessary to grow the
town and allow the easy access and transport of people and goods
Economic Reliance on Wine & Tourism
The Issue:
The Augusta-Margaret River economy is heavily reliant on the local wine industry and
tourism. Lack of economic diversification can lead to a lack of employment opportunities
for new and potential residents. It can also lead to greater volatility in the economic
cycle.
The Evidence:
The manufacturing and agriculture industries, which are dominated by wine, are both in
the top three industries (by value contribution to the economy) in the Augusta-Margaret
River LGA. Between them, they formed almost a fifth of the local economic activity in
2010-11. In 2006, over 12% of the local workforce was employed in either grape growing
or wine manufacturing.
Similarly, the local economy is heavily reliant on the tourism industry. In 2010-11, it was
estimated that almost 14% of the local workforce was employed in accommodation and
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food services, a significantly higher representation than in the broader SWDC region
(7.2%) and Western Australia (5.8%).
Figure 14.1: Location Quotients, 2006, 1-Digit ANZSIC
Agriculture, forestry and fishing
Accommodation and food services
Rental, hiring and real estate services
Manufacturing
Retail trade
Construction
Administrative and support services
Arts and recreation services
Education and training
Other services
Electricity, gas, water and waste services
Wholesale trade
Health care and social assistance
Public administration and safety
Professional, scientific and technical services
Transport, postal and warehousing
Financial and insurance services
Information media and telecommunications
Mining
Augusta-Margaret
River
SWDC
Perth SD
WA
0.0
1.0
2.0
3.0
4.0
Source: ABS (2007), AECgroup
Due to their natures, the wine industry and tourism industry are highly volatile. Both are
dependent, to a large extent, on consumer confidence and spending. The current trough
in the national tourism industry and persistent fears for a glut in the wine market
heighten the risks for the local economy from a lack of economic diversification. Building
on a region's unique competitive advantages is fundamental in supporting
sustainable economic growth, however, an overreliance on two industries of
high seasonality and extreme economic cycles is not ideal.
The Response:
Ensuring that economic development activities can provide a diversity of economic
activities. Proactive investment attraction and industry development can contribute
positively to diversifying the economy.
14.2
Employment Seasonality
The Issue:
Due to the town's reliance on wine and tourism as core industries, employment in
Margaret River can be extremely volatile. The risk is that seasonal employment hampers
wealth building in the town and can create numerous social issues.
The Evidence:
The local tourism activity peaks in the summer months with general declines in visitor
numbers in the June and September quarter. On average, since 2006, occupancy rates
are over 10 percentage points higher in the December and March quarters than the June
and September quarters. Similarly, the number of persons employed in accommodation
provision tends to be 12% higher in these peak periods (ABS, 2011d).
Fluctuations in activity and employment relating to viticulture and wine production also
have significant influences on the local economy and labour force, with the picking
season seeing large swings in employment.
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Seasonal employment can contribute to the lack of housing affordability in the region
(through the lack of constant incomes) and can negatively impact on the attractiveness
of a region for potential residents.
Figure 14.2: Quarterly Employment in Hotels, Motels and Serviced Apartments with 15 or
More Rooms, December 2006 – September 2011
Persons Employed (Quarter)
250
200
150
100
50
0
Augusta-Margaret River (S)
Source: ABS (2011d)
The Response:
Increasing economic diversity and investment attraction will recruit full-time positions
that provide year round employment and increase incomes. Ensuring effective education
and career pathways can assist in increasing incomes.
14.3
Cost of Living & Housing Affordability
The Issue:
As a lifestyle destination, Margaret River receives significant residential investment from
absentee owners, including holiday homes. In addition, the region has relatively low
average incomes due to its current economic structure. These factors have caused local
housing to be relatively unaffordable.
The Evidence:
In 2010-11, house prices in the Augusta-Margaret River LGA (with a median of
$430,000) were 34.1% higher than the average in SWDC and 14.7% higher than the
median for regional Western Australia, despite having fallen 10.4% over the preceding
four years. In terms of housing affordability, the average house price in Augusta
Margaret River equated to 8.4 times the average annual household income - far
exceeding the average of the SWDC (3.9 times) and Regional WA (5.5 times).
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Figure 14.3: Ratio of Median House Prices to Median Household Incomes, 2008/2009
9
8
Median Multiple
7
6
5
4
3
2
1
0
Augusta-Margaret River LGA
SWDC
Regional WA
Source: ABS (2011a), REIWA (2011) and AECgroup
Housing in affordability and mortgage and rental stress can have significant
impacts on the local society and economy. Economically, high house prices and
unaffordable housing can be a deterrent to potential new residents and can be the
impetus for existing local residents to leave the area. Rising mortgage stress and rental
stress can result in lower levels of local wealth and standard of living. A key risk is then
creating a community of ‘haves’ and ‘have nots’.
The Response:
Efforts need to be made to address the issue of housing affordability in the region.
Economic diversification and the provision of year-round employment opportunities are
likely to assist in increasing local income opportunities, reducing rates of mortgage stress
and increasing housing affordability. At the same time, ensuring adequate levels of
supply (and a diversity of supply) will help improve housing affordability.
14.4
High-Speed Internet
The Issue:
In today's modern world, internet connectivity is viewed as being essential by the
