4.0. Economic and Regional Significance

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1 4.0 Economic and Regional Significance 4.1 The economic significance of Sydney Airport Relationship to the Metropolitan Strategy 38 for Sydney 4.3 Local and regional setting/development context 42

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3 4.0 Economic and Regional Significance Sydney Airport is economically significant at the national, state, metropolitan and local levels. It is a major generator of employment in the region surrounding the Airport. Its location eight kilometres south of the Sydney CBD is a major influence on overall land use, transport and airport-related development in adjacent municipalities and the corridor linking the Airport and Central Sydney. The size of Sydney Airport and its location is an important factor within the strategic planning context for the region. 4.1 The economic significance of Sydney Airport Sydney Airport is one of Australia s most important pieces of infrastructure. The $8 billion of economic activity it generates every year is equivalent to 6% of the NSW economy and 2% of the Australian economy. International trade and communications are vitally important to Australia s continued national prosperity. Efficient airports are an essential part of the transport networks that all successful modern economies rely on. Sydney Airport is part of a network of major world airports linking Sydney Australia s only global city to other global cities. An efficient Sydney Airport is essential to Sydney s continued global city status. Sydney Airport s operational facilities, the national and international links it provides and its proximity to the Sydney CBD are key reasons why so many global companies select Sydney as the location for their regional head offices. For example, Sydney is home to: 81 per cent of Asia Pacific finance and insurance regional operations in Australia; 80 per cent of all banks, including the majority of leading international banks; 44 per cent of the specialist information and communications technology companies in Australia; 65 per cent of regional headquarters and regional operating centres of all international companies in Australia; 40 per cent of Australia s biotechnology companies; and 80 per cent of multinational pharmaceutical companies. Around the world, Sydney Airport has premier status within Australia s network of major airports. This gives Sydney a distinct competitive advantage compared to other Australian cities and helps Sydney when competing with other Australian cities for overseas investment in Australia. Sydney Airport also underpins Australia s tourism industry and creates jobs and economic growth for Sydney, NSW and Australia. International air services are also an essential factor for the high value service industries of education, finance, legal services and business generally as they provide access to new overseas customers, markets and opportunities. A recent analysis of the economic impact of growth at Sydney Airport measured the impact of the airport on four key indicators output, value added, household incomes and employment and a combination of direct and indirect effects (URS 2008). The results of the study provide sound evidence that Sydney Airport is a major employment generator and wealth creator in the NSW economy. Key findings of the study are that Sydney Airport provides or generates: direct employment (full-time and part-time jobs) of 75,580, plus indirect employment of 130,553 for a total of 206,133 jobs; 44,389 direct full time equivalent (FTE) jobs, plus 75,774 indirect FTE jobs for a total of 120,162; and an average wage level that is 18% above the NSW average; direct contribution of $8.0 billion in NSW Gross State Product (GSP). After taking into account flow-on impacts a contribution of a total of $16.5 billion to NSW GSP; directly $14.8 billion in output and, after taking into account flow-on impacts, generation of $30.4 billion in output; and directly $3.3 billion in household income and, after taking into account flow-on impacts, provision of $7.4 billion of household income. 37

