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Decentralisation - Studies commissioned by Committee of Commonwealth/State Officials


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THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

1975— Parliamentary Paper No. 248

STUDIES COMMISSIONED BY THE COMMITTEE OF COMMONWEALTH/STATE

OFFICIALS ON DECENTRALISATION

Presented by Command 5 Novem ber 1975

Ordered to be printed 11 Novem ber 1975

THE GOVERNMENT PRINTER OF AUSTRALIA CANBERRA 1976

Published for the Department of Urban and Regional Development by the Australian Government Publishing Service

ISBN 0642 00262 2

Printed by Brown Prior Anderson, 5 Evans Street, Burwood, Vic. 3125

Foreword

This volume contains the studies commissioned and co-ordinated by the Committee of Commonwealth/State Officials on Decentralisation. They are referred to in the text of the Committee’s Report and are listed as Attachment A in that Report which was published in October 1972.

These studies have a continuing relevance to research and policy-making in urban and regional development, and further work on many o f the matters covered in the Studies is being undertaken by the Department of Urban and Regional Development, the Cities Commission, and other Australian Government Departments.

Contents

Foreword page v

Book One j

Relative advantages of city and country locations as seen by industrialists. A survey of the views and experiences of city and country firms. (Victorian private costs study).

Book T wo 83

Relative advantages o f city and country locations as seen by industrialists (New South Wales private costs study).

Book Three 157

Estimated cost of water in the greater Sydney region to the year 2001.

Book Four 209

Public capital costs associated with selective decentralisation of 500,000 people from the Sydney region (New South Wales public costs study).

Book Five 271

Comparative costs of providing public utilities and services in Melbourne and selected Victorian centres (Victorian public costs study).

Book Six 341

Labour turnover and absence: Effect of location and size of undertaking.

Book Seven 353

Relative availability of unused labour in capital cities and other areas.

Book Eight 373

Relative wages in metropolitan and non-metropolitan areas.

Book Nine 381

Relative standard of labour in metropolitan and non-metropolitan areas.

Book Ten 395

Some sociological aspects of life in N.S.W. country towns.

vii

Book One

Division of State Development Victoria Relative

advantages of city and country locations as seen by Industrialists

1968

Victorian private costs study

Contents

Sum m ary page 6

1. Introduction 15

Country Firms 15

City Firms 16

Industry Pattern 16

2. Characteristics o f the F irm s 18

Age 18

Date of Establishing Business 18

Firms which have Changed their Location 18

Status of Business 18

Size 19

Value of Output 19

Number Employed 20

Labour Characteristics 20

Numbers 20

Turnover 21

Absenteeism 21

Sources of Inputs 21

Market Areas 22

3. Reasons for Location 23

Country Firms 23

City Firms 24

4. Assessm ent o f Past Location D ecision 25

Introduction 25

Why Were Firms Dissatisfied ? 25

Would you Decentralise Again ? 25

Would City Firms Move to the Country ? 26

Attitude of Country Firms to Establishment of Other Industries in their Town 26 Whether Presence of Other Industry Necessary Before City Firms would Decentralise 26

5. Assessm ent o f Factors Affecting Location 28

Transport Costs 28

Availability of Transport 29

Road Taxes and Other Regulations 29

Access to Markets and Supplies 29

Suppliers 29

Markets 30

3

Relative advantages o f city and country locations as seen by industrialists (Victorian)

Telephone and Telegram Charges 30

Servicing and Maintenance Facilities 31

Housing 31

Education 32

Labour 32

Wage Levels 32

Productivity 33

Labour 33

Turnover 33

Absenteeism 34

Availability 34

Town Size and Availability 34

Land and Buildings 35

Finance 36

Local Government Attitude 36

Property Taxes 36

Government Assistance 36

Parking and Traffic Conditions 37

Social and Recreational Facilities 37

Public Services 37

Water Supply 37

Electricity 37

Gas 37

Other Fuel 38

Waste Disposal 38

6. C ost D ifferentials 39

Introduction 39

The Total Differential 39

Variations Between Industries 39

The Freight Component 40

Telephone Costs 41

Other Factors 42

Labour Savings 42

Land and Building Costs 43

Public Services 44

Tables

1. Date of founding business: by area 45

2. Original location of the firm: by area 45

3. Distribution of business by area and industry group 45

4. Distribution of firms according to value of output 46

5. Distribution of firms according to number employed 46

6. Status of business 47

7. Extent of part processing carried out by country firms 47

8.1 48

9. /Finished goods—distribution of sales 49

10.1 51

11.1 52

12. /Sources of raw materials 53

13. 55

/Labour characteristics: proportion of various types of labour employed

4

Contents

16. Reasons for existing location 17. 18. 19. 20.

21.

Assessment of past location decision

22. Attitude of city firms to relocation in the country should it become necessary 23. Attitude of country firms to entry of other firms 24. Attitude of city firms to need for complementary industries 25.

26. 27. 28.

29. 30. 31. 32.

Assessment of the advantages and disadvantages of country areas

Cost differentials

59 60 60 61 62

62 63 64 64

65 67 69 71 72 73 74 74

Appendices (Questionnaire) I General II Location II I Costs

IV General Comments

75 76 80 81

5

Summary

This survey was undertaken by the Division of State Development in Victoria for the Commonwealth/State Consultations on Decentralisation. However, grateful acknowledgment is made of the invaluable guidance and assistance given the Division, at all stages of the project, by the Department of Trade and Industry, without which this report would still be unwritten.

The purpose of the study, usually referred to as the Private Costs Study, was to determine whether or not manufacturing industry in country areas suffered any net disability or advantage by virtue of its location, over that located in Melbourne. It must be emphasised that the study is essentially an opinion survey—the data being the opinions of a representative variety and number of industrialists supported, wherever possible,

by the records of their respective enterprises. The main findings and conclusions are set out in this section. A more detailed analysis of the results and the statistics upon which the report is based can be found in the various appendices.

A total of 101 firms in Victoria was interviewed. The 70 country firms in the survey were drawn from 23 regional towns and cities, not including Geelong, which was considered too close to Melbourne to be decentralised, yet not close enough to be regarded as part of Melbourne.

Thirty-one city firms were also interviewed to provide a comparison between city- country thinking on the advantages and disadvantages accruing to firms located in country areas. Some 20 different industries were represented. Of the three major groupings, one third of the firms were in the textile and apparel industries, another third in engineering and metal fabrication and just over a fifth in food processing. The remaining twelve per cent covered a number of other industries such as printing, rubber, plastics etc.

Characteristics o f the Firms: Many of the country firms had been established for a con­ siderable period of time; more than 40 per cent were founded before the Second World War and most of these before 1925. Eight were established during the War. In the immediate post war period, 1946-50, there appears to have been a brief acceleration in the establishment of manufacturing units in country areas, in fact, of those included in the survey, 14 firms were established in this relatively short period, whereas only five had been founded since 1961.

This post-war exodus to the provincial centres was undoubtedly due to the availability of premises in a period of shortage of building supplies and permit restrictions on buildings. One third of the country firms interviewed were previously located in the metropolitan area. With the exception of two firms, none had moved from their original country location.

On the other hand, half of the city firms interviewed had moved within the metropolitan area, mainly from inner to outer suburbs. One in four, in fact, had made such a move within the last twenty years. These moves were largely necessitated by the inadequacy of room for expansion at their original site. If the proportion of city firms which relocated is representative,

6

this indicates that, even where firms initially choose a city location, there may be subsequent opportunities to influence their re-location. The majority of country firms (six out of every ten) were either subsidiaries, branches or annexes of firms located elsewhere, mainly in Melbourne. This was especially marked in the textile industry. O f the 43 firms which were affiliated with others, 20 said they were part­

processing a product on behalf of their affiliate and nearly half of these said over 50 per cent of their output was in this category. Country firms included in the survey tended to be smaller than city firms interviewed,

both in terms of the value of output and numbers employed. Nearly half of the country firms had an annual output valued at less than $500,000. The average number employed by city firms interviewed was nearly twice as high as in the country. Both however employed roughly the same proportion of skilled labour—just over 50 per cent. O f these skilled workers approximately two thirds were male.

Melbourne was by far the most important market and source of raw and processed materials for both city and country firms. Interstate was the next most important area for both markets and source of supplies.

Reasons for Location Country firms: For country firms, no single over-riding factor emerged which was claimed to have influenced them to locate in country areas. At the industry level however, it is evident that one or two factors played a much more important part in location decisions than others.

Labour appeared to be the main attraction for textile firms. Half these firms gave the availability of labour as the main reason for their location decisions. Reasons given by other textile firms were diverse. Over 40 per cent o f food firms indicated that their main reason for locating in the country was the proximity to raw material sources. Another 30 per cent of food firms were in the

‘local1 firm category, i.e. they were originally established in the country, usually by country people, to serve no more than the local market. However they subsequently expanded to serve a much wider market. A further 20 per cent of food firms located because of the availability of suitable premises.

Approximately one third of metal firms were in the ‘local firm category’; a quarter located close to markets, while another 17 per cent gave availability of premises as the reason for their choice of location. Slightly less than 40 per cent of firms engaged in ‘other manufacturing’ were ‘local firms’. Another quarter gave the availability of premises as their reason for choice of location. Labour,

markets and raw materials were other influencing factors. Looking at all country firms, the ranking of location factors, in order or importance was: labour (23%); ‘local firm’ (22%); premises (16%); market (11%); raw materials (11%); land (6%); government urging (6%); government assistance (1%) and transport (1%).

City Firms: When city firms answered the question ‘what were their reasons for their original location’, most did not have the city/country alternative in mind. They merely gave the reason why they had chosen one city location rather than another. Availability of suitable land was the reason most often given.

Assessm ent o f Previous Location Decision: Firms were asked whether they would make the same decision again, ‘knowing as much about their present site as they do now’. Two out of three country firms said they would make the same choice again. Of the other country firms which indicated they would make a different decision, two thirds said they would

prefer a metropolitan rather than a country location. However, taking all country firms, 77 per cent said they would choose a decentralised location again, even without further Government incentives being offered. Two out of three city firms said they would make the same choice again. Those city firms

dissatisfied with their past decision mainly complained of labour problems, insufficient land

Summary

7

and inadequate premises. All city firms were asked whether they would move to a non­ metropolitan location should their present site become unsuitable. Only one firm in three said it would, the principal reason being the greater availability of labour in the country. The remainder said they would not consider a country location, mainly because of market con­ siderations and transport difficulties.

Thus 77 per cent of country firms seem to favour a country location as against approx­ imately 30 per cent of city firms. When country firms were asked whether they would like to see other industries established in their area, four out of five said they would, many of these having no preference as regards the industry to be introduced. Almost one firm in three, however, said they would prefer

industries employing complementary types of labour (i.e. an apparel firm, employing mainly women, would prefer the establishment of male-employing industries). Almost 60 per cent of metropolitan firms indicated that the presence of other industries would not affect their attitude towards a country location. Most of the remainder believed that the presence of industries which could supply them with basic inputs would have a con­

siderable influence on any location decision.

A ssessm ent o f F acto rs Affecting Location: Firms were asked in respect of a number of different factors of importance to location (e.g. labour, transport and public services) whether each was an asset, liability or a neutral factor of a country location compared with one in the city. They were also asked to state whether they thought the asset or liability was of major or minor importance.

The factors generally considered as liabilities to firms in country areas will be dealt with first, followed by those that were considered an asset and finally those that were thought of as neutral. (In some cases, reference will be made to Section IV of the questionnaire where firms attempted to express certain advantages and disadvantages in terms of the cost or saving per

$100 of sales.) The cost of transport emerged as the most important country disability. Approximately nine out of every ten firms interviewed felt that this was so. Generally, inward freight costs were assessed more unfavourably than outward freight costs.

The extra cost of freight to a country firm was estimated by country firms at $1.34 per $100 of sales. The inward freight component accounted for just over half of this differential. City firms rated the disability slightly higher, at $1.46, assessing inward freight costs higher than had country firms and outward freight costs lower.

Cost Differential (per $100 of sales)

Relative advantages of city and country locations as seen by industrialists ( Victorian)

City firms’ estimate Country firms’ estimate

Freight Total

Inward Outward $ $ $

1.05 0.41 1.46

0.71 0.63 1.34

The availability of suitable transport, on the other hand, was considered much less a disadvantage than transport costs. Sixty per cent of city firms and 40 per cent of country firms believed it a disadvantage, while most of the remainder thought it a neutral factor. A small number of country firms indicated that the availability of suitable transport facilities was of some advantage to country industries.

Firms were also asked to assess whether they thought charges and regulations imposed to protect the railways were an asset or disability for firms in country areas. Although this would seem more likely to affect country rather than city firms, less than half the firms, both city and country, rated this a disadvantage, while the majority classed it as

8

neutral. No doubt the special exemption for some country firms using their own vehicles has lessened the impact of regulations aimed at controlling the competition between road transport and State owned railways. A country firm’s access to both its markets and sources of supplies were considered to be a liability by the majority of city and country firms. However, it was believed that they were at a greater disadvantage from the point of view of obtaining supplies than they were in serving their markets.

Delays and frustrations in dealing with city suppliers caused considerable worry. Keeping in touch with the market and meeting delivery dates also presented special difficulties to country firms. Some firms found it necessary to maintain city offices. Firms which were branches of city firms had less trouble.

Telephone and telegram charges were considered a serious disadvantage for firms located in the country. Almost all firms (96 per cent) classed these costs as some disadvantage, while about 60 per cent of all country firms classed them as a major one. More country firms rated telephone costs a major disadvantage than transport costs.

Yet a comparison of the cost disabilities for transport and telephone shows that the latter is only one fifth of the former. This suggests that factors other than cost and availability were worrying country firms and have been included in this assessment. An attempt was made to separate these ‘other factors’ from cost and availability. Firms were specifically asked for their opinion on telephone disabilities other than cost and availability. This was intended to cover such considerations as the difficulty and time involved in contacting metropolitan suppliers or customers and the possible loss of business as a result of the reluctance of potential city customers to make trunk calls.

The number of firms (70%) which said these considerations constituted a disadvantage to a country firm was considerably smaller than the number (96%) rating telephone costs as a disability. The great majority of both city and country firms considered the availability of telephone services to be no better in the city than the country.

Both the availability and cost o f suitable servicing and maintenance facilities were rated by two out of every three firms as a disadvantage. Some city firms indicated that their alleged advantage for service and parts was considerably less than might be expected. Both the availability and cost of suitable housing tended to be considered a disadvantage of location in the country. However, availability was considered a greater liability, by both city and country firms, than costs.

Generally, primary schooling and lower grades of secondary schooling was considered just as adequate in the country as in Melbourne. However, the country was considered to be at a definite disadvantage at the tertiary level. Overall therefore education was considered to be a disadvantage of a country location. A higher proportion of city firms (90%) held this view as against 60 per cent of country firms.

The results of the survey demonstrated that overall labour costs were considered by most firms, both city and country, to be lower in the country. The extent of the advantage was considered to be about $1.00 per $100 of sales according to city firms and 21 cents according to country firms. Many factors contributed to this overall assessment.

Wage levels were generally considered by city firms to be somewhat lower in the country. Over 50 per cent stated they thought wage rates for both skilled labour and unskilled male labour were an advantage in the country. The great majority of country firms however, felt wage levels were no lower than in the city. On the other hand, of the remainder, more thought they were an asset than a (lability.

Productivity was considered higher in the country for both skilled and unskilled labour. The majority of country firms felt this while most of the remainder thought that it was no higher than in the city. However only about 20 per cent of city firms believed productivity was some advantage in the country while the remainder (with the exception of two firms) considered it was neutral.

Summary

9

The majority of firms, city and country, considered labour turnover to be lower in the country. It is interesting to note that the actual turnover rates supplied by firms suggested little difference between city and country. However, the seasonal activities of many large firms in the country (e.g. food processors) could result in a higher average annual turnover than would be the norm in the non-seasonal industries.

Absenteeism rates were also considered lower in the country by the majority of firms. Most of the remainder considered them no higher than in the city. Country firms tended to give a more favourable assessment than the city. The availability of unskilled labour was generally assessed as better in the country. Almost half the country firms and one-third of city firms felt this. Most of the remainder were neutral.

Less than 20 per cent rated unskilled labour availability a disadvantage to country firms. However, the availability of skilled labour was generally considered a disadvantage. Seven out of every ten firms claimed that skilled labour was harder to recruit in the country than in the city.

It is interesting to note that firms in the larger country towns generally assessed labour availability, both skilled and unskilled, more favourably than those in the smaller towns. The combined cost of land and buildings appears as another significant advantage for firms located in the country.

Although building costs were regarded by the majority o f firms as a liability in a country location, nine out of every ten firms regarded the cost of land as an asset. Country firms estimated the savings on these costs to be just over $1.00 per $100 of sales, i.e. higher than the saving in labour costs. City firms on the other hand thought the saving would be closer to 25 cents.

Firms’ assessment of the availability of suitable land and buildings did not differ greatly from their assessment of cost. Land availability was considered superior in the country while the availability of buildings was considered better in the city. Generally the availability of finance did not appear to be a problem in the country. Only one firm in five regarded it as a disadvantage, while most said it was neutral. Some of the firms which rated finance a disadvantage had found that in country areas their investments in land and buildings were worth little as collateral.

The attitude of local government in the country was generally considered to be an advantage. Nine country firms, however, stated that the attitude of their local council was a liability. Two general criticisms appear to lie behind their reasoning. Firstly, some local government councils may tend to be apathetic towards industry and, secondly, where the

council does try to encourage industry to their areas, it does little for those already established there. Firms interviewed left no doubt as to the vital role local government could play in attracting industry and helping it to survive and prosper.

Property taxes were considered by over 60 per cent of both city and country firms to be an advantage in country areas. Government assistance was considered an advantage by just under half the firms. Just under half thought it made little difference, while seven firms thought it a disadvantage. It would appear, however, by its very nature, Government assistance could not be anything but helpful and firms which considered Government assistance a disadvantage may have confused

‘disadvantage’ with ‘inadequate’. However, on the other hand, as Government assistance is not made available to all firms in any one area, those firms not receiving assistance may be at some disadvantage to those who do derive benefit from Government subsidies etc. Parking and traffic conditions were, as one would expect, generally considered (by about nine out of ten firms) an advantage in country areas.

City firms reported that employees spend about half an hour travelling to work. While no similar question was asked of country firms it is believed that average country travel times would not exceed ten minutes. Some city firms reported that they would not engage men who had to spend more than half an hour travelling to work because experience had shown that they would not stay.

Relative advantages of city and country locations as seen by industrialists (Victorian)

10

Both the availability and cost of public services were regarded by the majority of firms as a neutral factor in location. In all cases an overwhelming majority considered availability of these services neutral. This proportion ranged from 76 per cent for waste disposal facilities to 97 per cent for gas supplies.

Although there tended to be a wider dispersion of answers in respect of cost, in most cases this was also considered a neutral factor. The estimates of cost disability or advantage also suggested a negligible difference between city and country.

Cost Differentials: Both city and country firms were asked to supply actual cost data for freight, labour etc. and then to estimate what each of the costs would be in the ‘alternate area’, assuming that markets, sources of supply etc. remain unchanged. For country firms the ‘alternate area’ was, of course, Melbourne and for city firms, the most logical country centre.

The difference between city and country cost levels thus estimated, was calculated and expressed as a differential per $100 of sales. This revealed that the average cost disability of a firm located in a country area was of the order of 40 cents per $100 of sales. The estimates given by city (37 cents) and country firms

(41 cents) were surprisingly similar.

Summary

Cost Differential (per $100 of sales)

City Firms Country Firms Estimates Estimates

$ $

Freight - 1 .4 6 - 1 .3 4

Labour + 0 .9 9 +0.21

Telephone and telegram charges - 0 .1 5 - 0 .2 7

Cost of land and buildings + 0 .2 5 + 1.05

Public services + 0 .0 2 +0.01

Other - 0 .0 2 - 0 .0 7

Total - 0 .3 7 - 0 .4 1

Note: A plus sign indicates an advantage for the country.

Half of the country firms and one-third of the city firms had first hand experience o operations in both city and country and these firms supplied estimates of 32 cents (city firms) and 31 cents (country firms). These figures were considerably lower than those provided by firms not having this dual experience (39 cents, city firms; 50 cents, country firms).

Although city and country firms gave similar estimates for the total cost differential, there was some variety in their assessment of the components. The main variation was in the ranking of labour costs and the cost of land and buildings as advantages of location in country areas. Country firms tended to rate the latter first and labour costs second. The reverse was true for

city firms. Both factors however were considered, by city and country firms alike, to be an advantage to the country and to go a long way towards offsetting the disabilities of the additional freight costs and telephone and telegram charges which firms in country locations must of necessity

meet. Understandably there were wide variations in the estimates given by the different industries for both the total differential and its components. From the estimates next page, it would appear that, while there undoubtedly exists an overall disadvantage, some industries have in fact, gained a net advantage by locating in the country

(e.g. textile and apparel industries). This, together with a detailed account of the different components of the total differential, is discussed more fully in the appendix.

11

Relative advantages of city and country locations as seen by industrialists (Victorian)

Total Cost Differential By Industry Group (per $100 of sales)

City Firms Country Firms Estimates $ Estimates

$

Food Metals Textiles O ther manufacturing’

-0 ,6 7 -0 .9 4 + 0.21 +0.24

-0 .5 6 -1 .0 8 +0.06 +0.19

Total -0 .3 7 -0 .4 1

Note: A minus sign indicates an advantage for the city.

Conclusions: The most striking conclusion to be drawn from the study is that country firms do not appear to face a large cost disability. Firms in both city and country estimated that the average cost disability was in the order of 40 cents per $100 of sales (or 0-4% of sales). Firms with first-hand knowledge of both city and country locations provided an even lower estimate of 0 - 3 per cent on sales, reinforcing the conclusion that the overall cost disability is remarkably low.

Assuming the overall cost differential is in the region of 0·4 per cent of sales, it would appear that any Government contribution to eliminate the cost disadvantages of country industry need only be small. In practice it would probably be necessary for any Government contribution to be relatively generous in order to overcome those intangible disabilities which are not directly reflected in costs and also to provide an incentive which would tend to overcome the inertia and scepticism existing in varying degrees amongst city-based firms.

Provided the cost of any incentive was less than the net saving to Government because of the resulting lessened pressure on the cities, greater government financial involvement in industrial decentralisation would seem worthwhile. For instance if the incentive cost $1.50 cents per employee per week, this would be acceptable if it could be shown that the cost to Govern­ ment of providing services was at least $1.50 per employee lower in the country than the city. T he ‘Public Costs’ exercise, which is being undertaken in parallel with this ‘Private Costs’ study, is intended to shed light on this particular question.

In the United Kingdom, for example, an incentive called ‘The Regional Employment Premium’ has been introduced, whereby firms locating in specified areas receive $3 per employee week. A similar incentive in Australia, but at the rate of $1.50 per employee, only half of the U.K. incentive, would be equivalent to approximately 60 cents per $100 of sales— which offsets, by a comfortable margin, the average net cost disability suggested by this survey.

For some industries it appears that decentralisation may offer a net advantage, even without further incentives being provided. Firms in sections of the textile and apparel industry (largely female-labour intensive) have, for example, estimated a net saving as a result of their being located in the country.

Transport and, to a lesser extent, telephone charges appear to be the main areas in which country firms are faced with a cost disadvantage. However, most are of the opinion that these tend to be offset in other spheres, mainly in lower labour and land costs. In addition to actual cost, however, country firms also suffered a variety of disadvantages, as compared to their metropolitan counterparts, which cannot be readily expressed in terms of money. By virtue of their remoteness from main markets and/or sources of supplies, they faced delays when ordering from city firms and were therefore required to stockpile supplies where possible. Similarly, city customers were required to stockpile to offset the time lag associated

12

with the purchase of goods from country suppliers and to ensure the availability of emergency supplies. Whilst this latter situation does not effect the costs of country firms it obviously operates to their detriment as city customers would tend to deal with city suppliers to avoid the necessity for, and cost of, stockpiling.

Market penetration was also difficult for country firms, many of whom have no city representative to handle enquiries, orders, etc. but relied upon city firms to make contact with them. Firms were concerned with the general problem of communications. In their assessment of

telephone services it is clear that problems other than actual cost of trunk calls caused concern, e.g. the reluctance of city firms to make trunk calls; the time and often difficulty involved in making telephone connections (presumably where Subscriber Trunk Dialling did not operate); and the difficulty of maintaining close contact with customers purely by telephone.

The Survey discloses that industry has partly overcome these problems, particularly in the textile and apparel industries, most of whom have parents or branches located in Melbourne. An appropriate division of operations between city and country which many o f these firms have made, allows them to take full advantage of the benefits to be derived from a country location

and largely eliminate the difficulties likely to be faced by a wholly decentralised operation. In many cases the lack of local servicing facilities has been effectively and economically overcome by country firms establishing their own maintenance teams. There are also a number of other factors which affect the country firms, not the least of which is the inadequacy of higher educational facilities and housing.

The lack of higher educational facilities tends to force employees with families to move to Melbourne in order to take advantage of the tertiary facilities available there. Housing shortages, on the other hand, often force country firms to enter the housing field in order to provide accommodation for personnel, whereas few, if any, city firms are faced with this problem of tying up capital in non-productive fields.

Notwithstanding the multiplicity of country locational disadvantages and the generally expressed opinion that Government assistance is inadequate to overcome them, the impact of these on country firms does not appear to be overwhelming as the great majority of country firms (77%) appear satisfied with their present location and less than a quarter of those inter­

viewed would move to Melbourne if the opportunity presented itself. This satisfaction with present location, however, does not necessarily obtain for city firms; half of those interviewed had changed their location at least once. Obviously, then, a firm’s original location decision need not be considered its last and therefore it would seem that opportunities do exist for a successful program to be developed,

aimed at attracting city-based firms to country centres. In addition, as approximately half of the firms, city and country, were branches or had branches, there is an indication that the choice of location need not involve a black or white decision between city and country as many firms have obviously discovered that maximisation

of benefit can be achieved by a logical division of operations between the two types of location. Finally it must be emphasised that the findings of this survey are largely based on con­ sidered opinions expressed by industrialists supported, where possible, by their own records and whilst some of the findings may be affected by bias on the part of informants, the study does provide a wealth of informed opinion upon a subject which to date has been a matter for

conjecture. When consideration is being given by the Government to the introduction of a particular measure designed to promote industrial decentralisation, the results of the survey will undoubtedly facilitate the gauging of its effects on different classes of industries in a variety of locations.

In addition, the project has served to highlight aspects of decentralisation policy and problems which can and should be made the subject of further specific enquiries.

Summary

13

MAJOR URBAN CENTRES MILDURA

REFERENCE (AT 1 9 6 6 CEN SUS)

5,001 to 10,000 P e rs o n s φ

10.001 to 20,000 P e rs o n s - φ -

20.001 to 100.000 P ersons

O ver 100,000 P e rs o n s H

AUSTRALIA

SWAN HILL

ECHUCA WANGARATTA

WODONGA

HORSHAM

SHEPPARTON

BENDIGO

BENALLA

STAWELL MARYBOROUGH SEYMOUR

CASTLEMAINE

ARARAT

BALLARAT

HAMILTON

M E L B O U R N E

BAIRNSDALE

WARRNAMBOOL

G E E L O N G COLAC

m o r w e l l

VICTORIA S C A L E O F M ILES

Introduction 1

At the 1964 Premiers’ Conference, it was decided that consultations on decentralisation would be held between Commonwealth and State officials. Subsequently the officials met and decided to undertake a number of studies. One of these, referred to as the ‘private costs exercise’, was to be patterned on a study carried out for the Minister for Trade and Industry by the Manufacturing Industries Advisory Council in 1965.

The aim o f the study was to determine the advantages and disadvantages of a country location over one in the city, as understood or experienced by a sample number of firms. Commonwealth and State officials devised a questionnaire, based on that used by MIAC., and pilot surveys were carried out in N.S.W. and Victoria during 1967. The questionnaire was revised in the light of these and fairly detailed plans were made for the surveys in N.S.W. and Victoria to be closely co-ordinated.

In broad terms it was agreed that about 100 firms in each State would be included in the sample, in a ratio of approximately 50 country to 50 city firms, the actual numbers depending upon the interviewers’ experience. It was agreed that in each State, one officer would carry out all interviews and that the

questionnaires would be completed by the interviewer. An officer of the Department of Trade and Industry co-ordinated the two State studies and initial interviews for the survey were undertaken with all three officers present. For instance the first interviews with country firms were in the Latrobe Valley in Victoria. The three officers visited the firms together and took turns in completing questionnaires, thus enabling problems of definition etc. to be resolved as

they arose. The first city interviews were undertaken in Sydney on the same basis. By this means it was hoped to ensure that consistency of approach was achieved interstate, as well as state-wide. The survey was confined to industries falling within the agreed upon definition of

‘decentralised’. A decentralised firm was defined as one in an industry which locates in both city and country and which carries out more than a simple transformation of locally produced primary products (i.e. milk factories and sawmills excluded). The firm also had to serve an area beyond the town where it was located and the immediate surroundings (i.e. bakeries excluded).

Country Firms: The country sample was chosen by first selecting five routes, all starting and finishing in Melbourne, which included most of the important and many of the less important towns in Victoria. Twenty three towns were finally covered. Each route was then ranked in order of its efficiency; i.e. in terms of the greatest number of firms for the least number of

miles. Every decentralised firm was listed for each town on each route until about 100 firms had been listed. This represented reasonable balance of decentralised industry in Victoria and therefore gave a good indication of the overall industry pattern in country areas.

Field work began in Victoria in July 1967. As already mentioned the Latrobe Valley was the first area visited and the N.S.W. interviewer and an officer of the Commonwealth Depart­ ment of Trade and Industry participated in these initial country interviews.

15

Each firm to be visited was notified in advance of the aims of the study and given a copy of the questionnaire to be used. Immediately prior to the visit their willingness to take part was confirmed by telephone and a suitable time agreed on for the interview. The interviewer kept a progressive record of the unfolding industry pattern. I f this showed any bias towards a particular industry group some of the later firms in that industry were by-passed. This was done to save time as well as to keep the industry pattern close to the overall pattern of country industry in Victoria.

Altogether seventy country firms were interviewed.

City Firms: For those industries which were strongly represented in the country sample, an attempt was made to gauge the attitude of city firms for comparison. City firms were chosen on the basis o f being reasonably comparable, with more importance being placed on management ability, with those interviewed in the country. For instance they were in the same industry class and employed similar processes to those used in the country. The ratio of approximately two country to one city firm was found adequate because city firms tended to be more consistent in their answers. Where city firms in an industry were found to differ markedly in their views, the number of firms covered was increased until the interviewer was satisfied that a reasonably representative picture had emerged.

Nevertheless it should be noted that the small sample of city firms was not designed to be representative of city firms in general. It follows that care has to be taken in applying con­ clusions drawn from the results of comparing a city and country sample to all city firms. Generally this will be reasonably valid in respect of firms’ experience or views on relative city/country advantages but less so in respect of such things as size, ownership and independ­ ence.

Industry Pattern: Three main industry groups were represented in the Survey: food processing, engineering and metal fabrication and the textile and apparel industries. The number of individual industries and firms included under these headings are listed below.

Industries Included in the Survey

Relative advantages of city and country locations as seen by industrialists (Victorian)

C o u n try C ity

Food Processing

Sample Sample

Canning 6 3

Smallgoods 3 1

Killing 2 2

General 3 2

14 8

Engineering and Metal Fabrication Engineering Sheet and light Machinery and tools

Foundries

8 6 6 3

4 3 2 1

23 10

Textile and Apparel Clothing 11 4

Yams and fibres 6 3

Textiles 4 1

Shoes 3 1

Wool scorning 1 0

25 9

16

Introduction

Industries Included in the Survey—continued

Country City

Sample Sample

ther Manufacturing Paper and printing 2 1

Joinery and wood 2 0

Plastics 1 1

Rubber 1 0

Chemicals and paint 1 1

Coach building 1 1

8 4

Total 70 31

17

Characteristics of the Firms 2

Age: One-third of the country firms were founded before 1925 and 44 per cent before the Second World War. Firms engaged in food processing tended to be older than the others. Nearly 60 per cent of these were founded before the war. Eight country firms (i.e. 11%) were established during the war. However there did not appear to be any marked industry pattern.

Date of Establishing Business

Pre 1925 1925-38 1939-45 1946-50 1951-60 1961-Country firms 24 7 8 14 12 5

City firms 12 8 3 4 3 0

(See Table 1 at end of Report)

In the immediate post-war period, 1946-50, there appears from the sample, to have been a brief upsurge in the number of firms being established in country areas. Fourteen firms (i.e. 20%) were founded in this period, most of them being in the textile and metal industries. During the 1950s the rate slackened with twelve firms, again mostly textile and metal firms, being established in the country.

Since 1961 only five firms have been established—no one industry being dominant.

Firm s which have changed their location (See Table 2): Whilst almost two-thirds of the country firms in the sample have not moved from their original location, just over one-third were previously located elsewhere or were branches of metropolitan firms mainly in the metropolitan area. Most of these latter firms were textile and metal firms and only two firms, one engaged in food processing and the other in engineering, were previously located elsewhere in the country.

Half of the sample city firms have shifted their location, all within the metropolitan area, mainly because of inadequate room for expansion at their original site. Firms in the metal industries have been less prone to move, only 20 per cent of the sample doing so, while half those in food processing and textiles have shifted. All firms in the other manufacturing category

have moved. None of the city firms interviewed was previously located in the country. The fact that the relatively low cost of land in the country enables firms to provide inexpensively for future growth could account for the apparently lower propensity of country firms to relocate. Secondly it is interesting to note that so high a proportion of city firms relocate. This is significant because it offers an opportunity to interest such firms in a country location.

Status o f Business: Slightly more than 60 per cent of the country firms were affiliated with firms elsewhere, mainly in Melbourne. This was particularly the case for textile firms where three quarters of them had a parent in the metropolitan area, but less so for metal firms where only one-third had city affiliations.

18

Just under 10 per cent of country firms were affiliated with overseas firms. However, no industry pattern was evident. One food firm had a parent located elsewhere in the country. Half of the city firms were independent. The rest were mainly affiliated with other firms located in Melbourne. However, unlike the country, there were not a great number o f textile

firms with city affiliations. In fact only one-third had city affiliations. Three city firms had parents located overseas; however these were not confined to any particular industry. One metal firm had a country parent. Those country firms which were not independent were asked whether they were part­ processing a product which was also partly processed by their city affiliate (i.e. apparel designed

and cut out in the city and made up in the country). The main reason for asking this was that such an arrangement could enable a firm to gain the procurement and selling advantages of a city location and yet also benefit from any country advantages such as more productive labour,

cheap land etc. (See Appendix 1). O f the 43 country firms with an affiliation, twenty indicated that the materials handled were processed partly in the city and partly in the country. For about half of these firms, more than 50 per cent of their output was in this part-processed category. Seventy per cent of the

firms which were part-processing were in the textile and apparel industries. (See Table 7).

Characteristics of the Firms

Status of Business

Nature o f Affiliation City Country

Firms Firms

No parent 15 27

City parent 12 36

Country parent 1 1

Overseas parent 3 6

Total 31 70

(See Table 6 at end of Report for full details)

Size: Country firms on the whole tended to be smaller than their counterparts in the city sample. This is indicated by a comparison of their value of output and the numbers employed.

Value of Output (percentage of firms in each class)

Value o f Output City

Firms %

Country Firms %

Under $0.5 m. 13 48

$0.5 m. to $1 m. 13 10

$1 m. to $2 m. 30 16

$2 m. to $5 m. 17 16

$5 m. to $10 m. 10 4

$10 m. to $15 m. — 6

Over $15 m. 17 —

Total 100 100

(See Table 4).

Value o f Output (See Table 4): The average value of output for city firms was just over two and a half times as high as that in the country. Nearly half the country firms, comprising mainly metal and textile firms, had output valued at less than $500,000. Only about 40 per cent had an output exceeding $1 million. On the other hand only 13 per cent of city firms had an

19

output of less than $500,000 while three-quarters had an output exceeding $1 million. Whereas five city firms (17%) had a very large output exceeding $15 million, there were no country firms in this category. Firms in the metal industries were generally smaller than textile firms while those engaged in food processing were much larger than both. However, while this pattern was common to both city and country, the average size of the firms in each of the three main industry groups

was still roughly two and a half times larger in the city than the country, in terms of output.

Number employed: The average number employed by city firms was just over twice as high as in the country. While two city firms employed over 1000, there were no country firms in this category. Whereas over half the country firms employed less than 100 persons, only one-third of the city firms employed less than this number.

Numbers Employed (percentage of firms in each class)

Relative advantages of city and country locations as seen by industrialists (Victorian)

Numbers Employed Country

Firms Per cent

City Firms Per cent

Under 100 55 35

101-200 12 16

201-400 25 23

401-1000 8 19

Over 1000 — 7

Total 100 100

(See Table 5.)

This size pattern was common to all industry groups, but varied in degree. Food firms in the city sample employed, on average, three times as many as those in the country. On the other hand, while textile firms in the city employed just over twice as many as their country counterparts, the average number employed by city metal firms was only 60 per cent higher than in the country.

In the city, food firms employed the most people, followed by textiles and then metals. This pattern conformed with the size ranking in terms of output. However, in the country, textile firms employed more than food firms whereas in terms of output, food firms were larger. Metal firms were smallest both in terms of numbers employed and output.

Labour Characteristics: Firms were asked to supply employment figures broken down into factory and non-factory, with the former subdivided into skilled and unskilled.

Numbers: For both city and country firms skilled labour averaged just over 50 per cent. The numbers of skilled males employed was twice as high as skilled females. There was, however, wide industry variation. Textile firms, for example, employed nearly 70 per cent skilled labour, about 70 per cent of this being skilled females. Metal firms on the other hand employed 50 per cent of skilled labour, made up entirely of males. Just over forty per cent of the labour employed by food firms was skilled, and most of this, too, was male.

Unskilled labour accounted for one-third of total employment for both city and country firms. Here again there was wide variation in the proportion employed by the various industries. Food firms employed as much unskilled labour (41%) as skilled, and three-quarters of those employed were males.

Textile firms on the other hand employed less unskilled labour (about 25%), made up mostly of females (two-thirds). Metal firms employed about 40 per cent unskilled labour, nearly all of which was male. Non-factory employment accounted for roughly 10-15 per cent of total employment.

20

Turnover: Firms were asked to supply figures on turnover rates for both skilled and unskilled labour. There was very little difference between the rates supplied by city and country firms for skilled, (11% and 12% respectively). For unskilled labour however the average turnover rate quoted by country firms of 19 per cent was higher than that for city firms, 14 per cent.

Absenteeism: Absenteeism rates were also sought. The city figure of 3-6 per cent however was not significantly different from the country rate of 2 - 7 per cent.

Characteristics of the Firms

Employment

(percentage of various types of labour employed)

City and Country Combined

Country City Food Metal Textile Other

Labour Category Firms Firms Firms Firms Firms Mfg

Skilled males 37 36 39 50 20 46

Unskilled males 22 23 31 32 8 28

Skilled females 19 16 5 0 47 8

Unskilled females 11 9 10 6 16 6

Non-factory males 6 10 9 8 4 7

Non-factory females 5 6 6 4 5 5

Total 100% 100% 100% 100% 100% 100%

(See Tables 14-15.)

Sources of Inputs: Both city and country firms obtained much the same proportion of inputs from the city. Sixty per cent of country firms’ supplies came from Melbourne compared with 66 per cent for city firms. However there was some industry variation. Food firms, both city and country, tended to draw less of their inputs from the metropolitan area (39%) and more from elsewhere in the state (50%), particularly within a fifty mile radius of the plant. On the other hand metal and textile firms took the bulk of their supplies from Melbourne (70 and 71% respectively) with little coming from elsewhere in the state.

Source of Supplies (percentage coming from each area)

City and Country Combined

Country City Food Metal Textile Other

Source Firms Firms Firms Firms Firms Mfg

Metropolitan area 60 66 39 70 71 56

W ithin a 50 mile radius/ excluding metropolitan area 13 4 33 5 2 3

Outside a 50 mile radius 6 6 17 3 4 8

Interstate 14 13 10 15 12 18

Overseas 7 11 1 7 11 15

Total 100% 100% 100% 100% 100% 100%

(See Tables 11-13.)

About 13-14 per cent of both city and country firms’ supplies come from interstate. Industry variation was not marked. Inputs from overseas were relatively unimportant apart from textile firms, with 11 per cent coming from overseas. O ther manufacturing’ drew 15 per. cent from overseas. Paper, chemicals, and plastics firms accounted for this.

21

M arket A reas: On average about 45 per cent of both city and country firms’ sales were made in Melbourne. Next most important market was interstate. For country firms, however, markets within the state were equally important as those interstate.

Markets

(percentage of sales going to each area)

Relative advantages of city and country locations as seen by industrialists ( Victorian)

City and Country Combined

Country City Food Metal Textile Other

Source Firms Firms Firms Firms Firms Mfg

Metropolitan area 44 45 29 44 53 51

W ithin a 50 mile radius/ excluding metropolitan area 12 7 15 14 4 10

Outside a 50 mile radius 12 11 11 17 8 12

Interstate 23 28 21 21 29 23

Overseas 9 9 24 4 6 4

Total 100% 100% 100% 100% 100% 100%

(See Tables 8-10.)

As with supplies there was a marked industry pattern. Food firms tended to rely more or less as heavily on markets overseas (24%), interstate (21%) and within the state (26%) as those in the metropolitan area (29%). On the other hand, over 50 per cent o f textile firms’ sales were made in Melbourne and 30 per cent interstate. Metal firms made 44 per cent of sales in the metropolitan area, another third elsewhere in the state and 21 per cent to areas interstate. Except for food firms, overseas markets were relatively unimportant.

22

Reasons for Location 3

Country Firms: T here was marked variation between industries in factors dominating location decisions. For this reason, no one factor stood out overall.

Reasons for Location (percentage in each category)

Reason Food Metals Textiles Other Mfg Total

Labour 7 9 48 12 23

Local firm 29 31 4 39 22

Premises 21 17 8 25 16

Market 0 26 4 12 11

Raw materials 43 0 4 12 11

Land 0 9 8 0 6

Local capital 0 4 12 0 6

Government urging 0 0 8 0 3

Government assistance 0 0 4 0 1

Transport 0 4 0 0 1

Total 100% 100% 100% 100% 100%

(See Table 16.)

Twenty-three per cent o f all country firms gave labour as their main reason for locating in the country. M ost of these were in the textile industry. Next, close behind labour, came the ‘local firm’ category. These firms, 22 per cent of the total, were originally established in a country centre, usually by country people, to serve the local market. Subsequently they expanded to serve a wider market.

T he availability of suitable premises was the next most important factor. Sixteen per cent o f country firms gave this as their main reason for choosing their present location. Markets were considered an im portant attraction by 11 per cent of all country firms. These were mostly engaged in engineering and metal fabrication.

Another 11 per cent o f country firms had chosen a location close to their source of raw materials. These were mainly food firms. Other factors which influenced firms in selecting country areas in preference to the city were the availability and cost of land; local capital; government assistance and urging; and

transport considerations. As mentioned above, at the industry level one or two particular factors usually played an im portant part in influencing firms to locate in the country. For textile firms the primary reason was labour. Nearly half gave this as their main reason for location. Principal reasons why other textile firms located, however, covered a wide range of factors.

Over 40 per cent o f firms engaged in food processing located near their source of inputs. Nearly 30 per cent were in the ‘local firm’ category, (i.e. were started originally by people in the

23

country to serve the local market and then expanded to serve a wider market, beyond the town and its immediate surroundings). Just over 20 per cent located due to the availability of premises. Nearly a third o f the metal firms were in the ‘local firm’ category. Another quarter located due to market considerations. Next most important reason was premises. Seventeen per cent o f metal firms located for this reason. Other less important factors were labour, land, local capital and transport.

Nearly 40 per cent of those firms engaged in ‘other manufacturing’ were ‘local firms’. Another 25 per cent were attracted by available premises. Other reasons included labour, markets and raw materials.

City Firm s: City firms were also asked why they had chosen their present location. However, it is evident that in answering the question many firms did not have the city/country alternative in mind. Rather they merely gave reasons for choosing a particular location within the city. This pattern of answers may reflect the fact that few of these firms considered a country location a realistic alternative.

The main reason put forward by city firms was availability of land. Nearly 30 per cent of city firms gave this as their reason for location. Market considerations, labour, premises and transport were all equally ranked as important factors in location, after land. In each case five firms (or 16% of all city firms) gave one of these factors as their main reason. (See Table 16 at the end of the Report).

Relative advantages of city and country locations as seen by industrialists (Victorian)

24

Assessment of Past Location Decision 4

Firms were asked whether they would select their present site again, now knowing its advantages and disadvantages.1 Two-thirds of all firms, both city and country, answered ‘yes’.2 The remaining third indicated they were not completely satisfied. When country firms in this latter group were asked whether they would choose some other decentralised location

again, two-thirds answered that they would not. However, taking all country firms, 77 per cent said they would locate in the country again. Less than a quarter would relocate in the city, given the opportunity. There was not a great deal of variation in the assessments given by the different industry groups. In answer to the question ‘would you choose the same site again,’ just over 70 per cent of country textile firms, for example, said they were satisfied compared with 57 per cent of food and 54 per cent of metal firms. In the city, on the other hand, a slightly higher proportion of food firms (75%) were happy with their original decision than textiles (66%) and metal firms

(60%).3 .

Why Were Firm s Dissatisfied?: Reasons given by the minority of firms which were dis­ satisfied with their original location decision differed markedly between city and country. However, there was no marked industry pattern. For country firms the most common reasons for dissatisfaction with their original decision

were transport and higher costs.4 Transport was considered by six firms (i.e. a quarter of those dissatisfied) as the main area of misjudgment. Another six merely said they experienced higher costs operating in the country than they had expected. Labour and markets were also specifically mentioned. Five country firms claimed labour more of a problem than they expected, mainly the availability of skilled labour. It is interesting to note that most of these (i.e. four firms) were small, employing less than 100 people. Four

firms claimed they faced unforeseen market difficulties due to their present location. For city firms there were three main areas where they considered their original location assessment had been deficient.5 Labour was rated by three of the eleven dissatisfied city firms as their main worry. Availability rather than cost appeared to be the main problem. All three firms were small, employing less than 100 people.

Land and premises were equally ranked with labour. Three firms stated they had provided insufficient room for expansion. Another three claimed their premises had proved inadequate and would like to move. Other reasons given were unforeseen difficulties associated with markets and sources of raw materials.

Would You Decentralise Again?: As mentioned above, the twenty-five country firms dissatisfied with their past decision were asked whether they would relocate elsewhere in the

1 See Appendix I. 2 See Tables 17 and 18. 3 See Tables 17 and 18. 4 See Table 19. 5 See Table 19.

25

B

country if the opportunity arose.1 Two-thirds answered that they would not, saying they would prefer the city. The other third indicated they were satisfied with the country.1 2 There were three main reasons why two-thirds of the dissatisfied firms would choose a city rather than a country location. Nearly 40 per cent claimed that their genera] operating

costs were higher in the country. Half these firms were in the textile industry. A quarter of the firms claimed they suffered transport disadvantages in the country and would therefore con­ sider moving to the city. Two of these were engaged in food processing. Another 25 per cent gave markets as the reason why they would relocate in the metropolitan area given the oppor­ tunity. Three of these were metal fabricating firms.

The other third, (or nine country firms) however, said although they were dissatisfied with their present location they would still choose some other country location. Four of these were metal firms. Three firms, two of which were in the textiles group, said they had labour advantages in the country. Two firms indicated they would not move to the city because of markets. Another two, both metal firms, said they preferred a country location because of government assistance. One cannery gave transport as its reason.

Would City Firm s Move To the Country ?: City firms were asked if they would consider relocating some of their activities in the country, should their present metropolitan site become unsuitable. Eight of the thirty-one city firms in the survey (25%) said they would, with another two indicating they might.3 Thus one city firm in three expressed interest in a decentralised location. Labour appeared to be the main attraction. Four firms, three being textile firms, stated they would move to the country because of expected labour advantages. Two firms said market considerations were the attraction. Other reasons included transport and raw materials.

O f the other two-thirds of city firms, who said they would not move to the country, 40 per cent gave markets as their main reason. Two-thirds of these were metal firms. They believed that city customers would not use country suppliers on contract work. Just over a quarter claimed that a country location would place them at a major dis­ advantage as far as transport was concerned. Half these were food firms. Four firms (3 in textiles) stated that labour could cause some problems. They pointed out that although there may be a good supply of female labour it would be mainly unskilled and would need some training. Other reasons given included the cost of management, travel and problems with

communications.

Attitude o f Country Firm s to Establishment o f Other Industries in Their Town: Country firms were asked whether they would like to see other manufacturers establish in their area. (See Appendix 1). Four out of every five firms said that they would.4 Many of these firms (over a third) had no strong preference as to the type of industry. However, about 40 per cent of them, made up mainly of textile and metal firms, said they preferred those that would employ complementary labour, (e.g. textile firms would like to see industries established that

would employ mainly men as this would tend to increase the numbers of wives and daughters seeking employment). One in ten of the firms receptive to new industries said they would prefer those which would use their products as inputs. Another 10 per cent said they would welcome firms which could supply them with their necessary inputs.

Just over 20 per cent of all country firms said they would not like to see other manu­ facturers coming to their areas—mainly because they feared competition for available labour. Nearly half these were textile firms.

Whether Presence o f Other Industry Necessary before City Firm would Decentralise: City firms were asked whether certain other industries would be necessary before they would

Relative advantages of city and country locations as seen by industrialists (Victorian)

1 See Appendix I. 2 See Tables 21 and 22. 3 See Tables 21 and 22. 4 See Table 23.

26

Assessment of Past Location Decision

consider locating in a country town. (See Appendix 1). Nearly 60 per cent of firms said ‘No’.1 Of the 40 per cent which said it would be necessary (mainly in the textile and food industries) most specified industries which would supply basic inputs. Two textile firms said they would require industries employing mostly male labour to help provide an adequate supply of female labour.

1 See Table 24,

27

Assessment of Factors Affecting Location 5

Firms were asked to assess whether a number of factors which play a part in locational questions, such as transport costs, labour and building costs, were an asset or liability in the country compared with the city. They were also asked to indicate whether they thought a particular factor was a major advantage or disadvantage.

Those factors where the country was generally considered to be at a disadvantage will be discussed first, followed by those that were considered an advantage and then finally those that were classed as neutral. In Section IV of the questionnaire, firms were asked to express some of the assessments of the more important factors in terms of a cost or saving per $100 of sales, for firms located in the country. Some of these estimates will be compared or contrasted with the conclusions

drawn from firms’ assessments in this earlier section of the questionnaire. The cost differential figure for labour, for instance, brings together the combined effects of wage levels and product­ ivity, which are dealt with separately in this section.

Transport Costs: Transport costs for firms located in the country were almost universally considered a liability by both city and country firms. Roughly nine out of ten firms, both city and country, held this view. City firms estimated that the extra cost involved was in the order of $1.46 per $100 of sales, similar to country firms’ estimate of $1.34.1

Firms were asked to indicate their opinion on inward and outward freight separately. Nine out of every ten firms considered inward freight costs a disadvantage. Just over half the firms thought them a major one. Half those that did not think inward freight costs a dis­ advantage compared with the city, said they were neutral. Only five firms, two city and three country, considered inward freight costs an advantage in the country. There was little difference between city and country firms’ assessment.

There was some industry variation evident.1 2 All engineering and metal firms claimed inward freight costs were a disadvantage. All firms that rated inward costs an advantage were in food processing. However, only one food firm in five claimed this. All other food firms considered inward freight costs a disadvantage. About four in five textile firms claimed these costs were a disadvantage; the remainder considered them to be no higher than in the city.

Over eighty per cent of all firms both city and country claimed that outward freight costs were a disadvantage for firms in country areas. Nearly 60 per cent of all city firms and just over 40 per cent of country firms regarded these costs as a major liability. Only about one firm in ten claimed there was no difference, while six firms (6%) considered outward freight costs an

advantage to country areas. There was some variation between industries.3 The proportion of firms in food processing that assessed outward costs as a disability (70%) was slightly lower than in the other two main groupings—textile (97%) and metal firms (85%). With the exception of two firms, all those that claimed outward costs were an advantage in the country were engaged in food processing.

1 See Tables 30 and 31. 2 See Tables 27 and 28. 3 See Tables 27 and 28.

28

A vailability o f Transport: The availability of transport was considered much less of a disadvantage than costs. Just under 60 per cent of city firms felt availability was a disadvantage in the country while, with the exception of one firm, the remainder considered it a neutral factor.

Only forty per cent of the country firms thought availability of transport was a liability. H alf considered it a neutral factor as between city and country locations. One country firm in ten considered transport availability an advantage in country areas.

Assessment of Factors Affecting Location

Assessment of Factors Affecting Location* Transport (percentage of firms in each category)

City Firm s Country Firms

ML L N A MA ML L N A MA

Freight Costs Inward 52 36 6 0 6 52 40 4 3 1

Outward 58 23 13 0 6 43 43 8 3 3

Transport availability 26 32 39 3 0 13 27 50 6 4

Road taxes and other regulations 3 32 58 7 0 24 23 53 . 0 0

M L = Major Liability; L = Liability; N = Neutral; A — Asset; MA — Major Asset.

Road Taxes and other Regulations: Road regulations and charges imposed to make rail more competitive with road transport were generally considered a disadvantage of a country location, but less so than freight costs. Over half the firms thought these charges and regulations were a neutral factor in location.

However nearly half the country firms and a third of the city firms still considered that these taxes and regulations were a liability for country firms. A quarter of all country firms regarded this liability as a major one. Only one city firm, however, thought it a major disadvantage. Over seventy per cent of textile firms, both city and country, rated these taxes and

regulations as a neutral factor. Those engaged in food processing and metal industries were more concerned about these imposts, with forty per cent of city and fifty-seven per cent of country metal firms and twenty-five per cent of city and fifty-seven per cent of country food

firms rating them a disadvantage.1

Access to Markets and Suppliers: Generally country access, to both markets and suppliers of raw materials, was considered a liability by both city and country firms. Country firms were considered to be at a greater disadvantage with supplies than markets.

Suppliers: Seven out of every ten country firms and nearly nine out of ten city firms thought that those located in the country were at a disadvantage as far as access to suppliers was concerned. Over half the city firms and a quarter of all country firms thought it a major disability. Most of the remaining firms thought access no more a difficulty in the country than in the city.

There were some differences in the assessments given by the different industry groups.2 Just over half the country textile firms regarded access to suppliers as a disadvantage for those in the country compared with about three-quarters of both metal and food firms. This is no doubt explained by the fact that a much higher percentage of country textile

firms were affiliated with firms in Melbourne and in many cases would receive supplies through them. Firms without city affiliations had to make their own arrangements.

* See Tables 25 and 26. 1 See Tables 27 and 28. 2 See Tables 27 and 28.

29

On the other hand, all city textile firms regarded access to supplies a disability for country firms, compared with eighty per cent for metal firms and nearly ninety per cent for those in food processing.

Relative advantages of city and country locations as seen by industrialists (Victorian)

Assessment of Factors Affecting Location* Access to Suppliers and Markets (percentage of firms in each category)

M L

C ity F irm s L N A M A M L

C o u n try F irm s L N A MA

Suppliers 55 32 10 3 0 26 44 27 3 0

Markets 48 26 23 3 0 23 27 39 10 1

M L = Major Liability; L — Liability; N — Neutral; A = Asset; MA = Major Asset.

M arkets: Most city firms (75%) thought that access to markets would be a problem in the country. However only half of country firms shared this view. The rest generally considered it no more o f a problem than in the city. In fact one country firm in ten claimed to have better access to markets than its city competitors.

Opinion differed greatly among industry groups with food firms least concerned about alleged country disadvantages, and metal firms most concerned. Only one country food firm in five claimed market access was a disadvantage compared with forty-four per cent of country textile firms and three-quarters of country metal firms. The industry variation was not as marked for city firms although textile firms, on the whole, considered market access less of a

disadvantage than food and metal firms.

Telephone and Telegram Charges: Next to transport costs, telephone and telegram charges tended to be considered the most important disability for firms located in country areas. Well over ninety per cent of all firms, both city and country, classed these costs as some disadvantage.1 Sixty per cent of country firms and just over one-third of city firms claimed this disability was a major one.

Assessment of Factors Affecting Location* Telephones (percentage of firms in each category)

C ity F irm s C o u n try F irm s

M L L N A M A M L L N A MA

Cost 35 58 7 0 0 61 37 1 1 0

Availability 0 26 74 0 0 3 8 85 3 1

Other factors 32 32 36 0 0 30 41 26 3 0

M L = Major Liability; L = Liability; N = Neutral; A = Asset; MA = Major Asset.

Country firms estimated that the extra cost of telephone calls in the country would amount to 27 cents per 8100 of sales. This was higher than the city estimate of 15 cents.* 1 2 This estimate of the extra cost of telephones for country firms was about 20 per cent of that estimated for transport. Yet a greater number of country firms were of the opinion that telephone costs were more of a disadvantage than transport costs. While roughly the same

*See Tables 25 and 26. 1 See Tables 27 and 28. 2 See Table 30 and 31.

number stated both transport and telephone costs were some disadvantage, over 60 per cent of country firms have rated the latter a major liability compared with 43 per cent for outward freight costs and about 50 per cent for inward. This apparent anomaly, with firms considering telephone costs more of a disability than the expenditure involved would justify, has been noted in previous studies. Obviously there must be a factor related to the use of telephones, other than cost, which accounts for this situation. In the present study an attempt was made to separate these other factors. Firms

were specifically asked to assess telephone factors other than cost and availability. These would include such things as the time and difficulty involved in making trunk calls and the possible loss of business through the reluctance of city firms to make trunk calls. The number of firms that claimed these other factors as a disadvantage was not as high as those that rated cost a disadvantage. In their estimate of the actual cost involved (i.e. the cost differential), firms appear to have included, as was intended, only the extra cost of telephone calls.

The same problem did not arise with city firms. Their relative ratings for transport and telephone costs accorded reasonably well with their estimates of the respective cost disabilities. With these factors other than cost and availability of telephone services, about 70 per cent of country firms and nearly the same proportion of city firms (64%) rated them a disadvantage.

About a third of both city and country firms rated these factors as a major disability. There was an interesting difference between metal and textile firms in the importance they attached to these ‘other’ telephone disabilities. About 80 per cent of country metal firms thought they were at some disadvantage compared with 60 per cent of textile firms. The

same pattern emerged for city firms but tended to be a little less marked.1 The availability of telephone services was considered much less a disadvantage than costs and ‘other’ factors. In fact 85 per cent of country firms and three-quarters of the city firms considered the country no worse off than the city. All of the remaining city firms and most o f the remaining country firms, however, felt that those in the country were at a disadvantage.

Servicing and Maintenance Facilities: Both the cost and availability of suitable servicing and maintenance facilities were rated by two out of three firms, both city and country, as a disadvantage in country areas.1 2 Nearly all the remaining firms claimed there was little difference between city and country.

However, there was slight variation among the different industry groups. More food firms (82%) thought maintenance facilities a disadvantage than textile (68%) and metal (61%) firms.3

In many cases it was stated that good management could at least partially overcome the problem. The major problems appear to be the lack of specialist services in the country and facilities for handling larger repair jobs. In many cases repairs needing such facilities involved either sending the machine to Melbourne or else bringing someone in. Both add to country costs.

Housing: The cost of suitable housing was considered less of a problem in the country than availability. Both city and country firms agreed on this point. Over 60 per cent of both city and country firms classed availability a disadvantage. Roughly half of these firms claimed it a major liability.4

On the other hand under 40 per cent of country firms and 45 per cent of city firms said cost was a disability. About half these country firms and a quarter of the city firms said it was a major one. However, of the remaining firms one-third of those in the country claimed costs were lower in the country. Most of the remaining city firms claimed there was no

difference although 15 per cent of all city firms thought costs would be lower in country areas.

Assessment of Factors Affecting Location

1 See Tables 27 and 28. 2 See Tables 25 and 26. 3 See Tables 29 and 30. 4 See Tables 25 and 26

31

Education: Generally, facilities at the lower levels of education were considered to be much the same in the city as the country. Primary schooling was regarded by over 70 per cent of the city and country firms as being just as adequate as in Melbourne. Most of the remaining country firms thought it an advantage (smaller classes etc.) while the remaining city firms were fairly evenly divided as to whether it was an asset or liability.

With secondary schooling, 60 per cent of both city and country firms thought that the city had no advantage over the country. Three-quarters of the remaining country firms claimed country areas had an advantage. For city firms, however, the reverse was true. On the other hand country areas were considered to be at a disadvantage as far as higher education was concerned. Just over half the country firms thought that facilities for technical education were poorer in country areas. A third said there was little difference while one-sixth

claimed there was some advantage in the country. For city firms under half said the country was at a disadvantage while about the same number claimed there was little difference. Country areas suffered an obvious disadvantage with university training. Nearly 90 per cent of country firms felt this, while, with the exception of one firm, the rest claimed the lack of facilities caused no problem. All city firms, except one, claimed the country was at a disadvantage.

Hence when firms were asked to rate educational facilities overall, nearly 90 per cent of city firms claimed the country was at a net disadvantage. The proportion of country firms that took this view was lower, around 60 per cent. In fact one firm in ten claimed the country had a net advantage.1

Labour: Savings on labour costs were generally considered as one of the most important advantages for firms located in country areas. City firms estimated that these savings would be in the order of 99 cents per $100 of sales. Country firms’ estimate was lower at 21 cents per $100 of sales. (See Tables 31-32 at end of Report).

A number of factors would have contributed to this overall assessment—i.e. relative wage levels, productivity, turnover and absenteeism. Firms were asked to assess whether each of these was an advantage for a country firm.

Wage Levels: Country firms generally felt that wage levels were much the same in city and country. City firms tended to the view that skilled labour and unskilled male labour was cheaper in the country. More city firms, on the whole, claimed wage rates were lower in country areas, than country firms. Just over half thought wage levels for skilled workers would be lower while three-quarters of the remainder claimed there was little or no difference. On the other hand half the country firms said there was no difference between city and country skilled wage levels. Of the rest, only a slightly higher proportion thought they were an advantage rather

than a disadvantage. Unskilled wage rates were generally considered a neutral factor by both city and country firms. For unskilled males, again, just over half the city firms thought wage levels would be lower in the country. With the exception of one firm the remainder thought there was no

difference. Sixty-three per cent of country firms on the other hand, felt they had no advantage over the city with respect to unskilled male rates. However 65 per cent of the remainder thought there was some advantage for country firms. Only slightly less than one-third of city firms felt that unskilled female rates were lower

in the country while the rest, with the exception of one firm, thought there was no difference. Nearly 70 per cent of country firms said female rates were no lower in the country than the city, but two-thirds of the remainder claimed there was some advantage. Only one country firm in ten said wage rates, both male and female, were higher in the country.

There was some variation apparent in the assessments given by the different industry groups. Food firms, both city and country, tended to think there was little disparity between

Relative advantages of city and country locations as seen by industrialists (Victorian)

1 See Tables 25 and 26.

32

city and country wage rates. On the other hand, more metal firms thought wage levels were an advantage than in the other industry groups. (See Tables 29-30 at end of Report).

Productivity: Productivity was considered an advantage in the country. Half of the country firms felt that this was so, while almost all the remainder felt productivity was the same as in the city. T he assessment given by city firms came out less strongly in favour of the country. While 23 per cent thought productivity an advantage in country areas, the rest, with the

exception of two firms, claimed no difference. There was little difference in the assessment of productivity for skilled and unskilled labour. Nor was variation in the assessments given by the different industry groups marked. (See Tables 29-30 at the end of the Report).

There was some tendency for larger country firms to think that productivity was higher in country areas, than smaller firms.

Assessment of Factors Affecting Location

Productivity Assessment Country Firms (by employment size)

Number Percentage

employed claiming advantage

U nder 200 47

201- 400 53

401-1000 67

No such pattern emerged for city firms. Here it seemed there was little correlation between employment size and the assessment of productivity.

Assessment of Factors Affecting Location* Labour (percentage of firms in each category)

City Firm s Country Firms

ML L N A MA ML L N A MA

Wage Levels Skilled 6 6 36 46 6 6 15 50 26 3

Unskilled male 0 3 45 49 3 1 10 63 25 1

Unskilled female 0 3 68 23 6 1 10 69 17 3

Productivity Skilled 0 6 71 20 3 1 7 40 39 13

Unskilled 0 6 71 20 3 1 6 43 34 16

Turnover Skilled 6 3 20 51 20 6 1 30 27 36

Unskilled 3 3 23 61 10 6 1 44 27 22

Absenteeism 0 6 45 43 6 3 3 33 44 17

Availability Skilled 48 20 20 3 9 40 28 16 10 6

Unskilled males 10 13 45 22 10 6 12 41 33 8

Unskilled females 6 6 56 19 13 7 3 44 27 19

M L = Major Liability; L = Liability; N = Neutral; A = Asset; MA = Major Asset.

Turnover: Labour turnover was considered lower in the country. Over 70 per cent of city firms thought both skilled and unskilled labour turnover was lower in country areas. Most

*See Tables 25 and 26

33

of the remainder claimed the country had no advantage. More than 60 per cent of country firms felt skilled turnover was lower. This was higher than the number which felt unskilled turnover was lower, (50%). Less than one country firm in ten thought skilled and unskilled turnover was higher in the country.

Industry variation was not marked. (See Tables 29-30 at the end of the Report). It is interesting to note that while turnover was generally considered an advantage in country areas, an anlaysis o f the actual rates supplied by firms revealed little difference between rates for skilled workers while the country rate for unskilled appeared only a little lower than th at supplied by city firms (14% as against 18%).

Absenteeism: Absenteeism rates were also considered lower in the country by both city and country firms. Roughly 60 per cent of country firms claimed rates were lower while a third thought there was little difference. Half the city firms said the country had an advantage, while the remainder, with the exception of two firms, claimed no difference.

Here again there was little difference in the assessments given by the different industry groups. (See Tables 29-30 at the end of the Report). Although it was claimed that absenteeism rates were lower in country areas, a comparison of the figures supplied by city and country firms revealed no significant difference.

Availability: The availability of unskilled labour, both male and female, was generally considered better in the country. Over 40 per cent of country firms claimed that unskilled labour was easier to recruit in country areas. Roughly the same number felt it was no easier than in the city. One-third of city firms considered the country had an advantage here but most of the remainder felt there was little difference.

There was some industry variation evident. Textile firms, both city and country, felt that unskilled female labour was easier to recruit in the country than firms in other industry groups. Nearly 70 per cent held this view. With unskilled males, two-thirds of firms in the ‘other manufacturing’ category claimed availability was an advantage in country areas. Textile firms were least sure of the advantages. They felt, on balance, that availability of unskilled males was no better in the country than the city. (See Tables 29-30 at the end of the Report).

The availability of skilled labour on the other hand was considered a disadvantage in country areas. Nearly 70 per cent o f both city and country firms agreed with this. Just over 40 per cent of all firms said it was a major disadvantage. The remaining firms were fairly evenly divided as to whether it was an advantage or neutral factor. However only about one firm in seven said skilled availability was an advantage.

There was some slight industry variation evident. A higher proportion of metal firms (76%) and those in ‘other manufacturing’ (75%) thought availability of skilled labour was a disadvantage than food (60%) and textile firms (65%). (See Tables 29-30 at the end of the Report).

Town Size and Availability: An interesting relationship emerged between town size, in the country, and firms’ assessment of the availability of labour. Generally country firms in the larger towns assessed the availability of both skilled and unskilled labour more favourably than those in the smaller ones. This throws doubt on the claim by some firms that although

labour may be an attraction in country areas, the advantages a firm may have over the city (such as an adequate supply of female labour) rapidly disappears as the town grows. With unskilled labour, 46 per cent of firms in larger towns claimed that the availability of unskilled male labour was an advantage in the country, compared with 34 per cent in the smaller towns. Although most of the remaining firms were neutral, a smaller proportion of firms in larger towns (15%) claimed unskilled male availability a disadvantage, than those in smaller towns (29%).

For unskilled females, again the assessment in larger towns was more favourable. Just over half the firms in the larger towns claimed the country had an advantage over the city with the availability of unskilled females, compared with 38 per cent of those in smaller towns.

Relative advantages of city and country locations as seen by industrialists ( Victorian)

34

Nearly all the remaining firms, in each group, thought there was no difference between city and country. Although the availability of skilled labour was generally considered a disadvantage of a country location, firms in the larger towns considered this less so than other country firms. Whereas 80 per cent of firms in the smaller towns claimed skilled availability a disadvantage

in the country, only 60 per cent of those in larger towns claimed this. In fact over 20 per cent of those in the larger towns claimed the availability of skilled labour was an advantage in the country, compared with only seven per cent of those in smaller towns. The remaining firms were neutral.

Land and Buildings: The lower combined cost of land and buildings was considered an important advantage, for firms locating in country areas, by both city and country firms. The extent o f this saving was estimated by country firms at $1.05 per $100 of sales; higher than their estimated savings on labour costs (21 cents). City firms estimate of 25 cents was lower than their estimated labour savings of around $1.00. (See Tables 31-32 at the end of the Report).

Over 90 per cent of firms, both city and country, regarded the cost of land as an asset in the country. Nearly half of all country firms thought it a major asset. Only a very small number of firms did not agree that land costs were lower in the country. There was very little difference in the opinions of the various industry groups. (See Tables 29-30 at the end of the Report).

Assessment of Factors Affecting Location

Assessment of Factors Affecting Location* Land and Buildings (percentage of firms in each category)

City Firms Country Firms

ML L N A MA ML L N A MA

Land Cost 0 6 3 65 26 1 1 6 44 48

Availability 0 3 26 55 16 1 4 10 43 42

Buildings Cost 6 59 29 6 0 16 33 38 6 7

Availability 6 49 42 3 0 17 40 33 4 6

M L = Major Liability; L = Liability; N = Neutral; A = Asset; MA = Major Asset.

However, as one would expect, building costs were generally thought to be higher in country areas. About half the country firms and two-thirds of city firms thought this. Only a small proportion of firms felt it was a major liability. O f the remainder most considered costs to be no higher than in the city. This generally unfavourable assessment reinforces the

impression that although some building materials are produced locally many would have to be brought in from Melbourne. Nevertheless, although building costs were considered somewhat high in country areas,

the lower land costs more than compensated to make the combined cost lower in country areas than the city. The availability of suitable land was also considered superior in the country. Over 80 per cent of country firms claimed they had an advantage over the city, half these firms saying it was a major one. City firms agreed, although the proportion was slightly lower (about 70%).

Only about 15 per cent of all city firms said it was a major advantage. Most of the remaining firms (26% of city and 10% of country firms) thought land availability was no better than in the city.

*See Tables 25 and 26. -

35

The availability of adequate buildings, like cost, was considered a liability in the country. Country firms seemed a little more worried with availability than cost. Nearly 60 per cent claimed the country was at a disadvantage while one-third felt there was little difference. This was not the case for city firms. In fact they tended to think that cost was a bigger problem than availability. Just over half the city firms claimed that availability was a disability whereas

two-thirds said the same for cost.

Finance: The availability of finance was generally considered no worse in the country than the city. Only one firm in five thought that finance was harder to raise for firms in the country. Some country firms stated that in some cases their land and buildings were not acceptable as collateral. Three-quarters of both city and country firms claimed there was little difference.

(See Tables 25-26 at the end of the Report). There was some relationship between the size of the firm and the assessment of finance. In the country smaller firms seemed to find it harder to raise finance than larger ones.

Local Government Attitude: The attitude of local government councils in the country towards industry was considered by both city and country firms to be better than in the city. About 60 per cent of country firms felt this while half these thought it was a major advantage in the country. Although over two-thirds of city firms agreed only one thought it was a major advantage. All other city firms (about one-third) felt local government attitudes were no better than in the city.' (See Tables 25-26 at the end of the Report).

Whereas no city firm thought local government would be worse in the country than in the city, nine country firms (13%) claimed that it was. This highlights two criticisms that may be levelled at some local councils. Firstly, some, while trying to attract industry to their area, do little for firms already established. Secondly, some appear to make no effort whatever to attract or help industry, despite the fact it would probably be sound policy to do so.

Property Taxes: Country firms were considered to be at an advantage as far as property taxes were concerned. About 90 per cent of city firms claimed the country was at an advantage, compared with just under 60 per cent of country firms. Only a small number of firms (6 country and 1 city) thought that property taxes were higher in the country. (See Tables 25-26

at the end of the Report). The lower level of property taxes in the country would partly reflect the lower cost of achieving the same level of service (e.g. low cost of land, easier garbage disposal) and partly the fact that some services are not provided (and perhaps not needed) to the same extent in the country (e.g. open space for recreation).

Government Assistance: Government assistance to firms locating outside the metropolitan area was considered an advantage by nearly half the firms, both city and country. One-third of the country firms that regarded assistance as an asset thought it a major one. Only one city firm however felt it was a major advantage. Most of the remaining firms (43% of country and 48% of city firms) considered government assistance a neutral factor. (See Tables 25-26).

A small number of firms, one city and six country, regarded assistance as a disadvantage. All these were food and textile firms. Assistance, however, can hardly be a disadvantage. True, in some cases it may be inadequate to offset the cost of locating in a particular area. This, however, necessarily implies it is an asset. In other cases promised assistance may not have been forthcoming. This is probably what these firms had in mind. Some firms also

complained of the ‘red tape’ involved in getting assistance. There were marked differences in the assessments of the different industry groups. Nearly 70 per cent of country metal firms claimed government assistance was an advantage compared with 44 per cent for textile firms, 43 per cent of food firms and 12 per cent in ‘other manufacturing’. In the city, 78 per cent of textile firms claimed assistance an advantage

compared with 50 per cent in ‘other manufacturing’, 37 per cent of food and 30 per cent of metal firms. (See Tables 27-28).

Relative advantages of city and country locations as seen by industrialists (Victorian)

36

Parking and Traffic Conditions: Parking and traffic conditions were generally considered an asset in country areas. Ninety per cent of country firms thought the country was at an advantage, and one-third of these firms regarded it as a major one. Over 80 per cent of city firms considered parking and traffic conditions superior in the country. Only two firms however thought it a major advantage. With the exception of two country firms all the remaining firms (16% of city firms and 7% of country firms) thought conditions were no better than in the city. (See Tables 25-26).

City firms stated that on average, their employees spent about half an hour travelling to work. No similar question was asked of country firms but it is believed that a corresponding figure for the country would be around ten minutes. Some city employers said they would not employ people who had to spend more than half an hour travelling to work as experience showed they would not stay.

Social and Recreational Facilities: Those interviewed in the city tended to prefer the city and those in the country to prefer the country. However the pattern seemed a little more marked in the country, with 74 per cent preferring country, as against 65 per cent of city firms which preferred city.

Reasons given by both those who preferred the country and those who preferred the city were vague and, in fact, about 20 per cent of those who indicated a preference gave no reason. Generally the reasons given referred to such things as ‘way of life’, ‘recreation’, ‘sport’ etc.

Public Services: The cost of public services tended to play a neutral role in location. The cost differential of around 1 cent per $100 of sales suggested, if anything, an almost negligible saving to firms located in country areas. (See Tables 31-32). On the availability side, in all cases, an overwhelming proportion of firms thought that

these services were no better in the city than the country.

Water Supply: Nearly half the city firms and one-third of country firms regarded the cost of water as an advantage in country areas. All the remaining city (52%) and most of the remaining country firms (i.e. 55%) regarded cost as a neutral factor. Only a small number of country firms thought water cost more in the country. (See Tables 25-26).

Here the extra cost involved was mainly in the installation of special equipment, such as filtration plants, owing to poorer quality and pressure of available water supplies. Ninety per cent of city firms and 80 per cent of country firms regarded the availability of adequate water supplies as no better in the city than in the country. Seventeen per cent of

country firms regarded it as an advantage. Only three firms (1 country and 2 city) thought availability a disadvantage.

Electricity: All city firms and nearly 90 per cent of country firms thought the cost of electricity was no different in the country from the city. Most of the remaining country firms felt it was a disadvantage. Although the S.E.C. maintains a policy of uniform electricity charges through­ out the state, in some cases electricity charges may be higher as some country towns do have their own electricity supplies (e.g. Ararat). (See Tables 25-26).

Availability was similarly assessed. All city firms, except one, and nine out of every ten country firms claimed that availability of supplies was no better in the city than the country. Over half the remaining country firms (7%) claimed they were at a disadvantage.

Gas: Ninety per cent of city firms and 70 per cent of country firms thought that gas charges were a neutral factor in location. However all but one of the remaining country firms claimed that cost was a disadvantage. Although it is true that the price of gas does vary between Melbourne and various country localities, the margin is narrowing. (See Tables 25-26).

The availability of supplies in the country was considered much the same as in the city. All city firms and 95 per cent of country firms thought this to be the case.

Assessment of Factors Affecting Location

37

Other Fuel: The cost of ‘other fuel’ was considered a disadvantage in the country by 70 per cent of firms, both city and country. With the exception of two country firms the remainder said there was little difference. (See Tables 25-26). The availability of supplies was considered to be the same as for Melbourne in the opinion of all city firms and over 90 per cent of country firms. The remaining country firms were evenly divided as to whether availability was an advantage or disadvantage.

Waste Disposal: Eighty per cent of city firms and about two-thirds of country firms regarded the cost of waste disposal as no higher in the country than the city. The remainder were fairly evenly divided as to whether cost was an advantage or disadvantage. (See Tables 25-26). Availability of facilities was similarly assessed. Again 80 per cent of city firms and a slightly lower proportion of country firms regarded availability as a neutral factor in location.

Relative advantages of city and country locations as seen by industrialists (Victorian)

38

Cost Differentials 6

In the preceding section an outline has been given of the advantages and disadvantages which firms are likely to encounter when locating in the country. However this leaves unanswered the important question of the extent of the net cost disability or advantage accruing to country firms. Do in fact the advantages outweigh the disadvantages ?

In an attempt to answer this question, firms were asked to cost a number of important items such as transport, labour and so on and then to estimate what the cost would be in the ‘alternate area’ assuming that markets and sources of supply remained as before. (See Appendix I). The Melbourne Metropolitan area was of course the ‘alternate area’ for country firms while for city firms it was a logical country town of their own choosing. The differences'

obtained between the two costs were then expressed as a differential per $100 of sales.

The Total Differential: City firms estimated the overall cost disability of a country location at 37 cents. This was surprisingly similar to that given by country firms of 41 cents. Taking city and country firms together, the average was 40 cents per $100 of sales. (See Tables 31-32). O f the firms interviewed approximately half the country firms and one-third of the city firms had first hand experience of both city and country operations. One would expect that these firms would be in a better position to make an accurate assessment of the differential than those firms without such experience.

It was found, in fact, that these firms, both city and country, believed the total cost disadvantage to be lower than the estimates of firms without first hand experience. The city estimate of 31 cents per $100 of sales was almost the same as the country one of 32 cents. For the firms without experience, however, as well as their estimates being higher, the

difference between the city and country estimates were also wider. City firms estimated the cost disability at 39 cents compared with 50 cents by country firms. Therefore, taking the firms with first hand experience of both city and country locations, their estimates, as well as being lower than for other firms, showed a greater degree of

consistency between city and country firms estimates. One would have some confidence, therefore, in suggesting that the overall disability suffered by country firms is in the order of 30 cents per $100 of sales, or 0 · 3 per cent on sales.

Variations between Industries: There was marked variation in the estimates of the total differential supplied by the different industry groups. The close similarity between city and country estimates, evident for the overall disability, was generally maintained at the industry level.

Firms in both food processing and the engineering and metal industries incurred, on balance extra costs by locating in country areas. For metal firms the extra cost was estimated by city firms to be 94 cents per $100 of sales with the country estimate only slightly higher at $1.08. The net disability for those engaged in food processing was lower. Country food firms estimated it to be 56 cents and city firms 67 cents. The textile and apparel firms interviewed, however, showed a net advantage in the country, estimated at 21 cents by city firms and 6 cents

39

Differential on Telephone and Telegram Charges (per $100 of sales)

Relative advantages of city and country locations as seen by industrialists (Victorian)

Industry Group

Food Metals Textiles Other manufacturing

City Firms’ Estimates $ -0 .0 6

-0 .2 4 -0 .0 9 - 0 . 2 1

Total —0.15

Country Firms’ Estimates $ -0 .2 6

-0 .4 6 -0 .1 8 -0 .0 5

-0 .2 7

Note: A minus sign indicates an advantage for the city.

Other Factors: In addition, firms were asked whether there were any other categories of cost disability or advantage, i.e. such items as having to establish and maintain a city representative; the cost of travelling to and from Melbourne etc.