majority of Australians. Regions with a lack of high-speed internet may be less desirable
to potential new residents.
The Evidence:
In 2006, 43% of all households in the town of Margaret River had a broadband internet
connection (ABS, 2007). Whilst this is above the State average (of 41%), the speed of
connectivity remains an issue.
Currently, ADSL services are provided over the existing Telstra copper network, which
does not offer the same speed as a broadband connection over fibre optics. Speeds and
availability also vary with the existing 3G mobile network. Given that Telstra has a
current monopoly, there is no competition and incentive to invest in new infrastructure
and offer better services at lower costs.
In 2009-10, 90.1% of businesses had internet access and 40% had a web presence
(ABS, 2011). Ensuring that local businesses are well connected can lead to increased
productivity and increased access to larger markets, particularly for retailers. Ensuring
that existing and new businesses in Margaret River are adequately serviced will ensure
the region is able to attract a diverse range of economic activities. In particular, creative
industries and some businesses services require exceptional bandwidth in order to
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undertake their day-to-day work and activities. These businesses will only come to the
region if internet connectivity is assured.
The Response:
Ensuring the NBN is rolled out to the region as soon as possible will assist in unlocking
some of these economic opportunities. While the NBN will provide higher speeds over its
fibre network, the NBN also opens the market up to more competition, which will lower
costs and encourage further investment in infrastructure.
14.5
Accessibility & Transport Links
The Issue:
Accessibility and transport routes are fundamental to business and tourism. Direct access
to air, land and sea transport is essential for export oriented businesses. The Perth
International Airport is the closest major airport and the Port of Bunbury is the closest
export terminal with containers likely to be exported from Fremantle. This distance can
increase costs, particularly for exporters.
The Evidence:
In 2010, a regular survey of key corporate decision makers, including companies with
overseas investments, rated highway accessibility as the most important factor in their
site selection. Over 97% of all respondents cited this factor as a key issue when
considering an area for investment. Inbound/outbound shipping costs, proximity to
markets and accessibility of major airport were also mentioned (Area Development,
2011).
Margaret River’s location places additional costs on exporters, given the additional
distance that products must travel.
The Response:
Ensuring a high brand value in products will assist by translating to higher prices, which
can assist in the higher transportation expenses. Improving the transport linkages for
both bulk and containerised freight will also assist. The expansion of the Busselton airport
will also increase accessibility to the area both business and tourism.
14.6
Identifying Markets for Food Products
The Issue:
Building the local agriculture and food processing industries is required to build a more
sustainable economy. However, identifying new markets for these products can be time
consuming and difficult. In order to provide scale, sustainable export markets must be
found for local products (i.e. markets that are willing to pay a premium for the goods),
which will ensure future sustainable trade for businesses in Margaret River.
The Evidence:
Augusta-Margaret River has inherent opportunities in the agriculture and food
manufacturing sectors. As population growth continues, not just locally, but also
nationally and internationally, the region has an opportunity to become a part of the
global food solution. In particular, the Augusta-Margaret River area has an opportunity to
capitalise on its existing brand as a specialised wine region with the development of
specialised and niche food products, which attract a higher price.
Understanding the markets for these products is required to enable local businesses to
tap into new markets, domestically and internationally. Local markets are not of a
sufficient size to sustain growth in these areas. Accessing export markets can be an
expensive exercise, both in terms of financial cost and time.
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The Response:
Working with partners to identify and undertake research into key areas of interest will
be fundamental to the expansion of the local food products industry. Assisting local
businesses to access this information will assist in building the local economy and
supporting their business pursuits.
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15. Economic Development Plan
This chapter provides a detailed overview of the Economic Development Plan for
Augusta-Margaret River. An overview of the strategy is provided followed by a detailed
assessment of each step of the process.
15.1
Overview
The Economic Development Plan for Margaret River is outlined in Figure 15.1. The
plan is informed by the SuperTowns’ vision and the specific needs of Margaret River in
order to become a SuperTown.
The Economic Development Plan is enacted through a series of Strategic Initiatives
which include transformational projects which act as a catalyst for the town to achieve
the desired outcomes. Each of these transformational projects is closely linked with the
Economic Development Initiatives which will provide for the long-term economic
development of the Augusta-Margaret River Shire.
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Figure 15.1: Economic Development Plan Overview
SuperTowns Vision:
“To have balanced, well-connected regional communities, with lifestyle options and access to services – SuperTowns
will have affordable, quality housing and a growing and diverse range of job opportunities. They will offer more
choices for people living in regional areas and an attractive alternative to living in the metropolitan area ”
Economic Development Plan
What Does it Take to
Become a SuperTown?
•Diversify the economy.
Strategic Projects
1. Redevelopment of the Margaret River Townsite: Realignment of the
Perimeter Road, creation of a town square and revitalisation of the town
