Media release – Elise Archer, Attorney General, 6 July 2023
Report confirms economic boost for the Meander Valley
The Rockliff Liberal Government remains committed to delivering the Northern Correctional Facility (NCF) project that will provide better rehabilitation and reintegration outcomes for offenders and their families, with the added benefit of creating jobs and supporting our economy in the state’s north.
Attorney-General and Minister for Corrections and Rehabilitation, Elise Archer, said the Department of Justice Project Team continues to progress the due diligence investigations required for the development of this project at the Ashley Youth Detention Centre (AYDC) site.
“In line with our commitment to update the community as this important project progresses, the Project Team is today releasing the Economic Impact Assessment and Bushfire Hazard Assessment reports,” the Attorney-General said.
“Importantly, the results of the modelling indicate that the additional investment and activity associated with the NCF will increase Gross Regional Product in the Meander Valley by $289 million.
“In addition, the project is expected to create 273 full-time equivalent jobs in the Meander Valley by 2040.
“The results of the modelling indicate that the additional investment and activity associated with the NCF project is also expected to have a positive impact on the Tasmanian economy, increasing Gross State Product and employment over the period between 2024 and 2040.”
In addition to the Economic Impact Assessment, a Bushfire Hazard Assessment of the AYDC site for the NCF has been completed by independent consultants Emerge Associates.
“These assessments are vital, given most of Tasmania is considered a bushfire prone area and appropriate planning can then occur,” the Attorney-General said.
The assessment demonstrates that as development of the NCF progresses, it will be possible to satisfy the applicable provisions of the Bushfire Prone Areas Code, the National Construction Code, and the Director’s Determination.
A key finding of the Bushfire Hazard report is that habitable buildings must be surrounded by a Hazard Management Area (HMA) with sufficient separation from unmanaged vegetation to achieve a Bushfire Attack Level (BAL) rating for the buildings. The AYDC site is considered of sufficient usable size to accommodate the required HMA distance to satisfy the BAL rating.
The Economic Impact Assessment and Bushfire Hazard Assessment, as well as other due diligence reports, will be provided as supporting information to the Request for Tender for Architectural Services, so they can be utilised by the successful tenderer in understanding the site.
The requirements of these reports will inform the design development of the NCF and be included in the development application to be lodged with the Meander Valley Council.
For more information on the project’s progress, including a copy of the Economic Impact Assessment and Bushfire Hazard Assessment, please visit the project website at www.justice.tas.gov.au/ncf.
Economic Impact Assessment – Executive summary
Background
The Tasmanian Government is committed to building a new Northern Correctional Facility (NCF).
The NCF will be a 270-bed adult correctional facility to be located on the current Ashley Youth Detention Centre (AYDC) site, between Deloraine and Westbury in the state’s north. As part of this process, the AYDC is to be relocated.
The Tasmanian Department of Justice (DOJ) has engaged Deloitte Access Economics to provide an Economic Impact Assessment (EIA) of the development of the proposed NCF, which incorporates the economic impact of the relocation of the AYDC. Deloitte Access Economics has used its in-house Computable General Equilibrium (CGE) model to undertake this assessment.
The baseline economic trajectory accounts for the relocation of AYDC and its impact on the public administration sector in Meander Valley. The economic shocks to the CGE model included the capital investment for the NCF and the increased expenditure on public administration for operating the NCF over the modelling horizon to 2040. These construction and operational timeframes have been provided by DOJ.
Results
The results of the modelling indicate that the additional investment and activity associated with the NCF will increase Gross Regional Product in Meander Valley by $289 million. There is expected to be $89 million of crowding out1 in the rest of the Tasmanian economy, meaning that the net impact across Tasmania is $200 million in additional Gross State Product over the modelled period.
In addition, the project will result in an additional 273 Full-Time Equivalent (FTE) jobs in Meander Valley by 2040. There is expected to be a reduction of 229 FTEs due to crowding out and migration in the rest of Tasmania, leading to a net gain of 44 FTEs across the state over the modelled period.
1 A critical parameter of the EIA is the concept of crowding out. Crowding out accounts for economic limitations in availability of resources such as the supply of labour which is the major input for the NCF once operational. Whilst there will be hundreds of new employment positions at the NCF, this will draw existing employees from across the state resulting in employment reductions in other regions. This shift may be relocation of employees from the existing Risdon Prison or career moves from other industries. Accounting for the constraint of scarce resources available to the Tasmanian economy has become more important as the post-COVID economy continues to experience supply and demand challenges, especially in the availability of labour.
2 Value added refers to the level of economic activity within a particular region. It is measured as the returns to labour (in the form of wages and salaries) and capital (profits).
