Cost of doing business in the PilbaraWITH DIANE PENTZ

About us

Regional Development Australia

LOCAL LEADERS

55REGIONAL COMMITTEES

• Economic• Environmental• Social • Cultural

Cost of Doing Business in the Pilbara

$“The Pilbara costs of doing business are far higher than the rest of WA and most of Australia”RDA Pilbara, Cost of Doing Business in the Pilbara, May 2013

$

In just 12 months…

MAY 2013 MAY 2014

Investment Production

Economic and Business Impacts

$$

$

High costs threaten new businesses/start-ups

High costs put the squeeze on existing businesses/NGOs

High costs do not support economic diversification

Regional Price Index (RPI) Estimated every two years by the WA Department of Regional Development.

According to the 2013 results people would need to earn 18% more to make ends meet in the Pilbara, compared to Perth.

On average regional cost of living decreased by 19% since 2013. +

Karratha19%

+Port

Hedland22%

+Newman

12%Region/Town Pilbara Karratha Port Hedland Newman

Year 2011 2013 2011 2013 2011 2013 2011 2013

Composite Index

137.1 118.6 137.5 118.8 136.1 121.8 137.9 111.9

Cost of basic living

+Karratha

19%

Food+1.6%

Housing

+36.7%

Cigarettes, Tobacco, Alcoholic

drinks+8.8%

Transportation

+12.36% Household equipment

and operation+8.1%

Recreation and Education

+11.8%

Clothing+6.9%

Health and Personal care

+26.3%

Cost of Big Mac

Perth $5.35

Karratha $6.25 +17%

Affordability

42%HIGH INCOME EARNERS

(earn more than $2000 a week)

Karratha Newman Port Hedland Perth Western Australia Australia0

200

400

600

800

1000

1200

1400

1600

1800

Median Individual Weekly Income 2001-2011

2001 2006 2011

LABOUR COSTS

Pilbara Weekly Income

0

$1-$199

$200-$299

$300-$399

$400-$599

$600-$799

$800-$999

$1,000-$1,249

$1,250-$1,499

$1,500-$1,999

$2,000 or more

0

5000

10000

15000

20000

25000

Pilbara Weekly Income - Males

No.

of w

orke

rs

0

$1-$199

$200-$299

$300-$399

$400-$599

$600-$799

$800-$999

$1,000-$1,249

$1,250-$1,499

$1,500-$1,999

$2,000 or more

0

500

1000

1500

2000

2500

3000

Pilbara Weekly Income - Females

No.

of w

orke

rs

We also pay more for…

WATER

Karratha +47%

Port Hedland +31%

POWER

Electricity prices increased 86% in

the past five years

FUEL

Petrol +15.1%

Diesel +12.3%

AIR TRAVEL

Karratha to Perth $1260

Port Hedland to Perth $1506

Housing

Port Hedland’s all-time rental high was $2544

per week in September 2012.

Properties for saleProperties for rent

House pricesRental prices

House pricesRental prices

Properties for saleProperties for rent

2005 - 2012

2013 -

Construction

Construction costs are 1.75 to 2 times higher

in the Pilbara compared to those in Perth

DISTANCE * HIGH LABOUR COSTS * HIGH ACCOMODATION COSTS * HIGH MATERIAL COSTS

Looking forward

Difficult to predict!

Global market variations

Cost of living and business

Dependence on China

Overall cost structures remain high compared to

Perth

3 – 4% Global Gross Domestic Product 2014 to 2017

The Future

• Pilbara Population: Now 66,000 and by 2020 between 71,000 (low growth) & 82,000 (high growth)

• Between 2,000 and 6,000 new dwellings needed• Current GRP is $32 billion = 13% of WA and 80% of WA

mineral exports but with only 3% of the population. Export trend continues significantly upwards to 2020.

Our Needs

• We need innovative, private sector led housing solutions

• Reduction in the regulations and constraints facing SMEs

• Innovative funding models for NGOs which are crucial to the health, education and social needs of our communities

Diane PentzCEO

Regional Development Australia Pilbara

W| 08 9144 0651M| 0427 191 272