Brotherhood of St Lawrence snap shot of youth unemployment - New England

Towards the end of March, the Brotherhood of St Lawrence released a national snap shot of youth unemployment.

More than 264,000 young people aged 15 to 24 are currently unemployed across the country, accounting for more than a third (36 per cent) of unemployed people in Australia. The latest ABS data show the unemployment rate of 15–24 year olds in the labour force is much  higher than the unemployment rate for all ages. The youth unemployment rate in January 2018 of 12.2 per cent was more than twice the overall rate of 5.5 per cent, and three times the rate of those aged 25 and over (4.1 per cent)  The rate of 12.2 per cent, however, has come off the recent peak of 2014, when the youth unemployment rate reached almost 14 per cent. Nevertheless, youth unemployment is still well above the levels before the 2008 global financial crisis (GFC).

A Regional Focus

The report maps youth unemployment trends, zeroing in on 12-month averages to identify 20 ‘hotspots’ that have the highest youth unemployment rates in Australia. Comparing their current youth unemployment rates with two years ago reveals that in all but one of those hotspot regions youth unemployment had worsened.

In five regions, all outside capital cities, unemployment among 15 to 24 year olds in the labour force exceeds 20 per cent. Youth unemployment is at its extreme – more than 65 per cent – in a thinly populated but vast tract of land in the Queensland outback, encompassing Cape York as well as the mining centres of Mount Isa and Weipa.

Conversely, in the 20 regions with the lowest youth unemployment rates in 2018, all but two
recorded lower rates today than two years ago. Fourteen of these 20 regions are in capital cities – Sydney, Melbourne, Brisbane, Perth and Darwin.

The differences in youth unemployment trends between the low and high unemployment regions highlight the disparities between local labour markets. Place matters. In responding to the challenge of youth unemployment, it is important to understand distinctive features of local labour markets and develop local approaches to foster economic development and job opportunities for young people.

New England Position 

Two New England regions were listed in the 20 worst hot spots. Coffs Harbour - Grafton came in at 6 with a youth unemployment rate of 19.8% in January 2018, up from 9.4%  in January 2106 or by 10.4 percentage points. The second region, New England Northwest was at 16 with an  unemployment rate of 16.6%, down from 17.8% in January 2016, giving an improvement of 1.2 percentage points.

As an aside, I struggle with the idea that Coffs and Grafton in some way form a region. It doesn't make a great deal of geographic sense.

None of the twenty best regions are to be found in New England.

Australian census 2016 - tracing New England's decline over time

The 2016 ABS (Australian Bureau of Statistics) census allows you to sort regionally. The results summarised in the following table provide a snapshot of New England's continued structural decline.

The regions selected cover the boundaries recommended by the Nicholas Royal Commission boundaries that were used in the 1967 plebiscite. They exclude some western areas that form parts of other statistical divisions.  .

To put the numbers in the table into historical perspective:

• In 1911, New England's population was about 429,000. In that year, the NSW population was 1,699,376 (New England 25.7%), Australia's population 4,573,786 (New England 9.37%). In 1911, the population of Queensland was 623,123, South Australia 419,392 and Western Australia 293,923. The initial new state boundaries excluded the Hunter. The Cohen Royal Commission (1924) estimated the population in that initial area at 359,000, so more than WA and a bit behind South Australia.
• By 1950 with decentralisation and separation agitation relaunching, the NSW population had increased to 3,242,057 with a significant proportion of that growth in Sydney. The Queensland population had increased to 1,205,418, South Australia to 722,843, WA to 572,649. I haven't calculated precise figures for New England, but it was something around 700,000. The area had declined as a proportion of the NSW population, had fallen significantly behind Queensland, but was still level pegging with South Australia and well ahead of WA.
• By 1961 when Operation Seventh State was launched leading up to the 1967 plebiscite, New South Wales' population had increased to 3,951,65, again with Sydney attracting the lion's share of the growth. The Queensland population had jumped to 1,540,251, South Australia to 979,351 and WA to 755,213. I can't find my reference with New England's population, but I think it was around 760,000. Further down as a proportion of NSW, now well behind South Australia in total, but still level pegging with Western Australia. 
• If we now track forward to the statistics shown in the table, you can see that New England's relative decline has continued. In 2011, its population of 1,371,776 was 6.38% of Australia's population, declining to 5.89% in 2016 even though the total population had increased to 1,425,728.. In 2011, its share of the NSW population had dropped to 19.83%, falling further to 19.06% in 2016. In 2016 South Australia, often considered something of an economic basket case, had a population of 1,676,653.   

In addition to these higher level changes, there have been major distributional changes. These are discussed following the table.  .