4 Table 4.1 Airport-related business activity Business Sector Airlines Other aircraft operators Freight Airport service providers Retailers Hotels Government Car rental and parking Ground transport Source: URS 2008 Key Indicators 44 passenger airlines operating at Sydney Airport 25 General Aviation operators At least 130 organisations involved in freight activities including transport companies, handlers and forwarders 205 service providers including fuel, maintenance, flight catering and security organisations At least 157 on-airport retailers (some of which operate multiple outlets) Seven hotels in close proximity of Sydney Airport Six Australian and State Government departments and agencies As many as 14 operators servicing the airport At least 54 ground transport providers servicing the airport It is estimated that the 206,133 jobs provided or generated by Sydney Airport will deliver around $286 million in payroll tax revenue to the NSW Government, or more than $1.2 billion over the next four years. Over the 20 year planning period, the total contribution to NSW Government payroll tax revenue will be several billion dollars. In addition to the substantial contribution Sydney Airport makes to the NSW economy and its resulting direct and indirect contribution to the State s payroll tax revenue, Sydney Airport pays all other normal NSW Government business taxes and charges. As land at Sydney Airport is owned by the Australian Government, Sydney Airport pays land tax to it. In 2008, more than $3 million was paid. Since 2002, land tax payments have totalled $16.4 million. Finally, in lieu of rates, Sydney Airport also makes annual contributions to local councils bordering the airport. Last year, a total of nearly $1.9 million was paid to Botany Bay, Rockdale and Marrickville Councils. Since 2002, payments have totalled nearly $9 million. URS has also indicated that Sydney Airport s annual economic contribution to the NSW economy is forecast to increase to more than $27 billion by 2015/16, up by 65%. The number of jobs directly and indirectly associated with Sydney Airport could also rise to more than 338,000 by 2015/16, up by 64%. Many of these jobs and economic benefits will be generated locally in the areas around the Airport, particularly in the local government areas of Rockdale, Botany Bay and Marrickville. Around 650 firms operate in and around Sydney Airport (see Table 4.1), and they employ tens of thousands of people, many of whom are local residents. 4.2 Relationship to the Metropolitan Strategy for Sydney The NSW Government has developed an integrated metropolitan planning strategy that identifies Sydney Airport as a specialised centre at the southern end of a global economic corridor that extends from Macquarie Park through North Sydney and the CBD to the Airport and Port Botany. Relevant subregional strategies reflect this overall strategic intent and acknowledge the strategic importance of Sydney Airport to the economic functioning of metropolitan Sydney and the planning initiatives to be implemented in the areas surrounding the Airport Sydney a global city The NSW Government s Metropolitan Strategy for the Greater Metropolitan Region of Sydney entitled City of Cities a plan for Sydney s future (NSW Government 2005) is based on the premise that Sydney is:..recognised as Australia s only global city. With 30 per cent of national employment in financial and business services, nearly half of Australia and New Zealand s Top 500 companies, and more than 60 per cent of Asia Pacific regional headquarters established by multinational companies, Sydney is Australia s unrivalled global gateway. 38

5 4.0 Economic and Regional Significance Sydney Airport Master Plan 2009 Figure 4.1 Metropolitan Strategy corridors Source: City of Sydney 2031 Metropolitan Strategy Sydney is Australia s largest regional economycomparable in size to Singapore s economy and larger than New Zealand s. Sydney has a dominant role in Advanced Business Service exports. It hosts almost half the export supported jobs in this sector, a proportion well above the city s share of national employment (22 per cent). (NSW State Government 2005, 26). The Metropolitan Strategy identifies seven key strategies - one of which focuses on Centres and Corridors. Sydney Airport is located at the southern end of the global economic corridor as mentioned above. This corridor is the most significant concentration of economic activity in Australia (see Figure 4.1). Sydney Airport is also identified in the Centres and Corridors Strategy as a specialised centre. The function of specialised centres is described as: Areas containing major airports, ports, hospitals, universities, research and business activities. These perform a vital economic and employment role which generate metropolitan wide benefits. (NSW State Government 2008, 51) In addition, the Metropolitan Strategy promotes increased employment and residential densities in the corridor between the Airport and the CBD Subregional planning Subregional planning is a major implementation component of the Sydney Metropolitan Strategy. Sydney Airport is identified in two draft subregional strategies as its boundaries 39

