ORANGE CITY COUNCIL

Employment and Economic Development Policy Committee

 

Agenda

 

6 June 2017

 

 

Notice is hereby given, in accordance with the provisions of the Local Government Act 1993 that a Employment and Economic Development Policy Committee meeting of ORANGE CITY COUNCIL will be held in the Council Chamber, Civic Centre, Byng Street, Orange on  Tuesday, 6 June 2017.

 

 

Garry Styles

General Manager

 

For apologies please contact Michelle Catlin on 6393 8246.

    

 


Employment and Economic Development Policy Committee              6 June 2017

Agenda

  

1                Introduction.. 3

1.1            Declaration of pecuniary interests, significant non-pecuniary interests and less than significant non-pecuniary interests. 3

2                General Reports. 4

2.1            Quarterly Housing Data for Orange and the Region. 4

2.2            Update on Quarterly Unemployment Data for Orange. 11

 


Employment and Economic Development Policy Committee              6 June 2017

 

1       Introduction

1.1     Declaration of pecuniary interests, significant non-pecuniary interests and less than significant non-pecuniary interests

The provisions of Chapter 14 of the Local Government Act, 1993 (the Act) regulate the way in which Councillors and designated staff of Council conduct themselves to ensure that there is no conflict between their private interests and their public role.

The Act prescribes that where a member of Council (or a Committee of Council) has a direct or indirect financial (pecuniary) interest in a matter to be considered at a meeting of the Council (or Committee), that interest must be disclosed as soon as practicable after the start of the meeting and the reasons given for declaring such interest.

As members are aware, the provisions of the Local Government Act restrict any member who has declared a pecuniary interest in any matter from participating in the discussion or voting on that matter, and requires that member to vacate the Chamber.

Council’s Code of Conduct provides that if members have a non-pecuniary conflict of interest, the nature of the conflict must be disclosed. The Code of Conduct also provides for a number of ways in which a member may manage non pecuniary conflicts of interest.

Recommendation

It is recommended that Committee Members now disclose any conflicts of interest in matters under consideration by the Employment and Economic Development Policy Committee at this meeting.

 


Employment and Economic Development Policy Committee              6 June 2017

 

 

2       General Reports

2.1     Quarterly Housing Data for Orange and the Region

TRIM REFERENCE:        2017/237

AUTHOR:                       Tony Boland, Business Projects Officer    

 

 

EXECUTIVE Summary

At the meeting of 7 February 2017, a question was taken on notice for Council to receive regular reports on property sales in Orange.

Link To Delivery/OPerational Plan

The recommendation in this report relates to the Delivery/Operational Plan strategy “11.1 Our Economy – Encourage the growth of local business, support emerging industry sectors and attract new investment to Orange”.

Financial Implications

Nil

Policy and Governance Implications

Nil

 

Recommendation

That the report on housing data for Orange and the region be acknowledged.

 

further considerations

Consideration has been given to the recommendation’s impact on Council’s service delivery; image and reputation; political; environmental; health and safety; employees; stakeholders and project management; and no further implications or risks have been identified.

 

SUPPORTING INFORMATION

The most comprehensive reports on property sales and rental data is published by Housing NSW.  Council has used other data sources to supplement the Housing NSW information.

There are two other commonly reported sources of data on housing prices:

·    RP Data (trading as CoreLogic)                  

·    Domain (combination of former Australian Property Monitors and Pricefinder and owned by Fairfax media)

Both of these sources are more commonly reported in the media, however the source of the data and the methodology applied to the collection and inclusion of the data makes these sources less certain to use. The only advantage of these data sources is that they are more ‘real time’ than the Housing NSW data.


 

The supporting information in this report is broken into five categories:

 

·    median sales price

·    mean sales price

·    number of sales

·    median rental price

·    building approvals

Median Sales Price

The information surrounding housing sales and rent data is reported in terms of a median price.

