The Northern Territory Chief Minister, Paul Henderson, and Commonwealth Bank Chief Equities Economist, Craig James, addressed a full house at the Property Council’s 2011 State of the Territory Lunch last week. The annual event, which was sponsored by Knight Frank, Commonwealth Bank and Rider Levett Bucknall, attracted record numbers of NT business leaders and government officials, in a clear sign that the Property Industry is seen as a cornerstone of the NT Economy, and a Sector that must be supported.
Ahead of the Territory’s 2012 election, the Chief Minister went to some length to outline his Government’s achievements over the past twelve months, espousing progress in the areas of jobs creation, land release, Native Title, INPEX, Darwin as an oil and gas service hub, among others. In the course of the Chief Minister’s much anticipated delivery, he also made a number of important forecasts for and undertakings to the Property Industry.
The Chief Minister told event attendees that the Greater Darwin Region Land Use Plan would be re-released early in the New Year and the new version will address the concerns raised by the Property Council in its June submission, which called for the Land Use Plan (LUP) to adequately meet the COAG Capital City Planning Criteria and to include the integration of transport and infrastructure planning into the LUP.
As well as reiterating his long-standing position that a Labor Government would not introduce a Land Tax, Chief Minister Henderson also expressed continued support for the Capital City Committee, saying that the CCC initiative has great potential, and could be more progressive, more dynamic and more project-focused.
Henderson was unable to answer Property Council questions relating to the unusually long and costly lease renewal process for Government office accommodation, or the likely and/or intended impacts of new NT fire regulations. He did, however, reassure delegates that he will look into why it is taking so long for Government office leases to be renewed and that he would confirm what implications property owners and managers can expect from the recent changes to the Fire and Emergency Regulations that came into force in July this year, particularly in the area of emergency planning for certain buildings.
As expected, the Chief Minister highlighted President Obama’s commitment to base US Marines in Darwin, and he referenced numerous reports and statistics that were published throughout 2011 that promote the growing optimism for the NT Economy, all of which, he said, support his view that Australians are entering an era that will have a focus on Asian economic ties and which will be dominated by Northern Australia, with Darwin as its capital.
In answer to one question, Treasurer Delia Lawrie stepped in to assure Members and delegates that the NT Government will continue to obtain expert valuation evidence to provide market rent valuations for commercial leases.
Craig James, Chief Equities Economist at CBA’s Commonwealth Securities, also spoke at the Property Council’s 2011 State of the Territory lunch. His presentation provided guests with national and international context to commentary on the NT Economy.
Mr James forecast China would overtake the United States as the world’s largest economy within 10 years and that while the US economy is in fact recovering relatively well, its contribution to world economic growth is still currently less than that of China or India. He also anticipates global economic growth of between 3.5% and 4%, which is in line with long-term averages.
True to form, with candour that was appreciated by Members and guests, Mr James addressed the elephant in the room, stating that with more than 20 very large private sector projects in the pipeline, employment will be the Northern Territory’s biggest constraint. He pointed out that NT’s low unemployment and high workforce participation means the Territory is at employment capacity.
James also highlighted another alarming NT eccentricity, pointing out that rent is greater than mortgage repayments in the Northern Territory, which is the opposite of what is happening in all other Australian states and territories.
The bow drawn between housing affordability and labour shortages was not lost on the State of the Territory guests but James did balance these comments by offering a somewhat optimistic big picture, where wage gains would result and Government debt in Australia is not yet a problem. But he did say that employers would need to be nice to their “Generation Y” staff if they are to retain them through this volatile time.
And on an international scale, James said that the widespread concern over the potential collapse of Greece and Portugal is not based on the likely economic impact of those two economies collapsing, but rather it is driven by the possible contagion effect the collapses would have on the rest of the global economy.
“In spite of the uncertain economic climate, the Property Council’s NT Division has enjoyed a very successful 2011 with record attendance of its industry events and nearly 10% growth in Membership”, said NT Division Vice President, Trevor Dalton. “And we are hopeful that the growing optimism for the NT to outperform other state and territory economies will underpin an even more successful year in 2012. NT Property is a good place to be, and we look forward to assisting our Members to capitalise on favourable conditions.”
