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24 August 2013 Posted by 

Ready for take-off? Case for Western Sydney Airport

 By Kate Hill, Partner Deloitte Private

ALTHOUGH Western Sydney is one of the fastest-growing economies in NSW and Australia, it has a jobs deficit that means many residents have to commute long distances to the Sydney CBD on congested roads and transit.

I’m fortunate to have my office in Parramatta but I certainly know what it’s like to sit on a busy train or be stuck for ages in rush-hour traffic. The NSW Business Chamber and Sydney Business Chamber (‘the chambers’) estimated that in 2006 there was a shortfall of over 180,000 jobs in the region and this is expected to increase to over 320,000 jobs by 2036 without significant action.

The chambers argue that a Western Sydney Airport (WSA) at Badgerys Creek would help meet Sydney’s future transportation needs and also stimulate job creation, investment and economic growth.

That’s why they commissioned Deloitte Access Economics to investigate the potential economic impact of a new airport in Western Sydney. Another thing to consider is access by Western Sydney residents to Kingsford Smith Airport (‘KSA’).

As the chambers point out: “The residents of Western Sydney deserve an airport. Despite the population of Western Sydney being greater than that of South Australia and greater than the combined populations of Tasmania, Northern Territory and the Australian Capital Territory, it does not reap the benefits of having the same level of air transport access residents of Adelaide, Hobart, Darwin and Canberra enjoy.”

I’ll second that! One thing is certain, an airport expansion will have to take place in the not-too-distant future, with the least urgent estimate coming from the Sydney Airport Corporation, which estimates that KSA can meet demand until 2045.

Other studies, however, are less optimistic and expect an expansion is needed as early as 2025. The chambers say that Western Sydney businesses and residents cannot afford more delay and uncertainty surrounding this issue.

They are calling for bipartisan political support for an airport at Badgerys Creek from all levels of government, and they point out the urgency of commencing planning now, given the long lead times needed to obtain all approvals and design and build a new airport. Deloitte Access Economics’ report (available at www.deloitte.com.au) shows that an airport would have great benefits for Western Sydney.

Between a potential commencement of operations in 2027 and 2050, a Western Sydney airport would generate about 30,000 jobs and $9 billion in economic output across Western Sydney (with further benefits for the rest of the city).

The report lays out three possible scenarios:

• Scenario 1, assumes the WSA expands only as required to accommodate demand unmet by a constrained KSA.

• Scenario 2 allows for demand growth of between 5-20 per cent.

• Scenario 3 explores a greater degree of freight activity in the earlier stages of the airport, with the same passenger movement numbers as used in Scenario 2.

Modelling has been done which compare the increase in employment for Western Sydney and Sydney, and on employment and aggregate wages in various areas of Western Sydney under the three scenarios modelled.

All scenarios showed a large increase in the airport’s economic contribution, with the 2050 figures ranging from $11.6 billion in gross regional product under Scenario 1 to $15.2 billion under Scenario 3.

Meanwhile, Western Sydney gains more additional economic value than the rest of Sydney. In addition, by 2050, additional employment generated by the WSA is estimated to range from 35,216 jobs (of which 21,655 are in Western Sydney) under Scenario 1 to 46,285 (28,590 in Western Sydney) jobs under Scenario 3. Table i also shows the breakdown between construction jobs that would be created and direct airport employment.

The Liverpool local government area (LGA) would receive a significant portion of direct airport employment – between 16,251 and 20,013 FTE positions in 2050. Aside from Liverpool, the most significant beneficiaries from a WSA would be Blacktown LGA and Parramatta LGA.

Aggregate wage income would be fairly evenly spread, with the top five LGAs in Western Sydney receiving more than $200 million in additional aggregate wage income by 2050.

The impact on aggregate wages is to increase the number of jobs, but also to increase wages overall, including the wages of existing jobs, since labour would be in higher demand.

Not surprisingly, the air transport sector is anticipated to benefit the most from the WSA, growing to $6.4 billion. Aside from this, business services (i.e. car hire, travel agency services, etc.) would see an additional $1.7 billion in output, as well as an additional 1,312 small and 101 medium businesses. Other beneficiaries include the communications, finance and investment, and manufacturing sectors.

The additional tourism expenditure, freight transported and reduced surface travel resulting from the airport would also have a significant effect on the output of the regional economy in 2050, as follows:

• Scenario 1: a positive impact of $6.6 billion in Western Sydney and $11.6 billion in Greater Sydney.

• Scenario 2: $8.2 billion in Western Sydney and $14.7 billion in Greater Sydney.

• Scenario 3: $8.7 billion in Western Sydney and $15.3 billion in Greater Sydney.

Given the controversy around the idea of an airport expansion and the political positions taken by all levels of government, I wonder what the WSBA’s readers think of this plan. Is it the right option for Western Sydney businesses and future jobseekers?

Would it be welcome to have an airport nearby, so that Western Sydney families are less inconvenienced by having to travel to Botany to use the Kingsford Smith Airport? 

Are critics of the plan right to be concerned with issues of aircraft noise and potential pollution, or is this simply NIMBYism at work? Whatever your view, with the federal election on, now is the time to consider what a new airport might mean to your business, your own and your children’s job prospects, and even your neighbourhood, and to make your views known to your local candidates.

Kate Hill is a partner based at Deloitte’s Western Sydney office in Parramatta. Contact: 02 9840 7049 or email: khill@deloitte.com.au


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