Differential on the Cost of Other Factors (per $100 of sales)

Industry Group City Firms’ Country Firms’

Estimates Estimates

$ $

— +0.04

0.06 - 0.02

0.03 -0 .2 1

Food Metals Textiles Other manufacturing

Total -0 .0 2 -0 .0 7

Note: A minus sign indicates an advantage for the city.

These additional costs were small when compared, for instance, with freight costs. Country firms estimated they would amount to 7 cents per $100 of sales compared with the figure of 2 cents by city firms.

Labour Savings: Labour costs were generally considered to be lower in the country. City firms estimated that the saving would amount to 99 cents per $100 of sales (i.e. about 1% on sales). This was higher than the estimate given by country firms of 21 cents.

Differential on Labour Costs (per $100 of sales)

Industry Group City Firms’

Estimates Country Firms’ Estimates

Food +0.34 -0 .4 4

Metals +2.04 +0.28

Textiles +0.29 +0.41

Other manufacturing + 1.07 +0.58

Total +0.99 +0.21

Note: A plus sign indicates an advantage for the country.

42

Cost Differentials

The industry pattern showed interesting variations, not only between industries, but also between city and country. City metal firms estimated the country labour advantage at over 2 per cent on sales, about twice the average of all city estimates. However, country metal firms suggested a figure of 28 cents per $100 of sales (about average for estimates by country firms).

Whereas country food firms thought labour costs were higher in the country (to the extent of 44 cents per $100 of sales), city firms thought there would be a saving of 34 cents. One reason which could account for this difference is that the fruit award is lower in the city than the country.

The variation between city and country textile firms’ estimates of the labour differential was not nearly as marked as for other industries. The country figure of 41 cents was a little higher than the city one of 29 cents. It will be noted that city firms in the ‘other manufacturing’ category suggested that the labour advantage in the country was more than 1 per cent on sales. Country firms in this industry group also rated the labour advantage highly compared with other country firms.

This pattern was common to all industries in the ‘other manufacturing’ category, (i.e. printing, paper, coach building, joinery and wood). The city/country variation between industries is perhaps best illustrated by comparing the respective industry rankings. In the table below, industries are listed according to labour

savings as estimated by city and country firms respectively.

City Firms Country Firms

Highest estimate Engineering and Metal Fabrication O th er Manufacturing’ O th e r Manufacturing’ Textiles and Apparel

Food Processing Engineering and Metal Fabrication

Lowest estimate Textiles and Apparel Food Processing

(disadvantage)

Land and Building Costs: City and country firms were in agreement that firms located in country areas made a saving on the combined cost of land and buildings. Again there was wide variation as to the extent of the saving. Country firms estimated the saving to be in the order of $1.05 per $100 of sales, higher than the city firms’ estimate of 25 cents and even higher than their estimated savings on labour (21 cents).

Differential on Land and Building Costs (per $100 of sales)

City Firms’ Estimates S

Industry Group

Food Metals Textiles Other manufacturing

+ 0.20 - 0 . 0 1

+0.23 + 1.04

Total +0.25

Country Firms’ Estimates $ +0.44

+2.05 + 0.70 +0.43

+ 1.05

Note: A plus sign indicates an advantage for the country.

Variation between industries, and within industries, between city and country estimates was also marked. Country metal firms gave the highest estimate for any industry of $2.05 whereas those in the city gave the lowest, stating there was very little difference between city and country. This accounts for much of the difference between the overall city and country

averages. .

43

Country food (44 cents) and textile firms (70 cents) gave higher estimates than their counterparts in the city, (20 cents and 23 cents respectively). City firms engaged in ‘other manufacturing’ gave the highest estimate ($1.04) of any industry group in the city. This contrasts with the situation amongst country firms where this industry category gave a low estimate (43 cents). No one industry within the ‘other manufacturing’ category in the city accounted for the high figure.

Public Services: The relative cost of public services appeared to give rise to little advantage or disadvantage in the country. Both city and country firms estimated a negligible overall saving for firms located in country areas, 2 cents and 1 cent respectively.

Differential on the Cost of Public Services (per $100 of sales)

Relative advantages of city and country locations as seen by industrialists (Victorian)

Industry Group

Food Metals Textiles Other manufacturing

City Firms’ Estimates + 0.01 -0 .0 7

+ 0.12 +0.06

Total +0.02

Country Firms’ Estimates +0.04 - 0.01

+0.04 -0 .0 8

+ 0.01

Note: A plus sign indicates an advantage for the country.

There was some variation, however, in the estimates given by the different industry categories. City textile firms thought there was quite a definite advantage for country firms. They estimated a saving of 12 cents per $100 of sales compared with four cents by country textile firms. Metal firms, on the other hand, felt the cost of public services were a slight advantage for those located in the city. City metal firms thought this saving would be in the order of seven cents per $100 of sales while country metal firms said one cent.

44

Tables

Table 1

Date of Founding Business: by Area Num ber of firms in each category

Pre 1925 1925-38 1939-45 1946-50 1951-55 1956-60 1961-Country firms 24 7 8 14 6 6 5

City firms 12 8 3 4 2 1 0

Table 2

Original Location of the F irm : by Area Number of firms in each category

Present Location Previously Located Previously Located in the City in the Country

Country firms 45 23 2

City firms 15 15 0

Table 3

Distribution of Business by Area and Industry Group Number of firms in each category

Food Metals Textiles Other Mfg Total

City firms 8 10 9 4 31

Country firms 14 23 25 8 70

Total 22 33 34 12 101

45

Ox

Distribution of Firms According to Value of O utput: By Area and Industry Group Num ber of Firms in Each Category

Table 4

Country Firms City Firms

Value Under $500,000 $500,000-$lm. $lm .-$2m .

$2m.-$5m. $5m.-$10m. $10m.-$15m.

Over$15m.

Total

Food Metals Textiles Other Mfg 1 18 11 3

1 0 4 2

5 1 3 2

2 3 5 1

2 0 1 0

3 0 1 0

0 0 0 0

14 22 25 8

Country Firms City Firms

Number Employed Less than 100 101-200 201-300

301-400 401-1000 Over 1000

Total

Food Metals Textiles Other Mfg 6 17 11 4

2 1 3 2

4 2 2 1

2 1 4 1

0 1 5 0

0 0 0 0

14 22 25 8

Table 5

Distribution of Firms According to Number Employed at Local P lant: By Area and Industry Group Number of Firms in Each Category

8 5.

Relative advantages of city and country locations as seen by industrials

Tables

Table 6

Status of Business Number of firms in each category

By Industry Group (City and Country Combined)

By Area Total

Food Metals Textiles Other Mfg City Countr;

Nature of Affiliation

No parent 11 17 10 4 15 27

City parent 7 12 21 8 12 36

Country parent 1 1 0 0 1 1

Overseas parent 3 3 3 0 3 6

Total 22 33 34 12 31 70

Table 7

Degree of Part Processing

Distribution of Country Firms according to how much of their output is partly processed by them and also by their affiliates

Food Metals Textiles Other Mfg Total

Part Processed Output/ Total Output

Less than 50% 1 0 7 3 11

More than 50% 0 2 7 0 9

N o part processing 13 21 11 5 50

Total 14 23 25 8 70

47

Sale of Finished Goods: By Area

Estimate by Country and City firms as to what proportion of sales goes to the areas specified below Num ber of Firms in Each Category1

Table 8

Country Firms Proportion

Market 0 1- 20% 21-50% 51-80% Over 80%

Metropolitan area W ithin a 50 mile radius (exclud- 9 16 17 11 17

ing metropolitan area) 36 23 6 3 2

Outside a 50 mile radius 30 30 6 3 1

Interstate 25 15 19 10 1

Overseas 49 14 2 3 2

Total 70

70 70 70 70

City Firms Proportion

Market 0 1- 20% 21-50% 51-80% Over 80%

Metropolitan area W ithin a 50 mile radius (exclud- 1 3 14 9 4

ing metropolitan area) 10 21 0 0 0

Outside a 50 mile radius 5 22 4 0 0

Interstate 5 11 7 8 0

Overseas 14 14 1 2 0

Total 31

31 31 31 31

Mean

(Percentage)

44

12 12 23 9

100

Mean

(Percentage)

45

7

11 28 9

5.

a*

s eg ■si, **· <3

Q

r §·

S' I I.

S' 8^

100

1 Except for columns showing the mean percentage.

Sale of Finished Goods: By Industry Group Estimate by firms as to what proportion of sales go to the areas specified below (city and country firms combined) Number of Firms in Each Category1

Table 9

Food Firms

Market 0 1- 20% 21-50% 51-80% Over 80%

Metropolitan area Within a 50 mile radius (exclud-3 8 6 4 1

ing metropolitan area) 7 11 2 1 1

Outside a 50 mile radius 7 13 1 1 0

Interstate 5 8 7 1 1

Overseas 9 5 2 5 1

Mean

(Percentage)

Total 22 29

22 15

22 11

22 21

22 24

100

Metal Firms

Market 0 1- 20% 21-50% 51-80% Over 80%

Metropolitan area Within a 50 mile radius (exclud- 5 6 9 7 6

ing metropolitan area) 12 16 2 2 1

Outside a 50 mile radius 10 14 7 2 0

Interstate 11 9 10 3 0

Overseas 24 8 1 0 0

Total 33

33 33 33

33

Mean

(Percentage)

44

14 17 21 4

100

1 Except for columns showing the mean percentage.

Table 9— continued

Textile Firm s Proportion

Market 0 1- 20% 21-50% 51-80% Over 80%

Metropolitan area W ithin a 50 mile radius (exclud­ 1 4 12 6 11

ing metropolitan area) 22 12 0 0 0

Outside a 50 mile radius 25 18 0 0 1

Interstate 12 3 8 11 0

Overseas 22 11 0 0 1

Total 34

34 34 34 34

Other Manufacturing Proportion

Market 0 1- 20% 21-50% 51-80% Over 80%

Metropolitan area W ithin a 50 mile radius (exclud­ 1 1 4 3 3

ing metropolitan area) 5 5 2 0 0

Outside a 50 mile radius 3 7 2 0 0

Interstate 2 6 1 3 0

Overseas 8 4 0 0 0

Total 12

12 12 12 12

100

§â– 

s

<9. 8 . <2

Mean

(Percentage)

4 8

29 6

ft,

§

3 S'

I

Mean

(Percentage)

51

10 12 23 4

I.

Table 10

Sale of Finished Goods: By Industry Group and by Area1 Estimate as to what proportions of sales go to the areas specified below

By Industry Group (City and Country Firms Combined)

By Area

M arket

Metropolitan area Within a 50 mile radius (exclud­ ing metropolitan area)

Outside a 50 mile radius Interstate Overseas

Food Metals Textiles Other Mfg

% % % %

29 44 53 51

15 14 4 10

11 17 8 12

21 21 29 23

24 4 6 4

Country Firms City Firms % %

45 44

7

11 28 9

12 12 23 9

100 100

1 Adapted from Tables 8 and 9.

T ab le 12—continued

Textile Firms Proportion

Source 0 1- 20% 21-50% 51-80% Over 80%

Metropolitan area Within a 50 mile radius (exclud- 0 3 5 6 20

metropolitan area) 29 5 0 0 0

Outside a 50 mile radius 28 5 0 0 1

Interstate 21 4 8 0 1

Overseas 19 8 5 2 0

Total 34

34 34 34 34

Lh

Other Manufacturing Proportion

Source 0 1- 20% 21-50% 51-80% Over 80%

Metropolitan area W ithin a 50 mile radius (exclud- 0 2 3 3 4

ing metropolitan area) 9 3 0 0 0

Outside a 50 mile radius 8 3 0 1 0

Interstate 6 2 2 2 0

Overseas 6 2 3 1 0

Total 12

12 12 12 12

w E-o §·

I

R· <3

Mean

(Percentage)

2 4

12 11

100

f t .

Mean

(Percentage)

S'

56

3 8

18 15

1.

100

intry It

Source of Supplies: By Industry Group and by Area1 Estimate as to what proportion of supplies comes from the areas specified below

Table 13

Source

Metropolitan area W ithin a 50 mile radius (excluding metropolitan area) Outside a 50 mile radius

Interstate Overseas

By Industry Group (City and Country Firms Combined)

By Area

Food Metals Textiles Other Mfg

% % % %

39 70 71 56

33 5 2 3

17 3 4 8

10 15 12 18

1 7 11 15

Country Firms City Firms

% %

66 60

4 13

6 6

13 14

11 7

100 100

1 Adapted from Tables 11 and 12.

Labour Characteristics

Firms’ estimates as to the proportion of the various types of labour they employ in relation to total employment. Number of firms in each category1

Table 14

Country Firms Proportion

Labour Category 0 1- 10% 11- 20% 21-50% 51-80% Over 80%

Skilled males 4 12 13 17 18 6

Unskilled males 22 10 9 17 11 1

Skilled females 35 11 2 9 9 4

Unskilled females 35 14 8 10 2 1

Non-factory males 19 40 10 1 0 0

Non-factory females 12 56 2 0 0 0

Total 70 70 70

70 70 70

City Firms Proportion

Labour Category 0 1- 10% 11- 20% 21-50% 51-80% Over 80%

Skilled males 0 3 9 11 7 1

Unskilled males 6 8 3 10 4 0

Skilled females 16 5 1 5 3 1

Unskilled females 15 6 6 4 0 0

Non-factory males 6 15 8 2 0 0

Non-factory females 3 25 3 0 0 0

Total 31 31 31

31 31 31

Mean

(Percentage)

37 22 19 11

6 5

100

Mean

(Percentage)

36 23 16 9

10 6

6 §- B 1

t B

E.

§

Q δ* 8 δ·

3 B

<8

■ s*S' £ I 3: tv

i* 3^

100

1 Except for columns showing the mean percentage.

Labour Characteristics

Firms’ estimates as to the proportion of the various types of labour they employ in relation to total employment

By Industry Group (City and country firms combined) Number of firms in each category1

Table 15

Food Firms Proportion

Labour Category 0 1- 10% 11- 20% 21-50% 51-80% Over 80%

Skilled males 0 0 7 8 7 0

Unskilled males 4 1 3 10 4 0

Skilled females 10 10 0 2 0 0

Unskilled females 10 5 3 4 0 0

Non-factory males 2 13 6 1 0 0

Non-factory females 0 20 2 0 0 0

Total 22 22 22 22 22 22

Mean

(Percentage)

39 31 5 10

9 6

100

Metal Firms Proportion

Labour Category 0 1- 10% 11- 20% 21-50% 51-80% Over 80%

Skilled males 2 4 2 8 11 6

Unskilled males 4 5 5 12 6 1

Skilled females 31 2 0 0 0 0

Unskilled females 25 2 3 3 0 0

Non-factory males 10 14 7 2 0 0

Non-factory females 8 24 1 0 0 0

Total 33 33 33 33 33 33

Mean

(Percentage)

50 32 0 6

8 4

100

1 Except for columns showing the mean percentage.

T ab le 15—continued

Textile Firms Proportion

Labour Category 0 1- 10% 11- 20% 21-50% 51-80% Over 80%

Skilled males 2 10 10 10 2 0

Unskilled males 17 10 2 4 1 0

Skilled females 3 2 2 10 12 5

Unskilled females 10 8 7 6 2 1

Non-factory males 12 20 2 0 0 0

Non-factory females 5 28 1 0 0 0

Total 34 34 34

34 34 34

ux 00

Other Firms Proportion

Labour Category 0 1- 10% 11- 20% 21-50% 51-80% Over 80%

Skilled males 0 1 3 2 5 1

Unskilled males 3 2 2 1 4 0

Skilled females 7 2 1 2 0 0

Unskilled females 5 5 1 1 0 0

Non-factory males 1 8 3 0 0 0

Non-factory males 2 9 1 0 0 0

Total 12 12 12

12 12 12

Mean

(Percentage)

20 8

47 16 4 5

100

Mean

(Percentage)

46 28 8 6

7 5

§â–  §

IS

a. -5 » n.

I s

I.

100

Relative at

Total 5 0

0 5 5 0 9 0

0

0 5 1 1

31

Relative advantages of city and country locations as seen by industrialists ( Victorian)

Table 17

Assessment of Past Location Decision: By Industry Group Country Firms Number of firms in each category

Food Metals Textiles Other Mfg Total

Those satisfied with past decision Those dissatisfied with past 8 12 17 7 44

decision1 6 11 7 1 25

Total 14 23 24 8 69

1 Reasons for dissatisfaction appear in Table 19.

Table 18

Assessment of Past Location Decision: By Industry Group City Firms Number of firms in each category

Food Metals Textiles Other Mfg Total

Those satisfied with past decision 6 6 6 2 20

Those dissatisfied with past decision1 2 4 3 2 11

Total 8 10 9 4 31

1 Reasons for dissatisfaction appear in Table 19.

60

Relative advantages of city and country locations as seen by industrialists ( Victorian)

Table 20

Country Firms Dissatisfied with Past Location Decision and would Therefore Relocate in the City Reasons: By Industry Group1

Food Metals Textiles Other Mfg Total

Reasons

Generally higher costs 1 1 3 1 6

Transport 2 1 1 0 4

Market 0 3 1 0 4

Labour 1 0 0 0 1

Personal tie 0 1 0 0 1

Total 4 6 5 1 16

1 Country firms that were dissatisfied with past location decision (see Tables 17 and 1§) were asked whether they would choose a country location again if they had the opportunity. Sixteen of the 25 said they would not

Table 21

Country Firms Dissatisfied with Past Location Decision but would not Relocate in the City Reasons: By Industry Group1

Food Metals Textiles Other Mfg Total

Reasons

Labour 0 1 2 0 3

Market 1 1 0 0 2

Government assistance 0 2 0 0 2

Transport 1 0 0 0 1

Premises 0 0 1 0 1

Total 2 4 3 0 9

1 Country firms that were dissatisfied with past location decision (see Tables 17 and 19) were asked whether they would choose a country location again if they had the opportunity. Nine of the 25 said they would.

62

Tables

Table 22

Attitude of City Firms to Relocation in the Country in the Event of Relocation Becoming Necessary: By Industry Group * 1 * * 4

Food Metals Textiles Other Mfg

Those that would not Reasons

Market 1 5 1 1

Transport 3 2 1 0

Labour 0 1 3 0

Management travel 0 0 0 1

Communications 0 0 0 1

‘Know how* 0 0 1 0

Total 4 8 6 3

Those that would Reasons

Labour 0 1 3 0

Market 1 1 0 0

Transport 1 0 0 0

Raw materials 1 0 0 0

Total 3 2 3 0

Those that would consider at time Total 1 0 0 1

Total 4 2 3 1

Grand Total 8 10 9 4

Total

8 6 4 1

1 1

21

4 2 1 1

8

2

10 31

63

Table 23

Establishment of Other Manufacturers in the Area Attitude of Country Firm s: By Industry Group Number of firms in each category

Relative advantages of city and country locations as seen by industrialists (Victorian)

Food Metals Textiles Other Mfg Total

Those that would like to see others established in area Reasons1

Complementary labour 2 10 10 1 23

Competitive labour 0 0 1 0 1

Input industry 3 2 1 0 6

Output industry 1 0 4 1 6

No strong reason 7 8 4 3 22

Total

Those that would not like

13 20 20 5 58

1 3 5 3 12 to see others established in area

Total 14 23 25 8 70

1 Reasons relate to the benefits existing firms hope to gain from the establishment of other manufacturers in their area, e.g., Complementary labour—the present firm employs mainly women and would welcome firms employing mainly men because this will tend to increase the number of wives and daughters seeking employment. Competitive labour —the present firm feels that more firms using the same kind of labour would mean a bigger labour

pool (only 2 firms expressed this view).

Input industry —present firm would welcome firms making items which it uses as inputs. Output industry —present firm would welcome firms using the products it produces.

Table 24

Necessity of Other Industries in the Area Before City Firms Would Consider Locating in the Country: By Industry Group Number of firms in each category

Other industries necessary Reasons1

Complementary labour Competitive labour Input industry

Total

Other industries not necessary

Total

Food Metals Textiles Other Mfg Total

0 0 2 0 2

0 0 1 0 1

4 2 2 2 10

4 2 5 2 13

4 8 4 2 18

8 10 9 4 31

1 See footnote, Table 23.

64

Assessment of Advantages: By Area Number of firms in each category

Table 25

Factor TRANSPORT, SUPPLIERS AND MARKETS Transport availability

Road taxes and regulations Freight costs Inward Outward

Access to suppliers Access to markets PUBLIC SERVICES Water supply Si Availability

Cost

Electricity Availability Cost Gas

Availability Cost Other fuel Availability

Cost

Waste disposal Availability Cost

Telephones Availability ‘Other factors’ Cost

City Assessment

ML L N A MA

8 10 12 1 0

1 10 18 2 0

16 11 2 0 2

18 7 4 0 2

17 10 3 1 0

15 8 7 1 0

0 2 28 1 0

0 0 16 14 1

0 1 30 0 0

0 0 31 0 0

0 0 31 0 0

0 2 28 1 0

0 0 31 0 0

3 18 10 0 0

2 1 25 3 0

1 3 25 2 0

0 8 23 0 0

10 10 11 0 0

11 18 2 0 0

Country Assessment

ML L N A MA

9 19 35 4 3

17 16 37 0 0

36 28 3 2 1

30 30 6 2 2

18 31 19 2 0

16 19 27 7 1

1 1 56 7 5

1 7 38 18 6

1 4 62 2 1

3 3 62 2 0

0 3 66 1 0

2 18 49 1 0

0 3 64 3 0

8 42 18 2 0

6 3 51 6 4

7 5 45 10 3

2 6 59 2 1

21 29 18 2 0

43 25 1 1 0

9 M L = Major Liability^ L = Liability; N = Neutral; A ** Asset; MA = Major Asset.

Table 25— continued

LABOUR CHARACTERISTICS Availability Skilled Unskilled males

Unskilled females Turnover Skilled Unskilled

Wage level Skilled Unskilled male Unskilled female Productivity

Skilled Unskilled Absenteeism OTHER § Finance

Availability Land availability Cost Buildings

Availability Cost Servicing and maintenance facilities Availability

Cost

Property taxes Government assistance Local government attitude Housing facilities

Availability Cost Educational facilities Parking and traffic conditions

15 6 6 1 3

3 4 14 7 3

2 2 17 6 4

2 1 6 16 6

1 1 6 19 3

2 2 11 14 2

0 1 14 15 1

0 1 21 7 2

0 2 22 6 1

0 2 22 6 1

0 2 14 13 2

4 3 23 1 0

0 1 8 17 5

0 2 1 20 8

2 15 13 1 0

2 18 9 2 0

9 12 10 0 0

7 15 9 0 0

0 1 3 26 1

0 1 15 14 1

0 0 10 20 1

9 10 10 2 0

4 10 12 5 0

6 21 3 1 0

0 0 5 24 2

M L = Major Liability; L = Liability; N = Neutral; A — Asset; MA — Major Asset.

Tables

Table 26

Assessment of Advantages by Area1 Percentage Distribution

City Assessment1 Country Assessment

F actor L N A

TRANSPORT, SUPPLIERS, AND MARKETS Transport availability 58 39 3

Road taxes and regulations 35 58 7

Freight costs Inward 88 6 6

Outward 81 13 6

Access to suppliers 87 10 3

Access to markets 74 23 3

PUBLIC SERVICES Water supply Availability 6 90 4

Cost 0 52 48

Electricity Availability 3 97 0

Cost 0 100 0

Gas Availability 0 100 0

Cost 6 90 4

Other fuel Availability 0 100 0

Cost 68 32 0

Waste disposal

80 Availability 10 10

Cost 13 80 7

Telephones Availability O ther factors’

26 74 0

64 36 0

Cost 93 7 0

LABOUR CHARACTERISTICS Availability Skilled 68 20 12

Unskilled males 23 45 32

Unskilled females 12 56 32

Turnover Skilled 9 20 71

Unskilled 6 23 71

Wage level Skilled 12 36 52

Unskilled male 3 45 52

Unskilled female 3 68 29

Productivity Skilled 6 71 23

Unskilled 6 71 23

Absenteeism 6 45 49

1 Adapted from Table 25. L = Liability; N = Neutral; A = Asset.

67

Relative advantages of city and country locations as seen by industrialists (Victorian)

Table 26— co n tin u e d

City Assessm ent C ountry Assessment

F actor L N A L N A

OTHER Finance Availability 23 74 3 20 79 1

Land Availability 3 26 71 5 10 85

Cost 6 3 91 2 6 92

Buildings Availability 55 42 3 57 33 10

Cost 65 29 6 49 38 13

SERVICING AND MAINTENANCE FACILITIES Availability 68 32 0 66 33 1

Cost 71 29 0 67 29 4

Property taxes 3 10 87 9 34 57

Government assistance 3 48 48 9 43 48

Local Government attitude 0 32 68 13 26 61

Housing facilities Availability 61 32 7 65 21 14

Cost 45 39 16 38 29 33

Educational facilities 87 10 3 59 30 11

Parking and traffic conditions 0 16 84 3 7 90

L = Liability; N = Neutral; A = Asset.

68

Table 27— continued

Textiles Other Manufacturers

Factors

Road taxes and regulations Freight costs Inwards Outwards o Access to supplies

Access to markets Telephones O ther factors’ Government assistance

Productivity Skilled Unskilled

ML M C

0 6

3 9

5 10

6 5

5 9

2 8

0 1

0 0

0 0

L

M C

1 1

4 13

4 14

3 9

1 2

3 7

1 2

0 5

0 4

N

M C

7 18

2 3

0 1

0 11

2 14

4 10

1 11

7 6

7 7

A

M C

1 0

0 0

0 0

0 0

1 0

0 0

7 5

1 11

1 11

MA M C

0 0

0 0

0 0

0 0

0 0

0 0

0 6

1 3

1 3

ML L

M c M

1 3 3

3 6 1

3 4 0

2 2 1

1 0 2

0 0 3

0 0 0

0 0 0

0 0 0

C 2

2 2 5 4

5 0

0 0

N

M C

0 3

0 0

1 1

1 1

1 2

1 2

2 7

3 4

3 4

A

M C

0 0

0 0

0 0

0 0

0 1

0 1

2 1

1 3

1 2

MA M C

0 0

0 0

0 1

0 0

0 1

0 0

0 0

0 1

0 2

M L = Major Liability; L = Liability; N == Neutral; A = Asset; MA = Major Asset; M = Metropolitan Firms; C = Country Firms.

Tables

Table 28

Assessment of Advantages by Area and Industry Group Percentage Distribution1

Food Metals

L N A L N A

F actor M C M C M C M c M C M C

Road taxes and regulations 25 57 63 43 12 0 40 57 60 43 0 0

Freight costs Inwards 75 79 0 0 25 21 100 100 0 0 0 0

Outwards 63 72 12 14 25 14 80 87 20 9 0 4

Access to supplies 88 72 0 14 12 14 80 78 20 22 0 0

Access to markets 75 21 25 65 0 14 80 75 20 8 0 17

Telephones O ther factors’ 63 79 37 14 0 7 70 83 30 17 0 0

Government assistance 0 21 63 36 37 43 0 0 70 30 30 70

Productivity Skilled 12 0 63 57 25 43 10 4 70 43 20 53

Unskilled 12 0 63 57 25 43 10 4 70 48 20 48

Table 28— c o n tin u e d

Textiles Other Manufacturers

F actor M

L C

N

M C

A

M C M

L C M

N C M

A C

Road taxes and regulations 11 28 78 72 11 0 100 63 0 37 0 0

Freight costs Inwards 78 88 22 12 0 0 100 100 0 0 0 0

Outwards 100 96 0 4 0 0 75 75 25 12 0 12

Access to supplies 100 56 0 44 0 0 75 88 25 12 0 0

Access to markets 67 44 22 56 11 0 75 50 25 25 0 25

Telephones O ther factors’ 56 60 44 40 0 0 75 63 25 25 0 12

Government assistance 11 12 11 44 78 44 0 0 50 88 50 12

Productivity Skilled 0 20 78 24 22 56 0 0 75 50 25 50

Unskilled 0 16 78 28 22 56 0 0 75 50 25 50

1 In many cases these percentages represent a small number of firms, as set out in Table 27. L ~ Liability; N = Neutral; A = Asset; M = Metropolitan Firm ; C = Country Firm.

71

Assessment of Advantages by Industry Group Number of firms in each category (City and Country firms combined)

Table 29

Food Metals Textiles Other Mfg

Factor LABOUR CHARACTERISTICS Availability Skilled

Unskilled males Unskilled females Turnover Skilled

Unskilled Wage level Skilled Unskilled males

Unskilled females Productivity Skilled Unskilled

Absenteeism OTHER Land Availability

Cost Servicing and maintenance facilities Availability Cost

ML L N A MA

6 7 5 1 3

2 4 8 7 1

3 3 10 5 1

1 1 6 7 7

0 1 8 7 5

1 3 14 4 0

0 3 15 4 0

0 3 16 3 0

0 1 13 6 2

0 1 13 6 2

1 1 8 8 4

0 1 3 12 6

0 0 2 13 7

4 14 4 0 0

3 15 4 0 0

ML L N A MA

14 11 5 2 1

1 3 16 10 3

0 0 26 4 3

1 0 11 9 12

2 0 12 14 5

3 6 6 18 0

0 4 10 19 0

0 3 21 9 0

1 1 17 11 3

1 1 18 9 4

0 1 13 15 4

0 2 6 16 9

0 1 1 20 11

5 15 13 0 0

4 17 11 1 0

ML L N A MA

17 5 5 4 3

4 5 15 6 4

4 1 6 12 11

4 1 6 14 9

3 1 12 13 5

2 3 19 6 4

1 1 24 6 2

1 2 22 5 4

0 5 13 12 4

0 4 14 12 4

1 2 11 17 3

1 1 4 14 14

1 2 2 12 17

13 10 11 0 0

13 11 9 1 0

ML L N A MA

6 3 2 1 0

0 0 4 7 1

0 0 6 4 2

0 0 4 5 3

0 0 5 4 3

0 1 7 4 0

0 0 9 3 0

0 0 10 2 0

0 0 7 4 1

0 0 7 3 2

0 0 5 4 3

0 0 2 5 5

0 0 0 6 6

3 3 5 0 1

3 3 5 0 1

0

r 1 B- >5

Q S"

ί B . 5 I

M L = Major Liability; L = Liability; N — Neutral; A = Asset; MA — Major Asset.

Assessment of Advantages by Industry Group Percentage Distribution (City and Country firms combined)

Table 30

Factor LABOUR CHARACTERISTICS Availability Skilled

Unskilled males Unskilled females Turnover Skilled

Unskilled Wage level Skilled Unskilled male

Unskilled female Productivity Skilled Unskilled Absenteeism OTHER

Land Availability Cost Servicing and maintenance facilities

Availability Cost

Food Metals Textiles Other Mfg

1 Adapted from Table 29. L = Liability: N — Neutral: A = Asset.

Appendix

Confidential Ref. No.

Survey of Manufacturing Industries—Factors Affecting Location

Part I. General

A. 1. Name of business......................................................................................................

2. Address ......................................................................................................................

(of plant to which this questionnaire refers) 3. When was the business founded ? ..................................................................

(not necessarily in present location) (year)

4. Is this its original location ? Yes ( ) No ( )

(i.e. this country town or city suburb) (Tick appropriate box) 5. I f not, what was the original town or suburb ? ....................................................

6. When did operations in the present town or suburb commence ? ......................

(year)

B. 1. What is/are the principal product/s ? ......................................................................

2. What is the value of output ?* (Please give last available annual figure) $.................

* Value of output refers to the selling value of the goods at the factory, excluding all delivery costs and charges and excise duties, but including bounty and subsidy- payments to the manufacturer of the finished article. Can be estimated by making appropriate adjustments to the sales figure. Where no sales figure is available (i.e. where output becomes the input of another branch of the same firm) every effort

should be made to arrive at an estimate and an indication should be given of the nature of this estimate. An approximate figure will suffice.

3. What is the average total annual wages bill ? $.................

(Average for last available year; includes all payments by way of salaries, wages and allowances to employees located at or based on the particular plant. An approximate figure will suffice).

4. How many people are employed in the local plant ? .......................................................

(‘Skilled’ refers to people, including those trained ‘on the job’ or being trained, whose skill is or will be recognised and marketable within the particular industry. Average number employed during period of operation during last available year should be given).

(a) Factory Males Skilled ..................... Females Skilled....

Unskilled................. Unskilled

(b) Office Males ................................... Females ................

75

(c) Other, (including M a le s....................... Females ...............................

regular outside contractors).

C. If a branch or a subsidiary, please give the address of the head office or parent company

Relative advantages of city and country locations as seen by industrialists (Victorian)

Country firms only:

1. If so, are you part-processing a product or products also partially processed in the metropolitan area by your associate company ? ............................................................

I f so, roughly what percentage of your output would be in this part processed category ? ............................................................................................................................

D. 1. What percentage (approx.) of purchases of materials for manufacture by value comes directly* from sources located— Per Cent Within the metropolitan area in your State .......................

Within 50-mile radius o f the factory j other than .......................

Within the State but outside 50-mile > metropolitan or radius of the factory j interstate .......................

Interstate .......................

Overseas .......................

Total 100%

* e.g. steel purchased from a merchant in the metropolitan area would be ‘metropolitan’ even though it originate in another State.

2. What percentage (approx.) of sales of finished products goes directly* to locations— Per Cent

Within the metropolitan area .......................

Within 50-mile radius of plant \ not metropolitan .......................

Within the State but outside 50-mile or interstate radius of the plant J . . . . . . . . . . . . . . . . . . . .

Interstate .......................

Overseas .......................

Total 100%

* e.g. goods sold to an exporter in the city would be ‘metropolitan’, not ‘overseas’.

Part II. Location

Indicate (by placing a tick in the relevant column) whether the firm considers each factor an advantage of its location (metropolitan or country) compared with the alternative (country or metropolitan) or a disadvantage. The firm also has to decide whether it is a major advantage or disadvantage. The main point to bear in mind is that the aim is to compare the advantages of city and country locations. Transport costs, for instance, would normally be an asset to a city firm and a liability to a country firm. Whether major or minor would depend on the nature of the goods produced and the raw materials used.

Space has been provided throughout the table and at the end for any comments. These would be called for where the classification was unusual (i.e. transport an ‘asset’ for a country firm) but any other interesting comments should also be noted. All items should be marked.

76

Appendix

Major Minor Minor Major

Item disad- disad- Neutral advan- advan-

vantage vantage tage tage

E. 1. Transport (a) Availability (b) Charges and regulations designed to protect railway

revenues (c) Costs— (i) incoming freight (ii) outgoing freight

2. Labour (a) Availability (i) Skilled (see definition page 1)

(ii) U n sk illed -males females

(b) Turnover (cite annual percentage turnover as well as rating) (i) Skilled ........... %

(ii) U nskilled...........%

(c) Wage levels (i) Skilled (ii) U nskilled-males

females

(d) Productivity (this can be interpreted as relative city/ country output per man, other things—

i.e. management and plant— being equal) (i) Skilled (ii) Unskilled (e) Absenteeism (percentage

loss of work hours as well as rating) ........... %

3. Public Services (Where firm has no views on cost differential in this section and interviewer knows it is negligible, he can mark the item ‘neutral’).

(a) Water supply (i) Availability (ii) Cost (b) Electricity supply

(i) Availability (ii) Cost

(Continued next page)

77

Relative advantages of city and country locations as seen by industrialists (Victorian)

Major Minor Minor Major

Item disad- disad- Neutral advan- advan-

vantage vantage tage tage

(c) Gas supply ,

(i) Availability ...........

(ii) Cost ............

(d) Other industrial fuels (i) Availability ............

(ii) Cost ............

(e) Telephone Services (i) Availability ............

(ii) Inconvenience and loss of business (refers to alleged reluctance of Customers to make trunk calls) ............

(iii) Cost ............

(f) Disposal Facilities for Noxious Wastes (i) Availability .............

(ii) Cost .............

4. Materials used in Manufacture Access to suppliers .............

5. Markets for Finished Products Access to purchasers .............

6. Land (i) Availability .............

(ii) Cost .............

7. Buildings (i) Availability .............

(ii) Cost ..............

8. Servicing and Maintenance Facilities (i) Availability ..............

(ii) Cost ..............

9. Availability of Finance (Other than Government assistance) ..............

10. Property Taxes ..............

11. Parking, Traffic Conditions ..............

12. Local Government Attitude ..............

13. Government Assistance (overall) .............. (give overall rating and also list and rate each type of assistance received. If any of the types of assistance listed are not received do not rate).

(i) Rail freight subsidies ...............

(ii) Housing for executives ...............

(Continued next page)

78

Appendix

Major Minor Minor Major

Item disad- disad- Neutral advan- advan-

vantage vantage tage tage

(iii) Other housing ...

(iv) Finance ...

(v) ...................... ...

14. Housing Facilities (in absence of any Govt, assistance) (i) Cost ...

(ii) Availability ...

15. Educational Facilities (i) Primary ...

(ii) Secondary ...

(iii) University ...

(iv) Technical ...

(v) Overall rating ...

16. Other (specify) ...

F. 1. What factors influenced the business in selecting its present location? (If not known, the views of the interviewee on the probable reasons should be sought).......................

2. If, when the decision to establish at the present site was made, the business knew as much about its advantages and disadvantages as it knows now, would its decision have been any different ? Yes ( ) No ( )

(Tick appropriate box)

3. I f ‘Yes’, please give reasons

Country Firm s Only

4. I f ‘Yes’ would you choose some other decentralised location Yes ( ) No ( )

5. Please give reasons for answer .................................................

6. Would you like to see other manufacturers established in your area and if ‘yes’ what industries ? ..............................................................................................................

79

Relative advantages of city and country locations as seen by industrialists (Victorian)

C ity Firm s Only 7. Should the present site become unsuitable, or for any other reason, would the business consider either moving to, or locating some of its activities in, a non­ metropolitan area ?

Yes ( ) No ( )

(Tick appropriate box)

8. Please give reasons...........................................................................................................

9. I f ‘Yes’ what type advantages would the firm expect to gain ?

10. Would the business require the presence of other industries in the same locality in^he non-metropolitan area before it would consider moving ? Yes ( ) No ( )

(Tick appropriate box)

11. Please give reasons..........................................................................................................

G. 1. What percentage of employees comes to work in public conveyances............... % 2. What is the approximate average time spent each morning by employees in travelling to w ork.......................

3. What proportion, approximately, of employees spend more than 60 minutes ...................... %

from 30 to 60 m inutes....................... %

less than 30 minutes ...................... %

100%

travelling to work each morning ?

4. Are near-by parking facilities available ? (i.e. five minutes walk) Yes ( ) No ( )

(Tick appropriate box)

H. What advantages or disadvantages* does your location have with respect to social and recreational activities ? How important is this advantage (or disadvantage) ? ...............

* compared with the country in the case of city firms and with the city in the case of country firms.

Part III. Costs

This question sets out to find what firms think the city /country cost differential is. Experience suggests that most managers, at least in the country, have some idea of the extent of the differential. Given their own costs, part III can then be answered.

80

Appendix

Estim ated Differential

Actual Cost in Differ- per $100 o f

Cost Alt. Areaf ential Sales

(1)* (2) (3) (4)

I. 1. Freight

incoming! outgoing!

2. Labour cost per unit o f output

3. Telephones and telegrams

4. (i) Interest on land and buildings§ (ii) Rent on land and buildings

5. Public services (water, electricity, gas, etc.)

6. Other (specify)

$ $ $ $

* Total cost to firm of each item in latest available year. t ‘Alternative area’ would be country in case of a city firm and city in case o f a country firm. $ One figure for freight acceptable if break-down not available.

§ Apply standard interest rate of 10% to present market value of land and buildings and to estimated cost in alternative location. I f land and buildings are rented, this item will be left blank and (4) (ii) answered instead.

J. 1. I f the above answers are based on first-hand experience of the alternative type of location, please give details..................................................................................................

2, Have you any comments to make on past trends in costs peculiar to your location or on likely future trends which may affect your costs relative to those in the decentralised area referred to or to any other decentralised area ? .......................................................

Part IV. General Comments

K.

L. Name of interviewee Position ...................

81

Book Two

Department of

Decentralisation and Development New South Wales Relative advantages of city and country locations

as seen by industrialists

Contents

Introduction page 87

Sum m ary 90

1. Characteristics o f the Participating Firm s 93

Industrial Groupings 93

Date of Establishment 93

Firms Which Had Changed Their Location 93

Status of Business 93

Size 94

Value of Output 94

Numbers Employed 94

Labour 94

Breakdown of Skills 95

Turnover 95

Absenteeism 95

Sources of Raw Materials 95

Market Areas 96

2. Reasons for Choice o f Existing Location 97

Country Firms 97

Metropolitan Firms 97

3. Assessm ent o f Existing Location Decision 99

Reasons Where Dissatisfied 99

Would Country Firms Decentralise Again ? 99

Attitude of Metropolitan Firms to Relocating in the Country 100

Attitude to Need for Complementary Industries 100

4. Assessm ent o f Factors Affecting Location 101

Transport 101

Road Regulations and Charges 102

Access to Markets and Suppliers 103

Telephone and Telegram Charges 103

Servicing and Maintenance Facilities 104

Education 104

Labour: Introductory 105

Wage Levels 105

Productivity 106

Turnover 107

Absenteeism 107

Availability 1°8

Land and Buildings . 109

85

Availability of Finance 110

Housing 111

Local Government Attitude 111

Property Taxes 111

Government Assistance 112

Parking and Traffic Conditions 113

Public Services: Water 113

Electricity 113

Gas 114

Noxious Waste Disposal 114

Industrial Fuel 114

5. C ost D ifferentials 115

The Total Differential 115

Differences between Industrial Groupings 116

Components of Total Differential 116

The Freight Component 117

The Freight Component: Inward and Outward 117

Telephone Costs 118

Labour Costs 118

Land and Buildings 118

Public Services 119

Other Factors 119

Tables 1. Classification into Industrial Groupings 122

2. Date of Establishment 122

3. Original Location 123

4. Status and Affiliations 123

5. Extent of Part-Processing 124

6. Distribution by Output 125

7. Distribution by Employment 126

8. Labour Characteristics 126

9. Sources of Raw Materials 127

10. Distribution of Sales 127

11. Reasons for Existing Location 128

12. Assessment of Existing Location—Country 129

13. Assessment of Existing Location—Metropolitan 129

14. Reasons for Existing Location Dissatisfaction 130

15. Preference of Dissatisfied Country Firms for Country Location 131

16. Preference of Dissatisfied Country Firms for Metropolitan Location 131 17. Attitude of Metropolitan Firms to Country Location 132

18. Attitude of Metropolitan Firms to Need for Complementary Industries 133 19. Attitude of Country Firms to Entry of Other Firms 133

20. Assessment of Factors Affecting Location 134

21. Assessment of Factors Affecting Location—Percentage Distribution 137 22. Assessment of Factors Affecting Location by Industrial Groupings—Country Firms 140 23. Assessment of Factors Affecting Location by Industrial Groupings—Metropolitan Firms 142 24. Assessment of Factors Affecting Location—Percentage Distribution, Country Firms 144 25. Assessment of Factors Affecting Location—Percentage Distribution, Metropolitan Firms 146 26. Cost Differentials—Country Firms’ Assessment 148

27. Cost Differentials—Metropolitan Firms’ Estimate 148

Appendix: Form of Questionnaire 149

Relative advantages of city and country locations as seen by industrialists (N S W )

86

Introduction

The Com m onwealth/State Consultations: At the 1964 Premiers’ Conference it was decided that Consultations on Decentralisation would be held between Commonwealth and State officials. Meetings of officials subsequently agreed upon a program of major research studies designed to establish, as conclusively as possible, the merits or otherwise of decentral­

isation as a public policy objective.1 This report is the outcome of one of the studies undertaken in New South Wales by the Department of Decentralisation and Development in pursuance of the Commonwealth/State Consultations on Decentralisation.

It has become known as the ‘Private Costs Study’. It was patterned on a study carried out for the Minister for Trade and Industry by the Manufacturing Industries Advisory Council (MIAC) in 1965. A similar private costs study has been completed in Victoria.2 In both cases the aim has been to ascertain the comparative advantages and disadvantages of metropolitan and country locations as experienced, or assessed, by the industrial firms which participated in the surveys.

Scope and Method: Commonwealth and State officials devised a questionnaire, based on that used by MIAC, and pilot surveys were carried out in N.S.W. and Victoria during 1967. The questionnaire was revised in the light of these surveys, and fairly detailed plans were made for the surveys in N.S.W. and Victoria to be closely co-ordinated. A copy of the form of

questionnaire is attached as an Appendix. In broad terms, it was agreed that in both States at least 50 country manufacturing firms engaged in various industries should be included in the survey and that, as a basis for com­ parison of views on location factors, a sufficient number (to be determined by the interviewer’s experience) of metropolitan firms within a similar industry structure should also be included.

It was agreed that in each State, one officer would carry out all interviews and that the questionnaire would be completed by the interviewer. An officer of the Department of Trade and Industry co-ordinated the two State studies, and initial interviews for the survey were undertaken with all three officers present. For instance, the first interviews with country firms were in the Latrobe Valley in Victoria. The three officers visited the firms together and took turns in completing questionnaires, thus enabling problems of definition, etc. to be resolved as they arose.

The first metropolitan interviews were undertaken in Sydney on the same basis. By this

1 In N.S.W., in addition to the present study, the following studies have either been completed or are in the course of completion: _ . .

—an ‘Historic Costs Survey* of public costs incurred in a range of N.S.W. cities and towns of various sizes between 1950 and 1965; —a ‘Forward Estimates Study’ of comparative public costs likely to be incurred in providing for metropolitan and non­ metropolitan urban growth to the year 2000;

—a Traffic Congestion Costs Study; —a Demographic Study; —a Sociological Study of Aspects of Life in N.S.W. Country Towns; and

—a Sociological Study of Out-migration from N.S.W. Country Towns. The possibility of assessing and reporting quantitatively on certain other economic and sociological consequences of excessive centralisation is being investigated. 2 The Victorian Private Costs Study was undertaken by the Victorian Division of State Development. References are made to

certain comparative results in footnotes to Chapter 5.

87

means, it was hoped to ensure that consistency of approach would be achieved interstate as well as intra-state. The survey was confined to industries falling within an agreed definition o f ‘decentralised’.

For the purpose of the exercise, a decentralised firm was defined as one in an industry which could be expected to operate economically in either a metropolitan or country location and which carried out more than a simple transformation of locally produced primary products. Thus milk factories and sawmills were excluded. The firm was also required to serve an area beyond the town where it was located and its immediate surroundings, and therefore bakeries were excluded.

The country firms which participated in the survey were chosen from a list of country manufacturing firms prepared from various sources, such as business directories and records of the Department of Decentralisation and Development and the Department of Trade and Industry, after consultation with regional and other officers of the former.

Altogether 118 firms participated. The 87 country firms were drawn from 29 country centres; including Wollongong and Newcastle.3 Thirty-one Sydney firms were included in order to enable metropolitan and country industrialists’ views on matters relating to location to be compared.

Some twenty different industries were represented, in three major categories. The largest category, in terms of numbers interviewed, was the metal fabrication and engineering group which included about 45 per cent of country firms interviewed. Another 25 per cent were textile and apparel companies, while 13 per cent were engaged in food processing. The remain­ ing 17 per cent were manufacturing a variety of products including furniture and plastics. These firms were grouped together into a fourth category, ‘other manufacturing’. The industries and the numbers of firms included within these four categories or industrial groupings are set out in Table 1.

As it was not intended that all decentralised firms in the State should be visited, it was decided that firms should be selected from small as well as large towns, on a geographical basis, so that as far as practicable all areas would be covered. Most of the country firms contacted were only too willing to assist; only one declined to

participate. From information within the Department, it would seem that, in terms of the agreed definition above, about 70 per cent of decentralised manufacturing firms would have been covered by the survey in New South Wales outside Newcastle and Wollongong4 (and Broken Hill, which was omitted from the survey because of its specialised character). O f the remaining 30 per cent, some firms, particularly those engaged in engineering and abattoirs, were not included on the grounds that a sufficient number of firms representative of their industry had completed the questionnaire.

Before each firm was visited, it was contacted by telephone and the purpose of the exercise was explained. A copy of the questionnaire was then forwarded with a covering letter After a reasonable time had elapsed the firm was again contacted and a mutually convenient time for a personal interview was arranged. Field work began in July 1967.

Relative advantages of city and country locations as seen by industrialists (N S W )

m^Vmp^itai^complex*embrac«C^ y d n ^ f ^wcas^^and^Polkm gong^ it* was ^onsiderecf fo^the^urposes0o^the sjtudy1 that Newcastle and Wollongong were non-metropolitan locations and should be treated separately from Sydney. The survey results were analysed accordingly and the conclusions in turn reflect the inclusion of Newcastle and Wollongong with the

C°Idedly,eperliaps, two additional analyses should have been attempted—one isolating Newcastle and Wollongong firms as a

Se^ ^ th ^ u tt t ^ e ^ >^S t?ιm aϊnanafy^est ite™aΓ,nevertheless been possible to identify certain characteristics of Newcastle and Wollongong firms from the questionnaire returns and to form some opinion about their impact upon the overall survey results. While the overall cost disadvantage of a country location as estimated by country firms on the basis adopted by the survey was 92c per 8100 of sales (see Chapter 5), if Newcastle and Wollongong firms’ estimates had been excluded, the disadvantage

would have been marginally higher at $1.00 per 8100 of sales. , . ,

If Newcastle and Wollongong firms’ estimates of freight costs had been excluded, the overall freight costs disadvantage estimated by country firms would have been 81.98 instead of 81.75 per 8100 of sales. If Newcastle and Wollongong firms’ estimates of telephone costs had been excluded, the overall telephone costs disadvantage estimated by country firms would have been 39c instead of 35c per 8100 of sales. . - -

On the other hand, the labour experience of Newcastle and Wollongong firms was generally similar to that ot country firms, while the higher land costs in Newcastle and Wollongong reduced the overall advantage of country towns in this respect. 4 See footnote 3.

88

Introduction

To some extent the quality of the data supplied varied according to the amount of inform­ ation prepared by the company prior to the interview. For those industries which were strongly represented in the country sample, an attempt was made to gauge the attitude of metropolitan firms for comparison.

Arrangements were made to visit 31 metropolitan companies. This ratio of about three country firms to one metropolitan firm was found to be adequate because firms in the metro­ politan area tended to be more consistent in their answers. The metropolitan firms were chosen on the basis of their being reasonably comparable with those in the country. They covered similar industries and carried out similar processes.

It should be stressed, however, that the small sample of metropolitan firms was not designed to be representative of metropolitan firms in general. It therefore follows that care should be taken in applying the conclusions of the survey to all metropolitan firms. While they may generally be representative of firms’ views on the relative advantages and dis­

advantages of metropolitan and country locations, they will be less so in respect of such things as size, date of establishment and value of output. In the case of the individual industrial groupings of metropolitan firms, the samples are of course particularly small, and in the text of the report references to percentages within these metropolitan industrial groupings have therefore been avoided.

It should also be emphasised that in many respects the study was an opinion survey, particularly in the case of metropolitan industries, the data representing the opinions of a variety of industrialists supported as far as practicable by the relevant records of their respective enterprises.

Acknowledgments: Officers of the Planning and Research Branch of the Department of Decentralisation and Development implemented the Private Costs Study in this State, and sole responsibility for the conclusions hereunder is assumed by the Department. It is, however, particularly desired to acknowledge the close collaboration of officers of the Location of Industry Section of the Commonwealth Department of Trade and Industry in all stages of the research and that of officers of the Commonwealth Treasury in the computer analysis of the

results. It is also desired to acknowledge the co-operation received from senior executives of all the firms which participated.

D

89

Summary

The main conclusions drawn from the survey are set out hereunder. A more detailed analysis of the results is contained within the chapters and statistical tables which follow. 1. The overall cost disadvantage of a country location estimated by country firms was in the vicinity of 1 per cent on sales.

2. Firms with first-hand experience of both metropolitan and country locations generally rated the cost disadvantage as less than this: these, however, were mainly firms which had metropolitan affiliates to handle their purchasing and distribution. 3. The average estimate of metropolitan firms of the additional cost that would be

incurred if they were to re-locate in the country, but continue to supply their existing markets, was about twice that estimated by country firms, viz. just over two per cent on sales. 4. Some 25 per cent of the metropolitan firms stated that they would consider the

possibility of establishing at least part of their operations in the country if ever their existing premises became unsuitable for their purposes. 5. Some 80 per cent of the country firms were favourably disposed towards a country location, 67 per cent stating that they were satisfied with their location decision, while

13 per cent said that they would still choose another country location if they were to move. 6. This overall disposition of country firms towards a country location was not necessarily an indication that they had no problems but that, in all the circumstances, the favour­

able factors sufficiently counterbalanced the unfavourable.1 7. Country firms which had a large local market and/or were situated near the source of their raw materials generally were more satisfied with their location than firms which obtained raw materials from distant sources and/or supplied distant markets

and did not have an affiliated company in Sydney: a majority of firms in the latter category indicated that they would not re-locate in any country area. 8. Of those factors in respect of which an estimated cost differential could be ascertained, the highest liability overall was that in respect of freight, which was estimated by both

metropolitan and country firms to be in the order of $1.80 per $100 sales. 9. Regulations and charges imposed on road transport adversely affected most country firms, and, particularly in metal fabrication and engineering, firms claimed their choice lay between paying excessive transport costs or accepting unsuitable means of

transport. 10. Freight was regarded less seriously, however, by firms which had first-hand exper­ ience in both metropolitan and country locations. 11. There were other factors, such as access to suppliers and purchasers, which could not

be costed but which were regarded by some firms with more concern than they

1 In order to reconcile this overall disposition with the financial disadvantage evident in conclusion (I), it must be appreciated that the favourable factors included some which could not be costed, such as inertia and a reluctance to move because of a general preference for a country way of life attributable in some cases to family associations.

90

Summary

regarded freight costs: this was most pronounced amongst firms which were not located near the source of their raw materials and/or supplied the metropolitan and interstate markets. 12. Country firms which had an affiliated company in the metropolitan area generally

found that it enabled them to overcome many of the disadvantages common to their location, for example, in the field of purchasing and distribution, while allowing them to benefit from the advantages: this was especially apparent amongst textile and apparel firms where labour costs were particularly important. 13. Telephone costs were a major source of concern to country firms: firms were more

vocal about this item than about any other item covered by the survey, although the estimated telephone cost differential, at 35c. per $100 sales, was considerably less than that attributed to freight. 14. To 50 per cent of country firms other factors associated with telephones, such as delays and inconvenience, also caused concern; telephones in particular and com­ munications in general were regarded as a significant problem area confronting decentralisation. 15. Country firms considered that there was a need for greater government assistance, particularly by way of taxation concessions, reduced communications costs and managerial advice. 16. Many metropolitan firms considered that the present forms of assistance available to decentralised industry would not be sufficient to entice them to commence even a part of their operations in a country location. 17. Country firms and metropolitan firms agreed that servicing and maintenance were a problem in the country, although country firms rated it a much less important problem than metropolitan firms and instanced ways of at least partially overcoming it. 18. At the primary and secondary levels educational facilities in the country were generally considered to be not inferior to those in Sydney: at the tertiary level, however, it was considered that country areas were at a serious disadvantage. 19. Amongst the factors favourable to country location, the low cost of land (an advantage approaching, in monetary terms, one per cent on sales) and lower labour costs (about 0-4 per cent on sales) represented the most substantial savings: in some cases the availability of cheap land was regarded as in itself going a long way towards offsetting the transport liability of a country location. 20. Lower country labour costs were attributed to one or more of the following: lower

wage levels, higher productivity, and lower turnover and absenteeism, although firms were by no means unanimous about the advantages of country labour. 21. Some country firms expressed the view that absenteeism was less in the country, although when the actual absentee rates supplied by them were compared with those

given by metropolitan firms the differences were not significant. 22. On the score of labour availability, firms from both metropolitan and country areas generally regarded unskilled labour as being more readily available in the country, but considered that skilled labour was more difficult to engage. 23. Nevertheless overall labour costs were significantly lower in the country: textile firms

(including clothing manufacturers) consistently rated country labour advantages as particularly high, although country metal firms tended to claim that they had to pay higher wages to attract skilled labour. 24. Country firms were usually satisfied with the attitude of local government, although

a few country firms considered that they got less co-operation from their council than they would get in the metropolitan area. 25. To metropolitan firms the attitude of councils did not represent a major consideration. 26. Parking conditions were usually rated as being better in the country by firms from

both areas.

91

27. Country firms rated country traffic conditions an advantage, but a number of metro­ politan firms considered that they would be neither better nor worse off in a country location since the bulk of their customers were in Sydney and they would still be confronted with the problem of making deliveries there. 28. Metropolitan firms stated that some of their employees spent up to 60 minutes

travelling to work and that approximately forty per cent of employees spent more than 30 minutes, although the average time spent by metropolitan employees in travelling to work was stated to be about 20 minutes. 29. Metropolitan firms tended to consider decentralisation in terms of carrying out their

entire operations in the country, whereas some of the more satisfied decentralised firms carried out only a part of their operations in the country: firms operating in both locations were generally able to overcome the problem of access to suppliers and markets. 30. During the course of their growth metropolitan firms exhibited a much greater

disposition to relocate than country firms. To sum up, while country-based manufacturing industries enjoy certain advantages, they operate at an overall cost disadvantage compared with metropolitan industries. This advantage must be recognised as a deterrent to further decentralisation. It can, however, be measured and, by and large, it is not substantial.

Theoretically, therefore, it can be compensated. Whether the cost of doing so is worth while will depend upon the extent of public savings which would accrue if some of the State’s expected metropolitan growth were diverted away from metropolitan Sydney. The extent of these savings is the subject of other studies in the Commonwealth/ State series.

If these other studies demonstrate a net saving for every person settled outside the metro­ politan area, they should provide some indication of the extent of assistance which should be made available to country industry. If, for example, it were to be established that the diversion of one person from the metropolitan area to the country would result in a public saving of

$100, then a program to divert 1,000 people from the metropolitan area would theoretically be attractive provided it cost less than $100,000. What is more significant perhaps than the actual disadvantage experienced by country industries is the fact that metropolitan industries believe the disadvantage to be greater than in fact it is. The compensation may therefore involve subjective considerations which are not amenable to simple financial adjustment.

Thus the strategy by which decentralisation measures are implemented may be as important as the quantum of assistance.2 Granted this over-riding proposition, two further specific comments are worth making. One is that, whether or not they actually relocate, seemingly something like fifty per cent of metropolitan industries are confronted with a relocation decision at some stage in the course of their growth and expansion. Clearly, therefore, there are frequently propitious moments when a substantial number of metropolitan industries could be amenable to a well-presented case for relocation outside the metropolitan area.

Secondly, the survey suggests that there is scope for more actively canvassing the merits of partial decentralisation, in other words, the transferring of some processing operations to the country, particularly those requiring good quality unskilled female labour, while retaining skilled labour functions and marketing and distribution facilities in the city.

Overall, of course, it is clear from the views expressed by the participating firms that they consider greater public assistance is needed. In particular, country firms sought taxation concessions, relief in the field of communications, and more managerial advice and guidance, while metropolitan firms in general were not conspicuously attracted by existing incentives.

Relative advantages of city and country locations as seen by industrialists (N S W )

2 In this regard the survey results further reinforce the argument that metropolitan industry would be far more attracted by the reproduction of the metropolitan environment in one or more specific country centres than by the actual amount of financial assistance offered to induce a move simply to somewhere in the country—see Report on Selective Decentralisation, Development Corporation of N.S.W., March 1969.

92

Characteristics of the Participating Firms 1

Industrial Groupings: Table 1 shows the classification of participating firms into industrial groupings.

Date o f Establishment: Many of the country firms which participated were of fairly recent origin. Almost two-thirds had commenced operations since the end of the Second World War, and of these nearly half had commenced in the decade prior to the survey. Only 28 per cent of the country firms were founded before 1939, while nine per cent were established during the War—see Table 2.

About 35 per cent of the country firms were established in the 10 year period immediately after the War. This was a time of severe shortages of building materials. Building permits were difficult to obtain, particularly in the metropolitan area. The availability of former munition factories in country areas, coupled with the fact that building permits were easier to obtain there, encouraged a number of firms to locate in the country.

No relationship is apparent between date of establishment and industry classification. Food canning firms on the whole were rather older-established than the rest, and a possible explanation for this may be that, before the advent of modern cold storage vans, food canning firms found it necessary to locate close to the source of their raw inputs.

Firm s Which Had Changed Their Location: About three-quarters of the country firms had not moved from their original location. O f the remainder, most had come from the metropolitan area. Only four firms were previously located in some other country centre—

see Table 3. About half of the country firms that had relocated had done so in the previous 10 or 12 years. Eighty per cent of the firms that had moved from the city were textile and apparel companies, while three of the four firms which had previously operated in another country location were metal firms.

On the other hand, nearly half the metropolitan firms had relocated. None had been located in the country. Metropolitan firms which had relocated had done so either because they had inadequate room for expansion or because they sought to take advantage of the workforce available in the rapidly growing outer suburbs of Sydney.

I f the metropolitan sample could be taken as representative, it would appear that metropolitan firms have a higher propensity to relocate than their counterparts in the country. An explanation could be that firms which locate in the country can make better provision for expansion when making their initial location decision because of the availability of cheaper land. Conceivably some country firms may not have the same growth potential as metropolitan firms.

Status o f Business: Of the 87 country firms in the survey, 36 (or about 40%) firms were affiliated with companies located elsewhere, mainly in Sydney—see Table 4.

93

Sixteen of the 22 (i.e. 73%) textile and apparel firms operated as branches or subsidiaries, compared with between 28 per cent and 36 per cent of firms in other industries. This would seem to indicate that labour intensive industries such as textiles and clothing find the idea of establishing a branch in a country area an attractive proposition.

The 36 country firms which were not independent were asked whether they partly processed any goods which were also processed by their affiliate company. They were also requested to indicate how much of their output was in this part-processed category. Only seven of the 36 country firms with affiliates were part-processing—see Table 5. But six of these firms, all in the textile and apparel industries, had more than fifty per cent of their output in this part-processed category. It appeared that the process was not fully completed in the country merely to qualify for exemption from road co-ordination charges.

In the many cases where the metropolitan area was an important market and/or source of raw materials, country firms with an affiliated metropolitan company had a distinct advantage over those that had not. Country firms with a metropolitan parent were able to gain the purchasing and selling advantage of a city location while still benefiting from the advantages of a country location in terms of lower labour and land costs, etc.

Over 80 per cent of the metropolitan companies interviewed were not affiliated with other companies.

Size: Country firms tended to be smaller than their city counterparts in relation to value of output and numbers employed.

Value o f Output: The average annual value of the output of country firms was around $1 · I million. This figure would have been much lower but for a small number of very large companies included in the survey. Over a quarter of the country firms had an annual output valued at less than $100,000. Moreover, 60 per cent of country firms had an output not exceeding $500,000, while three-quarters had an annual output of less than $1 million— see Table 6.

In the country, firms in the metal industries and those classified as ‘other manufacturing’ were generally smaller than food and textile and clothing firms. About 55 per cent of metal firms and 64 per cent of firms in ‘other manufacturing’ had an output value of less than $250,000, compared with 18 per cent of food and 23 per cent of textile and clothing firms.

Food firms, in fact, tended to be the largest of any group, with 73 per cent having an annual output in excess of $1 million. On average, the annual value of output of city firms included in the survey, at $1 -4 million, was slightly higher than that of country firms. In addition, unlike country firms, there was an absence of very small firms. About a quarter of the city firms had an annual output of less than $500,000, while half had an annual output of over $1 million.

Numbers Employed: The average number of persons employed by country firms was 128. As with the value of output, it was evident that a small number of firms had a marked influence on the average. For example, 36 per cent of country firms had under 25 employees. Sixty-five per cent employed less than 100. On the other hand, eight per cent had over 400 employees— see Table 7.

At the industry level metal firms tended to be the smallest in terms of numbers employed. About three-quarters of these firms employed less than 50 persons. Firms in other manu­ facturing were next, approximately two-thirds having less than 50 employees. Only 13 per cent of textile firms and five per cent of food firms employed less than 50.

The average number employed by city firms, 195, was somewhat higher than the country average. Moreover, there were relatively few firms employing less than 50 persons.

Labour: Firms were asked to give a breakdown of their total employment figure. They were requested to distinguish between male and female and factory and non-factory. Factory

Relative advantages of city and country locations as seen by industrialists ( N S W )

Characteristics of the Firms

employment was further broken down into skilled and unskilled—see definition of ‘skilled’ in paragraph B (4) of the questionnaire. Firms also supplied figures on annual turnover and absenteeism rates.

Breakdown of Skills: There was a slightly higher proportion of skilled males (40%) employed in the metropolitan area than in the country (37%)—see Table 8. Slightly more skilled females were employed in the country (22%) than the metropolitan area (18%).

Of non-factory staff, the proportion employed, particularly in the case of females, was lower in the country. A factor contributing to this situation could be that, in the case of affiliated companies, the parent company in Sydney did the bulk of the clerical work associated with purchasing and distributing.

An examination of the composition of employment on an industry basis revealed some interesting results. For example, with metal firms the percentage of skilled males employed was higher in the country (55%) than in Sydney (44%). In the food industry the proportion of unskilled males employed in the country (39%) was higher than in Sydney (30%). However, the reverse applied in the case of unskilled females where the figures were 24 and 32 per cent, respectively. In the textile and clothing industries it was found that a much higher proportion of skilled females were employed in the country (70%) than in Sydney (57%). Furthermore, a larger percentage of unskilled females were employed in the country (8%) than in Sydney

(2%): this could indicate that there are more females available for employment in this industry in the country. To sum up, while food firms predominantly employed unskilled labour, employment in all the other industry groups was made up mainly of skilled labour. In the case of metal firms and those in ‘other manufacturing’, this was usually skilled male labour. With the textile and apparel firms it was mainly skilled females.

Turnover: Firms supplied estimates of annual turnover rates for both skilled and unskilled labour. For skilled employees the average country turnover rate of 15 per cent compared favourably with the average, metropolitan estimate of 22 per cent. This difference was also apparent for unskilled rates where the country average of 19 per cent was lower than the

metropolitan rate of 28 per cent. On an industry basis this difference between rates was also evident, with the exception of food firms where the metropolitan and country rates for both skilled and unskilled labour were similar.

When interviewed, industrialists thought that turnover rates were generally lower in the country. They claimed the country employee on the whole had a better approach to factory work and was much more settled than his metropolitan counterpart.

Absenteeism: The figures supplied by metropolitan and country firms indicated that there was little difference in absenteeism rates. The average for country firms was 3 per cent compared with 3 · 4 per cent for metropolitan firms. When interviewed, however, industrialists were of the opinion that country absenteeism was significantly loveer than in the metropolitan area.

Sources o f Raw Materials: Country firms stated that the metropolitan area was the most important single source of raw materials. Around 40 per cent of their supplies came from this source—see Table 9. Some industrial groups were more dependent upon Sydney than others. For example, 61 per cent of the textile and apparel firms’ supplies came from Sydney. The fact that many of the textile and apparel firms had affiliated companies in Sydney to do most of their buying

would help account for this. Moreover, materials of the type required by them are generally not readily available in country areas. Around 35 per cent of the metal firms’ supplies came from Sydney. Many purchased steel directly from Newcastle or Wollongong. Food firms were least dependent, with only

13 per cent of their raw materials being obtained from Sydney. .

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The next most important source of country firms’ supplies was from within a 50-mile radius of the firm (excluding the metropolitan area). On average, 19 per cent of supplies were drawn from this local area. Two factors accounted for this. First, most of the firms in Newcastle and Wollongong (and towns nearby) were able to obtain raw materials locally on much the same terms and conditions as in Sydney. Secondly, many food processing firms were situated near their source of raw materials. In fact half

About 20 per cent of supplies for firms in engineering and ‘other manufacturing’ were available in their town or immediate surroundings. About the same proportion came from interstate. Many of the firms in border areas such as Albury and Lismore purchased from Melbourne or Brisbane because they were closer than Sydney. In addition, this enabled them to avoid paying road co-ordination charges. Indeed, some firms said they bought interstate merely to avoid paying this tax.

Fourteen per cent of the country firms’ raw materials came from outside a 50-mile radius (i.e. excluding interstate and Sydney). Food firms (mostly abattoirs) and metal firms, which bought steel direct from either Newcastle or Wollongong, generally purchased more from this area than either textile or ‘other manufacturing’ firms.

Generally speaking country firms were not very dependent upon overseas sources for their raw materials. On average only eight per cent were imported. Textile firms and those in ‘other manufacturing’ relied more heavily on overseas sources than other industry groups. Food firms, by contrast, had no imports.

For Sydney firms the metropolitan area was by far the most important source of supplies. Nearly 80 per cent of their inputs came from Sydney. Next most important source was overseas. Textile firms and those in ‘other manufacturing’ were more dependent on this source than food and metal firms.

Market Areas: Country firms interviewed served a variety of markets. No one market area was dominant. On average, 30 per cent of the country firms’ output went to the metropolitan area, although this was a more important market for some industrial groupings than for others. For example, 64 per cent of country textile firms’ output was sold in the metropolitan area, compared with only 10 per cent for metal firms—see Table 10.

The local area, i.e. within a 50-mile radius of the firm, was also an important market area, taking about 26 per cent of the country firms’ output. Here again there was wide industry variation. Textile firms sold virtually nothing in their local area. On the other hand, 38 per cent of the metal firms’ output was sold within a 50-mile radius of the plant.

Interstate markets accounted for 21 per cent of output. There was little difference between industries. Country firms sold 20 per cent of their output outside a 50-mile radius of the plant (i.e. within the State but outside the metropolitan area as well as their own local area). These markets were more important for metal firms and those in ‘other manufacturing’ than for food and textile firms.

Export markets were relatively unimportant except for food firms. On average 11 per cent of the output of food firms was exported. For metropolitan firms, the Sydney metropolitan area was the main market. On average, 60 per cent of the city firms’ output was sold in Sydney. Interstate markets were also important. Except for food firms, export markets were relatively unimportant.

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Reasons for Choice of Existing Location 2

Firms were asked to indicate what major considerations influenced them in selecting their present location—see Table 11.

Country Firms: Thirty companies, representing about a third of all country firms inter­ viewed, stated that the main reason for their location was that they were a ‘local’ firm. These firms had begun operations in a small way to serve local needs. In most cases these firms had not made an explicit decision on location, i.e. beyond their own town other areas had not been considered. In other cases, although surrounding towns might have been examined, the firm’s existing location had been chosen because the founder of the company had lived there and was satisfied with the town’s prospects.

On an industry basis a large proportion of firms in ‘other manufacturing’ (58%) and metal firms (43%) indicated that being a local firm was the decisive factor influencing the selection of their existing site. Access to markets was the main reason supplied by a quarter of the firms. Markets were a particularly important consideration for engineering companies.

Labour was regarded by 23 per cent of the firms as the major factor influencing their location decision. On an industry basis this factor played a far more important role in deter­ mining the location of textile and apparel firms than for any other industrial grouping. Nearly three-quarters of textile and apparel firms located for this reason.

While the availability of raw materials was not an important location factor for country firms in general, it did play a major part in influencing firms in food processing. Forty-five per cent of these firms stated proximity to raw materials was the main reason for choosing their existing location. Nevertheless, as suggested earlier, more efficient transport probably renders this factor less important than it was.

Perhaps surprisingly, in view of the financial and other forms of assistance provided by the Department of Decentralisation and Development, only one country firm rated government assistance as the main factor in determining its location, although it was evident that in many cases government assistance was taken into account.

The availability and low cost of land were not rated major considerations except by four per cent of firms, all in the metal industry. Yet the annual saving resulting from cheap land in the country was found to be more important than lower labour costs—see Chapter 5.

Metropolitan Firms: The most important factor in determining the existing location of metropolitan firms was access to markets. On the average about half of the companies rated this their major reason. The majority of the firms in food processing and ‘other manufacturing’ rated it the main factor, although for textile and apparel firms markets were a relatively unimportant consideration.

Labour was rated very highly by around one-fifth of the metropolitan firms. In the case o f textile and apparel firms however, labour was the most important consideration. As noted above, it was also the principal reason for location of about three-quarters of the country

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textile and apparel companies. While metropolitan textile firms considered that there would be a large pool of unskilled females to draw on in the country, they tended to consider that this would not compensate for any shortage of skilled workers. Six of the 31 metropolitan firms stated that the deciding factor in their choice of a

metropolitan site was that they originated there. As with country firms, this reason figured prominently among metal firms as well as those in ‘other manufacturing’. The availability and cost df land were listed by four metropolitan firms as the main reason for their existing location. These were firms which had either been established for some time or had located in the outer suburbs where they had been able to obtain suitable land at reasonable prices with all the necessary services. Some of them considered that, at the time they were making their location decision, comparable land with adequate services was not available in the country.

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Assessment of Existing Location Decision 3

Firms were asked, in the light of their experience, whether or not they were satisfied with their existing location decision. Two-thirds of the country firms indicated that they were satisfied—see Table 12. Of those that were not (i.e. one-third of all country firms), nearly 40 per cent stated that they

would still choose a country location if the opportunity arose to relocate. Thus about 80 per cent of all country firms were satisfied with a country location. Given the opportunity, only 20 per cent would move to the city. Of city firms, 80 per cent were satisfied with their present location—see Table 13. Most

of those which were dissatisfied were engineering companies. There was a considerable difference between firms at the industry level in the degree of satisfaction with their existing location decision. In the country, metal firms tended to be more satisfied with their decision than others. Eighty per cent of metal firms claimed that they would make the same decision again, compared with about 60 per cent of textile and

clothing companies, 55 per cent of food firms and 50 per cent of those in ‘other manufacturing’. With food firms in the country, the 55 per cent which claimed they were satisfied were mainly abattoirs. Other firms in food processing (i.e. canning and confectionery) were generally dissatisfied with their location.

Country firms with affiliates in the city did not differ significantly from firms without any city affiliation in the way they answered this question.

Reasons Where Dissatisfied: Of the 29 country firms which said that they were dissatisfied with their location, nine (31%) claimed that either distance from or lack of markets was the main reason. Most of these were firms without an affiliate in Sydney. Difficulty in obtaining the right type of labour was listed as the main reason by seven (24%) firms. Four firms (14%)

claimed costs were generally higher in the country. Transport was considered the main problem by a further four firms (14%). Two firms (7%) claimed that assistance from the government had been much less than anticipated, while a further two firms claimed that

availability of raw materials caused concern—see Table 14. There was not a great deal of variation between industrial groupings in the reasons given. In the metropolitan area, three of the six firms which expressed dissatisfaction claimed that their expansion was curtailed by the non-availability of land. Reasons cited by the other three firms were transport, labour and markets.

Would Country Firm s Decentralise Again? The 29 country firms which indicated they were dissatisfied with their present location were asked whether they would still select another country location if the opportunity arose. Eleven of these companies (i.e. nearly 40%) stated that they would consider relocating elsewhere in the country—see Table 15. Labour appeared to be the main attraction according to six of the eleven firms (55%)· Other reasons included proximity to markets, raw materials

and transport.

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Eighteen o f the 29 companies (60%), however, considered that they would be better off in the metropolitan area—see Table 16, About 40 per cent of these firms claimed that either the small local market or distance from larger markets was the main difficulty with their present country location. Four firms claimed that they would be better off in the city in terms of transport. Labour availability was considered better in the city by a further three firms. Another three companies thought their general operating expenses would be lower if situated in the metropolitan area.

Attitude o f M etropolitan Firm s to Relocating in the Country: City firms were asked whether they would consider a country location should their present site become unsuitable. Generally they were not very receptive to the prospect, 22 of the 31 metropolitan firms in the survey (i.e. about 70%) saying that they would not—see Table 17. Availability of markets was the reason advanced by 16 of the 22 firms (73%). Six firms (27%) advanced labour requirements as their main reason. Four of these firms were in metal industries and claimed that they needed highly skilled labour which was not available in the country.

Eight metropolitan firms (i.e. around 30%) said that they might be prepared to relocate in the country. Textile firms were the most receptive, metal firms the least. Land, labour and raw materials were seen as the main advantages of locating in a country area.

Attitude to Need for Complem entary Industries: City firms were asked whether the presence of any other industries would be necessary before they would consider locating in a country area. Just over 60 per cent of the city firms considered this unnecessary. Eight firms (25%), however, said that certain industries would be required in a country area before they would consider locating there—see Table 18. According to six of these firms, such industries would be needed to supply them with materials. Another two claimed an industry would be needed to provide an outlet for their products.

Four of the firms would not comment. Country firms were asked if they would like to see other industries established in their area and, if so, what type. Nearly 90 per cent of the firms said that they would welcome other industries—see Table 19. Thirty-one of these firms (40%) had no preference regarding the type of industry, their attitude being that they would like to see their town develop and that this could best be achieved through any type of industry being attracted to the area.

Sixteen companies (21%) said that they would prefer industries which employed complementary types of labour. For example, in many instances textile and clothing companies felt that a large engineering works would attract married men with wives and/or daughters prepared to seek employment.

Twelve firms (16%) said that they would like to see industries established which could supply their materials. These were usually metal or food firms. They claimed this would mean lower inward freight costs and would also enable them to reduce inventories. Nine of the country firms wanted industries which would provide an outlet for their products. Another nine firms said any firm which was non-competitive would be acceptable.

Only ten of the country firms did not want other industries established in their area. These were mainly textile firms. They claimed that new industries would mean competition for markets and/or labour.

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Assessment of Factors Affecting Location 4

In the survey, firms were asked whether they thought a number of factors, all of import­ ance in choosing a location, were a liability, an asset, or a neutral factor for firms in country areas compared with those in Sydney. They were also asked whether they regarded these liabilities and assets as major or minor.

Metropolitan companies were asked to answer questions on the basis of how they felt they would be placed if they were located in the country and continued supplying their present market.

In this section reference is also made, where relevant, to estimates by firms of the extent o f cost ‘differentials’. These cost estimates are discussed in more detail in Chapter 5. Those factors which on the whole constituted a disadvantage for firms in country locations are discussed first, followed by those which represented a favourable factor, and finally those which were given a neutral rating—see Tables 20 and 21.

Transport: Firms were asked to consider various facets of transport, viz. cost, availability and State Government regulations and charges imposed on road transport. Both metropolitan and country firms agreed that transport costs constituted one of the major disadvantages of a country location. About 95 per cent of metropolitan firms considered both inward and outward freight costs would be a liability in a country location; most of them thought that the liability would be a major one. O f country firms, the number which considered the costs on incoming freight a liability (89%) was higher than the number which regarded outgoing costs a liability (68%). Moreover, 60 per cent of country firms regarded the liability on incoming freight as a major one, compared with 44 per cent in the case of outgoing freight. These differences in the assessment of inward and outward freight costs are largely accounted for by engineering firms. Because their markets were generally located away from the metro­ politan area, many considered that they were at no disadvantage with outward freight. With inward freight, however, they were faced with considerable additional costs as their supplies

often came from Sydney, Newcastle or Wollongong. Although the percentages of metropolitan and country firms which rated inward and outward costs a liability were very similar, the actual cost disability estimated by metropolitan firms for outgoing freight was much higher than that estimated for inward freight. On the average they claimed the extra cost of outward freight in the country would be in the order of $1.20 per $100 of sales, compared with 64 cents on the inward component. Hence the total

extra cost of freight was estimated at $1.84 by metropolitan firms. The country firms’ overall estimate of the freight disability at $1.75 per $100 of sales, was very similar. Unlike metropolitan firms, however, they estimated that the disability on inward freight costs ($1.42) was higher than that incurred on outward freight (33 cents).

There were some industry variations—see Tables 22 to 25. For metropolitan firms, although inward and outward costs were similarly assessed by each of the four main industry groups, freight costs as a whole were assessed as more unfavourable by metropolitan firms engaged in engineering and ‘other manufacturing’ than by those in food processing and the

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textile and apparel industries. This difference in assessment is understandable as the finished products and raw materials of firms in engineering and ‘other manufacturing’ (e.g. structural steel products, furniture, etc.) are relatively bulky (and hence incur high charges) compared with the materials and products of clothing companies.

Amongst country firms, with the exception of textile firms, the inward and outward freight components were differently assessed. Ninety-six per cent of textile firms, however, regarded both inward and outward freight as a disadvantage; half of them claiming it a major one. '

O f the metal firms, however, those which considered outward freight costs a liability (52%) were substantially fewer than those which considered inwards costs a liability (95%). Moreover, nearly 70 per cent of metal firms claimed the disadvantages on inward costs was a major one compared with only 35 per cent in the case of outward costs. While metal firms generally had a regional market, only one-quarter of them were prepared to regard outward

costs as an advantage of their location. The pattern which emerged for engineering firms also applied to firms in ‘other manu­ facturing’, although the difference between the assessments of inward and outward costs was not as wide and none of these firms claimed freight costs to be an advantage.

