COVID-19: Impact on Regional Australia – Major Employers in Regions
What happens when COVID-19 takes out a major employer in town?
COVID-19 will significantly impact the Australian economy. The true extent of economic impact is mostly speculative at this stage but is expected to be substantial. Over the coming months, businesses are expected to respond to a climate of reduced revenue.
What is known is that economic impacts will not be evenly distributed across the country and across industries. This means some sectors and some communities will be more disrupted than others. With that in mind, government support initiatives should be designed to reflect the varying needs, effectively creating place-based policies.
The Commonwealth and State and Territory Governments are responding to the economic risk at hand. Various stimulus packages and policies have been announced to support these most impacted industries.
The full details of how these packages will be implemented are in the design phase, as public administrators catch up with the speed of change occurring in response to the spread of the virus. An important aspect to be considered in designing how these policies and support measures will be implemented is where these industries are most important for regional jobs.
Mark Zandi, Chief Economist from Moody Analytics, suggests that the five industries most at risk include Travel Arrangements; and Leisure and Hospitality [i]. Of medium risk include Motion Pictures; Retail Trade; and Other Services. Both the most at risk and medium risk categories include aspects of the tourism and creative industries.
Tourism and creative industries are important job providers in many regional communities. Both industries are well represented in regional Australia, are driven mainly by the private sector and are highly susceptible to market forces. Both industries play an essential role in the employment of regional people, employing 221,592 and 95,660 regional people respectively in 2016. Tourism and creative industries, and the jobs they provide, will face disruption as COVID-19, and its economic fall-out, spreads across the country.
Regional Australia is not a homogenous group, and there are some communities where the tourism and creative industries are a more important source of local employment than in other regions. Policies crafted in a way that reflects the differences between different types of regional economies will ultimately result in better-targeted support measures and more effective use of resources. Understanding and engaging with the place-based diversity of these workforces and building support policies which recognise this variation will be vital in helping regional economies adjust to the changed economic situation in the wake of COVID-19.
To find the regions where tourism and creative industries are most important for local employment, we need to look at what proportion of local people are employed by the industry. These are places where there are limited other industries available to fill the employment void which may be left as tourism and creative industries are impacted. This is instead of looking at the total counts of people employed in the industry, which is a method that often biases places with large populations and overlooks many medium and small towns across regional Australia.
Where are the regions where tourism and creative industries are most important for local employment?
The table below shows some regions where tourism is vital for local employment, as the industry significantly represents local jobs, and in turn, should be considered for targeted geographic stimulus. It uses the tourism satellite account definition* for which jobs are included in the industry and uses ABS Census 2016 data to show where the jobs are at the Local Government Area scale. A Location Quotient (LQ) score is used as a statistical measure to show how big the proportion of tourism or creative industries jobs are in that region, compared to the national picture. LQ scores above 1 are regions which have an above-average number of those jobs, compared to the national average for a place of that size. Full methods are published in the RAI’s Regional Growth Prospects report [ii].
Top LGAs – Tourism employed 221,592 people in regional Australia. These are the Local Government Areas where Tourism accounted for the highest proportion of local jobs, and they are more reliant on the industry for local employment, 2016.
|Local Government Area||State||Tourism|
|Unincorporated Vic |
(Victorian high country)
|Snowy Monaro Regional||NSW||1,174||12.7%||2.09|
|Unincorporated NSW |
(Far West NSW)
Taking the example of Douglas in North Queensland, we can see it has 846 local jobs in the tourism industry (16 per cent of all local jobs). Another example from this data is Glamorgan/Spring Bay in Tasmania, where we can see there are 182 tourism jobs in the local economy. While this is a small number, it accounts for the employment of 14 per cent of the region. In these two regions alone, there could be 842 and 182 additional people without employment that will likely look to access welfare and other government support payments quickly, to help cover the gap in their incomes. This Census data picks up regions which are reliant on seasonal tourism, such as that driven by snow leisure activities in Unincorporated Victoria and the Snowy Monaro Region.
These are regions where an impacted tourism industry could be very significant for local jobs. They are not necessarily the icon tourism destinations, but this analysis instead shows where the industry is crucial for local economies and where they may be limited other industries to provide employment.
Tourism in regional Australia is driven mainly by the domestic, rather than the international market . This means that following travel restrictions, domestic tourists could likely be back to travelling sooner than international visitors.
The same methods were used for the creative industry, albeit using the Queensland University of Technology’s definition** for which jobs are included in the industry. The creative industries would be impacted by the cessation or significant slowing of the industry, but the degree which creative industries employment concentrates in regional areas is much less than the tourism industry. This is because there is a much stronger concentration of creative occupations in metropolitan areas, and often other industries are providing the bulk of employment in regional Australia. That is not to say that for some communities, the hit to creative industries would not be felt throughout and have flow-on effects in other sectors in the area.
