How much is the Defence industry worth to the Townsville economy

RACHEL RILEY, Townsville Bulletin

August 19, 2017

THE Department of Defence has injected more than $11 million into Townsville’s economy through tender contracts in the past 18 months.


But experts say that’s just a fraction of what the defence industry and its personnel are worth to the city.


An analysis by the Bulletin of the Federal Government’s procurement information system has revealed the Department of Defence awarded $11,459,298.91 worth of contracts beginning in February 2016 to August this year to Townsville entities.


The biggest winner was Townsville City Council who received more than $9 million for utilities services.


Other big spends included $235,500 to the Townsville Clinical Psychology Services, $70,000 for poultry from M & J Chickens, more than $22,000 for shoes from Intersport, $11,000 for SkyDive Townsville for resilience training and $10,327 to the Picnic Bay Surf Lifesaving Club for RAAF Townsville Airshow catering.


An analysis by James Cook University in 2013 called the Australian Defence Organisation and tropical Australia: its socio-economic impact in Cairns, Darwin and Townsville found that of the city’s 12.8 billion Gross Regional Product, Defence was worth 11 per cent of that.


The report’s industry breakdown for Townsville also showed the number of people employed by Defence was eight times the nationwide average at 5.4 per cent, according to the 2011 Census.


The remainder of the 2016 Census data, which will include the latest employment and industry statistics, is expected to be released in October.


According to the latest 2017 Defence data, there are currently 6853 Australian Defence Force personnel working in the city – 5943 army, 699 air force, five navy and 206 civilians.


That figure is up 276 people from 6577 in the 2013 study.


The Department of Defence this year awarded a contract to JCU worth $50,928 to complete a new report, a study of ADO and its socio-economic impact in the Townsville region, which is due for release early next year.


Author of the new and 2013 study JCU’s College of Business Associate Professor Riccardo Welters said it was difficult to predict with certainty if the impact of Defence on Townsville’s economy would exceed the previous 11 per cent. But he did anticipate it would likely again make up a large percentage of the city’s GRP.


“Townsville’s economy has grown a little bit since the last study but not as much as expected,” he said. “In the last 10 years, Defence in Townsville has grown as well and it remains an important sector in the economy.

“There are a lot of people employed in the industry in well paying jobs, and that really triggers that second round of economic affect and ­spending.”


Assoc Prof Welters said the last study identified the Townsville economy had struggled to cope with amount of infrastructure and services required to keep up with the growth of the Defence sector.


“It will be interesting to see, years on, if we are doing any better,” he said. “We also intend to look at the impact of the pending Singapore deal and what impact those people coming to Townsville for training exer-cises will have.”

Herbert MP Cathy O’Toole said the Defence presence in Townsville had grown tremendously over the years since World War II and she expected that to continue for decades to come. “Defence is so important to the fabric of our community and our economy, and there are so many little things they contribute to our economy,” she said. “There is a real intention of buying local, which is ­really impressive.


“What’s really important is for the defence personnel who live in our city to know we value their presence and don’t take it for granted.”


Ms O’Toole said in addition to pushing for Townsville’s share of the $2.25 billion Singapore deal, her focus was also on exploring what maintenance opportunities could emerge for the North out of the Land 400 military vehicle construction contract.


“We are talking about Townsville being a hub for the maintenance of vehicles, and I think it makes sense for us to have it here,” she said.


“Maintenance will be ongoing work and will create opportunities for our young people.”


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