The Housing NSW sales data is captured three months after the end of the reporting period. On average, around 80% of all sales contracts have been notified in this timeframe. Statistical analysis and testing by Housing NSW has shown that the housing mean and median prices do not vary greatly if data is captured at the six month point. The sales statistics are derived from information provided on the “Notice of Sale or Transfer of Land” form that is lodged with Land and Property Information NSW.

The Housing NSW median sales price in Orange in the June 2016 quarter was $336,000, down from a peak of $345,000 in June 2015. This is less than both Bathurst and Dubbo as shown in the graph below.

 

 

Due to the smaller nature of both the Cabonne and Blayney residential housing sales markets, the median sales price is subject to increased volatility in pricing as can be seen in the graph below.

 

 

Data from other sources can fluctuate significantly from the Housing NSW data. As an example, the median price listed by RP Data on 10 February 2017 was $345,000 and the median price from Domain for 2016 was $347,000. The median listed by Domain in their 2017 Domain House Price Report was $368,000.

The net growth in the median sales price for Dubbo and Bathurst for the period March 2010 to June 2016 was more than double that of Orange.

Mean Sales Price

The mean (average) sales price from Housing NSW is reported on a Statistical Area Level 3 (SA3) basis. The Orange SA3 is very similar to the local government areas of Orange, Cabonne and Blayney but doesn’t include Eugowra or Canowindra. The Bathurst SA3 aligns closely with the boundaries for Bathurst and Oberon LGAs.

When calculating a mean price, Housing NSW excludes the top 5% and bottom 5% of sales from each LGA to account for any anomalies or aberrations in the housing market sales. The result is a more accurate reflection of the true average price for the market.

The Dubbo SA3 includes parts or all of the LGAs of: Dubbo; Narromine; Wellington; Coonabarabran; and Gilgandra. The size of this SA3 makes comparison to Orange and Bathurst impractical.

The mean house price for the June 2016 quarter for Orange SA3 was $333,000 and for the Bathurst SA3 it was $387,000.

Number of Sales

Identifying the number of houses sold in a twelve month period is not possible through the Housing NSW reports. The two commercial sources listed the number of units and houses sold as 738 and 729 respectively for Orange. Comparatively, Bathurst was listed at 456 and 533 sales by the two sources and Dubbo was listed as 507 (there was an error with one of the Dubbo listings).


 

As the commercial sources would not be reporting houses that haven’t been sold, the variation in the figures are likely to be attributed to market share or some slight differences in geography. So, along with using the only available Dubbo result, the number of sales over the previous year are:

·    Orange - 738

·    Bathurst - 556

·    Dubbo - 468

According to realestate.com.au (RP Data), the number of house sales in Orange each calendar year over the past 9 years are:

 

2008

2009

2010

2011

2012

2013

2014

2015

2016

Orange

348

492

585

732

569

562

630

811

752

Bathurst

223

353

299

421

417

443

444

570

556

The turnover in housing is consistently higher in Orange than in Bathurst. This could be for a number of reasons including:

·    More people using Orange as a stepping stone in their career path

·    Orange has a larger population therefore a higher turnover is expected

·    Lack of supply and increased demand could be driving up the Bathurst price

·    The construction of new homes has not been able to keep pace as well in Bathurst.

Currently in Orange, the number of properties for sale across the 17 real estate agents listed in Council’s Business Directory range from 13 to 49.  Most of these properties are listed online with each individual business, or on domain and real estate.  When searching Orange current real estate market, 564 properties are listed on domain and 622 properties on real estate.  Both of these sites have duplication of listings. 

The current sales turnover of housing in Orange is steady.  The sales turnover is influenced by the appropriateness of the pricing and the location of the property. Properties over $500,000 are slower to sell and properties under $400,000 are faster.

Median Rental Price

The rental statistics from Housing NSW is derived from information provided on the rental bond lodgement form that is lodged with the Office of Fair Trading. Where there are less than 10 bonds lodged in a quarter the data will return a nil result.

The median rents for the region in the September 2016 quarter are listed in the following table. The areas are Local Government Area boundaries.