More food firms claimed outgoing freight a disadvantage (82%) than inward (63%). Although the availability of transport was considered by many firms to be a disadvantage in country areas, it seemed to be less of a problem than costs. Generally a higher percentage of metropolitan firms (nearly 60%) claimed it was a disadvantage, compared with 40 per cent of country firms. In fact nearly 60 per cent of country firms claimed there would be no difference between city and country in this respect. Again, a much higher proportion of metropolitan firms (48%) claimed it was a major liability, compared with nine per cent of country firms. Country firms considered that where rail transport was not available road hauliers were readily available.

Road Regulations and Charges: State regulations and charges imposed on road transport were considered a greater liability in the country than the availability of transport, but a lesser liability than freight costs. Nearly 70 per cent of metropolitan firms and 60 per cent of country firms felt these regulations amounted to some disadvantage. However, a higher proportion of country firms (39%) claimed it was a major liability than metropolitan firms (26%).

Metal firms appeared most concerned with road regulations and charges. Eighty per cent of metropolitan metal firms and 73 per cent of country firms claimed that they were some disadvantage. About 40 per cent of both metropolitan and country metal firms considered this disadvantage a major one. It appeared that metal firms preferred road transport as they

claimed rail services were too slow in moving goods. They considered their industry was a competitive one and that accordingly it was essential to be prompt with deliveries. Furthermore, they frequently claimed their finished products were damaged, usually from loading and unloading, when rail services were used.

Textile and food firms appeared rather less worried. Nearly 60 per cent of both metro­ politan and country textile firms claimed these factors played a neutral role in location, but just over 40 per cent in each case claimed they were a liability. With the food industry, two-thirds of metropolitan firms and 55 per cent of country firms claimed these factors placed

them at no disadvantage. The remaining one-third of metropolitan firms and 45 per cent of country firms claimed they were a liability. With firms in ‘other manufacturing’, a higher proportion of metropolitan firms claimed they were a disadvantage than country firms (57%). However, more country firms (50%) claimed they were a major disadvantage.

(It should be noted that, since the survey was carried out, the 50-mile limit for exemption from road charges has been increased to 150 miles in the case of a wide range of goods trans­ ported by country industries to other country centres. I f the goods are brought into the metropolitan area, however, the 50-mile limit still applies).

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Access to Markets and Suppliers: Access to markets was regarded by most metropolitan firms as an extremely important factor in any location decision. Nine out of ten metropolitan firms claimed that a country location would be a disadvantage because it was necessary for them to provide prompt deliveries, as well as maintain personal contact with customers. They

considered that this could not be done conveniently in a country location. This attitude was common on an industry basis. Most metropolitan firms also considered that access to suppliers would be a disadvantage

in a country location, although a marginally less serious one than access to customers. Again, this attitude was common on an industry basis. One of the reasons given why access to suppliers constituted a problem was that metropolitan firms considered that being in the country would mean ‘out of sight, out of mind’, and that in cases of urgency they would not get special deliveries to the same extent as in the metropolitan area because of the cost and

distance involved. Moreover, they considered that they would have to tie up capital in larger stocks of materials since they anticipated deliveries would be less frequent and reliable. Access to customers was rated less of a problem by country firms. Only 48 per cent

claimed that their location placed them at a disadvantage. In fact, 19 per cent claimed it was an advantage. As indicated earlier, a large number of country firms, especially engineering firms, had a substantial market within about 50 miles of their location, and, of those which did not, many had an affiliate company in the metropolitan area to handle distribution of their

product. Nevertheless, many firms which had a metropolitan market but were not associated with any metropolitan firm found that access to customers was indeed a major problem. In some instances they had found it necessary to maintain a city office for purchasing and distribution purposes and to keep contact with customers.

Country firms as a whole were somewhat less worried by access to suppliers than metro­ politan firms were. This could be attributable to the fact that many of the country firms had affiliate companies which did their purchasing in the metropolitan area, to the fact that some firms, particularly those in food processing, considered their country location was closer to the source of raw materials, and to the fact that some of the firms located in Newcastle and Wollongong felt that they were as well off in this respect as those in the metropolitan area.

In considering the foregoing it should be borne in mind that city firms usually answered the question on the basis of shifting their entire plant to a country location. In such an event they generally considered that they would need a city office, enjoying some degree of prestige, to handle marketing and purchasing. As well as causing considerable additional expense, they

claimed this would give rise to administrative and other problems.

Telephone and Telegram Charges: Firms were asked to consider this item in three parts, viz. cost, availability, and ‘other factors’ such as inconvenience and delays, the reluctance of customers to make trunk calls, and restrictions on time. Over 90 per cent of firms, both metropolitan and country, regarded telephone costs as

constituting some degree of disadvantage in a country location. A larger proportion of country firms (66%) rated it a major disadvantage, compared to just under 50 per cent of metropolitan firms. However, the adverse cost differential estimated by country firms at 35 cents per $100 of sales was considerably less than the city firms’ estimate of 63 cents. Next to transport costs, telephone charges were regarded by firms from both locations as the highest cost liability of

a country location. Although the telephone cost liability averaged less than 20 per cent of the transport liability, more country companies rated telephone costs a major disadvantage. This could be attributable to the fact that a specific account is received at regular intervals in respect of telephone charges, whereas transport costs are often included in the price of goods delivered.

The availability of telephones would seemingly have little bearing upon location decision. About 95 per cent of both metropolitan and country firms considered that telephones would be just as readly available in either location.

As for ‘other factors’, from experience gained in previous surveys it was considered

Assessment of Factors Affecting Location

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important that firms should be asked to assess factors associated with telephones other than availability and cost. Most firms considered these other factors a problem although less of a liability than telephone costs.

Half the country firms considered that they placed them at a disadvantage, and half of these (26% of the total) regarded it a major disability. On an industry basis firms in ‘other manufacturing’ were more concerned than firms in other groups, and about 80 per cent of these firms ranked ‘other factors’ a disadvantage. On the other hand, textile and apparel firms were least concerned, only 40 per cent rating them a disadvantage. An explanation could be that many textile firms had parent companies in Sydney which handled most of their business

in the metropolitan area. Metropolitan firms were significantly more concerned about these other factors than country firms. Eight out of ten considered that they would amount to a disadvantage in the country, and nearly two-thirds of metropolitan firms considered the disability would be a major one. Metropolitan firms anticipated that, if they relocated in the country, their city customers would be reluctant to make trunk calls because of the cost.

Servicing and Maintenance Facilities: This factor was looked at from two aspects, availability and cost. Generally ratings for both aspects were similar since one tended to determine the other. When services were available locally, country firms found that the cost was not greatly different from that in the metropolitan area. On the other hand, if services were provided from Sydney, additional costs were usually incurred, mostly from travelling and living expenses. These normally were met by country firms, which also faced problems in actually getting the services performed in that servicing companies tended to be reluctant

to send employees to country areas. Country firms experienced delays when plant broke down. Metropolitan firms usually considered that they would be worse off in a country area in this regard, over 80 per cent stating that it would amount to a disadvantage compared with just over 60 per cent of country firms.

On an industry basis there was not a great deal of difference between the metropolitan firms. There was, however, some variation between industrial groupings in the country. The country industries least concerned were those engaged in food and engineering. Many industries in these two groupings said that they usually carried out their own maintenance, and about 50 per cent of each grouping considered that they were neither better nor worse off than their metropolitan counterparts. Textile firms (81%) and other industries (72%) generally estimated that a country location put them at a disadvantage. Only one firm, which was in the ‘other manufacturing’ group, considered its location placed it at an advantage.

Metropolitan firms inclined to the view that, if they were to locate in the country, they would be at a disadvantage either because their equipment was too specialised to service and repair internally or because their skilled workers could be more economically employed.

Education: Taking education as a whole, about 60 per cent of both metropolitan and country firms regarded a country location as a disadvantage. At primary and secondary levels, however, firms from both locations considered that they would not be at a disadvantage in the country as the school standards were generally

comparable. Where firms considered that a country location constituted a disadvantage was at technical college and university level. Because their activities were not particularly skilled and because they had little or no need for research, more country firms were concerned with technical college facilities than with universities. Some 60 per cent claimed that the limited range of technical training facilities available placed them at a disadvantage. In answering the question

some country firms expressed concern about the lack of courses for management personnel and considered that there was not a sufficient range of trade training courses available. In some cases apprentices, for example, in printing, boilermaking and pattern making, had to do their training courses by correspondence.

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About 50 per cent of the country firms felt that the absence of universities constituted a disadvantage. While in many cases they did not have a direct need for university-trained staff, the absence of university facilities made it difficult to attract top level management people who had children of university age.

Metropolitan firms’ ratings were similar to those of country firms, with about 50 per cent claiming that the limited range of technical facilities and the absence of universities would place them at a disadvantage in a country location, generally for the same reasons as those expressed by country firms.

Labour: Introductory: As will be apparent in detail from the cost differential figures, firms from both city and country regarded a country location as providing an opportunity for them to save on labour costs. Overall, country firms estimated a saving of 42 cents per $100 of

sales, while metropolitan firms anticipated it as 38 cents. In view of the importance of labour as a factor of production it was considered desirable to analyse it in greater detail than other cost components. Accordingly firms were requested to look at various aspects, viz. wage levels, productivity, turnover, absenteeism and availability.

Before examining these items, it should be pointed out that occasionally during the survey country firms in the same industry in the same town assessed various aspects of labour differ­ ently. This may well have been caused by variations in management rather than labour. Moreover, where firms did not employ a particular type of labour, its availability or otherwise was not reflected in their assessments and the various aspects were rated neutral.

Wage Levels: Just over half the country firms stated that the rates they paid to obtain skilled labour were similar to those in the metropolitan area and therefore no advantage or disadvantage accrued from their location. Just under one-third stated that they enjoyed an advantage in terms of skilled labour costs, but on the other hand nearly 20 per cent claimed they suffered

a disadvantage. Outside the food industry, where 36 per cent of the country firms felt they had an advan­ tage and none claimed a disadvantage, there was no apparent industry pattern. Some firms in each group claimed an advantage while other firms in the same group claimed a disadvantage.

The attitude of metropolitan firms as a whole was similar to that of country firms. Just under 40 per cent felt that skilled labour costs would be lower, whilst slightly more considered there would be no difference. Just under 20 per cent considered they would be worse off in the country.

There were varied reactions on an industry basis among metropolitan firms. All the textile and clothing firms, which were predominantly female-employing industries, felt that skilled labour would be cheaper to obtain in the country. They attributed this to more junior females being available and willing to work in this industry in country areas. In the metro­

politan area, on the other hand, they usually had to employ adults at over-award rates since there was a growing reluctance among females, particularly juniors, to seek employment in the industry. None of the city food firms, however, considered they would gain an advantage from this factor in a country location: indeed most of them thought skilled labour might represent a liability. Engineering firms were about equally divided. Half the ‘other manu­

facturing’ firms thought there would be no difference. In the case of unskilled males, just on 70 per cent of the country firms considered that wage levels were much the same in either location. Another 24 per cent considered they were lower in the country which of course gave them an advantage. However, six per cent, mainly engineering firms, were of the opinion that they were required to pay more for unskilled

male labour. On an industry basis country food firms seemed most satisfied; 54 per cent considered they had an advantage while none considered that they were required to pay more for unskilled labour. Textile and clothing firms felt they were at least as well off in the country, with 73

per cent of the opinion that there was no difference, and a further 27 per cent claiming to enjoy some advantage. As with food firms, none felt that they were at a disadvantage. There

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was a roughly similar pattern for ‘other industry’ and engineering firms, although about 10 per cent of firms in these two groupings considered that they were at some disadvantage in a country location. In the metropolitan area the attitude of firms to unskilled males was not unlike that of country firms, with 68 per cent of the opinion that rates were much the same, and a further 32 per cent believing that some type of advantage would accrue in the country. None of the metropolitan firms considered that they would have to pay more for unskilled male labour in the country.

In the case of unskilled females the attitudes of metropolitan and country firms were similar. Three-quarters of the metropolitan firms and about 80 per cent of the country firms considered there was no difference between the two locations. The remaining firms (except one in the country) regarded a country location as constituting an advantage.

On an industry basis, country food firms seemed more satisfied than the other groups, with nearly 45 per cent claiming that they were able to obtain unskilled females at lower than metropolitan rates, while the balance considered there was no difference. Textile and clothing firms also seemed to regard this item favourably, with 32 per cent claiming that rates would be lower in the country, while the remainder (68 %) felt there would be no difference. Engineering firms regarded this factor as neutral (93%), mainly because they generally employed females only in the office where they represented only a small proportion of the total payroll. About 80 per cent of ‘other manufacturing’ firms expressed a similar view. A further 14 per cent considered rates were lower, while only seven per cent thought they were higher.

Textile and clothing firms in the metropolitan area generally considered unskilled female labour would be obtained at lower levels in the country. None thought the rates would be higher. These are interesting conclusions in view of the fact that, unlike firms in the other groupings, most of the textile and clothing firms had closely examined the pros and cons of establishing in a country location. Food and ‘other manufacturing’ firms believed rates would

be the same, as also did most of the engineering firms.

Productivity: A variety of opinions were expressed on the subject of productivity. Some opinions conflicted. Firms with experience of different country locations sometimes claimed that productivity varied inversely with trade union activity. In some instances country workers were thought to be not as keen as city workers to earn extra money and consequently less interested in incentive schemes or overtime. On the other hand, some firms claimed produc­ tivity was higher because country workers were more conscientious. It was also suggested that better educated workers, who would probably take office work if it were available, were prepared to accept factory employment in the country and thereby increased productivity.

Just over one-third of the country firms considered skilled labour productivity was higher in the country. About one-half said it was much the same, while another 15 per cent thought it was lower and therefore represented a disadvantage. Looking at industrial groupings separately, 27 per cent of the country food firms regarded productivity as higher in the country, while 73 per cent thought there was no difference. None felt they were at a disadvantage. This was not the case with the other groupings as some firms in each claimed to be at a disadvantage in the country. In the main, however, these were in the minority. Just over 40 per cent of the textile and clothing firms regarded the productivity

of skilled labour as an advantage, while only 13 per cent regarded it as a disadvantage. A similar attitude was apparent among engineering companies. Metropolitan firms did not regard skilled labour productivity in the country quite so favourably, although 25 per cent considered that it would constitute an advantage.

On an industry basis, metropolitan firms reflected no common pattern. In the case of unskilled labour nearly 70 per cent of the country firms regarded productivity as being much the same in either location. Another 23 per cent considered that it was an advantage, while the remainder considered they were at a disadvantage.

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When country industrial groupings were examined separately it was found in all cases that more firms considered they enjoyed an advantage than otherwise. No food firms regarded it as a disadvantage. The metropolitan rating was similar to that for the country, with about 70 per cent of firms considering that they would not be any better off in a country location. Only six per cent believed they would be worse off, while about a quarter considered this factor could be an

advantage in the country.

Turnover: Firms were asked to give an assessment in respect of both skilled and unskilled labour turnover. In the case of skilled labour, just under 50 per cent of the country firms considered that they derived an advantage from their location, while only 17 per cent considered it represented

a disadvantage. The balance (38%) felt there was not much difference. Many country firms stated that, once the problem of obtaining staff had been overcome, they were generally able to retain them. Provided employees stayed long enough to settle in, they usually grew to prefer the country way of life.

There was some relationship between town size and assessment of turnover. In towns with a population under 10,000,56 per cent of firms estimated turnover as lower in the country, compared with 41 per cent of firms in towns with a population in excess of 10,000. An explanation could be that there were relatively fewer alternative employment oppor­ tunities in the smaller towns.

On an industry basis, food firms apparently manage quite well in the country, with 64 per cent of them regarding their location as giving them a skilled labour turnover advantage, usually a major one, and the balance (36%) expressing a neutral view. The other industrial groupings did not regard the position quite so favourably, although in each group more considered country turnover rates an advantage than a disadvantage.

The attitude of metropolitan firms was similar to that of country firms, with just over 50 per cent considering that they would be able to keep staff longer in the country so that it would amount to an advantage, in many instances a major one. Only 13 per cent of the firms considered that turnover would be higher in the country, while 36 per cent believed that it

would be much the same. In the case of unskilled labour, firms from both locations were more disposed to rate this factor neutral than in the case of skilled labour, mainly because replacement of unskilled workers cost them less than skilled workers who were generally harder to replace and had to

be trained to satisfy the firm’s individual needs. About 65 per cent of the country firms con­ sidered that turnover did not vary much in either location, while 24 per cent felt they obtained an advantage in the country. The remainder thought it was higher and that they were at a disadvantage. Similar views were expressed on an industry basis, with the exception of food

firms, none of which considered that they were at a disadvantage from this factor, while 45 per cent considered that they enjoyed an advantage. Just over 50 per cent of the metropolitan companies considered unskilled labour turnover

would be much the same in the country. A further 42 per cent considered that it would be lower, while only six per cent felt it would be higher. None of the metropolitan clothing and textile and ‘other manufacturing’ firms considered they would be worse off in a country location, and a number considered that they would gain a decided advantage since they

experienced problems in retaining this type of labour in Sydney. The foregoing assessments of skilled and unskilled turnover rates may be compared with the actual annual turnover rates supplied by the firms. These tend to support the conclusion that turnover rates for both skilled and unskilled labour are somewhat lower in the country.

The average metropolitan and country rates were: skilled 22 per cent and 15 per cent; unskilled 28 per cent and 19 per cent.

Absenteeism: In the main both metropolitan and country firms considered that lower absen­ teeism was an advantage of a country location.

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Fifty-four per cent of the country firms thought that absenteeism was lower in the country and they tended to regard it as a major advantage. Another 36 per cent believed that they were neither better nor worse, off while about 10 per cent believed absenteeism was higher in the country.

A larger proportion of metropolitan companies (71%) considered that absenteeism would be lower in the country and that it would represent an advantage, in many cases a major one. A number of metropolitan firms thought that it would tend to be lower because persons who took a day off without good reason would be seen and recognised or, alternatively, would have nowhere to go. The remainder considered they would be neither better nor worse off in the country.

Although firms generally assessed absenteeism as lower in the country, when the actual figures supplied were compared there appeared to be no significant difference.

Availability: This factor was looked at from three aspects, viz. skilled labour, unskilled males and unskilled females. On the whole, country firms were quite concerned about the inadequate supply of skilled labour. In many instances they emphasised that this was one of the major drawbacks of a country location. Fifty-eight per cent claimed that this factor put country firms at a disadvan­ tage, while only 17 per cent, nearly half of which were textile or clothing firms, felt they

derived any advantage. Another 25 per cent considered there would not be much difference. Problems associated with attracting skilled labour were apparently not peculiar to any one industry or area. An analysis of the various country industrial groupings indicated that food firms appeared least concerned about the availability of skilled labour, 64 per cent rating it as a neutral factor. Eighteen per cent of food firms felt they enjoyed an advantage, but another 18 per cent felt their location was a disadvantage. O ther manufacturing’ firms seemed most concerned, with

77 per cent rating it as placing them at a disadvantage, mainly a major one, a further 14 per cent considering there was little difference, and the remainder believing they enjoyed an advantage. This factor was rated similarly by engineering firms, of which 66 per cent rated it as a disad­ vantage, while only nine per cent felt they gained, with the remaining 25 per cent being neutral.

More than half of the textile and clothing firms (54%) felt it was a disadvantage, yet 32 per cent regarded it as an advantage, mainly a major one. The balance were neutral. Many textile and clothing firms stated that, while there might be a good supply of unskilled female labour available, the shortage of skilled machinists meant that they had to take on unskilled girls and train them. The time taken to train machinists, and the consequent loss of productivity, together with the need for constant supervision, cost them money.

This was a factor which many metropolitan firms considered would be one of the major problems which they would be confronted with in a country location. They considered that there would be a shortage of skilled labour. About 65 per cent felt it would amount to a disad­ vantage, in most cases a major one, while only 10 per cent were of the opinion that they would enjoy an advantage. Metropolitan industrial groupings expressed broadly similar views, although textile and clothing firms were less unfavourably disposed towards a country location on this score than other city firms.

In the case of unskilled males a little over 50 per cent of the country firms expressed a neutral view. Of the remainder, those which claimed unskilled males were easier to obtain in the country outnumbered those which asserted the contrary. The assessment of this factor varied considerably on an industry basis in the country.

Food firms, which are large employers of this type of labour, seemed most satisfied, with nearly two-thirds considering they enjoyed an advantage, whereas only nine per cent believed they were at a disadvantage. More engineering firms (34%) considered they enjoyed an advan­ tage than considered it a disadvantage (23%). Almost 80 per cent of the textile and clothing firms considered there was not much difference; a further 14 per cent rated it as an advantage, while another nine per cent classified it as a disadvantage. The high neutral rating by clothing

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and textile firms is probably attributable to the fact that, on the whole, they are not large employers of this type of labour. O th er manufacturing’ firms expressed a similar view. Metropolitan firms generally did not think there would be much difference in a country location, nearly 80 per cent being of the opinion that the availability of unskilled males would be much the same or would not affect them greatly. A further 16 per cent thought they might

gain an advantage, while the remaining six per cent thought they could be worse off in the country. There were no very marked variations in attitude between the various metropolitan industrial groupings, except that, unlike their counterparts in the country, none of the metro­ politan food firms thought they would gain from this factor.

In the case of unskilled females country firms did not rate availability as favourably as might have been anticipated. O f all the country firms nearly 60 per cent regarded this factor as being neutral, although just over one-third thought they gained an advantage through a larger supply of unskilled females generally being available for employment. Only five per cent, however, rated their location a disadvantage.

On an industry basis in the country, textile and clothing and food firms seemed most satisfied with their location in this regard, about 65 per cent and 75 per cent, respectively, of the firms in these two groupings believing that it constituted an advantage. Engineering firms were not particularly concerned about this factor, 85 per cent rating it as neutral, as did about 65 per cent of the ‘other manufacturing’ firms.

About four-fifths of the metropolitan firms felt they would be neither better nor worse off in a country location in this regard. The balance thought they would gain an advantage, possibly a major one. Textile and clothing firms, which were large employers of females, were inclined to believe that it would be easier to obtain unskilled females in the country.

Land and Buildings: Firms were asked to assess these items, which are discussed separately hereunder, from two aspects, viz. availability and cost. Both metropolitan and country firms considered land cheaper in the country but the cost of building higher. As will be seen from the following chapter, however, the savings on land purchased in the country appear to more than offset the additional building costs. Annual net savings on land and buildings for factories in the country were estimated to be 93 cents per $100 sales by country firms and 69 cents by metropolitan firms.

Generally speaking the availability of land was regarded as a decisive factor favouring location of industry in the country. Just over 70 per cent of the country firms rated this item as an advantage, in many instances a major one. Only one firm considered that it was at a disadvantage, at the time of survey, through being unable to find any suitable industrial land nearby. Subsequently over 80 acres

of industrial land were made available in the town concerned by the local council. The remainder of the country firms thought that they would be able to obtain suitable land for their purposes in the fringe areas of Sydney. On an industry basis, more country firms than not considered that they enjoyed some

type of advantage from the availability of land, with the highest proportion being engineering firms (80%), ranging down to 54 per cent in the case of food firms. Metropolitan firms generally considered that being able to obtain suitable industrial land nearby for expansion purposes when required would relieve them of many problems, as they either had to move to a completely new area when they ran out of space or else limit their

proposed expansion. They anticipated that this situation would not arise in the country. Thus nearly 80 per cent of the metropolitan firms rated this item as an advantage in a country location. Only one firm thought that land, as good as that it presently held, might be more difficult to obtain in the country.

As for the cost of land, there was general agreement among metropolitan and country firms that a country location represented a substantial saving. In the country, 84 per cent of the firms rated the lower cost of land as constituting an

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advantage for them, while 15 per cent felt that it did not make much difference. One company in the clothing and textile industry, however, had factories in both city and country and rated land cost a disadvantage because appreciation in property values in the country was nothing like that in Sydney: it considered that this appreciation would be greater than the interest

saved on cheaper land acquired in the country. Other firms also mentioned capital apprecia­ tion, but they did not feel it outweighed the savings in the country from lower land costs. When the country industrial groupings were examined separately it was noted that ‘other manufacturing’ firms seemed most satisfied, with 93 per cent stating that land costs were an

advantage compared with about 80 per cent in the case of the other groupings. The attitude of metropolitan firms was generally similar to that of country firms, 87 per cent believing that country land costs would constitute an advantage. As with the country industrial groupings, metropolitan ‘other manufacturing’ firms tended to be most favourably

impressed on this score. As with land, the cost and availability of buildings were examined separately. Availability was rated as neutral by just over 50 per cent of the country firms. Many of these firms thought that in either location there would be few existing buildings to suit their needs so that, if they required new premises, it would be necessary for them to build. On the other hand, 43 per cent thought that the more limited choice of vacant buildings suitable for their needs put them at a disadvantage. Many intimated that they would prefer to lease premises, if they were available, and they felt they would be able to do this in

Sydney. About five per cent of the firms considered that they enjoyed an advantage from this factor in a country location since there were usually alternative buildings available to suit their needs. Metropolitan firms expressed a similar attitude, generally for the same reasons as those given by country firms. A slightly higher proportion of metropolitan firms (16%) thought

they would gain an advantage from this factor in the country. On the score of cost many firms without first-hand experience found it difficult to make an assessment. While they generally considered that the cost of building materials imported from other areas might be higher in the country, mainly because of freight charges, they thought this could be mitigated to a limited extent if builders were able to get more daily deliveries of bricks, structural steel etc. because of the absence of metropolitan traffic problems.

Some thought the productivity of country building industry workers might be higher. Just under 50 per cent of the country firms expressed a neutral view, but 35 per cent considered that costs were higher and constituted a disadvantage. On the other hand, 17 per cent felt they gained from this factor in the country.

The attitude of metropolitan firms was generally similar to that of the country firms in this regard.

Availability o f Finance: This factor was intended to cover all sources of finance other than Government. Nearly 75 per cent of the country firms considered that they could raise finance just as well in the country as in Sydney. Three firms believed that they gained an advantage in the

country, either because they felt they had better relations with their banker than they would expect to have in Sydney, or because finance was available from graziers who were willing to invest surplus funds in business enterprises. Another 23 per cent of country firms felt that the country was at a disadvantage. These

firms pointed out that financial institutions were reluctant to provide finance because land and buildings did not offer the same security as in Sydney owing to the more limited demand for factories in the country. Just under 80 per cent of the metropolitan firms considered that a country location would

make little difference to their ability to raise finance, mainly because they were self-financing, and accordingly they gave a neutral rating. The balance, 22 per cent, rated it a disadvantage, generally for the same reasons as those given by country firms.

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Housing: Just over half the country firms and three-quarters of the metropolitan firms claimed the availability of housing was much the same in city and country. The remaining firms, both metropolitan and country, were fairly evenly divided about whether availability was an advantage or a disadvantage of a country location.

The metropolitan firms’ assessment o f country housing costs followed a similar pattern, about 60 per cent rating cost a neutral factor, with half the remainder rating it a liability and the other half an asset. Country firms, however, gave a more favourable assessment. While about half felt that housing costs were much the same in city and country, most of the remaining firms claimed that costs were lower in the country.

Local Government Attitude: In considering the following it should be borne in mind that in New South Wales country areas local government assistance to secondary industries normally takes two forms, viz. financial and general. Except in certain special areas where 100 per cent assistance is available from the Department of Decentralisation and Development,

councils will usually lend up to about 30 per cent of the cost of land and buildings in con­ junction with the Department in pursuance of the ‘60 : 30 : 10’ scheme. General assistance includes the construction of access roads and provision of essential

services to industrial sites. Just over 55 per cent of the country firms were of the opinion that local government councils were more co-operative in the country and generally were prepared to provide, when required, all reasonable assistance. They considered this would not be so readily forthcoming from local government in Sydney. A number of these firms were newly established, or had recently carried out expansion programmes, which qualified for financial assistance. Another

35 per cent of the country firms rated assistance a neutral factor. The balance (10%) were not satisfied with the attitude of local councils and considered that they would get more co­ operation in the metropolitan area. In some cases firms in the same town rated this item differently. In several instances

it was found that it was rated by one firm as an advantage, by another as neutral and by yet another as a disadvantage. These differences between firms in the same towns are difficult to reconcile. In some cases dissatisfaction with local government apparently stemmed from disagreement between the local council and the firm concerned. In other cases it may be that, whereas recently established industries had received assistance and were therefore favourably

disposed towards their council, older established firms were indifferent. Nearly 60 per cent of the metropolitan firms thought that the attitude of local government councils would be much the same anywhere. The balance (42%) considered it would amount to an advantage in the country. These firms generally were of the opinion that local councils in the country were anxious to attract industry and for this reason might be more sympathetic to their needs and more willing to provide financial and other assistance.

Property Taxes: This factor was intended to cover all local authority rates and land tax. O f the country firms, 48 per cent considered that the property taxes they paid were less than what they would expect to pay in the metropolitan area. Another 46 per cent felt there was little difference between city and country charges. These firms considered that, while land values might be lower in the country, the rate in the dollar of unimproved capital value

was higher. They contended that the cost of providing basic local government services would be much the same in either location and consequently had to be paid for by local ratepayers. The remaining 6 per cent claimed the rates they paid were higher. O f the metropolitan firms, 74 per cent felt they would gain from this item in a country location. Another 23 per cent were of the opinion that the property taxes they paid would be

about the same. Only one metropolitan firm considered that it would be worse off in a country location. As for land tax, it should be pointed out that, at the time of the survey, land in New South Wales valued at less than $17,250 (U.C.V.) was exempt. The land requirements of

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many firms did not render them liable for land tax even in Sydney and this item was therefore not regarded as very significant.

Governm ent Assistance: Under the State Development and Country Industries Assistance Act, administered by the Department of Decentralisation and Development, manufacturing industries in N.S.W. outside the County of Cumberland, the City of Newcastle and the City of Greater Wollongong are eligible for a wide range of financial assistance by way of loans

at favourable rates for factories and land, freight subsidies and concessions, housing assistance for key employees, labour training subsidies, technical consultancy subsidies, and loans in respect of plant and machinery. Under the so-called 60 : 30 : 10 scheme, the Department may lend up to 60 per cent of the cost of factory buildings and land, leaving the local govern­ ment council to provide 30 per cent and the entrepreneur the remaining 10 per cent. In certain areas where the incidence of under-employment is high the Department is prepared to lend

up to 100 per cent of the cost. Assistance to country industries has been substantially expanded in recent years, and some firms which previously did not qualify for assistance would now do so in similar circum­ stances. For the purposes of the survey, however, firms answered the question on the basis of assistance actually received from the Government up to the time of the survey.

About 55 per cent of the country firms indicated that Government assistance was an advantage. The balance considered that it made no difference to them since all loans had to be repaid. Alternatively, they had not received any assistance. This latter category would include firms in Newcastle and Wollongong which were areas that did not qualify for assistance from the Country Industries Assistance Fund (although, since the survey was carried out, firms

in Wollongong employing predominantly female labour have become eligible for special assistance). Some country firms argued that both the local council and the Government were endeavouring to encourage new country industries without taking into account the interests of existing industries. One firm, for example, complained that financial assistance was extended to a Sydney-based firm to establish in the same area. It was not impressed with the suggestion that competition could ultimately lead to increased industrial efficiency.

Some firms contended that existing forms of assistance should be extended so as to provide assistance to industries which did not require assistance of the type currently offered. The assistance which country firms considered should be provided by government included:

(1.) The establishment of Government-sponsored organisation and methods teams to assist country manufacturers at no cost.

(2.) The granting of tax allowances, for example, depreciation and tax rate reductions for decentralised industry, to off-set the adverse cost differentials of their country location.

(3.) More sympathetic consideration to applications for freight assistance by road instead of rail. (Many firms claimed that, although preferring to purchase intra-state, they purchased interstate in order to avoid paying road charges. They did not wish to use rail services which they claimed were unreliable, inefficient and slow and damaged

their products).

(4.) The subsidisation of telephone accounts.

(5.) Exemption from payroll tax during the training of unskilled employees engaged because of the shortage of trained staff in country towns.

With one exception, all the metropolitan firms considered that existing forms of Govern­ ment assistance would not in themselves make a country location sufficiently attractive. Most considered that they would be able to raise their own finance and so would not qualify for financial assistance. Only one firm considered that the assistance available constituted an advantage.

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Parking and Traffic Conditions: Two-thirds of the country firms believed that an advantage accrued to them in their location from this factor. A quarter considered that there was not much difference. The balance, comprising three firms from Newcastle and Wollongong, thought they were worse off than firms in Sydney as there was not even street parking nearby.

Just over half the metropolitan firms considered that they would gain from this factor, while 45 per cent thought there would not be any difference. Some of the firms which gave a neutral rating said that the bulk of their market was in Sydney so that they would still be confronted with the same traffic problems when distributing to customers.

The time spent by metropolitan employees in travelling to work generally ranged up to about 60 minutes. Firms estimated that, while about half of their employees spent less than 30 minutes travelling to work, about 45 per cent spent between 30 minutes and an hour. Five per cent spent more than an hour. However, in answer to another question on travel times, firms estimated the average travelling time spent per employee at just over 20 minutes, which suggests that at least some metropolitan employees manage to keep work travel times down to a reasonable level.

While no similar question was asked of country firms, some volunteered information which suggested that average travel time for country employees would be in the vicinity of five minutes.

Public Services: Water: Firms were asked to consider how they felt they were placed relatively to various public utility services such as telephones, water, electricity, gas, and disposal facilities for noxious wastes. Apart from telephone services, for which separate figures were collated, the total additional cost of these services in a country location was estimated

by country firms as amounting to about 3 cents per $100 of sales and by metropolitan firms at 2 cents per $100 of sales. It would appear therefore that the cost impact was not very significant. Many firms questioned were not large consumers of water, and accordingly they gave a

neutral rating for both availability and cost. Availability was regarded as much the same in either location by over 90 per cent of the country firms. Only two companies considered that supplies were not as good in the country and that this placed them at a disadvantage. On the other hand, some companies considered that the country offered advantages: they did not suffer from water restrictions to which they

considered the metropolitan area was subject from time to time. Metropolitan firms expressed a similar attitude, with nearly nine out of ten rating availability neutral. None considered that they would be better off in the country, however, and the remainder considered they might be worse off.

The attitude of country firms to cost was much the same as their attitude to availability, with nearly 90 per cent of the firms stating that it would be no different, while another seven per cent indicated that it might constitute an advantage for them. The balance (5%), most of which were abattoirs and food processing firms, consuming large quantities of water, felt they had to pay more for water and accordingly rated it as constituting a disadvantage.

The metropolitan firms’ attitude to cost was similar to that for availability, just over 90 per cent considering that there would be no difference in either location, and the balance considering that it might cost more in the country and that it would be a disadvantage. None thought it would cost less.

Electricity: Cost comparisons in respect of this factor were rather more difficult to analyse because each of the forty-odd county councils responsible for electricity reticulation in New South Wales applies its own tariffs. In any estimate of the relative costs of power in different supply areas or between alternative tariffs in a particular supply area, satisfactory results would only be obtained by the application of a particular load and the calculation of the annual cost (or the cost for some other convenient period), thus arriving at an average cost expressed

in cents per unit. .

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Only a small number of firms kept detailed records. Just on two-thirds of the country firms considered tariffs were about the same and accordingly they gave a neutral answer. Only one firm claimed it enjoyed an advantage, a minor one. The remaining one-third considered costs were higher and that they were at a disadvantage in the country.

About 80 per cent of the metropolitan firms considered there was little variation in tariffs between the two locations. The balance considered that costs might be higher, which would place them at a disadvantage. Availability was rated as neutral by about 95 per cent of both metropolitan and country

firms.

Gas: A large number of the country firms intimated that they had no demand for gas so that they were not affected in their location by either availability or cost. This would seem to account for the large neutral rating by 98 per cent in respect of availability and 94 per cent in respect of cost. No firms considered that availability of gas constituted an advantage.

Cost of gas was regarded by five country firms as amounting to a disadvantage because they considered rates were higher in the country. One firm, however, which incidentally carried out large-scale manufacturing in both the country and metropolitan areas, considered it gained an advantage from this factor in its country location.

The availability and cost of gas were rated by all metropolitan firms as neutral. They either had no need for gas or, alternatively, believed that it would be just as readily available in the country at no additional cost.

Noxious Waste Disposal: Just over eight out of every ten country firms rated availability and cost of this item as neutral, with the balance being fairly evenly divided between those firms which claimed an advantage and those which claimed a disadvantage. Many of the companies interviewed did not have any need for this item, and this probably accounted for the high neutral rating. However, it was noted that, of the food firms, which as a group probably had most demand for this item, nearly half considered that the lack of facilities for disposal put them at a disadvantage. None claimed an advantage. On the other hand, costs did not appear to worry food firms significantly.

Both availability and cost of this item were rated similarly by metropolitan firms, usually because they considered that, if this facility were not available, then the cost of disposal would be higher. As with country firms, a number of the metropolitan firms did not have any demand for noxious waste disposal facilities, nearly eight out of ten rating cost and availability as neutral. However, a somewhat larger proportion of metropolitan firms than country firms thought they would be worse off in a country location.

Industrial Fuel: Availability of this item was given a much more neutral rating than cost by country firms. Over 90 per cent felt that this item was readily available in either location. Thirty-two per cent, however, mainly engineering firms, considered that the cost of industrial fuel was higher in the country because of freight charges, and that accordingly they were at a disadvantage. Another 66 per cent considered that it made little difference, but in the main these were firms which either did not have much demand for this item or were located at Newcastle or Wollongong where prices were similar to those in Sydney.

The attitude of metropolitan firms was similar to that of country firms in respect of availability. About nine out of ten rated it a neutral factor, the balance considering they would be worse off in the country. Nearly half the metropolitan firms considered the cost would be higher, however, and accordingly they rated it as constituting a disadvantage of a country location. None thought they would be better off.

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Cost Differentials 5

Chapter 4 records the reactions of the survey firms to various location factors. In order to determine the actual extent of the net advantage or disadvantage incurred by country firms, the participating firms were asked to estimate the annual cost of a number of factors in their present location and then to estimate what the annual cost would be in an ‘alternative area’. For country firms, the ‘alternative area’ was Sydney; for city firms, it was a country locality of their own choosing, but with markets and sources of supply remaining unchanged.

The difference between the two estimates was then expressed as a cost (or saving) per $100 of sales (referred to hereunder as the ‘cost differential’). To arrive at an average ‘differential’ for firms grouped by area or industrial grouping, the sum of the individual differentials was divided by the total number of firms in the group.

In the few cases where firms did not provide figures it was assumed for the purposes of the study that they thought there was no difference between city and country (i.e. that the differential was zero). This assumption made little difference to the average differentials obtained except in the case of ‘other factors’. Here, because only a small number of the firms supplied figures

(roughly one-third of both city and country firms), the average obtained was lower than if it had been calculated on the basis of the actual number of firms that supplied figures. The results of these analyses of costs are set out in full in Tables 26 and 27.

The Total Differential: Both metropolitan and country firms claimed, on balance, that there was a net cost disability associated with a country location. Country firms estimated this disability at 92 cents per $100 of sales. The average estimate of metropolitan firms, at $2.03 per $100 of sales, was more than twice as high.1 Much of this difference between metropolitan and country estimates was accounted for by three city firms which supplied particularly high estimates for the ‘other factors’ category. These firms thought that by locating in the country they would need an office in Sydney to carry out their marketing

and purchasing operations. They claimed that this would add considerably to their costs. A comparison of the cost differentials was also made between firms which had experience of both city and country locations and those which had not. It was considered that firms with first-hand experience of both locations would have a better idea of comparative costs.

Just over 20 per cent of the country firms did in fact have experience of both locations (mainly through having a metropolitan affiliate to handle their purchasing and distribution), and these firms actually averaged a small overall saving of about 5 cents per $100 of sales which they attributed to their country location. It should be noted, however, that an extremely high saving by one firm on labour costs contributed to this result. Nevertheless, even excluding this firm, the average disability of the remainder, at 68 cents per 3100 of sales, was less than the average for all country firms of 92 cents. Moreover there appears no reason to doubt the

115

high labour savings estimated by the firm in question, and its figures could well indicate an upward limit on labour savings in the country.

Differences between Industrial Groupings: The variations in estimates supplied by different industries were quite marked. Whereas some industries claimed a considerably greater disability than the overall average, some did in fact claim a net advantage from their country location.2

Relative advantages of city and country locations as seen by industrialists (N S W )

Total Cost Differential (per $100 of sales)

Industry Group Country Metropolitan

Firms Firms

$ $

Food +0.61 -2 .6 4

Metals -2 .0 8 -2 .7 6

Textiles -0 .3 3 +0.72

Other manufacturing -0 .0 1 -3 .1 1

Average -0 .9 2 -2 .0 3

Note: A minus sign indicates an advantage for the city.

Differences at the industry level, between city and country were also quite marked. Whereas food firms in the country estimated that they saved about 61 cents per $100 of sales, by locating in the country, city food firms claimed that by locating their operations in the country and continuing to serve their existing markets, they would incur a loss averaging

$2.64 per $100 of sales. On the other hand, while city textile and apparel firms thought they would gain by locating in the country, textile firms in the country claimed that they were at a net disadvantage. Whereas city firms in ‘other manufacturing’ claimed they would lose over $3 per $100 of sales by locating in the country, their counterparts in the country claimed there was little difference between city and country. Their estimate of the differential was only one cent per

$100 of sales. Unlike firms in other industrial groupings, estimates of the differential by city and country metal firms were reasonably similar.

Components o f Total Differential: The overall cost differential referred to above is the sum of the different components listed hereunder.3

Components of the Total Differential (per $100 of sales)

Component Country

Firms $

Metropolitan Firms $

Freight -1 .7 5 -1 .8 4

Labour +0.42 +0.38

Telephones -0 .3 5 -0 .6 3

Land and buildings +0.93 +0.69

Public -0 .0 3 -0 .0 2

Other -0 .1 4 -0 .6 1

Average -0 .9 2 -2 .0 3

Note: A minus sign indicates an advantage for the city.

116

The Freight Component: Both metropolitan and country firms agreed that freight costs were one of the major disadvantages confronting firms located in country areas, and their estimates were similar.

Cost Differentials

Differential on Freight Costs (per $100 of sales)

Industry Group Country Metropolitan

Firms Firms

$ $

Food -1 .0 8 -1 .6 7

Metals -2 .4 3 -2 .3 2

Textiles -1 .0 1 -0 .7 0

Other manufacturing -1 .6 8 -2 .0 7

Average -1 .7 5 -1 .8 4

Note: A minus sign indicates an advantage for the city.

Metal industry firms appeared to be at the greatest disadvantage.

The Freight Component: Inward and Outward: In order to determine whether firms regarded the disability on inward freight as seriously as that on outward freight, they were asked to supply figures for each of these components. Metropolitan firms considered that the liability on outward freight costs in the country

would be greater than for inward, whereas country firms considered the disability on inward costs was much greater than for outward.

Differential on Freight Costs (per $100 of sales)

Industry Group Country

Firms

Metropolitan Firms

Inward Outward Inward Outward

$ $ $ $

Food - 0 .2 6 - -0.82 -0 .6 4 -1 .0 3

Metals - 2 .4 2 - -0.01 -0 .9 0 -1 .4 2

Textiles -0 .4 9 - -0.52 -0 .1 6 -0 .5 4

Other manufacturing Average

- 1 .1 7 -

-1 .4 2 -

-0.51 -0.33

-0 .5 5 -0 .6 4

-1 .5 2 -1 .2 0

Note: A minus sign indicates an advantage for the city.

The pattern which emerged for metropolitan firms as a whole, viz. that outward freight costs were a greater disability than inward, was maintained at the industry level. In the country, however, the overall pattern, viz. a greater disability on inward than outward costs, was not common to all industrial groupings. Food firms, for example, considered the extra cost on outward freight was three times that on inward freight. Textile firms gave

similar estimates for both, generally because in their case the volumes of inward and outward freight were roughly the same. Metal firms, while regarding the disability on inward freight as very high ($2.42 per $100 of sales) thought they were no worse off than city firms in respect of outward freight. It might have been expected that country metal firms would have an

advantage on outward freight as their main markets in most cases were outside Sydney, but when questioned on this aspect they were generally adamant that they were at no advantage.

117

Telephone Costs: Telephone costs were considered higher in the country because of the greater number of trunk calls made by country firms, although telephone rentals were lower. The cost differential estimated by country firms was, however, only about half that which metropolitan firms estimated they would incur.

Relative advantages of city and country locations as seen by industrialists (N S W )

Differential on Telephone and Telegram Charges (per $100 of sales)

Industry Group Country Metropolitan

Firms Firms

$ $

Food -0 .1 6 -0 .6 4

Metals -0 .4 7 -0 .6 9

Textiles -0 .2 1 -0 .2 8

Other manufacturing -0 .3 7 -0 .8 9

Average -0 .3 5 -0 .6 3

Note: A minus sign indicates an advantage for the city.

The tendency of city firms to estimate a higher cost disability than country firms was fairly consistant at the industry level.

L abour C osts: Both metropolitan and country firms thought that considerable savings could be achieved through lower labour costs in country areas, and their estimates were very similar.

Differential on Labour Costs (per $100 of sales)

Industry Group Country Metropolitan

Firms Firms

$ $

Food + 1.65 -0 .3 0

Metals -0 .2 3 +0.13

Textiles +0.67 + 1.26

Other manufacturing +0.76 +0.33

Average +0.42 +0.38

Note: A plus sign indicates an advantage for the country.

The overall pattern, however, was not maintained at the industry level. For example, while food firms in the country estimated that labour savings would amount to $1.65 per $100 of sales, city food firms claimed they would incur extra costs on labour to the extent of 30 cents per $100 of sales if they located in the country. On the other hand, metal firms in the city thought they would save on labour by locating in a country area, whereas country firms in the metal industries claimed, on the average, that their labour costs were higher in the country

because they had to pay well above award rates to attract qualified tradesmen. Textile firms generally agreed that labour costs were lower in country areas, although the metropolitan firms considered that the advantage would be greater than that estimated by country firms.

L and and B uildings: The saving on the combined cost of land and buildings was an aspect which favoured country areas according to both metropolitan and country firms. The country firms’ estimate of this saving, at 93 cents per $100 of sales, was a little higher than that of metropolitan firms, at 69 cents. This overall saving was mainly due to lower land costs in country areas; building costs were generally not considered an advantage.

118

It is interesting to note that both metropolitan and country firms believed that savings on land and buildings in the country were higher than savings on labour costs.

Cost Differentials

Differential on Land and Building Costs (per $100 of sales)

Industry G roup C ountry M etropolitan

F irm s F irm s

$ $

Food + 0.36 + 0.16

Metals + 1.13 + 0 .7 9

T extiles + 0.58 + 0.72

Other manufacturing + 1.40 + 0.66

Average + 0.93 + 0.69

Note: A plus sign indicates an advantage for the country.

As will be seen, there was some variation between industries, especially in the country; in addition, some variation was also apparent within industries between city and country. In the textile industry the city firms’ estimate (of 72 cents) was higher than that of the country firms (58 cents). This is interesting in that more of these firms had given consideration

to establishing in the country and had studied the economics of country location in detail.

Public Services: Public services tended to play a neutral role in location. Metropolitan and country firms estimated a practically neglible country disadvantage.

Differential on Cost of Public Services (per 8100 of sales)

Ind u stry G roup C ountry M etropolitan

F irm s F irm s

$ 8

Food -0 .1 1 -0 .0 1

Metals -0 .0 2 - 0 .0 3

Textiles -0 .0 3 -- -

Other manufacturing - 0 .0 1 - 0 .0 1

Average -0 .0 3 - 0 .0 2

N ote: A m inus sign indicates an advantage for th e city.

There was little variation between industries and between city and country at the industry level.

O th er F acto rs: In the questionnaire, firms were asked whether any other factors, besides those listed, contributed to any costs or savings for firms in country areas. Factors submitted included such items as the need to maintain a city office, travelling expenses of country

executives and the need to hold considerable raw material stocks because of delays with deliveries, etc. Only one-third of the firms, however, both city and country, considered that there were in fact other factors which needed to be taken into account. Metropolitan firms considered that by locating their operations in the country an

additional cost attributable to these factors of 61 cents for each $100 of sales would be incurred. On the other hand, country firms gave a much lower estimate at 14 cents. As mentioned previously the city figure is somewhat inflated by three firms which claimed

119

that by locating in the country they would incur considerable additional expense by having to set up marketing and purchasing branches in Sydney. This was based on the premise that their entire operations would be shifted to the country. This, of course, would not necessarily be the case in practice—they could locate part of their plant in the country and part in Sydney.

The processes best suited to the country could be transferred there.

Relative advantages of city and country locations as seen by industrialists (N S W )

Differential on Cost of O th er Factors’ (per $100 of sales)

Industry Group Country

Firms $

Metropolitan Firms $

Food -0 .0 5 -0 .1 8

Metals -0 .0 6 -0 .6 4

Textiles -0 .3 3 -0 .2 8

Other manufacturing -0 .1 1 -1 .1 3

Average -0 .1 4 -0 .6 1

Note: A minus sign indicates an advantage for the city.

Industry variation was quite marked. In addition, differences between city and country at the industry level were also appreciable. Whereas metropolitan firms in ‘other manu­ facturing’ claimed the disability was $1.13 per $100 of sales, the estimate of their counterparts in the country was only 11 cents, and the metropolitan metal firms’ estimate of 64 cents was much higher than that of country firms (6 cents). On the other hand, metropolitan and country firms in the textile industry gave similar estimates (28 cents and 33 cents, respectively).

(1.) The companion study carried out by the Victoria Division of State Development suggested a lower average net disability attributable to country location. In Victoria country firms estimated their overall cost disability at 41 cents per $100 of sales, while Melbourne metropolitan firms estimated it would be 37 cents. Generally it would seem that the difference between the N.S.W. and Victorian results reflects the more compact pattern of Victorian development.

(2.) The industry group variations in Victoria which emerged as follows were also quite marked:

Total Cost Differential (per $100 of sales)

Industry Group Country Firms City Firms

Estimates Estimates

$ $

Food —0.56 —0.67

Metals —1.08 —0.94

Textiles + 0 .0 6 +0.21

Other manufacturing + 0 .1 9 + 0 .2 4

Total -0 .4 1 -0 .3 7

Note: A plus sign indicates an advantage for the country.

(3.) In Victoria the components of the total differential were rather more closely comparable with these figures than in the case of the industry group variations noted in (2) above:

120

Cost Differentials

Components of the Total Differential (per $100 of sales)

Component Country Firms

Estimates $

City Firms Estimates $

Freight - 1 .3 4 -1 .4 6

Labour +0.21 +0.99

Telephones -0 .2 7 -0 .1 5

Land and buildings + 1.05 +0.25

Public services +0.01 +0.02

Other -0 .0 7 -0 .0 2

Total -0 .4 1 -0 .3 7

Note: A plus sign indicates an advantage for the country.

In both States the major component of the differential was freight, and the industry group variations in respect of this component are remarkably similar.

Differential on Freight Costs (per $100 of sales)

Industry Group Country Firms City Firms

Estimates Estimates

$ $

Food -0 .3 9 -1 .1 6

Metals -2 .9 2 -2 .6 0

Textiles -0 .6 9 -0 .3 0

Other manufacturing -0 .6 8 -1 .7 3

Total -1 .3 4 -1 .4 6

Note: A minus sign indicates an advantage for the city.

E

121

Tables

Table 1

Classification into Industrial Groupings

Country Metropolitan Sample Sample

Engineering and Metal Fabrication •engineering 15 1

Sheet and light 9 8

Machinery and tools 11 5

Foundries 4 1

Shipbuilding 1 —

40 15

Textile and Apparel Clothing 15 3

Yarns and fibres 3 0

Textiles 2 2

Shoes 2 2

22 7

Food Processing Canning 4 1

Killing 5 1

Other 2 1

11 3

Other Manufacturing Paper and Printing 6 2

Joinery and wood 4 2

Rubber 2 1

Chemicals 0 *1

Coach Building 2 0

14 6

Total 87 31

♦This chemical company was included in the exercise because it was seriously considering establishing a plant in the country. It was felt that any observations it made would be of interest.

Table 2

Date of Establishment: By Area Number of firms in each category

Pre 1925 1925-38 1939-45 1946-50 1951-55 1956-60 1961-Country Firms 16 8 8 12 18 12 13

Metropolitan Firms 12 6 4 0 2 5 2

122

Relative advantages of city and country locations as seen by industrialists ( N S W )

Table 5

Extent of Part-Processing

(Proportion of country firms output which is partly processed by them and partly by their affiliate) Number of firms in each category

Other Total

Food Metals Textiles Manufacturing

Part Processed output-total output

Less than 50% 0 0 0 1 1

More than 50% 0 0 6 0 6

No part processing 11 40 16 13 80

Total 11 40 22 14 87

124

Distribution of Firms According to Number Employed at Local Plant by Area and Industrial Grouping Num ber of firms in each category

Table 7

Number Employed Under 25 26-50 51-75

76-100 101-200 201-300 301-400

401-1,000 Over 1,000

Country Firms

Total

Food Metals Textiles Other Mfg 1 22 1 7

2 8 2 2

1 3 3 0

0 0 3 1

0 5 7 3

4 0 3 0

0 1 1 0

2 0 2 1

1 1 0 0

11 40 22 14

Total 31 14 7

4

15 7 2 5 2

Metropolitan Firms

ο ­ Ι 6 §-

Table 8

Labour Characteristics

Firms estimates as to the proportion of the various types of labour they employ in relation to total employment

Labour Category Skilled males Unskilled males Skilled females Unskilled females

Non-factory males Non-factory females

Country Firms

Food Metals Textiles Other Mfg 19 55 10 45

39 23 4 13

5 0 70 14

24 5 8 9

9 11 4 10

4 6 4 9

Total 100 100 100 100

Average 37 19 22

8 9 5

100

Food 19 30 3

32 8 8

100

Metropolitan Firms

Metals 44 21 1

11 15 8

100

Textiles Other Mfg 25 57

6 13

57 12

2 1

5 11

5 6

100 100

Average 40 16 18

9

10 7

100

mtages of city and country locations as seen by industrialists (N S W )

Sources of Raw Materials

Estimates by country and metropolitan firms of the proportion of their supplies which are drawn from the areas specified below.

Table 9

Country Firms Metropolitan Firms

Source Metropolitan area Within 50 mile radius (excluding metropolitan

area) Outside a 50 mile radius Interstate Overseas

Total

Food Metals Textiles Other Mfg 13 35 61 45

49 20 0 20

20 19 5 9

18 24 14 11

0 2 20 15

100 100 100 100

Average 41

19 14 18 8

100 100 100 100 100

Average 77

1 3 5

14

100

Table 10

Distribution of Sales

Estimates by country and metropolitan firms as to what proportion of sales go to the areas specified below.

Country Firms Metropolitan Firms

Market Metropolitan area Within 50 mile radius (excluding metropolitan

area) Outside 50 mile radius Interstate Overseas

Total

Food Metals Textiles Other Mfg 37 10 64 28

22 38 2 31

9 30 8 20

21 19 25 21

11 3 1 0

100 100 100 100

Average 30

26 20 21 3

100 100 100

Average 60

2 7

27 4

100 100 100

mtry locations as seen by industrialists (N S W )

Tables

Table 12

Assessment of Existing Location Decision: By Industrial Grouping Country Firms Number of firms in each category

Food Metals Textiles Other Mfg Total

Those satisfied with past decision Those dissatisfied with past decision1

6 32 13 7 58

Would choose another country location 2 1 4 4 11

Would choose a city location 3 7 5 3 18

Total 11 40 22 14 87

1 Reasons for dissatisfaction appear in Table 14

Table 13

Assessment of Existing Location Decision: By Industrial Grouping Metropolitan Firms Number of firms in each category

Food Metals Textiles Other Mfg Total

Those satisfied with past decision 3 10 6 6 25

Those dissatisfied with past decision1 0 5 1 0 6

Total 3 15 7 6 31

1 Reasons for dissatisfaction appear in Table 14.

129

and country locations as seen by industrialists (N S W j

Tables

Preference of Dissatisfied Country Firms for Country Location Reasons By Industrial Grouping Number of firms in each category

Table 15

Food Metals Textiles Other Mfg Total

Reasons

Labour 1 0 3 2 6

Markets 0 0 1 1 2

Raw materials 1 0 0 1 2

Transport 0 1 0 0 1

Total 2 1 4 4 11

Table 16

Preference of Dissatisfied Country Firms for Metropolitan Location Reasons By Industrial Grouping Number of firms in each category

Food Metals Textiles Other Mfg Total

Reasons

Market 2 3 1 1 7

Transport 0 2 2 0 4

Labour 0 1 1 1 3

Lower costs 1 1 1 0 3

Raw materials 0 0 0 1 1

Total 3 7 5 3 18

131

Relative advantages of city and country locations as seen by industrialists (N S W )

Table 17

Attitude of Metropolitan Firms to Country Location By Industrial Grouping Number of firms in each category

Food Metals Textiles Other Mfg Total

Those that would not consider a country location Reasons Market 0 9 3 4 16

Labour 1 4 1 0 6

Total 1 13 4 4 22

Those that would Reasons Labour 0 1 2 0 3

Raw materials 1 0 0 1 2

Land 0 1 1 1 3

Total 1 2 3 2 8

No opinion 1 0 0 0 1

Grand Total 3 15 7 6 31

Tables

Attitude of Metropolitan Firms to Need for Complementary Industries By Industrial Grouping Number of firms in each category

Table 18

Other industries necessary Reasons1

Food Metals Textiles Other Mfg Total

Input supplying industry 1 3 0 2 6

Output using industry 0 1 0 1 2

Total 1 4 0 3 8

Other industries not necessary 1 8 7 3 19

No comment 1 3 0 0 4

Grand Total 3 15 7 6 31

Table 19

Attitude of Country Firms to Entry of Other Firms By Industrial Grouping Number of firms in each category

Those that would like to see others established Reasons1 Complementary labour

Input supplying industry Output using industry Any non-competitive No strong reason

Total

Those that would not

Grand Total

Food Metals Textiles Other Mfg

1 5 9 1

3 7 0 2

4 4 0 1

0 4 1 4

3 18 5 5

11 38 15 13

0 2 7 1

11 40 22 14

Total

16 12 9 9

31

77

10

87

1 Reasons relate to benefits present firms hope to gain from other manufacturers establishing m their area. e.g., Complementary Labour—existing firm employs mainly women and would welcome firms mainly employing men as this would tend to increase the number of wives and daughters seeking employment. Input industry —present firm would welcome firm making items which it uses as inputs.

Output industry —existing firm would welcome firms using the products ii produces.

133

Table 20

Assessment oi Factors Affecting Location: By Area Number of firms in each category

B §-

Country Assessment Metropolitan Assessment

Factor TRANSPORT, SUPPLIERS AND MARKETS Transport availability

Road taxes and regulations Freight costs— inward outward

Access to suppliers Access to markets „ LABOUR CHARACTER- £ ISTICS

Availability skilled unskilled males unskilled females Turnover

skilled unskilled Wage levels skilled

unskilled male unskilled female Productivity skilled

unskilled Absenteeism

M L = Major Liability in the country; L = Liability; N = Neutral; A = Asset; MA = Major Asset.

mtages of city and country locations as seen by industrialists (N S W )

Table 20— continued N u m b e r o f firm s in each category

Factor PUBLIC SERVICES Water supply availability

cost

Electricity availability cost Gas

availability cost Other fuel availability

cost

Waste disposal availability cost

Telephone services availability cost ‘other factors’

Country Assessment Metropolitan Assessment

M L = Major Liability in the country; L = Liability; N = Neutral; A = Asset; MA — Major Asset.

Table 20— continued N u m b e r o f firm s in ea ch category

a I

Factor OTHER Finance availability

Land availability cost Buildings

availability cost Servicing and maintenance facilities

availability cost Property taxes Government assistance

Local government attitude Housing facilities availability cost

Educational facilities Parking and traffic conditions

Country Assessment Metropolitan Assessment

M L — Major Liability in the country; L = Liability; N — Neutral; A — Asset; MA = Major Asset.

and country locations as seen by industrialists (N S W )

Table 21

Assessment of Factors Affecting Location: Percentage Distribution1 Number of firms in each category

Country Assessment Metropolitan Assessment

Factor TRANSPORT, SUPPLIERS AND MARKETS Transport availability

Road taxes and regulations Freight costs inward outward

Access to suppliers Access to markets LABOUR CHARACTER­ ISTICS

Availability skilled unskilled males unskilled females Turnover

skilled unskilled Wage levels skilled

unskilled male unskilled female Productivity skilled

unskilled Absenteeism

1 Adapted from Table 20.

M L = Major Liability in the country; L = Liability; N = Neutral; A = Asset; MA = Major Asset.

Table 21— continued N u m b e r o f firm s in e a c h category

Factor PUBLIC SERVICES Water supply availability

cost

Electricity availability cost Gas

availability cost Other fuel availability

cost

Waste disposal availability cost Telephone services

availability cost ‘other factors’ 1

Country Assessment Metropolitan Assessment

1 Adapted from Table 20

M L = Major Liability in the country; L = Liability; N = Neutral; A = Asset; MA = Major Asset.

mtages of city and country locations as seen by industrialists (N S W )

Table 21— continued N u m b e r o f firm s in each category

Country Assessment Metropolitan Assessment

Factor OTHER Finance availability

Land availability cost Buildings

availability cost Servicing and maintenance facilities

availability cost Property taxes Government assistance

Local government attitude Housing facilities availability cost

Educational facilities Parking and traffic conditions

ML L N

10 13 74

0 1 28

1 0 15

8 35 52

7 28 48

25 36 38

24 38 36

1 5 46

0 0 47

2 8 35

13 10 56

2 8 49

14 46 39

1 2 25

A MA1 ML

2 1 16

40 31 3

34 50 3

2 3 6

12 5 13

1 0 39

2 0 39

37 11 0

38 15 0

33 22 0

19 2 10

36 5 10

1 0 26

49 23 0

L

6

0 0

23 29

45 39 3 0

0

0

10 32

0

N

78

19 10

55 42

16 22 23 97

58

74 61 42

45

A

0

32 29

10 6

0 0

55 0

32

13 13 0

32

MA1

0

46 58

6

10

0 0

19 3 10

3 6 0

23

1 Adapted from Table 20.

M L = Major Liability in the country; L = Liability; N = Neutral; A = Asset; MA = Major Asset.

Assessment of Factors Affecting Location: By Industrial Groupings Number of firms in each category Country Firms

Table 22

| §

t 2. -3 Food Metals Textiles Other Mfg

Factor TRANSPORT, SUPPLIERS AND MARKETS Road taxes and regulations

Freight costs inward outward Access to suppliers £ Access to markets o LABOUR CHARACTER­

ISTICS Availability skilled unskilled male

unskilled female Turnover skilled unskilled

Wage levels skilled unskilled male unskilled female

ML L N A MA ML L N A MA ML L N A MA ML L N A MA

5 7 3 5

1 0 0

0 0

0 0 0

2 2 3 4

1 1 0

0 0

0 0 0

2 1 2 2

7 3 3

4 6

7 5 6

0 0 0 0

1 3 3

1 2

2 3 1

2 1 3 0

1 4 5

6

3

2 3 4

27 14 23 9

11 7 9 4

2 9 6

13

0 5 2 7

17 9 10 1

2 7 17 13

0 1 34 3

3 15 14

2 27 6

4 6 19 10

3 1 29 6

0 0 37 3

0 2 0 7

3 1 2

4

2

1 1 0

11 11 5 7

6 0 2

2 1

2 0 0

4 13

10 10 8 6

1 1 9 9

0 0 0 0

6 3

2 17

1 5

4 8

2 15

0 0 0 0

2 5

2 1

4 10

0 13 7

0 16 4

0 15 4

5 1

0 2 3

9 6 4 2

7 2 0

2 2

0 1 0

2 2 6 4

3 0 1

3

6 4 5

2 9 9

0 0 0 1

3 6

0 11

1 11

0 0 0 2

1 1

2 1

3 1

0 6 3

0 8 3

5 2 2

3 1

0 0 0

a, g

5 I*

I

§ a

I

L

M L = Major Liability in the country; L — Liability; N = Neutral; A = Asset; MA = Major Asset.

tstrialists ( N S W )

Table 22— continued N u m b e r o f firm s in each category C ou n try F irm s

Food Metals Textiles Other Mfg

Factor LABOUR CHARACTER­ ISTICS (cont.) Productivity

skilled unskilled Absenteeism £ PUBLIC SERVICES Telephones

‘other factors’ OTHER Land availability

cost

Servicing and maintenance facilities availability cost

Government assistance

A MA ML L A MA N A MA ML L N ML L

22 10

15 19

Assessment of Factors Affecting Location: By Industrial Groupings Number of firms in each category Metropolitan Firms

Table 23

Food Metals Textiles Other Mfg

§

Factor TRANSPORT, SUPPLIERS AND MARKETS Road taxes and regulations

Freight costs inward outward

Access to suppliers Access to markets LABOUR CHARACTER­ ISTICS

Availability skilled unskilled male unskilled female Turnover

skilled unskilled Wage levels skilled

unskilled male unskilled female

A MA ML L N A MA ML L ML L N A MA L N

M L — Major Liability in the country; L — Liability; N = Neutral; A = Asset; MA — Major Asset.

ive advantages of city and country locations as seen by industrialists (N S W )

T ab e l 23—continued Number of firms in each category Metropolitan Firms

Food Metals Textiles Other Mfg

Factor LABOUR CHARACTER­ ISTICS (cont.) Productivity

skilled unskilled Absenteeism 6 PUPLIC SERVICES

Telephones ‘other factors’ OTHER Land

availability cost Servicing and maintenance facilities

availability cost Government assistance

A MA ML L A MA ML L ML L A MA L N A MA1

50 22 14 7 7

14 0 64 15 7

0 7 64 22 7

0 43 21 21

0 58 21 7

21 43 36

0 79 14

7 79 14

intflges o / city a n d country locations as seen by industrialists (N S W )

Table 24— continued N u m b e r o f firm s in each category C ou n try F irm s

Food Metals Textiles Other Mfg

Factor LABOUR CHARACTER­ ISTICS (cont.) Productivity

skilled unskilled Absenteeism PUBLIC SERVICES Telephones

‘other factors’ OTHER Land availability

cost

Servicing and maintenance facilities availability . cost

Government assistance

1 Adapted from Table 22.

M L = Major Liability in the country: L = Liability: N = Neutral: A — Asset; MA — Major Asset.

ML L N A MA ML L

0 0 73 18 9 5 12

0 0 64 27 9 2 7

10 18 18 27 27 2 2

36 18 46 0 0 17 28

0 0 46 18 36 0 2

0 0 18 18 64 0 0

9 36 55 0 0 25 27

9 46 45 0 0 15 35

0 0 45 55 0 0 0

N A - MA ML L N

43 25 15 4 9 46

70 13 8 5 9 64

35 56 5 5 5 40

53 2 0 23 18 59

18 55 25 0 0 36

15 37 48 5 0 18

48 0 0 36 46 18

48 2 0 41 36 23

53 37 10 0 0 46

A MA ML L N A MA1

23 18 14 7 58 14 7

18 4 14 0 65 14 7

36 14 7 0 50 36 7

0 0 50 29 21 0 0

32 32 0 0 29 29 42

36 41 0 0 7 36 57

0 0 29 43 21 7 0

0 0 36 43 14 7 0

27 27 0 0 36 43 21

1 Adapted from Table 23.

M L = Major Liability in the country; L = Liability; N = Neutral; A == Asset; MA = Major Asset.

industrialists (N S W )

Table 25— continued N u m b e r o f firm s in each category M etro p o lita n F irm s

Factor LABOUR CHARACTER­ ISTICS (cont.) Wage levels

skilled unskilled male unskilled female Productivity

skilled

w unskilled

Absenteeism PUBLIC SERVICES Telephones ‘other factors’ OTHER

Land availability cost Servicing and maintenance facilities

availability cost Government assistance I

Metals Food Textiles

A MA ML L ML L ML L

0 100

I Adapted from Table 20.

M L = Major Liability in the country; L = Liability; N — Neutral; A = Asset; MA — Major Asset.

:s ( N S W )

Appendix

Confidential Ref. No.

Survey of Manufacturing Industries—Factors Affecting Location

Part I. General

A. 1. Name of business...........................................................................................................

2. Address ............................................................................................................................

(of plant to which this questionnaire refers) 3. When was the business founded ? .......................

(not necessarily in present location) (year) 4. Is this its original location ? Yes ( ) No ( )

(i.e. this country town or city suburb) (Tick appropriate box) 5. If not, what was the original town or suburb ? ..........................................................

6. When did operations in the present town or suburb commence ? ................

(year)

B. 1. What is/are the principal product/s ? ............................................................................

2. What is the value of output ?* (Please give last available annual figure) $................. * Value of output refers to the selling value of the goods at the factory, excluding all delivery costs and charges and excise duties, but including bounty and subsidy payments to the manufacturer of the finished article. Can be estimated by making

appropriate adjustments to the sales figure. Where no sales figure is available (i.e. where output becomes the input of another branch of the same firm) every effort should be made to arrive at an estimate and an indication should be given of the nature of this estimate. An approximate figure will suffice. 3. What is the average total annual wages bill ? $.......................

(Average for last available year; includes all payments by way of salaries, wages and allowances to employees located at or based on the particular plant. An approximate figure will suffice). 4. How many people are employed in the local plant ? .......................

(‘Skilled’ refers to people, including those trained ‘on the job’ or being trained, whose skill is or will be recognised and marketable within the particular industry. Average number employed during period of operation during last available year should be given).

(a) Factory Males Skilled .......................... Females Skilled ....

Unskilled ................... Unskilled

(b) Office Males ....................................... Females ................

(c) Other, (including Males ..................... ....... Females ................

regular outside contractors).

149

Relative advantages of city and country locations as seen by industrialists (N S W )

C. I f a branch or a subsidiary, please give the address of the head office or parent company

Country firm s only:

1. I f so, are you part-processing a product or products also partially processed in the metropolitan area by your associate company ? .............................................................

I f so, roughly what percentage o f your output would be in this part processed category ? .............................................................................................................................

D. 1. What percentage (approx.) of purchases of materials for manufacture by value comes directly* from sources located— Per Cent Within the metropolitan area in your State .......................

Within 50-mile radius o f the factory ) other than .......................

Within the State but outside 50-mile 1 metropolitan or .......................

r a d i u s o f t h e f a c t o r y J i n t e r s t a t e . . . . . . . . . . . . . . . . . . . .

Interstate .......................

Overseas .......................

Total 100%

* e.g. steel purchased from a merchant in the metropolitan area would be ‘metropolitan’ even though it originated in another State.

2. What percentage (approx.) of sales of finished products goes directly* to locations— Per Cent

Within the metropolitan area .......................

Within 50-mile radius of plant not metropolitan .......................

Within the State but outside 50-mile or interstate .......................

radius of the plant .

Interstate .......................

Overseas .......................

Total 100%

* e.g. goods sold to an exporter in the city would be ‘metropolitan’, not ‘overseas’.

Part II. Location

Indicate (by placing a tick in the relevant column) whether the firm considers each factor an advantage of its location (metropolitan or country) compared with the alternative (country or metropolitan) or a disadvantage. The firm also has to decide whether it is a major advantage or disadvantage. The main point to bear in mind is that the aim is to compare the advantages of city and country locations. Transport costs, for instance, would normally be an asset to a city firm and a liability to a country firm. Whether major or minor would depend on the nature

of the goods produced and the raw materials used. Space has been provided throughout the table and at the end for any comments. These would be called for where the classification was unusual (i.e. transport an ‘asset’ for a country firm) but any other interesting comments should also be noted. All items should be marked.

150

Appendix

Major Minor Major Minor

Item disad- disad- Neutral advan- advan-

vantage vantage tage tage

E. 1. Transport (a) Availability ........................

(b) Charges and regulations designed to protect railway revenues .........................

(c) Costs— (i) incoming freight .........................

(ii) outgoing freight .........................

2. Labour (a) Availability (i) Skilled (see definition page 1) .........................

(ii) Unskilled— males .........................

females .........................

(b) Turnover (cite annual percentage turnover as well as rating) (i) Skilled ........... % .........................

(ii) Unskilled............% .........................

(c) Wage levels (i) Skilled .........................

(ii) U nskilled-males .........................

females ........................

(d) Productivity (this can be interpreted as relative city/country output per man, other things—i.e. management and plant—being equal)

(i) Skilled .........................

(ii) Unskilled .........................

(e) Absenteeism (percentage loss of work hours as well as rating) ........... % .........................

3. Public Services (Where firm has no views on cost differential in this section and interviewer knows it is negligible, he can mark the

item ‘neutral’). (a) Water supply (i) Availability .........................

(ii) Cost .........................

(b) Electricity supply (i) Availability .........................

(ii) Cost .........................

(c) Gas supply (i) Availability .........................

(ii) Cost .........................

(Continued, next page)

151

Relative advantages of city and country locations as seen by industrialists (N S W )

Major Minor Minor Major

Item disad- disad- Neutral advan- advan-

vantage vantage tage tage

(d) Other industrial fuels (i) Availability ......................

(ii) Cost ....... ;..............

(e) Telephone Services (i) Availability .......................

(ii) Inconvenience and loss of business (refers to alleged reluctance of customers to make trunk calls) .......................

(iii) Cost .......................

(f) Disposal Facilities for Noxious Wastes (i) Availability .......................

(ii) Cost .......................

4. Materials used in Manufacture Access to suppliers .......................

5. Markets for Finished Products Access to purchasers .......................

6. Land (i) Availability ........................

(ii) Cost ........................

7. Buildings (i) Availability ........................

(ii) Cost ........................

8. Servicing and Maintenance Facilities (i) Availability ........................

(ii) Cost ........................

9. Availability of Finance (other than Government assistance)

10. Property Taxes ........................

11. Parking, Traffic Conditions .........................

12. Local Government Attitude .........................

13. Government Assistance (overall) .........................

(give overall rating and also list and rate each type of assistance received. I f any of the types of assistance listed are not received do not rate).

(i) Rail freight subsidies .........................

(ii) Housing for executives .........................

(iii) Other housing .........................

(iv) Finance .........................

(v) ........................................................................

(Continued next page)

152

Appendix

Major Minor Minor Major

Item disad- disad- Neutral advan- advan-

vantage vantage tage tage

14. Housing Facilities (in absence of any Govt, assistance) (i) Cost ...

(ii) Availability ...

15. Educational Facilities (i) Primary ...

(ii) Secondary ...

(iii) University ...

(iv) Technical ...

(v) Overall rating ...

16. Other (specify) ...

F. 1. What factors influenced the business in selecting its present location? (If not known, the views of the interviewee on the probable reasons should be sought).......................

2. If, when the decision to establish at the present site was made, the business knew as much about its advantages and disadvantages as it knows now, would its decision have been any different ? Yes ( ) No ( )

(Tick appropriate box)

3. If ‘Yes’, please give reasons

Country Firm s Only 4. I f ‘Yes’ would you choose some other decentralised location Yes ( ) No ( )

5. Please give reasons for answer .................................................

6. Would you like to see other manufacturers established in your area and if ‘yes’ what industries ? ........................................................................................................................

City Firm s Only 7. Should the present site become unsuitable, or for any other reason, would the business consider either moving to, or locating some of its activities in, a non­ metropolitan area ?

Yes ( ) No ( )

(Tick appropriate box)

F

153

Relative advantages of city and country locations as seen by industrialists (N S W )

City Firm s Only—continued 8. Please give reasons.................

9. I f ‘Yes’ what type advantages would the firm expect to gain?

10. Would the business require the presence of other industries in the same locality in the non-metropolitan area before it would consider moving ? Yes ( ) No ( )

(Tick appropriate box)

11. Please give reasons..... .....................................................................................................

City Firm s Only G. 1. What percentage of employees comes to work in public conveyances...............% 2. What is the approximate average time spent each morning by employees in travelling to w ork........................

3. What proportion, approximately, of employees spend more than 60 minutes .......................%

from 30 to 60 m inutes....................... %

less than 30 minutes .......................%

100%

travelling to work each morning ?

4. Are near-by parking facilities available ? (i.e. five minutes walk) Yes ( ) No ( )

(Tick appropriate box)

H. What advantages or disadvantages* does your location have with respect to social and recreational activities ? How important is this advantage (or disadvantage) ? .......................

* compared with the country in the case of city firms and with the city in the case of country firms.

Part III. Costs

This question sets out to find what firms think the city/country cost differential is. Experience suggests that most managers, at least in the country, have some idea of the extent of the differential. Given their own costs, part III can then be answered.

154

Appendix

Estim ated Differential

Actual Cost in Differ- per $100 o f

Cost Alt. A reaf ential Sales

(1)* (2) (3) (4)

I, 1. Freight

incoming! outgoing! 2. Labour cost per unit of output 3. Telephones and telegrams 4. (i) Interest on land and

buildings§ (ii) Rent on land and buildings 5. Public services (water, electricity, gas, etc.) 6. Other (specify)

$ $ $

* Total cost to firm of each item in latest available year. f ‘Alternative area’ would be country in case of a city firm and city in case of a country firm. % One figure for freight acceptable if break-down not available. § Apply standard interest rate of 10% to present market value of land and buildings

and to estimated cost in alternative location. If land and buildings are rented, this item will be left blank and (4) (ii) answered instead.

J. 1. If the above answers are based on first-hand experience of the alternative type of location, please give details...................................................................................................

2. Have you any comments to make on past trends in costs peculiar to your location or on likely future trends which may affect your costs relative to those in the decentralised area referred to or to any other decentralised area ?

K.

Part IV. General Comments

L. Name of interviewee Position ...................

155

Book Three

University of New South Wales School of Civil Engineering The estimated cost of water in the Greater Sydney Region

to the year 2001

J. W. Andrew and C. H. Munro

1970

Contents

Acknowledgements

Sum m ary

1. Introduction

2. Computations

3. Cost Projections

4. Population Projections

5. Projected Water Demand General Comments Extrapolation of Water Consumption per Capita per Day

6. Cost Projections Introductory Comment Sunken Costs Interest Charges

Annual Loan Capital Recovery Costs Estimated Costs of Future Major Works Introductory Comments Augmentation Costs

Treatment Works Cost Area Development Costs Extrapolated Administration and Management, Operation and Maintenance, and Renewal Costs

Introductory Comments Administration and Management Costs Operation and Maintenance Costs Renewal Costs

7. Costing Computations

8. Conclusion

9. References

Tables 1. Projected Population Distribution 2. Regression Coefficients: Past Water Consumption per/Capita Data 3. Projected Water Consumption per Capita per Day

4. Basic Annual Augmentation Costs

page 161

162

163

164

165

166

168 168 168

170 170 170 170 170 170 170 171 171 171

174 174 175 176 176

178

180

182

166 168 169 172

159

The estimated cost of water in the Greater Sydney Region to the year 2001

5. Basic Treatment Works Cost Breakdown 173

6. Basic Area Development Cost Breakdown 174

7. Regression Coefficients: Past Administration and Management Costs 175 8. Regression Coefficients: Past Operation and Maintenance Costs 176

9. Regression Coefficients: Past Renewal Costs 177

10. Estimated Costs Adjustment 179

11. Population, Cost and Consumption Estimates 181

Appendix 183

I Projected Area Populations and Development Costs 184

II Projected Area Populations and Development Costs 186

III Projected Area Populations and Development Costs 187

IV Projected Area Populations and Development Costs 188

V Annual Capital Recovery Costs 189

VI Annual Augmentation Costs 191

V II Annual Treatment Works Costs 193

V III Annual Area Development Costs 195

IX Estimated Population Growth 197

X Estimated Water Demands 197

XI Sunken and Estimated Augmentation, Treatment Works and Area Development Costs Adjusted Estimated Costs Extrapolated and Total Water Costs 198 X II Computed Costs per 1,000 gallons 199

Figures 200

1. Anticipated Population Growth in Sydney Region 201

2. Extrapolated Average Daily Water Consumption per Capita 202

3. Total Estimated Cost Adjustment 203

4. Extrapolated Administration and Maintenance Costs 204

5. Extrapolated Operation and Maintenance Costs 205

6. Extrapolated Renewal Costs 206

7. Estimated Cost of Water per 1,000 gallons 207

160

Acknowledgments

The authors wish to express their gratitude to M r N. M. Dunlop, Chief Engineer (In­ vestigations), Metropolitan Water, Sewerage and Drainage Board; M r A. G. Tilley, Assistant Chief Engineer (Investigations), Metropolitan Water, Sewerage and Drainage Board; Mr C. M. Day, Chief Accountant, Metropolitan Water, Sewerage and Drainage Board; and M r Charles O’Connell o f the State Planning Authority of New South Wales, for their assistance and suggestions during the preparation of the report.

M r K. Kerrison acted as liaison officer on behalf of the Department of Trade and Industry, and his assistance has been very much appreciated by the authors.