centre.
Outcomes
•Increased economic
prosperity.
•Improved economic capacity.
•Address growing social divide.
2. Surfers Point and Rivermouth: Regeneration and investment in this iconic
tourism precinct.
•Increased retention of
economic benefits in the local
region.
•Improve positioning on the
national and international
stage.
3. Margaret River Foreshores & Gloucester Park: Improvements to the
entry of the town, foreshore precincts and various community infrastructure.
•Increased opportunities.
4. Margaret River Cultural & Events Centre: Major upgrade to cultural and
events centre to facilitate larger business events.
•Improved sustainability.
•Increased service provision.
Economic Development Initiatives
1. Support Existing Business: Develop programs to proactively engage with
and assist the growth of local companies.
2. Market the Shire: Marketing the Shire as a dynamic and creative business
hub.
3. Attract and Facilitate New Investment: through pro-active business
attraction and support.
4. Develop the Local Workforce: Develop and attract new skills in the region.
Source: AECgroup
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15.2
Strategic Initiatives
The identified strategic projects will act as a catalyst for future activity and assist in addressing many of the key tasks that Augusta-Margaret
River must undertake for Margaret River to become a SuperTown (i.e. diversify the economy and improve positioning on the national and
international stage). Each of these projects individually and collectively will provide support for Augusta-Margaret River to transform its
economy, as highlighted in the diagram below.
Figure 15.2: Linkages of Strategic Projects
Critical Factors
Strategic Projects
Economic Opportunities
Agriculture and Growing
Redevelopment of Townsite
Food Processing
Economic Diversity
Surfers Point
Improving Brand Value
Creative Industries
Lifestyle Changes
Margaret River Foreshores & Gloucester Park
Tourism
Improving Social Divide
New Cultural and Events Centre
Health & Retirement
Education
Retail
Source: AECgroup
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Table 15.1: Strategic Project Overview, Augusta-Margaret River
Strategic
Project
Description
Strategic Importance
Relation to Long-term Economic Development
Re-Development
of the Margaret
River Townsite
Project includes:
 Realignment of the Perimeter
road
 Creation of a new town square
 Revitalisation of the town centre
This project will play a fundamental role in the future attraction of
residents and investment into the region. Improving the retail and
residential amenity of the town centre and creating a town square
which will serve as the heart of the city will assist in ensuring future
residents have a wide range of retail, food and amenity options in the
city centre. The redevelopment of the town will also have an
important impact on the brand ‘Margaret River’ as well as play a role
in increasing tourism. The realignment of the perimeter road will help
to streamline transport accessibility for industry (i.e. agriculture,
wine, food processing).
This project acts as a catalyst by increasing the
amenity of the town, which will assist in attracting
new residents as well as help to facilitate the
development of creative industries, business owners
making lifestyle changes as well as other
commercial/professional businesses.
Surfers Point
and Rivermouth
The $6 million upgrade to the Surfers
Point precinct will include:
 A new viewing deck
 Retaining walls and seating
 New toilet block and change
rooms
 Pathways
 Parking areas
 Community amenities
 Public artworks
 Interpretive signage
 Rehabilitation and protections
zones
This project will build upon an existing tourism attraction creating
greater amenity which will assist in improving the region's position on
the national and international stage. The project is likely to assist in
supporting existing tourism businesses which surround the region
through the attraction of greater numbers of visitors to the precinct.
The project, particularly when televised through the annual Pro Surf
Championships, will assist in marketing the region to potential
visitors, residents and businesses, resulting in increased business
attraction and skills development in the region.
This project acts as a catalyst to build greater brand
value for Margaret River. These upgrades will allow
for a wider broadcast of the annual Pro Surf
Championships and allow residents and visitors to
enjoy the precinct more. Building greater brand value
will assist in achieving the long-term vision of the
SuperTowns initiative.
Margaret River
Foreshores &
Gloucester Park
The project includes:
 Improvements to the entry of
Margaret River
 Improvements to the foreshores
 Community infrastructure
improvements
This project will assist in delivering required infrastructure to the
region to improve the liveability and tourism attractiveness. This will
assist in broadening the brand of the region as both a great place to
holiday and a great place to live. The new entry will assist in
supporting the Margaret River brand.
This project supports the long-term growth of
Margaret River through increasing and supporting its
brand.
Margaret River
Cultural &
Events Centre
This project includes a major
expansion of the Cultural and Events
Centre
The new Cultural and Events Centre will provide economic diversity
through providing infrastructure to facilitate business events and a
diversification of the tourism sector.
The new Cultural and Events Centre will provide
critical infrastructure to diversify the tourism industry
in Margaret River.
Source: AECgroup
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15.3
Economic Development Initiatives
15.3.1
Support Existing Business
Objective: To develop programs to proactively engage with and assist the growth of
local companies in Augusta-Margaret River.
Rationale: In most developed economies, existing businesses provide between 60%80% of new investment and jobs. Focusing on ways to assist local businesses,
particularly small and medium sized businesses, would allow these companies to grow
locally, employ more people and contribute successfully to the diversification of the
economy. Supporting local businesses is a key function of local government.
Key Initiatives: Key initiatives to support existing businesses include:
15.3.2