New England Comparative Population Statistics
2011					2016
	Population	% of Australia	% of NSW	% of New England	Population	% of Australia	% of NSW	% of New England	% increase over 2011
Australia	21,507,717				24,206,201				12.55
NSW	6,917,658	32.16	19.83		7,480,228	30.90	19.06		8.13
Greater Sydney	4,391,658	20.42	63.48		4,823,991	19.93	64.49		9.84
New England North West	182,559	0.85	2.64	13.31	185,787	0.77	2.48	13.03	1.77
Richmond Tweed	236,498	1.10	3.42	17.24	245,164	1.01	3.28	17.20	3.66
Coffs Harbour-Grafton	135,182	0.63	1.95	9.85	138,904	0.57	1.86	9.74	2.75
Mid North Coast	208,090	0.97	3.01	15.17	216,003	0.89	2.89	15.15	3.80
Hunter Valley exc Newcastle	251,865	1.17	3.64	18.36	269,688	1.11	3.61	18.92	7.08
Newcastle Lake Macquarie	357,562	1.66	5.17	26.07	370,182	1.53	4.95	25.96	3.53
Total New England	1,371,756	6.38	19.83		1,425,728	5.89	19.06		3.93

There have been important distributional changes within these aggregate figures over time. 

Up to the end of the seventies, the inland and coastal populations within New England outside the Hunter were broadly in balance. Then came the sea-change phenomenon which led to rapid growth in the coastal populations.To a degree, this growth was unstable and has now slowed because jobs did not follow the growth, leading to increased poverty. .

In 2011, the North Coast population reached 597,770, up slightly to 600,071 in 2016. Stagnation in the inland population meant that from rough balance, the New England North West population fell to 31.49% of the coastal population in 2011, down to 30.96% in 2016. 

The area was affected by fragmentation too from outside forces. The growth of Brisbane and the Gold Coast conurbation helped drive growth in the Richmond and especially the Tweed Rive Valleys. By 2016, the Richmond-Tweed population had grown to 245,164 or 17.2% of the New England population, roughly equaling the inland New England population including the Upper Hunter. 

In the south, two drive variables came into play. Sydney's growth extended into the Lower Hunter While Newcastle suffered from losses associated with the industrial restructuring of the 1990s including the closure of the BHP as well as Sydney blindness, its closeness to Sydney, its life style opportunities and the rise of coal mining and tourism all contributed to growth in Lake Macquarie, Newcastle and the Llower Hunter. The growth was lower than Sydney's, but high enough to increase the Hunter and especially the Lower Hunter's share of the New England population. 

In 1911, the population of Newcastle and the main nearby towns including Maitland and Cessnock was 71,000 or 16.5%  of New England's population.   In 2016, Newcastle and Lake Macquarie on their own totaled 25.96% of the New England population. The Hunter Valley as a whole totaled 44.88% of the New England population. 

The second southern driver, one not recognised because of border myopia, was the rise of Canberra.

In 1961, the ACT's population was just 76,000, although it had begun to grow rapidly. The population of the ACT plus what is now called the Capital Region, those areas most within Canberra's economic sphere of influence, was less than the inland New England population. In 2016, the ACT's population reached 403,468 with a further 224,288 living the Capital Region for a total population of 627,756. 

The effects have been quite profound, for it has shifted the economic center of gravity south. Lacking any major centre of economic gravity, New England has fragmented, drawn in multiple directions north and south with very little present control over its future.               

North West Electricity - Sydney's 1955 electricity heist revisited

On 23 August 2017 under the headline Inverell’s light bulb moment, the Inverell Times carried a piece remembering the North West County Council, the organisation that used to provide electricity to the North West.

 In 1995, after 50 years of electricity generation and distribution, the NWCC, trading as North West Electricity, and its $9m reserves were taken over by the state government. It became a larger organisation called Northpower, administered from Port Macquarie.

On 1 January 2001, Northpower was merged with the two other country electricity retailers (Great Southern Energy, Advance Energy)  formed after the forced acquisition and closure of all the electricity county councils. On 15 December 2010, the then Treasurer in the NSW Labor Government, Eric Roozendaal, announced that the retail division of Country Energy (including the Country Energy  brand) was to be sold to Origin Energy as part of a A$3.25 billion deal. As part of the sale of the retail business the electricity distribution division was separated from Country Energy and re-branded as Essential Energy on 1 March 2011

The original asset heist was justified on the grounds that these were state owned assets; that the Country Councils were not yielding a proper return from those assets; that while profitable, the Country Councils were too small to be viable in the new emerging national electricity market; and that the takeover would benefit consumers by lowering prices.  

The takeover came with costs to the North West. It lost the reserves built up from trading profits, as well as the contributions the NWCC had been making to local activities. The Ashford power station that had been locally funded was decommissioned, while both head office and support jobs were lost. Sadly, the expected benefits never eventuated. Sydney took the reserves, borrowed against the assets and then finally collected the money from the partial privatization. Little if any of that money came back into the North West, while there is no evidence that I know of to suggest that consumers benefited. If anything, the reverse seems to have been the case.