161

Summary

This report gives details of estimates of payments to be made by the Metropolitan Water, Sewerage and Drainage Board because of costs incurred in delivering water to property boundaries in the Greater Sydney Region in the period 1969 to 2001. This involved the esti­ mation by various methods at five-yearly intervals, of the population to be supplied and of increases in water consumption per capita per day.

It was estimated that the average cost of water in the Greater Sydney Region will rise from 39 cents per thousand gallons in 1969 to 76 cents per thousand gallons in 2001.

162

Introduction 1

This report represents an attempt to estimate the average and incremental ‘costs’ of the future supply of water delivered to property boundaries in the Greater Sydney Region during the successive five yearly periods between the years 1968 and 2001. The work was done by the Department of Water Engineering of the School of Civil Engineering of the University of New South Wales at the request of the Commonwealth Department of Trade & Industry

(Office of Secondary Industry), which made available the sum of $1,000 in support of the project. The term ‘costs’ is defined herein as the estimated future payments to be made by the Metropolitan Water Sewerage and Drainage Board to develop and operate the water

supply system and to service the capital invested in it. The cost of servicing capital has been assumed to be 6.25 per cent per annum. It was necessary to rely upon the State Planning Authority of New South Wales (which for the purposes of this report will be referred to as the S.P.A.) for total population (see Fig. 1)

and area population projections (Reference 1). The M.W.S.& D.B. kindly supplied past water consumption and cost figures, together with cost estimates for future augmentation works, treatment works and area development costs. Initial inspection of the past water consumption per head data, as shown graphically

in Figure 2, revealed two distinct trends in the consumptive use of water, one between 1905 and 1940 and the other between 1943 and 1968, with a significant decline during the Second World War. Corresponding trends also exist in the cost of water per 1,000 gallons, and it was therefore decided to consider only the later section of the historical records, i.e., 1943 to 1968, for the investigations carried out into past average water consumption per head per day and

water cost per 1,000 gallons. A problem which had to be overcome was the effect on costs in some of the early years of the period considered of heavy redemption costs of past loans. As most of the assets for which these loans were originally required are still in use, these amounts have been treated

as if they were capital investments undertaken in those years.

163

Computations Necessary to Extrapolate Curves of Past Consumption and Costs

2

Without a detailed analysis, estimates of future consumption and costs must be largely based on past trends of consumption and costs. As discussed in Sections 5 and 6 hereunder this can be done by plotting graphs showing the variation of these quantities with time in past years, and then extrapolating these curves.

After inspection of such past records (Reference 3) it was decided to determine a relation which best fitted the data by two methods. The first involved fitting a linear regression equation to the plotted points and the second the use of a semi-logarithmic regression equation. The equations are as follows:

where

For linear regression: Y = AX + B For semi-logarithmic regression: Loge Y = AX + B Y X

A and B

past annual data figures time increment base (for the period 1943-1968, X takes on the value 1 to 26) regression coefficients given by:

Σ(Χ2)

(ΣΧ)2

and B

Σ(Χ) (X.Y) — Σ(Î¥) Σ(Χ2) (Σ(Χ))2 - Ν .Σ (Χ 2)

where Ν = number of time increments (for an annual time increment for the period 1943 to 1968, N = 26) The lines having the equations so obtained from the above regression studies were then correlated to the past data by means of a correlation coefficient (R) given by the following formula.

n ΝΣ(Χ.Υ.) - Σ(Χ) Σ(Υ)________

R = V[N. Σ(Χ2) - (ΣΧ)2] [ΝΣ(Î¥2) - (ΣΥ)2] where + 1.0 > R ^ —1.0

In all regression computations the line o f best fit has been assumed to be that line with the highest correlation coefficient approaching + 1 .0 . All computations have been carried out at the University of New South Wales computing centre using an IBM 360 Series 50 computer.

164

3

Cost Projections

The M.W.S.& D.B. raises money annually to finance its works, and on maturity of loans, further loans are raised to repay initial loans, plus any additional loan money to finance future operations. From rates levied on the population served, the M.W.S.& D.B. repays annually the loan interest and also allocates 0.5 per cent of capital invested into a sinking fund. Following

discussions with the Department of Trade & Industry it was considered appropriate for this study to use an interest rate of 6.25 per cent per annum in conjunction with a capital recovery factor dependent on the life of the particular asset. This decision was made on the reasoning that not only should interest be paid on the money borrowed to pay for the asset; but in addition

sufficient funds should be set aside each year to ensure that the loan can be repaid at the end of the asset’s life. All costing has been carried out at the 1968 basic wage level and no allowances have been made for future inflation. All costs have been modified, as explained in Section 6, to bring past costs to 1968 level.

165

4

Population Projections

The future water demand for the entire Sydney region will be directly dependent upon the population growth and the average annual per capita consumption. In March 1968 the New South Wales State Planning Authority published the Sydney Region, Outline Plan, in which was discussed the areas suitable for development and the total population that each of these areas could accommodate. The overall population growth has been estimated assuming that the gross reproductive rate will remain constant, and the net migration component will also remain constant at 25,000 people per annum. However the projected population figures must be regarded as subject to a range of error of plus or minus 15 per cent. (Reference 1).

For the purpose of this study the population of the Gosford, Wyong and Blue Mountains areas, together with th$ minor extensions of towns and villages, have been disregarded as these areas are not served at present by the M.W.S.& D.B. The anticipated population in the year 2001 within the N.W.S.& D.B.’s jurisdiction has been estimated by the S.P.A. as 4,300,000. To align with the M.W.S.& D.B.’s costing areas, the S.P.A.’s population projections have been distributed into the following areas.

Table 1

Projected Population Distribution

M.W.S.& D.B. Areas Local Government Areas (S.P.A.) Population 2001

1, 2,3, 4, Existing built-up areas 1,885,000

Hornsby 115,000

Warringah (excluding North Warringah) 186,000 Sutherland 195,000

Liverpool 150,000

Part of Fairfield 59,000

5 Campbelltown 320,000

Camden 105,000

Wollondilly 90,000

6 Part of Fairfield 126,000

8 Penrith 205,000

Part of Blacktown 315,000

166

T ab le 1— continued

Population Projections

9 Baulkham Hills 290,000

Colo 10,000

Windsor 85,000

Part of Blacktown 70,000

11 North Warringah 94,000

TOTA L 4,300,000

Since the publication of the outline plan by the S.P.A., Areas 7 and 10 (the Holdsworthy and Galston areas respectively) have been removed as potential development areas due to their topographical unsuitability.

The ten year population projections of the S.P.A., have been broken into five year incre­ ments by interpolations of the projections on semi-logarithmic paper. The anticipated popul­ ations of the area to the year 2001, together with the five year increments from the year 1966 to 2001 appear in Tables I to IV in the Appendix.

It was originally suggested by the S.P.A. that development within the North Warringah area could occur at an earlier date than currently envisaged. It has been estimated by the M.W.S.& D.B. that this would increase the reticulation and distribution costs of this area by 60 million dollars during the period 1971 to 1981. Owing to this large additional cost, early development in this region will not be encouraged and it has been assumed in this study that

it will not occur. The total population growth for the Sydney Region, as envisaged by the S.P.A., is shown in Column 1 on Table IX. Using the past annual populations supplied by the M.W.S.& D.B., semi-logarithmic and normal linear regression coefficients of +0.953 and +0.980 respectively

were computed for the period 1943 to 1968. A comparison between this projection and that made by the S.P.A. is shown in Figure 1. The S.P.A. projections have been based on studies of likely birth rates, migration, fertility and mortality. As shown in Figure 1 the S.P.A. projections differ slightly from projections based on linear regression extrapolation and being the more conservative of the two methods they have been adopted for the purposes of this report.

167

Projected Water Demand 5

General Comments: Possibly the best method of estimating future water demand would be by separate extrapolations of the total annual industrial, commercial and domestic consump­ tions. However, past data of these separate uses are not available, and it has been assumed in this report that the distribution of total water consumption between these three uses has remained constant in the past and will remain constant in the projected period considered.

This may be justified by the fact that the ratios of the areas allocated in the S.P.A.’s Outline Plan for these types of use are similar to the ratios of the areas at present laid aside for such use. It is to be expected that with an anticipated increase in high rise development, domestic water consumption would decrease through a decrease in the demand for garden watering and the other uses associated with a private dwelling but not characteristic of high rise develop­ ment. However, technological changes together with an anticipated rise in the standard of living, may bring about the more common use of private swimming pools, automatic dish washers and other large water consuming appliances which will tend to offset the above decline in domestic consumption. No doubt increased attention to problems of pollution will also affect water consumption, however, it is not possible to gauge what this effect will be.

The projected annual consumption per capita has been computed as described hereunder.

Extrapolation o f Water Consumption per Capita per Day: This extrapolation was done by both normal and semi-logarithmic regression. In both cases only the period 1943-68 of past records was used, for the reasons given in Section 1 above. A comparative table of the equation and correlation coefficients appears below.

Table 2

Regression Coefficients—Past Water Consumption per Capita Data

Linear Regression Semi-log Regression

R 0.86138 0.87164

A 1.24820 0.01508

B 66.11070 4.20631

These coefficients gave rise to the following projected figures for average daily consump­ tion per capita in gallons. Figure 2 shows a comparative plot of these figures extrapolated from the data for the period 1943— 1968. Though the above correlation coefficients are similar, appreciable varia­ tions in the extrapolated figures occur in the later part of the period considered, which quite obviously affect the final water cost per thousand gallons, as shown in the results given in Table X II in the Appendix.

168

Projected Water Demand

Because of the similarity in the correlation coefficients computed, and the large variations in the extrapolated figures, a pilot study was done on an annual basis into the dependence of rainfall excess (rainfall minus evaporation) on the average daily water consumption per capita. However, it was found that on this time scale the correlation coefficient approached zero and

it is suggested that more positive results may be obtained using a monthly time scale. The scope of this project, however, did not allow for such studies to be undertaken.

Table 3

Projected Water Consumption per Capita per Day

Year

Linear Extrapolation gallons/ capita/day Sem i-log Extrapolation gallons/ capita/day

1971 102 103

1975 107 110

1976 108 111

1977 110 113

1981 115 119

1986 121 129

1991 127 139

1996 133 130

2001 140 161

Pilot correlation studies also carried out between rainfall excess and deviation of average daily water consumption per head from the mean, again on an annual basis. Though this method appeared to yield more positive results than the above, further studies again found the correlation coefficient tending to zero, and it is again suggested that studies be undertaken

along this line on a monthly time scale. It should be noted that rainfall excess correlation studies would probably bear greater significance to domestic use alone than with industrial or commercial use, and depending on the proportion of domestic use to the other two applications, the above studies may or may not be significant to the total annual average daily water consumption per capita. However,

as pointed out earlier, data on relative water usage by various sectors is not available for the Sydney region.

169

6

Cost Projections

Introductory Comment: To determine the annual payments by the M.W.S.&D.B. for water per thousand gallons it is necessary to estimate all costs to be met during the period. The cost projections made in this report are those costs to be borne by the M.W.S.& D.B. for the supply of water to existing and annual incremental populations within the Sydney Region. It has been necessary for the purpose of this report to break the costs into three main sections:

I. Sunken Costs II. Estimated Costs of Future Major Works III. Extrapolated Administration and Management, Operation and Maintenance and Renewal costs.

For all costs annual charges have been computed to the end of each financial year.

I. Sunken Costs

These are costs that the M.W.S.&D.B. has previously committed itself in the form of loans from Federal, State, or private sources. From payments by the M.W.S.& D.B., 65 per cent was directly attributable to water costs, and this figure has been used for the determination of the following annual costs.

Interest Charges: This is an annual figure of the sum of interest charges payable on all out­ standing loans and has been considered payable at the end of each financial year. These figures have been derived from the M.W.S.& D.B.’s Annual Report for 1968 (which includes a state­ ment of all outstanding loans up to 30 June 1968) together with the interest to be paid on approved loans to be taken out between 1 July 1969 and 30 June 1970. Annual interest costs to be met are shown in Column 9 o f Table XI.

Annual Loan Capital Recovery Costs: It has been assumed for the purposes of this report that present loans on reaching maturity will again be funded by the M.W.S.& D.B. as mentioned in Section 1. The total value of loans maturing in each particular year for the period considered has been derived from the same sources as the interest charges, and it has been assumed that these loans will be paid off over thirty years with an annual capital recovery factor (allowing for both interest and redemption) of 0.0746 for the 6.25 per cent interest rate considered.

O f the total computed annual charge for these loans, 65 per cent has been charged directly to the operation and development of the water supply system. Compilation of these annual costs are shown in Table V and the costs attributable to the years considered are shown in Column 20 of Table XI.

Π. Estim ated Costs o f Future Major Works Introductory Comments: All the basic estimated cost figures have been prepared and made available by the M.W.S.& D.B. These costs include all construction work to be carried out to enlarge the existing water supply system to cater for both an increase in the population and in the average daily consumption per head.

170

It has been assumed that for all these costs, initial capital will be raised by loans and that these loans will be paid off, on an annual basis, so that at the end of the functional life of the structure, the initial loan, together with the replacement costs, will have been fully paid. Capital recovery factors for the respective structure life periods and based on an interest rate of 6.25 per cent per annum have been used to compute all annual estimated costs. For the purposes of this costing method it has been further assumed that the structure will have zero salvage value at the end of its economic life.

Administration, management, operation and maintenance costs of the construction of these works have been included in the following costs.

Augmentation Costs: Extensive studies have been carried out by the M.W.S.& D.B. to supple­ ment the existing Sydney Region water supply system and to cater for projected population demand. From these studies it was found that the most feasible solution existed in the con­ struction of large headworks on the Shoalhaven and adjacent rivers. This scheme has been

costed at approximately $200 million and is expected to satisfy the demand until 2005. Details of this scheme, together with the time allocation of finance required, are to be found in a M.W.S.& D.B. publication (Reference No. 4). The basic breakdown of finance required for this scheme is as follows:

1970—1980 : $120 X 10e 1980—1990 : $ 50 X 106 1990—2005 : $ 30 X 106

A more detailed breakdown is shown in Table 4. Annual costs have been assumed to be met by loan funds at 6.25 per cent per annum and the annual charges of such have been computed as shown above. These costs appear in Table VI and are also shown in Column 11 of Table XI representing the actual total augmen­ tation costs to be incurred during the years considered.

It has been assumed that headwork structures have an economic life of 100 years.

Treatment Works Cost: W ith an anticipated increase in the standard of living, it is now con­ sidered necessary to purify Sydney’s water supply to a larger extent. The M.W.S.& D.B. proposes to construct one main treatment plant, estimated to cost $50 million over the next 30 years, and subsidiary treatment plant at an estimated cost of $40 million over the same period.

The total expenditure by the M.W.S.&D.B. in each decade has been estimated to be as follows: 1970—1980 : $30 X IO6 1980— 1990 : $40 X 106

1990—2000 : $20 X 106

The annual breakdown of these costs is shown in Table 5. The method of financing treatment works construction has been assumed to follow the same method as for the augmentation scheme, though with an economic life of 50 years. Total annual interest and capital recovery cost computations are shown in Table V II and appear in Column 12 of Table XI.

Area Development Costs: These costs include service reservoirs, pumping stations, trunk mains, and the reticulation system associated with the individual areas described in Section 4. Initial cost estimates for the individual areas have been computed by the M.W.S.&D.B. up to the year 2000. These have been further broken down to an annual basis as in Table 6, with the total costs being spread over 35 years. The five yearly area development costs have been allocated in proportion to the incremental population increase, while annual costs constitute

one fifth of this breakdown. It has been assumed that the design life of these services is 80 years and that finance for their construction will again come from loan funds. As for the previous two estimated cost tabulations, only annual interest and capital recovery costs have been charged against

any particular year, as shown in Table VIII. These costs also appear in Column 13 of Table XI.

Cost Projections

171

The estimated cost of water in the Greater Sydney Region to the year 2001

Table 4

Basic Annual Augmentation Costs

A ugm entation Costs ($ x 10e)

Financial M.W.S. & D.B. H a lf Decade A nnual Cost A ctual Annual

Year Decade Cost Cost R equirem ent P aym ent to be

Ending Breakdow n Breakdow n Breakdown m ade for the

30 June years considered

1971 16 1.00

1972 16

1973 82 17

1974 17

1975 120 16

1976 8 5.64

1977 8

1978 38 8

1979 7

1980 7

1981 5 7.84

1982 5

1983 25 5

1984 5

1985 50 5

1986 5 9.41

1987 5

1988 5

1989 25 5

1990 5

1991 3 10.85

1992 3

1993 3

1994 15 3

1995 3

1996 30 3 11.80

1997 3

1998 3

1999 15 3

2000 3

2001 12.75

Total 200 200 200

172

Table 5

Basic Treatment Works Cost Breakdown

Cost Projections

A ugm entation Costs ($ x 106)

F inancial M.W.S. & D.B. H a lf Decade A nnual Cost A ctual Annual

Y ear D ecade Cost Cost R equirem ent P aym ent to be

Ending B reakdown Breakdow n Breakdown m ade for the

30 June years considered

1971 2 0.13

1972 2

1973 10 2

1974 2

1975 30 2

1976 4 0.92

1977 4

1978 20 4

1979 4

1980 4

1981 4 2.00

1982 4

1983 20 4

1984 4

1985 40 4

1986 4 3.65

1987 4

1988 20 4

1989 4

1990 4

1991 3 5.01

1992 3

1993 15 3

1994 3

1995 3

1996 20 1 6.00

1997 1

1998 1

1999 5 1

2000 1

2001 6.39

T otal 90 90 90

173

The estimated cost of water in the Greater Sydney Region to the year 2001

Table 6

Basic Area Development Cost Breakdown

Area Development Costs ($ x 10e)

Financial Year Ending 30 June

M.W.S. & D.B. Decade Cost Breakdown

H alf Decade Cost Breakdown

Annual Cost Requirement Breakdown

Actual Annual Payment to be made for the years considered

1969 4.48

1970 4.48

1971 22.41 4.48 0.28

1972 4.48

1973 4.48

1974 12.97

1975 126.14 12.97

1976 64.83 12.97 3.30

1977 12.97

1978 12.97

1979 19.45

1980 19.45

1981 97.25 19.45 8.61

1982 19.45

1983 19.45

1984 154.43 13.45

1985 13.45

1986 67.25 13.45 13.60

1987 13.45

1988 13.45

1989 14.41

1990 14.41

1991 72.07 14.41 18.02

1992 14.41

1993 14.41

1994 11.33

1995 127.73 11.33

1996 56.66 11.33 21.90

1997 11.33

1998 11.33

1999 5.57

2000 27.83 5.57 24.46

2001 5.57

2002 5.57

2003 5.57

Total 408.3 408.3 408.3

ΠΙ. Extrapolated Costs o f Administration and Management, Operation and Maintenance, and Renewal Costs

Introductory Comments: Due to the complex nature of this problem it has been necessary to project administration, operation and renewal costs from past data using regression equations. Past data has been analysed using both linear and semi-logarithmic regression and the line of best fit (i.e. the method giving the highest correlation co-efficient) has been adopted.

174

As this study involves costing at the 1968 basic wage value, all past cost data have been modified to allow for past inflationary trends. After consideration of numerous engineering indexes it was thought best for the purposes of this study to use a basic wage index system with all past costs being divided by the ratio:

Basic Wage. YearX

Basic Wage. Year 1968

e.g. Basic wage in 1952 : $22.30 Basic wage in 1968 : $34.50 Actual operation cost in 1952 : $2,594 X 106 Therefore 1952 operation cost at the 1969 economic level

Z34 50\

= $(2,594 X 10·) .

= $4,015 x 10s

All past basic wages are those that existed at 30 of June in the particular year, and cost extrapolations have been carried out using this adjustment.

Administration and Management Costs: These costs also include expenses arising out of investi­ gation, research, and feasibility studies directly associated with water supply. Data used for extrapolation have been obtained from the annual reports of the M.W.S.& D.B. between 1943 and 1968 inclusive. For reasons mentioned above all data have been modified to allow for basic wage variations and a graph of these costs, together with the extrapolations against time appears in Figure 4.

Computer programs have been run to determine the line of best fit for (i) administration and management costs per head year, (ii) total administration and management costs per annum divided by the relevant anticipated populations and (iii) annual administration and management costs per 1,000 gallons. A comparison of the results obtained from these studies are shown in Table 7.

Cost Projections

Table 7

Regression Co-efficient: Past Administration and Management Costs

D ata based on D ata based on D ata based on

A dm in, and T otal Adm in. Annual Admin.

M anagem ent Costs an d M anagem ent and M anagem ent

p er Head Costs p er Costs per

Co-efficient

P e r Annum Annum 1,000 gallons

L inear Sem i-Log L inear Semi-Log L inear Semi-Log

R egres- R egres­ sion sion

R egres- Regres­ sion sion

R egres- Regres­ sion sion

R 0.91678 0.91646 0.96138 0.97299 0.54183 0.52816

A 0.00288 0.02471 0.11983 0.04979 0.03288 0.00832

B 0.07422 -2 .53169 0.83467 0 . 1?218 3.28727 1.19726

The criterion for selecting a method to compute values adopted in this report was based on the use of data giving the highest correlation co-efficient as mentioned earlier in the report. Consequently extrapolations for administration and management costs have been made using

175

the ‘semi-log’ regression co-efficients obtained from data based on the total administration and management costs per annum. Figures derived from such extrapolations appear in Column 14 of Table XI. Extrapolations were also made for the other two sets of data and in doing so it was possible to obtain upper and lower administration and management costs with large variations occuring in the later part of the period considered.

Data based on annual administration and management costs per 1,000 gallons has not been plotted due to the low correlation co-efficients obtained.

Operation and Maintenance Costs: Future operation and maintenance costs have been computed in the same way as the administration and management costs. Data has again been modified to allow for basic wage variations and these, in graphical form, are shown in Figure 5. A comparison of the results obtained from the regression studies are shown in Table 8.

The estimated cost of water in the Greater Sydney Region to the year 2001

Table 8

Regression Co-efficients: Past Operation and Maintenance Costs

Co-efficient

D ata based on O peration and M aintenance Costs p er Head

p er Annum

D ata based on T otal O peration and M aintenance Costs per

Annum

D ata based on A nnual O peration and M aintenance Costs p er

1,000 gallons

Linear Sem i-Log L inear Semi-Log Linear Semi-Log

Regres­ sion Regres­ sion

R egres­ sion Regres­ sion

Regres­ sion Regres­ sion

R 0.93932 0.95962 0.94862 0.97844 0.58426 0.59938

A 0.00873 0.03275 0.30578 0.05333 0.10478 0.01870

B 0.13880 -1.83300 1.56201 0.93330 7.17086 1.97839

From the above table, extrapolations for operation and maintenance costs have been made using the semi-log regression co-efficients obtained from data based on the total operation and maintenance costs per annum. It is again possible, however, to compute a range of costs using the maximum and minimum actual cost figures obtainable from the above co-efficients.

Figures derived from the co-efficients above appear in Column 15 of Table XI and also in graphical form on Figure 5 except again for the data based on operation and maintenance costs per 1,000 gallons.

Renewal Costs: Finance is allocated each year to allow for the replacement of construction, maintenance and all general equipment associated with the water supply system. In comparison with the total revenue received for water in the past, there has been an

overall increase in percentage renewal costs, though there have been significant fluctuations. Due to this fact the period considered has been extended back to 1925, with the years 1936— 1941 and 1950—1954 inclusive being neglected owing to large fluctuations arising from econo­ mic or political policies.

Correlation studies were carried out for both total annual renewal cost, and annual renewal cost expressed as a percentage of total annual water revenue. Due to the broken record, the above studies were also computed using the natural time scale and a condensed time scale, in which case the record was assumed to be complete with no time lags between data. The results of these correlation studies appear in Table 9 opposite page.

176

Using the semi-log coefficients obtained for the modified time scale data, extrapolations of the renewal costs have been made and appear in Column 16 of Table XI. Figure 6 illus­ trates, in graphical form, the fluctuations of the past data and the extrapolated values computed above. This figure also depicts the extrapolated values for the semi-log regression coefficients

derived from the natural time scale data, and past data of renewal costs expressed as a percentage of total water revenue.

Cost Projections

Table 9

Regression Co-efficients: Past Renewal Costs

Condensed T im e Scale N atural T im e Scale

L inear Sem i-Log Linear Sem i-Log

R egression Regression Regression R egression

Co-efficients Co-efficients Co-efficients Co-efficients

Total R 0.88012 0.93349 0.84299 0.91057

Annual A 0.15135 0.06774 0.09763 0.04449

Renewal B -0.22142 -0.52246 0.04873 -0.41990

Cost Annual Renewal R 0.84959 0.85181 0.84504 0.85133

Cost as a A 0.30446 0.03178 0.20394 0.02138

Percentage of Total Annual Water Revenue

B 5.07103 1.73046 5.44223 1.76669

177

Costing Computations 7

Columns I and 2 o f Table IX show the anticipated populations and the population increments over the five year periods. Estimated costs, have been based on the average daily consumption figures per head computed by the M.W.S.& D.B. Because the average consumption figures per head computed in this report varied from the above figures, it has been necessary to modify the total estimated

cost. This modification has been made by computing the total annual water consumptions for both this report’s and the M.W.S.& D.B.’s average daily consumption figures per head and plotting them against the total estimated annual cost as shown in Figure 3. The modified estimated costs have then been obtained from this figure by reading off the costs occurring

during the report years from the M.W.S.& D.B. costs. It was necessary to extrapolate the M.W.S.&D.B. costs from the year 2001 which has been done by using a semi-logarithmic straight line. For the year 1971 the adjusted estimated cost has been computed from the average daily consumption per head and multiplying by the estimated cost in the following manner:

103 109 X 1.41 — 1.30

Data used in the modification of the estimated costs appears in Table 10 opposite page.

The total annual water supply cost is shown in Column 17 of Table XI. Figures derived from the two methods of average daily water consumption per head computations (as discussed in Section 5) appear in Table X. From these figures the total annual water consumption has been computed by the following method:

[Average gals/head/day] X 365.25 X [population].

These figures have been divided into the estimated total annual costs to give the cost of water per 1,000 gallons as shown in Columns 18 and 19 of Table XII. From the figures the annual water costs per head have been computed (by multiplying the water cost per thousand gallons by the annual per capita consumption) and are shown in Column 20.

Graphical representations of the costs per thousand gallons are shown in Figure 7 as continuations of the past costs between 1943 and 1968.

178

Table 10

Estimated Costs Adjustment

M.W.S. & D.B. Data

Computed Report Values

Average Daily consumption per head

(gals)

Total

Annual Water consumption

(gals x 109)

Average Daily consumption per head

(gals)

Total

Annual Water consumption

(gals x 109)

Computed Estimated Costs

$ x 106

Modified Estimated Costs

$ x 10»

1966 88 81.80 88 81.80

1971 109 111.24 103 105.11

1976 116 128.90 111 120.81

1981 122 142.59 119 139.02

1986 129 163.46 129 163.46

1991 138 191.08 139 192.47

1996 145 213.43 150 220.80

'2001 151 237.16 161 252.88

1.41 9.86 18.45 26.66 33.88

39.78 43.60

1.30 5.80 16.00 26.66 34.25

40.80 45.50

§· a

ig Computm

Conclusion 8

Table 11 shows estimates derived from regression equations giving the highest correlation co-efficients from among the different methods used to estimate population, total cost, and consumption per head per day. These figures are felt by the authors to be the most realistic estiriiates of water consump­ tions and costs that can be made without a much more detailed investigation.

180

Table 11

Population, Cost, and Consumption Estimates

Year Estimated

Population Served

Total Average daily

Cost consumption

per head

Cost per 1,000 gallon

Cost per head per annum

x 106 $ x 106 gallons $ $

1966 —

1971 2.794

1976 2.980

1981 3.200

1986 3.469

1991 3.791

1996 4.030

2001 4.300

— 88

43.93 103

57.11 111

77.04 119

101.28 129

127.23 139

157.95 150

192.63 161

0.44* 14.40

0.42 15.73

0.47 19.17

0.55 24.08

0.62 29.20

0.66 33.56

0.72 39.20

0.76 44.80

The imposition of water restrictions in 1966 had had the effect of increasing (and distorting from a normal situation) the cost per thousand gallons consumed.

References 9

1 ‘Outline Plan, Sydney Region’, State Planning Authority of N.S.W., 1968 2 Projections of the Population of N .S .W ., 1966-1986. Commonwealth Bureau of Census and Statistics, Sydney. 3 Metropolitan Water, Sewerage and Drainage Board. Annual Reports 1926-1968. 4 Metropolitan Water, Sewerage and Drainage Board. ‘The Shoalhaven Scheme’. 1968. M.W.S. & D.B.

Library. Sydney. 5 ‘The Development of Water Resources for Sydney’, J. L. Bellamy, M.I.E. Aust., K. G. Aubrey, M.I.B. Aust., P. M. MacPherson, B.C.E., M.I.E. Aust., Institution of Engineers, Australia. Annual Engineering Conference Papers, 1969. 6 ‘Simulation Study of a Metropolitan Water Scheme’. I. L. Smith; unpublished M. Eng. Sc. Thesis.

School of Civil Engineering. U.N.S.W. 1967. 7 ‘Effect of Variation in Demand on Design of a Water Supply System’. B. J. Fleay. Unpublished M. Eng. Sc. Thesis, School of Civil Engineering, U.N.S.W.1968. 8 Principles of Engitteering Economy. E. L. Grant. Third Edition 1950. Ronald Press Company. New

York. Managerial and Engineering Economy. George A. Taylor. Princeton N.J. Van Nostrand. 1964.

182

Appendix

Table I

Projected Area Populations and Development Costs

a

5 ,

Year Sydney

Central

Areas 1, 2, 3, and 4

Inner Outer Hornsby

Suburbs Suburbs

Warringah

£

Population Population Population Population

Population Change Population Change Population Change Population Change Population Population Change

’000s ’000s ’000s ’000s

1966 347.1 — 711.2 — 722.9 — 81.2 —

1971 332.0 -1 5 .1 725.0 13.8 740.5 17.6 90.0 8.8

1976 325.0 - 7 . 0 737.0 12.0 754.5 14.0 101.0 11.0

1981 318.0 - 7 . 0 749.0 12.0 765.5 11.0 107.0 6.0

1986 311.0 - 7 . 0 760.0 11.0 775.5 10.0 111.0 4 .0

1991 304.0 - 7 . 0 769.5 9.5 784.5 9 .0 115.0 4.0

1996 299.0 - 5 . 0 777.5 8.0 794.5 10.0 115.0 0

2001 295.0 - 4 . 0 784.0 6.5 806.0 11.5 115.0 0

’000s

110.0 —

120.0 10.0

125.0 5 .0

129.0 4.0

134.0 5.0

143.0 9.0

161.0 18.0

186.0 25.0

| £ 8* Q

to S' a S S-

water in the Grt

a

T able I—continued

Area 1, 2, 3 and 4 cont’d

Year Sutherland Liverpool Part o f Area

Fairfield Population

Total

Population Population Population Total Population

Population Change Population Change Population Change Population Change

’000s ’000s ’000s OOOs

1966 134.1 — 69.0 — 32.0 — 2207.5 —

1971 174.0 39.9 74.0 5.0 43.0 11.0 2298.5 91.0

1976 184.0 10.0 75.0 1.0 47.0 4.0 2348.5 50.0

1981 192.0 8.0 76.0 1.0 51.0 4.0 2387.5 39.0

1986 194.0 2.0 77.5 1.5 55.0 4.0 2418.0 30.5

1991 195.0 1.0 80.0 2.5 59.0 4.0 2450.0 32.0

1996 195.0 0 112.0 32.0 59.0 0 2513.0 63.0

2001 195.0 0 150.0 38.0 59.0 0 2590.0 77.0

Area Cost o f Amplification and Extension

$ x 106

OOOs

10.0 40.0 60.0 30.0

10.0 7.0 3.0

I I

Area 6

Parts o f Fairfield and Hoxton Park

Popul-

Popul- ation

ation Change

Area Devel’t Cost $ x 106

OOOs

69.2 92.0 100.5 109.0 117.8 126.0 126.0 126.0

8 a.

•H, 8 ε> S'

Ο 5 1 6

s· s g . 9

22.8 8.5 8.5 8.5

8.5 0 0

1.01 2.03 3.05 3.05

5.07 4.06 2.03

Iney Regi

Table ΙΠ

Projected Area Populations and Development Costs

Area 8 Area 11

Year

oo -a

Penrith Part o f Area Area

Blacktown Population Devel’t

Cost

Total $ x 106

Population Population Total Population

Population Change Population Change Population Change

North Warringah

Population

Population Change

Area Devel’t Cost $ x 105

’000s ’000s ’000s

1966 46.4 — 91.2 — 137.6 — ____

1971 65.0 18.6 147.0 55.8 212.0 74.4 3.25

1976 90.5 25.5 169.0 22.0 259.5 47.5 6.50

1981 125.0 34.5 180.0 11.0 305.0 45.5 9.75

1986 153.0 28.0 217.0 37.0 370.0 65.0 9.75

1991 175.0 22.0 266.0 49.0 441.0 71.0 16.25

1996 191.0 16.0 293.0 27.0 484.0 43.0 13.00

2001 205.0 14.0 315.0 22.0 520.0 36.0 6.50

OOOs

11.8 — —

21.0 9.2 1.09

28.0 7.0 2.18

31.0 3.0 3.27

36.0 5.0 3.27

47.0 11.0 5.45

66.0 19.0 4.36

94.0 28.0 2.18

& ■ypendi;

6-44 8-29 9·08 10-36 11-64 12-25 12-89 13-79 14-64 15-52

T ab le V—continued

The estimated cost of water in the Greater Sydney Region to the year 2001

S

8 η0^ηΝΝηηη00ηηη0Ο0Ο0000ο00ο00000 -1 S « s ”

1 2 ° ” 2

£ g N ffi ° ” 2

i 8 (N “ Sj ° ” 2

s g s 8

° " 2

< 0 8 2 s

s ° ” 2

U 5 O 2 8

1 a

I n 2 s ° 2

m o M o

$ ° Ft 2

N r~ P o

1 ° cs 2

C O °° 2

$ 0 a £

g 8 s ό a -

„ ? 2 S s ° a 2

8 * s E o

2 0 a 2

£ £ 2 S

0 $ 2

8 s s $

2 ° 3 2

8 2 S

2 ° 2 2

190

The estimated cost of water in the Greater Sydney Region to the year 2001

192

The estimated cost of water in the Greater Sydney Region to the year 2001

Ί3 3 . «

S o

a> £>

H

Ί·

194

3-649

The estimated cost of water in the Greater Sydney Region to the year 2001

196

•449 15-296 16-204 17112 18-020 18-928 19-836 20-550 21-264

Appendix

Table IX

Estimated Population Growth

Year Estimated Total Estimated

Population Supplied Population Increment x 103 x 103

Column 1 2

1966 2545.1

1971 2794.4 249.3

1976 2979.9 185.5

1981 3199.5 219.6

1986 3468.7 269.2

1991 3791.0 322.3

1996 4029.8 238.8

2001 4300.0 270.2

Table X

Estimated Water Demands

Year Extrapolated average daily water consumption per capita

Based on Linear regression Based on Semi-Log regression

gals/ gals/ gals / gals/ gals / gals /

head / head / annum head/ head / annum

day annum day annum

x 103 x 109 x 10= x 109

Column 3 4 5 6 7 8

1966 88 32.14 81.80 88 32.14 81.80

1971 102 37.26 104.12 103 37.62 105.11

1976 109 39.81 118.63 111 40.54 120.81

1981 115 42.00 134.38 119 43.46 139.02

1986 121 44.20 153.32 129 47.12 163.46

1991 127 46.39 175.86 139 50.77 192.47

1996 133 48.58 195.77 150 54.79 220.80

2001 140 51.14 219.90 161 58.81 252.88

197

Table XI

Sunken and Estimated Costs Estimated Costs

Year Sunken Costs Estimated Costs

Interest Annual Augmen- Treat- Area Total Total

Costs Loan tation ment Develop- Estimated Adjusted

Capital Rees. Costs

Costs Works

Costs

ment Costs

Costs Estimated Costs

$ x 106 $ x 10» $ x 106 $ x 10» $ x 10° $ x 10s $ x 106

Column 9 10 11 12 13 a b

1966 1971 17.28 2.12 1.00 0.13 0.28 1.41 1.30

1976 12.30 8.29 5.64 0.92 3.30 9.86 5.80

1981 7.23 12.89 7.84 2.00 8.61 18.45 16.00

1986 4.17 15.95 9.41 3.65 13.60 26.66 26.66

1991 2.74 17.54 10.85 5.01 18.02 33.88 34.25

1996 2.03 18.32 11.80 6.00 21.98 39.78 40.80

2001 1.72 17.61 12.75 6.39 24.46 43.60 45.50

Extrapolated and Total Water Costs

Extrapolated Costs

Operation Renewal and Costs

Mainten­ ance Costs

Total Costs

$ x 106

11.95 15.50 20.40 26.60 34.80 45.20 57.60

$ x 106 $ x 10c

6.35 8.90 12.40 17.40 24.50

34.40 48.20

43.93 57.11 77.04 101.28 127.23

157.95 192.63

8 I· I n.

O

s· E1 Ώ 3 D

5 8->3 $

1" δ §.

'i e

Appendix

T ab le XII

Computed Costs per 1,000 Gallons

Year Costs based on extrapolated

daily water consumption per capita

Linear Semi-Log

Regression Regression $/l,000 gals. $/1,000 gals.

Cost per head per annum

$

Column 18 19 20

1966 0.44 0.44 14.40

1971 0.42 0.42 15.73

1976 0.48 0.47 19.17

1981 0.57 0.55 24.08

1986 0.66 0.62 29.20

1991 0.72 0.66 33.56

1996 0.81 0.72 39.20

2001 0.88 0.76 44.80

199

Figures

200

BY T H E M . W . S . & D . B x 1 0

Figure 1

A N TIC IP A T ED P O P U L A T IO N G R O W T H IN

T H E S Y D N E Y R E G IO N T O THE YEAR 2 0 0 1

( i ) L in e a r r e g r e s s i o n e x t r a p o l a t i o n f r o m p a s t d a t a

( i i ) S t a t e P l a n n i n g A u t h o r i t y P r o j e c t i o n

1 9 6 0 1940 1 9 6 5 1945 1 9 8 0

YEAR

AV ERA GE DAILY W A T E R C O N S U M P T I O N P E R C A P I T A * » 0

( a a l l o n s p e r h e a d p e r d a y )

Figure 2

------ ESTIMATED A V ER A G E DAILY W A T ER C O N S U M P T IO N P E R C A P IT A

(0 S em i log e x t r a p o l a t i o n o f p a s t d a t a . ( E x t r a p o l a t i o n a d o p t e d }

____ (ii) L i n e a r e x t r a p o l a t i o n o f p a s t d a t a .

Cm) E s t i m a t e d M .W .S & D .B . f i g u r e s .

1940 1943 1950

YEAR

3 5

I έ §· -5

3.

’imated cost of water in the Gre<

Figures

TOTAL ESTIMATED COST ADJUSTMENT

2 0 0 1

,1996

2001

1991 1 9 9 6

1 9 8 6

1 98 6

19 81 .·

M.W.S. & D.8. Consumption Data Report Consumption Data Adjusted es ti mat ed costs for

the y e a r shown. 1 9 7 6 ·

1 9 7 6

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203

Figure 4

_ E S T IM A T E D A D M IN IS T R A T IO N AN D M A NAG EM EN T C O S T S . _

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E ST IM A T E D O P E R A T IO N 4 M A IN T E N A N C E C O S T S .

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Figure 7

ESTIMATED COST OF WATER PER IOOO GALLONS.

(i) Costs based on daily water consumption per capita (linear regression}.

(ii) Costs basedon daily water consumption per capita (semi log regre ssion }. _

Book Four

Department of

Decentralisation and Development New South Wales Public capital costs associated with selective decentralisation of 500,000 people

from the Sydney region

Sinclair and Knight, Consulting Engineers in association with Development Planning and Research Associates

1970

Contents

Sum m ary page 213

Report

1. Introduction 217

Purpose of the study 217

Historic 217

Participants and Acknowledgements 217

Aspect not Covered 218

Future Work 218

2. Procedure 219

Cities Selected for Study 219

Population 220

Development standards 220

Capital Costs 222

3. Relevant Background Inform ation 223

Sydney Region Outline Plan 223

Surveys by Country City Councils 223

Water supply, Sewerage and Drainage 223

Roads 224

Transport in General 224

Electricity 224

4, Planning B asis 225

Metropolitan Development Foregone 225

Development in Country Cities 225

5. Costing Basis 228

Estimating Procedure 228

Development costs Considered 228

Unit Costs 228

6. Water Supply 230

Design Standards 230

Country Cities—Headworks 230

Country Cities—Treatment and Distribution 233

Sydney Region 234

Summary of Cost Estimates 238

211

Public capital costs associated with selective decentralisation of 50,000 people from the Sydney region

7. Sewerage 240

Design Standards 240

Country Cities 240

Sydney Region 241

Summary of Cost Estimates 241

8. Roads and Public Transport 245

Transport Planning Basis 245

Types of Transport Facilities 247

Roads in Country Cities 247

Estimated Costs of Country Cities Roads 250

Roads in Sydney Region 250

Estimated Cost of Roads in Sydney Region 251

Public Transport 251

Summary of Transport Costs 252

9. Major Drainage and Flood Control 254

Appendixes A. Planning 256

B. Water Supply 260

C. Sewerage 263

D. Roads and Public Transport 263

Figures 1. Cities Locality Plan 216

2. Sydney Region Population Projections 221

3. Sydney Region 226

4. Sydney Region Population Projection showing relation of Metropolitan Water Board population to Total population 235

5. Cost of Water Supply to Population served by Metropolitan Water Board 237 6. Cost of Sewerage Facilities to Population served by Metropolitan Water Board 242 7. Work Trip Duration against Size of City 246

8. Typical Road Cross Sections 248

9. City Plans—Nowra and Dubbo 264

10. City Plans—Wagga Wagga and Orange 264

11. City Plans—Grafton 264

12. Dubbo Water Supply Headworks 266

13. Grafton Water Supply Headworks 267

14. Nowra Water Supply Headworks 268

15. Orange Water Supply Headworks 269

16. Wagga Wagga Water Supply Headworks 270

212

S u m m ary

This report, one of a series being undertaken by the Department of Decentralisation and Development, presents the finding of a study undertaken to co-ordinate the work done by ten New South Wales City councils to identify major public capital cost items involved in the decentralisation of a significant number of people from Metropolitan Sydney to selected country growth areas. The costs formulated have been compared with costs of providing the same facilities in Sydney for these people in the event of non-decentralisation.

In this study the information from the ten cities’ reports formed the basis for comparing development in different geographic locations within N.S.W. (see Figure 1). From the ten cities that submitted reports, five were selected for more detailed investigation, based on representative locations within the state of coastal areas, tablelands and western plains.

Tentative plans of these five cities were then drawn up employing modern standards to provide for population increases of 100,000 persons added to the present population. This enabled the major public cost items to be examined and costs estimated. The items studied included:

Water Supply Sewerage Roads

Public Transport Drainage and Flood Control

The study also included examining the incremental costs of the same items for Sydney Region as between populations of 5 million ana 51 million people. It was not possible to take into account a staging strategy for selective decentralisation since none has been formulated. The rate of capital investment in time taken to reach a situation of viable development is not reflected in the resultant cost estimates.

The table of costs on the following page summarises the main results of the study. Com­ ments on these costs are given next page.

W ater Supply: The similarity between gross costs of country city and Sydney Region costs is misleading for two reasons:

(i) Other country cities, requiring new headworks and/or remote from major sources, would require higher per capita costs than Sydney Region which can achieve major economies of scale, particularly on headworks.

(ii) Some country cities on major regulated rivers can absorb very large population growths at low per capita costs, particularly where major headworks are already in existence.

I f selective decentralisation is adopted as a policy, it is unlikely that any particular five cities would proceed with exactly uniform development, as this study has assumed. If develop­ ment is staged to provide for early development of cities on major regulated rivers, average costs could be significantly lowered.

213

Summary of Cost Estimates (in millions of dollars)

A. Country cities costs summary

Water Supply Major Public Flood

Headworks Dist. Sewerage Roads Bridges Trans. Control Total

Cost in millions o f dollars

Dubbo 5.3* 11.9 18.0 24.3 4.3 1.6 — 65.4

Grafton 8.7 12.0 17.2 25.6 — 1.6 1.5 66.6

Nowra 8.4 10.6 16.7 22.5 6.2 1.6 1.0 67.0

Orange 16.1 11.8 18.4 21.9 — 1.6 — 69.8

Wagga Wagga 3.7* 12.1 18.2 26.6 3.9 1.6 1.0 67.1

Total 42.2 58.4 88.5 120.9 14.4 8.0 3.5 335.9

♦Including attributed proportion of costs of works already constructed.

B. Sydney region expenditure deferred

19.5 77.5 195.7 151.5 — 11.6 — 455.8

Cost per Additional Capita

$

654.0 666.0 670.0 698.0

671.0

912.0

§

4

I a ft a

1. o K ft. s. s- s ft. §

ft r 8· a■S.§ 5•8 s*S-% §* <3s· a

Summary

Potential irrigation supplies pre-empted for urban use are considered in Appendix B— Water Supply. These losses will be relatively minor, and will be offset by increased economic activity, more efficient use of water, and opportunities for additional regulation.

Sewerage: This represents the principal difference between the Sydney Region and country costs. All country costs components have been checked against recent construction costs and appear generally to be correct. Actual construction costs are surcharged about 35 per cent to allow for survey, design and administration costs o f a major instrumentality. There are several reasons for this very substantial difference. These include:

Longer and larger mains between dormitory areas and proposed treatment works in the Sydney Region. Considerably higher flow standards construction costs for Sydney Region sewerage facilities. Larger supervision structure in Sydney Region. Pre-sewering of planned developments has been assumed for both Sydney and country. This is considered essential both as an amenity and as a cost saving. It will also eliminate the heavy private cost of septic tank installation and removal, incurred by a high proportion of new home builders in the Sydney Region and, to a lesser extent, in country cities at present.

Roads & Public Transport: Costs of road construction do not greatly vary between Sydney Region and country development when the costs of major bridges are included. Excluding these major bridge costs, there are significantly higher costs for providing roads in Sydney Region, in particular Arterial Tipe I roads (Expressways).

Deeper examination of this aspect should take account of: Resumption costs (not included in this report, but significantly higher in Sydney Region). Levels of service and congestion (significantly higher level of service and lower congestion costs in country cities). Country work trips are shorter and private costs lower.

Inter-urban costs, which will probably be higher with decentralisation. It should be noted that major bridges and roads on flood plains constitute a significant portion of the road costs for country cities. Once provided, these costs would not recur for additional population growth beyond 100,000.

Flood Control and Major Drainage: Although this is a relatively minor cost item when viewed against the others, it is important in that it is adverse to selective decentralisation to certain locations.

General: The consultants emphasise their belief that selection will and should finally be based on the economic and social purpose of a city in its region, rather than solely on cost items of the type studied in this report.

215

FIGURE 1

CITIES LOCALITY PLAN

Public capital costs associated with selective decentralisation of 500,000 people from the Sydney region

INDICATING THOSE CITIES INVITED

216

In tro d u c tio n 1

P u rp o se o f the S tudy: T he objectives of this study were threefold. (i) T o compare the public capital costs of metropolitan versus non-metropolitan urban expansion in N.S.W . (ii) T o compare the development costs for cities in different geographic locations in New

South Wales. (iii) T o define and establish standards of environment and services necessary to be considered for decentralised country cities, so that major services and expenditure items are not om itted and high standards of living, working and visual environments are achieved.

A planning basis has been established to be comparable to the newer suburbs of Canberra. This study forms part o f a series for the Commonwealth-State Committee on Decentralis­ ation covering such items as private costs, historic costs, social and economic factors, traffic congestion, etc.

H istoric: In 1968 the D epartm ent for Decentralisation and Development invited twelve country cities in New South Wales to submit proposals and estimates of public costs to be incurred to increase their existing populations by 100,000 persons. At the same time, infor­ mation was sought from government bodies concerned with metropolitan Sydney development on the corresponding costs of providing for the estimated population growth of Sydney.

T he information received was in a form which made direct comparison between metropol­ itan and country public development costs difficult, and different country cities themselves adopted different standards of environment, provisions for services, employment, costing bases, etc.

T his study brings the various independent cost estimates to a common basis of planning provision for industry, standards of road provisions, etc. In this regard we assumed require­ ments for industry, tertiary education facilities, special use employment areas and planning standards are based on a high proportion of commercial & professional employment. Con­ firmation on economic and planning standards is desirable before a specific program is launched.

T he particular public capital costs studied in this Report include roads, public transport, water supply, sewerage and major drainage. No consideration has been given to such other public costs as schools, libraries, government offices, hospitals etc., nor to inter-city highways, transport or airports. Some study is required of some of these areas to completment the

present report.

P a rtic ip a n ts and Acknow ledgm ents: The work has been carried out as a joint study by Sinclair & Knight, Consulting Engineers, and Development Planning and Research Associates, each o f whom has carried out those sections of study appropriate to their particular disciplines. T he study was conducted and results compiled as a co-ordinated effort by these consultant organisations and with close liaison with officers of the Department of Decentralisation and Development.

In the study we have been particularly assisted by officers of the Department and various other government and semi-government organisations. These include, but are not confined

H

217

to, the National Capital Development Commission, the Department of Works, the Depart­ ment of Public Works, the Metropolitan Water, Sewerage and Drainage Board, the State Planning Authority of New South Wales, the Housing Commission of New South Wales, and the Department of Railways.

Aspects not Covered: Notwithstanding particular care, it has not been possible to cover all aspects. There will be significant differences in interpretation of data between various econo­ mists, government authorities, councils and other interested persons. Other public costs associated with selective decentralisation are not covered in this Report, in particular schools, public buildings, hospitals, airports, inter-city transportation and tele­ phones. With the exception of airports and inter-city highways, these should represent

approximately equal per capita cost in city and country. Cost of inter-city transport facilities could be considered as offset in part by benefits from increased utilisation of existing railways, but more detailed study is required. This report does not present or cost a particular plan or strategy for selective decentralis­ ation. If, as is likely, a program is approved providing for different cities to be developed at different times and at different rates, the average figures derived in this report would not apply. For example, initial substantial development at a location downstream of existing water headworks would show a significantly lower cost per capita than the ‘average’ derived in this Report.

No attempt has been made to discount costs to present worth. Whilst the cost estimates are considered to be accurate enough for this, discounting could only reasonably be applied to particular development strategies for selected cities, and is considered to be beyond the scope of this report.

Knowing that all possible aspects could not have been covered within the time and scope of the study, the consultants would be grateful to be advised of any questions of fact or inter­ pretation which may appear to be in error.

Future Work: As part of formulating a program of selective decentralisation, we recommend the following additional studies: (i) Airports and inter-city transportation and communications. (ii) A socio-economic model of a decentralised city to determine population and employment

spectrum, spending multiplier effects of industry, government employment, academic staff, etc. (iii) Costing a ‘real’ strategy based on selected centres. The Consultants would be prepared to recommend such centres but it is beyond the scope of the present report. (iv) An examination of the political and administrative framework necessary to achieve rapid

growth in an orderly and economic manner, as this task could well be beyond the resources of conventional Local Government.

Public capital costs associated with selective decentralisation of 500,000 people from the Sydney region

218

Procedure 2

C ities Selected fo r S tudy: The original survey by the Department of Decentralisation and Development was directed at establishing public costs in the country to cope with large units of population. To provide this information, twelve major towns in New South Wales were asked to submit cost reports. These were:

Population (1966 census)

Albury 23,379

Armidale 14,990

Bathurst 17,222

Coffs Harbour 7,700

Dubbo 15,561

Goulburn 20,870

Grafton 15,951

Lismore 19,730

Nowra 9,633

Orange 22,200

Tamworth 21,680

Wagga Wagga 25,819

O f these, all but Tamworth and Armidale submitted proposals. From the reports received from these towns and initial work done to co-ordinate the information contained in them, it was realised that, whilst each location of a growth centre had its own advantages and disadvantages, these points would more or less balance in a total programme, and that different geographic locations would provide a more appropriate basis for comparison. It was therefore decided to choose five cities from the original twelve for two reasons:

(i) To provide representative geographic locations. (ii) The sum of the public cost estimates of these five cities expanded by 100,000 people, would give a direct comparison with expenditure deferred in Sydney Region due to decentralisation of half a million people.

The locations and cities chosen were as follows:

Coastal Region — Nowra, Grafton Tablelands — Orange Western Plains — Dubbo, Wagga Wagga It must be stressed that the choice of these five cities in no way represents a leaning by the consultants towards these in preference to any others either within the original twelve or otherwise. They have been chosen purely to be representative centres for growth within

New South Wales when these centres are selected.

219

In covering this section of the study the consultants defined a ‘typical city’ of 100,000 population which represented the increment to the existing country centre. All planning space contents, road requirements and standards of services were determined and tabulated in the appendices, and have been adopted uniformly for the population increment to the various individual country centres studied. In this way the study overcomes the differences in standards, space provisions, etc., which were observed in the various proposals from the country councils.

In the case of country cities, it is considered that growth at the rates anticipated for these cities will require firm and efficient administration, and considerable council and government initiative in planning and development. No political forms are suggested in this report, but it is a field to which some attention should be directed by others.

High pressure initial development would be at inflated unit rates because of allowances and accommodation to be absorbed into construction costs, particularly for the smaller centres. It is assumed that intelligent planning and management of the development, plus use of the experience of Canberra and other cities, could minimise this impact. Some country cities enjoy a significantly lower average wage than Sydney, which could be to the benefit of decen­ tralisation if the labour force is not overstrained in the early years. No allowance is included

in the estimates for this factor. There are significant differences between cities in the case of water supply head works. Some centres, e.g. Sydney, Grafton and Orange, need new headworks constructed. Others, e.g., Wagga and Dubbo are downstream of major irrigation storages, and substantial urban development must pre-empt some of these supplies for urban use. In these cases urban needs are a small proportion of total supply, and headworks have been costed as a proportion of the present day capital costs of the existing facilities.

Population: The population growth assumed for the Sydney Region has been based on the principles and and forecasts set out in the State Planning Authority Outline Plan of 1968. This stated that under current trends in migration and growth, the population of the region was expected to grow from 2.7 million in 1968 to about 5.5 million by the year 2000.

The report then went on to state the provisional aim to decentralise 0.5 million people to other regions by this time such that the actual population figure in the region by 2000 was reduced to approximately 5 million. This has been adopted as the basis for forward planning in the Sydney Region.

It is assumed that this 0.5 million people will in general, be primarily drawn from popul­ ation growth which would otherwise occur in the newly developing areas, rather than throughout the entire Sydney region. The assumptions used to justify the prediction are explained in Section 4 of this report.

In the absence of more detailed information on the growth pattern, it has been assumed for the purposes of this Report that population growth will be generally linear, and this assump­ tion is illustrated on the population graph in Figure 2. The effect of this on various expenditure rates predicted for Sydney Region develop­ ment is explained elswhere in this Report. For example, it leads to the M.W.S.& D.B. forward expenditure projections being incurred over three periods of 14 years with decentralisation, instead of 11.3 years without decentralisation.

It has been assumed for the purpose of this study that the decentralised population of 500,000 persons mentioned above could locate in five country centres by adding 100,000 persons to each centre by the year 2000. The arbitrary assumption was made to provide a basis for uniform comparison of public capital costs for development of services for these cities. It is intended to indicate a possible strategy for decentralisation.

Developm ent Standards: It has been assumed that the general living and services standards in country cities should be in accordance with modern planning concepts of environment and facilities. Residential space standards are equivalent to the new suburbs in Canberra and provide adequate, but not over-generous living areas at economical service and development costs.

Public capital costs associated with selective decentralisation of 500,000 people from the Sydney region

220

Procedure

5 0 0 ,0 0 0 persons

F o re c a s t S y d n ey Region P o p u latio n u n d er cu rren t g ro w th rate

Reduced grow th rate of S ydney Region p o pulation if d ec en tralisatio n ic offtintorl

P o p u latio n a t 1966 Census

2000 1980

Figure 2

Sydney Region Population Projections

221

Industrial and special use areas have also been provided on a generous basis, as we believe selective decentralisation must allow opportunities for industries and special uses to take up large tracts of land.

C ap ital Costs: The main assumption on which unit costs have been based included: all construction work done by contractors under competitive tendering; any large developments will attract a good standard of workforce and supply outlets. Therefore labour and material cost will be generally comparable between Sydney and the country cities;

prices and values at 1969—70 rates; unit rates for water and sewerage include 35 per cent for survey, investigation, design, contingencies, and administration by a supply authority.

In general, rates have been taken as being similar in all cities. In the case of roads and pipelines, costs have been adjusted in accordance with terrain, anticipated rock excavation difficult access, route clearing, etc. The cost of land resumption has not been included. Land costs in country cities would be considerably lower than those in comparable areas in the Sydney Region. A broad com­ parison of land values in these areas is summarised in Appendix D. This summary was prepared from information on present land values provided by the Valuer General’s Department of New South Wales.

Public capital costs associated with selective decentralisation of 500,000 people from the Sydney region

222

Relevant Background Information 3

The basic information and data for the study was obtained from various sources and checked for applicability and comparability with the work being undertaken. T he main sources of information and the types of information provided are discussed in this section.

Sydney Region Outline Plan: This document was published in 1968 by the State Planning Authority of New South Wales to give general guidelines for development in the region for the years 1970-2000. It provided important information on the following matters relevant to this study:

basic principles for assessing population levels up to and beyond the end of the century. This was used in assessing the distribution of population deferment due to selective decentralisation; a first order concept plan for the Region indicating areas of likely urban development and transport principles.

background for examining existing and expected future urban development in the Metropolitan area.

From this, a statement o f Metropolitan Development foregone was formulated (see Section 4) and the area of Rouse Hill-Maralya was selected for the purpose of testing planning principles and preparing a planning framework for new development areas within the Sydney Region.

Surveys by country City Councils: These surveys were in the form of written reports submitted by the councils of the cities invited by the Department of Decentralisation and Development to participate in the original study. Much of the background information provided in them proved invaluable in the present study providing a basis for planning, provision of services and costing.

Variations exist between the town plans and the cost bases used in this report and those furnished by the individual councils. These variations arose due to the lack of a uniform set of standards for space provisions, services, etc. which is necessary to make valid comparisons, and from differences in costing and estimating procedures.

Water Supply, Sewerage & Drainage: Information on the Metropolitan Water, Sewerage and Drainage Board’s forward costing was obtained from:

Communication from Board to State Planning Authority dated 22 March 1968. Paper by N. M. Dunlop on Effects of Population Growth on Sydney’s Water, Sewerage & Drainage Systems. Report on Shoalhaven Scheme for Sydney Water Supply.

Discussions with Board Officers. This information proved invaluable and was adopted without change as a basis for this study.

223

Discussions were also held with and information obtained from the National Capital Development Commission and the Department of Works on development standards and costs in Canberra. The style of neighbourhood planning in Canberra was also taken into account during the city planning stage. Canberra costs were not directly used in the study, but were

used as a basis of comparison to confirm the general accuracy of the information collected from other sources.

Roads: Various information was obtained in discussions with officers of the Department of Main Roads and results from this study were reviewed with them. The useful information assembled in these discussions fell into the following areas: Types of roads and levels of service.

Design and operating standards. Unit costs and costs per unit length and major works. Actual and estimated costs for comparable roads. Summary information from the Road Needs Survey were made available.

Transport in General: The Sydney Region Transportation Study has only recently been initiated and, therefore, could not provide any relevant information. As this study progresses, much worthwhile data will become available, clarifying the transportation situation in the Sydney Region so that the assumptions made in, and results from, this Study can be reviewed.

General information and observations on public transport were obtained in discussions with the Department of Railways, Government Transport and Motor Transport (private buses) as well as the Executive Secretary of the Private Bus Operators Association.

E lectricity: In discussions with officers of both the Electricity Commission and the Electricity Authority of New South Wales it was concluded that, whilst it would be more expensive to provide distribution facilities to decentralised load centres in the country, this would be offset at least in part by the high cost of undergrounding through developed areas to provide power to newer developments in the Sydney Region. There appeared to be no significant economic

advantage to either country cities or to the Sydney Region.

Public capital costs associated with selective decentralisation of 500,000 people from the Sydney region

224

Planning Basis 4

Uniform planning standards were established for new developments in country cities and the Sydney Region to guide the development of concept plans for these areas which would allow preparation of comparable cost estimates. This section summarises the approach taken to provide comparative developments.

M etropolitan Developm ent Foregone: In the event of non-decentralisation, the 500,000 additional persons in the Sydney Region could locate anywhere in the region. These people would appear to have characteristics somewhat different from, those of the average person in the Sydney Region, in that they could locate satisfactorily in a country centre. They would not be likely to include the persons involved in State-wide, national or inter­ national activities which are, and will continue to be, centred in Sydney. Also, they would not be involved in special activities which are large in scope and metropolitan area oriented. The implications of this are that the additional people could be less cosmopolitan in outlook

and have less than the national average of high income earners. Their residence locations in Sydney would not tend to be in existing and new inner high rise cosmopolitan areas and higher income areas, but more in the new development areas such as those being developed in the Cumberland Plains, See Figure 3. Their work locations could be less in the central city and more in local employment areas.

While there are many other factors that could be considered, it is beyond the scope of this study to analyse these influences, except by broad rationalisation. It is assumed that the most reasonable and valid basis for this study is to assume that the 500,000 additional persons would reside and work in the Sydney Region using the same distribution pattern as would

apply to the population increase of 2,320,000 persons. It has been assumed that the development of the metropolitan areas will continue along present lines, with a balance between private and public development. It is expected that, by the year 2000, all backlogs will have been overcome and that new developments will be sewered in advance of building. A significant proportion of this will be at private developer cost under

present M.W.S.& D.B. policy, but this is assumed as a public cost for the purpose of this study.

Developm ent in country Cities: The planning requirements of a country city were studied by D r Ivan Boileau, now Professor of Town and Country Planning at the University of Auck­ land, and the principals used in this section of the study devolve from Dr Soileau’s work. They represent a standard of urban environment which is considered to be fully adequate for sponsored decentralised developments and are generally based on the newer residential subdivisions in Canberra, with consideration also given to the recent subdivisions of the New

South Wales Housing Commission at M t D ruitt and other locations. Many suburban subdivisions around Sydney fall short of the standards postulated. However, we believe it would be remiss to base country town estimates on any less standard than those currently applying to new areas of Canberra, which are adequate but not over- generous.

A detailed breakdown of the standards is given in Appendix A.

225

sg Urban develcpmen tion 2 67 million

WYONG

Pr op os ed New Urban dev elo pment by th e year 2000

P ro p o s ed Po pu lati o n 2 32 million

•50 million people d e c e n tr a l is e d by th e year 2000 a s s u m e d to

r e p re s e n t de v elo p m en t forgone in a r e a s shown thus

COLO

ROUSE HILL-MARALYA

BAILKHAM

BLAtXTOWN

JJVEfcPOOt·

Public capital costs associated with selective decentralisation of 500,000 people from the Sydney region

p\

;t a i n s

t v ..> 2

Planning Basis

The plans of the five country cities studied have been prepared for the particular purpose of determining costs of roads, water and sewerage services. They are not intended as recom­ mended plans for these cities. In each case they acknowledge the thought given to planning aspects in the proposals submitted by the individual cities. In each plan consideration has

been given to further expansion beyond an additional 100,000 persons. A summary of the city plans is given below. More detailed descriptions and the plans themselves are given in Appendix A.

Dubbo: Expansion has been centred around the existing urban area with the majority of the residential development located on the rolling country near Ulomogo Creek and Troy Gully. Similarly the large industrial estates have been developed around those existing in West Dubbo and towards the abattoir.

Grafton: To avoid floor-prone land, all new development is proposed on the south side of the Clarence River. It would be centred around a new central business district and takes advantage of the attractive rolling country overlooking the flood plain.

Nowra: Development is shown both north and south of the river with the majority to the south. The pattern is substantially linear, with the present urban area and the Princes Highway providing the basis.

Orange: The majority of development is located on the north of the existing urban area on land that varies from easy rolling to undulating. Topographical and water catchment constraints prevent expansion south and west and to a certain extent to the east.

Wagga Wagga: Development is divided between north and south by the river and its flood plains; about 60 per cent being to the south of the existing urban area. The C.B.D. is con­ strained by the proximity of the river so that its future expansion tends to be linear along the existing main street.

227

Costing Basis 5

Various detailed information is available on the capital costs of each type of service considered in this report, as well as cost estimates of proposed facilities. These were analysed to develop the costing basis and unit costs for use in the study. This section generally discusses the basis used for preparing the estimates of capital costs summarised as follows:

Estim ating Procedure: As indicated earlier, an appraisal of costs o f layout and materials indicated that significant differences between the Sydney Region and country cities would be unlikely in the event of major selective decentralisation. The general procedure adopted was as follows:

(i) Establish concept plans using a relatable and comparable planning basis and principles. The concept plans established in this study for the Sydney Region and for country cities provided a basis for defining the future extent and type of transport and other service needs. These concept plans are discussed in the Appendix A. (ii) Define extent of works for costing, based on the concept plans. (iii) Estimate capital costs of development from rates and extent of work. (i v) Where possible validate the resulting cost estimates by comparison with similar develop­

ments elsewhere.

The results obtained from using this approach are approximate, but are considered satis­ factory for comparing ‘order-of-magnitude’ cost estimates. However the constraints of limited basic data and forecasts need to be overcome in further study to allow more detailed estimates to be made. This is particularly true regarding the definition of service demands and standards for future populations.

Developm ent Costs Considered: Many factors, including contract size, location of job sites, prevailing prices of labour and material, and supervisory controls of tendering and con­ struction, can cause fluctuations in cost. Many development improvements can be handled in small units, while others such as water headworks and major residential and industrial

subdivisions will be funded in large contracts. The capital cost estimates presented in this study cover construction costs including project design, and an estimate for authority administration costs. These include labour, supervision, materials, equipment and engineering. Land costs for rights of way, etc. have

not been included. The estimates of cost have been based on current unit values. Although future values will most likely fluctuate and possibly exceed certain of the current levels, present-day prices represent a good indication of the anticipated relative costs of major development items.

U nit Costs: The Unit costs established for this study were based on current average prices for similar type and quantity work in the Sydney Region and country cities as obtained from the State and other organisations doing comparable developments as mentioned in Section 3.

228

Costing Basis

Unit costs per lineal foot per person served were complied for typical sections of each type of major improvement, while large individual cost items such as water headworks were estimated on the basis of estimated construction quantities and rates. The costs of rail cars and buses were also ascertained for public transport costing.

The length, type of section and any major lump sum cost items were defined for each transport and other service facility identified in the concept plans.

229

Water Supply 6

Design Standards: In determining water supply design standards it has been assumed that a reliable, good quality supply, delivered through meters, would be available to all consumers on the hottest day. This is consistent with present accepted standards for Sydney, principal country areas of New South Wales and Canberra.

Consumption levels have been estimated in view of present day trends so that by the year 2000 the average daily demand through the whole year would be 140 gallons per head in towns east of the Great Dividing Range and 180 gallons per head in towns on the west of the Range.

Details of these trends and the general standards adopted for this section are given in Appendix B (Water Supply).

Country Cities — Headworks: Water sources for the five selected have been studied, and costing is based on the assumption that supplies are obtained almost entirely from river flows. Diagrams showing the assumed sources are shown in Figures 12-16. The sources fall into two broad categories:

those where flow is from a stream largely regulated by existing storages; those where flow will need to be controlled by new headwork structures. In both cases there are certain features which are common to the towns involved. In the first case, applying to Dubbo and Wagga Wagga, the towns are sited on major rivers, and the intake structure and treatment plant for water supply can be sited at or near the town boundary. Water in these rivers is regulated by existing major W.C.& I.C. dams upstream. In the other cases the towns are so situated that their supplies have to be picked up at a distance from the town and relayed to the city boundary by pipeline. In the cases of Grafton and Nowra the remote intakes are due to the necessity to avoid saline water, and both require some additional storage to regulate the rivers at the diversion points. At Orange new storages are required on unregulated watersheds for piping direct to town as the city develops. Before the end of the development period it appears that an augmented supply from the Macquarie River will be required. In each case the existing system has a requirement to supply surrounding areas. For instance this adds about 12,000 people in the case of Grafton and about 5,500 in the case of Nowra at the present time. It is difficult to assess to what extent these surrounding areas will grow with selective decentralisation concentrating on particular country centres, but it has been assumed that: The water supply authority’s present responsibility to outlying areas will continue. The extra population served will increase by 20 per cent by the year 2000. This allows for the normal natural growth of seven per cent per annum in these areas being offset by gravitation towards major work centres. The consumption per capita will remain basically similar to other rural areas rather than suburban consumption, which is affected by industrial requirements. The main points about the headworks for each town are as follows:

230

Dubbo: The present supply is extracted from the Macquarie River at the outskirts of the city. Average daily demand is expected to be about 21 million gallons with a peak daily demand of 47 m.g.d. for a population of 116,000. The Dubbo City Engineer proposed that future demands be met from two sources; one being the Macquarie River and the other being groimdwater. Tests recently conducted in an

area south of the town have shown promising results and it is assumed that 12 to 15 m.g.d. will be obtained from bores. The remaining 32 m.g.d. at peak daily demand will be taken from the Macquarie River, which is regulated to a large extent by Burrendong Dam situated about 40 miles upstream of Dubbo. Although primarily an irrigation storage, it is assumed that a certain proportion of its

capacity will be reserved for Dubbo town supply. Urban supplies must have a higher reliability than irrigation supplies, to carry a city over extended droughts. In the Macquarie Valley, droughts have been known to last for over three years. Therefore, it is assumed that a storage of 56,000 acre ft would be reserved in Burrendong

Dam against a need of 14,000 acre ft per annum for Dubbo. This is approximately equal to one twentieth o f the total storage capacity of the dam. The dam is estimated to be worth approximately $90 million, at present day values, so that a value of $4.5 million is attributed to Dubbo public costs for water headworks. The detailed method by which this figure is arrived at is explained in Appendix B.

Alternative but more costly ways to achieve the necessary reserved storage would be the construction of storages on the Bell and/or Talbrager Rivers, which are not considered in detail in this report.

Grafton: The present supply system serves a population of 27,500 and is able to provide for a peak demand of 8.5 million gallons per day. The proposed population of 116,000 in Grafton itself plus the 12,000 presently served in surrounding districts will require an average of 17.6 m.g.d. The present and future supply will be from Nymboida Weir which is over 100 river

miles upstream of the city. In 58 years of records the river at these headworks has only once fallen below a flow of 40 m.g.d. On this occasion it remained depleted for three months. To provide for such a reduced flow period, Grafton City Council propose a dam on Clouds Creek with a storage capacity of 2,500 m.g., this being 100 per cent of requirement for about

two peak months at the expanded population level. The pipeline from intake weir to the treatment works is 19 miles long and represents well over half of the total headworks cost. No pumping is required in the system, and under these circumstances additional mains of 30 in. and 33 in. diameter could adequately provide

for peak demands. The cost of dam, intake and pipeline is estimated at $8,740,000 for a population increase o f 100,000.

Nowra: It is anticipated that by the time the city of Nowra had expanded by 100,000 the water supply network would be distributing to about 117,000 people of which 7,000 would be settled in districts around the proposed expansion but outside the town limits of the ‘decen­ tralised city’. This does not allow for a major steelworks complex outside the town, which

would, if approved, provide Nowra with the necessary growth stimulus without special Govern­ ment effort. Although current requirements by the Shoalhaven Paper Mills represent over 50 per cent of total peak daily demand, it is assumed that, as expansion proceeds, its effect on the system will be less significant, becoming absorbed into the overall per capita consumption stated in the standards. This would apply even if the paper mills increased its capacity.

Peak daily demand for the 117,000 people would be in the region of 37 million gallons o f which the present system is able to provide 9.7 million gallons per day. The source of raw water is the Shoalhaven River (See Figure 14). The headworks pumping station and river bank inlet could be developed at the existing site at Burrier without difficulty.

Fluctuations in natural flow at the headworks site is such that present day needs are jeopodised

Water Supply

231

during dry years. Consequently a dam of 6,700 ac ft storage is being constructed at Yalwal Creek to provide approximately six months supply. The cost of this scheme has not been included in the estimate, as construction is already under way. To guarantee reliability when summer demands reach 37 million gallons per day, there is a necessity for further storage. This will be provided by gating the spillway on Yalwal Dam. From Burrier intake, water will be pumped 11 miles to Nowra treatment works via three pipelines.

The cost of these headworks and delivery pipelines is estimated at $8,400,000. Although the Shoalhaven catchment is being developed by the M.W.S.& D.B. for supplies to Sydney, ultimate development as proposed to date should not adversely aifect the reliability

of the proposed Nowra supply. Two thousand of the total 2,500 square miles catchment at Burrier will be regulated by the M.W.S.& D.B. scheme. An alternative to providing separate headworks for Nowra is to purchase raw water direct from the M.W.S.& D.B. Whilst this is a possibility which requires further investigation, it is

understood that a system independent of the M.W.S.& D.B. would provide cheaper water up to the 117,000 level of population and would be favoured by the Shire.

Orange: Orange is at present served by several dams on the Summer Hill Creek catchment just east of the city, and this system is adequate up to a population of about 25,000. Beyond that population, the possibilities exist of:

Developing storage on Molong Creek, north-west of the city. (See Figure 15). This has a limited catchment and is not expected to have any greater safe yield than the present system. Further storages would be required beyond a population of 50,000 — 60,000. Molong Creek also has the disadvantage of restricting westward development of an ex­ panded City. Developing dams on creek catchments north-east of the city. This would require dams

on Lewis Ponds and Emu Swamp Creeks, about twelve miles of delivery line, and a static lift of 900 ft. Subject to cost and the availability of damsites, it should, in conjunction with Molong Creek and present sources, prove adequate for a supply to 120,000 persons. Pumping from Burrendong Dam. This source is virtually unlimited, but delivery would require 34 miles of pipeline and a 1750 ft static lift. Pumping from Macquarie River. This would require a diversion weir, some 18 miles of pipeline and a static lift of 1100 ft, as well as additional storage in the headwaters of the river to give a regulated supply.

All of the above alternatives are high in initial capital cost and operating cost and selection should follow more detailed study. Consideration should also be given to a strategy which allows the existing storages to be retired, allowing balanced urban development to the east of the city.

For the purposes of cost estimates in this report a combination of existing sources plus Molong Creek plus new storages in the Emu Swamp or Lewis Ponds Creeks area have been assumed. The estimated cost of the works involved is $16.1 million.

Wagga Wagga: The present supply to the city is provided by the Southern Riverina County Council and forms part of a total system which currently supplies over 35,000 people. The source for the system is a treatment plant and pumping stations on the Murrumbidgee River just upstream of the city.

Major flows in the Murrumbidgee River at Wagga are substantially regulated by dams at Burrinjuck and Blowering over 80 miles upstream, and it is anticipated that a 100 per cent reliable supply could be obtained for a city of 125,000 population and greater without recourse to alternative sources (See Figure 16). Groundwater is currently being investigated, but the possibility of a major supply from this source is discounted for the purpose of this report.

Annual average daily demand for Wagga is expected to be about 22.6 million gallons with peak days reaching a demand of 51 million gallons.

Public capital costs associated with selective decentralisation of 500,000 people from the Sydney region

232

The capacity of the present works is about 7.5 million gallons per day, of which two million gallons per day are committed to other outlying districts within the Southern Riverina County Council area. To maintain these commitments and also supply Wagga at 125,000 population level a new system will be required to provide an extra 46.0 m.g.d. during peak demand periods.

As in Dubbo, an entirely new intake structure is proposed, sited upstream of the proposed industrial development on the Sturt Highway. This will protect the source from pollution which may be associated with industrial discharges and recreational activities on the river. Raw water would be pumped to a new treatment works which could be located adjacent to

this new intake or to the old works about two miles away. To guarantee 100 per cent reliable supply, a certain proportion of the capacity of Blowering and/or Burrinjuck Dams will need to be reserved for Wagga usage. The method by which it is estimated is explained in Appendix B.

The cost of the intake works to be constructed is estimated at $240,000 and the contrib­ ution to the capital cost of the headworks is estimated at $3.5 million at present day values.

Country Cities — Treatm ent & Distribution: Treatment of water supplies from all New South Wales sources has been assumed to be essential to guarantee the high standards of water purity which will certainly be demanded before the end of the century. The capital cost of treatment plants varies relatively little with different water sources. From data available it has been assumed that a plant for 10 million gallons per day costs in the region of $700,000 and an extension of this plant to treat further 10 million gallons per

day costs about $500,000. The main distribution network in each city is shown on the plans in Figures 9-11 and is described below:

Dubbo: The proposed town development makes augmentation of the existing works on the present site undesirable and assumes that a new plant would be situated upstream of this presently proposed development at the point O f diversion from the river. The existing treat­ ment works will remain part of the overall system, so that a new plant will be required to treat

a maximum of 29 m.g.d. as well as mixing with bore water. A reservoir and distribution system has been provided to serve the town from the sur­ rounding ring of high ground to east and west. Total costs of the treatment plant, service reservoirs and distribution to the neighbour­ hoods and industrial areas is estimated at $6.76 million.

Grafton: There is no existing treatment works so that a new plant will be required. This will cost in the order of $2 million and is assumed to be developed at a site on Rushforth Road. Service reservoir capacity will provide for both Grafton and the 12,000 people already served outside the area. This involves an extra 42 million gallons storage placed at strategic high points on the perimeter o f the proposed city. The size of pipes used in the distribution system to the service reservoirs are designed for gravity flow and no pumping is anticipated.

In order that supplies to the existing city are maintained, with increased demand, a new 21 in. diameter line has been provided from the 10 million gallon storage just south west of the new Central Business District.

Nozvra: The existing treatment works will be kept in operation but no expansion on that site is recommended due to its central position in a new residential neighbourhood. A new plant will be required further west of the town. From the plant the water is able to gravitate to about 45 per cent of the consumers. The other 55 per cent requiring pumping via service reservoirs sited on hills to the north and south of the proposed city limits.

The overall system and treatment plant is estimated to cost $6.5 million.

Orange: The topography o f the area covered by the proposed development is undulating and presents several convenient sites for service reservoirs.

Water Supply

233

The distribution system has been designed without interconnection between the eastern and western supply sources although this would occur within the reticulation during the early stages of the expansion. The overall cost of the system is estimated at $6.66 million, a figure lower than average due to the lack of pumping stations required, the lack of large mains associated with separation o f treatment sites and the existence of a relatively new filtration plant on a site suitable for expansion. However, the above benefits are more than offset by the costly nature of headworks required for Orange.

Wagga Wagga: Normal treatment works costs have been assumed. Distribution is by pumping through a series of radial mains to service reservoirs suitably sited on high ground north and south of the expanded town. The majority of the population will be served from the same level, although a minor pumping station is required to boost pressure up to a high level reser­ voir on the south side of the town. Further development beyond 125,000 people will spread population towards the higher ground served by this system justifying its inclusion at this stage.

The provision of treatment, distribution mains and pump stations will cost about $7 million, with operating costs about average, involving pumping to virtually all consumers. The industrial zone on the Sturt Highway adjacent to the water treatment works may be served directly from the plant without pumping.

Sydney Region: O f the total area proposed for urban development in the Sydney Region Outline Plan, approximately 80 per cent comes under the jurisdiction of the M.W.S.& D.B. for water and sewerage services, the balance being under the control of individual local govern­ ment councils.

In their report to the State Planning Authority in March 1968 the Board stated that ultimate development of future urban areas under the Board’s jurisdiction would support a population of 4.91 million people, assuming current trends in population density. O f these 2.55 million are already served. The total expenditure of water and sewerage services to these areas was then costed against this level o f ultimate development.

However, the Outline Plan (allowing for 500,000 people selectively decentralised) proposes a population of only 4.3 million in the M.W.S.& D.B. area by the end of the century. With a linear growth projection the figure would reach 4.91 by about the year 2012. At that time the population of the Sydney Region would be 5.8 million (see Figure 4). Alternatively, without a policy of decentralisation, this figure would be reached in 2004.

The available information has been separated into different water supply authority areas, and the following table consolidates the Sydney Region population growth forecasts adopted.

Public capital casts associated with selective decentralisation of 500,000 people from the Sydney region

Population in Millions

1968 2000 2004 2012

Regions A* B* A* B* A* B*

Area under the M.W.S. & D.B. 2.550 4.300 4.710 4.500 4.910 4.910 5.434

Lower Blue Mountains 0.031 0.085 0.090 0.091 0.097 0.097 0.108

Gosford 0.045 0.325 0.373 0.351 0.423 0.423 0.493

Wyong 0.026 0.255 0.300 0.276 0.331 0.331 0.393

Fringe areas — 0.035 0.037 0.032 0.039 0.039 0.042

Total 2.652 5.000 5.500 5.250 5.800 5.800 6.470

Decentralised population 0.500 0.550 O.i670

*A—With Decentralisation. B—Without Decentralisation.

