Industries and Employment in Australia's Tropical Savannas

This article is largely based on the report: Stoekl, N., Stanley, O., Brown, V. And Stoekl, W. (2007) Regional Economic Multipliers in Australia’s Tropical Savanna, Tropical Savannas CRC

Note: the Tropical Savannas CRC considers the savanna zone to range from Rockhampton in Queensland to just south of Broome in Western Australia, covering an area of 1.9 million km², including the major regional town of Rockhampton (pop. 75,000).  The 2004 population of this area is considered to be 604,000 people. 

Pioneering industries

The first traders in northern Australia were the Macassan (modern Sulawesi, Indonesia) fishermen who came to the shores of Australia to trade trepang (sea cucumber), pearl shell and other products with the local indigenous people. The pearl industry grew in north-western Australia, employing about 3500 people in 1910 and today is a $150 million per year industry¹.

Following European settlement of the savanna region in the 1850s, cattle grazing and gold mining became major industries and created many of the settlements we still see today². 

About 66% of savanna regions remain under pastoral lease, an industry which generated more than $1000 million in 2003. 

Mining of gold and other minerals, including uranium, manganese, bauxite and lead continues to be the major industry in the savanna (by profit).

Proportion of part-time employees

A large proportion — an average of 48% — of people in remote areas of the savanna are employed part time, which is much higher than the national average of 30%. The average household income of these areas is lower than the national average, at $600–$800 per week. The highest income ($1000+/week) is earned by those living and working in mining towns such as Jabiru, Nhulunbuy and Mount Isa.

Large proportion of small businesses and organisations

Mining companies are by far the largest organisations employing people in all regions of the savanna zone, with an average of at least 110 employees.  However, mining communities are shrinking due to the increase in Fly-In-Fly-Out arrangements where employees are not required to permanently live on site.  All other industries, with the exception of government agencies, employ an average of fewer than 50 people.

• Organisations with the highest annual gross turnover are the mining, wholesale, government and electricity sectors. This activity is concentrated in and around Darwin, Mackay, Jabiru and Mount Isa.
• The major industries in northern Australia (by profit) are mining, tourism and cattle².
• Australia’s savanna provides 30% of the nation’s exports.

Low Indigenous participation in management

• Only 6.11% of organisations in the savanna zone are managed by Indigenous or Torres Strait people.  Government, cultural and health sectors had the highest percentage of both Indigenous managers and employees, particularly in very remote areas.

Importance of family connections

• A large proportion (39%) of employees across all sectors are members of a family, particularly in the Agriculture (65%) and Manufacturing (55%) industries.

Low unemployment rate amongst non-indigenous people

In the Northern Territory, unemployment was just 2.4% in December 2006³.  As a result, many businesses experience difficulties in recruiting trained staff.  The Northern Territory Government estimates that around 50% of businesses in the Top End experience difficulties recruiting staff, particularly in the communication services, hospitality and manufacturing sectors.  They also report a high level of staff turnover, with 28% of businesses having an annual turnover of 20% or more⁴.

High unemployment rate among Indigenous people

In contrast, the Indigenous community has a high unemployment rate due to lack of opportunity to access the mainstream labour market because of the remote nature of many communities and socio-economic disadvantage.  The national Indigenous unemployment rate is 16% and 20% for the Northern Territory².

Key employers

• The key employer in very remote areas is the government sector, employing more than 18% of the workforce across two-thirds of the savanna zone.
• In remote areas, mining, agriculture and retail sectors are the key employers, respectively employing 15%, 13% and 11% of the workforce.
• In outer regional areas, retail is the key employer, employing 15% of the workforce.
• For industries within the savanna zone, overall the retail sector has by far the largest aggregate annual gross turnover, or budget.  Interestingly, those industries with the largest turnover per organisation (mining, government, wholesale and electricity) have a relatively low aggregate turnover within the savanna. 

This shows that the retail sector comprises many small successful businesses, whereas sectors such as mining, government, wholesale and electricity are made up of just a few large successful businesses.

Regional economic multipliers

The health, electricity and government sectors spend the largest proportion of their total revenue within their local community (over 60%), making them the most important sectors to the sustainability of remote communities.  This compares to the mining sector, which spends 46% of its revenue locally.

Large military operations

About 1% of the savanna region is used for military purposes.  Many people also temporarily relocate from other areas of Australia to live and work at military communities, such as Robinson’s Barracks near Darwin which houses 5600 defence force employees and their families⁵.

Increasing employment opportunities in the area of Tourism

• Growth from 5.8% in 1991 to 7.3% in 2001 of total workforce.

Other References

1.  Australian Government Culture and Recreation Portal (2007) Australia’s Pearl Industry, http://www.cultureandrecreation.gov.au/articles/pearling/

2. Woinarski, J., Mackey, B., Nix, H. And Traill, B. (2007) The Nature of Northern Australia, ANU E Press

3. Northern Territory Government (2006) Workforce NT Report, Chapter 3 http://www.deet.nt.gov.au/employment/workforce_nt/docs/workforce_nt_2006/workforce_nt_report_chapter3.pdf

4. Northern Territory Government (2006) Workforce NT Report, Chapter 4
http://www.deet.nt.gov.au/employment/workforce_nt/docs/workforce_nt_2006/workforce_nt_report_chapter4.pdf

5.  http://defence.gov.au/minister/budget/0708/budget49.htm