Back in 2010 in Sydney's 1995 electricity heist, I provided details of the policy and political background to the changes. Seven years' later with current problems in the energy marketplace, the changes seem even more suspect.  

Problems with ATMs

I see from the Moree Champion that Moree's Balo shopping centre has lost its only ATM. The National Australia Bank decided not to renew its lease on the spot.

Given the size of the shopping centre, the decision is a little surprising. One side effect has been a big increase in people asking for cash out from Coles to the point that Coles is no longer giving cash out from the cigarette counter as too many people were taking time away from customers who were buying something from the store.

The decline in ATMs is the latest in a series of changes that tend to affect country areas more than the city, although there are city problems too. We have seen how bank closures carried out in the name of efficiency and cost savings adversely affected country regions in particular. The spread of ATMs represented a partial compensation, giving country people continued access to cash. Now the spread of new payment mechanisms with consequent decline in use of cash is leading to a decline in ATMs.

This trend is already creating its own problems Again, the country is likely to be most affected. There are more older people, cash usage is higher, while fewer shops have the new payments mechanisms or provide them for free. .

Newcastle news - Knight's sponsorship, Muswellbrook coal mine extension universally approved, Pacific National job losses

Health fund nib is to be the Newcastle Knight's major sponsor for the next three years in a deal worth around $1 million a year.

Meantime, it is not clear just how the sale process for the club is going. After the financial collapse of Nathan Tinkler, the club was taken over by the National Rugby League (NRL).

The NRL launched the sale process two months ago, appointing Tony Garrett, the head of mergers and acquisitions at Deloitte Australia, to broker a transaction they hope will be completed by Christmas. Since then, all parties have been bound by confidentiality agreements, so whatever progress has been made behind closed doors appears a closely guarded secret.

In another Newcastle Herald story, it appears that Muswellbrook Shire Council has given the shire’s oldest mine a green light to finish what it started more than a century ago.At an extra ordinary meeting on Wednesday evening, councillors unanimously approved a Muswellbrook Coal Company development application to continue mining until mid-2022. Muswellbrook Coal senior operations manager Grant Clouten said there was three years of resource remaining at the site, and the company was doing the right thing by the community to continue its work. The motion was supported by CFMEU Northern Mining and NSW Energy District vice president Jeff Drayton who addressed council, and a full public gallery, presenting reasons why the expansion should be approved.

On a less positive note, Pacific National is reported as cutting another 121 jobs. Union organiser Steve Wright said 32 drivers’ positions were going from Port Waratah, with eight from Greta, 12 from Gunnedah, nine from Narrabri and 23 from Port Kembla. The company was also moving all of its “live run” planning and rostering positions to North Sydney, costing another 24 jobs at Port Waratah, nine at Greta and five in the Illawarra. Coal has always been a cyclical industry, so the losses are not surprising.  .

Nathan Tinkler's Dartbrook coal play

I hope that you had a happy and peaceful Christmas.

The proposed sale of the mothballed Dartbrook coal mine Anglo American plc to the Nathan Tinkler controlled Australia Pacific Coal (Stock Exchange ticker AQC) for a price of up to $A50 million (here, here, here) has been greeted with a degree of incredulity and indeed anger in some quarters.

Under the terms of the deal, AQC will acquire:

• Anglo American's 83.33% interest in the Dartbrook JV
• a 100% interest in Anglo Coal (Dartbrook Management) Pty Ltd, manager of the Dartbrook JV 
• a 83.33% interest in Dartbrook Coal (Sales) Pty Ltd, marketing agent of the Dartbrook JV (

The consideration for the acquisition includes:

• a A$25 million cash payment
• a royalty over AQC’s share of coal from the Dartbrook joint venture at a rate of A$3.00 per tonne of coal sold or otherwise disposed of and A$0.25 per tonne of any third party coal processed through the Dartbrook infrastructure, but capped at A$25 million (subject to escalation in accordance with CPI). 
• in addition, the Company will be replacing approximately A$7.7 million in financial assurances in respect of the Dartbrook mining tenements.

You can see what Mr Tinkler is trying to achieve. Anglo American is in a degree of trouble world wide, and is seeking to slash 85,000 jobs. Dartbrook is on a care and maintenance basis, is quite surplus to requirements, while coal prices are very low. It wants out. From Mr Tinkler's perspective, the mining and transport infrastructure is there, while the coal is high quality thermal coal that can be extracted more cheaply if the present underground mine is replaced by an open cut. His aim is a low cost coal mine that will be profitable once coal prices recover somewhat, highly profitable is if coal prices increase significantly, creating either an asset for sale or a cash flow that can be used to support other projects. He is, in fact, trying to replicate the process that gave him his original fortune.