Type

All Dwellings

Separate Houses

Flats/Units

Bedrooms

1

2

3

4

2

3

1

2

 

 

 

 

Orange

208

250

310

395

270

310

210

240

Bathurst

190

260

320

420

268

320

190

260

Dubbo

178

250

320

380

270

315

175

230

Cabonne

 -

 -

250

280

 -

250

 -

 -

Blayney

 -

210

250

335

 -

265

 -

 -

The rent for a one bedroom unit is higher in Orange than both Bathurst and Dubbo. The rent for a two bedroom unit in Bathurst is significantly higher than for a one bedroom unit. The prices for 2 and 3 bedroom separate houses is very similar across Orange, Bathurst and Dubbo while a four bedroom house brings significantly more in Bathurst than Orange or Dubbo.

 

The rental costs for 3 and 4 bedroom houses were at an all-time high between June 2011 and September 2012. This was a period of intense commercial and mining construction with a number of projects going on in and around the city. Accommodation at that time was at an absolute premium, driving up the price.

 

Building approvals

The number of building approvals is a key indicator in the confidence and growth of a geographic location. While not all approvals graduate to the commencement of construction, it is a consistent way to measure potential building activity between regions and from year to year. This information is from the Australian Bureau of Statistics (Category 8731.0 – Building Approvals).

The table below shows the comparison between the cities (not LGAs) of Orange, Bathurst and Dubbo. The three measures are new houses (houses), other new residential premises (other) and the total numbers of new residential premises approved (Total).

 

 

2010/11

2011/12

2012/13

2013/14

2014/15

2015/16

2016/17

Orange

Houses

133

248

287

305

283

269

141

Other

2

19

20

14

21

193

10

Total

135

267

307

319

304

462

151

Bathurst

Houses

52

118

171

203

196

293

115

Other

0

38

64

58

116

77

13

Total

52

156

235

261

312

370

128

Dubbo

Houses

61

139

168

232

251

303

142

Other

20

26

20

112

58

87

64

Total

81

165

188

344

309

390

206

 

 

There was a rapid growth in building approvals in 2011. This rapid growth has been sustained and was still at 269 at the end of last financial year. This rapid growth in approvals (and subsequent construction) would have contributed to keeping the median sales and rent prices in check in Orange. Both Dubbo and Bathurst experienced a steady growth in approvals over the same period. Although they had a higher number of approvals last financial year, they both had less net approvals over the same period, potentially leading to shortage in supply and driving up the median sales price.

The total building approvals for Orange shows a rapid growth from 30/6/14 to 30/6/15. This growth is in spite of a reduction of houses being approved in the same period. For the majority of the time the total residential approvals in Orange are higher than in Bathurst and Dubbo. This will be in part from having a larger population.

 

  


Employment and Economic Development Policy Committee              6 June 2017

 

 

2.2     Update on Quarterly Unemployment Data for Orange

TRIM REFERENCE:        2017/815

AUTHOR:                       Tony Boland, Business Projects Officer    

 

 

EXECUTIVE Summary

At the Employment and Economic Development Policy Committee meeting of 3 May 2016, Council requested that the quarterly unemployment figures be reported to Council.

The Federal Department of Employment compiles and reports Small Area Labour Market (SALM) data. This report provides the most recently published data.

Link To Delivery/OPerational Plan

The recommendation in this report relates to the Delivery/Operational Plan strategy “11.1 Our Economy – Encourage the growth of local business, support emerging industry sectors and attract new investment to Orange”.

Financial Implications

Nil

Policy and Governance Implications

Nil

 

Recommendation

That the report by the Business Projects Officer on Unemployment Figures for Orange be acknowledged.

 

further considerations

The recommendation of this report has been assessed against Council’s other key risk categories and the following comments are provided:

 

Service Delivery

The data provided within this report is also provided to companies looking for assistance with information as well as being used by staff in submissions.