234

Water Supply

0,50 million persons decentralised by 2000 AD

Limit of Water Boards Estimates.

TOTAL SYDNEY REGION

8 Years

M.W.S. & D.B. AREA

A — w ith D ecentralisation

B — w ith o u t D ecentraN sation

2020 2010 2000

YEARS

Figure 4

Sydney Region Population Projection Showing Relation of Water Board Population to Total Population

The Board’s report then goes on to say that the total cost of providing water supplies to this increased population will be of the order of $780 million, including $210 million during the same period to eliminate existing backlogs. Although the expenditure is planned to be spent in three decades, based on the foregoing population assumptions, these ‘decades’ should be 11.3 years without decentralisation and 14 years with decentralisation. This position is illustrated on Figure 5.

This represents an expenditure deferment as at 2000 A.D. of $75 million directly attrib­ utable to decentralisation. This conclusion is independent o f the rate at which backlog is overtaken, provided it is all taken up before the year 2000. The approach to costing water supply for those areas o f the Sydney Region outside the Water Board’s jurisdiction, that is Lower Blue Mountains, Wyong, Gosford and small fringe areas, followed much the same pattern as that used for country city estimates.

Particular features of these services are as follows:

Water Supply Headworks: Present water supplies to the Water Board’s area is provided mainly from the Nepean, Woronora and Warragamba catchments which are capable of yielding about 355 million gallons per day. This is estimated to be adequate until 1976. Beyond this, the Board proposes to exploit the Shoalhaven Valley catchment with a scheme ultimately involving three major dams and associated works. The total scheme will cost an estimated $200 million and will increase the average yield available to the Board’s consumers to 810 million gallons per day. This is a level of demand not expected to be reached until at least 2010.

Not all of the cost of the scheme, however, is attributable to the population increase within the Sydney Metropolitan Region, although it is estimated that this will account for some 70 per cent. Other requirements include the proposed expansion in the South Coast area and the general increase in per capita consumption with time.

Other areas such as the Lower Blue Mountains, Gosford and Wyong will have to provide independent supplies from local catchments. The independent supplies to Gosford and Wyong will be derived from the catchments to the west of both towns. In the case of Gosford this will be initially from Mangrove Creek with further develop­ ment towards the end of the century in the form either of increased exploitation of Mangrove

Creek or development of the Macdonald River. Wyong is in a similar position in that it has Wyong Creek near at hand for initial development, followed by the exploitation either of another creek to the north, or the Macdonald River in conjunction with Gosford. This latter alternative would need more investigation at a date when growth patterns in both shires have

been more clearly established. The source of supplies to the Lower Blue Mountains area is not clearly defined at this stage. However, the main possibility is the extraction of water from the Grose River which flows about 4 miles north of the proposed urban development. At this point it commands a catchment of about 250 square miles in an area of reliable rainfall. A weir on this river is envisaged with a pumping station capable of delivering 23 million gallons per day against

1200 feet lift. Expenditure on this is estimated at about $4.00 million. The expenditure rate for the M.W.S.& D.B. headworks has been predicted by the Board as $110 million, $60 million and $30 million over three successive epochs of 10 to 12 years. The high initial expenditure is due to the present need for relatively rapid expansion of its water headworks. Also larger construction works involved will require longer times to complete

but an early expenditure commitment. Total expenditure by all authorities on headworks for a Sydney region of five million will be of the order of $151.5 million by the year 2000. This figure would increase to $171 million had decentralisation not taken place.

Treatment, Distribution and Reticulation: At present water supplies to Sydney are substantially untreated, but the Water Board proposes to provide treatment works for all water distributed by them at the end of the century. The cost is estimated in their report at $90 million of which half will be to treat the demands of the existing population. The other $45 million expenditure

Public capital costs associated with selective decentralisation of 500,000 people from the Sydney region

236

Water Supply

$ 7 5 m iilio n

deferred

w ith Decentralisation

B — w it h o u t Decentralisation

1970 1980 1990 2 0 0 0 2 0 1 0 2020

Y EA RS

Figure 5

Cost of Water Supply to Population Served By Metropolitan Water Board

237

is to provide works for an increase in population of 2.33 million. However, with decentrali­ sation, this population increase is predicted to be only 1.7 million within the Board’s area by the year 2000. On a proportional basis, the expenditure requirement for 1.7 million would only be $32.8 million. Without decentralisation this population increase is expected to be 2.1 million in which case $40 million would be required to keep ahead of backlog and guarantee an acceptable standard of water purity. Not until at least 2008 would the 2.33 million be reached.

The provision of treatment works for the other areas in the Sydney Region has been costed on the same basis as used for the country cities, that is, capacity to treat maximum daily demand over 22 hours. Costs of providing these plants is estimated at $8 million. Without decentralisation this would rise to about $9.2 million.

T he total expenditure deferment on treatment works will be approximately $8.4 million by the year 2000. Water distribution costs have been estimated by the Water Board to include distribution pipework from treatment works down to and including four inch diameter mains in each street. Although these costs are partially borne by the private sector they are included in the Board’s forward estimates and are therefore included as a public cost in this report. These costs are significantly higher per head than country costs because of greater distribution distances in the metropolitan area and because of M.W.S.& D.B. standards and job management factors

which are covered in the section on sewerage. T he reticulation distribution and service reservoirs estimates for Gosford, Wyong and Lower Blue Mountains have been costed on a comparable basis to other country cities.

S um m ary o f Costs Estimates: The costs of providing Water Supplies to the Country Cities and the expenditure deferred in the Sydney Region by decentralising 500,000 people are given in the table opposite page. It is emphasised that a developed strategy of decentralisation could come up with country costs substantially lower than metropolitan if decentralisation is concentrated on lower cost cities.

Public capital costs associated with selective decentralisation of 500,000 people from the Sydney region

238

Water Supply—Summary Table

Country Cities Costs

Sydney Region Expenditure Deferred

Wagga M.W.S. Gosford

Dubbo Grafton Nowra Orange Wagga Total & D.B. Wyong & Total

Areas Others

in millions of dollars

Headworks and delivery 5.28 8.74 8.40 16.10 3.74 42.26

Treatment works 1.74 2.16 1.50 2.16 2.32 9.88

Distribution, service reservoirs 5.02 4.64 5.00 4.50 4.65 23.81

Reticulation 5.14 5.14 5.14 5.14 5.14 25.70

10.00 7.20 57.80

9.50 1.20 6.30 5.00

19.50 8.40 69.10

17.18 20.68 20.04 27.90 15.85 101.65 75.00 22.00 97.00 Total

7

Sewerage

D esign Standards: The sewerage systems costed have been designed on the basis that flows per capita and materials used in construction would be in keeping with present day practice in New South Wales, which differ somewhat as between M.S.W.& D.B. and other authorities. It has also been assumed that all effluent would be fully treated irrespective of the location

including Sydney Region, and that activated sludge is the most applicable treatment process for populations of the size considered. Detailed information of the standards used are given in the Appendix C.

Country Cities: The approach to the system design and costing in each city is given below. T he main elements of the system are shown in the city plans in Figures 9-11.

Dubbo: The topography on which the proposed town is developed presents several well defined drainage basins allowing for straight forward collection systems. Thus initial development will not require long and large diameter lines to be installed too far in advance of service needs. A slope of at least 1 in 125 should be achieved without difficulty throughout the gravity system.

Five pumping stations will be required to deliver the sewage to a single treatment plant on the banks of the Macquarie River several miles downstream of the existing plant. It is assumed that the existing treatment plant will be phased out as the city grows. From this new works, the effluent will be ponded and discharged directly into the river.

Overall costs are estimated at $9.38 million and $7.8 million for reticulation, a total o f $17.18 million.

Grafton: The town plan indicates all development on the south side of the Clarence River. There is only one direction of drainage and hence only one treatment plant is recommended. T he relatively flat nature of the ground has led to a number of large pumping stations in the design, although with detail survey gravity mains laid on a flat grade may be more economic.

The site selected for the treatment works is away from the river because of the possibility of flooding, although a more economic site may be located in more detailed studies. In the design long sections of the reticulation are adjacent to the river and through swamps and the estimates allow a provision for dewatering and other construction difficulties.

The balance of the area is rolling country with no special problems anticipated.

Nowra: The geographical features of this town require many trunk lines serving relatively long narrow drainage systems. It also requires a considerable number of pumping stations. Though the town is divided by the Shoalhaven River, there is a pronounced tendency on the north side for the flows to converge to a point adjacent to the existing bridge, and it is assumed that the existing treatment works site will be developed in preference to a new site. The existing plant is relatively close to the commercial centre, but the plant is on low flat land and development is not expected in this direction.

Topography varies from land slopes of 1 : 10 and 1 : 50 and has been taken into account in the design and estimates.

240

Sewerage

Orange: There are two major drainage basins in the area selected, and as a result, two treatment plants will be required. The existing treatment works at the east side of town is quite large and can be augmented to serve up to 40,000 persons. Additional growth would then be served by an additional plant

at the same site. A tentative selection has been made of the general area of the north western treatment works site, but this should be further investigated. It is noted that once development of areas draining to this western plant commences, a substantial length of trunk mains must be built

before sewerage can be provided.

Wagga Wagga: There are three major drainage systems in the developed areas; one each side of the Murrumbidgee River, and one draining to the Lake Albert area. The treatment plant in the Lake Albert area would have to be augmented or rebuilt to serve 25,000 persons. The effluent from this should be piped to the river or used for spray

irrigation of pastures. The existing plant west of the city would be held the same size, and eventually phased out by a new plant developed several miles downstream. Catchments connected to the present site would be progressively transferred as they developed, including North Wagga.

There are no adverse topographical features for sewerage in Wagga, but some long mains to the treatment works and several large pumping stations are involved.

Sydney Region: As in the case of water supply, the Metropolitan Water Board will have responsibility to provide sewerage facilities to an extra 1.7 million people settling in the Sydney Region by the year 2000 (see Section 6). The Board proposes to treat fully sewage from all their areas by this time. This criterion will also apply to those areas outside the Board’s juris­ diction.

Considerable expenditure is attributed by the Board to the augmentation of the existing system to cater for the population increase within existing areas. With decentralisation this increase would be in the order of 240,000 people. However, it is assumed earlier that those people most likely to settle in the country cities are those who would have settled in the new areas had decentralisation not been effected. It is estimated by the Water Board that the cost attributable to these new areas to provide for ultimate development will be $810 million.

The Water Board expenditure deferred by decentralisation on half a million people is estimated at $177 million. (See Figure 6). Whilst costs of activated sludge treatment plants will vary very little throughout the State, the cost of reticulation and collection systems will depend on prevailing topography. In the case of the Lower Blue Mountains the total system will be fairly expensive due to rock excavation, and the large number of pumping stations required for a relatively small population.

The topography of the proposed development in Gosford and Wyong presents several good drainage basins so that a logical system can be developed. However, allowances have been made for timbering and dewatering in trench in a large part of the development areas. Two treatment works are proposed for Gosford, one being on Pelican Island and the other in the Avoca-Terrigal area, whilst a single large works is anticipated for Wyong. In all three cases advantage is taken of the economies of scale presented by large treatment works.

Sum m ary o f Cost Estim ates: The following table indicates the estimated cost of providing sewerage facilities to the five cities at a minimum desirable level. It also shows the estimated cost differential on Sydney Region expenditure due to decentralisation. The following comments are made on the apparent large discrepancy between metropolitan

and country costs: (i) The figure of M.W.S.& D.B. expenditure deferred is derived as a difference in estimated expenditure if certain population strategies are adopted. It does not represent cost estimates of specific works and may thus not be strictly comparable to the country city

estimates.

241

Public capital costs associated with selective decentralisation of 500βΟΟ people from the Sydney region

-5 1500

$ 1 7 7 m illion deferred

A — w ith D ecentralisation

β — w ith o u t D ecentralisation

1970

YEARS

Figure 6

Cost of Sewerage Facilities for Population Served By Metropolitan Water Board

242

Sewerage—Summary Table

Country Cities Costs

Sydney Region Expenditure Deferred

Wagga M.W.S. Gosford

Dubbo Grafton Nowra Orange Wagga Total & D.B. Wyong & Total

Areas Others

in millions of dollars

Reticulation 8.65 9.04 8.65 8.77 8.65 43.76

Gravity mains 3.00 2.54 3.00 3.24 2.85 14.63

Effluent outfalls — — 0.12 — 0.32 0.44

Pumping stations 0.67 0.55 0.94 1.08 0.70 3.94

Risining mains 1.49 1.30 0.51 1.28 1.16 5.74

Treatment works 4.21 3.78 3.51 4.00 4.49 19.99

98.00 55.23

1.67 22.10

10.68 3.00 0.20 1.23

1.20 2.42

111.68 55.43

4.10 24.52

18.02 17.21 16.73 18.37 18.17 88.50 177.00 18.73 195.73 Total

(ii) The M.W.S.& D.B. uses different flow standards from the P.W.D. This results in a design flow for up to 50,000 persons of the order of 40 per cent higher in the metropolitan area, with greater pipe sizes and depths. (iii) There is a diseconomy of scale in a major metropolis due to long distances between

sources of sewage and treatment sites. (iv) The M.W.S.& D.B. have a substantial cost structure on sewerage works due to strict supervision, high safety standards, high day-labour content, etc. The effect of this may be reduced in future by presewering of undeveloped areas, but in so far as it is included in

the Board’s estimates, it is reflected in the figures in this report. (v) The country cities costs are based on current rates, with considerable oncost for adminis­ tration by an authority, investigation, design, etc. They are considered realistic for con­ struction in country cities to P.W.D. design standards.

Public capital costs associated with selective decentralisation of 500,000 people from the Sydney region

244

Roads and Public Transport 8

The overall planning basis, as put forth in Section 5, provided the background for the planning and costing of transport discussed in this section. The principal factors affecting the preparation of comparative cost estimates of road and public transport fall under the following general headings:

The demand for transport facilities which is based on the development proposals put forth in the concept plans. The most appropriate method of accommodating this demand, type and extent of transport proposals.

The capital cost of developing the various types of transport proposals as obtained by costing the defined development items using the established unit costs.

Transport Planning Basis: The demands for transport facilities are defined by obtaining an understanding of the number of trips generated by persons at their origins or destinations, and the number of trips made by these persons between their origins and destinations, and the means they use to make these trips, e.g. by car on roads, or by public transport. The latter factor is generally referred to as the ‘modal split’.

There are various analytic techniques for estimating future travel demands. The most effective and economical means of deriving reasonable forecasts is by use of an estimating model, the ‘gravity model’ being the most extensively used.

There are no estimates of travel demands for the year 2000 available for the Sydney Region or the country cities, except for Wagga Wagga. In Wagga Wagga a simple gravity model was applied using the basic approach and factors developed in Canberra. For the purpose of this study giving recognition to the constraints, there was only an opportunity to assess broadly future transport demands. Comparative average travel charac­ teristics were assumed for this purpose.

A broad analysis of future journey-to-work trips was made using the forecast population and employment distributions resulting from the concept plans prepared for this study. The relationship between the person’s origin (home) and destination (work place) represents the trip he must make for a work purpose.

The comparative travel characteristic assumed gave recognition to the differences in these characteristics between a large urban city such as the Sydney Region and small country cities. For example, the percent of the population who would use public transport in a country city could be minimal (10 to 15%) while in the Sydney Region it could be three to four times larger.

The average length of work trip and in particular travel time in a country city could be almost half of that expected in the Sydney Region. This is illustrated in Figure 7 which shows the relationship between average duration of work trips and city size for existing urban areas. Indicative estimates were made of the expected future resident-work relationships or

work trips in the Sydney Region and each selected country city. The work trips represent the larger part of peak-hour traffic and, therefore, the estimates of these trips provide an indicative basis for determining demands for transport facilities. The demand estimates were

245

A R E A

Public capital costs associated with selective decentralisation of 500}000 people from the Sydney region

AVERAGE TRIP DURATION minutes

F ig u re 7

W o r k T r ip D u r a t io n A g a in s t S iz e o f C ity

246

used as a general guide for selecting transport routes and in particular the type of major road or public transport facility.

Types o f T ra n s p o rt F acilities: Urban roads or streets were classified as part of the recent Australian Road Needs Survey. The following classes of streets were defined: Arterial Type I (Expressways) — These streets have grade separated intersections with full control of access.

Arterial Type II (Major Streets) — These streets have at-grade intersections with partial or no control of access. Sub-Arterial (Minor Streets) — These streets serve to inter-connect the the local streets to the artcrials and provide access to abutting properties. The last classification is for local streets which were not considered in this study. Typical cross sections for each type of street are shown in Figure 8 for varying numbers of traffic lanes. These sections were used as the basis for estimating construction costs for

each type of street. The two types of public transport considered were rail rapid transit and buses in the Sydney Region and only buses in country cities. The estimated future usage of these public transport types was based on the assumption that they would be improved versions of the

present systems. It was not part of this study to consider different forms of public transport. The type and extent of the transport facilities needed to provide for the expected demand were determined using the level of service standards established for this study. In the Sydney Region, it was assumed that the transport System would be developed to the absolute minimum level of service by the end of the century. In the country cities, it was

assumed that the transport system would be developed to the desirable minimum level basically due to the higher order of overall development standards needed to attract people to these cities as discussed in Section 2. The types of roads and public transport are further described in Appendix D. The com­

parative levels of service established for each type are also summarised in this Appendix.

Roads in C o u n try C ities: The major physical factors influencing the locations of roads as well as all other land developments in the selected country cities were land form and water­ ways, especially where the rivers are subject to floods. Existing and committed developments were duly recognised.

In developing the first order plans, discussed in Section 5, due consideration was given to locating the roads to service the expected travel demands reflected by the relationship of residential districts to major employment areas. The road networks defined as part of these concept plans were predicated on basic principles for locating each type of road and the type of section needed to service adequately anticipated travel demands at the desirable minimum level of service. See Figures 9-11.

D ubbo: This city is bisected by a major river which passes just west of the C.B.D. in a north- south direction. This river and floor plains require three major bridges to interconnect the existing and future land developments on either side. The road network is basically a grid form modified to suit the local conditions. The main through route breaks from the grid form as it passes from the future urban area to radiate to the north west and south east. The middle section of this route near the C.B.D. should be

grade separated to serve as a collector-distributor for traffic concentrations to and from the C.B.D. as well as to major employment areas on both sides of the route.

G ra fto n : Since the employment areas are concentrated just south or south east of the re­ located C.B.D., the travel demands also concentrate on these major travel attractors. The road network compromised by the many physical constraints (mainly flood plains) does not conform to one basic pattern but takes on some characteristic of all basic forms to adequately service travel demands.

Roads and Public Transport

247

it

Public capital costs associated with selective decentralisation of 500,000 people from the Sydney region

EXPRESSWAYS (Arterial Type II

10' , 24'36'or48' 8', 2<36'or48' J O ' Varies Varies Varies Min. 30'

4, 6, or 8 Lane Freeway Normal R.O.W. — 2 to 4 chains

(A .1.4. 6 or 8)

ARTERIALS (A rterialType 2)

Ε 12'+ 33' 16' 33' 12'+

-— τ---------— I-—-— ■ ——

6-Lane Arterial (A.2.6) R.O.W. - Up to 2 chains (Min. 106')

^ 12'+ 22' 16' 22' 12'+ K -

- ' " I * --------------- -- ' i - I - --------------- - f - — -

4-Lane Arterial (A.2.4) R.O.W. - Up to VA chains (Min. 84')

2-Lane Arterial (A.2.2) — Interim Stage of Section A.2.4

SUB-ARTERIALS

tl2 '+ 42'

— i—

12' + $ ·

4-Lane Sub-Arterial (5.4) R.O.W. — 1 Chain

2-Lane Sub-Arterial (5.2) — Interim Stage of Section A.2.2

F ig u re 8

S e le c t e d T y p ic a l R o a d S e c tio n s

248

A grade-separated road is needed to provide for the traffic to and from the C.B.D. and that passing around it to the adjacent employment concentrations. The external highway connections between Glen Innes and Newcastle via Pacific Highway essentially follow the existing route. A north-south by-pass route is provided for Pacific Highway traffic east of the city.

Nowra: Since the expansion in land use developments takes the form of a north-south corridor, the major road network reflects a basic corridor configuration. There is a north-south major arterial in the middle serving the C.B.D. and existing development. On either side of this central spine road are new major arterials connecting residential districts to major employment areas, as well as supplementing the central arterial for movements to and from the C.B.D.

The easterly north-south route also serves as the principal route for the main through traffic. The combined traffic demands on this route and from major employment areas adjacent to the road and through the city, are sufficient to warrant a grade separated facility.

The Shoalhaven River with its flood plains bisects the city. Three major bridges are needed on the north-south arterials to cross this river. Also, smaller bridges are required on other arterials to cross tributeries.

Orange: Orange is the only city of the five investigated that does not have a major river passing through it. The lack of such a river as well as land form constraints has allowed for planning of the most compact land development and road network. The road network follows a basic grid form with the major through route cutting across it as a radial in the northwest-southeast direction. A section of this radial route should be grade separated just north of the C.B.D. to collect and distribute the traffic concentrations.

Roads and Public Transport

E x t e n t a n d C o s t o f R o a d s in S e le c t e d C o u n tr y C it ie s

T ype o f R oad D ubbo G ra fto n N ow ra O ran g e W agga

L E N G T H OF ROAD (in miles)

Arterials— Type 1 2.8 3.6 4.7 2.1 2.8

Type 2 36.6 35.2 30.7 27.2 39.5

39.4 38.8 35.4 29.3 42.3

Sub-Arterials— Residential 35.8 38.7 40.2 36.4 39.5

T O T A L CA PITA L COSTS (in millions of dollars)

Arterials— Type 1 Type 2

Sub-Arterials— Residential

7.00 10.74 17.74

6.50

9.05 9.49 18.54

7.02

7.31 7.93 15.24

7.29

6.78 8.56 15.34

6.60

8.00 11.47 19.47

7.16

T otal

38.14 48.19 86.33

34.57

T o ta l 24.24 25.56 22.53 21.94 26.63 120.-90

Major bridges 4.25 — 6.20 — 3.90 14.35

N ote: T h e costs fo r m a jo r b rid g e s in clu d ed in th e above ta b le are th e sam e as p u t fo rth in th e n ex t section u n d e r drainage and

flood control. T h e s e costs are show n in each o f th e se sections since they are significant w h e n co nsidering roads or flood co n tro l in th e ir sep arate context.

J

249

W agga W agga: The future development form and therefore road network configuration for Wagga is similar to that for Nowra, a north-south corridor form with three main north-south arterials. The main difference is that there is a corridor of major employment areas running east-west across Wagga south of the river. A grade separated facility should be developed to service the needs of this corridor by inter-connecting the main north-south arterials.

Three major crossings of the Murrumbidgee River and flood plains are needed on the main north-south arterials. Since the flood plains are extensive in Wagga these crossings are comparatively long.

E stim a te d Costs fo r C o u n try C ities R oads: A typical road section was selected for each portion of each road type in the road network defined in each city. The section selected was the one considered to provide adequately for the expected traffic demands and service the needs of adjacent developments.

The length of each type of road for each typical section was measured from the plans for each country city. These measurements are summarised in the table below. The unit costs for road sections were applied to the measured route lengths to obtain the cost of these roadways. To these were added the derived costs of major structures crossing rivers and inter-changes on freeways. The bases for these unit costs are summarised in

Appendix D. The estimated total capital costs for providing the future road network in each country for the additional populations are also summarised in the table. It is apparent that the cost of new river crossings make a significant difference in total costs.

R oads in th e Sydney R egion: The regional road network to serve Sydney is indicated in the Principles Diagram in the Sydney Region Outline Plan Report. The further definition of this network to provide for the demands of alternative population increases of 2,320,000 and 2,820,000 was done as part of this study to serve as a basis for preparing differential cost estimates for roads.

The regional road network is composed of freeways and major roads connecting with the road networks in the various districts. The district roads in new development areas were delineated by investigations of road needs in a representative district, Rouse Hill-Maralya area, see Figure 3.

The definition of regional and district networks was based on the transport corridor concept discussed in the Outline Plan Report. The transport needs of the additional 500,000 population will be primarily provided for by extensions of the regional and district networks into new development areas since their trips will be made to mainly employment areas in these districts or in adjacent areas. The marginal increase in the regional road network developed for the basic five million population to serve the needs of the additional 500,000 persons is

expected to be relatively insignificant. The type and extent of the regional and district road networks serving the new develop­ ment areas was defined by analysing the Maralya area and then developing an average cost per capita for providing such roads.

It is apparent that the cost per capita for roads in the new areas developed on the Warringah Penninsula, where more difficult topography is encountered, would be higher than the above- mentioned cost per capita. Only about 120,000 additional persons are expected to locate in North Warringah which is about five per cent of basic population increase of 2,320,000 persons. As indicated in Section 4 it is more likely that more of the additional 500,000 persons would locate in the outer new development areas. The additional cost for road facilities in North

Warringah, which could be up to 20 to 30 per cent higher, would not significantly change the average cost per capita. It is expected that the cost per capita for expansion of road facilities for the 10 per cent of the 500,000 persons locating in the main existing urban area would be lower than for the new development areas since their travel demands could be accommodated on the upgraded existing and expanded system with only minor improvements. This lower cost per capita

Public capital costs associated with selective decentralisation o f 500,000 people from the Sydney region

250

should more than offset the higher cost per capita for the facilities in the North Warringah area, so that the computed average cost per capita should be applicable for providing for the road needs of the additional 500,000 persons.

E stim ated C ost o f R oads in Sydney R egion: The estimated costs for expanding the road network for catering for the travel demands of the additional 500,000 persons were obtained by using the computed average costs per capita for developing the district networks in new development corridors and extending the regional roads to serve these corridors. It is assumed that the costs for bringing the existing road system up to the minimum level of service would be met in the next couple of decades.

The average costs per capita and derived total costs for expanding the regional and district roads to serve the needs of the additional 500,000 persons are as follows:

R oads and Public Transport

E x t e n t a n d C o s t o f R o a d s in t h e S y d n e y R e g io n

fo r A d d it io n a l 5 0 0 ,0 0 0 P e r s o n s

T ype o f R oad

M iles p e r 100,000 P e rso n s C ost p e r P e rso n

T o ta l C ost ( $ m illio n )

Arterials— Type 1 6.6 8172 86.0

Type 2 19.9 62 31.0

26.5 $234 117.0

Sub-Arterials— Residential 36.8 $69 34.5

T o ta l 63.3 $303 151.5

P ublic T ra n sp o rt: The marginal costs in the Sydney Region for providing for the demands for public transport for the additional 500,000 persons were derived in a similar manner to those for roads. A total cost per capita was computed for extending the regional public transport facilities into new development areas and developing the district public transport services.

The extensions of regional rail rapid transit and express bus services into the Maralya area were defined and costed. A network of district express and local buses was also defined and costed. The total cost per capita was derived from these costs. The total costs for rail rapid transit extensions include the costs for new trackage, up­ grading existing trackage where needed, new or expanded transfer stations and rail equipment. The costs for bus services include only the costs for buses and depot facilities since they operate

on the proposed road network. The public transport system for each of the country cities was defined as being express or local bus services connecting residential districts with the principal employment areas, in particular the C.B.D. The bus networks would essentially radiate from the C.B.D. but also where warranted pass by the larger inner employment areas.

The expected total costs for providing the needed public transport facilities for the additional population located either in the Sydney Region or a country city are summarised as Table on following page:

The cost per person for providing bus services in country cities is higher than that for the Sydney Region primarily due to the need to provide basic services which are not patronised to the same extent as those in the Sydney Region as indicated earlier in this section. There are more buses provided per person to give the basic service in a country city and less passengers carried per bus on these services.

251

Public capital costs associated with selective decentralisation o f 500,000 people from the Sydney region

C o s t o f P u b lic T r a n s p o r t in S y d n e y R e g io n a n d F iv e C o u n tr y C itie s

fo r A d d it io n a l P o p u la t io n

P u b lic T ra n s p o rt Five C o u n try C ities S ydney R egion

C ost p e r T o ta l C ost C ost p e r T o ta l C ost

P e rso n ($ m illio n s) P e rso n ($ m illio n s)

Rail rapid transit $— $12.3 6.25

Express and local bus services 16 8.0 10.8 5.40

$16 8.0 23.1 11.65

S u m m a r y o f T ra n s p o r t C o sts: T he comparative capital costs for providing the transport needs for the additional 500,000 persons either in the Sydney Region or in country cities is as follows:

R o a d s a n d P u b lic T r a n s p o r t — S u m m a r y T a b le (in millions of dollars)

C o u n try C ities S ydney R egion

C osts E x p e n d itu re D e fe rred

Roads Arterial Type 1 38.14 86.00

Type 2 48.19 31.00

Sub-Arterial Residential 34.57 34.50

120.90 151.50

Public transport Rail Rapid Transport — 6.25

Express and local Bus services 8.00 5.40

8.00 11.65

Major bridges 14.35 —

N o te : T h e se are th e sam e m a jo r b ridges referre d to in th e n e x t section b u t are in c lu d ed here since th e y are a significant p a r t of th e re a d in g costs.

As will be noted, the implication of having to provide major bridges and long approaches for crossing rivers and flood plains in the country cities makes a significant difference when compared with the Sydney Region. T he following items which are not included in the above figures w o u M somewhat offset the above indicated difference:

Higher capital cost o f land resumptions for roads and rail facilities in the Sydney Region. H igher social and economic costs in the Sydney Region because o f the lower levels of service on roads resulting in more total traffic congestion. The country cities were costed

on a desirable minimum level whilst in the Sydney Region an absolute minimum level was used. An indication of the possible differences in land resumption costs was obtained from analysing data on average land values for different types o f vacant and developed land in the five country cities and the various municipalities in the Sydney Region. These data were

provided by the Valuer General’s Department.

252

T he results o f this review o f indicative land values disclosed the following: Land on the fringe or urban developm ent, which is still in a non-urban zone, could have an average value up to ten times higher in the Sydney Region than in a country city. Land on the fringe of urban developm ent, which has been zoned for urban residential use, could have an average value o f about five tim es higher in the Sydney Region.

Land zoned for urban residential use, w hich has been sub-divided b u t not developed or only partially developed, could have an average value over twice as high in the Sydney Region. This indicated that land resum ed for road rights o f way could be significantly lower at present in a country city when com pared w ith the Sydney Region.

It was not part of this study to define the land needs for roads so that land resumption costs could be estim ated. Also, the effect on land costs o f accelerating the growth of a country city was not investigated. Even so, it can be generally concluded th at the cost of land for road reservations could be significantly lower in country areas especially if an early program

o f resum ption is im plem ented. A study of traffic congestion costs in the Sydney Region and a country city (Wagga Wagga) is presently being completed for th e D epartm ent o f Decentralisation and Development. It is expected th at the results from this study will broadly define the traffic congestion costs for both o f these environments and indicate th at they are significantly higher in the Sydney Region.

As shown in Figure 7, travel tim es become longer as cities grow. Part o f this increase is due to longer distances travelled w ith th e greater spread o f job opportunities and other attractions in larger cities. Also traffic congestion, especially in and around the C.B.D., becomes greater as cities grow because o f m ore concentrations o f developments. T his adds significantly

to travel times. T h e longer travel distances and tim es in larger cities are considered to be an additional cost borne by people selecting to live in larger cities.

Roads and Public Transport

253

Flood Control and Major Drainage 9

M ost o f the areas planned for development in the Sydney Region are in rolling or elevated country free from flooding. However many minor bridges, as well as substantial improvements to Tuggerah Lakes Entrance, Eastern Creek and South Creek can be predicted. Costed on a per head o f population basis, these will be relatively minor. Some areas of swamp land will require reclamation, particularly in the Gosford-Wyong area and the Penrith Plains, but this will be a relatively minor item to the total development costs and much can be assigned as

a private cost. Country cities bordering rivers will require flood mitigation works, and the rivers also impose requirements for additional major bridges and road mileage. Further drainage to rivers will generally impose additional costs of carrying drainage through, and minor bridges across estuarine marshes and/or river terraces. T he latter may be offset by the Sydney Region costs, so th at the differential diseconomy of country development will be principally in major bridges and flood mitigation works.

These costs are considered below in relation to each city. It should be noted that in cities where there are existing bridges, such as Nowra and Grafton, it has been assumed that replace­ m ent will be necessary within the next thirty years irrespective o f decentralisation to these cities. Therefore the costs have not been attributed in this report. The location of the bridges with respect to the road network and town plan is seen in Figures 9-11.

Estimated Cost in $ Millions

DUBBO

4 lane bridge at northend Additional 2 lanes to existing bridge 2 lane bridge at southend N o flood mitigation required

2.00 0.75 1.50

4.25

1.50

1.50

G R A FT O N

No major bridges Flood mitigation and reclamation

254

Flood Control and Major Drainage

NOWRA

2 lane bridge on western north-south arterial road 2 lane bridge on eastern north-south arterial road Some flood mitigation

Estimated Cost in $ Millions

2.20 4.00 1.00

7.20

ORANGE

No flood mitigation No flood control

WAGGA WAGGA

4 lane bridge on western arterial road 3.50

2 lane bridge on eastern arterial road 0.40

Some flood control 1.00

4.90

S u m m a r y o f C o s t E s t im a t e s (in millions of dollars)

D ubbo G ra fto n N ow ra O range

Wagga Wagga

Sydney Region

Major bridges 2.75 6.20 _ 3.90

Flood control 1.50 1.50 1.00 — 1.00 —

T o tal 4.25 1.50 7.20 — 4.90 —

TOTAL COST FOR 500,000 PEOPLE $17.85 million

N o te : B rid g e s c o s te d in th is s e c tio n a re th e sam e as th o s e co ste d in S ectio n 8— R o ad s an d P u b lic T ra n sp o rt.

255

Appendixes

Appendix A P la n n in g

1. S ta n d a rd s The standards devolved from D r Ivan Boileau’s work were used in the town planning exercise to produce viable town plans from which the costs of services could be obtained. The basic information and these standards are given below:

(a) P opulation 100,000 persons + existing (1970) population

(b) P opulation D istribution Based on traffic generation, capacity of intersections and on primary school catchments, assume an average neighbourhood size of 5,000 persons. Twenty neighbourhoods of 5,000 each will require between 357 and 410 acres:

Four to five industrial estates, each of 200 to 250 acres, and some of which may be located together to form an industrial district; a high school and minor park and playing fields for every three neighbourhoods; a golf course for every six to eight neighbourhoods; major park and playing fields, race track, showground, public gardens etc. as required up to 4 acres/1,000; one or two major hospitals (allowance is 30 acres), plus convalescent and nursing homes, specialised hospitals (maternity or psychiatric) as required, plus other public uses up to 200 acres; green space provided to suit topography, ridges neighbourhood divisions, etc.; a high quality C.B.D. to provide an attractive and pleasant environment in the city centre. Within any city of 100,000 plus population, there needs to be several large industrial areas, at least one major basic industry employer and a significant tertiary employer.

A cross section of the population will then include a spread of interests and intellectual standard to produce a viable and self-generating community. The tertiary purpose employer would occupy the special use areas indicated on the individual town plans. The type of tertiary employer envisaged could be a university, military base, advanced research establishment, technology intensive industry, etc. Some of these may require sites close to the Central

Business District.

(c) E m p lo ym en t D istribution (i) 10 per cent service and related industry adjacent to the C.B.D. at high density— say 45 workers per acre—0.5 acres/1,000 population. (ii) 20 per cent at medium density inner suburbs locations—say 30 workers per acre—

1.5 acres/1,000 population. (iii) 40 per cent in outer suburbs, industrial estates, etc.—say 15 workers per acre— 6 acres/1,000 population. (iv) 30 per cent in special use areas at say 15 workers per acre—4.5 acres/1,000 population. Therefore Industry and Special Purpose requires 12.5 acres/1,000 population.

256

Appendix

(d) A r e a Requirem ents Average size of residential blocks based on recent subdivisions in Canberra is 8,400 square feet. Average dwelling occupancy rates are: Sydney Metropolitan Area 3.6, Canberra 4 .0 , Bathurst 3.8, Albury 3.4 and Elizabeth (S.A.) 4.2. The probable population structure of a new town in New South Wales is estimated at 3.8 persons per dwelling or block. This in turn gives a site density of 20 persons per acre.

Residential:

Site Area Fixed Neighbourhood Uses—

50.0 acres/1,000 persons

Local Shopping 0.7 ac.

Service Industry 0.9 ac.

Community and Church 1.0 ac.

Local Open Space 2.5 ac.

Primary Schools 2.0 ac.

7.1 acres/1,000 persons

57.1 14.3

Access Roads (20% of total) ------

71.4 acres/1,000 persons

This gives an overall neighbourhood density of 14 people per acre. These standards should be regarded as minima which may be achieved under ideal conditions. For average conditions, a factor of 15 per cent should be added to the neighbour­ hood area to allow for vacant lots, waste spaces due to topography and the like. This provides flexibility in development and prevents shortages of land supplies which tend to make land values unstable. This reduces the expected neighbourhood density to 12.5 people per acre.

Regional Open Spaces: Major Parks Minor Parks Golf Courses

4 acres/1,000 persons 2 acres/1,000 persons 4 acres/1,000 persons

10 acres/1,000 persons

Industry and Special U se: Assumption: that the work-force will be 45 per cent of the total population and that the distribution of employment is as follows:

Basic Industry 35%

Office 25%

Specialised Tertiary 15%

Retailing 10%

Other 15%

100%

Therefore for every 1,000 persons in the population there will be 225 industrial and specialised tertiary purpose workers.

Central Business District: Assume a standard of 1.0 acres/1,000 for retails and office purposes, plus approximately 0.5 acres/1,000 for parking and 0.5 acres/1,000 for special uses associated with Central Business District Location.

257

Public capital costs associated with selective decentralisation of 500,000 people from the Sydney region

Public Services:

Major Roads and Communications Networks: Assume 8 .0 —14.0 acres/1,000 population

2. Town Plans Detailed descriptions of the town plans formulated for the five cities are given below. The plans themselves are shown in Figures 9, 10 and 11.

D ubho: The present population of Dubbo is 16,000 and there is sufficient land zoned in the proclaimed Town Plan for about 24,000 people. Therefore, to provide sufficient land for a city of 116,000 people by the year 2000, 18 additional neighbourhoods have been proposed. The proposed development is in two sections, separated by the Macquarie River and is generally concentric around the existing town. A large part of the development is shown to the east of Dubbo on a flat or gently sloping ridge (along the line of the Main Western Railway),

and the valley sides of Ulomogo Creek and Troy Gulley. Future expansion of the city above the level of 120,000 will extend further in this direction. North of the city a large area has been proposed for industrial use, and includes flat areas adjacent to the railway and the existing abattoir. Industry west of the city could be an extension of the present specialised aviation-oriented facilities.

Along the western bank of the river there are relatively narrow river terraces, and six neighbourhoods have been proposed for this area. Between these neighbourhoods and the present town a large park has been proposed, containing the river, and land which is prone to flooding. Developments further westwards and to the south will be limited by the steeper hilly nature of the topography in these directions, although some discontinuous development may be possible along the Macquarie River south of the city.

A large Special Use area has been provided south of the city. To the north-west of the present city there is a large flat area between the Mitchell Highway and the Macquarie River. This area is the site of Dubbo airport and the existing sewerage treatment works, but these will not be a barrier to the growth of the city above the level of 120,000. Beyond this level it is likely that the city will grow north-west along the Macquarie River, and north-east on the flat land along the Talbrager River, as well as to the

east and south-west. The quality of the existing downtown area is suitable for an enlarged city provided redevelopment is properly controlled. A nominal sum has been allowed for improvements to services in this area.

G ra fto n : The existing city of Grafton occupies a plain subject to flooding and is bounded by flood-prone land to the north and the Clarence River to the west, south and east. All develop­ ment up to a population level of 120,000 has been assumed to occur on the flood free land around South Grafton.

The areas selected for development are flat, with gently rolling hills, and a few slopes. Areas in the north are expected to be further developed only when the population passes 120,000. The areas selected for development are in well-defined catchments, permitting adequate natural drainage.

As shown in the Figure 11, the neighbourhoods will follow generally concentric circles along the radial urban corridors (Pacific Highway, Armidale Road, Glen Innes Road). These concentric circles of development will be arrested by: rugged land and ridges to the north, west and south;

flood-prone land to the east. Two industrial areas of 1,400 acres are located along the Pacific Highway and Armidale Road. _

A new Central Business District must be created in South Grafton and strong admin­ istration and careful phasing will be necessary to achieve this.

Secondary Schools General Hospitals Other Institutions

1.2 acres/1,000 population 0.3 acres/1,000 population 2.0 acres/1,000 population

3.5 acres/1,000 population

258

Although a fair amount of traffic will be generated, no additional bridges are considered to be needed up to 120,000 population.

N ovrra: Proposed development is both north (30%) and south (70%) of the Shoalhaven River, on relatively flat but flood-free land. To the east and north-east of the present town there are large areas of swamps which are

at present a barrier to urban development, but which may be suitable for future urban development as and when drainage and flood protection works are provided. Development of these areas is not assumed up to 120,000 population. North-west of the town there are rolling bush and scrub covered terraces, and a small fertile valley which is farmed at present. The proposed development (to 120,000) includes

part of this area, and some of the development over 120,000 will be in this direction. There appear to be few major physical restraints on future urban growth to the south and south-east of the proposed city of 120,000, and this direction has the advantage of being closer to future industrial activity around Jervis Bay. At present much of this land is classified as State Forest, but it is expected that a great deal of future urban development will be in this direction, especially if the swamps east of Nowra continue to be unattractive, or un­ economic to develop.

Major industrial areas are located north and south of the city, but these would vary to suit the particular needs of particular industries. A grade-separated by-pass east of the city is considered necessary for a major highway passing a city of this size. A major at-grade facility to the west, and radial routes, will make

up the arterial highway system. No provision for a railway extension south of the Shoalhaven River is made in this report.

O range: The plan o f the expanded city of Orange is confined within a water-shed boundary line. There are two reasons for this: (a) The present and immediate future population of Orange will rely on the water supplied by the two existing reservoirs shown on the map, and development past the watershed

boundary line would cause pollution problems in the feeder streams of those two existing reservoirs. (b) Immediate future water development is assumed to be in Molong Creek west of Orange creating a development boundary to the west.

Further development past 120,000 population will be confined to the north-west of Orange. Beyond this population, the existing reservoirs will be making such a minor con­ tribution to the water supply that they can be phased out or used for recreational purposes, allowing development to the south and east of the present city.

Nineteen neighbourhoods are shown in the plan. It is proposed that another neighbourhood be located within the boundary line of the S.P.A. plan of Orange, as this plan is designed for a greater population than the present.

A grade-separated by-pass will be required to the north of the Central Business District from the existing highway east of the city to the Mitchell Highway/Parkes Road intersection.

W agga W agga: T he proposed development is in two general areas, separated by the Murrum- bidgee River and its floodplain, and the existing city of Wagga Wagga. The present population is 27,000 but the proclaimed Town Plan allows for a capacity of 55,000 people. Therefore there is enough vacant zoned residential land in Wagga at present to house an additional 28,000 people.' Most of this is south of the present city and in many cases road networks and subdivisional patterns are established.

Sufficient area for another 72,000 people is required, and this has been provided in the form of fourteen neighbourhoods of approximately 5,000 each. Eight neighbourhoods have been located north of the river and six south of the city as defined on the proclaimed Town Plan. Because of the broad flood plain, this separation will give the city a definite north-south

orientation. Further expansion of the city above the level of 127,000 will ultimately be restricted by the Malebo range o f hills, which rise to over 1,200 feet in an arc around Wagga from the north-west, through west, south-west and south to south-east, being between six and eleven

miles from the centre. The north-east sector contains scattered hills to about 1,000 feet, but these do not appear to be a serious long-term restraint on urban development.

Appendix

259

The future city with its long north-south axis, will require two additional arterial roads, one on each side of the Central Business District, with a grade separated facility connecting them on the south side. Industry is located in three areas, north-east, east and west of the town, and the existing military and soil conservation Special Use areas are assumed to provide the necessary space for this requirement.

Public capital costs associated with selective decentralisation o f 500,000 people from the Sydney region

Appendix B W a te r S u p p ly

1. S ta n d a rd s These standards have been formulated in the light of present trends in consumption of service throughout New South Wales:

(a) C onsum ption Levels The following assumptions were made in deciding on the demand per head of population: Water supply should be adequate for residential and civic areas developed in a generous, landscaped style.

Substantial demand from industry with at least one consumer requiring large quantities. Connections to all consumers metered, with excess charges designed to discourage wastage. Demand variations throughout the year to give overall peak daily demand of 2.25 times average daily demand. Demand on the west side on the Great Dividing Range greater than on the coastal side. Continuation of present trend for per capita demand (city and country) to increase with time. A figure of 140 gallons per head per day for average daily demand in the year 2000 has been used for towns east of the Great Dividing Range and 180 gallons per head per day for

towns on the west of the Range. This is compared with estimates from Metropolitan Water Board at 148 g.p.h., (adopted for this study) Canberra 138 g.p.h., and, from reports to Department of Decentralisation and Development, Grafton 120 g.p.h., Nowra 147 g.p.h., Wagga 156 g.p.h. (approximately) and Dubbo 167 g.p.h. (approximately).

(b) T rea tm en t To meet adequate health standards it is assumed that water from any source in New South Wales will ultimately require treatment and filtration. Irrespective of the detailed design of plant involved to treat the water from any particular catchment, the cost of providing the plant will be of similar order.

Cost estimates are based on conventional plants, sized to treat the peak daily demands in a period of 22 hours.

(c) P um ping S ta tio n s Where these are required they have been sized to cope with the highest of peak daily demand within the area served over a period of 22 hours. Sizes of pumps and number of stand-by units being determined by number of units required for fluctuations in demand.

(d) T ru n k M a in s Supply mains have been sized to carry peak daily demand over a period of 22 hours, as above. Distribution mains to individual neighbourhoods from Service Reservoirs are sized to provide adequate pressure at peak instantaneous demand.

(e) R eticulation Reticulation within neighbourhoods of decentralised cities is based on current standards and costs in country areas. Although we expect that this will mostly be paid by developers, it is accepted as a public cost for this study, to make the figures comparable with those of the

Sydney Water Board.

260

Appendix

(f) Service R eservoirs These have been sized to provide 400 gallons storage per head, being between one and 11 days supply at peak demand. Current Public Works Department practice is to provide 200 g.p.h. in country towns. However, a major city calls for a greater reserve to provide for urban populations, important industrial consumers and fire fighting emergencies, particularly within the Central Business District, and 400 g.p.h. is considered to be more appropriate. This is in agreement with the capacity adopted for Canberra of 400 gallons per head and

compares to the M.W.S. & D.B. standard of 270 gallons per head estimated for the year 2000. The main elements of the water distribution system designed for each city are shown on Figures 8, 9 and 10. The relationship between each city and its proposed source of supply is shown on Figures 11-15.

2. C ost o f providing re lia b le re g u la ted supplies fro m existing irrig a tio n storages Both Dubbo and Wagga Wagga are involved in this type of situation. However it could also apply to Albury. Although there are several methods by which this cost may be calculated, only two are investigated here to indicate an order or cost rather than to establish an accurate amount.

In the first case the amount is calculated as a proportion of the present day cost of the dams by calculating the cost per acre-foot of storage constructed. In the second case the value of irrigation benefits foregone by pre-empting water for urban and industrial use is calculated. Figures used in this method are as follows:

Average Net Irrigation Benefit to the nation = $20.00 per acre per annum

Average Water Requirement for Irrigation = 2 \ acre feet per acre per annum

These figures are based on studies in recent years on economic assessments of irrigation developments in various parts of the State. The ‘reliability factors’ differ as between the Macquarie and Murrumbidgee rivers by virtue of the annual snow melt in the Snowy Mountains guaranteeing the reliability of the

Murrumbidgee.

(a) Dubbo Annual requirement (from Macquarie River at 116,000 population) = 3 .8 0 billion gallons

Capacity Acre feet Date Built

COST 1970 COST

Dam $

Burrendong 0.96 m*

Cost per acre-foot of storage

0.96 m* 1958-65 3 8 .4 m

= 44.5 m

44.5 m

0.96 m $46.4

Proportion of cost of dam for reserved storage = 56,000 X $46.4

= $2.6 million

261

Public capital costs associated with selective decentralisation of 500,000 people from the Sydney region

(ii) Method 2 Annual value of 56,000 acre-feet of pre-empted irrigation storage at $20 per acre and 2 \ acre-feet per acre " 56,000 x $20 = $450,000

2 i

Present worth at 7% over 70 years— multiply by 14.16 $450,000 X 14.16 = $6.37 million

An average figure from the two methods of $4.5 million is accepted as reasonable.

* 0.96 m ac ft storage does not include flood mitigation storage of 0.4 million acre-feet.

(b) W agga W agga

Annual requirement (at 125,000 population)

Reliability Factor x 1J Reserve storage of 31,000 X 1 |

= 8.25 billion gallons

= 31,000 acre-feet

= 46,500 acre-feet

(i) Method 1

Dam

Capacity COST 'C O ST 1970

Acre-feet Date Built $ $

Burrinjuck 0.80m 1925 13.3m 33.0 m

Blowering 1.3m 1968 42.0m 42.0m

TO TA L 2.1 m $75.0m

Cost per acre-foot = $75 m

--------------- = $35.7

2.1 m ac ft

Proportion of Cost of Dams for Reserved Storage.

= 46,500 x $35.7 = $1.66 million

(ii) Method 2

Annual value of 46,500 acre-feet of pre-empted irrigation storage = 46,500 X $20 = $370,000

Si-

Present worth at 7% over 70 years— multiply by 14.16 $370,000 x 14.16 = $ 5 .2 6 million

Comparing the two methods, an average figure of $3.5 million is considered to be reasonable.

262

Appendix C S e w e r a g e

Appendix

1. S ta n d a rd s (a) E ffluent Q u a lity Most of the towns under review are on streams which supply water to towns downstream. In the cases of Nowra and Grafton, these are on rivers which enter the ocean adjacent to popular and attractive swimming beaches. Sewage would, in all cases, require full treatment and we have assumed the generally accepted treatment standard of 20 p.p.m. suspended solids for the effluent. The Department of Health also requires detention for 30 days of chlorination with some detention. This degree of treatment is in line with current practice for schemes being installed in New South Wales.

(b) T rea tm en t P la n ts O f the various sewage treatment processes in common usage the activated sludge plant is considered to be the most economic type to achieve the required degree of treatment. The size of plants being considered are generally in excess of an equivalent population of 50,000.

Other types of treatment that may be considered are: Biological Filters—Generally high initial cost tends to make large plant uneconomic. Lagoon Treatment—this type of plant has low initial cost and low operating cost but is not yet accepted by the N.S.W. Department of Health.

The cost of a similar size plant would not vary greatly from one town to-another.

(c) R eticu la tio n Two authorities in New South Wales are concerned with sewer reticulation design, namely Public Works Department and Metropolitan Water Sewerage & Drainage Board, and each has different standards of flow and pipe sizing. In this report we have assumed that the sizing of reticulation would be in accordance with current standards of these bodies, thus

varying between metropolitan and country. T he significance of this is discussed later in this Appendix. In each case the estimates are based on reticulation service being provided to each property. It is also assumed that construction would be carried out in advance of development.

(d) M a teria ls The materials used for sewer pipes can be considered separately in sizes under and over 18 in diameter. Under 18 in diameter the two most common materials are asbestos cement and vitreous clay. The P.W.D. approve of and use A.C. as well as V.C. Competitive bidding generally determines which material is used and most P.W.D. installations are in A.C.

The M.W.S. & D.B. permits only V.C. The difference in overall cost is slight when compared with the overall cost o f the reticulation, and V.C. has been assumed in these estimates. Over 18 in diameter, concrete pipe is generally used by the P.W.D. and cast iron by the M.W.S. and D.B. Concrete has therefore been assumed for country cities and cast iron for

the M.W.S. & D.B. areas. The main elements of the system designed for each town are shown in Figures 9,10 and 11.

Appendix D

R o a d s a n d P u b lic T r a n s p o r t

This Appendix presents further background information on certain aspects of the cost estimates for roads and public transport.

(a) Types o f R oads The functional classifications of streets in urban areas were defined as part of the Roads Needs Study as follows:

263

A r te r ia l T yp e I {E xpressw ays): These streets have grade separated intersections with full control of access. This type of street is primarily devoted to through traffic movement, provides no access to abutting property, and generally carries the longest trips made within the metropolitan area. The main characteristics are multi-lane pavements, paved shoulders, medians, and no at-grade intersections.

A r te r ia l T yp e I I {M a jo r S tre e ts): These streets have at-grade intersections with partial or no control of access. This type of street is primarily devoted to through traffic movement but also provides access to abutting property.

The arterial system in each of the Australian capital cities consist mainly of this type at present. These streets are generally spaced one to two miles apart depending on the intensity of land use development and proximity to the central city area. Major intersections are normally signalised. Parking may be banned during peak periods on these roads. They are not easily identifiable by their geometric characteristics and generally range in cross sections from 4-lane undivided to 8-lane divided roads.

S u b -A r te ria ls {M inor S tre e ts): This type of street is the principal feeder to the arterial system and provides access to abutting property. They collect traffic from and distribute it to the local street system of the area through which they penetrate. Such areas will be bounded by the immediate arterial system.

Sub-arterials may also be expected to provide for travel between these neighbouring areas. These streets may be used as bus routes and parking is generally permitted at all times. The average length of trip made on sub-arterials should be less than that on arterials. Their spacing will be determined to some extent by the spacing of the arterials, usually one-lialf to one mile apart.

(b) Types o f P u b lic T ra n sp o rt Rail rapid transit should operate over exclusive grade-separated right of way, eliminating conflicts with other rail or vehicle traffic and providing full opportunity for schedule control and desired frequency of service. While rail rapid transit equipment other than the type using standard gauge tracks is being developed abroad, most of the planned urban rail systems use standard gauge equipment so that existing railway trackage can be used. It was assumed for this study that the rail network in the Sydney Region would be an improved version of the existing network to provide a rail rapid transit type of operation.

The modern, attractive rail rapid transit car has comfortable accommodation for a maximum seated load. It is considerably lighter in weight than its predecessor and has higher acceleration and deceleration rates to obtain higher terminal to terminal operating speeds. Stations in the outer areas are located about two miles apart to provide good pick-up and distribution for persons transferring to and from the motor car and feeder buses. The transfer from these feeder vehicles (cars and buses) to rail rapid transit is accommodated in convenient and attractive transfer stations.

Express bus services to be effective have to provide a standard of service comparable to that offered by rail rapid transit. To be successful, express buses should be able to circulate suburban areas until an economic loading has been obtained then enter a freeway or major arterial and operate express to large travel generators, such as the larger commercial centres.

Express and local bus services supplement and compliment rail rapid transit services in the Sydney Region by accommodating the travel demands in lower volume travel corridors with a higher speed attractive rapid transit service. In country cities the public transport services are composed entirely of these bus services.

(c) Level o f Service The comparative levels of service standards for urban transport facilities assumed for this study are summarised in the table on the following page. As stated in Section 8, it was assumed for this study that the absolute minimum would prevail in the Sydney Region while a desirable minimum standard should apply in a country city. The levels of service for roads were based on those defined in the Road Needs Survey.

Public capital costs associated with selective decentralisation of 500,000 people from the Sydney region

264

Appendix

S u m m a r y o f L e v e l o f S e r v ic e S ta n d a r d s

fo r U r b a n T r a n s p o r t F a c ilitie s

C o m p arativ e Levels o f Service

C h ara cteristics U sed fo r C o m p ariso n D esirab le M in im u m A bsolute M in im u m

Roads E xpressw ays Average Travel Speed (mph) 40 35

Service Volumes for 3 lanes in One Direction— Cars per hour 4200 4600

M a jo r S treets Average Travel Speed Midblock (mph) 25 20

Per cent of Traffic Signal Green Time Used at Major Intersections 75-85 85-95

P ublic T ra n sp o rt R a il R a p id T ra n sit Average Travel Speed *(mph) 35 28

Per cent of Rail Car Seats filled 100 120

Frequency of Service (min.) 10 20

E xpress B uses on F reew ays Average Travel Speed *(mph) 30 25

Per cent of Bus Seats filled 100 110

Frequency of Service (min.) 15 20-30

L ocal B uses Average Travel Speed *(mph) 12 8

Per cent of Bus Seats filled 150 175

Frequency of Service (min.) 10 20

N o te : The above data represents peak-hour operating conditions in an intermediate area.

* Average travel speed between outer terminal and C.B.D. including stops.

(d) U n it C osts Unit costs per lineal foot for each road cross section shown in Figure 8 were compiled to include the items listed below, except for interchanges or structures. Clearing and grubbing—Cost per acre.

Earthworks, all costs associated with the excavation, loading, hauling, spreading, com­ paction and grading—cost per cu yd. Storm water drainage, provision of new storm water drainage lines and structures excluding kerbs and gutters—cost per lin ft. Pavement—cost per sq yard. a) Trimming and compaction of sub grade b) Basecourse and surface course. Kerb and gutter—cost per lin ft. Median; kerb and gutters, paving and/or top soil, grass, trees and other plantings—

cost per lin ft. Traffic aids; pavement markings, signing, lighting etc.—cost per lin ft. Roadside improvements—cost per lin ft.

Interchanges, the cost for typical interchanges were based on the items listed above— lump sum. _

Major structures required for principal waterway crossings—lump sum estimated for particular locations. The unit costs per lineal foot used in this study were prepared from the most recent cost data available from the DM R for the above items, verified where necessary with other cost data.

265

Public capital costs associated with selective decentralisation of 500,000 people from the Sydney region

■•p r o p o s e s TREATMENT , WO R K S .

SCALE IN MILES

.

FIGURE 12

DUBBO WATER SUPPLY HEADWORKS

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.

. ,

. ■ " V V ov -■ 1

- i · x T „ ' * < ~ 7 <

' w· ' f - J .... r - x ^ > , - ^ 4 ··

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(

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- f ’ f r - .TV' ! . . ✓ * · · . *

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s i n * n

r - X - v ' , · .{Oi ^

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Figures

267

Public capital costs associated with selective decentralisation of 500,000 people from the Sydney region

268

Figures

FIGURE 15

/ A T E

269

FIGURE 16

‘ t _ WAGGA WAGGA WATER / [ SU PPLY HEADWORKS

Public capital costs associated with selective decentralisation of 500,000 people from the Sydney region

270

B ook Five

D i v i s i o n o f

S t a te D e v e lo p m e n t V ic to r ia

C o m p a ra tiv e costs

of p ro v id in g p u b lic u tilitie s an d services in M elb o u rn e a n d selected V icto rian cen tres

Dr John Paterson

1971

Summary

The broad purpose of this Study was to determine whether there are significant differences in the costs of supplying public services to towns and cities of different sizes. In particular we sought to find out if the cost of providing and operating services in Melbourne was signifi­ cantly different from the cost of supplying the same range and quality of services in Victorian

provincial cities, such as Geelong, Ballarat and Bendigo, or in smaller centres such as Shep- parton, Wangaratta, Hamilton, Stawell and Camperdown. The method adopted was to use historical expenditure data from each of the towns and cities as a basis measuring costs of supplying police and education services, garbage collection and hospitals, water supply and sewerage, gas and electricity, telecommunications, public transport and roads, Local Government administration, parks and gardens, and certain other

Local Government services. The data were analysed in relation to the populations served in the respective towns and cities. The data collected for Melbourne were more complete than those for the other centres

and Melbourne is analysed separately in Chapter 3 to provide a benchmark for the subsequent comparative analysis. It appeared that the operation of public services in Melbourne led to an expenditure of about $116 per person per year in 1953-4, rising to about $147 per person per year in 1965-6.

During the six years 1960-61 to 1965-66 the average expenditure on urban public capital formation in Melbourne was about $2,236 per person. Stated differently this means that in the early sixties it cost an average of $2,236 to provide the buildings, road, pipes, wires and other public sector plant necessary to meet the demand of each additional resident of Melbourne.

Apart from the requirement for additional plant to meet the demand of new residents, the existing population increased their rate of service utilisation; households used more electricity, made more motor trips, filled more classrooms with advanced secondary school pupils and so on. Increased utilisation by existing residents led to capital investment of about $25.4 per

resident per year. Capital spending required to meet the changing demands of existing residents accounted for about one-third of total public capital formation, while population growth accounted for the other two-thirds. The data relating to non-metropolitan centres were less complete than those relating to

Melbourne, so it was not possible to make cost or expenditure comparisons over the full range of public sector functions. In the case of those services for which data were available it appeared that operating costs in Melbourne were lower than elsewhere over-all, although there was not much in it one way or the other. The position varied from service to service and from

city to city. Among the non-metropolitan centres costs varied over a wide range. The capital cost of service plant appeared to be substantially lower in Melbourne than in the non-metropolitan centres. There are very substantial difficulties involved in making comparisons of capital costs because capital investment, being long-lived, is difficult to associate

with any single measure of output. This matter is discussed at length in the text; for summary purposes it is safe to say that the cost of services in non-metropolitan centres was at least fifty per cent higher on average than the cost of services in Melbourne.

273

For many of the public utility services, mean spending gave a poor indication of the actual position because unit costs in the individual towns varied so much around mean unit costs. In the case of several services the size of the urban area did seem to have some influence but other factors were evidently of far greater importance in determining unit costs. This was particularly true among the non-metropolitan centres. The wide variation found in unit

costs for given services between towns is a significant finding in itself because it indicates the importance of factors other than size in determining the efficiency of public sector operations (1). It appeared from the data analysed in this study, as it has in other work on public sector costs, that factors such as managerial efficiency and the geographical location of population

centres are very important influences on the cost of supplying services.

Comparative costs of providing public utilities and services in Melbourne and selected Victorian centres

274

C o n ten ts

S um m ary page 273

1. In tro d u c tio n 277

2. P u b lic C osts, P riv a te C osts an d D ecen tra lisatio n Policy 280

3. P u b lic S ecto r O p e ratio n s in M elbourne 284

4. T he H isto ry a n d E conom ic C h ara cteristics o f th e Study Towns 293

5. C o m p ariso n o f P ublic S pending on C u rre n t A ccount in M elbourne a n d O th e r U rb a n C en tres 305

6. C o m p ariso n o f P ublic S pending on C a p ita l A ccount in M elbourne a n d O th e r U rb a n C ities 328

Appendix

I. Current Expenditure Melbourne 1953-4 to 1965-6 338

II. Capital Expenditure Melbourne 1953-4 to 1965-6 339

Tables

1. Population in Towns Grouped by Size Range at 1961 282

2. Context of Melbourne Public Capital Expenditure 1953-4 and 1965-6 284 3. Synopsis of Spending Percentages 285

4. Percentage of Current Expenditure 286

5. Percentage of Capital Expenditure 287

6. Analysis of Capital Spending 1960-1 and 1965-6 289

7. Population Size Distribution of Urban Centres in Victoria at 1966 296

8. Study Towns — Employment in Some Main Industry Groups as a Proportion of Total Employment 1966 297

9. Study Towns — Employment of Industry Sub Groups as a Proportion of Total Employment 1966 298

10. Census Population 299

11. Total Population Growth Over Intercensa! Periods 300

12. Annual Average Population Growth over Intercensal Periods 300

13. Estimated Net Migration Between Urban Centres and the ‘Rest of the World’ 303 14. Current Expenditure 1965-6 306

14. A Current Expenditure — Per Capita 1965-6 307

15. Operating Expenditure 1965-6 Larger Sample of Victorian Towns 308

16. Comparison of Per Capita Operating Expenditure for Melbourne and Smaller Centres 1965-6 309

17. Capital Expenditure 1963-4 to 1965-6 — Study Towns 329

18. Capital Expenditure 1953-4 to 1965-6 — Larger Sample of Victorian Towns 330

275

19. Analysis of Incremental Capital 1953-4 to 1965-6 331

(A) Capital Spending per Head due to Increased Utilisation (B) Capital Spending per Head due to Increased Population 20. Comparison of Per Capita Expenditure for Melbourne and Smaller Centres 1953-4 to 1965-6 332

(A) Base Population Form (B) Incremental Population Form

Figures

4.1 Age-Sex Distributions of Study Towns at Census 1954, 1961 and 1966 301 5.1A Police — Operating Expenditure — Towns less than 20,000 Persons 1965-6 311 5.IB Police — Operating Expenditure — Study Towns 1965-6 312

5.1C Police — Per Capita Operating Expenditure 1965-6 313

5.2 Education — Operating Expediture per Enrolled Student 1965-6 314

5.3A General Hospitals — Cost per Occupied Bed Day 1965-6 316

5.3B 19 Metropolitan General Hospitals — Cost per Occupied Bed Day 1965-6 317 5.3C 24 Non-Metropolitan General Hospitals — Cost per Occupied Bed Day 1965-6 318 5.4A Sanitary and Garbage— Per Capita Operating Expenditure — 46 Metropolitan Municipalities 1965-6 320

5.4B Sanitary and Garbage — Per Capita Operating Expenditure — 18 Non-metropolitan Municipalities 1965-6 321

5.5 Water Supply — Per Capita Operating Expenditure 1965-6 323

5.6 Local Government Administration — Per Capita Operating Expenditure — 18 non-metropolitan Municipalities 1965-6 324

6.1 Water Supply Capital Expenditure 1953-4 to 1965-6 334

Comparative costs o f providing public utilities and services in Melbourne and selected Victorian centres

276

In tro d u c tio n

1

Following the 1964 Premier’s Conference, a joint Commonwealth/State Committee on Decentralisation was established, comprised of officials of the Commonwealth, New South Wales and Victorian Governments. The Committee was directed to consider the economic justification for a policy of decentralisation of population. Particular emphasis was given to the dominance of Sydney and Melbourne in the affairs of the two States.

Arguments for decentralisation have frequently been couched in social and political terms. The force of such arguments tends to depend on the personal values of those to whom they are addressed. Some people regard large metropolitan areas as undersirable p er se, while others positively prefer life in large cities and see little virtue in provincial centres.

The Commonwealth/State Committee took the view that no case for decentralisation could be conclusively established in purely social and political terms. To be convincing, a case must also be made in terms of economic justification. Any active program to decentralise population within the State would inevitably require considerable public spending, at least in its early stages. It was felt that such spending could be justified only if it could be shown to reap a return at least equal to the return which could be earned in other fields of public

spending, such as on education, or northern development, or on services in existing cities and towns. (1) The Committee focused its attention on two broad economic questions. It appeared that non-metropolitan population growth would depend on the creation of jobs in provincial

cities. This would only occur if private employers could be induced to locate their plants and offices outside the metropolitan areas. Private location decisions of this kind would depend on whether non-metropolitan locations could be shown to be as profitable as metropolitan locations. Consequently the first area for attention was the effect of ‘decentralised’ locations

on private enterprise production and marketing costs. The second economic question related to the effect of accelerated growth of provincial cities on the total cost of public services for the economy as a whole. The addition of a new household to any urban area requires considerable investment by the various ‘service authorities’

on water and· sewerage, schools, roads, hospitals, and so on. The growth of population also calls for more expenditure on the operation of the services once the additional investment has been made. Teachers, policemen, meter readers and maintenance men must be employed, again at a cost to the public sector. The Commonwealth/State Committee thus took the view that to justify a new emphasis on decentralisation, some account must be taken of the effect

of this policy on the cost of supplying services in the metropolitan areas and in provincial cities and towns. It was decided that the States of New South Wales and Victoria should undertake studies aimed at clarifying these issues. To this end, both undertook ‘Private Cost Studies’, aimed at determining the experience of private employers who were in fact operating at non-metro­ politan centres. These have subsequently been completed and published under the titles R e la tiv e A d va n ta g es o f C ity and C ountry Locations as Seen by Industrialists, Division of State Development, Victoria, 1968, and In d u s tr ia l L ocation S u rv e y , The R ela tive A dvantages o f

277

Metropolitan and C o u n try Locations as Seen by Industrialists, Department of Decentralisation and Development, N.S.W. 1969. Although the determination of ‘Public Costs’ would appear to be a relatively straight forward matter, on closer inspection, this is anything but the case. Some of the problems associated with measuring the cost of public services are discussed later in this Report. In the initial planning o f the research on ‘Public Costs’ these problems were not fully anticipated, and both New South Wales and Victoria undertook to ascertain the effects of town size on the cost of ptiblic services.

In the early Commonwealth/State discussions which set up this research program, two approaches to public cost estimates were proposed. These were described respectively as the ‘Historical Costs’ and ‘Forward Estimates’ approaches. It was originally planned that each State would undertake both Historical Costs and Forward Estimates studies. After the amount of work involved came to be more fully appreciated, they decided to specialise. New South Wales briefed engineering and town planning consultants to undertake the Forward Estimates study. A number of towns were selected, outline plans prepared for their extension to accom­ modate substantial population increments and the costs of undertaking these development plans estimated. On the other side, the costs saved by reducing the growth rate of Sydney were estimated, and the results compared. The study and its findings have been published as Report on Public C a p ita l Costs Associated w ith Selective Decentralisation o f 500,000 people from the Sydney R egion, Department of Decentralisation and Development, N.S.W. 1970.

Victoria undertook to attempt an ‘Historical Costs Study’. To that end a meeting of representatives of the various departments and instrumentalities engaged in the supply of services in Victoria was held at the end of 1967. With the guidance of specialists made available by the Commonwealth, methods were mapped out for the collection of historical data from these authorities’ records. In most cases the departments and instrumentalities agreed to prepare the information themselves, along lines suggested by the Commonwealth. This body of data was returned to the Division of State Development, Victorian Premier’s Department,

by mid-1968. Difficulties had been encountered by some of the collaborating authorities when it came to retrieving data from their own records in a form consistent with the guidelines laid down. In some cases this was due to inadequacies, for the purpose of this Study, in the internal records of the authorities themselves. In other cases however, it arose from certain weaknesses in the analytical framework which had been laid down. Other difficulties arose when the data

came to be analysed. Late in 1968 the author, then a Research Scholar in the Urban Research Unit at the Australian National University, was approached for guidance on the analysis of the historical data which had been assembled. In the light of discussions it was decided that to complete the Study a modified framework of analysis would be required, and that a certain amount of extra data should be collected. The main problem with the data previously collated was that it related to expenditure, and expenditure is quite a different thing from costs.

In economic parlance, ‘expenditure’ relates to total inputs, whereas ‘cost’ means total inputs per unit of o u tp u t. For example to produce ten pounds of sausages it may be necessary to ‘input’ so many cents worth of materials, and so many cents worth of labour. Expenditure will be the sum of labour and materials inputs. The cost o f one pound of sausages will be one-tenth of the total expenditure involved in making ten pounds. One can only talk about the cost of sausages if one knows how many pounds were produced with the amount of expen­

diture incurred. The difficulty of measuring the cost of public services arises from the fact that, while expenditure may be easily ascertained, the measurement of output is often a far more difficult matter. While the output of a sausage factory is readily measured, the output of a school, hospital, fire brigade, police station or of municipal government is not. If output cannot be measured, then strictly speaking, costs cannot be measured.

In later sections o f this report we shall often return to the difficulties, both practical and theoretical, which arise in any attempt to measure the cost of public services. The problems

Comparative costs o f providing public utilities and services in Melbourne and selected Victorian centres

278

Introduction

of public cost measurement are well discussed by Hirsch in reference (2) to which anyone seeking a deeper understanding of this area of applied economic methodology may turn. For the moment it will suffice to indicate the nature of the problem of public cost measurement in very general terms.

The word expenditure denotes only a financial outlay. I f we know from its accounts that a municipality had an expenditure of $1,000 on road construction, we know what part road construction took of the total municipal budget, but we know absolutely nothing about how much road was constructed. The word cost denotes expenditure per unit of output. If we know the cost of road construction in a particular area, we can infer how much road was built for a given expenditure. To make comparisons between different municipalities’ road building efforts we need to know both expenditure and unit costs for each municipality.

The basic objective of the Victorian Historical Cost Study was to obtain information about the relative costs of settling population in different places. To obtain the cost data for making comparisons between different towns and cities, it was therefore necessary to know both expenditure on each service, and the output of each service in each of the centres used in the comparison. Without the output data, nothing could be said about costs. An example

may help. Suppose we find that two towns are spending identical amounts on road construction. This in itself tells us practically nothing. One may be perched on a hillside, where each yard of road requires a heavy outlay to blast through rock and where heavy expenditure is incurred through earthworks and structures. An outlay of $1,000 may buy very little road. The other town is on a level, well drained plain with firm subsoil conditions. An outlay of $1,000 will build a lot of road.

The data previously collected for the twenty four towns and cities were not associated with any direct measures of output, such as gallons of water, school enrolments, etc. Without these quantitative statistics only limited conclusions could be drawn regarding service costs. To fill this gap it was decided that in addition to looking at the data in terms of town size, as

originally proposed, an ‘in depth’ study should be made of a smaller number of towns. However certain difficulties remained. Even when the quantity of output was accounted for, differences remained in quality. The objective of the additional research was to investigate qualitative aspects of the supply

of services. By investigating the actual experience of the smaller sample of towns it was hoped that some light might be shed on aspects of the supply of services which could not be revealed by analysis of the extensive but logically incomplete quantitative data already available. The logic of such an approach was as follows. Firstly, because many aspects of service output could not be quantified, the analysis of expenditure data was likely to lead to inconclusive results.

Given that the results of the historical costs study were likely to be open to question, the emphasis should be shifted to a broader examination of the towns themselves. From this it may be possible to focus attention on the factors other than town size which could account for differences in service expenditure between towns. The insights thus gained could be an

aid to clearer thinking on the issues relating public spending to decentralisation. The nine centres for more detailed study were chosen from the previous list of twenty four. Melbourne, Geelong, Ballarat and Bendigo, the four largest in the State were retained. Five smaller towns were chosen

(i) to give a spread of sizes, and (ii) with an eye to statistical convenience.

All had virtually constant municipal boundaries between the Censuses of 1954 and 1966, and the municipal areas were dominated by the town sites. In this they contrasted with many other provincial municipalities, which contained a significant township together with sub­ stantial non-urban area. The five smaller towns, with their 1966 populations in parenthesis, are Shepparton and Wangaratta (17,487 and 15,175), Hamilton (10,054), Stawell (5,909) and

Camperdown (3,540).

279

P u b lic Costs, P riv a te C osts an d D ecen tralisatio n Policy

2

Before discussing the findings of the Public Cost (Historical) Study in detail it is worth pausing to put the findings of the public and private costs studies in an economic perspective. In this Chapter we briefly consider the general significance of such studies as guides to policy. One can approach the question by considering a more general question. We may assume broadly that economic policy is directed toward achieving some given rate of population growth, some given rate of growth of per capita incomes, and some given distribution of income and wealth. It then becomes possible to ask:

(i) what geographical distributions of national population are consistent with achieving these broad economic objectives, and (ii) which of these distributions is optimal ?

The geographical distribution of population is almost entirely determined by the geo­ graphical distribution of economic activity. If the level of activity declines in a particular area, then the incomes which may be earned in that area also decline, and people leave. Entre­ preneurs locate their businesses where they believe that profits can be earned. Where profits are earned, businesses tend to flourish, to grow and to employ more people. Where the entre­ preneur picked the wrong location his growth prospects suffer. In the long run it is these forces which have the determining influence on the distribution of population. In a market economy such as we have in Australia, the actual location of economic activity can be taken as a first approximation to the most efficient location.

This assertion however, must be hedged in several regards. The contemporary location of population and economic activity is not entirely the product of contemporary market forces, because location decisions by households, firms and Government instrumentalities are not made on a day to day basis. Once a firm or household is established in a town it may often remain there even though its income could be increased by moving elsewhere. People develop attachments to a way of life, a social climate, or a familiar place, which makes them willing to forego material benefits which could be obtained by moving. We might say that inertia can cause a divergence between the actual distribution of population, and that distribution which is indicated by market forces and Government policy.

Habit, tradition and intertia often seem to allow towns or industries with ‘a past’ to support a considerable population, at a relatively low income, even where there is little present justification for population remaining where it is. There is also considerable evidence that once an urban system reaches a certain size cumulative processes can come into operation and maintain the growth of the system even after the locational advantages which led to its initial establishment have disappeared. Summarising this point we may say that once a pattern of location is established, strong forces may operate to maintain that pattern, even though the factors which led to that pattern have subsequently changed.

Australia’s population is one of the most ‘urbanised’ in the world, in the sense that a very large proportion of the total population lives in a very few large cities. Advocates of decentral­ isation have usually relied upon arguments based on the factors of inertia and cumulative

280

growth processes to explain Australia’s pattern of population distribution. Such arguments tend to be raised against others who would assert that, since the population is so centralised in metropolitan cities, there must be sound economic reasons for such a location pattern. Factors such as inertia and cumulative processes are often described as ‘dynamic’. A

dynamic process is that in which tim e is of importance in its own right. Where inertia or cumulative processes are operating, the population of a town or region is strongly influenced by its population level at some previous time. Similarly the level of economic activity and growth rate of the town is related to institutions, resources and expectations established at some previous time.

In addition to these dynamic factors which may cause the actual distribution of popula­ tion and economic activity to diverge from the ideal distribution, there are also factors which are commonly described at ‘static’. In the present context the most important static influences are those known by economists as ‘externalities’. An ‘externality’ is present when the activities of an enterprise or household confer advantages on other establishments for which no charge is made, or imposes disadvantages on other establishments for which no compensation is given.

For example the driver of a motor car may pay a substantial price to own and operate a car, but his use of it imposes disadvantages on other road users by adding to traffic congestion, and imposes disadvantages on people who breathe the air which has been polluted by his passage. These are negative externalities associated with use of the car, because those who are disadvantaged receive no compensation, and those who benefit by being free to enter the traffic stream and free to emit combustion products do not directly pay the price of doing so.

It has been argued that the actual distribution of population in Australia does not reflect an economically desirable distribution, because those who make private location decisions do not take the externalities created by their location decision fully into account. In particular it is often argued that people who choose to live, or to conduct their businesses in the great metropolitan areas, do so without being faced with the full social costs associated with their choice. One important set of costs which is not directly borne by the user is the cost of supplying public services. Consequently the location decisions made in the market place may not take account of the differential impact of location choices on costs to the public sector. Private establishments maximise their own location net benefits and the public sector picks up the bill.

It was this line of thinking which led to the present Study being commissioned. We are now in a position to put public sector costs into perspective as a desideratum of decentralisation policy. The fact that service costs may be high in one place and low in another has no necessary implication for public policy. The difference only has policy significance if it can be shown that establishments choosing between the two places have not taken the cost difference into account. Where it can be shown that a different balance would have been achieved had those choosing the expensive place been charged, or those choosing the cheaper place been compensated, then public sector costs will be an important policy consideration. On the other hand if the act of charging or compensating private establishments made no significant

difference to· population distribution, then public cost differences would not be a significant consideration in economic policy. Having looked briefly at the role of public costs in the context of a static analysis, we may now return to the dynamics of the matter. Supposing for the moment that a decision is made to divert growth away from the major metropolitan areas, a number of policy alternatives remain open. At one externe we might consider putting all our eggs in one basket and attempting to develop one non-metropolitan centre to a metropolitan size. This centre might be a ‘New Town’ like Canberra, or an extension of an existing provincial city. At the other extreme we might attempt to induce population growth in a large number of smaller, well established provincial towns and cities. To the extent that decentralisation has been attempted in Australia to date it has tended towards this latter approach, that is, it has been directed at encouraging virtually any non-metropolitan growth, more or less indiscriminately. The exceptions to this policy have been the ‘New Town’ of Canberra and Adelaide’s satellite, Elizabeth. The general rule has been for State Governments to promote decentralisation by putting advantages in

Public Costs, Private Costs and Decentralisation Policy

281

the way of industries which agree to establish at non-metropolitan locations. Regardless of whether such a policy is economically sound from a national point of view, it has not been a conspicuous success. With a few notable exceptions the smaller provincial centres have not attracted a significant part of Australia’s total post war population growth.

Because of changing boundary definitions, long term growth rates of urban areas are not easily measured. However the pattern of growth of Australia’s urban areas between the Censuses of 1961 and 1966 is suggestive. The highest rates of population growth occurred in urban areas in the size ranges 50,000-999,999 and 1,000,000-1,999,999. The eleven cities in these groups had an average annual growth rate of 5.4 per cent, well over twice the rate (1.9%) experienced by Australia as a whole. The two cities over two million (Melbourne and Sydney) and the 51 urban areas with populations between 10,000 and 49,999 grew a little faster than the national population. Towns between 5,000 and 9,999 had a growth rate identical to Total Australia, which means they just held their proportion o f the national population. At 1961 there were 2,798,000 people (26.6% of the national total) living in settlements of less than

5,000 people. This group declined in absolute terms over the following five years, losing a net 104,000 people and at 1966 accounted for only 23.3 per cent of Australian residents. The eleven cities in the 50,000-1,999,999 range, constituting the smaller State capitals and largest provincial centres, increased their share of national population from 22.3 per cent to 26.3 per cent over those five years.