I am not privy to the numbers, but they could well stack up in commercial terms. However, the AQC statement to the Exchange seems remarkably sanguine on two points: the first the likelihood of community support, the second the expectation that environmental approvals will be relatively easy to obtain given nearby mines. Every Hunter Valley coal proposal now meets fierce environmental opposition, while too many people are owed money from Mr Tinkler's previous ventures to provide a basis of trust. Even the unions which normally support mining ventures because of the jobs provided are extremely cautious because of Mr Tinkler's involvement. .    

Newcastle real estate booms, Upper Hunter prices drop

This chart comes from the Newcastle Herald. Brief comments follow the graphic.  

The story reports that the median house price in Newcastle have grown faster than in every Australian capital city over the past five years. It also reports that house prices in Upper Hunter coal dependent towns have collapsed.

Have a look at the story. What do you think? Surely the results are not surprising. 

The need for a New England investment bank

It doesn’t take rocket science to know why localities and regions decline. You just have to look at patterns.

In a post on my personal blog I asked: Monday Forum - why is there an investment strike? Here My focus was national, global, macro, but you can see the effect at local level.

Over the second half of the twentieth century, the number of locally or regionally owned businesses declined across Northern NSW. This broke the nexus between local savings and investment. Previously, local savings moved to local investment via the channel created by local businesses. Those businesses no longer exist. Local profits accrue to externally controlled enterprises. Local personal savings and especially superannuation go to external entities that cannot afford to focus locally.

Obviously, I am generalising, but I think that it’s a pretty fair summary. So what do we do about it? One option would be the creation of a New England investment bank to create a new channel. This is a far from perfect idea, but it might be a start.

What do you think?  

Competition heats up for Port of Newcastle

An article in today's Financial Review, I can't give you a link because it is behind the firewall, suggests that competition for a 99 year lease over the Port of Newcastle is hotting up, with a likely winning bid of close to $700 million. There has been very little apparent opposition in Newcastle to the sale, in part because this is one case where Sydney has indicated that a reasonable proportion of funds from the sale will be reinvested in Newcastle.

Postscript

It appears that I was a little too sanguine on this one. Regular commenter Greg wrote:

Actually Jim, there has been a fair amount of opposition in Newcastle. The port of Newcastle is substantially different to both Port Botany and Port Kembla in that the government would not be selling a business so much as a) a tax stream (ie. charges for use of the port facilities) and b) an awful lot of prime harbourside land which will severely restrict what can be done on and around the harbour for the next century. In particular, a container terminal was promised for the port a decade ago. That would have been logical to service the north of the state and help relieve congestion around Port Botany. This government has canned that and it is likely that the sale of the port will see hopes fade of a container terminal ever being built in Newcastle.

There is also resentment that the money for infrastructure in Newcastle is tied in to the port sale, yet the dollar figure is set in stone. If the port gets sold for closer to say $1bn (highly likely), Newcastle won't see a zac more than that already promised from the sale. The state has made that absolutely clear. I don't think that there are too many people who believe that it is a good deal for Newcastle. The sale of the port will benefit Sydney more than it does Newcastle.

I can see Greg's point. What do you think?

Aborigines, Greens and coal seam gas

I have referred before to the gas wars raging across New England.

Over two years ago, the NSW Aboriginal Land Council (NSWALC), the peak body representing Aboriginal land councils in NSW, decided to become involved in resources exploration as a way of generating long term income and job opportunities for Aboriginal people. As part of its plans, NSWALC has applied for prospecting and exploration permits that, if granted, would make it the largest holder of coal seam gas exploration acreage in NSW.

According to a story in today's Australian Financial Review by Angela Macdonald-Smith (Aboriginal council takes on greens, farmers over gas), NSWALC CEO Geoff Scott has come out with a swinging attack on the green movement for refusing to negotiate in good faith. He also accused the Lock the Gate Alliance led by Drew Hutton and other anti coal seam gas groups of ignoring the Aboriginal community's need for economic development.

:Hutton was out there saying that we should be noble and grow vegetables"  Mr Scott said. "Thanks for your advice! Its not noble having people whose sewerage systems don't work. It's not noble having people live on the dole all their life".

"We want something better and we don't want to rely on government. That's not sustainable. It's benevolence."  Mr Scott went on to attack the O'Farrell government's restrictions on coals seam gas development for driving up costs without improving protection of the environment.

The Greens were not impressed. Dawn Walker, the Green's spokesperson for the Tweed Valley region, said that its opposition was to coal seam gas in general and who owned the license was irrelevant. "The Greens have a no-CSG policy. We don't believe that it is a safe industry. It is not a suitable industry for Australia."

Clearly, the twain will never meet in this case.

Postscript

For those like me who get confused about aspects of the coal seam gas debate, Rod Holland had quite a useful post on his Northern Rivers Geology blog, Being tight with loose terminology?. Rod has promised to write more explanatory material.