SUPPORTING INFORMATION

The figures are published on a quarterly basis by the Department of Employment in the Small Area Labour Markets publication https://www.employment.gov.au/small-area-labour-markets-publication.

The SALM data is released by the Department of Employment three to four months after the end of the quarter. The most recent data available is for the quarter ending 31 December 2016. The data in this report is on a Local Government Area basis in the first section and then on a city by city (SA2) basis for the second half of the report. There is additional information on SA2 geography in the second part of the report.

 

Measurement – Orange LGA

December Qtr 2016

Labour force

22,555

Unemployed persons

983

Unemployment rate – September 2016

4.4%

The unemployment rate for the Orange LGA was 6.6% in the December 2015 quarter. The Department of Employment cautions consideration of quarter on quarter comparison due to the volatility of the data. It recommends analysis on year to year basis.

A comparison of the Orange LGA results in the December 2016 quarter to other LGAs is shown in the table below (noting this relates to the LGAs as they were in December 2016):

 

LGA

UE rate – Dec 2016

 

LGA

UE rate –Dec 2016

Albury

7.4%

 

Lithgow

6.2%

Armidale

7.1%

 

Maitland

4.4%

Bathurst

3.9%

 

Mid-Western

5.2%

Blayney

3.8%

 

Oberon

3.7%

Cabonne

2.8%

 

Orange

4.4%

Coffs Harbour

3.4%

 

Parkes

6.5%

Cowra

6.2%

 

Port Macquarie

4.6%

Forbes

4.2%

 

Tamworth

7.2%

Griffith

4.1%

 

Wagga Wagga

4.3%

Hilltops +

5.0%

 

Western Plains+

4.7%

 

 

 

NSW

5.2%

+ Dubbo and Young Councils were amalgamated with other Councils to form new merged entities.
 Previous reports have reported the Dubbo and Young unemployment rate.

 

The SALM data has been measured for over 30 years. This information has been provided on a geographic basis where the boundaries match the appropriate Local Government Area. The graphs in the first section below depict the historical data for the Orange LGA. Data has only been collected on a SA2 basis since 2010. There are two or three SA2 areas that form an equivalent geographical area to each of the cities.

 

Labour Force

The labour force is the number of persons aged over 15 years with the exclusion of certain persons, including those in permanent defence force positions, overseas residents in Australia and some diplomatic roles. The labour force is the number of non-excluded people who are working or actively looking for work, so the labour force figure includes people who are unemployed.

For Orange LGA, the graph below displays a peak in the labour force in March 2011 which coincided with a significant number of construction projects including Cadia East, CSU and new hospital by the Orange Health Service.

The period from December 2013 to September 2014 includes a significant number of people who relocated for the purposes of the Cadia East construction project and Orange Airport Development. This is reflected within our population statistics. September 2014 saw the completion of the last of these projects, with the conclusion of the Cadia East construction.

From September 2014 to June 2015 there was a significant reduction in the labour force. This was potentially linked to jobseeker confidence in the light of the scaling back of Electrolux operations. Jobseeker confidence and jobs have recovered well for the labour force to be at an all time high in June 2016 and only slightly less than that in the September 2016 quarter.

 

 

 

Unemployed persons

The number of unemployed persons in Orange LGA has traditionally been less than 1,000 persons.


 

The 1,000 person ‘barrier’ was broken after September 2012 quarter. This coincided with the completion of a number of large projects. The number of unemployed continued to climb quarter on quarter (with the exception of March and June 2014) until a peak of 1,504 was realised in September 2015 quarter.

There was a rapid decline in the number of unemployed people (to 1,018) in the twelve months from September 2015 to September 2016. This is a net reduction of 486 unemployed people over the twelve month period. The labour force also increased by 1047 people in this same period. This decline continued in the December quarter, albeit at a lesser rate of decline.

Unemployment rate

The unemployment rate has historically been relatively conservative in the 4-5 per cent range. The unemployment rate peaked in September 2015 at 7.0%. This quarter coincided with a significant number of retrenchments from Electrolux and the reduction of contractors at Cadia Valley Operations.