Engage regularly with existing businesses of all sizes in order to stay abreast of key
issues, industry trends, opportunities and needs. This interaction is a critical element
to deliver economic development and provides a strong basis on which to understand
the needs of business to facilitate and support growth. At their place of business, over
lunch or for coffee.

Work with local businesses to identify opportunities to broader regional, state or
Federal business support programs which may assist local businesses to expand and
diversify. Particular programs to assist businesses to export should be explored.

Hold regular events (i.e. breakfasts and lunches) with partners to act as a convener
of local businesses. Events can assist business networking and ensure that as much
business spending as possible stays in the region.
Market the Shire
Objective: To market the Margaret River area as a dynamic and creative business hub.
Rationale: Marketing and attracting investment into the Augusta-Margaret River will
assist in diversifying the economy and attracting new skills into the area. Marketing will
broaden knowledge of Augusta-Margaret River as a place to live and do business,
highlighting the area's key attributes and competitive advantages. Marketing should also
assist in building greater brand awareness and value. Marketing efforts should extend
beyond Australia.
Key Initiatives: Key initiatives to market Augusta-Margaret River include:
15.3.3

Develop and maintain a comprehensive suite of marketing materials which can be
used as tools to attract businesses and residents to the Margaret River. These tools
should highlight the benefits of living and working in the Margaret River and provide a
range of statistics which will inform readers of existing industries and opportunities in
the town. These tools should be focused on the economic opportunities highlighted
above, professionally presented and should be updated regularly to ensure their
accuracy. Tools should include brochures, websites and email newsletters.

Undertake, with partners, a range of marketing programs which will raise the profile
of the Margaret River as a destination for new business investment and residents.
These marketing programs are likely to include raising the profile of the region as an
investment destination in Perth, Sydney and Melbourne as well as overseas targets to
support export activities.
Attract & Facilitate New Investment
Objective: To attract new investment into Augusta-Margaret River through pro-active
business attraction and support.
Rationale: Attracting new investment into Augusta-Margaret River will be important to
diversify the economy away from its dependence on the viticulture, wine manufacturing
and tourism industries. Recruiting new businesses to establish in Margaret River will
provide investment into the community as well as new employment opportunities for
local workers and create year long employment opportunities. Increasing investment in
infrastructure will also play a fundamental role in the diversification of the local economy.
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Key Initiatives: Key initiatives to attract and facilitate new investment into Margaret
River include:


15.3.4
Develop and execute a proactive business development program. This program
should comprehensively outline all activities required to develop Augusta-Margaret
River, a should include:
o
Market research into identified industries of opportunity with an aim to identify
potential future investors in Augusta-Margaret River, existing and anticipated
market trends and locational requirements of these industries.
o
Business trips to Perth and other key centres to meet with selected potential new
investors.
Facilitate public sector investments in the Augusta-Margaret River (i.e. perimeter
road realignment and Cultural and Events Centre), through providing detailed
information and assistance to assist businesses that are considering investment in the
Margaret River.
Develop the Local Workforce
Objective: To develop the local workforce in order to meet the requirements of existing
and new industry in Augusta-Margaret River.
Rationale: In order to attract new business ventures into Augusta-Margaret River and to
ensure their ability to grow and prosper it is important that the local workforce is able to
be up-skilled to meet the needs and requirements of these new industries.
Key Initiatives: Key initiatives to develop the local workforce in the Margaret River
include:

Participate pro-actively in encouraging on-going interaction and discussions between
industry and education providers to facilitate long-term career pathways for local
residents.

Develop student accommodation to house students and work towards creating a
centre of excellence in hospitality and culinary arts (building on existing competency
in viticulture).

Indentify key gaps in the local skills supply and proactively seeking to attract new
residents who are able to fill these gaps.
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16. Implementation Plan
The following implementation plan has been established to carry out the Economic Development Plan and link together with the Margaret River
Growth Plan.
Table 16.1: Economic Development Implementation Plan, Margaret River
Economic
Development
Initiative
Support
Existing
Business
Scope
Recommended Actions
Shire
Appoint a Business
Development Officer to
spearhead the majority of
the marketing, brand
management and
investment attraction
activities.
Shire
Engage regularly with
existing businesses of all
sizes in order to stay
abreast of key issues,
industry trends,
opportunities and needs.
This interaction is a critical
element to deliver economic
development and provides a
strong basis on which to
understand the needs of
business to facilitate and
support growth.
Key Agency /
Lead
Responsibility
Timeframe for
Delivery
Funding
Source
Contingency
Funding
Population
Threshold
(where
relevant)
Estimated
Costs
Delivery
Mechanism
Key Agency
Consultation
Short
0-5
years
Medium
5-10
years
Long
1020
years
SoAMR / Margaret
River Marketing
Collective



$130,000
pa
Royalties
for
Regions
(ST)
SoAMR
NA
In house with
consultant
assistance as
required.
SWDC
RDL
Private Sector
SoAMR



$10,000
SoAMR
SWDC
NA
Implement
through the
Economic
Development
role.
SWDC
Chamber of
Commerce
105
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Economic
Development
Initiative
Scope
Recommended Actions
Shire
Work with local businesses
to identify opportunities to
broader regional, state or
Federal business support
programs which may assist
local businesses to expand
and diversify. Particular
programs to assist
businesses to export should
be explored.
Shire
Hold regular events (i.e.
breakfasts and lunches)
with partners to act as a
convener of local
businesses. Events can
assist business networking
and ensure that as much
business spending as
possible stays in the region.
Key Agency /
Lead
Responsibility
Timeframe for
Delivery
Funding
Source
Contingency
Funding
Population
Threshold
(where
relevant)
Estimated
Costs
Delivery
Mechanism
Key Agency
Consultation
Short
0-5
years
Medium
5-10
years
Long
1020
years
SoAMR