Metgasco suspends Northern Rivers coal seam gas development

The Northern Star (Lismore) carried a report today  of a press conference held in Metgasco's Casino office by managing director Peter Henderson to explain why the company was immediately suspending caol seam gas operations in the Northern Rivers. Fifteen Casino based employees will lose their jobs as a consequence.

According to Metgasco's Henderson, the uncertain regulatory environment aws the key cause.

Mr Henderson said the primary reason for the immediate suspension was the NSW Government's residential 2km CSG-free buffer zone announced three weeks ago, which remained unclear in its definition of a residential area.

He also blamed the previous 18-month statewide moratorium on the industry and what he said were increasingly lengthy delays in approvals for continued exploration.

"We don't think we'll have sensible stable policy in place until the end of the year after the Federal election, and to go through spending shareholders' funds on that basis would be just wasteful," Mr Henderson said.

Coal seam gas exploration and development has generated considerable community opposition in both the Northern Rivers and on the Liverpool Plains on the other side of the Tablelands. You will get a fair feel of some of the opposing views from the Green blog, North Coast Voices.

New England Business News - February 2013 1

A brief round-up this evening of some of the economic and business news affecting New England.

One of the problems of not having our own state is that the statistical data required for proper analysis is either not available or available only at considerable effort. Over on the Conversation, they have been running a series on the future of Tasmania. New England is a damn sight bigger, but we lack visibility as well as statistics.

Back in November 2012, I made brief reference to the financial troubles faced by Nathan Tinkler. Somehow and somewhat to my surprise, he has continued to survive, buying time here and there. Now (here and here), he has settled a few more matters, including the debt to the Australian Tax Office on the Newcastle Knights Rugby League team; a tax debt on the Newcastle Jets is still subject to action.

The Knights have just begun a visit to Tamworth: The Northern Daily Leader reported yesterday: " The start of four days of “footy fever” rolled into Tamworth late yesterday when the blue and red cavalry arrived ahead of their pre-season National Rugby League match between the Newcastle Knights and the Cronulla Sharks". No doubt the Jets are hoping for a similar tax reprieve, as will be the Northern NSW State Football Federation.

Mr Tinkler's financial survival depends heavily upon Whitehaven Coal. His shares in that company were worth  $1.1 billion last April, dropped to $539 million in November (ouch!) and are now worth $630 million. Even with moderate gearing, and Mr Tinkler's gearing was more than moderate, that size decline in market values will create real pain.

Still Mr Tinkler did have some apparent good news during the week, with Federal Environment Minister Tony Bourke giving environmental approval Mr Burke has given the green light to Whitehaven's Maules Creek mine and the nearby Boggabri extension in the Leard Forest (both on the Liverpool Plains), as well as the AGL Gloucester coal seam gas development. I say apparent, because if Mr Bourke is to be believed the conditions imposed are so onerous that none may proceed. Whitehaven's press release on the matter can be found here.

I have written before about the environmental wars that have been raging across New England. The politics of all this are remarkably complex, too complex for a short economic round-up since it plays out at local, state and national levels. For the moment, I just note that the continuing disputes mean some suppression of mining investment below the levels that might otherwise have occurred.

On another matter, in a Financial Review story, Fonterra Board member Ralph Norris has bluntly told dairy farmers concerned about the impact on their viability of the supermarket milk wars to get over it. I can't give you the link because its behind the pay wall.

New Zealand based Fonterra is the world's largest exporter of dairy products. You have too much tied up in domestic white milk sales, dairy farmers were told. In response, Australian Diary Farmer's president Noel Campbell commented that dairy farmers in Queensland, Western Australia and Northern NSW have higher costs of production which makes them less competitive exporters. They also lack processing infrastructure to convert drinking milk into milk powders. He might have added, too, they they have been less active in moving into the higher value end of the market.

The still independent Norco cooperative dominates the Northern New England industry from its headquarters in Lismore. In the South, the Huinter Valley's traditional Oak brand is now owned by Pamalat.  In writing, I have spotted a gap in my historical knowledge because I don't know the story of Dairy Farmer's acquisition of Oak and the subsequent on-sale.

In another economics story with political overtones, the Armidale Express reports that Armidale's largest industrial estate cannot access the new National Broadband Network without paying hefty connection fees. Armidale may be a test roll out site, but the estate falls outside the connection rules laid down by the Federal Government. New England Federal MP was not impressed. I quote:      

NBN advocate and Member for New England Tony Windsor said he had spoken to Communications Minister Stephen Conroy and NBN Co about the issue.

“I reiterated to the minister that most industrial estates in regional communities would be found on the outskirts of town and that they should be recognised as economic drivers for the community, thereby supporting the case to include them in the fibre  out footprint,” he said.