Comparative costs of providing public utilities and services in Melbourne and selected Victorian centres

T a b le 1

P o p u la t io n in T o w n s G r o u p e d b y S iz e R a n g e at 1961

(Ό00)

N u m b e r 1961 P o p u la tio n 1961

P o p u la tio n 1966 In crease P e rc e n ta g e

o f 1961

Over 1 million 2 4,056 4,557 501 12.3

100,000 + 6 2,050 2,462 412 21.0

50,000 + 5 303 371 68 22.4

25,000 + 7 251 284 33 13.3

10,000 + 44 638 730 92 14.4

5,000 + 60 412 452 40 9 .7

5 ,0 0 0 - — 2,798 2,694 — 104 - 3 . 7

T o tal A u s tra lia 10,508 11,550 1,042 9 .7

Source: T a b le 5 , C en su s B ulletin 9.8 (C .B .C .S .). T h e g io u p s a p p e a rin g above re p re s e n t th e ranges M e lb o u rn e -S y d n e y , A d e la id e -H o b a rt, G eelo n g -B all ara t, G old C o a s t-C a irn s , W agga W a g g a-K a to o m b a , an d P o r t A u g u sta -M u d g e e in th e o rd e rin g o f tow ns p re s e n te d b y th e S tatistician .

It should be emphasised that major differences in the growth performance of different sized settlements does not necessarily indicate that size was the major factor determining differential growth rates. There were substantial differences in growth performances within groups which demonstrate the presence of other influences. However the pattern which we have observed for the years 1961-66 suggests a strong possibility that size was working for the eleven cities in the range 50,000-1,999,999 and against settlements under 5,000 while having a more or less neutral effect on Melbourne and Sydney, and on cities in the range

5,000 to 49,999. If this generalisation should be supported by empirical evidence, certain policy implica­ tions would follow. T here would be economic justification for public action to increase the number of urban areas with populations of around 100,000 people. The main instruments for achieving decentralisation are public spending, and incentives to private business. Operation

282

of these instruments is in itself a resource-using activity. If they are concentrated on a few cities which may then be rapidly pushed to 100,000 the social return on resources devoted to ‘decentralisation’ will be maximised. If they are scattered amongst a large number of provincial cities the social return will be reduced, because the number of towns reaching the critical population level, per unit of time, will be reduced.

Public Costs, Private Costs and Decentralisation Policy

283

P u b lic S e c t o r O p e r a t io n s i n M e lb o u r n e

3

In this Chapter we discuss the level and distribution of public spending on services in Melbourne over the thirteen years 1953-4 to 1965-6. The data was collected in the course of work for a Ph. D. in the Urban Research Unit at the Australian National University. (3) The emphasis in that study was not on aggregate expenditure as such, but rather on examining the factors which lead to different service costs for different areas, or at different times, within

a metropolitan complex. Year by year expenditure figures for the major urban services appear in the Appendix. For the range of services shown, current or ‘operating’ expenditures rose from $123 millions in 1953-4 to $310 millions in 1965-6. Over those thirteen years prices increased 44 per cent. (4) After making allowance for price increases, there was a ‘real’ increase in operating expenses for the Melbourne public sector of 75 per cent over the thirteen years. Melbourne’s population increased by 38 per cent so we can say that between 1953-4 and 1965-6 ‘real’ per capita current expenditure on urban services increased by 26.7 per cent. Stated in terms o f ‘constant 1965-6 prices’, real per capita expenditure increased from $116.1 at 1953-4 to $147.0 at 1965-6. At 1965-6 ‘personal disposable income’, that is total receipts by persons less income tax, estate and death duties, amounted to an average $1,222 per capita for Australia as a whole.

Consequently we can say that current expenditure on urban services in Melbourne was equiv­ alent to about 12 per cent of average personel disposable income. At 1953-4 the proportion was 11 per cent. Gross fixed capital investment by the Melbourne public sector was $63.6 millions in

1953-4 at current 1953-4 prices. It increased to $196.3 millions at current prices in 1965-6. There are serious difficulties attached to the common practice of expressing capital expenditure in terms of incremental population. We shall return to this later in the Chapter. To get some feeling for the magnitudes involved we shall look at public capital expenditure in Melbourne in relation to public investment for Australia as a whole.

T a b le 2

C o n te x t o f M e lb o u r n e P u b lic C a p ita l E x p e n d itu r e

1. Melbourne public enterprises and authorities ($m.)

1953-4

63.6

1965-6

196.3

2. Total Australia public enterprises and authorities ($m.) 798.0 1979.0 3. Melbourne population (m.) 1.524 2.109

4. Australia population (m.) 8.987 11.550

5. Melbourne urban per capita $ 42 93

6. Australia total per capita $ 89 172

7. Share of urban services in public sector capital spending % 47 54

284

It would appear that, if Melbourne is representative of other urban areas in Australia, then urban public capital spending accounts for about half of total public capital spending. The Melbourne data suggests that the proportion may have risen over the 13 years, from 47 per cent to 54 per cent. In summary it appears that between the mid-fifties and the mid­ sixties public spending on operation of urban services, and on capital works related to urban

areas at least held their own in an environment of rising prices and incomes. Current spending increased relative to personal disposable incomes, and urban public capital spending increased as a proportion of total public capital spending. Table 3 gives a breakdown of capital and current spending in terms of major public sector ‘functions’. Current expenditures for 1965-6 are shown as a percentage of total 1965-6 current spending. The capital expenditure data relate to the six years 1960-61 to 1965-6 inclusive. The reason for summing over a number of years is that for any particular functional group,

capital spending tends to fluctuate from year to year, so that data related to a single year can be misleading.

Public Sector Operations in Melbourne

T ab le 3

S y n o p s is o f S p e n d in g P e r c e n ta g e s

C u rre n t 1965-66 P ercen tag e

C ap ital

1960/61-1965/66 P ercen tag e

Electricity and gas 26.03 28.78

Public transport 19.01 4.17

Education 17.71 4.48

Post and telephone 9.22 11.02*

Hospitals (general) 7.40 2.17

Police and fire 4.64 1.26

Port and airports 3.99 3.74

M.M.B.W . services (water, sewerage and main drainage) 2.88 15.77

Local Government administration 2.83 —

Sanitary and garbage 1.64 —

Roads and car parking 2.01 26.17

Other 2.64 2.44

T o ta l 100.00 100.00

* T e lep h o n e only.

In terms both of capital and current expenditure, gas and electricity production and distribution constituted the largest head of expenditure, taking more than one quarter of both current and capital outlays. Electricity and gas are produced for sale on a commercial basis. Both yield substantial surpluses on current account which provide a major source of funds for capital investment. From the public sector point of view they make a positive net contribution to the State consolidated revenue.

A major part of capital spending on gas and electricity supplies is related to production, and transmission from the point of production. A substantial but minor part of their capital outlay is related to reticulation within the urban area, and only this part can be strictly regarded as ‘urban’ capital spending as such.

Melbourne’s public transport services include a radially oriented electric railway system operated by the Victorian Railways, an electric tramway system operating on the public streets, also predominatly over radial routes, and a bus network, operated in part by the Tramways Board and partly by private bus operators. Private operators are included in the Public Trans­ port expenditure figures, just as a public company, the Colonial Gas Association, operating a minor part of Melbourne’s gas supplies, was included in ‘Electricity & Gas’. The functions

285

Comparative costs of providing public utilities and services in Melbourne and selected Victorian centres

of these private enterprises, and the tight regulations under which they operate, make them practically indistinguishable from public enterprises and authorities in the more important regards. Public Transport accounted for just under one fifth of current spending and a very much smaller part of capital spending. The suburban railways made substantial losses on current account in all years, making no contribution to debt service or depreciation reserves, and in fact requiring a net subsidy to remain in operation. The Melbourne and Metropolitan Tramways Board had a sufficient surplus after meeting direct operating expenses to be able to provide for capital charges more or less on a commercial basis. The private bus lines made modest profits.

In terms of impact on the State Budget, education and hospitals make the biggest inroads into total available funds. Both of these functions yield negligible revenues in relation to the outlays incurred. At this point it is worth noting the omission o f special hospitals, mental health institutions and Repatriation hospitals from the list of services included in the table. Were these to be included the capital and current figures for hospitals w'ould be approximately doubled. The figures for education spending do not include spending on private schools, which accommodated approximately 25 per cent of all pupils enrolled in Melbourne at 1966.

Unfortunately no distinction is made between capital and current works in the accounts of the road-making authorities. Since the greater part of road spending is properly regarded as capital spending it seems best to follow official practice and put the item in the capital account.

Table 4

P e r c e n ta g e o f C u r r e n t E x p e n d itu r e

1953-54 1960-61 1965-66

Police Fire brigade Education—primary secondary

secondary technical

General hospitals Sanitary and garbage (LG) Infant health, pre-schools (LG) Libraries (LG) Water supply (M.M.B.W.) Sewerage (M.M.B.W.) Drainage (M.M.B.W.) Post offices—official

non-official

Telephone system Suburban railways (VR) Trams (M.M.T.B.) Buses (M.M.T.B.)

(Private)

Street cleaning (LG) Street lighting Car parking Port (M.H.T.) Aerodromes (3) (D.C.A.)

Gas (G. & F.C. and C.G.A.) Electricity (arb. 50% S.E.C.V.) Local Government administration (L.G.) Public halls (L.G.) Parks, gardens, etc. (L.G.)

2.90 3.13 2.79

1.48 1.51 1.63

8.37 8.95 9.86

2.31 5.09 7.62

1.39 3.67 5.36

5.06 7.40 8.41

1.67 1.64 1.48

0.23 0.25 0.33

0.18 0.38 0.55

1.50 1.41 1.44

1.59 1.38 1.34

0.13 0.09 0.17

2.83 2.57 2.68

0.23 0.48 0.49

6.94 6.17 5.35

14.94 10.06 8.31

7.37 5.60 4.21

2.29 1.26 0.98

2.27 2.09 2.19

0.82 0.82 0.83

0.45 0.48 0.54

— 0.44 0.64

1.92 2.01 1.55

— 1.98 2.07

14.28 12.46 10.08

14.74 13.57 13.72

2.03 2.83 3.07

0.39 0.46 0.50

1.68 1.83 1.82

T otal 100.00 100.00 100.00

286

Public Sector Operations in Melbourne

It has already been mentioned that various forms of health spending are omitted from the data used in this Chapter. A number of other significant omissions should be noted before proceeding with a more detailed analysis of the data:

Tertiary education. Welfare institutions for children, the aged, invalid and destitute. Central mail exchange, telegraph and trunk exchanges. Public housing, including housing for the aged.

State library, museum and art gallery. Orchestras, broadcasting and television.

In quantitative terms these are important, but expenditure on these functions is not closely tied to the rate or pattern of urban development. Table 4 shows the distribution of current spending between functions at the three census years, 1953-4, 1960-61 and 1965-6. Spending on secondary education, hospitals and Local

Government administration increased substantially more than the other services, while the importance of public transport and gas showed a substantial decline. The proportion of current spending due to the distribution networks, such as water supply, sewerage, telephones and electricity, declined to a minor extent over the period.

Table 5 shows the distribution of capital spending between functions for the two periods 1953-4 to 1959-60 and 1960-61, of seven and six years respectively. Capital spending both on

Table 5

P e r c e n t a g e o f C a p ita l E x p e n d it u r e

1953-54 to 1959-60 %

1960- 61

to

1961- 66 %

Police 0.28 0.28

Fire brigade 0.67 0.98

Education—primary 1.71 1.43

secondary 2.39 2.06

secondary technical 0.62 0.99

General hospitals 3.46 2.17

Water supply 7.79 5.32

Sewerage 5.27 9.25

Drainage 1.54 1.20

Telephone network 12.45 11.02

Suburban railways 4.72 3.25

M.M.T.B. trams 0.84 0.71

M.M.T.B. buses 0.06 0.21

Port 2.99 2.24

Aerodromes 0.96 1.50

Electricity—production 19.75 16.53

distribution 6.21 6.17

Gas 9.55 6.08

Infant health and pre-school 0.06 0.11

Libraries 0.02 0.08

Car parking 0.32 0.41

Public halls 0.19 0.80

Parks and gardens 0.28 1.46

Roads, etc.—local 12.93 16.53

network 4.97 9.23

Total 100.00 100.00

287

Comparative costs of providing public utilities and services in Melbourne and selected Victorian centres

local and metropolitan network roads, and also spending on sewerage works and parks and gardens, increased substantially more than other services. On the other hand the share of capital funds absorbed by hospitals, water supply, electricity and gas declined substantially. We shall now attempt to interpret the capital expenditure data. It has already been mentioned that the use of ‘crude’ incremental capital ratios can lead to misleading results. This may be illustrated by example. Suppose that we have a town of 100 people, consuming

100 units of some service, such as gas, electricity, water or the like. Then a year later the same town has a population of 103 people, and a service consumption of 105 units. Over that year in which consumption and population both increased, suppose that $200 were spent on capital works related to the supply of the service. We might then say that the crude incremental

capital cost of servicing the new population was $200/3 = $66.7 per person. In fact what has happened is that over the year, the utilisation rate for the service has risen from 1.00 units per person to (105/103) = 1.019 units per person. Consumption has risen by five units, but part of the rise is due to increased demand by people who were in the town at the beginning of the year. We can split up the parts of new consumption, and capital spending due to the old 100 people and the new three people respectively if we assume that both have the same consumption rate:

Shares of Shares of P er

New D em and C apital C apita

Expenditure Costs

Initial population 100x0.019 = 1.94 $77.6 $0,776

New population 3x1.019 = 3.06 $122.4 $40,800

5.00 $200.0

It would appear that in our hypothetical town, demand by old residents accounted for 1.94 of the extra five units, while increased consumption due to the three new residents accounted for 3.06 units. Assuming that the capital cost of catering for a new unit of demand was the same whether due to a new or an old resident, then the higher utilisation by old residents required a capital outlay of $77.6, while the cost of extending the service to new residents was $112.4.

Comparing our result with the crude incremental capital cost we find that the crude cost resulted in an overstatement of per capita incremental capital requirements of ($66.7 - $40.8) = $25.9, so we can say that use of the crude incremental coefficient led to an overstatement of the real incremental cost by ($25.9/$40.8) = 64 per cent. An adjustment procedure along the lines of the above example permits capital expenditure on the various functions to be divided roughly into the two components, due to:

(1) increased utilisation, (2) increased population.

We have observed in passing that the use of this procedure rests on two assumptions th at:

(a) new and old residents have the same consumption rate at any given time, and (b) that the incremental cost of servicing an additional unit of demand is independent of whether that demand is due to new or old residents.

Neither of these assumptions is strictly valid, and the accuracy of the estimates must suffer in consequence. However, when the data is to be used for comparative purposes, much more serious errors can result from using crude incremental ratios. This is because the percent­ age error involved in use of crude incremental ratios is positively related to the rate of utilisation increase for a particular service and inversely related to the population growth rate of the town during the period over which the measurement is made. The incremental cost of services in a slow growing centre will always be overstated relative to a fast growing centre if crude incremental ratios are used. Within a given town the incremental cost of a service with a rapid

288

Public Sector Operations in Melbourne

increase in utilisation rates will be overstated relative to one for which per capita demand is relatively constant. After making these adjustments to the respective functions’ spending data over the years 1960-61 to 1965-6 it appeared that increased utilisation of public services accounted for about 33 per cent of the $922 millions total capital spending. Increased population accounted for the rest. The adjusted incremental capital cost of services was ($621,712,000/278,000) =$2,236. Thus it would appear that during the early sixties it was costing about $2,236 to outfit each new Mclbournite with service facilities. The ‘crude incremental’ method of calculation would have given a figure of ($922,097,000/278,000) = $3,317 leading to an overstatement of the real cost of servicing a new resident by about 48 per cent.

If we take the mean population o f Melbourne over the period 1960-61 to have been (1,831,000 - 0.5 X 278,000) = 1,970,000 then increased utilisation of services by existing residents resulted in public capital spending of ($300,385,000/1,970,000) = $152.5 per resident over the six year period. In annual terms this means capital deepening cost about $25.4 per resident per year. If Melbourne’s experience is representative of similar cities this would lead

us to expect that for a city of say two million people, public capital spending of ($25.4 X 2,000,000) = $50.8 millions per year could be incurred even if the city had zero population growth.

Table 6

A n a ly s is o f C a p ita l S p e n d in g : 1 9 6 0 - 6 1 to 1 9 6 5 - 6

A nnual Average C apital Spending P ro p o rtio n o f Total

Increase of due to C apital due to

U tilisation Increased Increased Increased Increased

(P ercent) U tilisation P opulation U tilisation P opulation

(1) (2) (3) (4) (5)

Primary education 0.3 1,292 11,876 0.14 1.29

Secondary education 4.7 16,602 11,498 1.80 1.25

Hospitals 1.0 5,366 14,672 0.58 1.59

Water supply 0.0 — 49,074 0.00 5.32

Sewerage 0.0 — 85,262 0.00 9.25

Telephone system 4.9 60,885 40,687 6.60 4.41

Railways 0.0 — 29,928 0.00 3.25

Tramways 0.0 — 6,582 0.00 0.71

Electricity 8.0 103,798 48,592 11.26 5.27

Gas 0.9 13,691 42,365 1.49 4.59

Local roads 0.0 — 152,422 0.00 16.53

Network roads 5.3 52,377 32,773 5.68 3.55

Other — 46,374 95,981 5.03 10.41

T otal 300,385 621,712 32.60 67.40

100.00

Base population 1,831,000 1960 30 June End population 2,109,000 1966 30 June Incremental population 278,000

Table 6 shows the capital expenditure on the twelve largest public sector functions in Melbourne apportioned between the two elements of increased demand. The change in utili­ sation rates was calculated as an annual average for the five years after 1961. The annual average change was then used to apportion the six years’ total capital expenditure on each of the

12 functions from 1960-61 to 1965-6 inclusive. There was no significant increase in per capita water consumption or per capita sewerage generation, so for these two services all capital outlays were treated as being due to the demand of the incremental population. Per capita

289

Comparative costs of providing public utilities and services in Melbourne and selected Victorian centres

utilisation of the railways declined at an average 1.9 per cent annually and per capita utilisation of the tramways declined at an annual 5.2 per cent over the five years following 1960-61. Because lower utilisation does not generally permit significant dis-investment in permanent way or rolling stock, capital spending on these services was treated identically with the services for which utilisation rates were constant (water supply and sewerage) and incremental capital attributed entirely to the growth of population. Local roads were also treated as having constant utilisation rates. Consequently for water supply, sewerage, railways, tramways and local roads the crude incremental was identical with the adjusted incremental capital cost.

The other seven services showed varying degrees of increased utilisation. The 0.3 per cent annual average per capita demand for primary school places was due to an increase in the proportion of primary school aged children in the population. The much stronger growth of demand for secondary school places was due in part to an increased proportion of the population in the adolescent years, but more importantly to an increase in the proportion of that age group remaining at school in the higher secondary grades. After adjustment it appears that most of primary school capital spending was due to increased population ($11,876 m.) and only about 10 per cent due to the increase in the primary school age group as a proportion of the population. For secondary schools, on the other hand, the major part of capital spending was attributable to increased utilisation, so that the parts of primary and secondary capital school spending attributable simply to urban growth were almost identical (i.e. primary

$11,876 m. and secondary $11,498 m.). Electricity experienced an average eight per cent annual increase in per capita consump­ tion while the demand for gas grew at only 0.9 per cent. Consequently the capital spending on these services attributable to urban growth was fairly similar, and in fact the major part of electricity capital investment was required to meet the growing demand of existing consumers. The same was true of spending on the telephone network and on the metropolitan road net­ work. Apart from twelve major functional groups it was not possible to obtain utilisation rates which could provide a reliable basis for the apportionment of capital spending. The remaining functions, accounting in total for 15.4 per cent of capital spending, were grouped as O th e r’ and apportioned between the existing and incremental population in the same proportions as the sum of the twelve major functions.

It appears from this analysis that of the total $922 m. spent on public capital formation in Melbourne over the years 1960-61 to 1965-6, about one-third was due to increased demand by 1,831,000 existing residents, and about two-thirds were due to the requirements of the additional 278,000 residents who were added during the period. In per capita terms the base year population was responsible for ($300.4m ./l.831 m.) = $164.1 and the incremental population for ($621.7 m ./0.278 m.) = $2,236.4 of public capital formation. Stated differently we could say that capital spending of $27.3 per capita per annum was required to meet the increasing demand for services by each existing resident of Melbourne, and that $2,236.4 was required to outfit each new resident with the full range of urban services.

The adjustments make some dramatic changes in the distribution of spending between services, relative to the unadjusted figures. From Column 5 of Table 6 it can be seen that local roads and sewerage become the largest components of adjusted incremental capital costs, accounting between them for 26 per cent of all capital spending (including that due to increased utilisation) and accounting for almost 40 per cent of adjusted incremental spending due to population growth. Water supply, telephones, electricity and gas all account for around 7.5 per cent of the adjusted incremental cost, and metropolitan network roads account for just over five per cent. Almost one quarter of all urban public capital spending between 1960-61 and 1965-6 was required to provide capacity for the growing utilisation rates on the telephone, electricity and main roads networks.

The main objective of this Chapter has been to provide some magnitudes for comparison with Victorian provincial centres, and to allow some general discussion of problems associated with the measurement of public sector ‘costs’. A few other general considerations must be raised before we proceed to the data relating to the non-metropolitan centres.

290

Public Sector Operations in Melbourne

We have attributed capital spending to two sources of demand, that is to increased utili­ sation and increased population, but there are in fact a variety of other factors which can operate to complicate the picture further. The arbitrary line between capital and maintenance works has already been noted. In a city with old established services, renewals can be an important part of gross works spending. Where the city is growing, renewal works may be brought forward and combined with capacity expansion works. For example a pipeline may be scrapped before its physical life is over because there is demand for an additional main to meet new requirements. The new main can serve both new and old customers so that the old main is no longer required. Similarly in fixed rail technology recent improvements in techniques often make new capital works economically justifiable as a means of reducing operating and maintenance costs, even when demand is constant or falling. The Local Roads item in this Chapter is undoubtedly overstated because it includes a large component of maintenance spending, some of which may be of a

capital nature, but much of which is concerned with patching up pot holes. Spending on some services is of a very ‘lumpy’ nature. For example when a water supply reservoir and catchment system or a sewage treatment plant reaches the limits of its capacity, a new unit will be required. Generally such a unit will be large, because these items of service plant are marked by very great economies o f scale. If a dam must be built, then usually it will be efficient to build one which will meet expected requirements for some time into the future.

Consequently, during the time the reservoir is under construction, capital spending on water supply will appear to be very high. Once construction is completed there may be sufficient surplus catchment and storage capacity in the system to cater for increasing demand over several decades into the future. In these future years total water supply capital costs will be relatively small because expenditure on the headworks component approaches zero. Thus if

we compare two towns over a period of years in which one is constructing a new major head-work while the other is enjoying the benefits of previously constructed head-works, the latter will appear to have much lower incremental capital costs than the former. The only adequate method of controlling for this source of error when making comparisons is to make the comparisons over a long period of time, in the hope that measured costs will approach the real long run incremental cost, and to use discounted expenditure and output streams to bring all values back to a common comparison year. In the present study the available data were not an adequate basis for such an approach.

One final restriction on the comparability of expenditure data which should be mentioned is that due to variable lags. When we corrected the capital outlays for the effect of increased utilisation rates we then took the adjusted incremental capital figure to be proportional to incremental population. We implicitly assumed that the capital spending observed in the years

1960-61 to 1965-6 was required to provide services for the new residents. This assumption is not necessarily well founded. In Melbourne, for example, during the sixties, new households could usually obtain connections to water supply and electricity almost on request and without significant delay. Frequently there were delays in extension of sewerage and telephone services to new areas and road construction lagged behind residential development in some areas. For

most services the lag tended to fall from the late fifties onward. This is another way of saying that service backlogs were made up to some extent, so that actual service extensions were greater than would have been required simply to keep up with population increase as measured

between the 1961 and 1966 Censuses. Thus the adjusted incremental capital cost will tend to overstate unit incremental costs for the various services to an extent which is positively related to the rate at which the backlog was overcome for each particular service. Generalising we can say that the adjusted incremental capital costs of a particular service

will be overstated if measured over a period in which the lag was reduced. When it comes to making comparisons between towns, in Chapters 5 and 6, we can do little more than bear this restriction in mind. The data are certainly not sufficient to permit any adjustments to be made.

When we come to compare public sector spending between urban areas in Chapter 6

291

we shall use incremental capital ratios both in the crude and adjusted forms. In view of the restrictions on comparability which we have noted this may seem surprising. The reason is that figures adjusted for any single factor amongst the many which limit comparability may in

fact be worse in terms of any other factor or set of factors. The only really satisfactory means of controlling simultaneously for the many variables which can affect observed incremental costs is by constructing a mathematical model of the production function for each service and using the model to generate multidimensional adjustment factors. Such an approach is well beyond the scope of this study.

In the next Chapter we shall briefly survey the characteristics and history of Melbourne and the eight Victorian cities and towns which were chosen for intensive analysis. The des­ criptive data presented in outlining the history and economic characteristics of the eight towns can later be used to help make some qualifications to the cost comparisons.

Comparative costs o f providing public utilities and services in Melbourne and selected Victorian centres

292

The History and Economic Characteristics of the Study Towns

4

This Chapter attempts to put the recent growth and operation of public services in the metropolitan area and eight provincial centres within the context of the long term growth pattern and economic structure of those respective centres. The origins of a population centre usually affect the physical lay-out and the availability of services in the centre. A town’s

historical pattern of growth leaves physical evidence in the age of its buildings and service plant, so that periods of rapid growth are indicated by large numbers of houses and buildings, while periods of stagnation generally leave little residual contribution to the capital stock. Where a town had an opulent beginning, perhaps as a gold rush centre, this tends to leave its mark in the form of grandiose public buildings and numerous pubs. The economic structure

of a town also makes its mark on the physical form and structure of public utility plant. A town whose main function is to service its hinterland tends to have a relatively large retail and wholesale market area. It generally requires less in the way of water, sewerage, power and transport than another town based on manufacturing industry. Such matters are the subject

of this chapter. Melbourne and Geelong were established in 1835 when the pressure of pastoral expansion in Tasmania overflowed into the Port Phillip District of the Colony of N.S.W . Melbourne quickly established its dominance over its early rivals for primacy in the District. Outside

Melbourne, rural centres developed to service the pastoral hinterland of Vcitoria during the 1840s. The seven inland centres to be analysed in this study appear to have had their first stirrings during the forties. The discovery of gold led to an economic boom and rapid population growth in Victoria

during the 1850s so that by 1861 Melbourne had grown to 126,000 and the rest of Victoria held 413,000 people. Ballarat, Bendigo, Shepparton and Wangaratta received a major influx of population during the 1850s from the activity in their adjacent gold fields. The three smaller towns, Camperdown, Stawell and Hamilton developed as rural service centres. From about

1870 to the present day, Melbourne has absorbed the lion’s share of Victoria’s population growth; the metropolis held 24 per cent of the State population in 1861 and 66 per cent in 1966. The diversity of the growth experiences of the urban centres considered in this study

cannot be put down to any single factor. Melbourne, the centre of Government administration, consolidated its position as the State railway system fanned out from its port and as vested interests were established in Melbourne and used their influence over the State Government to protect the primacy of their city. By hampering port and transport development in Geelong, Melbourne was in a good position to develop its own commercial and financial institutions and to handle a lion’s share of the business induced by gold production. As the gold fever receded, Melbourne was ideally placed to offer employment opportunities to a major part of Victoria’s recently acquired workforce.

Geelong and Melbourne were connected by rail only in 1857 when the main effect of the gold rushes had passed. The first dredging of a channel from the port into Corio Bay began in 1852 but proceeded slowly for financial reasons. In 1856 a deputation from Geelong to the

293

State Governor uring greater effort on port deepening, was told that the current inaction was due to, ‘the strong influence exterted by certain officials to draw commerce to Melbourne’. Consequently during Victoria’s first great growth period, the decade of the fifties, Geelong was substantially by-passed by traffic through the port of Melbourne, even though Geelong was better located than Melbourne relative to the Ballarat gold fields.

At 1851 Melbourne had a population of 25,000 and Geelong about 9,000. A decade later Melbourne had grown to 126,000; a figure which Geelong has yet to achieve. Geelong’s smaller size retarded the development of public utilities, introducing a qualitative difference between the amenities offered by Melbourne and by its early rival. Geelong’s population grew slowly to about 40,000 by 1925, with some manufacturing industry, concentrated in woollen mills, salt and cement works. In 1925 the Ford Motor Company established a plant at Geelong, ushering in a new period of growth, based on the engineering industries. This has subsequently widened the gap between Geelong and the other Victorian provincial towns and cities.

In 1853 about 20,000 miners worked the shallow diggings of the Ballarat gold fields. When these diggings were exhausted in the 1860s, companies were formed to exploit the deeper quartz load. The area reached a peak of activity in about 1868, when the field was being worked by some 300 companies and held a population of about 64,000. Ballarat was proclaimed a City in 1870, but with the decline of mining the population fell, to stabilise at a level which could be supported by non-mining pursuits. The survival of Ballarat and to a lesser extent, o f Bendigo, as significant centres of population over a century in which many other mining centres became deserted ghost towns, can be put down to the nature of the mining industries in their respective hinterlands. After attracting large numbers of small operators to their rich alluvial fields, Ballarat and Bendigo became centres for deep m ining companies, employing large numbers of workers and requiring substantial investment in mechanical equipment.

Industries sprang up to build and maintain mining machinery, and as mining declined the more enterprising engineering concerns diversified to produce for other markets. Foundries and engineering shops began exporting mining machinery and railway plant, and also produced agricultural machinery for the local market. The engineering base was capable of supporting the requirements of textile manufacture. The building materials manufacturers which had

developed to serve local demand during the mining boom turned their hands to the production of bricks, tiles and stoneware pipes for a wider market. Ballarat witnessed the development of still more diverse engineering manufactures during the period between the World Wars, with the commencement of agricultural engines and valves manufacture, continued growth o f textiles and the establishment of bacon curing. After the Second World War industrial development accelerated, with an emphasis on more sophisticated light and heavy engineering

products. The early diggings at Bendigo were characterised by alluvial lode which required a reliable water source for refining. Water shortage was a major problem, and quartz reefing (i.e. deep mining) began to take over from about 1860. The industry prospered until about 1915 and then gradually declined until 1955 when active mining ceased. Bendigo was connected to

Melbourne by rail in 1862 and major railway workshops were later established to make Bendigo the maintenance centre for Northern Victoria. The city subsequently became the centre for a regional complex of highways and railways which facilitated its development as the market and service centre for a large agricultural hinterland. It provided an outlet for the vast wheat- fields of the Mallee and Wimmera. Meatworks and flour mills produce poultry feed and the Victorian poultry industry is now centred within a 20 mile radius of Bendigo. The livestock market is one of the State’s largest and the Victorian Inland Meat Authority processes a major part of the throughput locally, slaughtering sheep, cattle and pigs, and processing and packing ham and bacon.

Irrigated areas adjacent to Bendigo produce dairy products, apples and pears, and to a lesser extent, citrus fruit, much of which is also processed at Bendigo. An ordnance factory established during the Second World War continues to provide some industrial employment, but the city is pre-eminently a market and transport service centre.

Comparative costs o f providing public utilities and services in Melbourne and selected Victorian centres

294

The History and Economic Characteristics of the Study Towns

Shcpparton and Wangaratta were also established as a consequence of the Gold Rushes. Shepparton grew as a crossing on the Goulburn River, used by miners on the way to the Ovens Valley fields. A street plan was laid out in 1855 but the town remained little more than a crossing place until the V ictorian L a n d s A c t 1868-72. As the squatters’ runs were broken up into farms, the new agricultural population created a demand for services which were served from Shepparton. In the later decades of the 19th century Victorian Government policy promoted the development of headwater reservoirs to control the inland rivers, financed by the State. Trusts were established to distribute water downstream. The Goulburn Weir was

built at Nagambie and linked to an ancillary storage in the Waranga Basin, and also with the West Goulburn Irrigation areas by 1906. Upon its establishment in 1906 the State Rivers and Water Supply Commission commenced to build the Eastern Canal. This allowed the Shepparton area to be irrigated around 1912, at a time when ‘closer settlement’ policies were

creating smaller holdings out of the Lands Act selections, intended to absorb urban Australians and overseas immigrants into rural areas and occupy them in more intensive forms of cultivation. A butter factory was established at Shepparton in 1894 and a co-operative venture, the Shepparton Fruit Preserving Co. Ltd, came into operation in 1917, subsequently providing

a major part of the town’s employment. Dairying and production of fat lambs and beef on the irrigated pastures grew steadily throughout the 20th century, and Shepparton derived further employment from meat processing and dairying. More recently wool spinning and food processing have grown in importance. However the town remains essentially an agricultural service centre, supplying farmers and marketing and processing local agricultural products.

Wangaratta was established with an hotel and post office at the junction of the Ovens and King Rivers in the 1840s. A considerable amount of gold was extracted from the Ovens Valley in the years 1851-4. As the alluvial fields were worked out mining continued in the hands of a small number of mining companies. Agriculture developed after the sale of country lots

around Wangaratta in 1857, when unsold lots were made available for selection. Small scale manufacturing establishments developed, starting with carriage making and followed by dairy factories, small flour mills, breweries and cordial works, brickyards, sawmills and soapworks. Regulated by the Buffalo River Dam, the Ovens headwaters permit irrigation farming of dairy

cattle, tobacco, hops and vegetables, with viticulture, citrus and cherries in the nearby Warby Ranges and mixed farming based on wheat and cattle. In 1922 local businessmen established the Wangaratta Woollen Mills and more recently Bruck Mills have occupied an aluminium factory which was established in the town by Govern­ ment initiative during the Second World War. Modern service-type industries such as sheet metal manufacturing, ready mix concrete, tyres and cement tiles have grown up in recent years.

Hamilton on Grange Burn, a tributory of the Wannon River, is bisected by the Henty and Glenelg Highways and by a rail connection with Melbourne. The townsite was surveyed in 1850 and created a Borough in 1863. The second largest town of Victoria’s Western District, its hinterland is mainly devoted to sheep and cattle raising, flax growing and dairying, and timber getting. Apart from its retail market functions, the town has some small manufacturing

establishments, producing for the local market. Stawell was established during the gold rushes and, when the early alluvial diggings were worked out, became a centre for quartz reefing which continued until 1918. It was created a Borough in 1869, adopting the motto ‘By Industry’. Unfortunately, however, the mining industry did not create a basis for manufacturing as it had in Bendigo and Ballarat and it was only in the 1920s that manufacturing appeared in the form of small establishments processing wool, wheat, clay and timber.

Camperdown was established in about 1850 and grew slowly to be created a Borough in 1952. The largest employers are a butter factory and an export abattoirs. Wool growing is the major primary industry in its hinterland. The place of the Study towns in the hierarchy of Victoria’s urban centres is set out in Table 7. Melbourne, Geelong, Ballarat and Bendigo are the four largest centres in the State.

295

Comparative costs o f providing public utilities and services in Melbourne and selected Victorian centres

The other centre listed in the range 25,000-49,999 is the total Albury-Wodonga complex on the Victoria-N.S.W. border, the Victorian portion of which (i.e. Wodonga) had a population of under 9,000 at the 1966 Census.

T ab le 7

P o p u la t io n S iz e D is t r ib u t io n o f U r b a n C e n tr e s in V ic to r ia at 1 9 6 6

Size Range o f U rban A rea N um ber in Range C entres in Study

500,000 and over 1 Melbourne

100,000-499,999 1 Geelong

75,000- 99,999 — —

50,000- 74,999 1 Ballarat

25,000- 49,999 2 Bendigo

20,000- 24,999 1* —

15,000- 19,999 4 I Shepparton

1 Wangaratta

10,000- 14,999 4 Hamilton

5,000- 9,999 16 Stawell

2,500- 4,999 26 Camperdown

T otal 2,500 and over 56

Source: C .B .C .S ., C en su s B u lletin 2 .8 o f 1966, P opulation and Dwellings in L ocal G overnm ent Areas— Victoria p . 39. * M o e-Y allo u rn .

It has already been noted that the number of towns included in this Study was controlled by the resources available, and that the restricted sample size consequently limits the degree to which findings for the nine centres may be generalised. In the remainder of this Chapter certain characteristics of the centres will be noted in relation to town size, but it must be

borne in mind that such relationships which appear to be present may be specific to the towns selected, rather than being general consequences of scale. Table 8 shows the industry composition of employment in the towns grouped under eight broad headings. Three of these major groups are dissected further in Table 9. The columns representing towns are ranked in order of town size to emphasise such size-related features of employment or industry structure as may be contained in the data.

Certain groups or sub-groups do appear to be size related. In the smaller towns significant proportions of the resident workforce appears to be employed in Primary Industry, presumably in areas surrounding the town. The relatively large employment in Building and Construction in the six smaller centres also suggests that the towns serve as a base for workers in Building and Construction employed in the rural hinterland.

The role of the country towns as markets and service centres is emphasised by the large proportions of their employment in commerce and finance, in community and business services, and in amusements, hotels etc. Employment in retailing is a particularly clear case. Melbourne had ten per cent of its 1966 workforce employed in retailing while none of the five smallest towns had a retailing sector employing less than fifteen per cent of its workforce.

Broadly speaking manufacturing employment seems to absorb a smaller proportion of workers in the smaller centres, although employment opportunities specific to individual towns are important. Geelong has the largest proportion of its workforce in manufacturing due to the great importance of the motor vehicle and the yarns and textiles industries in the urban economy. Melbourne had relatively large proportions in clothing and knitting, boots and shoes, paper, printing, and in food, drink, tobacco etc. The other seven towns had smaller manufacturing sectors, but the figures in Table 4.3 clearly illustrate the importance of food

296

Table 8

S t u d y T o w n s : E m p lo y m e n t in S o m e M a in I n d u s t r y G r o u p s as a P r o p o r tio n o f T o t a l E m p lo y m e n t 1 9 6 6

M elbourne Geelong B allara t Bendigo S hepparton W angaratta H am ilton Stawell C am per-

down

Primary production 0.5 0.9 1.7 2.7 4.9 2.8 4.5

Manufacturing 37.8 40.0 34.8 27.7 25.0 32.2 12.5

Building and construction 7.5 9.5 7.7 9.2 11.6 10.1 11.5

Communication 2.2 1.5 2.2 2.1 3.5 2.4 4.1

Commerce, finance, etc. 20.8 19.6 19.2 22.2 26.2 23.1 29.8

Community bus services 11.8 11.8 18.6 16.0 10.2 12.4 18.7

Amusements, hotels 6.1 5.1 5.8 6.6 9.2 7.3 8.0

Other 13.3 11.6 10.0 13.5 9.4 9.7 10.9

8.6 7.8

23.6 16.8

13.7 12.0

2.2 5.0

19.9 24.8

13.1 12.9

7.8 8.2

11.1 12.5

The History and Economic Characteristics of the Study Towns

processing in Shepparton, yarns and textiles in Wangaratta and Stawell, and food processing in Camperdown. Within the ‘Finance and Commerce’ main group, the importance of livestock and wholesale distribution to Melbourne, Geelong, Bendigo, Shepparton, Wangaratta and

Hamilton is clear. We may now relate employment structure to population growth and age distribution. At the 1921 Census Melbourne had just over three-quarters of a million inhabitants. The populations of Geelong, Ballarat and Bendigo were all of a similar order of magnitude, around the 40,000 mark. Wangaratta, Hamilton and Stawell were around the four thousand mark.

Figures for Shepparton and Camperdown were not available on a basis comparable with more recent figures. In the post war period the growth rates of all the towns increased, but Geelong left Ballarat and Bendigo far behind. The established industrial bases of Shepparton and Wanga­ ratta allowed them to out-distance substantially the smaller towns in the group.

Between the 1954 and the 1966 Censuses the percentage increase in population was as follows:

Melbourne

Percentage

38

Geelong 46

Ballarat 19

Bendigo 14

Shepparton 62

Wangaratta 42

Hamilton 18

Stawell 8

Camperdown 11

Tables 10, 11, and 12 present summaries of the population-growth experience of the various centres.

Table 10 C e n s u s P o p u la t io n

1921 1933 1947 1954 1961 1966

Melbourne 783,000 992,000 1,226,000 1,532,000 1,909,000 2,109,000 Geelong 42,804 51,252 59,543 82,377 103,859 120,162

Ballarat 40,362 41,658 44,440 49,355 55,802 58,851

Bendigo 39,650 37,987 38,624 43,056 47,252 49,209

Shepparton NA 5,698 7,914 10,848 13,880 17,487

Wangaratta 3,689 4,795 6,670 10,715 13,784 15,167

Hamilton 5,097 5,786 7,180 8,507 9,495 10,054

Stawell 4,413 4,747 4,840 5,463 5,506 5,904

Camperdown NA NA NA 3,205 3,446 3,540

We have already noted that historical growth pattern of an urban area has a marked effect on the character of the area at any particular point in time. For example, the age of buildings and services plant depends on when the town experienced its major periods of growth. A town which has stagnated will have a relatively ‘old’ stock of plant and buildings compared with one which has had major population growth more recently, because the fast growing town will have a higher proportion of its total facilities composed o f ‘new’ construction.

In a similar way, the historical growth pattern of the town leaves its mark on certain characteristics of its population. A slowly growing area will have difficulty in providing jobs

299

for its young adults. As these go elsewhere in search of work, the proportion of population in the young adult groups declines. A faster growing town can hold its own young and if growth is sufficient also attract population in the early adult years from other places. It will consequently have a younger population than its slower growing neighbour.

Comparative costs of providing public utilities and services in Melbourne and selected Victorian centres

Table 11

T o t a l P o p u la t io n G r o w th O v e r I n te r c e n s a l P e r io d (Percent)

1921-33 1933-47 1947-54 1954-61 1961-66

Melbourne 26.5 23.3 24.5 25.0 10.5

Geelong 19.5 16.0 38.5 26.0 17.0

Ballarat 3.5 6.0 11.5 13.0 5.5

Bendigo - 4 . 3 1.5 12.0 9.5 4.0

Shepparton NA 39.0 37.5 27.5 26.0

Wangaratta 33.0 39.0 60.5 29.0 10.0

Hamilton 13.5 24.0 18.5 11.5 5.5

Stawell 7.5 1.5 13.5 1.0 7.0

Camperdown NA NA NA 7.5 2.5

Table 12

A n n u a l A v e r a g e P o p u la t io n G r o w th O v e r I n te r c e n s a l P e r io d (Percent)

1921-33 1933-47 1947-54 1954-61 1961-66

Melbourne 2.2 1.7 3.5 3.6 2.1

Geelong 1.6 1.1 5.5 3.7 3.4

Ballarat 0.3 0.4 1.6 1.8 1.1

Bendigo - 0 . 4 0.1 1.7 1.3 0.8

Shepparton NA 2.8 5.4 3.9 5.2

Wangaratta 2.8 2.8 8.6 4.1 2.0

Hamilton 1.1 1.7 2.6 1.6 1.1

Stawell 0 .6 0.1 1.9 0.1 1.4

Camperdown NA NA NA 1.1 0.5

The graphs appearing in Figure 4.1 show the age distributions of the Study towns at the three most recent Censuses. In each case, the number of males and females respectively in each quinquennial age group is divided by the total population of the town, to highlight differences in age structure, rather than absolute size, from town to town. The ‘waisted’ shape of the graphs at 1954 is due to the low birth rate of the 1930s. The graphs taper away at the top, reflecting attrition by death in the older section of the population.

The process of population formation seems to have been fairly similar in Melbourne and Geelong. This is perhaps not surprising, since both are known to have experienced rapid growth in the post-war period. Ballarat, Bendigo, Hamilton, Stawell and Camperdown all had smaller rates of growth and these five centres also have population-age profiles with certain common characteristics. This is most clearly evident by inspecting the profiles o f the five slow growing centres at 1966. All have broad bases indicating large numbers in the age groups 0-4 up to 15-19 years. Above 20 years of age the numbers in each group are substantially less than below. The ‘tapering’ at the top is less pronounced than for Melbourne and Geelong,

300

Figure 4.1— c o n tin u e d

Comparative costs of providing public utilities and services in Melbourne and selected Victorian centres

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F F M

The History ans Economic Characteristics of the Study Towns

not because death rates differ, but because the relatively slow growth reduces the proportion of population in the young adult years and consequently the elderly represent a greater pro­ portion of total population. Consequently we say that ‘dependency’ is greater in the slower growing centres; there are greater numbers in the school age and infant groups, and amongst

the elderly, relative to the number of the ‘economically active’ groups. Other things being equal, then, we would expect incomes to be higher on a per capita basis in the fast growing centres with their lower rates of dependency. Shepparton and Wangaratta are the two success stories amongst the smaller centres in the sample. This had a clear impact on their age structures; both profiles approached a regular

‘beehive’ shape at 1961. After 1961, Shepparton continued to grow rapidly and so maintained the same form at 1966. In Wangaratta the pace slackened and the effect can be seen very clearly in the loss from the young adult male population of the town. At 1966 each of the four

age groups from 0-4 up to 15-19 in Wangaratta contained over five percent of the total popula­ tion. Each of the five age groups 20-24 to 40-44 contained only about 3 percent of total population.

T able 13

E s t im a t e d N e t M ig r a tio n B e t w e e n U r b a n C e n tr e s a n d t h e ‘R e s t o f t h e W o r ld ’

(A) Intercensal Period 1954-61

10-19 20-29

Age G roups 30-39 O ther T otal

Melbourne 58,550 66,090 52,840 42,255 219,735

Geelong 3,470 950 11,300 -4,950 10,770

Ballarat 1,600 -7 1 0 350 1,350 2,590

Bendigo 340 -6 5 0 120 277 87

Shepparton 1,770 210 260 -6 5 0 1,590

Wangaratta 1,750 120 220 -3 5 6 1,734

Hamilton 210 -1 3 0 - 4 0 55 95

Stawell -1 0 0 -1 1 0 - 6 0 -1 7 4 —444

Camperdown - 1 0 10 20 - 2 4 - 4

(B) Intercensal Period 1961-66

Melbourne 29,590 31,980 12,270 -12,766 61,074

Geelong 2,570 280 1,100 2,899 6,849

Ballarat 750 -1 ,4 5 0 -2 8 0 -4 6 0 -1,440

Bendigo 310 -6 9 0 - 9 0 388 - 8 2

Shepparton 480 600 430 1,507 3,017

Wangaratta 90 - 8 0 60 285 355

Hamilton 230 -1 1 0 - 2 0 - 8 6 14

Stawell - 2 0 - 3 0 40 149 139

Camperdown - 7 0 10 0 0 - 6 0

Using the Census data it is possible to estimate roughly the net flow of people in or out of a town, in each age group, between Censuses. Suppose a man was 20 at the 1961 Census. T hen if he remained in the same town and survived the ensuing five years, he would have been 25 at the 1966 Census. I f the number aged 25 at 1966 was greater than the number aged

20 at 1961 this indicates that there was a net gain by migration in that age group. The size of this net migration (which may be positive or negative) can be estimated after the effect of mortality has been accounted for on survival in the particular age group. Age-specific mortality rates were applied to the 1954 and 1961 population counts in each quinquennial age group

303

to estimate net migration by age group in each town between 1954-61 and 1961-66. These are shown for three decennial age groups in Table 13. As a background to Table 13 it is worth bearing in mind that Victoria as a whole had a period of rapid growth in the 1950s, which tapered off in the following decade. International and inter-regional migration tends to be a sensitive barometer of relative rates of economic growth. M elbourne’s average annual gain by net migration (from overseas and the rest of Australia) was about twice as high 1954-61 as 1961-66. For Geelong the cut-back in the ages

20-39 was even more pronounced. The rate of loss in younger adults increased in Ballarat, Bendigo, Hamilton and Stawell. For Camperdown the effect of net migration was negligible in both periods. Wangaratta, which had picked up about 340 adults 1954-61, lost a small number 1961-66. The strength of Shepparton’s growth is particularly evident from this analysis; the town attracted about 70 persons per annum aged 20-39 during the first intercensal period, and attracted over 200 per annum in the same ages during the second intercensal period.

In this Chapter it has been our aim to indicate that urban areas of different sizes differ in many respects other than their sizes alone. A city has many attributes which distinguish it from other cities. Each city has a unique history, a unique location and a unique combination of institutions. Its population and buildings, as well as its service plant, reflect the distinctive features of the city. Public sector costs reflect the resources required to maintain the level of services which support the city’s activities, and the structure of a city’s public sector consequ­ ently reflects the nature of the city in various ways. At first blush the discussion in this Chapter may appear to have been something of an irrelevance to our central purpose which is to compare the costs of operating cities of different sizes. It will become apparent in subsequent pages that just as each city has a unique character, so too does it have a cost structure which cannot be entirely explained by its size or rate of population growth. After accounting for these determinants of public spending we should expect some residual variation in costs to remain, to reflect the terrain on which the city stands, the history from which it took its form, and the

economic base from which it lives.

Comparative costs o f providing public utilities and services in Melbourne and selected Victorian centres

304

5

C o m p a riso n of P u b lic S pending on C u rre n t A ccount in M elb o u rn e an d O th e r U rb a n C entres

In this Chapter we shall be principally concerned with comparing per capita current, or operating, expenditure on services in Melbourne with comparable measures o f expenditure for the non-metropolitan towns. In spite of a very considerable effort being put into data collection, the final range of public sector functions for which data were obtained was much narrower for the non-metropolitan towns than for Melbourne. In a few cases data were collected and processed, and then excluded when found to be non-comparable for one reason or another.

We have already observed that there are many reasons why per capita expenditures on services may differ between towns for reasons quite apart from town size. For each service function analysed in this Chapter the data were plotted on scatter diagrams in absolute and per capita terms, and inspected, before making statistical summaries of the observations. The scatter diagrams made it possible to decide on the most appropriate means of statistical analysis for each function. Rather than embark now on a lengthy discussion of the methods employed

we will outline these as they are encountered in running through the cost comparisons. Table 14 sets out current expenditure data for Melbourne and the small sample of Study Towns as at 1965-6, in absolute and per capita terms respectively. For the very restricted range of functions included in these tables per capita spending in Melbourne of $71.5 was substantially less than for any of the Study Towns. It should be remembered that important public sector functions such as electricity and gas supply and public transport operations are

excluded from the Table. Table 15 sets out data which were collected for the large sample of 25 urban areas adopted in the early stages of the Public Cost (Historical) Study. These data are particularly useful as a background to the intensive analysis of Melbourne and eight other centres because they

can shed some light on the distribution of expenditures among a fairly large number of centres within a restricted size range, namely in the range up to a population of 20,000. Because of the wide spread in sizes among Victoria’s three largest centres (Melbourne, Geelong and

Ballarat) the Victorian data do not permit any generalisation about the effects of size on expenditure (and/or costs) in the size range 50,000 and above. All we can do is to describe the position which actually applied. However with 21 towns in the range up to 20,000 people we can make some valid generalisations about this group.

Table 16 compares per capita spending in Melbourne with expenditure in various group­ ings of non-metropolitan centres. The method used to prepare this summary Table was as follows. Per capita rates of spending were calculated for the largest available group of non­ metropolitan units. A mean and standard deviation were calculated to describe the distribution

of expenditure rates for the non-metropolitan towns. Per capita spending was calculated for Melbourne. The distance between the Melbourne value and the mean for the non-metropolitan centres was then expressed in terms of standard deviation units derived from the non-metro­ politan centres. To give a concrete illustration, consider the case of current expenditure on Police. The mean per capita expenditure was $6.97 with a standard deviation of $0.90 for 21 non-metropolitan centres with less than 20,000 people for which data were available. The

mean per capita rate of spending for Melbourne was $5.44 so the distance between the towns

305

Table 14

Current Expenditure—1965-6 ($’000)

Geelong B alla ra t Bendigo S hepparton W an g aratta H am ilton Stawell

Police 507.9 254.0 265.0 127.0 82.8 66.3 38.6

Education 4241.0 2331.0 2140.0 956.0 705.0 476.0 201.0

Hospitals 2246.5 1067.6 1189.8 919.3 741.6 697.9 155.5

Sanitary and garbage Infant welfare and 217.0 72.4 52.2 32.5 28.5 14.7 7.0

pre-school 69.0 18.1 21.1 9.0 8.3 4.9 1.9

Libraries 135.9 63.2 32.5 15.0 13.0 8.5 3.2

Water supply 463.2 (452.5) 441.8 102.3 79.5 32.0 18.8

Sewerage 275.7 (161.6) 47.5 124.8 62.3 29.5 18.3

Official Post Offices 417.5 267.0 241.4 105.1 93.7 88.0 45.4

Street cleaning 79.6 43.5 37.0 8.2 0 .0 2 .3 0 .0

Street lighting Local Government 77.1 33.9 19.3 8 .4 7.1 4.5 5.1

administration 484.7 142.5 162.2 61.5 64.6 45.8 24.1

Halls 54.0 37.3 26.9 26.2 13.7 7.6 6.8

Parks and gardens 552.6 126.7 89.3 47.3 34.6 25.4 22.4

9821.7 (5071.3) 4766.0 2552.6 1934.7 1503.4 548.1

C am p er- M elbourne down

22.1 8660.0

173.0 70866.0

106.3 26094.0

3 .9 4580.0

6.8 1016.0

0 .0 1694.0

30.6 4472.0

13.9 4166.0

39.8 8320.0

5 .2 2574.0

1.6 1688.0

26.0 9526.0

0 .0 1550.0

19.3 5632.0

448.5 150838.0

4

§. i?

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T able 14A

C u r r e n t E x p e n d it u r e — P e r C a p ita ( $ ) 1 9 6 5 - 6

Geelong B a llara t Bendigo S hepparton W angaratta H am ilton Stawell C am per- M elbourne

down

Police 4.83 4.51 6.28 7.26 5.46 6.60 6.53

Education 40.37 41.41 50.70 54.67 46.46 47.35 34.02

Hospitals 21.38 18.97 28.19 52.57 48.87 69.43 26.32

Sanitary and garbage Infant welfare and 2.07 1.29 1.24 1.86 1.88 1.46 1.19

pre-school 0.66 0.32 0.50 0.52 0.55 0.49 0.32

Libraries 1.29 1.12 0.77 0.86 0.86 0.85 0.54

Water supply 4.41 (5.85) 10.47 5.85 5.24 3.18 3.18

Sewerage 2.62 (3.57) 1.13 7.14 4.11 2.94 3.10

Official Post Offices 3.97 4.74 5.72 6.01 6.18 8.75 7.68

Street cleaning 0.76 0.77 0.88 0.47 — 0.23 —

Street lighting Local Government 0.73 0.60 0.46 0.48 0.47 0.45 0.86

administration 4.61 2.53 3.84 3.52 4.26 4.56 4.08

Halls 0.51 0.66 0.64 1.50 0.90 0.76 1.15

Parks and gardens 5.26 2.25 2.12 2.71 2.28 2.53 3.79

6.24 48.87 30.03 1.10

1.92

8.64 3.93 11.24 1.47

0.45

7.35

5.45

4.11 33.60 12.37 2.17

0.48 0.80 2.12 1.98

3.95 1.22 0.80

4.52 0.74 2.67

93.47 (88.59) 112.94 145.42 127.52 149.58 92.76 126.69 71.53

S

S

Comparison of Public Spending on Current Account in Melbourne and Oti

and the Melbourne mean was (6.97-5.44) = $1.53. With a standard deviation of $0.90 the distance between the Melbourne mean and the non-metropolitan mean was (1.53/0.90) = 1.70 standard deviation units. The negative sign in —1.70 indicates that Melbourne was lower than the sample of non-metropolitan observations.

Comparative costs o f providing public utilities and services in Melbourne and selected Victorian centres

T ab le 15

O p e r a tin g E x p e n d it u r e : 1 9 6 5 - 6 6 L a r g e r S a m p le o f V ic to r ia n T o w n s ($’000)

Education H ospitals W ater Supply Sewerage Police

Melbourne 35433.0 24791.8 4472.0 4166.0 11478.2

Geelong 4241.0 2246.5 463.2 275.7 507.9

Ballarat 2331.0 1067.6 NA NA 254.0

Bendigo 2140.0 1189.8 441.8* 47.5 265.0

Shepparton 956.0 919.3 102.3 124.8 127.0

Warrnambool 776.0 862.6 190.8 57.2 99.4

Wangaratta 705.0 741.6 79.5 62.3 82.8

Mildura 788.0 891.1 157.8 23.8 110.4

Horsham 549.0 575.6 51.7 35.6 66.3

Hamilton 476.0 697.9 32.0 29.5 66.3

Sale 509.0 632.7 37.6 22.1 60.7

Ararat 297.0 306.0 44.9 19.9 49.7

Benalla 480.0 183.0 24.1 35.2 66.3

Maryborough 460.0 268.4 28.3 18.7 55.2

Swan Hill 467.0 382.3 NA NA 60.7

Castlemaine 424.0 212.9 — 28.4 49.7

Echuca 483.0 377.7 22.1 17.3 55.2

Portland 272.0 189.5 39.9 20.9 44.2

Stawell 321.0 155.5 18.8 18.3 38.6

Wonthaggi 306.0 247.2 18.1 Unsewered 33.1

Kyabram 250.0 130.8 6.8 14.9 27.6

Camperdown 173.0 106.3 30.6 13.9 22.1

St Arnaud 127.0 157.3 20.7 10.8 22.1

Pt Fairy 61.0 86.9 9.3 Unsewered 16.6

Koroit 12.0 92.0 2.8 Unsewered 11.0

*Coliban System including Castlemaine.

Where the difference is less than one standard deviation unit in either direction we can say that there was little apparent difference between Melbourne and the other centres. This appears to be the case for education, street cleaning, and parks and gardens. Per capita spending appeared to be significantly higher in Melbourne on general hospitals, Local Government administration, sanitary and garbage and street lighting. Melbourne appeared to be sub­ stantially cheaper than the other centres in provision of police services, the operation of water supply and sewerage systems and postal services. Thus, for the very restricted range of services for which current expenditure comparisons were possible, some services appeared to be cheaper, some more expensive, and some much the same for Melbourne as for elsewhere. We will now look at the pattern of spending on these services individually. Police: Current expenditure on police services accounted for about three percent of public sector operating expenditure in Melbourne. It was possible to obtain data for spending on police within each of 45 metropolitan municipalities and to estimate the following relationship:

Spending on police ($) = $40,374 + $0,266 (Pop.) + $4.65 (Emp.) R2= 0.91 n = 4 5

308

T able 16

C o m p a r is o n o f P e r C a p ita O p e r a tin g E x p e n d it u r e fo r M e lb o u r n e a n d S m a lle r C e n t r e s : 1 9 6 5 - 6 6

S m aller C entres M elbourne

M ean

Expenditure $

S tan d ard Deviation $

N um ber of C entres

M ean

Expenditure $

(4)

Difference in S tan d ard Deviation U nits

(5)

Police Education General hospitals Sanitary and garbage

Water supply Sewerage Street cleaning Street lighting

Local Government administration Parks and gardens Official Post Office

6.97 0.90 211

222.19 44.90 211

13.16 2.56 24

1.51 0.50 181 2

5.17 2.84 191

3.40 1.18 171

0.87 0.60 92

0.52 0.20 182

2.86 1.09 182

3.43 2.42 182

6.79 2.35 8

5.44 - 1 .7 0

239.42 + 0 .3 8

16.55 + 1.32

2 .4 6 3 + 1.91

2.12 - 1 .0 7

1.98 -1 .2 1

1.323 + 0 .7 5

0.8 6 3 + 1.71

5 .603 + 2 .5 3

2 .673 - 0 .3 1

3.95 - 1 .2 1

-a §.

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1 C en tres less th a n 20,000 po p u latio n , 2 S tu d y T o w n s M unicipalities. 3 M M A M u n icip alitie s less th a n 50,000 p o p u la tio n .

’W

In words this equation means that spending within any municipality was approximately equal to a constant $40,374 annually, plus $0.266 per annum for each resident and $4.65 per annum for each job located within the municipality. The statistic R2 describes the strength of the estimated equation in accounting for the level of spending; with R2 of 0.91 we can say that the equation accounts for 91 per cent of variation around the mean spending on police in the 45 municipalities for which data were available. It appears from the equation that the concentration of police in any given area was strongly related to the number of jobs in that area.

Data relating to the distribution of employment within the urban areas were not available for the non-metropolitan centres so it was not possible to use an equation containing employ­ ment as a basis of comparison. The proportion of jobs to residents does not vary much between different cities even though it ranges widely between sub-areas of a given urban area. Con­ sequently there was little to be lost by using population alone as the independent variable in examining average per capita costs for different cities and towns.

Data relating to police spending were available for the large sample of 25 towns, which included Melbourne and the eight Study Towns. Total spending is plotted against population for the towns with less than 20,000 people in Figure 5.1 A. It appears that spending was strongly related to population and that the relationship was approximately linear. The spending data for the Study Towns appears in Figure 5 .IB and again appears to be strongly related to population size, and linear over the range up to Geelong’s 105,000 people. With data which appears:

(i) to be linear, and (ii) to pass through the origin (i.e. expenditure is approximately zero when population is zero), it is meaningful to talk of spending in per capita terms. Per capita spending for the large sample

of towns at 1965-6 appears in Figure 5 · 1C. Several points emerge from Figure 5-1C. Per capita spending on police in the towns with populations less than 20,000 show a very random scatter, ranging from about $5 · 4 for Wanga- ratta to $8.5 for Mildura. Spending for Melbourne is marked on the right hand side of the graph; Melbourne’s population being twenty times that of Geelong it is not easily shown on the same page as the other towns. It appears that the three largest centres, Melbourne, Geelong and Ballarat all had lower per capita spending on police than any of the towns under 20,000.

The mean per capita expenditure for the 21 small towns (used henceforth to describe those with less than 20,000 people) was $6 · 97 with a standard deviation of $0 · 90. From Figure 5.1C it appears that the cities with over 20,000 people had lower levels of spending on police protection than the small towns. How safe are we in making this assertion ?

Is it possible that large towns just happen to be out-liers in precisely the same way as Wanga- ratta and Mildura appear to be ? We can test this by using a statistical procedure known as the ‘t-test’. For a distribution of 21 observations with a mean value of $6.97 and a standard deviation of $0.90 we can say that there is only a 2.5 per cent probability that any observation will have a value of less than $5.09. Per capita police spending in Ballarat and Geelong was less than this, so we can say that these were significantly cheaper than the small towns at the five per cent (i.e. 2.5% X 2) confidence level. Melbourne, with spending of $5.44 per head of population only just fails to be significant at the ten per cent confidence level. Bendigo is not significantly different to the small towns. The mean value for Melbourne, Ballarat and Geelong is significantly different to the mean of the small towns at the five per cent level.

Summarising the analysis of police spending, we can say that towns with less than 20,000 people appear to be more costly to police than larger towns, although this assertion cannot be made on the basis of anything approaching complete certainty.

Education: For comparative purposes spending on State primary, primary-secondary, secondary and secondary technical schools was aggregated and divided, not by population, but by school enrolments. The data for expenditure per student appear in Figure 5.2. Once again we observe the high degree of dispersion in the figures for the small towns. Much of this is

Comparative costs of providing public utilities and services in Melbourne and selected Victorian centres

310

14 Or

Comparison of Public Spending on Current Account in Aielbourne and Other Urban Centres

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'■omparative costs of providing public utilities and services in Melbourne and selected Victorian c<

undoubtedly due to the different ‘mixes’ of the various types of schools within the small towns, which tend to even out in larger population centres. Mean spending per student for the small towns was $222.2 and all four larger centres had expenditure rates higher than this. However the difference was not statistically significant, so all we can say is that the larger centres were

cheaper on average than the small towns, but amongst the small towns some were as high as or higher than Bendigo, Ballarat, Geelong and Melbourne.

G en eral H ospitals: Whether these are located in a large urban area, or in a provincial centre which serves the medical requirements of an extended region, there is no close correspondence between the size or cost of a hospital and the population in its immediate neighbourhood. For this reason hospital spending was analysed not in terms of cost per head of population, but rather in terms of a more immediate ‘output’ variable, namely occupied bed days. The analysis

was confined to ‘general hospital’ because it was felt that the output of these could be regarded as reasonably homogeneous. Special hospitals, dealing with special fields of medical practice, can generally not be compared in terms of cost per occupied bed day, since this does not always provide a good measure of output.

The data relate to 19 general hospitals in the metropolitan area and 24 general hospitals in non-metropolitan centres. The metropolitan hospitals had a mean expenditure per bed day of $16.55 with a standard deviation of $2.95, while the provincial hospitals had a mean ex­ penditure of $13.16 and standard deviation of $2.56. The mean values were significantly

different at the five per cent level. When the data for the metropolitan and non-metropolitan hospitals were graphed it appeared that there was a relationship between unit cost and the size of the hospital. This can be seen in Figure 5.3A. Cost per bed day appears to increase

with size, but at a diminishing rate. In order to test whether such a relationship could be confidently asserted to exist, the data were transformed to logarithms and used to fit a curve of the form : In (Y) = a + B In (X)

which, when converted back to the units of the original data takes the form:

Y = A.XB, where a = In [A]

In the estimated equation Y is cost per occupied bed-day and X is the number of inpatient bed-days ‘supplied’ by the hospital in 1965-6. The estimated equation was:

Cost per occupied bed-day ($) = 5.52 (inpatient bed-days)0' 11 : R2= 0.64 n = 19

The equation accounted for 64 per cent of the variation around the mean cost per bed day expressed in logs. The exponent B was significantly less than unity indicating that while cost per bed day increased with the size of the hospital it did so at a decreasing rate. It is likely that the wide range of specialised services offered in the medium sized and large metropolitan hospitals accounted for this phenomenon, in which case the higher unit cost represents the

cost of a higher quality of service. The exponent B was also significantly greater than zero so there was a relationship between size and cost. Just as we were able to use summary statistics (mean and standard deviation) to describe the distribution of costs for police services, and set limits within which we expected most members of the population to fall, we can use a similar device here. We can calculate

‘confidence bands’ around the regression line. The estimated curve (the regression line) and five per cent confidence limits are plotted on Figure 5.3B. Figure 5.3C shows the non-metropolitan hospitals associated with the large sample of towns with cost per occupied bed-day plotted against inpatient bed-days. The five per cent confidence bands

estimated for the Melbourne hospitals are plotted on the scatter diagram. It appears that except for a few of the smallest hospitals where the dispersion effect of small scale came into play, the non-metropolitan hospitals were significantly cheaper to operate than the metro­ politan general hospitals. This appeared to be so even for the non-metropolitan ‘Base Hospitals’,

Comparison of Public Spending on Current Account in Melbourne and Other Urban Centres

315

Comparative costs of providing public utilities and services in Melbourne and selected Victorian centres

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Comparison o f Public Spending on Current Account in Melbourne and Other Urban Centres

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centres for medical services over wide regions offering a variety of specialised services not available in the other provincial hospitals. In summary it appeared that unit expenditure on hospital treatment was higher for metropolitan than for non-metropolitan hospitals. No conclusions can be drawn from this about the relative efficiency or quality of service in the institutions composing the respective groups.

S an itary a n d G a rb ag e: These services are supplied by Local Government. Since the objective of the study was to look at scale effects, it was necessary to conduct the analysis of these and other Local Government services in terms of Local Government Areas, rather than as aggre­ gates of municipalities within the cities and towns. T he eight Study Towns contained 18 municipalities; for Melbourne 46 municipalities (excluding the Melbourne City Council area) were used. The Study Town municipalities had mean per capita expenditure of $1.51 with a standard deviation of $0.50 compared with the metropolitan municipalities’ mean $2.46 and standard deviation $1.02; per capita spending in Melbourne was significantly higher than in the towns at the five per cent level.

Within Melbourne, spending on sanitary and garbage services by Local Government was strongly related both to the size of residential population and the number of jobs within a municipality. An equation was estimated:

Sanitary & garbage spending = $9753.2 + $0.67 (pop.) + $0.51 (jobs) R2== 0.82 n = 4 8

(T = 8.0) (T = 8 .8 )

In words this means that for the 48 Melbourne municipalities an extra resident raised garbage collection costs by $0.67 and an extra job raised garbage collection costs by an average $0.51 and the estimated equation accounted for 82 per cent of the variation in individual municipalities around the metropolitan mean. The ‘T-ratio’ is a statistic which is used to describe the relative strength of the independent variables in accounting for variation in the dependent variable. It is calculated as the ratio of the regression coefficient to its standard

error of estimate. Before going on to compare Melbourne with non-metropolitan municipalities a couple of other relationships may be of interest. Data were obtained for 18 metropolitan municipalities relating to the num ber of garbage vehicles in the municipal fleet, and the number of garbage vehicle miles run. Rather surprisingly it appeared that there was a negligible correlation between sanitary and garbage expenditure and vehicle miles run. On the other hand there

was a very strong relationship between expenditure and the number of vehicles in the fleet.

Sanitary & garbage expenditure = $33,300 + $9,606 (garbage vehicles) R2= 0.90 (T = 12.0) n = 18

This suggests that there was a wide range in the efficiencies of the various municipalities, since for spending to be uncorrelated with miles run, and strongly correlated with fleet szie suggests that utilisation rates varied over a wide range. In order to compare Melbourne with the Towns it was necessary to express the expenditure

figure in terms of resident population alone. This is not a strictly valid procedure in a case such as the present one where other factors such as number of jobs are known to account for a significant part of total spending. However, per capita spending for the Melbourne munici­ palities were graphed in Figure 5 .4A and it appears that some sort of negative exponential relationship between size and per capita costs could be present. The high employment munici­

palities appear to be randomly distributed over the ranges of spending and residential popul­ ation so no systematic bias appears to be imparted by using residents as the output unit. The Melbourne City Council data were excluded and the per capita expenditure for the remaining 44 observations transformed to inverses in order to fit a curve of the form:

Y = A + B(x)"1

Comparison o f Public Spending on Current Account in Melbourne and Other Urban Centres

319

Comparative costs of providing public utilities and services in Melbourne and selected Victorian centres

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F I G U R E 5 . 4 B SANITARY AND GARBAGE PER C A P ITA OPERATING

18 NON METROPOLITAN M

S E B A S T O P O L B '

C O R IO S S H E P P A R T O N

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The estimated relationship was:

Sanitary & garbage expenditure = $1.42 + $30,222 (residents)-1 : R2= 0.46

The relationship accounts for less than half of the total variation in expenditures around the mean, as we should expect from our previous analysis of the relative importance of residents and jobs in determining expenditure. Because of the relative weakness of the relationship the band on either side of the regression curve representing five per cent confidence limits is very wide, this is plotted on Figure 5 .4B with the data for the non-metropolitan municipalities. It appears from Figure 5.4B that the better established non-metropolitan municipalities have characteristics which put them within the prediction limits derived for Melbourne. However, for all the small non-metropolitan municipalities with populations under 14,000 spending was well below the lower prediction limit. It was this group of small provincial municipalities which caused the non-metropolitan mean spending figure to lie significantly below the mean for the Melbourne municipalities.

Infant W elfare a n d P re-S chools: Spending was found to be very similar to sanitary and garbage in terms of the relationship between Metropolitan and Study Town municipalities. Mean spending for Melbourne was significantly greater than the mean for the study town municipalities and the Melbourne data for 45 municipalities gave a relationship:

Infant welfare & pre-school expenditure = $0.23 + $7,958 (pop.)-1 : R2= 0.65

The better established non-metropolitan municipalities fell within the prediction limits for Melbourne, though below the regression curve in all but two cases, while most of the small non-metropolitan municipalities fell well below the lower five per cent confidence band. Summarising, one could say that spending on infant welfare and pre-school services tended to be lower in non-metropolitan municipalities than in metropolitan municipalities of similar size but the fact that the difference in mean spending was statistically significant resulted from the low spending rates in the smallest non-metropolitan municipalities.

W ater Supply: Operating costs varied over a wide range for the non-metropolitan systems, from $1.5 per head in Kyabram to $12.2 in Mildura, and inspection of the scatter Figure 5.5 suggested no relationship between population and unit costs for the centres with less than 50,000 people. It appears that locational effects specific to particular towns accounted for a

considerable part of the variation in unit costs. Most of the towns with high unit costs obtained their water by means of pumping and/or from very distant headwork sources. Several of the lowest cost systems required (or had) no purification plant. It was not within the scope of this study to control for these sources of cost variation. For the towns of less than 50,000 people

(n = 20) the mean per capita cost of water works operations was $5.44 with a standard devia­ tion of $3.00. Geelong, with a per capita cost of $4.41 was less than one standard deviation unit below the mean for the smaller towns, but Melbourne with a cost of $2.12 was outside the one S.D. range and in fact only two of the 20 small towns, both with particularly advan­ tageous supply conditions, had lower unit costs. Consequently there is fairly substantial evidence that economies of scale operate for water supply systems serving metropolitan sized populations, but these effects do not appear to come into effect in the size range occupied by Victoria’s non-metropolitan centres.

Sewerage: Operating costs were considerably less dispersed than in the case of water supply, with the high cost Shepparton system being partly attributable to the heavy, and temporally concentrated loads imposed by food processing wastes. For the 17 smallest towns for which data were available the mean operating cost was $2.40 per capita with a standard deviation of $1.18 and no evidence of scale effects. Per capita cost in Geelong was fairly similar to the mean for the smaller towns but Melbourne had a mean cost 1.21 standard deviation units below the mean for the small towns and only Mildura and Bendigo had lower costs than

Melbourne.

Comparative costs o f providing public utilities and services in Melbourne and selected Victorian centres

322

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Comparison of Public Spending on Current Account in Melbourne and Other Urban Centres

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Comparative costs o f providing public utilities and services in Melbourne and selected Victorian centres

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S tre e t C leaning a n d W atering: For this municipal service, expenditure in Melbourne was found to be much more strongly related to the number of jobs within a municipality than to the number of residents. A relationship was estimated:

Street cleaning expenditure = $3460 + $0.48 (pop.) + $1.63 (jobs): R2= 0.87 T = 2.81 29.75 n = 46

It was consequently not surprising that when per capita spending was plotted against residential population only a very weak association was evident. Mean spending for Melbourne was higher than in the 9 municipalities in the study towns which reported some street cleaning expenditure but both populations were very dispersed so that the difference in means was

only 0.75 standard deviation units.

S tre e t L ighting: Expenditure in Melbourne was quite strongly related to the size of the residential population; Street lighting expenditure = $1,929 + $0.70 (pop.) + $0.30 (jobs): R2= 0.72 T = 8.57 1.46 n = 4 6

although a considerable amount of unexplained variation remained when population and jobs were accounted for. The mean per capita expenditure for Melbourne lay 1.71 standard deviation units above the mean for the 18 non-metropolitan municipalities and the difference between the two means was significant at the five per cent level.

Local G ov ern m en t A d m in istratio n : For the three Local Government functions which we have considered so far, namely sanitary and garbage services, street cleaning and street lighting, there has been evidence that per capita spending in Melbourne has been higher than in the non-metropolitan municipalities. For Local Government administration the same appears to

be true. According to the summary comparison in Table 16 spending on Local Government administration (including health administration) averaged $2.86 in 18 non-metropolitan municipalities, with a standard deviation of $1.09. The Melbourne average of $5.60 per head was 2.53 standard deviation units above the non-metropolitan mean and the difference between means was statistically significant at the five per cent level. Cross sectional analysis of the Melbourne municipalities yielded the following relationship for Local Government adminis­ tration excluding health administration:

Local Government administration = $48,356 + $0,986 (pop.) + $4,828 (jobs): R2= 0.85 T = 2 .0 6 14.7

Thus one job had an impact on Local Government administration expenses roughly equivalent to five residents, while with a T-value = 2 .0 6 it can be said that the incremental effect due to residents is only just significant at the five per cent level. By summarising the data in terms of cost per resident we open ourselves to substantial loss of definition in making

comparisons between Melbourne and elsewhere; this is evident in the distance of the five per cent prediction limits either side of a regression curve:

Local Government administration = $2,362 -- $61,588 (pop.)"1 : R2= 0.54

The estimated relationship and the five per cent prediction limits for this equation, plotted from Melbourne data, appear in Figure 5.6. Per capita expenditure data for the non-metropolitan municipalities are plotted on the same diagram. It can be seen that, even with this comparatively inefficient means of discriminating, the non-metropolitan munici­

palities have distinctly different characteristics to the metropolitan group. Among the five Local Government functions, shown in Table 16 only current spending on parks, gardens, reserves, sports grounds etc. (described as Parks and Gardens) appeared to be higher in the non-metropolitan municipalities. Even here the difference was too small

(—0.31 standard deviation units) for any reliable conclusions about expenditure rates to be drawn on a generalised basis.

Comparison of Public Spending on Current Account in Melbourne and Other Urban Centres

325

P o sta l Services: These are organised in a fairly similar way to police, with a hierarchy of establishments and numerous small operating units (post offices, local police stations) at the bottom of the hierarchy making the service available in each locality. Expenditure in Melbourne on both police and postal services was substantially lower than in non-metropolitan areas.

Within the metropolitan area police and postal services were distributed in very different ways. Police establishments tended to be concentrated in areas where employment was high (see page 310 above) whereas the distribution of post office establishments was equally strongly associated with residential and working areas, and in fact the cost of postal services per resident

was higher than the cost per worker.

Official Post Office expenditure = $20,954 + $2.65 (pop.) + $2.18 (jobs): R2= 0.80 T = 6.92 T = 8 .4 1 n = 4 6

Sum mary: Before turning to examine relative capital expenditures in Chapter 6 a few general comments seem warranted. We have examined a quite restricted range of public sector func­ tions and for this range have found that expenditures in Melbourne are lower in total than expenditures in Victorian provincial centres, although the position varies from function to function. The analysis was confined to data relating to 1965-6. We noted that in Melbourne in 1965-6, per capita spending on public sector operations resulted in an average expenditure of $147 per capita when public transport and electricity and gas were included, (see page 309 above). Consequently the services for which we have been able to make comparisons between Melbourne and elsewhere, accounting for $71.53 (see Table 14 above) per capita at 1965-6 constituted just under one half of the total public sector. Adequate data for comparative pur­ poses were not available for gas and electricity. The cost of supplying one unit of energy or meeting one unit of peak demand for electrical power was very much cheaper in Melbourne than for Victoria as a whole, partly because of Melbourne’s location relative to the Latrobe

Valley, and partly because of technical economies in meeting demands which are spatially concentrated. Whether these factors give Melbourne a significant cost advantage over the larger provincial cities is not known. The same considerations apply to gas supply and the operation of a telecommunications network.

Only Melbourne has both suburban railways and tramways networks; the operating expenses of these two systems accounted for 19 per cent of all public sector current spending in Melbourne at 1965-6. If these were included in Melbourne’s total expenditure and compared with total spending for the non-metropolitan towns they would certainly make per capita spending in Melbourne appear to be higher than in the smaller centres. There are several factors which render their inclusion invalid if a comparison of aggregative expenditure in contemplated. Firstly, Melbourne’s fixed rail public transport networks are in part a substitute for road spending. By convention road spending is treated as being of an entirely capital nature although it does in fact contain a large current (i.e. maintenance) component. It will be seen in the next Chapter that road spending was substantially higher in the Study Towns than in Melbourne. Secondly, the public transport networks are substantially financed by charges to users; only losses and new capital works are financed in a manner similar to road construction. In a sense it can be said that the public sector supplies these services in Melbourne and the transport services for which they substitute are supplied by the private sector (through private motoring or private bus operations) in the cities without fixed rail systems. Thirdly the pro­ vincial centres account for the greater part o f passenger rail traffic (other than interstate passenger traffic) outside the metropolitan area and this would have to be brought into account in any valid comparison which included metropolitan fixed rail transport costs. Finally it is worth noting that tramways operated in Ballarat and Bendigo by the State Electricity Com­ mission introduce a major element of non-homogeneity into the Study Towns themselves; these two systems covered only about one-third of their operating expenses from traffic receipts.

In conclusion it would seem that any generalisation about relative per capita expenditures on public services will depend on which services are included. With intra-urban public transport included, Melbourne expenditures in total will exceed those of the non-metropolitan centres.