$20,000
SoAMR
SWDC
NA
Implement
through the
Economic
Development
role.
SWDC
Chamber of
Commerce
SoAMR / Chamber
of Commerce /
Augusta-Margaret
River Tourism
Association



$20,000
SoAMR
SWDC
NA
Implement
through the
Economic
Development
role.
SWDC
Chamber of
Commerce
Augusta
Margaret River
Tourism
Association
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Margaret River SuperTown Combined Report
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Economic
Development
Initiative
Market the
Shire
Scope
Recommended Actions
Shire
Develop and maintain a
comprehensive suite of
marketing materials which
can be used as tools to
attract businesses and
residents to Margaret River.
These tools should highlight
the benefits of living and
working in the Margaret
River and provide a range
of statistics which will
inform readers of existing
industries and opportunities
in the town. These tools
should be focused on the
economic opportunities
highlighted above,
professionally presented
and should be updated
regularly to ensure their
accuracy. Tools should
include brochures, websites
and email newsletters.
Shire
Undertake, with partners, a
range of marketing
programs which will raise
the profile of the Margaret
River as a destination for
new business investment
and residents. These
marketing programs are
likely to include raising the
profile of the region as an
investment destination in
Perth, Sydney and
Melbourne as well as
overseas targets to support
export activities.
Key Agency /
Lead
Responsibility
Funding
Source
Contingency
Funding
Population
Threshold
(where
relevant)
$45,000
SoAMR
SWDC
NA
Target
marketing to
new residents
and new and
existing
businesses to
invest in
Margaret
River.
SWDC
Chamber of
Commerce
Augusta
Margaret River
Tourist
Association
$100,000
Royalties
for
Regions
(ST)
SoAMR
SWDC
NA
Implement
Targeted
Marketing
program to
new residents
and
businesses.
SWDC
Timeframe for
Delivery
Short
0-5
years
Medium
5-10
years
Long
1020
years
SoAMR/ Chamber
of Commerce /
Augusta-Margaret
River Tourism
Association



SoAMR/ Chamber
of Commerce /
Augusta-Margaret
River Tourism
Association /
Margaret River
Marketing
Collective

Estimated
Costs
Delivery
Mechanism
Key Agency
Consultation
107
Margaret River SuperTown Combined Report
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Economic
Development
Initiative
Attract and
Facilitate New
Investment
Develop the
Local
Workforce
Key Agency /
Lead
Responsibility
Timeframe for
Delivery
Long
1020
years
Funding
Source
Contingency
Funding
Population
Threshold
(where
relevant)
Estimated
Costs
Delivery
Mechanism
Key Agency
Consultation
Scope
Recommended Actions
Shire
Develop and execute a
proactive business
development program to
ensure economic
diversification, investment,
and job growth. This
program should
comprehensively outline all
activities required to
develop Augusta-Margaret
River, including market
research to identify
prospective investors,
engaging with prospective
investors, and networking
with partners to identify
prospective investors and
facilitate investment.
SoAMR

$90,000
Royalties
for
Regions
(ST)
SoAMR
SWDC
NA
Implement
through the
Economic
Development
Plan.
SWDC
Chamber of
Commerce
Shire
Facilitate public sector
investments in the AugustaMargaret River (i.e.
perimeter road and Cultural
and Events Centre), through
providing detailed
information and assistance
to assist businesses that are
considering investment in
the Margaret River.
SoAMR

$20,000
SoAMR
SWDC
NA
Implement
through the
Economic
Development
role.
SWDC
Shire
Participate proactively in
encouraging on-going
interaction and discussions
between industry and
education providers to
facilitate long-term career
pathways for local
residents.
SoAMR / MREC /
Local Industry /
DET / Chamber of
Commerce

$10,000
SoAMR
DET
NA
Implement
through the
Economic
Development
role
SWDC
MREC
Chamber of
Commerce
DET
Short
0-5
years
Medium
5-10
years
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Margaret River SuperTown Combined Report
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Economic
Development
Initiative
Key Agency /
Lead
Responsibility
Timeframe for
Delivery
Long
1020
years
Funding
Source
Contingency
Funding
Population
Threshold
(where
relevant)
Estimated
Costs
Delivery
Mechanism
Key Agency
Consultation
Scope
Recommended Actions
Shire
Investigate options and
develop investor materials
for student accommodation
to house students and work
towards creating a centre of
excellence in hospitality and
culinary arts (building on
existing competency in
viticulture).
SoAMR / DET /
MREC

$35,000
SoAMR
DET
NA
Implement
through the
Economic
Development
role.
DET
MREC
Chamber of
Commerce
Shire
Identify key gaps in the
local skills supply and
proactively seek to attract
new residents who are able
to fill these gaps.
SoAMR

