Ports and tourism - The Good Oil by Rod Brown

The Tasmanian tourism industry is booming and heads are in the sand over a Newcastle container port.

Newcastle container port: Agatha Christie would be proud
Twenty years ago, Hunter Region councils and trade unions actively supported BHP Billiton’s proposal for a container terminal on the former steelworks site. But the New South Wales government terminated the proposal in 2002, and allegedly leased Port Botany in 2013 and Newcastle in 2014 to restrict or effectively prohibit Newcastle from building a major container terminal.

I understand that modest container traffic does go through the Port of Newcastle but there is a hidden fee on every container moved above a specified number each year. The fee is paid as compensation to the owners of Port Botany.

There is something odd going on here, because container ports are critically important to regional development – 80 percent of non-bulk product goes by container these days. The practical effects of putting the Port of Newcastle in such a headlock is that:

  • Substantial tonnages from northern NSW and the central west (viz. Tamworth, Dubbo, Armidale, Port Macquarie) must go to Port Botany.    
  • It adds to congestion on the Sydney road system e.g. the ludicrous M5.
  • It adds to the operating costs of regionally-based companies. In a competitive commercial environment, they are surely losing sales.

Greg Cameron, a former BHP executive in Newcastle has been railing against the situation for some years. Indeed he and others have engineered some 100 Questions On Notice in the NSW Parliament since October 2014 about the failure to build a decent container terminal at Newcastle. Successive governments have put their heads in the sand, as have the unions and certain councils.  

So we did some digging. Port Botany handles around 2.3 million containers per year, and is owned by a consortium including Australian Super, Cbus, HESTA and HOSTPLUS. A nice little earner.

Conversely, the Port of Newcastle handles fewer than 10,000 containers annually, and a Port of Newcastle spokesman said last year that, “there is no business case at this point in time for a container terminal. If there is a market or demand...in the future, we will look at it.”

This is clearly rubbish, and people don’t like being played for suckers. Port Botany has a monopoly on container traffic, and no one is measuring the impact on (a) the regional economies requiring container services or (b) road users in the Sydney Basin. ASIC is taking an interest. Please drop us a line if you can shed anything more. Go to www.containerterminalpolicyinnsw.com.au

Tassie tourism
A south coast NSW oyster grower was recounting her holiday to Tasmania recently, and she marvelled at the quality of the food and tourism product there. She said Tassie is years ahead of NSW.

Similar plaudits from others. However it’s still amazing to learn that Tasmania recorded a 28 percent growth in tourism patronage last year.

I thus rang the University of Tasmania to seek out the success-underlying factors. I was lucky to find Dr. Alison Dunn, a Scot, who kindly offered her thoughts along with a Tasmanian Government official. Their take is as follows:

  • Improvements in tourism transport e.g. refurbishment of the Spirit of Tasmania, cheap flights instigated by Virgin, Jetstar and Tiger.
  • Improvements in the tourism product – MONA has inspired other arts and culture stakeholders, and the external perception of Tasmania has lifted.
  • High-end accommodation. Facilities like the Saffire resort on the Freycinet Peninsula and the Pumphouse retreat near Cradle Mountain have reinforced tourist perceptions.
  • Improvements in marketing e.g. the ‘Behind the Scenery’ campaign and the Tassie whisky publicity.
  • Growing awareness of the quality of Tasmania’s wines e.g. sparkling wines, pinot noir.
  • The 2014 visit by Chinese President Xi – Chinese tourist arrivals grew 49 percent last year!
  • The weaker $A i.e. attractive for international tourists as well as Aussies on the mainland pulling back from international markets.
  • The fact that Tasmania is a captive regional market i.e. tourists travel around the island, spreading their expenditure.

What can other regions learn from the Tasmanian experience?
Well cheap flights are very important – Canberra, Cape York, Pilbara, Kimberleys, Broken Hill and many other suffer here. Secondly, alliances can help. The Tassie whisky industry has come from nowhere, and the Scottish distilleries have been a great help. Thirdly, iconic institutions can drive your marketing effort – MONA is an absolute one-off, but the Bendigo Gallery’s innovation with its Marilyn Monroe features is another route. Fourthly, can we leverage off the aura of international leaders like Premier Xi? This could backfire, but it’s worth thinking about.

But the bottom line is that Tasmania deserves its tourism success. It’s been a long road. The dismantling of its manufacturing and forestry industries has arguably been a wake-up call to Tasmanians and they have responded magnificently.   

Rod Brown is a Canberra-based consultant and lobbyist specialising in industry/regional development, investment attraction and clusters, and accessing federal grants. He also runs the Cockatoo Network.
Phone: (02) 6231 7261 or 0412 922 559
Email: apdcockatoo@iprimus.com.au
Blog: www.investmentinnovation.wordpress.com (750+ articles)