Top LGAs – Creative industries employed 95,660 people in regional Australia. These are the Local Government Areas where creative industries accounted for the highest proportion of local jobs, and they are more reliant on the industry for local employment, 2016.
|Local Government |
Taking the example of Byron in northern New South Wales, we can see there are 942 jobs in creative industries which is nearly 8 per cent of local employment. Another example from this data is Hobart, where creative industries account for 6.4 per cent of jobs or 3,030 jobs. Compared to the national picture, both regions have an above-average proportion of creative jobs for a place of their size, as measured by the LQ score.
For both industries, some very small and remote regions show as places which are fairly reliant on tourism and creative industries for employment. For example, Anangu Pitjantjatjara is a small, remote, mostly Indigenous community in South Australia. In the community, there are 35 visual arts and crafts professionals which is a small number but is highly significant for a place of its size where there are limited other industries to support employment.
This analysis shows that the tourism and creative industries vary in their importance across different regional economies. For some places, these industries provide a significant proportion of local jobs, and in other places, other industries may provide this. While some places may have a large overall number of tourism or creative industry jobs, from a regional economic perspective, the places where these industries account for a large proportion of jobs are also important.
By building this understanding of regional variation into COVID-19 support packages, the Commonwealth and State and Territory Governments can take a contextual approach to implementation which means supporting the economies most reliant on tourism and creative industries for employment. This is rather than a ‘one-size-fits-all’ solutions to policy or economic development and will mean resources target the places where it is most needed.
JobKeeper payments will go some way to offsetting the lost worker income from industries in these regions. However, the impacts of COVID-19 will mean that businesses in these places will be forced to hibernate. While the JobKeeper payments will help keep incomes flowing, the business impacts – immediate and longer-term – will be significant. This will be especially so for the smaller, more remote places where the visitor flow is a critical part of their small economies.
For some regions, COVID-19’s impact comes after a disastrous summer of bushfire, floods, drought and other natural disasters, which further compounds the effects of COVID-19 on local economies and employment. Strong local economies and employment are important factors contributing to the prosperity of regional Australia and Australia as a whole.
* Occupations included in the Tourism industry are based on the Australian Bureau of Statistics, Tourism Satellite Accounts definition. This includes portions of other sub-industries. Therefore the tourism occupations are: 9% of Retail Trade; 45% of Accommodation and Food Services; 14% of Transport, Postal and Warehousing; 1% of Information Media and Telecommunications, 2% of Rental, Hiring and Real Estate Services, 4% of Administrative and Support Services, 5% of Education and Training; 0.5% of Health Care and Social Assistance; 14% of Arts and Recreation Services; and 1% Other Services.
** Occupations included in the creative industries is based on the Queensland University of Technology definition, which includes both cultural production occupations and creative services occupations. Therefore the cultural production occupations included in creative industries are: Actors, Dancers and Other Entertainers; Music Professionals; Photographers; Visual Arts and Crafts Professionals; Artistic Directors, and Media Producers and Presenters; Authors, and Book and Script Editors; Film, Television, Radio and Stage Directors; Journalists and Other Writers; Librarians; Gallery, Library and Museum Technicians; Performing Arts Technicians; and Library Assistants. The creative services occupations include Advertising, Public Relations and Sales Managers; Advertising and Marketing Professionals; Architects and Landscape Architects; Fashion, Industrial and Jewellery Designers; Graphic and Web Designers, and Illustrators; Interior Designers; Urban and Regional Planners; ICT Business and Systems Analysts; Multimedia Specialists and Web Developers; Software and Applications Programmers; ICT Support and Test Engineers; Architectural, Building and Surveying Technicians; ICT Support Technicians; and Jewellers.
[i] Zandi M., 2020, COVID-19: A Fiscal Stimulus Plan, Moody’s Analytics.
[ii] Achurch H., 2019, Regional Growth Prospects: Strategic Investment in Food Processing, Tourism, Advanced Manufacturing and Creative Industries, Regional Australia Institute, Canberra.
[iii] Hallak R., O’Connor A., Corsi A., Akbar S., Onue I. and Ludwichowska G., 2019, Investment on Tourism Growth and Employment: Impacts of technology investment on tourism growth and employment, University of South Australia report for the Regional Australia Institute, Adelaide.
[iv] Pugalis L. and Bentley G., 2014, (Re)appraising place-based economic development strategies, Local Economy, Vol 29, Issue 4-5.
[v] Barca F., McCann P. and Rodriguez-Pose A., 2012, The case for regional development intervention: Place-based versus place-neutral approaches, Journal of Regional Science, Volume 52, Issue1.