6 traverse Botany Bay in the East Subregion and Marrickville and Rockdale in the South Subregion of Metropolitan Sydney. In the draft East Subregion Strategy, Sydney Airport is identified in several of the key directions: to support and strengthen the nation s economic gateways through the protection of strategic employment lands in the area around Sydney Airport and Port Botany; to support the future role of retail centres within the subregion, the airport s retail services are considered to be ancillary to the operations of the airport providing fundamental services for airport employees as well as passengers; and to improve east-west public transport access, this direction explores opportunities to strengthen the movements between subregions and bordering growth centres, such as Green Square, where there is a significant transport infrastructure linking the airport that is currently underutilised. One of the key directions for the draft South Subregion Strategy is to plan for employment growth at Sydney Airport and environs and to protect employment lands around Sydney Airport and Port Botany. Employment targets have been set for the South Subregion with the portion of Sydney Airport located within Rockdale Local Government Area (LGA) identified to accommodate 4,000 additional jobs between 2001 and The portion of the Airport site and its environs located within Marrickville LGA is considered a significant employment lands precinct and is classified Category 1 Land to be retained for Industrial Purposes with its key functions being freight and logistics. Category 1 classification does not prevent sites from being intensified in their use or redeveloped to meet current industrial requirements, creating additional employment and economic benefits, but they will continue to primarily accommodate industrial and related uses, within what is generally permitted under the land use zoning. Being identified in the Metropolitan Strategy as a Specialised Centre, Sydney Airport and environs are linked with other strategic centres such as the CBD by corridors which are generally highly concentrated areas of activity. It is estimated that by 2031, over 30% of new housing in existing areas will be located within the global economic corridor that runs from Port Botany and Sydney Airport through the CBD to North Sydney and Macquarie Park. The South Subregional Strategy reflects the significance of Sydney Airport on the economy of the State and Australia as a whole. This Master Plan and the land use zoning provisions for the Airport (see Chapter 12) are consistent with the NSW Government s Local Environmental Plan (LEP) Template for both the airport and Port Botany as well as surrounding areas Draft Sydney City Subregional Strategy The NSW Government has recently released the draft Sydney City Subregional Strategy for comment. This Strategy reflects that Central Sydney forms the core part of Global Sydney as identified in the Metropolitan Strategy: Sydney City Subregion encompasses part of Global Sydney and is located centrally within the Global Economic Corridor which extends from Macquarie Park to the Airport and Port. Sydney s CBD is the primary hub for the Greater Metropolitan Region, providing advanced business services, cultural and creative facilities, specialised retailing and tourism attractors. The efficient functioning of the Sydney City Subregion is central to the economic prosperity of the broader region and Australia as a whole. (NSW Government 2008, 24) The Subregional Strategy also acknowledges the role of Sydney Airport as follows: Located south of the subregion, the economic gateways of Sydney Airport and Port Botany are vital parts of the national trade and tourism infrastructure which also provide support for the Sydney CBD and subregion. (NSW Government 2008, 24) As part of this draft Strategy, Green Square, which is located 3.5 kilometres north-east of the Airport, is identified as a Planned Major Centre. Over 1,700 new dwellings have been built over the last five years and it is estimated another 11,000 are proposed during the next 20 years. The Draft Strategy also notes that: As well as providing jobs, retailing and services for the growing local population, the centre creates the opportunity for development of high quality office space on the rail network and close to Sydney CBD, Sydney Airport and Port Botany providing important capacity to cater for future subregional office demand. (NSW Government 2008, 64). 40