The problem in this case appears to be that the those involved will actually be disadvantaged by the changes, expected to rely on inadequate wireless connections in place of their existing connections. If my interpretation is correct, that would appear to be very silly.

Finally, Irish billionaire Dennis O'Brien's coup against the exiting Board and management of APN News & Media has been successful. I wonder what that means for APN's papers.

As I said. A brief report. 

Postscript

Before leaving this post behind, I wanted to make a brief response to some comments from Scott. In doing so, my intent is to spell out questions in my own mind, to clarify my own thinking.

The genesis of the discussion lay in my brief comment above on the NBN roll-out. This drew from this story in the Armidale Express. The crux of the story is that businesses in the Acacia Park industrial estate have been told that they cannot have NBN connection unless they pay a $225,000 connection fee. Acacia Park businesses claim to contribute 12% of the local economy. Two of the twenty or so businesses are locally headquartered if small international operations.

Now this story pulled me up. I had thought that one key argument for the NBN lay in the way it opened new economic development opportunities for county businesses. Now I find that those businesses have to pay for connection; the Federally mandated roll-out guidelines centre on residential customers. Let me be blunt here. In local terms, the primary effect of improved communications has been the delivery of an increased proportion of local markets to external suppliers. One part of this has been the closure of local service facilities. If country areas are to benefit in a longer term sense, that benefit will come if and only if local businesses can use the communications technology to grow their own activities. That is why the story surprised me, for it said that another cost impediment had been created for country businesses.

I was surprised for another reason too. I would have thought in business terms, it made sense to connect potential higher traffic areas to the NBN because that improved base load operations.

The Acacia park businesses complained about another issue too, the way they might be forced to wireless technology. Here Scott wrote:

I don't believe wireless NBN connections will be inadequate. While maybe not as good as the fiber NBN, it will still be streets ahead of anything available now. The decisions as to what areas get fiber access is based on common sense economic calculations to deliver value for money both in the construction and the ongoing service.

Now this is what worried me as well. Leaving aside the economic rationality of current NBN guidelines, if the the practical effect is to force businesses onto a less efficient delivery system, those businesses will suffer.  There are two very different issues here: one is cost, the second reliability. An internet based business really relies on reliability.

Let me illustrate by example. Just at the moment, I'm working off site. Our business systems are based on a cloud environment. Over the last week, problems with service delivery have been acute. On one day, more than seventy per cent of staff lost the ability to work productively. Our IT people don't actually know what the problem is yet. They have been working with suppliers to find a longer term solution while working on a shorter term fix.

Now think of the Acacia Park businesses. To grow international operations, even to service local customers, they need reliability. If they move to a cloud environment, if they base their phone systems on the internet, if they want to offer national or global 24/7 service support, they must have a reliable system that has the delivery capacities they need. They also have to have a scalable service, one that can manage data spikes and high traffic volumes and that can grow with them.

Can wireless manage this? My impression is not, although I stand to be corrected. My own connection at the moment is ADSL plus wireless. Down times are frequent.

Now some would say that if country businesses want fibre they should pay for it. My problem is that this defeats a central purpose of the exercise.      

In my discussion, there are two very different issues. One is technical, factual: what are the performance capacities of different systems? The second is economic: what do those capacities and associated costs mean in terms of economic and business development? I don't know. Maybe you can help?

Postscript 2

IT News had a very interesting article, NBN Co fudges numbers to expand rollout, dealing with problems in the NBN roll-out, including what appears to be a case of robbing Peter to pay Paul.

UNE's trimesters hit Armidale economy

It's not on-line, at least at this point, but the Armidale Express is reporting that UNE's new trimester system has hit the local economy hard.

The system allows students to do an extra semester between November and February, a time when the University was previously in recess. It sounds good, but there is a problem.

To accommodate the system, the end date of the previous semester has been shortened by three weeks, finishing end October. Because offerings in the new trimester are on-line, residential students have been leaving Armidale earlier than previously, hitting local businesses. 

Back in Armidale earlier this month, I noticed how quiet the University campus and city centre were, but didn't properly realise the cause.

Judith Ross Smith is leading a campaign to revitalise the Armidale CBD. For those who are interested, you will find the Facebook public group page here. 

Postscript

Siobhan McCarthy's Armidale Express story - Cafes reel over UNE trimester - is now on-line.

In a comment here, Rod wrote:

I don't like the idea of shortening semesters to create trimesters. A similar thing happened to my closest university (SCU) about three years ago. I remember how the students struggled to do the units adequately within a shortened time frame. Eventually the units had content cut or more units were created (of course the number of units needed to complete a degree didn't decrease) and the result is... graduates with less knowledge than before. That is without considering the issues associated with a local economy relying on tertiary education.

