1. 1 ECONOMIC PROSPECTS IN A CHANGED GLOBAL ECONOMY

2. Ref: J2478 | August 2011 PRESENTATION TO WS (Bill) Cummings MINING, AGRICULTURE, TOURISM, TRANSPORT, CONSTRUCTION, MANUFACTURING, DEFENCE, EDUCATION, ADMINISTRATION, SERVICES

3. 3 WHERE DO WE GO FROM HERE? MINING, AGRICULTURE, TOURISM, TRANSPORT, CONSTRUCTION, MANUFACTURING, DEFENCE, EDUCATION, ADMINISTRATION, SERVICES WHAT WENT WRONG?

4. 4 WORKFORCE - FNQ STATISTICAL DIVISION (1) 2008 TO 2011 Average Employed (000) Average Unemployed (000) Total Workforce (000) Average Unemployment Rate % 20081 st half130.88.0138.85.8% 2 nd half137.48.0145.45.5% 20091 st half129.114.6143.710.2% 2 nd half132.116.3148.411.0% 20101 st half133.516.6150.111.0% 2 nd half137.313.1150.48.7% 20111 st Qtr130.416.2146.7 11.0% 2 nd Qtr136.913.7150.6 9.0% (1) Note: Cairns city and its servicing region. Source: Cummings Economics from ABS data.

5. DWELLING APPROVALS FAR NORTH QUEENSLAND STATISTICAL DIVISION Source: Cummings Economics from ABS data. Number 5

6. VALUE OF BUILDING APPROVALS FAR NORTH QUEENSLAND STATISTICAL DIVISION Source: Cummings Economics from ABS data. $M 6

7. 7 RESIDENTIAL POPULATION GROWTH - CAIRNS

8. 8 AVERAGE ANNUAL UNEMPLOYMENT RATE FNQ STATISTICAL DIVISION 1989 TO 2010 Source: Cummings Economics from ABS labour force data.

9. 9 AVERAGE ANNUAL EMPLOYED FNQ STATISTICAL DIVISION 1989 TO 2010 Source: Cummings Economics from ABS labour force data.

10. 10 POPULATIONAV UNEMPLOYMENT RATE YEARGROWTH1st HALF2nd HALF 2007/08 4.4%-5.6% 2008/09 3.2%5.5%10.2% 2009/10 2.6%11.0% 2009/11 Est. 1%8.7%10.0% TWO YEAR LAG Source: Cummings Economics from ABS population & labour force data.

11. DWELLING APPROVALS Far North Queensland Statistical Division Source: Cummings Economics from ABS data. Number 11

12. 12 WORKFORCE CHANGES CAIRNS SSD-URP Growth 1996-2001Growth 2001-2006 Agriculture, forestry & fishing-15.38%-27.04% Mining-23.96%74.35% Manufacturing5.16%0.02% Electricity, gas, water & waste services53.28%21.68% Construction-14.66%71.93% Construction affected Wholesale trade-6.14%-8.48% Retail trade15.23%10.94% Accommodation & food services1.83%-2.44% Transport, postal & warehousing3.34%15.32% Information media & telecommunications-12.11%-3.94% Financial & insurance services-13.77%12.50% Construction affected Rental, hiring & real estate services-6.58%26.06% Construction affected Professional, scientific & technical services0.56%21.68% Administrative & support services4.06%3.65% Public administration & safety9.21%38.48% Education & training19.52%11.93% Health care & social assistance15.14%26.57% Arts & recreation services-6.14%2.40% Other services-12.81%12.45% Total1.21%16.35% Source: Cummings Economics from ABS Census data.

13. 13 ESTIMATED INCOME OF BASE INDUSTRIES EARNING INCOME FROM OUTSIDE THE REGION (1) Estimated 2008/09 Income Tourism$2.5 bn Primary industries$1.7 bn Mining$0.6 bn Other (manufacturing, service industries, regional trade, etc) $1.0 bn Total$5.8 bn (1) Note: ie. approximate regional exports overseas and to the rest of Australia. Source: Cummings Economics from various sources.

14. YEAR-ON-YEAR GROWTH IN PASSENGER NUMBERS CAIRNS AIRPORT Source: Cummings Economics from ABS data. % 14 PILOTS DISPUTE ASIAN CRISIS ANSETT COLLAPSE

15. 15 ESTIMATED TOURISM EXPENDITURE FNQ DOMESTIC $MINTERNATIONAL $MTOTAL $M 2003/04 $1,424$1,020$2,444 2004/05 $1,319$1,106$2,425 2005/06 $1,468$1,110$2,578 2006/07 $1,545$1,041$2,586 2007/08 $1,546$1,030$2,576 2009 (YE DEC) $1,741$813$2,554 2010 (YE DEC) $1,440$795$2,235 Source: Cummings Economics from Tourism Research Australia, NVS & IVS data.

