Energy and vibrancy of Hunter region to withstand carbon tax hit

Energy and vibrancy of Hunter region to withstand carbon tax hit.

Growth has prompted the NSW state government to ask Hunter councils to draft land-use blueprints. 

"THE closest Sydney people get to our region is when they fly over us on their way to Hong Kong." 

That comment by a shire council chief executive encapsulates how many in regional Australia feel about a nation in which most people, and most decisions, are based in the big cities.
Many regional areas have thriving economies and property markets at a time when media is telling us the nation is afflicted with stuttering markets, stalling economies and low confidence. I can present few better examples than the Hunter Valley region of NSW. People running businesses and real estate offices there must wonder whether they are living in another nation entirely.

Throughout this region, population growth, jobs creation, infrastructure development and business generally are all powering. I expect that to continue in a carbon-tax future, despite the scare campaign of the mining lobby and the federal opposition.

Towns such as Muswellbrook, Maitland and Singleton have strong property markets at a time when many city markets are flat, because of the strength of economic activity in the Hunter region.These are not mining towns but they are boosted by mining in a region where there are many coalmines and power stations -- and gas exploration is increasingly creating debate.

The rise of gas as an energy alternative is one reason I believe the Hunter will, over time, absorb the impacts of a carbon tax without taking a major economic hit.

Much of the state's energy is generated in this area (something that can't change quickly, despite fears about the carbon tax impact) and this is also a major region for wineries and horse studs -- which create a busy tourism industry. Hunter tourism is a $1.4 billion a year business and there are moves to expand Newcastle Airport (if planners can overcome the problems created by the airport's co-existence with the Williamtown RAAF base).

The Hunter Valley is also getting plenty of stimulus from the $1.4bn extension of the F3 to Branxton, creating the Hunter Expressway -- a project funded in the 2009 federal budget and now under construction.

Everything about this region seems to be moving forward. Its population has recorded the largest increases of any NSW region outside Sydney in recent years. Australian Bureau of Statistics figures show Muswellbrook is the Hunter's baby capital, with strong employment and a young population driving the growth rate. The Hunter region's fertility is higher than the state average.

Lake Macquarie's population has topped the 200,000 mark, making it one of the state's fastest-growing local government areas.ABS data shows that strong growth is happening also in Maitland (which topped 70,000 last year), Cessnock and Gloucester. Population growth is translating into high levels of new housing construction. The Housing Industry Association says the Hunter region is defying national trends on building approvals, showing steady increases while nationally approvals are falling.
The growth has prompted the state government to ask Hunter councils to urgently draft land-use blueprints. Newcastle, Lake Macquarie, Maitland, Cessnock and Wyong have been earmarked as priority councils. Part of the urgency arises from a desire to address concerns about land-use conflicts between coalmining, gas exploration and farming. Key mining areas Muswellbrook and Gloucester have already delivered local environment plans.

Many of these towns have appeal for property investors, but my favourite is Muswellbrook, a busy regional centre with multiple economic drivers, affordable housing and a strong future. Mining and power generation are important to Muswellbrook, but there are also winemaking, horse breeding, dairying and agriculture. There are two power stations, Liddell and Bayswater, south of the town, which employ more than 500 people. The power stations are owned and operated by Macquarie Generation, which produces 15 per cent of the electricity needed by eastern Australia from South Australia to north Queensland.

Macquarie Generation has state government support to build a new power station about 4km from the Bayswater plant, costing more than $2bn. Singleton is another town surrounded by mining operations and power stations. It also has market gardens, a large dairy and beef cattle industry, and an emerging mushroom industry. 


Branxton is wine country: it's a place of vineyards, wineries, resorts, B&Bs and restaurants.

Maitland is a town with wonderful heritage features, with a large number of historic buildings including the Old Maitland Gaol.

There are good prospects for property values to keep rising because of the number and scale of mining, energy and infrastructure projects in the region.

The Newcastle Herald reported recently: "The Hunter's economy is in the midst of a civil engineering boom with $2.6bn worth of work under way and more than $13bn in the planning stages. A shortage of trucks, operators and earthmoving equipment has brought interstate and Sydney-based firms flocking to the Hunter in an effort to secure work." Developments under way or proposed include expansion of facilities at Newcastle port, new mines, expansion of existing ones, gas plants and pipelines, new power stations, upgrades to rail links, the new Hunter Expressway and large-scale housing projects.

A national property analyst is forecasting house prices in the Hunter to steadily increase over the next three years. BIS Shrapnel expects median house prices to rise a further 18 per cent by 2014. My prediction is for growth higher than that.

It's impossible to predict with certainty the impact on the coalmining economy from the carbon tax policy announced on Sunday. Partly that's because the detail is still being analysed and partly because of the difficulty in separating political tactics from genuine concerns. The mining lobby's claims of mine closures and massive jobs losses have a low credibility rating because they've been caught out many times in the recent past with rhetoric that has been contradicted by their actions. The scare campaigns overlook the compensation packages, which appear generous.

Terry Ryder is the founder of hotspotting.com.au

ryder@hotspotting.com.au

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