Doomsday predictions dumped on regional cities: Terry Ryder

Many doomsday predictions have been dumped on regional cities in the wake of adverse events. Few of those forecasts have come to pass.

When negative events sour the economy of a regional city, the community mobilizes. Civic, business and political leaders take action. The apparently doomed city fights back, recovers and often reinvents itself.

The latest to have a premature death proclaimed, Townsville and Whyalla, follow a long line of notable examples of cities about which their death was greatly exaggerated. They include Newcastle, Wollongong and Geelong.

Newcastle was widely considered to have suffered a mortal wound when BHP shut down in the late 1990s. It fought back and is today one of Australia’s largest and strongest regional cities. Its economic strength and diversity has been sufficient to withstand the negative impacts of the recent downturn in the coal sector.

When Bluescope Steel seriously downsized in 2011, it was declared the end for Wollongong. I recall one newspaper headline which predicted a 50% decline in property values. In contrast to that rather extreme forecast, Wollongong’s property market has shown strong growth in recent years. 

What many failed to realise is that Wollongong was no longer a smoke-stake town dependent on steel furnaces for its prosperity. It had been reinventing itself for years, with education, IT and tourism the key sectors.

Similar things are true of Geelong, once a factory town but now a modern city where the biggest employers are the health and education sectors. The decision to locate the national headquarters of the NDIS in Geelong has created a new industry sector, with related businesses keen to locate nearby.

So the impending closure of a car plant, while an adverse event many would prefer did not happen, can be absorbed by this growing economy without too many side-affects. Geelong continues to be the strongest Victorian property market outside of Melbourne.

Now we have Townsville apparently on its deathbed because another of Clive Palmer’s extravaganzas has gone belly up.

When this story exploded in January I wrote: “The latest Australian regional city to inspire a premature obituary is Townsville in the wake of the decision by political and business buffoon Clive Palmer to shed 237 jobs at his Queensland Nickel refinery.

“As has become common in the wake of such events, the media coverage has been a tad over the top since the announcement. I’ve seen reports predicting devastation of the local economy. One suggested Townsville would become ‘a ghost town’.”

The story has moved on since then, with the refinery business collapsing. That’s a hit to the Townsville economy, particularly as it was struggling a bit beforehand. But it’s far from terminal.

Townsville is a very resilient place. It has one of the most diverse economies in regional Australia, with strong elements of government administration, education, tourism, the military, the resources sector and manufacturing.

And lots of positive news has emerged more recently. Some seriously major enterprises have stepped forward to help take up some of the economic and employment slack created by Clive’s latest brain explosion.

The economic and defence deal between Australia and Singapore means $2.25 billion in new defence infrastructure will be built in Queensland, including in Townsville, which already has a big military presence through its RAAF Base and recently-expanded Army base.

In the past week came the announcement of “Australia’s biggest solar farm” covering 200ha just outside Townsville, with Origin Energy signed up to buy the electricity generated from 2017 to 2030.

A $400 million maintenance contract for Queensland Rail will be shared between UGL in Townsville and Downer EDI in Maryborough, reportedly at the behest of the State Government.

The State Government says it has fast-tracked almost $200 million worth of infrastructure spending in the Townsville area to boost the economy in the wake of the nickel refinery collapse, while $75 million in Federal Government funding will help establish the new Cooperative Research Centre for Developing Northern Australia in Townsville.

If you add together all those positives, and subtract the nickel refinery negative, I see it as a net gain for the city of Townsville.

Whyalla in South Australia will take a hit if attempts to rescue the Arrium steel business are unsuccessful. Arrium, formerly OneSteel, is a big chunk of Whyalla’s economy and is in voluntary administration.

But is this the end for SA’s biggest regional city? I would suggest not. Like Townsville, Whyalla has been attracting plenty of positive announcements in the past few weeks.

Oz Minerals is advancing its $975 million Carrapateena copper mine expansion and it wants to build its $150 million Concentrate Treatment Plant at Whyalla. The mine expansion will create 800 jobs and it’s hoped many of the workforce members will be sourced from Whyalla.

BHP Billiton continues to work on its alternative plan for development of the Olympic Dam resource and said in April it hoped to include Whyalla in the new project plans (put together after the previous $30 billion scheme was shelved because it was too expensive).

And there is hope for Arrium in the announcement that 15,000 tonnes of its steel will be used for a $620 million road project, the Darlington Upgrade Project, in Adelaide.

The Federal Government has handed Arrium at $80 million contract to replace around 1200km of rail lines for federal agency ARTC.

Arrium is also a chance to attract steel orders from the recently-confirmed Federal Government project to build 12 submarines in Adelaide.

I’ve been getting lots of emails from people who own real estate in Whyalla. I would suggest those who panic and sell in the wake of recent negative headlines will regret it later.

Terry Ryder is the founder of hotspotting.com.au. You can email him or follow him on Twitter.