$20,000
SoAMR
SWDC
NA
Target
Marketing to
new residents.
SWDC
Chamber of
Commerce
Short
0-5
years
Medium
5-10
years
Source: AECgroup
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Margaret River SuperTown Combined Report
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Canberra
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November 2011.
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Areas, Australia, 2008-2009. Cat. No. 5673.0, ABS, Canberra. Australian Bureau
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Entries and Exits, June 2007 to June 2009. Cat. No. 8165.0, ABS, Canberra.
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Carlsen, J. (2004). A Review of Global Wine Tourism Research. Journal of Wine Research,
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Last
Curtin University (2011). Environment and Agriculture: Margaret River Education
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Margaret River SuperTown Combined Report
Final Draft
Appendix A: Modelling Approach
Projections of labour demand by industry for the Manjimup LGA have been developed
utilising projections of Gross Regional Product (GRP) based on expected real industry
growth rates, using 2010-11 as a base. In developing industry growth rates, industries
are classified into one of three categories:

Leading Economic Drivers (LEDs): LEDs are the industries that are either
expected to be a focus for economic growth in the region or that are drivers of growth
in other industries;

Population Driven (PDs): PDs are industries that are driven almost entirely by
population growth and consumption; and

Business Activity and Population Driven (BAPDs): BAPDs are industries that are
driven by some combination of activity in other sectors and household consumption.
The following types of information will be used to develop growth estimates for each
industry within the three types of industry categories:

LEDs: Expected real growth rates for LEDs have been developed based on a
combination of historic national growth and performance, industry consultation,
desktop research regarding growth potential for each LED in the Manjimup LGA from
published sources and the professional judgment of AECgroup staff;

PDs: Projections of population growth from Department of Health and Ageing,
Western Australian Planning Commission and the Supertowns population growth
targets for Manjimup LGA all have been used to identify low, medium and high
population growth rates for the Manjimup LGA. Industry growth rates for PDs have
then been developed based on the historic relationship between population growth in
Western Australia (ABS, 2011) and overall growth in Gross State Product (ABS,
2011g). This modelling approach supports the assumption that, as the Manjimup LGA
economy expands, it will trend towards the State economic structure; and