Rod, this was something I wondered about. I didn't have time on my last trip to Armidale to properly suss out the on-ground position. You have to talk to a number of coal-face people to get a proper picture. The comments I did get were negative along three lines: some to the supporting systems hadn't been properly worked out; student's weren't dumb - they knew when they were being short-changed; finally, the additional load on staff.

According to a comment on the Express story from one student studying in residence, not all the courses are on-line delivered. When I get time, I will try to properly establish just what courses are offered, how, over what real period and with what content. That will make a standards judgement easier to make.

I won't repeat the Express comments in detail, but I wanted to pick up a couple of themes.

First, the UNE heavies have in fact ignored concerns raised by students and by the residential system. There was on-campus consultation, but Professor Barber's very focused support on one primary solution has raised concerns among alumni. That is, its not consultation but direction and persuasion. I covered this a little in Saturday Morning Musings - UNE alumni dinner.

If you look at my report, you will see how Professor Barber's initial and very enthusiastic for on-line as a low cost profitable delivery device that would allow UNE to compete in the new world actually got quite a frosty response. He was telling the wrong story to an audience scarred by previous university mistakes. UNE might become successful in commercial terms or as measured in Canberra, but what was the point if the UNE experience was lost, if it became just another on-line delivery vehicle. Professor Barber then changed track. I quote from my story: 

"Now I heard Jim Barber start by talking about the university as a business, about the on-line revolution, about the need to deliver a low cost product. UNE, he seemed to be saying, had to survive by delivering a mass, cheap, on-line product. There was not a single word in the first five minutes of business/CEO speak that explained to me why I should continue to support UNE.

From my question, the flood gates opened. It wasn't harsh questioning. It was persistent questioning. Under that questioning, VC Barber gradually gave us reasons for encouragement.

UNE was not going to become, as it first seemed, a low cost provider of mass on-line education. In fact, UNE had chosen to stay smallish. UNE was not going to become just an on-line institution, something that worried many alumni. In fact, UNE was going to use revenue from on-line delivery to cross-subsidise the redevelopment of the University's unique residential model.

And yet, all this had to be dragged out through questioning. Even then, there was no real recognition of the University's history, of what in management speak might be called its unique selling points.

If you now look at the Express story, and I quote:

Ms Woodbury (pro-vice chancellor) said that given the positive student response, the university anticipates that in the coming years there would be more on campus study options as well as seeking alternative uses for the campus over the summer months.

“As the student interest in trimester three grows the university would look to see more on campus and residential schools take place over this period,” she said.

“The university is looking to have a better use of the summer period with a wider range of options with more school and sporting groups and conferences.

“This is a long term plan and I think it is good news for Armidale.”

On the surface, and if you consider Professor Barber's presentation, the University would have appeared to have delivered the first arm, on-line delivery, without the second, ways of managing the impact of change to enhance other aspects of the UNE experience. All the positives are possibles, long term things.

Normally when you introduce a major change, you do two things. You model the impacts on other parts of the system and you do a risk analysis. Now that may have been done, but I have the strong impression that University management was so focused on selling the new approach, on trying to make it work, that they may not have looked at broader issues. As I said, that is an impression.

Turning to another matter raised in the comments, I quote Jack:

So, if trimesters are here to stay, and retail is suffering because of it... what is the solution?

Here is a hot tip, when the students come back, make sure you let them know how valued they are.

Next hot tip; Armidale had better start looking at other ways to turn a buck. Shutting down for all of january - really? That's a business plan nowadays?

As a former Chair of Tourism Armidale, I can tell you that the city is very bad at promoting itself. One of our problems at the time lay in our inability to get people to recognise that it needed too. Part of the problem, too, was the purely domestic focus of many local businesses including those servicing tourists.

Later, I hammered away at somewhat similar themes in my Belshaw World columns. I traced the rise of Armidale inwardness and indeed that of UNE back to the university expansion of the 1970s. Then official NSW projections saw Armidale's population passing that of Tamworth by the turn of the century. Everybody talked about growth. Many were concerned to restrict it to preserve the city's life style.

I talked about the near-death experience that the city and university faced in the 1990s. I argued that Armidale now could not assume that the University would be there in future; other options had to be found. I pointed to the dramatic decline in the name recognition attached to the city and what that meant for the future; and I argued that in promotional terms the city's approach was narrow, unimaginative, unstable, using only a tiny proportion of the sizzle that could sell the city. I also suggested that the university actually suffered from similar problems. Both had become parochial and inward looking.

Was I right? Am I right? I don't know. I do feel that both UNE and the city itself need a reality check plus a large dose of applied imagination.

Tinkler's Troubles

Nathan Tinkler has been struggling to meet his debts for some time, fighting a series of delaying battles. In one case, time has run out with one company, Mulsanne Resources, placed in the hands of liquidators Ferrier Hodgson (and here).

Postscript

The Newcastle Herald has a little more.