16. GROSS VALUE AGRICULTURAL PRODUCTION (LONG TERM GROWTH 1982/83 TO 2009/10) Source: Cummings Economics from ABS data.

17. VALUE OF MINING FAR NORTH QUEENSLAND Source: Cummings Economics from Queensland Mines & Energy data (DEEDI). $M 17 SALE VALUESPRODUCTION VALUES

18. 18 WORKFORCE CHANGES CAIRNS Growth 1996-2001Growth 2001-2006 Agriculture, forestry & fishing-15.38%-27.04% A AGRICULTURE Mining-23.96%74.35% M MINING Manufacturing5.16%0.02% Electricity, gas, water & waste services53.28%21.68% Construction-14.66%71.93% Wholesale trade-6.14%-8.48% Retail trade15.23%10.94% Accommodation & food services1.83%-2.44% T TOURISM RELATED Transport, postal & warehousing3.34%15.32% Information media & telecommunications-12.11%-3.94% Financial & insurance services-13.77%12.50% Rental, hiring & real estate services-6.58%26.06% Professional, scientific & technical services0.56%21.68% Administrative & support services4.06%3.65% Public administration & safety9.21%38.48% G Education & training19.52%11.93% G GOVERNMENT SERVICES Health care & social assistance15.14%26.57% G Arts & recreation services-6.14%2.40% T TOURISM RELATED Other services-12.81%12.45% Total1.21%16.35% Source: Cummings Economics from ABS Census data.

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22. 22 CONSISTENTLY HIGH UNEMPLOYMENT RATE LOW POPULATION GROWTH LOW PRIVATE CONSTRUCTION LOW CONSUMER SPENDING PROPERTY PRICES DOWN SHARE MARKETS DOWN INTERNATIONAL UNCERTAINTY GROSS REGIONAL PRODUCT $12BN 1% GROWTH NEEDS $120M CURRENT SITUATION

23. 23 MINERALS / ENERGY BASIC AGRICULTURAL COMMODITIES REGIONS POTENTIAL? WORLD ECONOMY CHANGED HIGH DOLLAR SUPPRESSING TOURISM MASSIVE DEMAND CHINA & INDIA

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25. 25 MINERAL SALES 2009/10$900m FIFO Est.$150m NEAR NORTH TRADE Est.$600m MINING

26. 26 REAL LONG TERM GROWTH 2-3% PA TOTAL INCLUDING POST FARM GATE $1.7BN HINTERLAND POPULATION 2010 AGRICULTURE CAIRNS129,000 TOWNSVILLE104,000 Incl. Bowen DARWIN102,000 MACKAY76,000 Excl. Bowen

27. 27 AGRICULTURAL POTENTIAL Source: NTGC University of Montana from Modis Satellite Data. MEASURES OF NET PRIMARY PRODUCTIVITY

28. 28 Source: NTGC University of Montana from Modis Satellite Data. AGRICULTURAL POTENTIAL MEASURES OF NET PRIMARY PRODUCTIVITY

29. 29 Source: NTGC University of Montana from Modis Satellite Data. VALUE OF AGRICULTURAL PRODUCTION (FARM GATE) FAR NORTH$1.2bn VICTORIA$10.3bn SE & SW QLD$4.4bn

30. 30 ROAD RAIL SEAPORTS POWER GRID WATER STORAGE / IRRIGATION INFRASTRUCTURE UPGRADING

31. 31 TURNAROUND FORCES NATIONAL SETTINGS AUD / INTEREST RATES CONSTRUCTION CYCLONE YASI EFFECTS COUNCIL / GOVERNMENT MEASURES TOURISM DIRECT CHINESE FLIGHTS CONFERENCE, SPORT, EDUCATION PNG FLY-IN SERVICES SHIPPING SERVICES MINING FLY-IN CENTRAL QLD / OTHER HINTERLAND MINING COPPERSTRIKE, KAGARA, CONSOLIDATED TIN WEIPA EXPANSION GOVERNMENT CATCHUP UNIVERSITY HOSPITAL (TERTIARY) OTHER MARITIME NAVY, CARGO SUPERYACHT AGRICULTURE SUGAR EXPANSION & NEW PRODUCTS BIOFUELS / OTHER

32. 32 RECOGNITION THAT THE WORLD ECONOMY HAS CHANGED CAIRNS CAN RETURN TO STRONG GROWTH AND PROSPERITY BUT SOME CHANGES IN ATTITUDE NEEDED

33. Ref: J2478 | August 2011 PRESENTATION TO WS (Bill) Cummings WS (Bill) Cummings MINING, AGRICULTURE, TOURISM, TRANSPORT, CONSTRUCTION, MANUFACTURING, DEFENCE, EDUCATION, ADMINISTRATION, SERVICES ECONOMIC PROSPECTS IN A CHANGED GLOBAL ECONOMY www.cummings.net.au