BAPDs: Expected real growth rates for BAPDs are developed based on a combination
of growth in demand from households (population) and business activity in other
sectors that demand goods and services from BAPDs. The relationship between
BAPDs, other industry and household demand has been estimated using an Input
Output table specifically developed for the Manjimup LGA (described below), and this
relationship has been applied to growth projections of industry and population to
develop individual BAPD industry growth rates.
Input-Output Transaction Table Development
An Input Output transaction table specific to the Manjimup LGA economy has been developed for
this project. The process of developing a regional transaction table involves the development of
regional estimates of gross production and the development of purchasing patterns based on a
parent table, in this case the 2007-08 Australian transaction table (ABS, 2011h).
Estimates of gross production (by industry) for the Manjimup LGA economy were developed based
on the percent contribution to employment (by place of work) of the Manjimup region to the
Australian economy (ABS, 2010a), and applied to Australian gross output identified in the 2007-08
Australian table. Industry purchasing patterns within the Manjimup LGA were then developed using
cross industry location quotients and demand-supply pool production functions, consistent with the
approach outlined in West (1993).
Employment projections by industry are developed based on GRP projections by industry
and historic estimates of value added production per employee from the transaction
tables developed specifically for the Manjimup LGA, with consideration of any potential
changes in productivity in line with historic multi-factor productivity growth (ABS,
2010b). The figure below summarises the modelling approach utilised to estimate
employment by occupation requirements in the Manjimup LGA to 2031.
Employment projections in key industrial sectors were then used to calculate industrial
land demand assuming a 20 employee per hectare standard, incorporating productivity
gains over time.
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Figure A.1: Manjimup LGA Economic Modelling Approach
Vision/ Industry
Growth Scenarios
Low Population
Growth
-Uses Department of
Health and Ageing
population estimates
over the forecast
horizon.
Medium Population
Growth
-Assumes the Manjimup
Town's populatoion
doubles by 2031 and
the remainder of the
LGA continues along
historical trends.
High Population
Growth
-Assumes the Manjimup
Town's populatoion
grows by 4.2%pa to
2031 and the remainder
of the LGA continues
along historical trends.
Economic Drivers
Leading Economic Drivers (LEDs)
Industries that are expected to be a focus for
economic growth in the region or that are
drivers of growth in other industries, e.g.:
-Agriculture
-Manufacturing
-Wholesale trade
-Transport, postal and warehousing
Business Activity & Population Driven
(BAPDs)
Industries that are driven by some combination
of activity in other sectors and population, e.g.:
-Electricity, gas, water and waste services
-Construction
-Financial and insurance services
-Professional, scientific and technical services
Population Driven (PDs)
Industries that are driven almost entirely by
population growth and consumption, e.g.:
-Retail trade
-Accommodation and food services
-Education and training
-Health care and social services
Outputs
Gross Regional Product
& Employment
Projections
Economic drivers and
growth expectations will
be used to develop gross
regional production
projections by industry
through to 2031.
Employment projections
can then be calculated
based on value added
activity per employee,
factoring in labour
productivity
improvements.
Industrial land demand
estimates were calculated
based on average
amployee per hectare
benchmarks in key
industries.
Population Growth Projections
Source: AECgroup
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Appendix B: Journey to Work Details
Table B. 1: Journey to Work Movements by LGA, Agriculture, Forestry and Fishing, 2006
LGAs
Bunbury
Augusta-Margaret River
Boyup Brook
Lives in Manjimup and
Works in...
Works in Manjimup
and Lives in...
Difference
15
0
-15
0
0
0
0
0
0
11
16
6
Busselton
0
8
8
Capel
0
0
0
Collie
0
0
0
Dardanup
0
0
0
Donnybrook-Balingup
0
0
0
Harvey
0
4
4
727
727
0
-11
Bridgetown-Greenbushes
Manjimup
Nannup
11
0
Other
42
25
-17
Total
806
781
-25
Source: ABS (2007), AECgroup
Table B. 2: Journey to Work Movements by LGA, Manufacturing, 2006
LGAs
Lives in Manjimup and
Works in...
Works in Manjimup
and Lives in...
Difference
Bunbury
6
0
-6
Augusta-Margaret River
4
0
-4
Boyup Brook
0
0
0
10
16
7
Busselton
0
0
0
Capel
0
0
0
Collie
0
0
0
Dardanup
0
0
0
Donnybrook-Balingup
0
0
0
Harvey
0
3
3
434
434
0
0
0
0
Bridgetown-Greenbushes
Manjimup
Nannup
Other
14
14
0
Total
467
467
0
Source: ABS (2007), AECgroup
Table B. 3: Journey to Work Movements by LGA, Construction, 2006
Works in Manjimup
and Lives in...
Difference
10
3
-7
Augusta-Margaret River
0
0
0
Boyup Brook
0
0
0
Bridgetown-Greenbushes
7
0
-7
Busselton
0
0
0
Capel
0
0
0
Collie
0
0
0
Dardanup
0
0
0
Donnybrook-Balingup
7
0
-7
0
0
0
132
132
0
LGAs
Bunbury
Harvey
Manjimup
Lives in Manjimup and
Works in...
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LGAs
Nannup
Lives in Manjimup and
Works in...
Works in Manjimup
and Lives in...
Difference
0
0
0
Other
39
3
-36
Total
196
138
-58
Source: ABS (2007), AECgroup
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Appendix C: Detailed Location Quotients
Figure C.1: Location Quotients, 2006, 1-Digit ANZSIC
Agriculture, forestry and fishing
Public administration and safety
Accommodation and food services
Education and training
Manufacturing
Retail trade
Rental, hiring and real estate services
Health care and social assistance
Transport, postal and warehousing
Wholesale trade
Other services
Administrative and support services
Arts and recreation services
Construction
Financial and insurance services
Electricity, gas, water and waste services
Professional, scientific and technical services
Information media and telecommunications
Mining
(6.2, 6.8)
Manjimup
Lockyer Valley
Gympie
Casino/Lismore
0.0
1.0
2.0
3.0
4.0
5.0
Source: ABS (2007), AECgroup
Figure C.2: Location Quotients, 2006, 2-Digit ANZSIC, Agriculture, Forestry and Fishing,
and Mining
Forestry and Logging
Aquaculture
Agriculture
Manjimup
Agriculture, Forestry and Fishing Support
Services
Lockyer Valley
Gympie
Non-Metallic Mineral Mining and Quarrying
Casino/Lismore
0.0
5.0
10.0
15.0
Source: ABS (2007), AECgroup
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Figure C.3: Location Quotients, 2006, 2-Digit ANZSIC, Manufacturing
(11.7)
Wood Product Manufacturing
Beverage and Tobacco Product…
Basic Chemical and Chemical Product…
Furniture and Other Manufacturing
Non-Metallic Mineral Product Manufacturing
Fabricated Metal Product Manufacturing
Machinery & Equipment Manufacturing
Food Product Manufacturing
Textile, Leather, Clothing and Footwear …
Primary Metal and Metal Product …
Manjimup
Printing (including the Reproduction of …
Transport Equipment Manufacturing
Lockyer Valley
Polymer Product and Rubber Product…
Gympie
Petroleum and Coal Product Manufacturing
Casino/Lismore
Pulp, Paper and Converted Paper Product …
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
Source: ABS (2007), AECgroup
Figure C.4: Location Quotients, 2006, 2-Digit ANZSIC, Business and Professional Services
Library and Other Information Services
Real Estate Services
Internet Service Providers, Web Search …
Building Cleaning, Pest Control and Other …
Rental and Hiring Services (except Real …
Administrative Services
Finance
Professional, Scientific and Technical …
Auxiliary Finance and Insurance Services
Telecommunications Services
Insurance and Superannuation Funds
Publishing (except Internet and Music …
Computer System Design and Related …
Internet Publishing and Broadcasting
Broadcasting (except Internet)
Motion Picture and Sound Recording …
0.0
Manjimup
Lockyer Valley
Gympie
Casino/Lismore
0.5
1.0
1.5
2.0
Note: Includes Professional Scientific Services, Financial and Insurance Services, Information Media and Telecommunications,
Administration and Support Services.
Source: ABS (2007), AECgroup
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Appendix D: GRP Methodology
This document briefly outlines AECgroup’s methodology for developing 2010-11 Gross
Regional Product (GRP) estimates for Manjimup.
Gross Domestic Product (GDP) and Gross State Product (GSP) figures are produced on a
regular basis and published by the Australian Bureau of Statistics and the relevant State
and Territory Government departments. However, regular official estimates of production
for sub-State regions do not exist (Gross Regional Product, GRP6).
The Australian Bureau of Statistics (ABS) use three approaches to calculate GDP / GSP
(Australian Bureau of Statistics, 2000):