Has the Greiner infrastructure report failed New England?

Infrastructure NSW has finally released its blue print into the State's long term infrastructure needs. This photo of Mr Greiner is from the Australian. It's a long report and I have to assess it properly. However, I thought that I would give you a quick preliminary reaction, subject to the necessary qualification that my views may change with further analysis.

To begin with, in presentation, it is one of those reports so beloved by modern governments all expressed in present tense. In <insert date>, NSW will <insert aspiration>. To counter this, my starting point is always to ask if the proposals achieve every one of the expected benefits, will New England be better off and if so how? The answer is not much, with some minor gains in some areas, potential losses in others.

To understand this, you have to look at some of the assumptions built into the report. These include:

1. There is such a thing as a NSW economy. There is not beyond a statistical construct based on current boundaries.
2. That economic growth in Sydney will have spin-off benefits to the rest of NSW. That's an assumption. My view is otherwise.
3. That modelling and policy should be based on current trends, on what is, not what might be. The past is not a good guide to the future, nor does analysis based just on aggregate statistics of what is provide a solid planning base without considering other variables.
4. That you can analyse inland NSW by lumping everything from the escarpment minus the Blue Mountains into a single entity.

The report suffers, too, from  border myopia. It does not adequately recognise the interlinks between parts of NSW and surrounding jurisdictions.

If the report delivers on every one of the identified New England benefits, this is (broadly) what we can expect:

1. The Pacific Highway upgrade will continue because it is current policy, but subject to reviews as to costs and value for money.
2. Some money will be invested in the coal corridor. However, there appears no recognition of the need to assist local authorities to manage the strain on infrastructure created by mining development. 
3. There will be some investment in Hunter water needs. Other water bodies will be aggregated into bigger units.
4. There will be some new investment in dams for irrigation.
5. Other existing projects will continue, but inland NSW won't get anything because this cannot be justified on the economic modelling. I refer you to assumptions 3 and 4 above.

Now because I have only skim read the report, I am happy to be corrected. But do you think that a New England Government would have had quite the same focus?   

Social change, footloose industries and the closure of the Goonellabah Call Centre

In my writing on the social and economic history of New England I traced some of the economic and social changes that swept across the broader New England over the second half of the twentieth century. The pace of change accelerated with the passage of time and has continued to accelerate.

In July, we had the protests over the threatened closure of Grafton Jail. The photo from the Daily Examiner shows one part of the protest. Now we have the decision by Telstra to close its Lismore Goonellabah Call Centre on October 23 this year with the loss of 116 positions. North Coast Voices has reproduced a copy of the combined letter of protest to Telstra from the Mayor and State and Federal members.

One of the features of the changes over time is the constant claims that these changes will offer benefits in terms of improved services and new local business opportunities and yet, somehow, it never seems to happen. The call centre case is especially interesting in that call centre operations were seen as the new holy grail to replace other losses. Get a call centre to compensate. Now as a consequence of continuing change in the on-line world, the rise of self-service internet transactions, that holy grail has proved to have a very short half life indeed.

Call centres are examples of what I call migratory or footloose economic activities, activities that are actually location independent and rise, fall and shift with changes in relative economics. The rise of these activities was a central feature of the last two decades of the twentieth century.

I don't have an answer. I don't think there is a complete answer. But I do know that it is very difficult for any form of purely local response or protest to have a real impact.

Further south over the escarpment from Lismore, the NBN (National Broadband Network) is seen as one solution to Armidale's problems and, more broadly, the solution to service delivery problems created by distance. A lot of us have doubts.

You will get a feel of this from a post I did on my personal blog, Saturday Morning Musings - UNE alumni dinner. Will on-line delivery provide a growth opportunity for UNE or will it become another step in the progressive decline of the North? This photo from that post shows VC Barber under alumni questioning.

In the years that I have been writing this blog, I have consistently argued that the rise of localism, the fall in the broader sense of Northern identity, limits our capacity to respond to the challenge of constant change.

Outside the Northern Rivers and perhaps even Lismore itself, there is no appetite for support. The closure is seen as a local problem, one without relevance to concerns elsewhere. That's a problem. United we may fall, but divided we shall surely hang.

One of the difficulties that people have, one that I know that I have despite my own knowledge and experience, is simply the difficulty in understanding just what is happening.

In my professional capacity, I first wrote on the rise of footloose industries in the 1980s. I didn't believe that the outcomes of the new technologies would be as so commonly presented. As best I could, I posed a blunt question to those in Sydney and Melbourne who talked so glibly of the opportunities opening up. What made them believe that in the absence of effective planning, Australia would benefit? Surely it was more likely that Australia as a whole would go through the experiences that South Australia or New England had already experienced, a decline in relevance?

I don't want to discuss the detailed economics of it all in this post, just to record another New England loss and to make a continuing plea for the need for a broader vision.