Comparative costs of providing public utilities and services in Melbourne and selected Victorian centres

326

With public transport excluded Melbourne spending will be rather lower than elsewhere. If the comparison was restricted to net impact on consolidated revenues the relative weights of police, education, health and Local Government spending will increase and on balance Melbourne will look like the more costly proposition. The position will change again if the

expenditure data is corrected for utilisation rates; Melbourne’s higher education spending is due largely to the smaller drop-out rate in the advanced secondary school years, and its higher hospital spending due to the fact that the larger metropolitan hospitals offer a range of services not available elsewhere and used by people other than metropolitan residents. When any results are as conditional as those we have produced in this Chapter it would seem good sense

to say that as far as public service operating cost comparisons for Melbourne and smaller Victorian centres are concerned, there is not much in it.

Comparison of Public Spending on Current Account in Melbourne and Other Urban Centres

327

C o m p ariso n of P u b lic S pending on C a p ita l A ccount in M elbourne a n d O th e r U rb a n C entres

6

We now examine capital spending in Melbourne relative to spending in other urban areas. Again data were collected for a smaller range of functions in the non-metropolitan towns than for Melbourne. Table 17 shows aggregate expenditure on eight functions summed over thirteen years for Melbourne and the eight Study Towns. Remembering from Chapter 3 that spending in Melbourne for the same thirteen years was estimated at $1,579.8 m., it appears that the group of functions for which sufficiently accurate data were available for comparisons of capital spending account for only about 51 per cent of total spending. The results obtained in this Chapter must consequently be used with its limited coverage being borne in mind. Data were available for additional towns in respect of some of the functions appearing in Table 17, namely hospitals, water supply, sewerage and police; these appear in Table 18 and will also be used in the comparative analysis below.

To permit valid comparisons of per capita capital spending, the increased output of the various functional categories was split between the part attributable to increased utilisation by existing residents, and the part attributable to incremental residents. These two parts of total capital spending were then divided respectively by base and incremental populations, the base population being that of 1953. The results of this exercise appear in Table 19. Data were incomplete for certain functions in particular towns. These gaps were filled by arbitrarily setting them as the average per capita rate for the non-metropolitan towns for which complete data existed. They appear in parenthesis in Table 19. This method of filling in gaps could invalidate comparisons between the non-metropolitan towns, but should not seriously affect their comparison, as a group or individually, with Melbourne.

Although Melbourne lay below the expenditure range of the Study Towns for the eight functions in aggregate, it did not do so for all the functions taken individually. It is easier to see how Melbourne fits in with the other urban areas, function by function, if a measure of dispersion is used in combination with the mean figure. In Table 20 the unweighted mean and the standard deviation for the non-metropolitan centres is shown. In this table the total spending by function and year was divided by base (1953) population in Part A and total spending divided by incremental population in Part B. Thus it does not correspond exactly with the breakdown shown in Table 19, where total spending was split into parts estimated to be due respectively to increased utilisation and to incremental population. Broadly speaking Table 20 avoids errors arising from differences in the unit cost of plant required to deal with higher utilisation and larger population respectively, and also errors arising from incorrect estimates of increased utilisation rates as between towns. On the other hand it includes errors arising from treating capital spending either as a function of base population alone or of incremental population alone, rather than as a function of both.

If capital spending is treated as being mainly related to the size of the centre, then it appears from Table 20 part A that per capita spending for Melbourne was lower than mean per capita spending for the Study Towns in respect to all functions other than telephone network capital. However, for primary and secondary education, hospitals, water supply and

sewerage the difference was less than one standard deviation unit. The difference was greater

328

T able 17

C a p ita l E x p e n d it u r e 1 9 5 3 - 4 t o 1 9 6 5 - 6 ($ ’000) Study Towns

Geelong B allara t Bendigo S hepparton W angaratta H am ilton Stawell C am per- M elbourne

down

Primary education 2218.8 521.6 328.2 382.7 77.7 9.9 92.8

Secondary education 4292.7 2677.5 2096.8 1214.7 1188.5 172.9 16.1

Hospitals (includingland) 2564.0 NA 871.1 1418.1 NA NA NA

Water supply 11901.5 NA 4580.9 892.6 285.7 647.1 539.2

Sewerage 5868.6 NA 2442.3 1619.5 1074.8 323.9 1061.2

Telephone system* 2797.0 1001.2 719.4 645.5 190.4 365.8 188.7

L.G. Roads 14478.0 4546.0 5156.0 1852.0 1272.0 1080.0 346.0

C.R.B. Roads 11651.8 2907.7 5047.8 879.6 1768.6 738.6 400.4

Total NA NA NA NA NA NA NA

♦Data for non-metropolitan centres 1959-66.

135.8 24432.0

338.6 47870.0

461.4 76323.4

26.1 100322.0

578.3 119888.0

384.8 183426.0

402.0 237476.0

177.3 117866.0

NA 907604.0

comparison of Public Spending on Capital Account in Melbourne and Other Urban Centr,

than one standard deviation unit only for spending on secondary technical schools and on road spending both by the Country Roads Board and by Local Government. If capital spending is treated as mainly due to population increase then it appears from Part B of Table 20 that Melbourne was lower than the mean of the Study Towns for all func­ tional groups. Again the difference was greater than one standard deviation unit only for secondary technical schools, and road spending by the C.R.B. and by Local Government.

Comparative costs of providing public utilities and services in Melbourne and selected Victorian centres

Table 18

C a p ita l E x p e n d it u r e 1 9 5 3 - 4 to 1 9 6 5 - 6 ( $ ’000)

Larger sample of Victorian Towns

Hospitals (inc. land) W ater Supply Sewerage Police1

Melbourne 76323.4 100322.0 119888.0 1756.6

Geelong 2564.0 11901.5 5868.6 57.0

Ballarat NA NA NA 371.8

Bendigo 871.1 4580.9s 2442.3 35.4

Shepparton 1418.1 892.6 1619.5 27.7

Warrnambool 2207.6 388.5 606.0 8.6

Wangaratta NA 285.7 1074.8 2.7

Mildura 820.6 1139.8 770.2 17.0

Horsham 764.7 410.7 398.3 2.7

Hamilton NA 647.1 323.9 8.7

Sale 1081.3 231.3 1191.4 36.4

Ararat 338.8 892.5 169.3 14.1

Benalla NA 284.9 376.7 20.8

Maryborough NA 483.7 1150.2 0.0

Swan Hill 1062.8 NA NA 2.3

Castlemaine NA ___ 3 345.3 0.5

Echuca 712.6 2237.3 249.9 0.1

Portland 280.8 463.0 933.3 23.9

Stawell NA 539.2 1061.2 0.0

Wonthaggi NA 101.4 Unsewered 0.2

Kyabram 121.8 72.6 446.9s 1.0

Camperdown 461.4 26.1 578.3 2.3

St Amaud NA 123.7 498.8 14.2

Pt Fairy NA 108.9 Unsewered 1.6

Koroit 313.1 25.9 Unsewered 0.3

1 Period 1961-2 to 1965-6. 2 11 years data only. 3 Coliban System including Castlemaine.

Interpreting these results we could say that Melbourne would appear to have a lower spending rate on capital account for public services, regardless of how it is measured. However, because of the great dispersion of spending rates among the non-metropolitan centres, Melbourne cannot be shown to be significantly lower in a strict statistical sense. It was in fact lower over the years 1953-4 to 1965-6, but not to such an extent as to set it apart as an entirely different phenomenon from the non-metropolitan towns.

The most noteworthy characteristic of the capital spending data was the very high level of dispersion among unit costs, however calculated, for the various urban areas. In Table 20A where spending is expressed as $ per 1965-6 resident, the ratio of standard deviation to mean ranges from 0.25 to 0.94. In Table 20B where spending is expressed as $ per incremental resident, the ratio ranges from 0.61 to 1.37, so that it appears incremental population accounts for less of the between-town variation in spending than does the size of the town. This is

330

Table 19

A n a ly s is o f I n c r e m e n ta l C a p ita l 1 9 5 3 - 4 t o 1 9 6 5 - 6

(A)

Capital Spending per Head due to Increased Utilisation

Function Geelong Ballarat Bendigo Shepparton Wangaratta Hamilton Stawell Camper- Melbourne

down

Primary education Secondary education Hospitals Water supply

Sewerage Telephone system L.G . Roads ~ C.R.B. roads

2.1 1.7

26.4 60.5

6.7 (27.0)

0 0

0 0

17.5 14.2

0 0

74.8 42.0

1.6 1.8

40.6 41.5

10.0 19.2

0 0

0 0

14.1 22.4

0 0

100.0 31.6

0.5 0.2

51.4 13.5

(27.0) (27.0)

0 0

0 0

8.4 28.8

0 0

79.9 59.2

4.8 10.1

2 .4 81.9

(27.0) 72.2

0 0

0 0

28.3 93.6

0 0

60.6 43.6

1.3 15.2 13.1 0

0

59.1 0

23.7

Total 127.4 145.5 166.3 116.4 167.3 128.8 123.3 301.4 112.3

(B)

Capital Spending Per Head Due to Increased Population

Primary education 59.0 49.2 46.8 50.7 15.0 5.0 137.7

Secondary education 69.7 159.8 107.4 109.6 135.9 35.7 6.3

Hospitals 59.5 (239.2) 88.4 169.7 (239.2) (239.2) (239.2)

Water supply 338.4 (413.6) 799.4 124.1 59.1 386.1 1116.1

Sewerage 166.9 (717.7) 426.2 225.2 222.5 193.3 2196.4

Telephone system 44.9 36.6 36.1 57.6 21.5 74.1 72.7

L.G. roads 411.7 508.0 899.7 257.5 263.3 644.4 716.1

C.R.B. roads 182.6 102.6 244.1 77.1 195.0 144.6 147.9

286.2 216.4 639.1 71.9 1593.4

240.6 1107.7 106.5

35.6 40.2 115.9 158.3 189.2 151.9 244.5

57.7

1332.6 2226.7 2648.0 1071.5 1151.4 1722.4 4632.4 4261.9 993.3 Total

•omparison of Public Spending on Capital Account in Alelbourne and Oh

C o m p a r is o n o f P e r C a p ita C a p ita l E x p e n d it u r e fo r M e lb o u r n e a n d S m a lle r C e n tr e s 1 9 5 3 - 4 t o 1 9 6 5 - 6

11.587 16.468 6.236

36.198 47.580 56.859 48.173

73.494 33.888 330.483

41.808 59.416 22.499 130.604 171.670 205.151 173.809 265.170 122.268 1192.395

Difference in Standard Deviation Units

-0 .2 8 7 - 0 .7 6 2 -1 .4 5 2 -0 .5 3 6 - 0 .4 1 4

-0 .6 4 2 + 0.503 -1 .0 9 1 -1 .4 9 9

-0 .5 1 8 -0 .6 1 4 -1 .2 1 8 -0 .5 3 3

-0 .6 3 3 -0 .6 3 8 -0 .2 4 9 -1 .7 7 7

-1 .3 8 4

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further evidence of the danger of using crude incremental capital-output ratios as a measure of incremental capital costs. However, the most important conclusion to be drawn from the analysis of Table 20 is that factors unrelated to the size of urban areas play an overwhelmingly important role in determining capital costs of services. The technically complex task of identi­ fying these factors was well outside the scope of the present study. However, it is worth noting that our results suggest there is very great scope for controlling development costs by appro­

priate policies in regard to the location, planning and administration of urban development, and these are likely to be more effective in minimising urban service costs than any policy aimed at controlling the size of urban areas as such. It may be worth looking at the actual pattern of dispersion for just two capital intensive

services, water supply and sewerage. In Figures 6-1A and 6 -IB we see the characteristic scatter of unit costs for the urban areas with less than 20,000 people in the case of Water. Over this range there was a weak but clear relationship between capital spending and town size (Figure 6 · 1A) but virtually no association with incremental population. The Study Towns were too few for any general relationship to be hypothesised. Because of the difference in magnitude between the group under 20,000, the Ballarat, Bendigo and Geelong Group, and Melbourne, least squares fitting would give a very high level of association between size, or growth rate, and expenditure. A double-log transformation partly overcomes this limitation

of least squares methods, and was used to estimate the following curves:

Capital spending on water supply = $4-66 [pop. at 1966]1 16 : R2= 0-87, n = 8 Capital spending on water supply = $610-6 [change in pop. between 1954 & 1966]0,94 : R2= 0.82, n = 8

In the first equation, relating water supply capital spending to 1966 population, it appears that spending over the 13 years was equal to $1-54 per head multiplied by a factor representing population raised to the power 1-16. An exponent greater than unity suggests diseconomies of scale.

T he second equation, linking spending with incremental population suggests an average cost of $5 · 35 per capita, multiplied by a factor which declined (due to an exponent 0 · 94 less than unity) as population change increased. Stated differently this equation implies economies of scale resulting from higher growth rates. However it turned out that neither of the exponents

has significantly different to unity so that to put such an interpretation on the relationships would push the data too far. In the case of sewerage, relationships again based on double-log transformations, were estim ated:

Capital spending on sewerage = $151.4 [pop. at 1966]0-87 : R2= 0-92, n = 8 Capital spending on sewerage = $2779 [pop. change between 1954-66]0-70: R2= 0-85, n = 8

In the case of sewerage both the exponents were significantly less than unity, 0.87 at the 30 per cent level and 0 ■ 70 at the five per cent level. Consequently on the basis of evidence presented by Melbourne and the Study Towns (excluding Ballarat) it appears that there are economies of scale in supplying sewerage services to larger rather than smaller centres, and also that there are economies of scale in handling faster rather than slower absolute growth rates

of population. Again this result should be treated cautiously, because for the eight urban systems in the sample the correlation between town size and population increase, at R2 = 0 · 95, was higher than the correlation between either of these factors and Sewerage spending. Con­ sequently the separate effects of scale and incremental population cannot be logically dis­

tinguished. Before concluding this Chapter it is worth considering alternatives to the hypothesis that Melbourne was ‘less costly’ in terms of capital requirements than the non-metropolitan centres during the years 1953-4 to 1965-6. In the case of schools one might speculate that the increase in participation rates in secondary education caught the metropolitan area earlier

Comparison of Public Spending on Capital Account in Melbourne and Other Urban Centres

333

Comparative costs of providing public utilities and services in Melbourne and selected Victorian centres

„ Φ g

334

Comparison of Public Spending on Capital Account in Melbourne and Other Urban Centres

li b I S

I 3

!, ·?

P °

335

than the provincial towns and was overcome earlier so creating a ‘backlog’ effect which made the expenditure rates of the towns appear higher in the period under consideration. A similar effect, though resulting from a different cause, may account for the lower rate of metropolitan hospital spending. The ‘square root theorem’ of inventory theory would lead one to predict smaller capacity requirement in meeting the sum of independently distributed requirements by members of a large population than a small one. In addition to this effect, Melbourne may have been better supplied with hospital facilities at 1954 than the non-metropolitan centres.

In the case of the ‘tree-like’ water and sewerage networks, incremental loads can generally be handled at roughly the average cost previously applying, and economies of scale in compo­ nents, such as reservoirs, treatment works, trunk mains and so on offer some scope for marginal cost to be lower than average cost. The ‘multi-terminal’ networks, telecommunications plant and roads are the villains of the piece in the urban development melodrama. Complexity of these systems, and loads on existing components, tend to rise exponentially as the size of the systems rise. It could be this combinatorial effect of scale which caused the capital costs of increased utilisation on the telephone network, alone among all the items in Table 20 to incur higher spending in Melbourne than in the Study Towns. Roads suffer the same kinds of technical effects of increased system size as telecommunications plant. It seems likely however that the level of service on Melbourne’s roads declined substantially as congestion increased

over the thirteen years from 1953-4. This effect was not as pronounced in the smaller centres. Consequently while theory would lead us to predict that expenditure on roads would be higher in the larger city, providing quality standards, or in other words levels of service, were maintained, it appears that spending was lower in Melbourne and quality suffered. The number of school places increased, while the hydraulic networks were extended, and availability of telephone services increased, but the quality of service on the roads declined, as a result of the low level of spending on metropolitan roads during, in particular, the 1950s. The lower capital cost of Melbourne’s roads is apparently due to institutional forces which caused road finance to be distributed on grounds other than an economic ‘rate of return’ criteria.

In summary we can say that the somewhat scanty data available for this study indicate that over the thirteen years in question, capital outlays on service in Melbourne were lower, in relation to size or population growth, than outlays in Victorian provincial centres. We cannot conclude from this that, other things being equal, a large urban area is cheaper to

service than a small one.

Comparative costs of providing public utilities and services in Melbourne and selected Victorian centres

336

Appendix

Current Expenditure: Melbourne _______________________________________ (g’OOO)_________________________________________________________________

1953-4 1954-5 1955-6 1956-7 1957-8 1958-9 1959-60 1960-61 1961-2 1962-3 1963-4 1964-5 1965-6

Appendix Table I

Police operating expenditure 3,566 3,624 4,330 6,648 5,324 Fire Brigade G. & S. 1,822 1,922 2,072 2,292 2,552

Education expenditure Primary 10,314 11,344 12,864 13,856 15,228

Secondary 2,842 3,754 4,980 5,788 6,612

Technical (secondary) 1,706 3,366 4,054 4,588 5,160 General hospitals 6,236 10,088 9,702 11,170 11,600

Sanitary and garbage (L.G.) 2,060 2,262 2,632 2,878 3,038 Infant health and pre-school 288 332 358 372 402

Libraries 216 262 344 390 556

M.M.B.W. Water supply operation 1,848 1,946 2,152 2,390 2,404 Sewerage operation 1,956 2,072 2,290 2,458 2,514

Drainage operation 158 228 158 202 204

00 Post Office Official Post Offices 3,490 3,620 3,810 4,050 4,570

Non-official Post Offices 286 450 520 628 752

Telephone operation 8,542 9,260 10,238 9,496 10,332 Suburban railways (V.R.) (18,400) 19,068 19,582 19,822 20,496 M.M.T.B.—Trams 9,076 9,048 10,484 11,724 11,302 M.M.T.B.—Buses 2,820 2,790 2,438 2,644 2,692

Private buses (2,800) (3,000) 3,240 3,560 4,240

Street cleaning 1,006 1,088 1,220 1,338 1,388

Street lighting 560 564 604 784 786

Car parking — 200 196 182 286

Melbourne Harbour Trust 2,370 2,906 3,234 3,042 2,752 Aerodromes (3) (D.C.A.) NA NA NA NA 2,926

Gas supply 17,594 18,402 19,180 20,570 21,038

Electricity (arbitrary 50%) 18,150 20,192 22,222 24,934 24,836 Local Govt, administration including health 2,506 3,152 3,750 4,440 4,862

Public halls 484 546 566 682 708

Parks, gardens, etc. 2,072 2,184 2,470 2,638 2,818

Total 123,168 137,670 149,690 163,566 172,378

5,592 6,064 6,840 7,386 7,714 7,656 8,428 8,660

I, 810 3,324 3,298 3,780 3,982 4,144 4,472 5,048

16,510 17,848 19,588 21,466 23,962 26,094 28,134 30,588 7,852 9,426 11,148 13,248 15,700 17,362 20,106 23,652 5,874 6,978 8,034 9,048 10,446 11,668 11,502 16,626 12,492 14,348 16,202 17,836 19,682 21,354 22,762 26,094

3,232 3,312 3,596 3,646 3,776 3,960 4,318 4,580

470 556 550 676 784 832 918 1,016

574 658 830 1,154 1,028 1,116 1,274 1,694

2,684 2,888 3,088 3,370 3,570 3,798 3,924 4,472

2,666 2,942 3,026 3,068 2,968 3,290 3,510 4,166

190 208 200 270 362 416 388 538

5,090 5,500 5,630 6,070 6,470 7,060 7,670 8,320

840 936 1,056 1,150 1,226 1,272 1,352 1,528

10,844 12,434 13,494 14,130 14,334 15,396 (16,000) (16,600) 21,814 20,762 22,008 23,226 22,902 23,182 24,694 25,786 II, 488 12,020 12,248 12,024 11,620 11,848 12,760 13,052 2,586 2,654 2,764 2,992 2,958 2,994 3,164 3,050

4,158 4,350 4,584 4,660 4,816 5,258 5,848 6,780

1,528 1,654 1,792 1,980 2,004 2,140 2,386 2,574

876 946 1,048 1,196 1,272 1,394 1,500 1,688

306 626 956 1,018 1,222 1,428 1,710 1,980

3,176 3,814 4,394 4,082 4,162 5,122 4,908 4,822

3,326 3,004 4,338 4,152 4,070 4,630 5,258 6,412

20,018 26,126 27,274 26,650 27,336 28,806 30,168 31,280 24,336 27,388 29,692 31,714 33,884 37,772 41,646 42,556

5,220 5,642 6,190 6,530 6,530 7,230 7,938 9,526

846 1,056 1,008 1,170 1,146 1,276 1,430 1,550

3,014 3,044 4,010 4,242 4,644 5,168 4,990 5,632

179,412 200,508 218,886 231,934 244,570 263,666 283,158 310,270

■a.

£ 2 5

Melbourne and selected Victoriai

Capital Expenditure: Melbourne ( $ ’000)

Appendix Table II

1953-4 1954-5 1955-6 1956-7 1957-8 1958-9 1959-60 1960-61 1961-2 1962-3 Police 142 150 300 265 300 350 350 330 360 535

Fire Brigade 391 632 439 509 639 801 969 1,000 1,205 1,301

School buildings (excl. land) Primary 1,340 1,246 1,894 1,844 1,860 1,234 1,846 2,644 2,600 1,788

Secondary 654 1,528 1,686 2,286 5,456 1,348 2,754 3,456 4,724 3,048

Technical — — — 552 1,036 716 1,574 2,246 1,830 1,882

General hospitals (excluding land) 2,240 4,146 3,868 3,804 3,154 2,600 2,920 2,642 2,996 2,736

Infant health and pre-school 76 36 34 60 76 72 48 50 106 176

Libraries 6 10 — — 52 0 42 50 34 82

M.M.B.W. Water supply 4,900 6,966 8,212 8,212 7,566 8,800 6,592 6,410 7,440 10,138

Sewerage 2,050 3,138 3,394 3,648 4,578 7,274 10,544 9,164 12,656 11,264

Drainage 754 962 1,304 1,880 1,986 1,858 1,364 916 1,052 1,174

Post Office— Telephone system 9,388 10,164 9,532 10,984 12,878 14,256 14,652 14,844 16,428 15,628

Suburban railways 836 2,264 6,298 5,824 4,622 7,946 3,224 3,584 4,516 3,618

M .M .T.B.—Trams — — 1,796 750 1,034 936 1,022 1,004 1,044 1,082

M .M .T.B.—-Buses NA NA NA 360 2 0 0 34 16 0

Port of Melbourne 2,512 3,020 3,220 2,108 3,318 2,916 2,562 2,698 2,618 2,416

Aerodromes 656 262 548 420 1,616 812 1,966 3,906 614 882

Gas supply 2,826 5,256 3,954 22,012 4,602 17,678 6,452 11,772 11,116 8,564

Roads and bridges—local 7,674 9,160 12,106 13,646 12,994 13,438 16,036 19,916 21,796 22,858 Roads and bridges—network 1,590 1,974 3,068 3,692 4,698 7,988 9,706 11,494 13,232 10,404

Car parking Electricity production (50%Victoria total) Electricity distribution

(50%Victoria total)

— 40 62 392 230 274 1,096 858 528 452

21,324 17,536 16,080 15,970 17,878 19,542 21,574 20,088 22,332 22,288

4,130 4,795 5,606 6,018 6,498 6,579 7,195 8,386 8,995 8,676

Public halls 24 22 118 118 240 286 450 426 780 1,270

Parks and gardens 120 222 208 258 304 290 462 792 1,114 1,318

1963-4 1964-5 1965-6 535 504 341

1,370 2,486 1,657

1,576 1,880 1,914 2,680

3,230 2,638

1,314 1,100 718

5,258 2,660 3,746

98 264 340

206 206 174

9,028 8,226 7,832

16,342 16,942 18,894 2,240 2,694 2,982

16,746 17,814 20,112 3,786 7,166 7,258

1,046 1,266 1,140

6 1,502

4,348

374

2,824 5,742

1,152 2,154 5,076

11,118 5,530 7,956

25,214 27,656 34,982 13,636 17,082 19,302 550 702 666

26,818 27,682 33,182

9,167 10,458 11,230 1,732 1,848 1,316

1,474 2,846 5,942

97,617 117,994 115,580 128,710 140,132 133,580 156,466 166,930 196,280

ipendix

References

1 G. M. N eutze, Economic Policy and the Size of Cities, A.N.U. Press, 1965. 2 H. S. Perloff and L. W ingo Jnr (eds), Issues in Urban Economics, Johns Hopkins Press, 1968; especially contributed by W. Z. Hirsch. 3 JOHN Paterson, Programming Urban Development and the Incremental Cost of Public Services: Melbourne

1953-4 to 1965-6. Unpublished Doctoral Thesis, Australian National University, 1970. 4 The price index used was that implied by the Commonwealth Statistician’s publication of G.N.P. at constant prices.

340

Book Six

Department of Labour and National Service

Labour

turnover and absence: Effect of location and size of undertaking

L a b o u r tu rn o v e r a n d absence: E ffect of lo catio n a n d size of u n d e rta k in g

Overseas research has shown that an undertaking’s geographical location can have a strong influence on its labour turnover rates1. The study reported here aimed at examining the extent to which this was the case in Australia and, also, what effect geographical location had on absence rates. A further aim was to study the influence of undertakings’ size, measured

by numbers employed, on both labour turnover and absence rates. A number of manufacturing and non-manufacturing undertakings located in metropolitan and non-metropolitan areas in New South Wales, Victoria and Queensland were asked to record, on a standard form, details of their labour turnover and employee absence1 during the month of September 1967. Completed usable records covering 438 undertakings were received. Of these, 162 from undertakings located in metropolitan areas were able to be paired

with an equal number from those located in non-metropolitan areas which had approximately the same numbers of employees and were in the same industry groups. It was originally planned to compare labour turnover and absence rates for undertakings in metropolitan and non-metropolitan areas only; however, an examination of the geographical distribution of undertakings which returned completed forms showed that 50 per cent of those in non-metropolitan areas were located in large provincial cities of relatively high indus­ trial concentration. As it was felt that relevant characteristics of these areas might have differed significantly from those of either country or metropolitan areas, they were treated as a separate group. The areas comprising this provincial group were Maitland, Newcastle and Wollongong/

Port Kembla in New South Wales; Ballarat, Bendigo and Geelong in Victoria; and Ipswich, Toowoomba and Townsville in Queensland. All other non-metropolitan locations were classified as ‘country’. The State, location and industry distribution of the 438 undertakings which participated

in the study are given in Table 1. One hundred and sixty-seven of the undertakings were located in New South Wales, 187 in Victoria and 84 in Queensland. Total employment was 89,191, almost 60 per cent o f the undertakings employing between 50 and 150 people and

slightly over 80 per cent employing less than 300 people. Distribution of the 324 undertakings which were matched on the basis of size and industry is summarised in Table 22. Total employment for this group was 59,577 and the distribution by industry group and numbers employed was similar to that of the full group of 438 under­ takings. The emphasis on small to medium-sized undertakings mainly resulted from an attempt, when selecting undertakings for the study, to choose those in metropolitan and non-metro­

politan areas which were in the same size and industry groups; few matching large under­ takings were located in both metropolitan and non-metropolitan areas in the same State. A number of the undertakings which provided records for the study belonged to companies which operated in both metropolitan and non-metropolitan areas. In some cases, however, records were not available from both metropolitan and non-metropolitan undertakings of the

same company. Those undertakings from which such records were available were studied as a 1 M a n u fa c tu rin g u n d e rta k in g s w ere asked to re c o rd th e se details fo r fa c to ry em ployees only. . . . ,

2 It will be noted that each figure for the metropolitan group equals the sum of the corresponding figures for the provincial and country groups.

343

> r and absence: Effect of location and si

Labour turnover and absence: Effect of location and size of undertaking

separate group. Table 3 shows the location and industry distribution of this group of 69 undertakings, operated by 28 companies.

Data Collection and Analysis: Participating undertakings supplied a daily record of the number of employees leaving and those absent for the month of the study. From these, labour turnover and absence rates were derived. Labour turnover rates for the month were calculated as follows:

_ , _ Total Employees Leavmg

Labour Turnover Rate = —-------- —— :---- — — -------

Average Number Employed X 100

This formula can be used for calculating rates for individual undertakings or for groups of undertakings. In this study the average labour turnover rate for a group (e.g. a particular industry group in one location) was calculated by combining the total number of leavers for all undertakings in the group and then expressing this as a percentage of the total number

of employees in the group. The alternative of computing rates for individual undertakings and averaging them to find the average rate for the group might have given a disproportionate emphasis to the labour turnover experience of the smaller undertakings. Absence rates for the month were calculated using the formula:

Absence Rate = Number of Man-Days Lost Number of Man-Days Rostered X 100

As with labour turnover, each group’s absence rate was based on the group’s collective experi­ ence, rather than on the average of absence rates for individual undertakings. Only absences due to such factors as sickness, industrial or other accidents or family reasons were included. Absences such as annual leave, scheduled rest-day and strike absences were excluded.

Records from the full group of 438 undertakings were used in calculating labour turnover and absence rates for males (separately for tradesmen and non-tradesmen) and females. In some industry groups, undertakings had few or no employees in some of these categories and, in these cases, rates could not be calculated. Non-manufacturing industry groups were analysed in terms of males and females only. Rates were calculated also for all employees in each State, industry group and location for the 324 undertakings matched for size.

Statistical tests were used, where appropriate, to test whether differences in labour turnover and absence rates were significant.1

L a b o u r T u rn o v e r R ates: Labour turnover rates for all employees in each location, industry group and State for the 324 undertakings matched for size are given in Table 4.2 A statistical analysis of this table showed that rates for metropolitan undertakings, considered as a single group, were significantly higher than those for all provincial undertakings or all those in country

areas. There were, however, no significant differences in rates between provincial and country areas. It is interesting to note that, in a number of individual industry groups, rates for metro­ politan undertakings were lower than those in country or provincial areas. For example, this

occurred in the Engineering and Metal Fabrication industry group in all three States. When labour turnover rates for the three States were compared no significant differences were found. Labour turnover rates for tradesmen, non-tradesmen, all males and females in each

location and industry group for the total sample of 438 undertakings are given in Table 5. Except in four cases—the most noticeable being non-tradesmen and all males in Other Manu­ facturing—metropolitan rates were higher than country rates. In a further two cases—females in Engineering and Metal Fabrication and tradesmen in Other Manufacturing—provincial rates were higher than metropolitan rates. Another finding was that labour turnover rates for tradesmen were significantly smaller than rates for non-tradesmen, which in turn were significantly smaller then female rates.

1 A ll differences re p o rte d as significant w ere a t least a t th e 5 p e r ce n t level o f confidence. T h a t is, in o n ly 5 cases or less in a 100 w o u ld a difference as la rg e as th a t fo u n d h av e o cc u rre d sim ply b y chance. , . , . , , , , ,

2 It should be noted that in Tables 4 and 5 an estimate can be made of annual rates by multiplying the monthly figures by a factor of 12.

M

345

Labour Turnover Rates for Tradesmen and Non-Tradesmen. All Males and Females for the Total Sample of 438 Undertakings

Table 5

Labour T urnover Rates for M onth (p er cent)

Males

I

T radesm en N on-Tradesm en

Me P r Co Me P r Co

Industry Group Engineering and metal fabrication 3.8 3.3 3.7 6.2 4.9 6.0

Non-metal manufacture and fabrication 4.7 2.9 1.8

Textiles, clothing, footwear 4.3 3.4 4.1

Food and drink 2.7 0.7 1.2 6.2 4.2 6.3

Woodworking, furniture, sawmilling 4.9 2.6 2.3 6.1 1.6 3.8

Other manufacturing Community and public service 1.8 2.5 1.4 2.5 2.1 4.2

(e.g. hospitals and councils) Wholesale and retail trade All manufacturing All non-manufacturing

3.5 3.0 3.0 5.3 4.0 5.0

All industries 3.5 3.0 3.0 5.3 4.0 5.0

All Males Me P r

5.4 4.5

4.7 2.9

4.3 3.4

5.2 2.8

5.7 1.9

2.3 2.2

4.6 1.3

9.8 3.5

4.8 3.8

8.0 2.4

5.2 3.6

Co

5.3 1.8 4.1 5.7

3.5 3.1

1.4 3.2 4.5 3.1 4.3

Me

Fem ales P r Co

6.4 7.1 5.0

6.1 4.6 4.4

10.9 10.3 5.2

6.6 3.7 3.5

9.3 4.0 4.2

7.0 5.4 4.6

7.9 3.9 3.7

7.4 4.9 4.2

M E = M e tro p o lita n P R = P rovince C O = C o u n try

md absi

Undertakings of the Same Company in different Locations: There were differences in labour turnover rates between undertakings in different locations operated by the same company. The general pattern shown above of labour turnover rates being higher in metropolitan than in provincial or country locations seemed to be followed but the small number of undertakings precluded any detailed analysis.

Influence of Size: The 324 undertakings matched for size and industry group were analysed to see what relationship there might be between labour turnover and size of undertaking. There did not appear to be any consistent pattern; that is, the size of an undertaking did not appear to affect its labour turnover.

A bsence R ates: Absence rates for all employees in each State, industry group and location for the 324 undertakings matched for size are given in Table 6. An analysis of this table indi­ cated no significant differences in absence rates between metropolitan, provincial and country locations when all undertakings in each of these locations were treated as a single group. However, when undertakings were considered by States and industry groups, a number of differences were evident.

Absence rates for tradesmen, non-tradesmen, all males and females in each industry group and location for the total sample o f 438 undertakings are given in Table 7. Statistical analysis of this table revealed no significant differences in absence rates between the total numbers of tradesmen, non-tradesmen, and females. However, some differences did exist between tradesmen, non-tradesmen and females in individual industry groups and locations.

Undertakings of the same Company in different Locations: There were differences in absence rates between undertakings in different locations operated by the same company. The general pattern found above of no differences in absence rates between locations seemed to be followed, but again, the small number of undertakings precluded any detailed analysis.

Influence of Size: Absence rates did not appear to be related to size of undertaking.

S u m m a ry : This study examined the influence of geographical location and size of under­ takings on labour turnover and absence rates. Records from a total of 438 undertakings in metropolitan, provincial and country areas in New South Wales, Victoria and Queensland were used to study the effect of these factors on overall rates and on those for tradesmen, male non-tradesmen, and females and to compare the effects as between industry groups and between States. In addition, an examination was made of the rates of undertakings operated by companies with establishments in both metropolitan and non-metropolitan areas.

In looking at the effect of location an attem pt was made, by using a sample in which under­ takings in metropolitan areas were matched by the same number of undertakings of similar size and industry grouping in non-metropolitan areas, to minimise the influence of these two variables on labour turnover and absence rates.

A separate examination was made of the relationship between size of undertakings and their labour turnover and absence rates. Among findings to emerge were:

(i) Undertakings located in metropolitan centres had significantly higher labour turnover rates than undertakings in either provincial or country centres, but there were no significant differences as between undertakings located in provincial and country centres.

(ii) The higher labour turnover rates in metropolitan centres applied to all categories of employees studied—males (tradesmen and non-tradesmen) and females.

(iii) There were no significant differences in labour turnover rates between undertakings in New South Wales, Victoria and Queensland.

Labour turnover and absence: Effect of location and size of undertaking

348

T able 6

Absence Rates (all Employees) for the 3 2 4 Undertakings M a tc h e d for S iz e

Absence Rates fo r the M onth (p er cent)

N.S.W. Victoria Q u eensland

Me P r Co Me P r Co M e P r Co

Industry Group Engineering and metal fabrication 4.9 5.8 3.4 6.2 4 .4 4.5 5.9 2.6 4.7

Non-metal manufacture and fabrication 2.7 3.7 3.6 4.6 4.7 2.5 3.9

Textiles, clothing, footwear 6.4 3.5 5.0 4.3 5.5 3.9 4 .4 2.8

Food and drink 7.7 2.5 3.3 3.9 8.2 3 .0 3.7 7.4

Woodworking, furniture, sawmilling 5.8 1.3 2.8 6.2 4.0 3.6 4.1 3.2

Other manufacturing 3.4 10.7 3.8 1.2 4.2

Community and public service (e.g. hospitals and councils) 4.1 4.7 3.2 4.8 3.1 2 .4

Wholesale and retail trade 2.6 2.7 1.2 4.0 2.0 1.6 3.2 3.7

All manufacturing 5.4 5.0 4.1 5.0 4.7 4.9 4.2 3.2 6.1

All non-manufacturing 3.4 3.0 2.6 4 .4 2.6 2.0 3.2 3.7

All industries 4.8 4.8 3.5 4.9 4.3 4.1 4.1 3.2 5.8

M e All S tatse P r Co

§â– 

5.7 4.9 4 .4

|

3 .4 4.3 4.7

5.1 4.6 4.6

3.8 3.8 5.8 §- 5.1 3.7 3.2 3.7 1.2 6.2 4.4 3.3 2.9

i 3.2 2.4 1.9 5.0 4.7 4.73.8 2 .7 2.5 4.8 4.3 4.0ME = Metropolitan PR = Province CO = Country

Table 7

Absence Rates for Tradesmen, Non-Tradesmen, All Males and Females for the Total Sample of 438 Undertakings

Absence R ates fo r M onth (p e r cent)

M ales

T radesm en N on-T radesm en All Males

Me P r Co Me P r Co Me P r Co

Industry G roup Engineering and metal fabrication 6.4 4.8 3.7 6.3 4.5 4.2 6.3 4.6 4.1

Non-metal manufacture and fabrication 3.8 4.4 4.7 3.8 4.4 4.7

Textiles, clothing, footwear 3.1 4.3 3.1 3.1 4.3 3.1

Food and drink 3.2 2.2 5.2 3.7 3.2 6.5 3.6 2.8 6.3

Woodworking, furniture, sawmilling 4.1 4.6 3.2 4.9 3.4 3.7

Other manufacturing Community and public service 2.7 2.9 3.1 6.5 3.5 3.1 5.1 3.3 3.1

(e.g. hospitals and councils) 3.8 3.1 2.6

Wholesale and retail trade 2.4 1.8 1.2

All manufacturing 5.0 4.3 3.3 5.1 4.3 4.6 5.0 4.3 4.4

All non-manufacturing 3.1 2.3 1.9

All industries 5.0 4.3 3.8 5.1 4.3 4.6 4.8 4.1 4.2

Me

Fem ales P r Co

5.2 5.6 4.1

6.2 5.8 4.9

5.0 5.8 7.2

4.2 3.1 2.9

3.6 2.6 2.5

5.8 5.8 5.1

3.9 2.8 2.7

4.8 4.8 4.1

·$. c

ME = Metropolitan PR = Province CO — Country

Labour turnover and absence: Effect of location and size o f undertaking

(iv) T here were no significant differences in absence rates between occupational groups, between locations, or between States.

(v) T here were no significant differences in labour turnover or absence rates between undertakings of different sizes.

Reasons why some groups o f undertakings did not conform to the overall patterns found are not examined in this report, b u t they would seem to represent an interesting area for future research.

351

Reference

1 j^a^KNOWLES, ^Review of Labour Turnover Research’, Personnel Practice Bulletin, Vol. XX, No. 1,

352

Book Seven

Department of Labour and National Service Relative Availability

of Unused Labour in Capital Cities and Other Areas

Relative Availability of Unused Labour in Capital Cities and Other Areas

T he purpose o f this paper is to examine to what extent greater reserves o f unused labour may exist in non-m etropolitan areas o f Australia than in the capital cities. T h e term ‘unused labour’ calls for careful definition. T he population at any particular tim e can be divided into three groups:

(a) those actually working; (b) those willing to work b u t not working; (c) those not wishing to work.

U nused labour resources are represented by category (b). However, the precise size of this category is difficult to determine. T o begin with, willingness to work is seldom absolute. It is normally related to the job or jobs under consideration. T hus membership o f this group ranges from those willing to accept almost any job, to those who would be prepared to accept

only a very limited range o f jobs carrying particularly high rewards or especially favourable conditions. T he most effective means o f discovering the num ber of persons willing to work, b u t not actually working, would be by means o f carefully phrased questions included in the regular

Census schedule or in an appropriate sample survey. Even here, however, one might anti­ cipate a degree of inaccuracy owing to the subjective nature of the subject: an expression of willingness to work can depend on the whims of the moment and on preconceived ideas on available opportunities to work. So it is quite likely th at the num ber of individuals who would actually undertake and continue in regular employment could be considerably more or less than those who before the event might proclaim th e ir willingness to do so.

Since data concerning category (b) as a whole is not available it is necessary to consider measures which m ight provide at least approximate information as to the volume of unused labour. Two such measures are Commonwealth Employment Service statistics and Census data on work force participation rates. Commonwealth Employment Service statistics are a

direct measure of that part o f category (b) which relates to those people who not only consider themselves to be unem ployed but actually register as such. On the other hand, work force participation rates can be used to provide an indirect indication o f the relative overall availab­ ility of unused labour resources between different areas.

C om m onw ealth E m p lo y m en t Service S tatistics: A substantial, if unknown proportion o f those willing to work but not actually working, register for employment with the Common­ wealth Employment Service. Between any two areas, however, the number seeking employment will tend to reflect the relative size o f the work force. T hus, in making comparisons between

capital cities and non-m etropolitan areas, it is necessary to take this factor into account. This can be done in a variety o f ways; for instance, num bers registered for employment may be correlated to total work force in the areas, or to the num ber of job vacancies registered by employers. In the present paper the latter method is adopted.

Tables have been compiled from the records of the Commonwealth Employment Service. T hey show for the three years 1965 to 1967 inclusive, persons registered for employment and

355

Relative Availability of Unused Labour in Capital Cities and Other Areas

vacancies notified by employers in respect of the capital city and the District Employment Office areas which include the four largest provincial towns1 in es>rh ctate of the Commonwealth. T he absolute figures are compared in the form of a ratio, mowing persons registered for employment as a proportion o f vacancies notified by employers. These ratios are then used as indicators o f the relative availability o f unused labour. A comparison o f the ratios o f the metropolitan and non-metropolitan areas provides a measure o f the relative degree o f ‘unused’ labour between the two areas.

Perhaps the m ost im portant feature o f the following Tables 1-6 is that they demonstrate the dangers involved in making Australia-wide generalisations, and emphasise the need to make specific comparisons between identified areas in order to secure meaningful conclusions. Substantial differences appear in the tables between males and females, between the various States o f the Commonwealth, between various capital cities and between various non-m etro­ politan areas of any particular State. Again, while ratios vary for most areas during the three- year period, the direction and extent o f the movement differs in different States. Under the circumstances, the most satisfactory approach appears to be to examine each State individually.

New South Wales: In this State, the ratio o f persons registered to vacancies was clearly greater in non-metropolitan areas than in the capital city. W ith only three exceptions, all relating to males, the ratio was, throughout the period, lower in Sydney than in the provincial towns. T he three exceptions were Newcastle in 1967 and Wollongong in 1966 and 1967. Taking the provincial towns as a group, the relative availability of female labour was much greater than th at for male. For both male and female labour, the variations between individual towns were very great. T he variation between Cessnock and Wollongong, for instance, was greater than that between Sydney and the average of the provincial towns as a group.

Victoria: In Victoria, the higher ratio o f persons registered to vacancies in non-metropolitan areas was even more pronounced than in New South Wales. Only in one instance, Warragul for males in 1966, did a provincial city have a lower ratio than Melbourne. For country towns as a group, the relative availability o f female labour was greater than for males, although Ballarat provided a significant exception to this trend. In the case of both males and females, variations between individual country towns were much less than in New South Wales.

Queensland: In Queensland, the ratio o f persons registered to recorded vacancies was, with three exceptions, higher in provincial towns. T he exceptions were all for males; Rockhampton in 1966 and 1967, and Toowoomba in 1967. Taking provincial cities as a group, the relative availability o f female labour was very m uch greater than for males. Once again there were substantial differences between the various provincial areas. The statistics for Queensland provincial cities, however, are greatly influenced by marked fluctuations in seasonal unemploy­ m ent unique to this State, and this factor should be taken into account in assessing the figures.

South Australia: In South Australia there are no clear-cut differences in the ratio o f persons registered to vacancies as between the m etropolitan and non-metropolitan areas, unless Elizabeth is regarded as being metropolitan, in which case, availability of labour is rather greater in metropolitan areas. D uring the period of the survey, South Australia experienced a marked deterioration in the overall employment position and this must also be taken into account in analysing the figures. In the case o f males particularly, the difference between country towns was again substantial. Generally speaking, however, the intermediate position o f Elizabeth as both an independent provincial town and a labour market satellite of Adelaide, so clouds the picture that no further generalisation is attempted. In the case of Port Pirie, local factors accentuated the rising ratio of unemployed to vacancies.

Western Australia: Generally speaking, the ratio of persons registered to vacancies was greater in Perth than in provincial towns, with Bunbury being the exception. This was most marked in the case o f females; two o f the country towns, Geraldton and Albany, had ratios below

1 T h re e in th e case o f T a sm an ia

356

P e r s o n s R e g is te r e d fo r E m p lo y m e n t a n d R e c o r d e d V a c a n c ie s in C a p ita l C itie s a n d L a r g e T o w n s 1 9 6 5 , 1 9 6 6 , 1 9 6 7 ,

M o n t h ly A v e r a g e s b y S e x a n d L o c a tio n

NEW SOUTH WALES

Table 1

D istrict E m ploym ent Recorded Vacancies P ersons R egistered

Office

Year Males Fem ales Persons Males Fem ales Persons

Sydney 1965 9,078 5,154 14,232 4,338 3,010 7,348

(Metropolitan area) 1966 5,872 4,600 10,472 7,562 3,601 11,163

1967 5,085 3,881 8,996 8,373 3,766 12,139

Broken Hill* 1965 15 7 22 135 83 218

1966 9 3 12 153 105 258

1967 9 7 16 165 114 279

R atio o f Persons R egistered to R ecorded Vacancies

M ales Fem ales Persoi

0.48 0.58 0.52

1.29 0.78 1.07

1.65 0.97 1.35

9.00 11.86 9.91

17.00 35.00 21.50

18.33 16.29 17.44

|

X

-S.

Cessnock* 1965 2 1 3 169 125 294

1966 1 4 5 235 210 445

1967 6 2 8 187 103 290

84.50 235.00 31.17

125.00 52.50 51.50

98.00 89.00 36.25

Newcastle* 1965 664 51 715 473 733 1,206

1966 474 54 528 937 787 1,724

1967 557 53 610 701 775 1,476

0.71 14.37 1.69

1.98 14.57 3.27

1.26 14.62 2.42

Wollongong* 1965 1,100 1,126 1,226 572 608 1,180

1966 802 68 870 924 836 1,760

1967 792 74 866 849 956 1,805

0.52 4.83 0.96

1.15 12.29 2.02

1.07 12.92 2.13

*N ot all reco rd ed vacancies or p ersons registered are located in th e tow ns indicated. E ach n o n -m e tro p o litan D is tric t E m p lo y m e n t Office area includes th e to w n in w h ich th e office is situ a ted and o th e r areas w hich in som e cases w ill in c lu d e one or m ore o th e r u rb a n centres.

ied Labour in Capital Cities and Oti

P e r s o n s R e g is te r e d fo r E m p lo y m e n t a n d R e c o r d e d V a c a n c ie s in C a p ita l C it ie s a n d L a r g e T o w n s 1 9 6 5 , 1 9 6 6 , 1 9 6 7 ,

M o n t h ly A v e r a g e s b y S e x a n d L o c a t io n

V ICTO RIA

Table 2

District Employment Recorded Vacancies Persons Registered

Office

Ratio of Persons Registered to Recorded Vacancies

Year Males Females Persons Males Females Persons Males Fem ales Persons

Melbourne (Metropolitan area)

1965 11,465 5,657 17,122 3,428 2,422 5,850

1966 9,922 5,214 15,136 5,875 3,171 9,046

1967 7,186 4,685 11,871 7,056 4,141 11,197

0.30 0.43 0.34

0.59 0.61 0.60

0.98 0.88 0.94

Geelong* 1965 481 81 562 539 541 1,070

1966 317 108 425 914 767 1,681

1967 251 85 336 846 703 1,549

1.12 2.88 3.37

6.68 7.10 8.27

1.90 3.96 4.61

Ballarat* 1965 346 208 554 295 230 525

1968 176 172 348 311 222 533

1967 115 108 223 385 275 660

0.85 1.77 3.35

1.11 1.29 2.55

0.95 1.53 1.71

f I a.

§.

X 8

Bendigo* 1965 238 92 330 258 190 448

1966 238 63 301 336 239 575

1967 210 79 289 388 256 644

1.08 1.41 1.85

2.07 3.79 3.24

1.36 1.91 2.23

Warragul/Morwell* 1965 339 90 429 175 305 480

1966 366 106 472 207 274 481

1967 260 92 352 270 456 726

0.52 0.57 1.04

3.39 2.59 4.96

1.12 1.02 2.06

*See footnote to Table 1.

Persons Registered for Employment and Recorded Vacancies in Capital Cities and Large Towns 1965, 1966, 1967, Monthly Averages by Sex and Location QUEENSLAND

Table 3

D istrict Em ploym ent R ecorded Vacancies Persons R egistered

Office

Year Males Fem ales Persons Males Fem ales Persons

Brisbane 1965 1,583 849 2,432 1,777 1,443 3,220

(Metropolitan area) 1966 1,191 873 2,064 2,721 1,677 4,398

1967 910 846 1,756 3,387 1,881 5,268

Ipswich* 1965 106 20 126 199 247 446

1966 78 24 102 294 262 556

1967 31 15 46 299 285 584

Rockhampton* 1965 220 21 241 494 309 803

1966 189 26 215 336 226 562

1967 85 18 103 211 209 420

Toowoomba* 1965 189 53 242 387 225 612

1966 143 51 194 393 337 730

1967 103 41 144 352 320 672

Townsville* 1965 131 26 157 541 302 843

1966 81 21 102 551 329 880

1967 86 17 103 515 321 836

*See footnote to Table 1

R atio of Persons R egistered to R ecorded Vacancies

Fem ales Persons Males

1.12 2.29 3.72

1.88 3.77 9.65

2.25 1.78 2.48

2.05 2.75 3.42

4.13 6.80 5.99

1.70 1.92 2.22

12.35 10.92 19.00

24.71 8.69 11.61

4.25 6.61 7.81

11.62 15.67 18.88

1.32 2.13 3.00

3.54 5.45 12.70

3.33 2.61 4.08

2.53 3.76 4.67

5.37 8.63 8.1 2

■ a.

I g S '

Persons Registered for Employment and Recorded Vacancies in Capital Cities and Large Towns 1965, 1966, 1967, Monthly Averages by Sex and Location SO U T H AUSTRA LIA

Table 4

District Employment Recorded Vacancies Persons Registered

Office

Ratio o f Persons Registered to Recorded Vacancies

Year Males Fem ales Persons Males Fem ales Persons Males Fem ales Persons

Adelaide (Metropolitan area)

1965 2,579 451 3,030 1,313 793 2,106

1966 1,063 344 1,407 3,340 1,867 5,207

1967 783 333 1,116 3,781 2,291 6,072

0.51 3.14 4.83

1.76 5.43 6.88

0.70 3.70 5.44

Elizabeth* 1965 192 64 256 210 470 680

1966 109 45 154 427 460 887

1967 77 35 112 474 502 976

1.09 7.34 2.66

3.92 10.22 5.76

6.16 14.34 8.71

M t Gambier* 1965 155 40 195 23 81 104

1966 105 26 131 41 107 148

1967 62 14 76 59 95 154

0.15 0.39 0.95

2.03 4.12 6.79

0.53 1.13 2.03

3.

S'

Pt Augusta* 1965 425 14 438 23 60 83

1966 308 13 321 30 92 122

1967 318 6 324 56 128 184

0.05 4.29 0.19

0.10 7.08 0.38

0.18 21.33 0.57

Pt Pirie* 1965 134 39 173 77 94 171

1966 59 18 77 14 132 146

1967 18 11 29 154 166 320

♦See footnote to Table 1.

0.58 2.41 0.99

0.24 7.33 1.90

8.56 15.09 11.03

T able 5

Persons Registered for Employment and Recorded Vacancies in Capital Cities and Large Towns 1965, 1966, 1967, Monthly Averages by Sex and Location W ESTERN AUSTRALIA

D istrict E m ploym ent R ecorded Vacancies P ersons R egistered

Office

Year Males Fem ales Persons Males Fem ales Persons

Perth (Metropolitan area) 1965 1,915 425 2,390 1,343 1,357 2,700

1966 2,129 513 2,642 1,433 1,081 2,514

1967 1,800 348 2,148 1,466 1,160 2,626

Albany* 1965 92 26 118 23 27 50

1966 110 23 133 15 39 54

1967 111 27 138 16 42 58

Bunbury* 1965 173 28 201 98 215 313

1966 132 28 160 102 195 297

1967 147 35 182 152 227 379

Geraldton* 1965 114 27 141 34 32 66

1966 102 28 140 44 29 73

1967 81 29 110 42 32 74

Kalgoorlie* 1965 106 8 114 38 68 106

1966 101 14 115 36 40 76

1967 155 12 167 32 39 71

*See footnote to Table 1.

R atio o f Persons R egistered to R ecorded Vacancies

M ales Fem ales Persons

0.70 3.19 1.13

0.67 2.11 0.95

0.81 3.33 1.22

0.25 0.14 0.14

1.04 1.70 1.56

0.42 0.41 0.42

0.57 0.77 1.03

7.68 6.96 6.49

1.56 1.86 2.08

0.30 0.43 0.52

1.19 1.04 1.10

0.47 0.52 0.67

0.36 8.50 0.93

0.36 2.86 0.66

0.21 3.25 0.43

•S.

S'

o s-

Table 6 |

. £

Persons Registered for Employment and Recorded Vacancies IF

in Capital Cities and Large Towns 1965, 1966, 1967, Monthly Averages by Sex and Location TASM ANIA

District Employment Recorded Vacancies Persons Registered

Office

Ratio o f Persons Registered to Recorded Vacancies

Year Males Females Persons Males Fem ales Persons Males Fem ales Persons

U1 Os to

Hobart 1965 320 150 470 735 522 1,257

1966 348 169 517 575 547 1,122

1967 628 159 787 668 506 1,174

2.30 1.50 1.06

3.48 3.24 3.18

2.67 2.17 1.49

Bumie* 1965 157 20 177 63 98 161

1966 221 32 253 77 104 181

1967 420 62 482 98 95 193

Devonport* 1965 43 18 61 36 82 118

1966 58 25 93 48 57 105

1967 55 29 84 73 83 156

0.40 4.90 0.91

0.35 3.25 0.72

0.23 1.53 0.40

0.84 4.56 1.93

0.83 2.28 1.27

1.33 2.86 1.86

Launceston* 1965 284 112 396 254 243 497

1966 314 316 630 232 210 442

1967 264 174 438 350 353 703

0.89 0.74 1.33

2.17 0.67 2.03

1.26 0.70 1.61

♦See footnote to Table 1.

Unused Labour in Capital Cities and Oti

Relative Availability of Unused Labour in Capital Cities and Other Areas

Perth figures. As in the eastern States, however, differences between individual provincial towns were greater than between the average o f those towns and the m etropolitan area.

Tasmania: Like W estern Australia, Tasmania, generally speaking, represented the opposite of the trend in the three eastern mainland States. T h e ratio of persons registered to vacancies was generally greater in the capital city than in the three major provincial towns, but with some exceptions, e.g. Devonport and Launceston males in 1967, Devonport females in 1965,

Burnie females in 1965 and 1966.

Skilled Labour: Tables 7 to 12 compare persons registered for employment and recorded vacancies for skilled labour only, in respect of the metropolitan areas and large provincial towns in the six States. N ote, however, that the Commonwealth Employment Service does not cover all vacancies and job-seekers for skilled jobs.

In all States, the num ber o f skilled jobs sought or required outside m etropolitan areas is relatively small. F u rth er, th e range o f skills among people registering w ith the individual D istrict Employment Office can sometimes be very limited. One significant instance o f surplus skilled labour, from the following Tables, is Cessnock, where a very large proportion of those

registered for employment are miners whose skills are not readily transferable to other indus­ tries. Although data for females are included, num bers are too small to enable meaningful comparisons to be made and so the following discussion is confined to males. In New South Wales, it is somewhat difficult to generalise about the relative availability

o f skilled labour in the D istrict Employment Office areas incorporating the major provincial towns. Broken Hill and Cessnock districts have both tended to have an excess o f skilled registrants over vacancies, bu t the numbers have been quite small and included some specialists, e.g., skilled mine workers with skills not readily transferable. In Newcastle and Wollongong larger num bers o f skilled workers have been registered with the C.E.S. b u t, relative to the

dem and as indicated by registered vacancies, the availability o f skilled labour was less in these two centres than in Sydney during 1965 and 1966, though greater in 1967. In Victoria a clear pattern emerged. Apart from Warragul in 1966, the ratio of registrants to vacancies was consistently and often substantially higher in the non-metropolitan areas.

T here were considerable differences between provincial cities, e.g., Geelong and Warragul. In Queensland no clear pattern emerged. For Rockhampton and Toowoomba, the ratio of registrants to vacancies was consistently below the metropolitan figures. For Townsville, on the other hand, it was consistently higher.

In South Australia the ratio o f registrants to vacancies was generally much lower in the three purely provincial centres than for either Adelaide or Elizabeth. In Western Australia the ratio o f registrants to vacancies tended to be lower in non­ metropolitan areas b u t one o f these areas, Bunbury, had easily the highest ratio for the State.

In Tasmania th e ratio o f registrants to vacancies was consistently lower in non-m etro­ politan areas in 1965 and 1966 and consistently higher in 1967.

Work Force Participation Rates: T he proportion of the population either at work or who state that they are unemployed can be obtained from Census data. From this, relative work force participation rates for particular areas can be worked out. In terms of the original tri­ partite classification:

(a) those actually working; (b) those willing to work b u t not working; (c) those not wishing to work.

W ork force participation rates record the ratio of the sum of category (a) and part of category (b) to the total of (a), (b) and (c). Thus they give some guide to the num ber of those who are willing to work b u t not working (i.e. category (b)) but who do not register as unemployed with the C.E.S. T he assumption is that an area with a relative low participation rate, contains

a correspondingly higher proportion o f these people who by definition comprise unused labour resources.

363

P e r s o n s R e g is t e r e d fo r E m p lo y m e n t a n d R e c o r d e d V a c a n c ie s , S k ille d L a b o u r o n ly , in C a p ita l C it ie s a n d L a r g e T o w n s ,

1 9 6 5 , 1 9 6 6 , 1 9 6 7 M o n t h ly A v e r a g e s b y S e x a n d L o c a t io n

NEW SO U T H WALES

Table 7

D is tric t E m p lo y m e n t R eco rd ed V acancies P e rso n s R e g iste re d

Office

R a tio o f P e rso n s R e g iste re d to R e c o rd e d V acancies

Y ear M ales F e m a le s P e rso n s M ales F e m a le s P e rso n s M ales F e m a le s P e rs o n s

Sydney (Metropolitan area)

1965 2,802 51 2,853 1,607 33 1,640

1966 2,482 66 2,548 900 34 934

1967 1,936 47 1,983 971 23 994

0.57 0.36 0.50

0.65 0.52 0.49

0.58 0.37 0.50

Broken Hill* 1965 7 0 7 10 0 10

1966 6 0 6 11 0 11

1967 8 0 8 5 0 5

1.43 1.83 0.63

1.43 1.83 0.63

Cessnock* 1965

1966 1967

0 0 0

1 0 1

5 0 5

21 0 21

31 1 32

15 0 15

31.00 3.00

32.00 3.00

X <3

■St,

6*

S'

|

o

Newcastle* 1965 311 1 312 44 7 51

1966 197 1 198 90 7 97

1967 104 2 106 187 3 190

0.14 0.46 1.80

7.00 7.00 1.50

0.16 0.49 1.79

Wollongong* 1965 438 0 438 86 4 90

1966 436 1 437 154 4 158

1967 271 1 272 294 1 295

*See footnote to Table 1

0.20 — 0.21

0.35 4.00 0.36

1.09 1.00 1.09

P e r s o n s R e g is te r e d fo r E m p lo y m e n t a n d R e c o r d e d V a c a n c ie s , S k ille d L a b o u r o n ly , in C a p ita l C itie s a n d L a r g e T o w n s ,

1 9 6 5 , 1 9 6 6 , 1 9 6 7 M o n t h ly A v e r a g e s b y S e x a n d L o c a t io n

VICTORIA

T a b l e 8

D istric t E m p lo y m e n t R ecorded V acancies P erso n s R eg istered

Office

Y ear M ales F em ales P erso n s M ales F em ales P e rso n s

Melbourne 1965 4,882 151 5,033 510 29 539

(Metropolitan Area) 1966 4,616 145 4,761 813 41 854

1967 3,669 123 3,792 1,010 45 1,055

Geelong* 1965 220 1 221 94 4 98

1966 132 1 133 176 8 184

1967 110 0 111 172 11 183

Ballarat* 1965 176 0 176 48 1 49

1966 88 1 89 42 1 43

1967 56 0 56 50 1 51

Bendigo* 1965 130 1 131 32 2 34

1966 99 0 99 35 1 36

1967 99 1 100 51 3 54

Warragul* 1965 184 0 184 23 1 24

1966 218 0 218 29 1 30

1967 137 0 137 49 3 52

*See footnote to Table 1.

R atio o f P erso n s R eg istered to R eco rd ed V acancies

M ales F em ales P e rso t

0.10 0.19 0.11

0.18 0.28 0.18

0.28 0.37 0.28

0.43 4.00 0.44

1.33 8.00 1.38

1.56 — 1.65

0.27 — 0.28

0.48 1.00 0.48

0.89 — 0.91

0.25 2.00 0.26

0.35 — 0.36

0.52 3.00 0.54

0.13 — 0.13

0.13 — 0.14

0.36 — 0.38

I

5i -3 •a. F

s a. t- 8.

| Q E·

o r

Persons Registered for Employment and Recorded Vacancies, Skilled Labour only, in Caiptal Cities and Large Towns, 1965, 1966, 1967 Monthly Averages by Sex and Location SOUTH AUSTRALIA

Table 10

District Employment Recorded Vacancies Persons Registered

Office

Year Males Females Persons Males Females Persons

Adelaide 1965 1,141 15 1,156 226 27 253

(Metropolitan area) 1966 517 11 528 565 29 594

1967 336 12 348 623 30 653

Elizabeth* 1965 97 1 98 57 5 66

1966 68 0 68 100 4 104

1967 77 2 79 85 2 87

Mt Gambier* 1965 39 0 39 3 0 3

1966 33 0 33 6 0 6

1967 23 0 23 13 0 13

Pt Augusta* 1965 283 0 283 9 0 9

1966 181 0 181 3 0 3

1967 236 0 236 10 0 10

Pt Pirie* 1965 48 0 48 6 0 6

1966 38 1 39 12 0 12

1967 10 0 10 12 0 12

•See footnote to Table 1.

Males 0.20 1.80

1.09 2.64

1.85 2.50

0.59 5.00

1.47 1.10 1.00

0.07 —

0.18 —

0.57 —

0.03 —

0 . 0 2 —

0.04 —

0.13 —

0.32 —

1.20 —

Persons 5.

0.22 |

1.13 g

1.88 s

0.03 £

0 .02 g.

0.04 &

Q

0.13 5­

0.31 Ξ

1.20 g

--------- o

Ratio of Persons Registered to Recorded Vacancies

Females

0 .1 0 0.05 0.06

0.16 0.13 0.39

•See footnote to Table 1.

Table 12

Persons Registered for Employment and Recorded Vacancies, Skilled Labour only, in Capital Cities and Large Towns, 1965, 1966, 1967 Monthly Averages by Sex and Location TASMANIA

D istrict Em ploym ent R ecorded Vacancies Persons R egistered

Office

Year Males Fem ales Persons Males Fem ales Persons

σ~ Hobart 1965 142 1 143 70 2 72 V O 1966 179 1 180 58 2 60 1967 314 0 314 33 1 34

Burnie* 1965 79 0 79 16 1 17

1966 124 0 124 19 1 20

1967 210 0 210 26 0 26

Devonport* 1965 16 0 16 6 0 6

1966 27 0 27 5 0 5

1967 37 0 37 7 0 7

Launceston* 1965 124 1 125 29 2 31

1966 152 3 155 30 1 31

1967 142 2 144 48 3 51

R atio of Persons R egistered to Recorded Vacancies

Males Fem ales Persoi

0.49 2.00 0.50

0.32 2.00 0.33

0.11 — 0.11

0.21 0.22

0.15 — 0.16

0.12 — 0.12

0.38 0.38

0.19 — 0.19

0.19 — 0.19

0.23 2.00 0.25

0.20 0.33 0.20

0.34 1.50 0.35

X

<8.

I S'

♦See footnote to Table 1.

\ed Lai

The following Table 13 shows the work force (all ages) as a proportion of the population aged 15 to 64. Ideally, it would be desirable to confine both work force and population to similar age groups, but this cannot be done, as there are no census data cross-classifying the work force by both age and location. In preparing the table, it has been assumed that the distribution of the work force outside the 15 to 64 group, as between capital city and other areas, is identical with those inside the group. Even if this is not completely accurate, the numbers involved are so small that any possible error would be only minor.

Given the assumptions involved, it would appear that there is no significant difference in the relative availability of unused male labour between capital cities and other areas. On the other hand, there appears to be a greater quantity of potentially available female labour in large towns, than is the case in the capital cities. In assessing the significance of this, it is necessary to keep in mind the difficulty in generalising about so complex a community as a large city. Information supplied by the local district officers of the Commonwealth Employ­

ment Service, suggests that female work force participation within capital city areas is far from uniform, being very high in inner urban areas, and much lower in outer suburban areas, even possibly equal to non-metropolitan towns.

Conclusion: This analysis has been in terms of relative availability of unused labour. Unused labour resources have been defined as that group in the community willing to work, but not actually working. No precise measurement of this group is possible at present; but some indication of its size is drawn from two sets of related statistics—Commonwealth Employment

Service data of registered vacancies and persons registered for employment and workforce participation rates derived from Census statistics. On the basis of Commonwealth Employment Service statistics, it would appear that for the three eastern mainland States, New South Wales, Victoria and Queensland, in the years

1965 to 1967 inclusive, unused labour resources relative to demand were somewhat greater in the major provincial centres than in the capital cities. No such trend is evident in South Australia, Western Australia and Tasmania where the situation appears to have been one of closer balance between the two sectors.

Differences in labour availability between various provincial centres were often consider­ able. This points up the danger involved in generalising about labour availability in non­ metropolitan centres as a single concept and the need to consider each centre individually in relation to the particular matter in hand.

On the basis of work force participation rates, there appears to be no significant difference for males as between capital cities and the major non-metropolitan centres. But in the case of females there does appear to be a significantly greater proportion of unused labour in non­ metropolitan areas. However, other evidence indicates that work force participation within the metropolitan area differs widely, and that the participation rate of females in provincial towns may not differ very greatly from that in outer suburban areas.

Considering now the evidence from both sets of statistics mentioned, it appears that, in terms of absolute numbers, the total unused labour in non-metropolitan areas is less than in the capital cities, and is largely female and unskilled. For each of the provincial centres con­ sidered separately, the amount of unused labour would be quite small.

Relative Availability of Unused Labour in Capital Cities and Other Areas

370

Relative Availability of Unused Labour in Capital Cities and Other Areas

Table 13

Work Force as Percentage of Population Aged 15-64, By Sex and Degree of Urbanisation (1961 Census) MALES

W ork Force Population W ork Force

15-64 as

P ercentage of P op u latio n 15-64

Capital cities 1,767,361 1,860,325 95.0

Other urban Four largest towns in each State* 312,477 329,111 94.9

Remaining towns 459,142 483,231 95.0

Total, other urban 771,617 812,342 95.0

Rural 607,786 609,862 99.6

Migratory 19,161 19,378 98.9

T otal 3,165,927 3,301,907 95.9

FEMALES

W ork Force Population W ork Force

15-64 as

P ercentage of P opu latio n 15-64

Capital cities 716,544 1,856,143 38.4

Other urban Four largest towns in each State* 90,404 315,084 28.7

Remaining towns 143,356 478,674 29.9

Total, other urban 233,760 793,758 29.4

Rural 107,279 481,516 22.3

Migratory 1,586 3,607 44.0

T otal 1,059,169 3,135,024 33.8

PERSONS

W ork Force Population W ork Force

15-64 as

P ercentage of P opulation 15-64

Capital cities 2,483,905 3,716,468 66.8

Other urban Four largest towns in each State* 402,881 644,195 62.5

Remaining towns 602,498 961,905 62.6

Total, other urban 1,005,379 1,606,100 62.6

Rural 715,065 1,091,378 65.5

Migratory 20,474 22,985 90.3

T otal 4,225,096 6,436,931 65.6

♦ In c lu d in g also tw o tow ns (D arw in an d A lice S prings) in th e N o rth e rn T e rrito ry .

371

Book E ig h t

D e p a r t m e n t o f

L a b o u r a n d N a t io n a l S e r v ic e

R elative Wages in M etro p o litan an d N o n -M etro p o litan A reas

R elativ e W ages in M etro p o litan an d N o n -M etro p o litan A reas

In response to a request from the Commonwealth-State Technical Sub-committee on Decentralisation, the Department of Labour and National Service, in January 1968, under­ took a survey of wages in metropolitan1 and non-metropolitan areas. The purpose of the survey was to compare wages for similar work in those areas, with a view to providing an indication as to whether differences in wage costs were a factor in the location of firms.

The survey covered all six States and, in each State, 13 recognised occupations that appeared as specific classifications in the appropriate Federal or State Award or both: Fitter, General Engineering; Welder, 1st Class; Electrical Mechanic (metal trades); Electrical Mechanic (contracting); Compositor, Hand and Machine; Process Worker, Metal Trades; Truck Driver, 25 cwt to 3 tons; Storeman and Packer (General); Machinist (2nd class); Clerk (General) Male over 23 years; Typist, female over 23 years; Machinist (female) Textile Trades, Experienced; and Carpenter and Joiner, Joinery Shop.

For each occupation in each State information was sought from eight firms, four in the country and four in metropolitan areas. Each metropolitan firm was ‘paired1 with a corres­ ponding firm in the country. In each instance the ‘pairs’ were designed to be comparable in that both were manufacturing similar products or engaged in similar industries; both employed an approximately equal number of workers; and both engaged in similar work within the

various occupations being examined. The country areas from which data was drawn covered a wide spectrum of non-metro­ politan Australia, from large provincial cities such as Newcastle, Geelong and Launceston, to small urban centres such as Kiama (New South Wales) and Berri, Nairne and Mannum

(South Australia). Figures were obtained for both actual wages and award wages. Actual wages included incentive payments, bonuses, etc. but not overtime payments which of course involve additional work.2 All data related to the wage of an employee beyond the first six months of employment since during this initial period wages are frequently less than those paid subsequently.

The information was gathered by choosing what was regarded as a sample of firms capable of giving a reasonable indication of the current position. In seeking the data in the various states the original requirements for comparability could not always be met, so that unlike industries and unequally sized firms had sometimes to be ‘paired’. In a number of instances no satisfactory information on wages could be obtained at all. During the period of the study there was some uncertainty in industry over the question of the absorption of over-award payments following the metal trades work value judgement in 1967. This uncertainty and the understandably sensitive nature of the subject made some firms unwilling, and in some cases unable, to provide readily the information sought. Con­ sequently, the number of firms involved in the study was less than anticipated3. In fact, a

1 I n th is p a p e r ‘m e tro p o lita n areas’ m e an capital city areas. T h e te rm s ‘n o n -m e tro p o lita n areas’ an d ‘co u n try areas’ are used sy n o n y m o u sly in th e p a p e r. .

2 T h e w ages co n sid e red w ere gross w ages, th a t is p rio r to ded u ctio n s su ch as tax an d su p eran n u atio n p aym ents. 3 A ll to ld so m e 300 firm s ev e n ly d iv id ed b etw e en m e tro p o lita n an d c o u n try areas p articip ated in this survey. T h e firm s re p re ­ sen te d th e m a jo r in d u s trie s , an d ran g ed fro m sm all size to very large. T h u s 109 o f th e firm s em ployed less th a n 50 w orkers 37 b etw e en 250 a n d 500 w orkers an d 21 o v er 500 w orkers.

375

considerable amount of ‘doubling-up’ occurred—the same firms supplying information for more than one occupation. Sometimes job classifications varied from state to state leading to further difficulties in establishing comparability.

Incidence o f W age V ariations—all O ccupations T ogether: The following table shows the incidence of wage variations between metropolitan and country areas. For a total of 238 ‘matched pairs’ of occupations covering the thirteen award classifications in the six states, it

Relative Wages in Metropolitan and Non-Metropolitan Areas

T ab le 1

Incidence of Wage Variations—All Occupations Together (i) AWARD WAGE RATES*

S tate H igher in H igher in No

M etropolitan C ountry Difference

Areas

New South Wales 3 1 47

Victoria — — 37

Queensland — 18 30

South Australia — 13 24

Western Australia 1 I 25

Tasmania 14 2 22

Australia 18 35 185

(ii) OVER-AWARD PAYMENTS

State H igher in H igher in No

M etropolitan C ountry Difference

A reas

New South Wales 32 19

Victoria 25 10 2

Queensland 28 15 5

South Australia 12 19 6

Western Australia 15 5 7

Tasmania 9 9 20

Australia 121 77 40

(iii) ACTUAL WAGES

State H igher in H igher in No

M etropolitan C ountry Difference

Areas

New South Wales 31 19 1

Victoria 25 10 2

Queensland 25 20 3

South Australia 12 20 5

Western Australia 13 9 5

Tasmania 15 7 16

Australia 121 85 32

♦A w ard rates w ere th e sam e fo r m o st o f th e ‘m a tc h e d p airs’. D ifferences occurred in a m in o rity o f cases. T h is appears to have been d u e first to th e existence o f ‘locality loadings’ an d second to th e fact th a t one o f th e ‘m a tc h e d p airs’ m ig h t w ork u n d e r a F ed eral aw ard w hile th e o th e r w orked u n d e r a S tate aw ard.

376

indicates the num ber o f instances where the metropolitan member of the ‘pair’ paid a higher wage, the num ber where the country m ember paid a higher wage, and where they both paid the same. Inform ation is provided separately for actual wages, award wages and over-award payments.

A broad pattern emerges from the table. As between ‘matched pairs’ o f firms, actual wages were more frequently higher for the m etropolitan than the country component. The difference in frequency, however, was not particularly great. In South Australia the pattern was the reverse o f that for the rest of the Commonwealth. In that state the greater frequency of higher country wage rates reflected the num ber of Whyalla based firms included in the

survey. In the case o f over-award payments, these were more frequently higher in the metro­ politan than in the country components o f each ‘matched pair’. Both South Australia and Tasmania, however, diverged from this pattern.

A m ount o f W age V ariatio n s—A ll O ccupations T ogether: T he following table gives an indication o f the am ount o f the difference between metropolitan and country wages. The figures represent in each instance the average o f all the responses received for each State and for Australia as a whole.

Relative Wages in Metropolitan and Non-Metropolitan Areas

T able 2

A v e r a g e A c t u a l W a g e s b y S ta te — M e tr o p o lit a n a n d C o u n tr y A r e a s (S per week)

S ta te A v e ra g e A c tu a l W ag e f o r A ll

O c c u p a tio n s in th e S a m p le

M e tro p o lita n C o u n try

E x ce ss o f M e tr o p o lita n W ages o v e r C o u n try W ages

New South Wales 51.64 50.30 1.34

Victoria 49.36 50.19 - 0 .8 3

Queensland 48.08 47.44 0.64

South Australia 45.28 45.87 - 0 .5 9

W estern Australia 50.08 49.85 0.23

Tasmania 48.02 47.78 0.24

Australia 48.90 48.60 0.30

Although for most states the average actual wage was higher in metropolitan areas, the difference in the average for Australia as a whole can scarcely be regarded as very significant.

Incidence o f W age V ariatio n s—Individual O ccupations: Table 3 shows for each of the 13 occupations, the incidence of wage variations between metropolitan and country areas— i.e. the num ber of instances in which the m etropolitan member of the ‘matched pair’ paid higher wages, the num ber in which the country m em ber paid higher wages and the number in which there was no difference between the two.

Eight of the individual occupations showed no major difference in the incidence of variations as between metropolitan and country areas. In four occupations, fitter, machinist, clerk and typist, the country m ember of the ‘matched pair’ paid lower wages· in most instances. In the case o f process workers, however, wages were mostly higher in the country.

A m ount o f W age V ariatio n s—Individual O ccupations: T he following table gives some indication of the am ount by which actual wages for individual occupations varied between metropolitan and country areas.

N1

377

Relative Wages in Metropolitan and Non-Metropolitan Areas

T ab le 3

Incidence of Variations in Actual Wages—Individual Occupations

O ccupation H igher in

M etropolitan Areas

H igher in C ountry Areas

No

Difference

Fitter—general engineering 14 5 2

Welder—1st Class 10 11 2

Electrical mechanic (i) Metal trades 10 9 1

(ii) Contracting 11 9 2

Compositor (hand and machine) 8 8 -

Process worker (metal trades) 6 10 -

Truck driver—25 cwt to 3 tons 7 7 3

Storeman and packer (general) 10 9 1

Machinist—2nd class 8 1 4

Clerk (general)—male over 23 12 2 6

Typist—over 23 13 3 4

Machinist (female)—textile trades 2 3 2

Carpenter and joiner, joinery shop 10 8 5

All occupations 121 85 32

T ab le 4

Average Actual Wages by Individual Occupations— Metropolitan and Country Areas ($ per week)

Average Actual Wage for Excess of

All States M etropolitan

Wages Over

O ccupation M etropolitan C ountry CountryW ages

Fitter—general engineering 53.27 51.72 1.55

Welder—1st class 52.84 53.26 -0 .4 2

Electrical mechanic (i) Metal trades 52.96 52.68 0.28

(ii) Contracting 55.05 54.98 0.07

Compositor (hand and machine) 58.68 58.48 0.20

Process worker (metal trades) 41.35 40.72 0.63

Truck driver—25 cwt to 3 tons 47.64 46.58 1.06

Storeman and packer (general) 44.56 44.19 0.37

Machinist—2nd class 46.10 44.79 1.31

Clerk (general)—male over 23 50.32 47.25 3.07

Typist—over 23 37.60 36.11 1.49

Machinist (female)—textile trades 33.71 33.04 0.67

Carpenter and joiner, joinery shop 52.96 53.34 -0 .3 8

All occupations* 48.90 48.60 0.30

♦This figure is obtained by totalling all the responses in each category and then averaging them.

In eleven of the 13 occupations the average of metropolitan wages exceeded that of country wages. In five instances, fitter, truck driver, machinist—2nd class, clerk and typist,

378

the margin was over one dollar. The average for all occupations showed metropolitan wages to be higher by a margin of only thirty cents.

C onclusion: As only a small sample has been taken, this survey cannot be used to conclude positively that significant differences in wage rates occur between city and country areas1. However, for most firms and occupations covered in this survey, actual wages were slightly higher in metropolitan areas than in the country; for Australia as a whole the margin was less than one per cent. In some states and some occupations the margin was considerably

greater.

Relative Wages in Metropolitan and Non-Metropolitan Areas

1 See also the section on wage rates in the Study of Relative Standard of Labour in Metropolitan and Non-Metropolitan areas, where 64 per cent of firms contacted reported no difference between the two areas.

379

Book N ine

D e p a r t m e n t o f L a b o u r a n d N a t io n a l S e r v ic e

R elative S ta n d a rd of L ab o u r in M etro p o litan an d N o n -M etro p o litan A reas

Relative Standard of Labour in Metropolitan and Non-Metropolitan Areas

I n tr o d u c tio n : In November 1967 the Department of Labour and National Service conducted a survey designed to obtain information on labour recruitment, quality of labour, labour turnover, absence rates, time keeping, efficiency of labour and wage rates in fifty selected firms with plants located in both metropolitan and non-metropolitan areas.1 The survey was

done at the request of the Commonwealth/State Technical Sub-Committee on Decentralisation as part of a program of studies into the factors involved in decisions concerning the location of industrial establishments. Each firm chosen for the study was required to have manufacturing plants in both metro­

politan and non-metropolitan areas and to be manufacturing similar products at each location. This specification raised some difficulties but eventually with the aid of the Productivity Groups sponsored by the Department, 50 firms regarded as broadly representative of various, but mainly manufacturing industry groups, were chosen. A break-up of the 50 firms by industry group and State is shown in Table l.1 2 As only 50 firms have been included in this survey,

Table 1

N u m b e r o f F ir m s in t h e S u r v e y b y I n d u s t r y G r o u p a n d S ta te

N .S .W . V ic. Q ld S.A . W .A . T as. A u st.