7 4.0 Economic and Regional Significance Sydney Airport Master Plan 2009 One of the identified actions in the draft Strategy is: B5 PROTECT AND STRENGTHEN THE PRIMARY ROLE OF ECONOMIC CORRIDORS B5.1 ESTABLISH A STRONGER CORRIDORS PLANNING AND DEVELOPMENT INITIATIVE The Sydney City Subregion forms the core part of the Global Economic Corridor which runs from Macquarie Park, through Sydney CBD to Sydney Airport and Port Botany. The NSW Government and relevant councils will continue to plan for expansion of economic opportunities and population growth along this corridor. (NSW Government 2008, 73) Major development projects near Sydney Airport In addition to the development of Green Square, there are several other approved major development projects near Sydney Airport being undertaken by third parties. These projects are described below. Port Botany Expansion Sydney Ports Corporation is responsible for managing Port Botany, which is located on the eastern shore of Botany Bay approximately one kilometre to the east of Sydney Airport s Runway 16L/34R. Commencing operations in 1979, Port Botany currently handles the second largest container volumes in Australia. The port currently covers an area of 210 hectares and provides an integrated area for stevedoring, trucking, warehousing, bulk liquid trade and storage, customs and empty container storage. In 2005, the NSW Government approved the expansion of the existing port. Currently under construction, the expanded port will provide 60 hectares of reclaimed land for additional terminal area and the development of five deep water berths, providing for a capacity of up to 3 million containers per annum to meet projected long-term growth With this increased growth, the NSW Government has identified a need to improve road and rail links, between Port Botany and Western Sydney. Cook Cove redevelopment Cook Cove is a 100 hectare site, located in Arncliffe, immediately to the west of the Cooks River and Sydney Airport. In 2001 the NSW Government established the Cooks Cove Development Corporation to manage development of the site and in 2004 gazetted Sydney Regional Environmental Plan No. 33 Cooks Cove which provides the planning framework. Table 4.2 Land use and planning relationships between Sydney Airport and nearby local government areas Local government area City of Sydney City of Botany Bay Marrickville Rockdale City Land use and planning relationship with Sydney Airport Following the development of the Eastern Distributor and the Airport Rail Link to link the CBD with the Airport, the southern section of the LGA closest to the Airport is undergoing a major transformation to a mixed residential, light industrial and commercial hub, particularly around Green Square which is identified as a Planned Major Centre. Qantas is a major land user in the western sector of the LGA, with administrative, operational and stores facilities located adjacent to the Mascot Railway Station. Zoning initiatives have further encouraged commercial development in this area. This zoning flexibility has allowed airport-related industries such as freight forwarders, catering facilities and car rental/parking facilities to be established in close proximity to the airport. Port Botany is a dominant land use within the LGA. Like Sydney Airport, Port Botany is a specialised centre and is linked by significant road and rail corridors. Due to access limitations, few airport-related industries are located within Marrickville. Future motorway developments may facilitate development of airport-related industries on remnant road reservations. Sydney Airport owns approximately 31ha of land in the Marrickville LGA which may be developed for freight, logistics and other opportunities and is contiguous to the former Tempe Tip site owned by Marrickville Council. The suburbs of Rockdale are located immediately to the west of the airport and separated from the airport by the Cooks River. The area is characterised by a diverse range of commercial, residential, industrial and natural landscapes such as Botany Bay. As with other parts of inner Sydney, growth is being driven by increasing residential densities in existing and new development areas. Due to access limitations, few airport-related industries are located within Rockdale. Future developments may facilitate establishment of airport-related industries within Cook Cove. 41

8 The proposed development involves relocating the northern part of the Kogarah Golf Course to the parklands to the south. These parklands have limited utility for built development due to its close proximity to the east-west runway. Proposed land uses for the northern part of the site closest to Sydney Airport s International Terminal Precinct include 20 hectares of trade and technologyrelated offices; warehousing and support retail; and offices and 5,000 sqm of serviced apartments. During the Cooks Cove Development Application consultation process, SACL made submission regarding the regional traffic impact of the development proposal. Detailed planning approvals have been issued by Rockdale City Council. The first works to commence on the project involve the sporting club facilities at Scarborough and Bicentennial Parks which will allow the sporting clubs to relocate off the site and the remediation works to commence. 4.3 Local and regional setting/ development context To assist land use planning and stakeholder consultation about airport operations, Sydney Airport has close connections with nearby local government authorities. The land use and planning relationships between Sydney Airport and surrounding and nearby local government areas (LGAs) are summarised in Table

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