 

Employed persons

The figure for employed persons is not reported by the Department of Employment but is derived by taking the unemployed persons out of the labour force. The December 2016 quarter saw a slight drop from the highest ever level of people in employment (21,724 people) achieved in Orange. This figure is higher than the number of people employed at any time during the major construction projects or in the mining boom.


 

City to City Comparisons

It has become increasingly unreliable to do city to city comparisons using LGA boundaries as a number of Local Government Areas are now merged, and therefore increase in geographic and population size. The Department of Employment now releases employment data using the Australian Statistical Geography Standard Statistical Area Level 2 geography. This allows data to be closely matched to the geography of a city as well as a Local Government Area.

By matching to the geography of a city, direct comparisons can be made between each city’s labour market rather than guessing how much of the LGA data is attributable to the city and how much is attributable to villages and rural communities.

To help put the city based employment data in context, it is useful to gain an understanding of each city’s population. The table below shows the estimated residential population for the year ending June 30 for each of the cities.

 

2010

2011

2012

2013

2014

2015

2016

Orange City

36,988

37,785

38,523

39,208

39,741

40,075

40,582

Bathurst City

33,328

33,754

34,203

34,855

35,369

36,013

36,701

Dubbo City

35,056

35,281

35,701

36,073

36,599

36,941

37,245

 

The Labour Force for the three cities is contained in the following graph. Of note, the lines denoting the Orange and Bathurst labour force almost run parallel over the entire period. Orange has consistently had a workforce of around 2,000 more people than Bathurst. This is consistent with having around an extra 4,000 residents in Orange compared to Bathurst.

 

It is interesting to note in the following two graphs that the unemployed persons and the unemployed rate for Orange and Bathurst follow a similar trend while the unemployed persons and rate for Dubbo trends differently. Some of the similarity in the Orange and Bathurst trends could be apportioned to the relatively close geographic positioning of the two cities to each other, allowing flexibility of people to move between the two labour markets for work. This would help to counter individual city labour market peaks and troughs in Bathurst and Orange.

 

The figure for employed persons is not reported by the Department of Employment but is derived by taking the number of unemployed persons out of the labour force figure. The graph below shows Orange has around 2,500 more jobs than either Bathurst or Dubbo in December 2016.

 

 


 

Impact of Council’s Jobs Creation Strategy on local jobs

Council has allocated $110,000 p.a. to its Jobs Creation Strategy initiatives over a 10 year period.  The Grow Local Campaign was one of the initiatives funded where Council obtained matching funding from the NSW Government in a program designed to assist local businesses impacted by the closing of the Electrolux factory and other structural changes that could impact on jobs.

An example of the impact of Council’s efforts in supporting local businesses is provided to illustrate how even a small allocation can have a large impact.

One of the local businesses assisted was Wangarang. 

Wangarang is a local not for profit company that operates as an Australian Disability Enterprise (ADE). An ADE is partially funded through government funds and grants but it must find the majority of its funding through work sought and gained in the private marketplace.

A significant proportion of Wangarang’s income in the past has been from work performed for Electrolux. Wangarang was awarded a Grow Local grant in January 2016 to assist with a marketing plan and delivery. The grant was awarded based on the effect on business from the downturn at Electrolux (primarily) and Cadia (secondary). The grant proved to be effective in stemming the loss of work to Wangarang by attracting new business.

A significant further reduction in the work from Electrolux occurred in April and September/October of 2016. The program allowed for a second grant in extenuating circumstances but not within the same financial year. As such, Wangarang was approved for a second grant to market additional and alternative sources for work. This proved successful again in supporting the employees within the business with alternative, meaningful work.

The net result was that 52 full time, 105 part time and 8 casual staff still have a job. Wangarang faced the biggest challenges of any company with the closure of Electrolux, yet with the assistance of the Grow Local program and the buoyancy in the local economy and labour market, not one position was lost and an income stream from Electrolux has been effectively replaced.