Value added approach: represents the difference between taking the market value
of the goods and services produced by an industry (gross output) and deducting the
cost of goods and services used up by the industry in the productive process
(intermediate consumption);

Income approach: calculates the cost of producing GRP by summing the incomes
accruing from domestic production. These income components can be viewed as the
market costs of production consisting of the compensation of employees (wages,
salaries and supplements), provision for the consumption of fixed capital
(depreciation), net operating surplus, and net indirect taxes; and

Expenditure approach: sums all final expenditures (ignoring expenditure on
intermediate consumption) on goods and services, add on the contribution of exports
and deduct the value of imports. Final expenditures are known as final demand and
include final consumption expenditure by households, gross fixed capital expenditure
by producers (i.e. durable assets), investment stocks and exports to the rest of the
world.
Due to data limitations it is not possible to calculate GRP using the same approach as
national or State values. As such, a different approach is required that effectively
utilises national or State figures and attempts to apportion these estimates to the
constituent regions.
There are a number of different “top-down” approaches that can be employed to
disaggregate national or State estimates. AECgroup estimate GRP at factor cost using
an indirect, top-down approach to disaggregate official State GSP totals from the State
Accounts, utilising a number of data sources to apportion GSP to sub-regions.
AECgroup’s approach is discussed in further detail below.
All GRP estimates, regardless of the approach, will be subject to a combination of any
errors in the national/ State GSP estimates as well as those introduced by the
methodology and data limitations used to allocate GSP to the constituent regions.
To allocate a State’s GSP to its constituent regions, a number of data sources are used,
including State Accounts (ABS, 2010a), National Input-Output transaction tables (ABS,
2010b), the Census of Population and Housing (in particular employment by industry
estimates by place of work) (ABS, 2010c), the Australian Labour Force Survey (ABS,
2011) and Small Area Labour Market data (DEEWR, 2011).
Disaggregation is undertaken through the following process:

Transaction tables for each region and the State of interest were generated from the
2006-07 national Input-Output transaction table to develop preliminary gross
production estimates for each region. Estimates of gross production (by industry) in
the study areas were developed based on the percent contribution to employment (by
place of work) of the study areas to the Australian economy, and applied to
Australian gross output identified in the 2006-07 Australian table. This provides gross
6
GRP at factor cost is that part of the cost of producing the gross regional product which consists of gross
payments to factors of production (labour, land, capital and enterprise). It represents the value added by these
factors in the process of production and is equivalent to gross regional product less indirect taxes plus subsidies.
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value added and gross product estimates across 111 industries, which are then
aggregated to the 19 major ANZSIC categories plus ownership of dwellings.

2006-07 regional estimates developed from the transaction tables were equalized to
State Account estimates of gross value added production by industry for the
corresponding year (i.e., estimates were inflated/ deflated by an appropriate
multiplier to ensure that aggregating each region would equate to the State figure for
2006-07).

Preliminary growth rates for the State and Statistical Divisions to 2010-11 for each
industry were taken from the State Accounts figures (for the State) and regional
differences in growth in employment by industry as outlined in the Labour Force
Survey7 (for the SDs).

Preliminary growth estimates for each local government area of interest is generated
based on growth in employment estimates between 2006-07 and 2010-11 as outlined
in the Small Area Labour Market Data, with industry structure assumed to change
from 2006-07 to 2010-11 in line with estimated change in structure for the SD in
which it is located (i.e., if the SWDC region is estimated to have doubled its presence
of construction since 2006-07, then this factor was applied to the 2006-07 industry
contribution of construction to Manjimup).

All preliminary 2010-11 estimates were then equalized to the State Account estimates
of gross value added production by industry using an appropriate multiplier to ensure
that aggregating each region would equate to the State figure for 2010-11.
AECgroup’s methodology for estimating GRP is subject to the following key limitations:

The use of the transaction tables provides preliminary 2006-07 estimates across 111
industries which allows for a greater richness in industry composition (and differences
in value add by industry) than the traditional 19 sector approach. However, this
approach does assume that production functions for each of the 111 industries are
the same across all regions.

The relative difference between each regions’ value add per employee and that of the
State is assumed to remain relatively constant across regions and over time, which
may not be an accurate reflection of regional differences and changes in the actual
economy.

Annual employment counts in the Labour Force Survey and Small Area Labour Market
data are based on usual place of residence, not place of work, which can
misrepresent the actual level of employment in some regions and industries. To
overcome this issue to some degree, AECgroup apply growth rates in these data sets
only, rather than using these data sets to understand actual employment in each
region.
These limitations can act to artificially inflate (or deflate) a region’s or industry’s GRP
contributions. As such, the GRP estimates provided in this report should be used
with caution, and are intended as a guide to the level of economic activity and
growth in the region relative to other areas and the State.
7
A smoothing technique using a Henderson Moving Average is applied to the Labour Force Survey to remove some
of the volatility in this data series.
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