I n d u s tr y G ro u p Chemicals 2 1 1 1 1 6

T extiles 2 2 1 5

Clothing (including footwear) 1 2 3

Food, drink and tobacco 4 1 2 1 1 9

Timber products, building materials 1 1 1 3

Quarrying/concrete products 1 2 1 1 1 6

Heavy machinery 1 1

Fuels 1 1

Packaging 1 1 1 3

Transport 1 2 3

Commerce 4 4

Retail 2 2

Woolbrokers and stock and station agents 2 1 3

Miscellaneous 1 1

T o ta l 9* 19 6 4 5 7 50

* T h e sm all n u m b e r o f firm s selected in N ew S o u th W ales was d u e to th e fact th a t an earlier N ew S o u th W ales su rv ey d u p licatin g several o f th e q u estio n s covered in th is survey, h ad m ade it difficult to find e n o u g h additional firm s to m e e t th e c riteria o f th e p re s e n t stu d y . T h u s th e sam ple is n o t divided pro p o rtio n ately b etw e en S tates, w h ic h fact, to g e th e r w ith th e sm allness o f th e overall sam ple, p reclu d e any com parative

analysis as betw een S tates in th e study.

1 I n th is p a p e r ‘m e tro p o lita n areas’ m e a n capital city areas. T h e te rm s ‘n o n -m e tro p o litan areas’ and ‘co u n try areas’ are used syn o n y m o u sly in th e p ap e r. 2 T h e to tal n u m b e rs em ployed in b o th m e tro p o lita n an d co u n try areas in th e fifty firm s ran g ed from 20 to 7,400. M o st w ere

typical m id d le sized to large firm s: tw e n ty o f th e 50 em ployed m o re th a n 500 p eo p le; only 12 em ployed less th a n 200.

383

the numbers of firms falling into industry or State groups are too small to allow any com­ parative analysis between industries or between States. Therefore the analysis which follows concerns itself with a single group of 50 firms—covering a wide spectrum of industry operating in Australian metropolitan and non-metropolitan areas. Non-metropolitan areas included in the survey ranged from large provincial cities such as Newcastle and Geelong down to small urban centres such as Dungog (New South Wales), Maldon (Victoria), Roma (Queensland) and Northam (Western Australia).

Information was sought from the firms by means of a questionnaire (Appendix). As can be seen in the Appendix executives of the firms were asked to give opinions about their expe­ rience on certain specific questions presented in the questionnaire in such a way that the opinions could be analysed statistically. The tables and the text below present this analysis. In addition, the executives concerned were asked to offer any comments on, or reasons for, the differences they had recorded between metropolitan and non-metropolitan labour. These interesting,, albeit subjective, comments have been incorporated in the text below to present some relevant attitudes and feelings held by a reasonably large and important group of execu­ tives in firms operating in both metropolitan and non-metropolitan areas.

L im i ta ti o n s o f D a t a : As the data became available it was evident that in some respects comparisons between metropolitan and non-metropolitan experience could not be drawn with any confidence. Labour employed in some establishments was too small to allow any but limited comparisons. Some non-metropolitan firms operated as independent units for employ­

ment purposes and, through lack of a personnel section, were unable to provide adequate information. In a few instances the answers given were not suitable and did not contribute to the study. It is necessary to stress that the study was a subjective one; the conclusions reached are based upon opinions of individuals—individuals with employer orientated attitudes. Rather than being a limitation, this aspect of the study may indicate its usefulness.

L a b o u r R e c r u i t m e n t : Firms were asked to state for each of six general categories of labour— male, female, skilled, unskilled, manual and non-manual labour—the relative ease of recruit­ ment in metropolitan and non-metropolitan areas.1 Table 2 shows that in three of these areas— male, skilled and non-manual labour—a majority of firms found recruitment easier in metro­ politan areas. For the remaining three—female, unskilled and manual labour—there was no strong tendency in either direction.

Relative Standard o f Labour in Metropolitan and Non-Metropolitan Areas

Table 2

R e la tiv e E a s e o f L a b o u r R e c r u itm e n t in C a p ita l C ity a n d

O t h e r ’ A r e a s , b y C la ss o f L a b o u r

C la s s o f F ir m s F i r m s F ir m s N o t T o ta l

L a b o u r R e p ly in g : R e p ly in g : R e p ly in g : A p p lic a b le

‘E a s ie r in ‘E a s ie r in ‘N o

M e tr o p o lita n N o n -M e tr o . D iffe re n ce

A r e a s ’ A r e a s ’

No. % No. 0/ /o No. % No. 0/ Zo No. 0/ Zo

Male labour 26 (52) 11 (22) 10 (20) 3 (6) 50 (100)

Female labour 14 (28) 9 (18) 12 (24) 15 (30) 50 (100)

Skilled labour 28 (56) 5 (10) 10 (20) 7 (14) 50 (100)

Unskilled labour 12 (24) 16 (32) 17 (34) 5 (10) 50 (100)

Manual labour 13 (26) 14 (28) 12 (24) 11 (22) 50 (100)

Non-manual labour 26 (52) 4 (8) 8 (16) 12 (24) 50 (100)

1 T h e s e categories o v erlap , so th a t each m u s t be co n s id e re d in d e p en d en tly of th e other.

J 8 4

Regarding particular occupations, there was some agreement in the replies that clerical staff and most tradesmen, especially metal tradesmen and within this category, particularly fitters and turners, were more easily recruited in the city.

Q uality o f Labour: Firms were asked to state and then to elaborate on whether there have been any differences in the general quality of labour offering for employment in the two types of areas. This was a very general question left purposely vague. As expected, respondents placed many and varied interpretations on the meaning of ‘quality of labour’. The discussion below reveals some of these interpretations and presents their comments in tabular form.

O f course as can be seen in the Appendix, most of the other questions in the questionnaire were directed at various and more specific aspects of ‘quality’.

Relative Standard of Labour in Metropolitan and Non-Metropolitan Areas

Table 3

D if fe r e n c e s in t h e Q u a lity o f L a b o u r E m p lo y e d in

M e tr o p o lit a n a n d N o n - M e t r o p o lit a n A r e a s

S u p e r io r Q u a lity in

N u m b e r s o f F i r m s M e tr o p o lita n

A re a s

N o n ­

M e tr o p o lita n A re a s

N o t S ta te d

T o ta l

Replying: ‘Difference in quality of labour’ 7

Replying: ‘No difference in quality of labour’ —

22 4 33

14

Not stated — — — 3

T o ta l — 50

Some replies were indefinite; others varied with different classes of labour. But of the 33 firms which detected differences in the quality of labour, 22 found non-metropolitan labour superior.

Very often firms had little to add to these claims. Country employees for instance were simply described as ‘more stable’, ‘more willing to work’ and ‘quickly adaptable to their environment’. Some firms commented that casual or short-term labour in country areas was of superior

quality because much of it was provided by farmers seeking to supplement their incomes with outside employment. Country drivers were also instanced by some as being of superior quality and this was attributed to their concern, not only with their employer’s reputation, but also with their own reputation in small closely knit communities.

The tendency for employees with above-average education—those who would normally seek non-manual work if they were in the city—to accept factory employment in country areas because of the lack of opportunities there, was also advanced as contributing to this higher quality country work force.

In the case of skilled tradesmen it was claimed that they tended to specialise less narrowly than their city counterparts and were thus more versatile. Versatility was also claimed to apply to other classes of labour in non-metropolitan areas where men are often engaged in a variety of operations during the year.

One of the few direct criticisms of the quality of labour in non-metropolitan areas was that very often there was no alternative but to employ itinerant workers.

385

On the other hand, taking metropolitan labour as a whole, it was generally agreed that the main point in its favour was the wider available selection of employees. For this reason positions involving skill and responsibility were more easily filled there. Varied backgrounds of experience, better experience in particular fields—e.g. general factory operations and condi­ tions—and higher educational qualifications were advanced as factors supporting the proposi­ tion that selection of suitable employees for more responsible positions was easier in metro­

politan areas. It was suggested, however, that the large number of positions available in metropolitan areas created a tendency for employees to drift from job to job, to display a degree of disinterest in their work, and to be ‘less stable and less hard-working’, qualities which, according to one

respondent, were noticeable more especially in unskilled workers.

L a b o u r T u r n o v e r : Labour turnover was, according to 60 per cent of respondents, higher in metropolitan areas. The majority of firms made the same observation in respect of every individual labour category. The observation was somewhat more conclusive in regard to male than female labour.

Relative Standard o f Labour in Metropolitan and Non-Metropolitan Areas

Table 4

D if f e r e n c e s in L a b o u r T u r n o v e r in M e tr o p o lita n a n d N o n - M e t r o p o lit a n A r e a s , b y C la s s o f L a b o u r

C la ss o f F ir m s F ir m s F ir m s N o t T o ta l

L a b o u r R e p ly in g : R e p ly in g : R e p ly in g : A p p lic a b le

‘H ig h e r in ‘H ig h e r in ‘N o

M e tr o p o lita n N o n -M e tro . D iffe re n c e ’

A re a s ’ A r e a s ’

No.

Male labour 29

Female labour 18 Skilled labour 18 Unskilled labour 21 Manual labour 20 Non-manual

labour 21

All labour 30

0/ /o No. %

(58) 5 (10)

(36) 1 (2)

(36) 5 (10)

(42) 7 (14)

(40) 5 (10)

(42) 3 (6)

(60) 6 (12)

No. % No.

11 (22) 5

15 (30) 16

11 (22) 16

11 (22) 11

13 (26) 12

12 (24) 14

10 (20) 4

% No. %

(10) 50 (100)

(32) 50 (HO)

(32) 50 (100)

(22) 50 (100)

(24) 50 (100)

(28) 50 (100)

(8) 50 (100)

A wide variety of explanations for variations in relative turnover rates were offered by different firms. One common claim was that the ease with which jobs could be secured in metropolitan areas tended to produce a poor class of employee—restless with ‘no sense of belonging’. Related to this also was the assertion that metropolitan employees, with plentiful job opportunities, were more financially oriented than country employees and would change jobs readily for even small pay increases; the latter were forced by circumstances to regard job security as their

primary concern. A factor said to raise indirectly the level of labour turnover was the superior training facilities found in large metropolitan firms. Such facilities were thought to encourage workers to seek promotion not only inside but outside the firm. Similarly superior technical facilities and more rapid introduction of new techniques in the more progressive firms were said to lead to an increase in turnover in metropolitan areas.

Where labour turnover was higher in country areas this was for the most part said to be due to seasonal influences. This was so not only because a new labour force had to be recruited at the beginning of each season, but also because transient labour was often poor quality labour prone to constant movement.

386

In addition, firms in poorly developed country areas deficient in education, housing, transport and cultural facilities, were regarded as especially prone to loss of particularly skilled employees to metropolitan areas. Further, migrants and Aborigines were both cited as con­ tributing to labour turnover in country areas; the former because having found work initially

in country centres and become established financially, they then moved to metropolitan areas; and the latter because they tended to have migratory habits and were concentrated in rural areas.

Relative Standard of Labour in Metropolitan and Non-Metropolitan Areas

A b s e n c e f r o m W o r k : Information about absence from work was divided into three parts: absence due to (i) accidents, (ii) sickness, and (iii) other causes. In each part, the majority of respondents reported no differences between metropolitan and non-metropolitan areas. But where differences were reported, nearly all the firms felt that there were greater time losses in

metropolitan areas.

Table 5

D if f e r e n c e s in T i m e L o s t T h r o u g h A b s e n c e fr o m W o rk

N o. o f F ir m s

r e p ly in g ‘G r e a t e r T im e L osses in M e tr o p o lita n

A re a s ’

N o. o f F ir m s

r e p ly in g ‘G r e a te r T im e L o sses in N o n -M e tro .

A re a s ’

N o. o f F ir m s

r e p ly in g ‘N o d iffe re n c e in T im e

L o s t’

N o t S ta te d T o ta l

Absence due to accidents 13 3 30 4 50

Absence due to sickness 19 3 26 2 50

Absence due to other causes 18 4 23 5 50

A bsence due to A ccidents: Where time lost as a result of accidents was indicated to be higher in metropolitan firms (13 firms), a number of points emerged. One firm claimed that although attitudes towards safety were comparable in both areas, ‘exposure rate was significantly higher in metropolitan factories’. T he firm was presumably referring to longer man-hours worked in

metropolitan areas and the consequently longer time each individual spent in the work situation. Some firms suggested that a higher accident rate in metropolitan areas might be due to the longer and more complex travelling between home and work; to the different kinds of personnel offering for employment in each area; and to the consequences of certain social conditions thought to prevail more in metropolitan areas—in particular the tendency for many employees to take part-time employment in addition to their normal jobs.

Related to the reported lower incidence of absence due to accidents in country areas were the observations that workers were more easily supervised, formed more closely-knit work groups and were able to establish closer management/employee relations. They were thus more strongly concerned about ‘letting the side down’, and more readily regarded a low

accident frequency as a mark of achievement.

A bsence due to Sickness: As Table 5 showed, the majority of firms reported that there were no differences in the amount of time lost through sickness in metropolitan and country areas. However, 22 firms stated that there were differences and, of these, 19 said that the time lost was greater in metropolitan areas.

A variety of explanations for the differences was provided but the most common explan­ ation was the more impersonal employer/employee relations in metropolitan firms brought

387

about by the larger size of such organisations. In addition it was felt that the small size of country communities made it relatively more difficult for employees in country firms to take time off where there was no valid excuse for doing so.

A bsence due to O ther Causes: Again, as can be seen in Table 5, the picture which emerged from the replies to this question was similar to that obtained in respect of the other two ques­ tions on absence from work. Where absenteeism of this type was stated to be higher in city areas, many of the explanations were also similar to those provided for absence due to sickness. Many firms mentioned in addition that the ease with which metropolitan workers could obtain alternative jobs made them more prone to absenteeism than country workers. On the other hand in country areas, where employment opportunities were considerably more limited, the threat of possible dismissal following leave without permission was regarded more seriously.

T im e k e e p in g : Overall, the replies to this question suggested that timekeeping standards were comparable in metropolitan and non-metropolitan areas. O f the 45 firms who replied to this question, 35 said that there were no differences in standards between the two areas, five said that standards were lower in the capital city and the remaining five said that they

were lower in non-metropolitan areas. In the few instances where standards were reported to be lower in metropolitan firms, the cause was generally considered to be the longer travelling distance between home and work and the more congested traffic conditions. Lower standards of punctuality were also attributed to the greater availability of job opportunities and more lax supervision in metropolitan firms.

On the other hand, those firms which reported a lower standard of timekeeping in country areas attributed this to the less reliable public transport in such areas, the more casual approach o f country employees to time, and the opportunities available to them for supplementing their wages through part-time farming and seasonal work.

E ffic ie n c y o f L a b o u r : Most firms indicated that they detected no difference in the efficiency of labour employed in the two types of areas. O f the 20 firms that did indicate a difference, a slight majority felt that labour in metropolitan areas was more efficient.

Relative Standard o f Labour in Metropolitan and Non-Metropolitan Areas

Table 6

D if f e r e n c e in E ffic ie n c y o f L a b o u r E m p lo y e d in M e tr o p o lita n a n d N o n - M e t r o p o lit a n A r e a s

E ffic ie n c y H ig h e r in

N u m b e r s o f M e tr o p o lita n N o n ­

F i r m s A re a s M e tro p o lita n

A re a s

N o t S ta te d

T o ta l

Replying: ‘Difference in efficiency of labour’ 11 8 1 20

Replying : ‘No difference in efficiency of labour’ 27

Not stated — — — 3

T o ta l — — — 50

It is interesting to compare the above replies with those to the question on quality of labour (see Table 3). In that case, a majority of the firms (33) answered that there was a differ­ ence in the q u a lity of labour in the two areas; and of these firms, 22 thought that quality was

388

higher in non-metropolitan areas. On the face of these contrasting replies, one can conclude that overall the firms felt that quality and efficiency were conceptually different, the former being more apparent in country areas and the latter more in metropolitan areas. On the other

hand, one must suspect that the emotive values likely to be associated with the terms ‘quality’ and ‘efficiency’ could easily have led to the contrasting replies given. Returning to the replies concerning efficiency of labour, several of the firms reporting equal efficiency, qualified their remarks. Whereas they felt that educational standards, and therefore levels of ability, were generally higher for metropolitan employees (more especially skilled employees), they also believed that this ability was offset by the greater degree of loyalty morale and work-interest shown by country employees. It was on such a basis that those firms

reported equal efficiency. As already mentioned, 20 firms did detect differences in efficiency. Replies from the 11 firms regarding metropolitan workers as more efficient, suggested that metropolitan workers were better educated, more highly skilled, more diligent and factory-minded; that they were

quickly adaptable to ‘automatic machinery and general production line methods’, and that they were quick-witted and appreciated the relationship between time and money. It would seem that the claimed superior efficiency of metropolitan workers was based largely on work qualities as opposed to innate or personal qualities. It was held to be the product partly of a broader factory experience, and partly of closer contact with senior management. Related to factory experience was the increased volume and tempo of work and higher speed machinery, all of which produced a more highly ‘geared’ metropolitan labour force. Widespread in-plant and outside training, more specialised positions for unskilled workers, and more intense competition between ambitious metropolitan employees due both to their greater

numbers and to the more favourable opportunities for promotion, were additional influencing factors. On the other hand, where employees in country areas were claimed to be more efficient, the reasons given were similar to those advanced in reply to other parts of the questionnaire.

Country workers were said to be more versatile, although perhaps less sophisticated than city employees; more reliable and conscientious; and easier to manage and more hard working. Another comment was that comparatively small communities engendered a feeling of fellow­ ship not only amongst the inhabitants in general, but amongst employees of relatively small firms; and as a result of this closer bond, it was suggested that workers tended to develop a desire to outdo the performance of their counterparts in the cities. Another factor, mentioned as probably contributing to higher efficiency of labour in country areas, was the fear that poor performance might lead to a ‘close-down of operations and consequent economic embarrass­

ment’ to the country firm.

D ilig e n c e a n d C o n s c ie n tio u s n e s s : 29 of the 50 respondents felt there were no special factors or attitudes operating in either metropolitan or non-metropolitan areas to influence the diligence and/or conscientiousness of employees. On the other hand, 21 firms felt that there were. To support this view these firms advanced

such reasons as the striving for job security by country employees, the less serious work- attitude of city workers more interested in making quick money than laying the foundation for a secure future, and the tendency for some metropolitan workers to hold two jobs.

W a g e R a te s : Overall there appeared to be no significant difference in wage rates paid to males or females in metropolitan and non-metropolitan areas for the 50 firms in this survey. Any wage rate differentials that existed were said to be due to one or more of the follow­ ing: (i) the existence of area allowances (for workers outside metropolitan areas); (ii) the fact

that some metropolitan workers might be covered by a Federal Award which was sometimes more generous than the corresponding State awards covering the corresponding country employees and vice versa; and (iii) special payments applying to specific categories of labour (female textile operatives were cited in the replies).

Relative Standard o f Labour in Metropolitan and Non-Metropolitan Areas

389

Relative Standard of Labour in Metropolitan and Non-Metropolitan Areas

Table 7

I n c id e n c e o f D if f e r e n c e s in W a g e R a te s P a y a b le t o E m p lo y e e s in

M e tr o p o lit a n a n d N o n - M e t r o p o lit a n A r e a s

S ex F ir m s

R e p ly in g : ‘D iffe re n c e in W age R a te s ’

F ir m s

R e p ly in g : ‘N o D iffe re n c e in W age

R a te s ’

F ir m s R e p ly in g : ‘N o t A p p lic a b le ’

N o t S ta te d T o ta l

Males 7 37 0 6 50

Females 5 32 4 9 50

C o n c lu s io n : Although the experiences of individual firms differed widely, the general im­ pression gained from the survey was that labour in country areas was of a somewhat higher standard than in metropolitan areas; precisely how much cannot be stated because of the qualitative nature of the replies.

In respect of two factors, ‘quality of labour’ and ‘labour turnover’, the majority of the replies showed a more satisfactory situation in non-metropolitan areas. In respect of ‘absen­ teeism’, a majority of firms detected no difference of any consequence, but of those which did detect a difference, an overwhelming proportion found the situation less satisfactory in metro­ politan areas.

Any implications of superiority of country labour should be drawn with caution. According to the comments given in this survey, country labour, when it is considered superior, is so mainly because of the differences in the sizes of the communities concerned. In smaller com­ munities job availability is so much less, that jobs are naturally more highly prized and workers are prepared to do more to retain them. Therefore, as a corollary, it would seem reasonable to suppose, that as the size of a country town increases and industrial diversification extends,

so then, whatever superior standards of labour it did enjoy, might tend to disappear. It would seem then that the major point which comes out of this survey is that this sizeable group of firms, with considerable experience in employing labour in both metropolitan and country plants, was able to detect so little difference in the labour available in the two types of areas. It is apparent that these firms were certainly confident that they were suffering no penalty, in respect of the standards of labour that they were able to attract, in locating some of their plants in country areas—if anything, they felt they enjoyed a slight bonus in doing so.

390

Appendix

Decentralisation of Industry A survey of labour employed in and away from capital cities conducted by the Department of Labour and National Service

November 1967

Name of firm .......

Location of (a) Head Office (b) Branch(es) .

Nature of business ..........................................................................................................................

Name and telephone number of executive who may be contacted in connection with this survey................................................................................................................................................

A. L a b o u r R e c r u i t m e n t 1. In which area, (capital city or other) have you found it easier to recruit the following categories of employees ? E a s ie r

in

E a s ie r in N o N o t

c a p ita l o th e r d if fe r - a p p lic -

c ity a r e a s e n c e a b le

(a) Male labour ...........................................................................................

(b) Female labour ............................................................................................

(c) Skilled labour ............................................................................................

(d) Unskilled labour ...........................................................................................

(e) Manual labour ...........................................................................................

(f) Non-manual labour ...........................................................................................

2. Please mention any particular trade or other classification (for example, carpenters, storemen, etc.) in which you have found recruitment for comparable work to be easier or more difficult in the capital city than in other areas.

(a) Easier in capital city...........................................................................................................

391

(b) More difficult in capital city

Appendix

3. In your experience are there any differences in the general quality of labour offering for employment in the capital city compared with other areas ? If so, please comment.

4. Please add any additional comment relevant to the recruitment of labour in capital city and other areas. '

B. L a b o u r T u r n o v e r 1. From your experience which of the following areas in general has a higher labour turnover rate of employees ?

Capital C ity................... Other A reas................... No Difference...............

2. In which area have you found labour turnover rates to be higher for each of the following categories of employees considered separately ?

H ig h e r H ig h e r

i n in N o N o t

c a p i t a l o th e r d if fe r - a p p lic -

c ity a r e a s e n c e a b le * 1

(a) Male labour ...........................................................................................

(b) Female labour ...........................................................................................

(c) Skilled labour ...........................................................................................

(d) Unskilled labour ...........................................................................................

(e) Manual labour ...........................................................................................

(f) Non-manual labour ...........................................................................................

3. What reasons can you advance for the situation described in your answers to questions 1 and 2 above ?

C. A b s e n c e f r o m W o rk —D u e to A c c id e n ts 1. I f there are differences in the amount of time lost through job-related accidents in comparable employment in capital city and other areas, in which area are the losses greater ?

Capital C ity ................... Other A reas................... No Difference...............

2. To what do you attribute any differences ?

3. Please add any additional comment relevant to this topic.

D. A b s e n c e f r o m W o rk —D u e to S ic k n e s s 1. I f there are differences in the amount of time lost through sickness in comparable employment in capital city and other areas, in which are the losses greater ?

Capital C ity ................... Other A reas................... No Difference...............

2. To what do you attribute any differences ? 3. Please add any additional comment relevant to this topic.

E. A b s e n c e f r o m W o rk —D u e to O t h e r C a u s e s 1. If there are differences in absence rates due to causes other than accidents or sickness, in which area is the absence rate generally higher ? Capital C ity ................... Other A reas................... No Difference...............

2. To what do you attribute any differences in such absence rates ?

3. Please add any additional comments relevant to absence rates.

392

F. T im e k e e p in g 1. I f there are differences in the standard of tim ekeeping, in which area is the standard generally low er?

Capital C ity .................... Other A reas.................... No Difference...............

2. To what do you attribute any differences in timekeeping ?

3. Please add any additional comments relevant to timekeeping.

G. E ffic ie n c y o f L a b o u r 1. Have you observed any differences in the efficiency of labour as between capital city and other areas ? Yes ( ) No ( )

If ‘yes’ please indicate how capital city labour differs from labour in other areas and give what you consider to be the reasons for these differences.

2. In your experience, are there any attitudes or special factors producing a difference in the diligence or conscientiousness of labour employed in the capital city as distinct from labour employed in other locations ?

Yes ( ) No ( )

3. If you have found that there are differences in diligence or conscientiousness, will you please indicate how capital city labour differs from labour in other areas, and what you believe to be the reasons.

H. W a g e R a te s 1. In your establishments are there any differences in wage rates paid to employees on comparable work in capital city and other areas ? (Please consider males and females separately).

Relative Standard o f Labour in Metropolitan and Non-Metropolitan Areas

Males .......................... Yes ( ) No ( )

Females ...................... Yes ( ) No ( )

2. If there are differences, in which occupations are the differences most marked ? I .

I. G e n e r a l

Please use the remaining space for any further comments you feel would throw additional light on differences which may exist in the behaviour in the work situation of labour in city and other areas.

393

Book Ten

Macquarie University

Some sociological aspects of life in New South Wales country towns

Contents

1. I n tr o d u c tio n page 399

Background 399

The Survey 399

2. E m p lo y m e n t A s p e c ts 401

Convenience to Employment 401

Availability of Employment 402

3. F a c ilitie s 403

Local Shopping in Country Towns 403

Convenience to Theatres 403

Convenience to Medical and Dental Facilities 403

Proximity to Relatives 404

Social and Sporting Club Membership 404

4. P r o x i m i t y to G o o d s a n d S e r v ic e s 405

Range of Goods and Services 405

Quality of Goods and Services 406

5. C o m p a r is o n o f C o u n t r y C e n tr e s w ith S y d n e y 407

Cost of Living compared to Sydney 407

Housing Costs 407

6. R e la tio n o f S o c io - E c o n o m ic F a c t o r s to A s p e c ts o f C o u n tr y T o w n L ife 409

7. S u m m a r y a n d R e v ie w 412

T a b le s 414

1. Travel Time of Journey to Work, Selected Country Towns, New South Wales 1968 415 2. Mode of Travel, Journey to Work, Selected Country Towns, New South Wales 1968 415 3. Availability of Alternative Local Jobs, Selected Country Towns, New South Wales 1968 415

4. Availability of Second Jobs, Selected Country Towns, New South Wales 1968 416 5. Normal Purchase of High Order Goods in Selected Country Towns, New South Wales 1968 416

6. Frequency of Visits to Live Theatres, Selected Country Towns, New South Wales 1968 416

7. Location of Live Theatre, Selected Country Towns, New South Wales, 1968 417 8. Location of Dentists Relative to Residence, Selected Country Towns, New South Wales 1968 417

9. Location of General Practitioners, Selected Country Towns, New South Wales 1968 417

397

Some sociological aspects of life in New South Wales country town

10. Location of Medical Specialists, Selected Country Towns, New South Wales 1968 418 11. Proximity of Hospitals, Selected Country Towns, New South Wales 1968 418 12. Frequency of Visits to Church, Selected Country Towns, New South Wales 1968 418 13. Frequency of Visits to Relatives, Selected Country Towns, New South Wales 1968 419 14. Proximity of Near Relatives, Selected Country Towns, New South Wales 1968 419 15. Social and Sporting Club Membership, and Proximity, Selected Country Towns,

New South Wales 1968 419

16. Convenience of Goods and Services, Selected Country Towns, New South Wales 1968 420

17. Range of Goods and Services Available, Selected Country Towns, New South Wales 1968 420

18. Quality of Goods and Services Available in Country Towns, New South Wales 1968 421

19. Comparison of New South Wales Country Towns with Sydney for Provision of Goods and Services, 1968 422

20. Comparison of General Costs of Living in Sydney and Selected Country Towns, New South Wales 1968 423

20A House Costs in Sydney and Selected Country Towns, New South Wales 1968 423 21. Significant Associations Between Socio-Economic Characteristics and Mode of Travel to Work, Country Towns, New South Wales, 1968 424

22. Significant Associations Between Socio-Economic Characteristics and Attitudes Towards Local Employment Opportunities, Country Towns, New South Wales, 1968 424

23. Significant Associations Between Socio-Economic Characteristics and Attitudes Towards Convenience, Range and Quality of Goods and Services, Country Towns, New South Wales, 1968 425

24. Significant Associations Between Socio-Economic Characteristics and Evaluation of Provision of Local Goods and Services Compared with Sydney, Country Towns, New South Wales 1968 427

25. Significant Associations Between Socio-Economic Characteristics and Attitudes Towards Range and Quality of Local Job Opportunities and Comparison of Local Job Opportunities with Sydney 428

26. Significant Associations Between Socio-Economic Characteristics and Frequency of Visits to Relatives, Country Towns, New South Wales, 1968 428

27. Significant Associations Between Socio-Economic Characteristics and Frequency of Visits to Church, Country Towns, New South Wales, 1968 429

28. Significant Associations Between Socio-Economic Characteristics and Attitudes Towards Relative Costs of Living in Sydney and Country Towns, New South Wales, 1968 429

29. Significant Associations Between Socio-Economic Characteristics and Attitudes Towards Comparative Housing Costs in Sydney and Country Towns, New South Wales, 1968 429

398

Introduction 1

B a c k g r o u n d : The report encloses the findings of a survey of some aspects of living in major country towns in New South Wales. It is an extension of a larger undertaking being conducted by geographers at Macquarie University, in which activity systems of people living in Sydney’s fringe areas are being studied. Household activity patterns represent the sum of movements

of the individual members of each family to work, to shop, to school, to church and to recreation. From a study of these patterns the rate and intensity of movement to, and the importance of convenience to, areas and institutions of the city can be gauged. The understanding of these patterns can have important planning implications. The various nodes in relation to which

planning decisions have traditionally been made—the Central Business District, the factory, the church, the neighbourhood, — may have to be replaced. The areal extent of the city and the dispersion of retailing and industry may put a greater emphasis on regionalisation within the city; increased leisure time and prosperity enlarges the importance of beaches and clubs.

As Sydney has become larger and more diffuse, district regionalisations of this type have been in evidence; and as Sydney splits into several regional spheres of influence separated by distance and congested transport routes, the relative benefits of country town living, where the same activity patterns are repeated without the congestion and expense of the city, become

greater.

T h e S u r v e y : The present survey was undertaken against this background. Twelve of the largest towns in the State were surveyed: A lb u ry , A rm id a le, B a th u rst, Dubbo, G oulburn, G rafton, L ism ore, L ith g o w , O range, T a m w o rth , Taree and W agga. Gosford, Cessnock and Queanbeyan were excluded because of their important and growing associations with the cities of Sydney,

Newcastle and Canberra. Broken Hill was omitted because of the specialised nature of its functions. The survey was conducted in three different ways to try and overcome bias in the results while keeping costs to a minimum. The first survey consisted of a ten per cent random sample of families selected from school enrolment lists; the second survey was conducted through service clubs in each town to provide a coverage of business and professional men; the third survey was conducted by mail to a ten per cent random sample of unmarried individuals and pensioners selected from electoral rolls and other sources. The response rate varied between

towns but on the average represented some six per cent of households in the towns and provided a substantial base of over 3,000 completed returns from which to draw conclusions. The survey form itself is divisible into three parts. The first asked for information concern­ ing the family size, age, sex, occupation, employment, schooling and accommodation of each household. The second section of the survey questioned the respondents on the distance and frequency of use of various services and retail items. The third part of the questionnaire sought

information regarding the convenience of various goods and services, their range and quality, and the cost of living in the country centres. The survey should be regarded as a first step in understanding the sociological patterns which exist in country centres; since sociological systems are neither good nor bad of themselves

399

but must be viewed in relationship to some outside criterion, constant reference to and com­ parison with Sydney has been maintained. Some of the results are confirmatory, substantiating generally held views concerning the convenience and ease of country town living; some of the results are exploratory, suggesting gaps in the opportunities offered to residents of country centres and pointing towards new directions of research and policy making which must be undertaken if country towns are to survive and grow under the fierce competition offered by the capital cities.

The survey results were analysed in two ways. Firstly, the availability, range, convenience and general suitability of various aspects of country life are examined and the results listed on a town by town basis. Secondly, these replies are linked to the socio-economic characteristics of the respondents to isolate the attitudes of the various groups towards living conditions and possibilities within country centres.

Some sociological aspects of life in New South Wales country town

400

Employment Aspects 2

C o n v e n ie n c e to E m p lo y m e n t: The most significant movement of people within a city is that from residence to work place. Recent work by Schmidt and Campbell1, in studies of 38 U.S. cities and by Willbur Smith and Associates2 in surveys of eight U.S. and Australian cities, suggest that the journey-to-work accounts for at least 40 per cent of the total number

of movements which begin at home. Traditionally the centre of the city, a focal point for converging transport routes and the most attractive location for industry and retailing, has been the area which provides employment for the largest number of people in the metropolitan area. In Sydney the position is now changing; shortages of land in the inner city areas and continuing high rates of home ownership have produced a constantly expanding city in which retailing has followed the expansion trends by decentralising. Government planning has accentuated the out-movement of industry producing a regionalisation within the city. Average

journeys-to-work have declined with the decentralisation of activity. Movements of people to work within country centres must be viewed against this background. Logan has shown that in Sydney 70 per cent of the people working in the major industrial area centred on Alexandria-Botany live in the surrounding inner city, southern and eastern

suburbs; it should be noted, however, that many persons live up to 10 miles from the factory. In the case of the industrial areas centred around Auburn average journeys-to-work are longer but 80 per cent of factory workers still live in adjacent local government areas to the west and south. Ninety-two per cent of the factory workers in the Penrith-St Marys district live in the suburbs immediately to the east but may still have to travel up to 15 miles to work. The central

area of the city predominately attracts workers from the north and south of the city; many o f whom travel up to 25 miles per day to work. Logan’s research demonstrated that whilst suburban manufacturing districts are predominantly drawing workers from adjacent suburbs the workers still undertake relatively long journeys to work; moreover, office workers, who

form the main corpus of commuters to the city centre, undertake long trips to work. Logan supplied no detailed statistics of average distances or times travelled in journeying to work; preliminary results from the Macquarie University research in Sydney’s north and western fringe areas suggest that 20 per cent of workers reach their workplace within 15 minutes of leaving home; 46 per cent live within 15 to 45 minutes travel and a further 34 per cent

spend more than 45 minutes travelling to work trip. These long journeys-to-work contrast with the general proximity of residence to workplace within the large country towns of New South Wales. Eighty-two per cent of respondents to the survey lived within 15 minutes of their place of work; only 1.5 per cent of workers had

to travel longer than 45 minutes to reach work (Table 1). The pattern remained the same throughout all the towns except Lithgow where only 70.7 per cent of respondents stated that they lived within 15 minutes of their work. A longer than average trip to work has been a characteristic of coal-mining towns in modern times3 and the pattern in Lithgow may well

be a local manifestation of a world-wide trend.

1 J . F . Κ α ιν , ‘T h e D e v e lo p m e n t o f U r b a n T ra n sp o rta tio n M odels’, Regional Science Association Papers, V ol. 14 (1964), 147 173. 2 Μ . I. L og an, ‘W o rk -R esid en ce R e latio n sh ip s in th e C ity ’, A ustralian Geographical Studies, Vol. 6 (1968), p p . 156. 3 S ee R. L a w to n, ‘T h e Jo u rn e y to W o rk in E n g lan d an d W ales; F o rty Y ears of C h an g e’, Tijdschrift voor Economische en Sociale Geografie, 53 ste. Ja a rg a n g , N o . 1, J a n u a ry 1962, p p . 1 -7 .

401

O

Besides a shorter journey-to-work the survey revealed that workers in country centres had a more leisurely time than did their Sydney counterparts. The majority (73.7 per cent) travelled by car; but over a shorter distance and on less congested roads. In greater contrast, however, 19 per cent of respondents walked to work in country towns; few travelled by public transport (Table 2). Preliminary figures from the Macquarie survey of fringe areas in Sydney show that 61 per cent of people travel to work by car and a further 33 per cent use public transport; only six per cent of people from the outer suburbs of Sydney walk to work. More­ over, 27 per cent of the Sydney inter-viewees use two or more means of transport in each journey-to-work.

A v a ila b ility o f E m p lo y m e n t: Economic motives are most consistently ascribed to people migrating from country towns into large cities. Workers are said to be attracted by a greater variety of better paid jobs and by the possibility of obtaining a second job for themselves or employment for their wives and children. In view of this interviewees were asked whether, in the event of their seeking new employment, they could find alternative jobs in the town as good, better or worse than their present positions. The survey revealed that the majority of workers in the country towns (58.8 per cent) considered that they could not find comparable or better employment than they already had in the town. A large number (34.3 per cent) viewed alternative jobs as being equal to their present employment and only a few (6.9 per cent) suggested that there were better alternatives offering locally. Towns taken individually gave similar responses indicating a widespread lack of local employment opportunities. In Lithgow and Grafton 73 per cent of the respondents viewed alternative local jobs as being worse than that which they already held. In only one case, Dubbo, was there an indication o f a significant improvement in local employment alternatives as 46.4 per cent of those inter­ viewed saw alternative jobs as being equal to their present position and 12 per cent thought that alternatives were better. In contrast to the country town situation the Sydney survey found that the majority of people considered that they could obtain a job with equal opportun­ ities and pay without difficulty and without having to travel any further from their homes.

A minority of respondents (27.9 per cent) found second jobs available in the twelve towns. Again the towns of Grafton and Lithgow (each with 16 per cent reporting second jobs available locally) were the only centres to record a significantly lower proportion of second jobs than the average; while Dubbo, with 42.4 per cent of replies indicating that second jobs were available, was the only town where second job opportunities were greater than the average. (Table 4).

Some sociological aspects of life in New South Wales country town

402

3

Facilities

L o c a l S h o p p in g i n C o u n t r y T o w n s : Whereas journeys-to-work generate the major move­ ments of people from their homes, shopping trips form an important secondary source of travel. The studies of Willbur Smith and Associates, which were cited earlier, reveal that some 12 per cent of city movements from residences are for the purpose of shopping. Moreover,

a great proportion o f shoppers still walk or travel by public transport to shop; in this regard and for the provision of normal weekly shopping needs (groceries, meat, clothing) the country centres were revealed to be highly convenient. Convenience, however, is only one aspect of shopping and range of goods is also important, some observers have suggested that the range of goods available in country towns is so limited as to encourage shoppers

to purchase their expensive and less frequently obtained goods in the capital cities1. The survey revealed that in general goods are purchased in the local centre with respondents reporting that 70 per cent of fashion clothes were purchased locally, 72 per cent of the furniture and 75 per cent of home appliances were bought in the local town (Table 5). The major exceptions to this general pattern were found in the purchase of fashion clothes especially from Dubbo and Lismore residents. In Sydney the results so far to hand indicate that 43 per cent of the people shop for such goods within the central business district and a further 43 per cent shop at centres beyond 5 miles of their homes. Only 14 per cent of the fringe dwellers in the city share the same convenience to centres selling high order shopping goods as people

living in large country towns.

C o n v e n ie n c e to T h e a tr e s : The literature analysing motives of people who migrate to large cities usually lists the anonymity, variety, excitement and cultural satisfaction of city living as contributing causes to movement. Live theatre is one of the most tangible forms of cultural life and residents of the twelve country centres were asked to state the frequency of their visits to theatre and the convenience of the theatres to their homes. The overwhelming majority

of respondents (80.1 per cent) recorded that they attended live theatre less frequently than once a year although when the theatre was available it could be reached by a drive of less than five miles from the home. (Tables 6-7). The survey did reveal a sizeable interest in live theatre in country centres: the Arts Council of Australia provide theatre to large country

towns on an average of four times a year and 19.9 per cent of respondents indicated that they went to the theatre at least quarterly including some 3 per cent who visited the theatre more often. The lack of opportunities for theatre in the country towns does not seem to restrict country people to less frequent visits than their city counterparts. Eighty-two (82) per cent

of people in the Sydney fringe areas reported that they never visited the theatre while only 9 per cent attended at least quarterly.

C o n v e n ie n c e to M e d ic a l a n d D e n ta l F a c ilitie s : Medical services within large country centres are generally good and proximate to most residences. For example, 85 per cent of the inhabitants of the twelve towns live within five miles of a dentist, 73 per cent are within

1 A . J . R ose, P atterns o f Cities, N e ls o n , S ydney, 1968.

403

five miles of a general practitioner and 54 per cent live within five miles of a hospital. (Tables 8, 9, 10). Specialist medical attention is not so well provided, with 64.4 per cent of the res­ pondents who had need of it being attended to in their local town. The remaining 35.6 per cent visited Sydney, Melbourne or Brisbane. The provision of specialist services varies greatly between towns. In Lithgow, close to Sydney, 74 per cent of those seeking specialist attention received it in the capital. In Bathurst, Orange, Armidale and Albury patients received specialist attention in capital cities at about the average rate for all the country towns. In Goulburn, Dubbo and Grafton residents used local specialists at a slightly greater rate than the average whilst in Wagga Wagga, Tamworth and Lismore local specialist attention was received by 90 per cent of the residents. No obvious explanation presents itself to account for these vari­ ations, but the fact that one person in three, on the average, has to visit the capital cities for such services indicates the degree to which country centres are dependent.

P r o x i m i t y to R e la tiv e s : One of the principal social arguments in favour of a policy of decentralisation, or rather government support to stabilise and boost the development of country centres, is the unity of the family. Lack of employment opportunities and social amenities are pictured as driving the younger members of the family towards the city causing break-ups of families. Respondents to the survey were asked to state how proximate their relatives were and to record the frequency of their visits to relatives. As shown in Table 14, 30.8 per cent of the respondents had close relatives living in the local towns whilst Table 13 shows that 26.3 per cent of the respondents visited their relatives at least weekly; a further 12.2 per cent visited relatives at least monthly. The tables indicate two conclusions:

(1) in large country towns in New South Wales less than one person in three has close relations living in the same town, suggesting that the close-knit nature of rural com­ munities, often proposed by sociologists, is not applicable here; and

(2) where country town inhabitants do have relatives living in the town, ties, as evidenced by frequent visits, are fairly strong.

In Sydney half the respondents reported that they had close relatives living within a 10 mile radius of their home. Moreover, two-thirds of the interviewees in Sydney visited their relatives at least once a month. It appears that in one aspect Sydney people have more frequent connections with relatives than do those from country towns.

S o c ia l a n d S p o r tin g C lu b M e m b e r s h ip : The general structure of recreational movements has altered considerably in the past decade in New South Wales. The licensed social and sporting clubs have come to provide a good deal of the entertainment needs of a large section of the population by offering live entertainment, cinema and sporting facilities. Sixty-four per cent of the respondents reported belonging to a club; 29 per cent of these belonged to two clubs, 15 per cent of the club members belonged to three clubs; and a further 20 per cent were members of four or five clubs (Table 15). Clubs have obviously come to form a major element of the social life of a community and apparently more so in country centres than in

Sydney. Preliminary figures from the Sydney survey suggest that only 50 per cent of the respondents belonged to a club and only 18 per cent of these belonged to two or more clubs. Ninety-eight per cent of the clubs in the country towns were within five miles of the homes of respondents, indicating a further aspect of the convenience of services in country towns.

Club membership rates are fairly constant throughout all the country towns with slightly higher rates in Bathurst, Tamworth, Lithgow and Taree.

Some sociological aspects of life in Nezo South Wales country town

404

Proximity to Goods and Services 4

In reporting the major services used locally by residents of country towns it was suggested that most services were convenient to homes. To test this further the respondents were asked to state whether each of a list of twelve goods and services was convenient to their homes. Most (97 per cent) people considered shopping facilities in country centres to be convenient

to their homes although a large number (46 per cent) claimed that their place of employment was not convenient to their home (Table 16). This contrasts with the fact that 82 per cent of the respondents lived within 15 minutes of their place of work and suggests a high degree of subjectivity in the answers. Taree and Armidale were the towns reporting the highest degree of inconvenience of place of work with 68 per cent and 65 per cent of respondents reporting that their workplace was not close enough to their homes. When considering a range of services, which included theatres, cinemas, restaurants and libraries, most respondents noted that they found them within convenient reach of their homes; 72 per cent of the replies were in this category although other evidence suggests that the services are infrequently used.

Willbur Smith and Associates estimated that movements to recreational centres accounted for 15 to 20 per cent of all trips generated within city areas. In the country centres investigated proximity to these important nodes is high; in the case of outdoor recreation 88.3 per cent reported that facilities were convenient to their homes whilst sporting events could be con­ veniently reached by 89.3 per cent of people. Holiday areas were said to be convenient to the local town by 63 per cent of the respondents with especially high convenience in the coastal and near-coastal towns of Taree, Lismore and Grafton. Perhaps the biggest contrast between

the country and the city is the low participation rates in outdoor recreation revealed by the city survey; 61 per cent of respondents in the north and western outer areas of Sydney indicated that they never took any outdoor recreation while 10 per cent of those who did undertake some form of recreation had to travel more than 10 miles to obtain it.

Outside of work, shopping and recreation the most important movement within cities, as reported by Willbur Smith and Associates, is the trip to school. Ninety-one per cent of the replies indicated that schools in the larger country towns were convenient to homes. Finally, the survey asked whether the whole range of services within the country towns was convenient to available accommodation and in reply to this broad question 75 per cent

of the people answered in the affirmative.

R a n g e o f G o o d s a n d S e r v ic e s : To develop a more rounded appreciation of the availability of goods and services, the survey asked respondents to nominate whether the range of such services available within the country towns was satisfactory. Table 17 demonstrates that people found the range of most items to be suitable. Eighty-five per cent regarded the range of shopping

goods, on the one hand, and schools, on the other, to be satisfactory whilst only 53 per cent indicated that the range of local jobs was as good as they desired. The greatest dissatisfaction with the range of employment opportunities was recorded in Taree where only 34 per cent of interviewees found that the range of local jobs was fully satisfactory.

405

Q u a lity o f G o o d s a n d S e r v ic e s : To complement the discussion o f the convenience and variety of life in the country towns, the survey sought to discover whether the quality of local services was satisfactory. Ninety-one per cent of the respondents considered that the quality of local shopping was good whilst more than two out of three people viewed the quality of restaurants, theatres, cinemas and libraries as being suitable. Local schools were also considered to be satisfactory by 82 per cent of people. Once more employment was a target for criticism;

only 63 per cent of the replies indicated satisfaction with the quality of local employment opportunities.

Some sociological aspects of life in New South Wales country town

406

Comparison of Country Centres with Sydney 5

The forces compelling people to move from town to city are complex and interwoven1 but usually involve a desire to improve their economic position and to gain a more satisfactory social and cultural life. However, internal migration is frequently not inspired by the solid evidence of fact but by the hazy and sometimes false impressions of city life gleaned in short

and episodic visits to the city. In order to highlight which facets of city life country town dwellers found attractive the survey asked respondents to state whether they felt they would be better off in Sydney, than in the country, for a wide range of goods and services. The results were variable and often surprising.

Fifty-two per cent considered that they would be better off living in Sydney for shopping. Responses varied greatly between towns with a large number of centres recording above average interest in Sydney as a shopping venue (Table 19). In Albury 66 per cent of the replies stated that Sydney was a better place to live and shop than the local area. Some centres, notably

Bathurst, Lithgow and Dubbo, were considered superior to Sydney for general shopping by a majority of respondents. One person in three recorded that they would be better off in Sydney for employment.

Outside of Albury and Tam worth where the percentage of people considering the employment opportunities of Sydney to be better than locally was close to the average, the answers to this question varied a great deal. In Armidale, Bathurst, Grafton and Lithgow the majority of respondents (57 per cent, 54 per cent, 66 per cent and 66 per cent respectively) considered employment opportunities in Sydney were better than in the local centre. However, in Orange, Taree, Wagga Wagga, Dubbo, Goulburn and Lismore replies indicated that only between

12 and 18 per cent of people considered that job opportunities were better in Sydney. A majority of the respondents (53 per cent) considered that schools were better in Sydney than in the country towns. Comparing this with information in Tables 17-18 and with com­ ments written at the end of the questionnaire it appears that most concern with local education is with the provision of tertiary facilities rather than secondary schooling. Judging fr o m the consistency o f the com m ents th is fa c to r above a ll others is the m ajor cause f o r dissatisfaction w ith co u n try living.

Satisfaction with local services, such as restaurants, libraries, cinemas and theatres, varied greatly throughout the different areas of the State. On the average, however, one third of the respondents considered that they would be better off for these in Sydney. Most (51 per cent) of the respondents viewed Sydney as being better endowed with out­

door recreational facilities than the local centre, although in Armidale, Grafton and Lithgow only a minority considered that Sydney was superior in this regard. Forty-four per cent of the replies indicated that Sydney was better served with sporting events than the country centres, although once again there was variation between the towns. Orange (28 per cent),

Bathurst (32 per cent) and Dubbo (31 per cent) were the towns recording lowest interest in Sydney as a venue for sporting events. Similarly 39 per cent of the replies indicated that people living in Sydney were better off in regard to holiday resorts than those in country towns, although there was great variability between centres.

1 S ee R . T o m l in so n , P opulation D ynam ics, C h . 11, R a n d o m H o u se , N ew Y ork, 1965.

407

Finally, 55 per cent of the respondents considered that accommodation in Sydney was better than in the country towns. Armidale, Grafton and Lithgow provided the major exception to this as 62 per cent, 72 per cent and 74 per cent in each town considered that local accommo­ dation was superior to that available in Sydney.

C o s t o f L iv in g C o m p a r e d to S y d n e y : Concluding the series of questions asking country town dwellers to compare local service, educational and employment provision with Sydney, the questionnaire asked people to compare the cost of living (excluding housing) in their local town with that of Sydney. The results were instructive: 39.6 per cent of respondents considered

that the cost of living in the local town was higher than in Sydney; 35.9 per cent estimated that general costs in Sydney were higher than in the local area, whilst 24.5 per cent concluded that costs were about the same (Table 20). Most of the centres were close to the average figures.

However, in Albury, Lismore and Lithgow the number of people considering the cost of living in the local town to be lower than in Sydney was notably larger than the group average: 51 per cent in Albury, 67 per cent in Lismore and 42 per cent in Lithgow.

H o u s in g C o s ts : The cost picture changed drastically when the questionnaire added the comparison of housing costs in Sydney and the country towns. Sixty-eight point six (68.6) per cent of the respondents agreed that local housing costs were below those of Sydney; 21.3 per cent considered that housing costs would be about the same in Sydney and over

10.1 per cent suggested that housing costs would be considerably lower in Sydney (Table 20A). Variations between towns were only slight, revealing that throughout the State, dwellers in large country towns considered themselves to be at least as well off, and in most cases better off, than their counterparts in Sydney regarding house costs.

C o n c lu s io n s : The survey served to demonstrate the general convenience of country living. Workplace, shops, churches, clubs and recreational centres all were reached within 15 minutes travel. Despite some dissatisfaction with the range and quality of certain things, especially jobs, tertiary education and cultural activities, most replies indicated that services were not only convenient but generally satisfactory for the inhabitants. The second part of the report relates these attitudes to various socio-economic characteristics such as size of family, age, occupation and vocational training.

Some sociological aspects of life in New South Wales country tozvn

408

R e la tio n of Socio-E conom ic F a c to rs to A spects of C o u n try T ow n Life

6

To examine whether attitudes towards country town living varied with such factors as age, family size, occupation, level of training or the number of working members of a family a series of chi-square tests were run. To provide a high degree of reliability in the results, significance was measured at the one per cent level (i.e. in 99 cases out of 100 the results will

be reliable). Table 21 reveals that the length of the journey from home to workplace varies significantly with the home ownership status of the individual. Workers living in rented accommodation tend to live closer to their work than those who own their own homes. Despite the slightly

longer journeys-to-work undertaken by home owners in country towns they still live closer to their workplace than do city people (cf. Table 1). The chi-square test also revealed a signifi­ cant association between occupation and mode of travel to work. More workers in high status occupations (professional and managerial positions) drove cars to work and the relatively

large number of people who walked to work tended to be drawn from lower status occupational groups (Table 21). Table 22 is more important than Table 21 for it considers the attitudes o f different socio­ economic groups to local employment opportunities. Significant associations were revealed between the availability of country town job alternatives and age, education, number of workers

in each family and number of workers with second jobs. The survey revealed that the people most concerned about the availability of alternative local jobs and promotional opportunities were those in the 31-40 and 41-60 years age groups. Somewhat surprisingly younger people expressed satisfaction with local employment opportunities. Most anxiety about the lack of job alterna­ tives came from replies of towns such as Wagga Wagga, Albury, Tamworth, Bathurst and

Orange. More concern, however, was evidenced by people below thirty concerning the lack of second jobs in the country towns. Again in the towns of Wagga Wagga, Albury, Tamworth, Bathurst and Orange the greatest problem appeared to lie. There were significant associations revealed between level of training and local job availability. Skilled tradesmen appeared to be most affected by the lack of alternative jobs and the dissatisfaction was general throughout all the towns. Similarly, skilled tradesmen were

more concerned with the lack of second jobs in country towns than were others with differing levels of occupational training. Families with only one worker, as opposed to families with working wives or children, were most disturbed by the lack of employment opportunities within the country centres. T he towns of Goulburn, Lithgow, and Armidale appeared to be the worst off in offering alternative employment. In contrast, families with working wives expressed greater difficulty in obtaining second jobs than did any of the other respondents. Once more Lithgow and

Goulburn were remarkable for the lack of second jobs. One of the principal aims of the survey was to establish the general activity systems of country town inhabitants and to compare and contrast these with the movements of people living in Sydney’s fringe areas. The convenience, range and quality of a wide variety of goods and services were examined in order to link these with socio-economic characteristics of the

409

respondents (Table 23). Significant associations were few and scattered and it is difficult to sort them into a meaningful pattern. The frequency of visits to live theatres and the assessment of quality of productions were significantly linked to occupation. Most of the people reporting frequent visits to theatre belonged to the professional or managerial class and most concern about the quality of local theatre also came from these groups. Occupation was also significantly linked to attitude towards the quality of local restaurants; once more the higher status groups, the professional and managerial sectors of the workforce, were less satisfied with the quality of restaurants offering than were any other groups.

The convenience of public transport was significantly associated with family size and structure. Most of those who were dissatisfied with the convenience and availability of public transport had children attending school. This group was also notable in criticising the range of outdoor recreational facilities available in the country towns; a significant association existed between the range of outdoor recreational facilities available in the towns and family structure with parents of secondary school children and working children who were still living at home expressing most dissatisfaction. This raises one of the most important, yet unexplored, aspects of country town living and stability: that the range of recreational facilities in country centres does not appear to be satisfactory for teenagers and young adults.

The convenience and range of accommodation in country centres was significantly associated with home ownership. Both those owning their own homes and those renting accommodation in country centres viewed their residences as being highly convenient to the range of services they require.

The final significant relationship was between convenience of schools and the family size and structure. Generally respondents were satisfied with the proximity of schools to their homes, with most satisfaction being expressed by parents of primary school aged children. The range of goods and services were then compared with respondents’ impressions of the availability and range of these goods in Sydney (Table 24). One significant association was between occupation and shopping. People engaged in professional occupations and those working in entertainment and services were the most closely linked with the idea that living in Sydney would improve their shopping satisfaction. The only other significant association was between family size and structure and the availability of holiday resorts; it is noteworthy that towns close to the coast (Grafton, Lismore and Taree) did not follow the general pattern in this regard suggesting that the attraction is perhaps not towards Sydney so much as towards the coast as a venue for holidays.

As revealed in Table 25 the only significant association of country town job opportunities as compared with Sydney is with the age of the respondent. People in the under 30 age group and those in the 41-60 age group suggested that they considered job opportunities in Sydney to be better than in the country towns. In Lismore, Lithgow and Grafton the attitude that

Sydney had better employment opportunities was more strongly held than in the other towns. Tables 26 and 27 link social factors with two generally accepted foci of movement within centres: visits to churches and relatives. No variables were found to be significantly linked to the visiting of relatives whilst only one, age of respondent, was found to be closely associated with visits to church. Here it was found that the least frequent churchgoers were in the under 30 age group.

Family size, age and home ownership are all significantly associated with cost of living comparisons between country centres and Sydney. Married couples without children, and presumably spending a larger proportion of their incomes on consumer durables and luxury goods, stated that the cost of living was significantly higher than in Sydney. In proportion fewer of the families with children at school agreed with this proposition. This pattern persisted throughout all the centres. The majority of respondents below the age of 30 stated that the cost of living in country centres was higher than in Sydney with young people in the near coastal centres of Grafton and Lismore expressing this view most persistently. Additionally

Some sociological aspects of life in New South Wales country town

410

Relation of Socio-Economic Factors to Aspects of Country Town Life

the survey showed that people who were renting accommodation found the cost of living in country towns higher than in Sydney. Finally, Table 29 shows significant associations between housing costs in country centres and socio-economic factors; family size, age, occupation and home ownership again make up the list of significant variables. In general people believed that housing costs in the country

centres were below those of the city with the strongest enunciation of this view coming from married couples with working children; i.e. probably couples who have been longer established in the country centres. This view was most firmly put forward in the replies from Bathurst, Orange, Wagga Wagga, Dubbo and Albury. The lower costs of country housing was also firmly held by the younger age groups; by people below 30 years of age. Clerical workers were the exceptional group out of the various occupations in that they believed country housing costs

to be higher than those of Sydney whereas all other occupational groups stated that houses in Sydney cost more than in country centres. Lastly, housing costs were significantly associated with home ownership: persons who owned their own homes overwhelmingly stated that housing costs in country towns were lower than in Sydney.

C o m m en ts: The final section of the questionnaire invited comments from the respondents on their general attitude to and problems associated with country town living. A large proportion of the replies included comments which generally expressed:

(1) Inhabitants of the country towns are generally quite satisfied with life within the country centres and do not wish to live in Sydney.

(2) Many respondents expressed dissatisfaction with the range of local employment possibili­ ties and suggested that they may be forced to Sydney to gain the level of advancement they feel they can reach.

(3) Chief concern was expressed about the lack of tertiary educational facilities in country areas. Most respondents regarded this as a primary and initiating factor in forcing people to leave the country for the city.

S u m m a ry a n d Review

7

The survey of major country centres in New South Wales, although confessedly broad in scope and exploratory in nature, provides insights into most facets o f country living, high­ lighting the advantages and suggesting the major areas of dissatisfaction.

The following conclusions are pertinent:

(1) Life in a large country town is considerably more relaxed than life within a capital city. Shops and institutions lie within a short distance of the home and journeys-to-work are shorter and less strenuous. Eighty-two per cent of the people live within 15 minutes of their workplace (as compared to 20 per cent in Sydney’s outer suburbs) and 20 per cent of the workers can walk to work. Only 1.5 per cent spend more than 45 minutes travelling to work in country towns whilst in the city the figure reaches 34 per cent; and many of these latter have to use more than one mode of transport.

(2) Lack of local employment opportunities, whether in the form of suitable alternative jobs or promotional avenues within current work, is a continuing problem. Fifty-nine per cent of workers could see no hope of transferring to a better job within the same town while the majority of respondents considered that they could find better alternative work in Sydney. Most concern about the employment situation was voiced by the people in the 31-40 and 41-60 age groups. Skilled tradsmen were the most vitally affected occupational group. One in two people in country towns considered that the range of employment was unsatisfactory and one person in three viewed the quality of country town jobs as inferior to that of the city.

(3) The majority of people shopped in the country even for expensive and infrequently purchased goods. Despite this more than half the people considered that they would do better living and shopping in Sydney.

(4) Although the overwhelming majority of people expressed complete satisfaction with country schools, more than half considered that Sydney provided better educational opportunities. The major problem is the provision of tertiary-education·, this was mentioned so persistently that the provision of tertiary education to country residents, without bringing

them into the cities, appears to be the greatest challenge facing those providing for the stability and growth of country towns.

(5) People in high status jobs—professional and managerial occupations for example— expressed disquietude at the quality of night life in country centres. Theatres and restaurants were said to be too limited in range and quality.

(6) Parents of young people viewed another aspect of country town living, outdoor recreation, as more seriously lacking. Comparisons with the Macquarie University study of Sydney’s outer suburbs, however, suggest that in fact country people participate far more frequ­ ently in recreational activities and have to travel shorter distances to obtain facilities, than do their Sydney counterparts.

412

Summary and Review

(7) Inasmuch as clubs have come to form a major segment in the leisure life of people in New South Wales, country towns residents appear to be better off than people in Sydney. More people belong to clubs, which are close to their homes, and a large number of people belong to more than one club.

(8) In terms of specialist medical attention country centres are poorly placed in relation to the city and at least one person in three has to travel to the capital to obtain satisfactory attention.

(9) Large country centres are less closely knit than many people suggest as only one person in three had close relatives living in the centres surveyed.

(10) The majority of people in the country centres considered that the cost of living was lower than in the city. This, along with the lower cost of housing, appeared to be a prime reason for satisfaction with country town life.

(11) The survey suggests other areas which need to he investigated to gain a completely rounded view of the satisfactions and dissatisfactions of residents of country towns:

(a) Investigations could be made into ways and means of improving the cultural and leisure-life opportunities of country living to make it more attractive for high status workers. (b) A complete research project could be undertaken restricting the scope to the pro­

blems of young adults in country towns. From both the employment, educational and recreational views it appears that these people are not being satisfied by country centres. (c) Some investigation of recent emigres to the city should be carried out to find out what motivated them to come to the city; and to discover whether their subsequent

experience within the city has justified their movements.

413

£ £

T ables

Table 1

Travel Time of Journey to Work, Selected Country Towns, New South Wales 1968

A lb u r y A r m id a le B a th u r s t D u b b o G o u lb u r n G r a fto n L is m o r e L ith g o w O r a n g e T a m w o r th T a r e e W a g g a W a g g a T o ta l

N u m b e r o f resp o n d en ts 469 234 77 125 390 257 226 263 330 288

U n d e r 15 m in u tes 370 207 70 104 327 202 178 186 297 240

B etw een 15 an d 30 m inutes 87 21 5 15 49 37 32 69 22 28

B etw een 30 an d 45 m in u tes 11 4 2 3 7 13 8 6 5 10

O ver 45 m inutes 1 2 3 7 5 8 2 6 10

196 380 3,235

175 291 2,647

15 59 439

3 8 80

3 22 69

Table 2

M o d e o f T r a v e l, J o u r n e y t o W o r k , S e le c t e d C o u n tr y T o w n s ,

N e w S o u t h W a le s 1 9 6 8

A lb u r y A r m id a le B a th u r s t

N u m b e r o f respondents 469 234 77

B us 15 5

C ar 344 176 58

W alk 105 47 11

O th er 5 6 8

D u b b o G o u lb u r n G r a fto n L is m o r e L ith g o w

125 390 257 226 263

4 17 13 14 16

90 273 196 163 169

24 92 39 46 72

7 8 9 3 6

O r a n g e T a m w o r th T a r e e W a g g a W a g g a T o ta l

330 288 196 380 3,235

4 11 2 16 117

269 224 152 324 2,438

52 42 42 40 612

5 11 68

Table 3

A v a ila b ility o f A lte r n a tiv e L o c a l J o b s , S e le c t e d C o u n tr y T o w n s , N e w S o u th W a les 1 9 6 8

A lb u r y A r m id a le B a th u r s t D u b b o G o u lb u r n G r a fto n L is m o r e L ith g o w O r a n g e T a m w o r th T a r e e W a g g a W a g g a T o ta l

N u m b e r of resp o n d en ts 469

B etter alternatives available 39

A lternative jobs th e sam e 192

A lternative jobs w orse 238

234 16 84 134

77 3

21 53

125 15 52 58

390 28 142 220

257 10 59 188

226 13 80 133

263 17 54 192

330 31 111 188

288 25 104 159

196 380 3,235

9 16 222

60 151 1,110

127 213 1,903

Table 4

Availability of Second Jobs, Selected Country Towns, New South Wales 1968

A lb u r y A r m id a le B a t h u r s t D u b b o G o u lb u r n G r a fto n L is m o r e L ith g o w O r a n g e T a m w o r t h T a r e e W a g g a W a g g a T o t a l

N u m b e r o f res p o n d e n ts 469 234 77 125 390 257 226 263 330 288 196 380 3,235

N u m b e r o f re sp o n d e n ts re p o rtin g seco n d jo b s available 142 80 21 53 96 42 47 43 111 101 63 106 905

Table 5

N o r m a l P u r c h a s e o f H ig h O r d e r G o o d s in S e le c t e d C o u n t r y T o w n s ,

N e w S o u t h W a le s 1 9 6 8

-5, § S’ I

£

A lb u r y A r m id a le B a t h u r s t D u b b o G o u lb u r n G r a fto n L is m o r e L ith g o w O r a n g e T a m w o r t h T a r e e W a g g a W a g g a T o t a l

N u m b e r o f re sp o n d e n ts 469 234 77 125 390 257 226 263 330 288

N u m b e r w ho n o rm a lly p u rch ase fash io n clothes locally 354 161 57 30 319 198 68 219 276 239

N u m b e r w ho n o rm a lly p u rch ase fu rn itu re locally 360 150 56 68 326 184 111 209 264 222

N u m b e r w ho n o rm a lly p u rch ase h o m e appliances locally 371 172 62 64 312 179 146 201 267 221

196 380 3,235

158 205 2,284

152 255 2,357

165 276 2,436

Table 6

F r e q u e n c y o f V is it s t o L iv e T h e a t r e s , S e le c t e d C o u n tr y T o w n s ,

N e w S o u t h W a le s 1 9 6 8

A lb u r y A r m id a le B a t h u r s t D u b b o G o u lb u r n G r a fto n L is m o r e L ith g o w O r a n g e T a m w o r t h T a r e e W a g g a W a g g a T o t a l

N u m b e r o f resp o n d en ts 469 234 77 125 390 257 226 263 330 288

W eekly 2 1 0 0 1 1 1 6 0 0

M o n th ly 33 11 2 3 9 2 7 5 6 2

E very 3 -4 m o n th s 80 39 15 13 47 4 25 28 71 40

O n ce a year or less freq u en tly 354 183 60 109 333 250 193 224 253 246

196 380 3,235

2 0 14

4 11 95

19 61 442

171 308 2,684

ith Wales country town

Table 7

Location of Live Theatre, Selected Country Towns, New South Wales, 1968

A lb u r y A r m id a le B a th u r s t D u b b o G o u lb u r n G r a fto n L is m o r e L ith g o w O r a n g e T a m w o r th T a r e e W a g g a W a g g a T o ta l

W ith in 5 m iles o f ho m e 315 138 61 54 246 142 111 104 187 188 64 251 1,861

W ith in 10 m iles of ho m e 17 5 1 0 5 7 10 11 8 4 3 21 92

S ydney 17 18 3 13 28 7 10 47 14 7 44 2 210

Table 8

L o c a t io n o f D e n t is t s R e la tiv e t o R e s id e n c e , S e le c t e d C o u n tr y T o w n s , N e w S o u t h W a le s 1 9 6 8

A lb u r y A r m id a le B a th u r s t D u b b o G o u lb u r n G r a fto n L is m o r e L ith g o w O r a n g e T a m w o r th T a r e e W a g g a W a g g a T o ta l

D e n tist w ith in 5 m iles o f h o m e 366 188 65 108 327 211 177 223 255 255 182 301 2,658

N u m b e r o f resp o n d en ts 469 234 77 125 390 257 226 263 330 288 196 380 3,235

Table 9

L o c a t io n o f G e n e r a l P r a c titio n e r s , S e le c t e d C o u n tr y T o w n s , N e w S o u t h W a le s 1 9 6 8

A lb u r y A r m id a le B a th u r s t D u b b o G o u lb u r n G r a fto n L is m o r e L ith g o w O r a n g e T a m w o r th T a r e e W a g g a W a g g a T o ta l

G .P . w ith in 5 m iles 368 194 65 108 327 209 84 39 254 246 177 301 2,372

N u m b e r of resp o n d en ts 469 234 77 125 390 257 226 263 330 288 196 380 3,235

Table 10

Location of Medical Specialists, Selected Country Towns, New South Wales 1968

A lb u r y A r m id a le B a t h u r s t D u b b o G o u lb u r n G r a fto n L is m o r e L ith g o w O r a n g e T a m w o r t h T a r e e W a g g a W a g g a T o t a l

S pecialist in local to w n 140 45 22 38 9 8 89 130 39 138 169 36 202 1,146

S pecialist in S y d n ey or M e lb o u rn e 84 47 26 32 99 34 12 122 62 15 68 24 625

Table 11

P r o x im it y o f H o s p it a ls , S e le c t e d C o u n tr y T o w n s ,

N e w S o u t h W a le s 1 9 6 8

A lb u r y A r m id a le B a t h u r s t D u b b o G o u lb u r n G r a fto n L is m o r e L ith g o w O r a n g e T a m w o r t h T a r e e W a g g a W a g g a T o t a l

N u m b e r o f re sp o n d e n ts 469 234 77 125 390 257 226 263 3 3 0 288 196 380 3,235

H o sp itals w ith in 5 m iles o f h o m e 222 122 42 72 228 139 134 189 124 166 110 216 1,764

■5-S'

£ $$

3

Table 12

F r e q u e n c y o f V is it s t o C h u r c h , S e le c t e d C o u n tr y T o w n s ,

N e w S o u t h W a le s 1 9 6 8

A lb u r y A r m id a le B a t h u r s t D u b b o G o u lb u r n G r a fto n L is m o r e L ith g o w O r a n g e T a m w o r t h T a r e e W a g g a W a g g a T o t a l

N u m b e r o f resp o n d en ts 469 234 77 125 390 257 226 263 330 288

W eekly 191 105 38 60 162 113 127 121 114 122

M o n th ly 68 20 12 12 51 29 24 32 41 34

Q u arterly 72 44 9 38 83 63 34 47 104 39

L ess o ften th a n once a year 66 32 8 7 59 30 22 39 45 57

N ev er 72 33 10 8 35 22 19 24 26 36

196 79 29 15

30 43

380 3,235

183 1,415

41 393

80 628

42 437

34 362

Table 13

Frequency of Visits to Relatives, Selected Country Towns, New South Wales 1968

A lb u r y A r m id a le B a th u r s t D u b b o G o u lb u r n G r a fto n L is m o r e L ith g o w O r a n g e T a m w o r th T a r e e W a g g a W a g g a T o ta l

N u m b e r o f resp o n d en ts 469 234 77 125 390 257 226 263 330 288 196 380 3,235

W eekly 129 54 25 29 118 27 70 83 77 70 62 108 852

M o n th ly 78 31 4 4 45 20 52 50 32 30 23 27 396

Table 14

P r o x im ity o f N e a r R e la tiv e s , S e le c t e d C o u n tr y T o w n s , N e w S o u t h W a le s 1 9 6 8

A lb u r y A r m id a le B a th u r s t D u b b o G o u lb u r n G r a fto n L is m o r e L ith g o w O r a n g e T a m w o r th T a r e W a g g a W a g g a T o ta l

N u m b e r o f resp o n d en ts 469 234 77 125 390 257 226 263 3 3 0 288 196 380 3,235

L ive in local tow n 148 62 26 32 136 25 78 100 102 89 71 126 995

Table 15

S o c ia l a n d S p o r tin g C lu b M e m b e r s h ip , a n d P r o x im ity , S e le c t e d C o u n tr y T o w n s , N e w S o u t h W a le s 1 9 6 8

A lb u r y A r m id a le B a th u r s t D u b b o G o u lb u r n G r a fto n L is m o r e L ith g o w O r a n g e T a m w o r th T a r e e W a g g a W a g g a T o ta l

Belongs to O N E club only 113 44 16 42 126 20 65 51 130 61

Belongs to T W O clubs only 84 53 20 34 85 16 40 75 42 80

B elongs to T H R E E clubs only 43 29 9 17 38 12 25 50 21 46

Belongs to F O U R clubs only 26 26 1 5 5 10 7 17 2 24

B elongs to F IV E clubs only 11 22 5 1 9 9 5 18 3 15

C lubs w ithin 5 m iles 371 50 140 343 352 240 157 118 404

C lubs w ithin 10 m iles 25 6 1 8 12 7 26 8 14

N u m b e r o f resp o n d en ts 469 234 77 125 390 257 226 263 330 288

46 46 25 12

7

264 14 196

98 812

32 607

4 319

86 221

11 116

220 2,659

12 133

380 3,235

Table 16

C o n v e n ie n c e o f G o o d s a n d S e r v ic e s , S e le c t e d C o u n tr y T o w n s , N e w S o u t h W a le s 1 9 6 8

A lb u r y A r m id a le B a t h u r s t D u b b o G o u lb u r n G r a fto n L is m o r e L ith g o w O r a n g e T a m w o r t h T a r e e W a g g a W a g g a T o t a l

N u m b e r o f res p o n d e n ts 469

S h o p p in g c e n tre c o n v e n ien t to h o m e 440

Jo b s c o n v e n ien t to h o m e 337

T h e a tre s c o n v e n ie n t to h o m e 377

R e sta u ra n ts c o n v e n ien t to h o m e 403 L ib ra ry co n v e n ien t to h o m e 445

P u b lic tra n s p o rt c o n v e n ien t to h o m e 350

O u td o o r re c re a tio n c o n v e n ien t to h o m e 441

S p o rtin g ev e n ts c o n v e n ien t to h o m e 433

C in e m a c o n v e n ien t to h o m e 429

H o lid a y areas co n v e n ien t to h o m e 387

A vailable ac co m m o d a tio n c o n v e n ien t 423

S chools co n v e n ien t to h o m e 426

234 77 125 390

210 66 121 371

82 38 64 204

134 33 45 221

187 63 77 346

219 69 115 367

111 55 83 285

214 67 110 338

206 70 106 329

187 19 91 299

129 60 32 228

188 15 98 329

219 77 115 353

257 226 263 330

347 223 237 316

123 118 144 183

158 145 122 200

200 188 155 275

216 216 126 310

179 200 211 217

213 215 241 198

213 214 230 287

209 117 179 240

222 221 128 180

210 205 210 190

230 222 235 270

288 196 380 3,235

274 188 355 3,148

181 62 200 1,736

190 40 252 1,917

203 141 280 2,518

270 68 361 2 ,782

230 148 264 2,3 3 3

269 190 363 2,859

266 182 352 2,888

242 155 278 2,445

128 191 205 2,111

259 183 120 2,430

267 188 350 2,952

Table 17

R a n g e o f G o o d s a n d S e r v ic e s A v a ila b le , S e le c t e d C o u n tr y T o w n s , N e w S o u t h W a le s 1 9 6 8

A lb u r y A r m id a le B a t h u r s t D u b b o G o u lb u r n G r a fto n L is m o r e L ith g o w O r a n g e T a m w o r t h T a r e e W a g g a W a g g a T o t a l

N u m b e r o f resp o n d en ts 469

S atisfactory range o f shop p in g goods available 428

L ocal jobs satisfactory 331

R an g e offered b y th e atres satisfactory 348

L ib ra ry range satisfactory 435

R an g e o f p u b lic tra n s p o rt satisfactory 348

R an g e o f o u td o o r recre atio n satisfactory 451

R an g e o f sp o rtin g events satisfactory 442

S atisfactory range o f holiday areas 432

R ange o f schools satisfactory 420

R an g e o f cinem as satisfa cto ry 439

R an g e o f acco m m o d atio n satisfactory 423

234 77 125 390

145 50 106 344

124 31 70 204

109 30 59 211

199 66 111 343

109 55 89 290

201 66 114 346

188 66 106 339

182 37 97 302

214 68 111 358

110 19 69 216

170 19 97 312

257 226 263 330

181 215 228 289

130 120 130 184

169 146 134 174

215 209 243 300

190 192 202 119

226 215 239 281

240 212 219 249

209 196 202 170

229 111 240 270

170 193 179 190

209 196 198 250

288 196 380 3,235

258 172 337 2,753

181 67 152 1,724

150 63 202 1,796

257 71 348 2,797

214 139 243 2,190

275 189 350 2,953

176 170 346 2,753

259 181 205 2,472

269 180 350 2,820

205 101 290 2,181

257 181 120 2,432

§

IOl uh Wales country town

Table 18

Q u a lity o f G o o d s a n d S e r v ic e s A v a ila b le in C o u n tr y T o w n s , N e w S o u t h W a le s 1 9 6 8

A lb u r y A r m ld a le B a th u r s t D u b b o G o u lb u r n G r a fto n L is m o r e L ith g o w O r a n g e T a m w o r th T a r e e W a g g a W a g g a T o t a l

N u m b e r of resp o n d en ts 469

Q u ality o f shop p in g goods satisfactory 450

Q uality of jobs available ► ξ satisfactory 357

μ: Q uality o f th eatres satisfactory 369

Q uality o f restaurants satisfactory 398

Q uality o f libraries satisfactory 445 Q uality o f p u b lic tra n sp o rt satisfactory 378

Q uality o f O u td o o r R ecreation satisfactory 450

Q uality o f sp o rtin g satisfactory 435 Q uality of holiday areas satisfactory 412

Q u ality o f accom m odation satisfactory 432

Q u ality of schools satisfactory 418 Q uality o f cinem as satisfactory 419

234

206

124 125

178 213

114

204 174

161

182 219 137

77 125 390 257 226 263 330

56 114 369 219 221 217 306

35 78 241 151 160 150 229

42 70 246 193 166 142 207

53 90 322 207 177 166 265

67 115 351 225 211 244 299

56 94 298 207 200 231 206

67 115 347 233 118 243 270

64 108 320 214 210 214 265

38 39 268 236 221 171 160

60 102 323 217 205 212 92

77 112 359 229 219 244 270

60 74 281 174 188 199 170

288

279

200 199

215 261

238

274 252

189

267 278 205

196

184

184 75

145 74

150

189 171

188

184 189 201

380 3,235

337 2,958

184 2,093

234 2,068

251 2,467

52 2,557

259 2,431

349 2,859

327 2,754

176 2,259

100 2,376

40 2,654

n o 2,218

C o m p a r is o n o f N e w S o u t h W a le s C o u n tr y T o w n s w it h S y d n e y fo r P r o v is io n o f G o o d s a n d S e r v ic e s , ^

1968 =

Table 19

A lb u r y A r m id a le B a t h u r s t D u b b o G o u lb u m G r a fto n L ls m o r e L ith g o w O r a n g e T a m w o r t h T a r e e W a g g a W a g g a T o t a l

N u m b e r o f res p o n d e n ts 469

S h o p p in g b e tte r fo r people living in S y d n ey 312

J o b o p p o rtu n itie s b e tte r fo r p eo p le living in S y d n ey 160

T h e a tre s b e tte r fo r people living in S y d n ey 157

R e sta u ra n ts b e tte r fo r p eo p le living in S y d n ey 178

L ib ra rie s b e tte r fo r people living in S y d n ey 264

P u b lic tra n s p o rt b e tte r for people living in S y d n ey 213

O u td o o r recre atio n b e tte r fo r p eo p le living in S y d n ey 344

S p o rtin g events b e tte r in S y d n ey 289 H o lid a y reso rts b e tte r for people living in S y d n ey 252

A cco m m o d atio n b e tte r for people living in S y d n ey 320

S chools b e tte r in S y d n ey 280

C in e m a b e tte r in S y d n ey 220

234 77 125 390

152 19 57 210

135 42 19 72

186 8 11 55

165 15 28 123

103 37 49 177

153 28 40 134

77 42 68 205

125 26 49 155

108 20 17 127

90 40 67 201

35 60 62 208

176 38 15 70

257 226 263 330

122 120 81 159

171 31 176 59

158 39 182 45

137 59 162 72

78 106 53 130

100 110 81 82

58 139 44 137

100 111 89 95

33 149 151 90

69 128 66 230

72 138 53 228

135 90 125 170

288

172

88

29

69

145

114

199 138

96

175 171 75

196 380 3,235

105 181 1,690

24 68 1,045

14 60 944

53 96 1,157

22 166 1,330

88 136 1,279

153 205 1,671

105 168 1,450

174 53 1,270

158 240 1,784

136 270 1,713

29 120 1,263

New South Wales country town

C o m p a r is o n o f G e n e r a l C o s ts o f L iv in g in S y d n e y a n d S e le c t e d

C o u n tr y T o w n s , N e w S o u t h W a le s 1 9 6 8

Table 20

A lb u r y A r m id a le B a th u r s t D u b b o G o u lb u r n G r a fto n L is m o r e L ith g o w O r a n g e T a m w o r th T a r e e W a g g a W a g g a T o ta l

C ost o f living h ig h e r th a n in S ydney C ost of living equal to S ydney 91 168 32 67 171 118 32 73 154 115

136 34 21 38 98 52 42 78 89 69

C ost o f living low er th a n in S ydney 242 32 24 20 121 87 152 112 87 104

N u m b e r o f resp o n d en ts 469 234 77 125 390 257 226 263 330 288

72 187 1,280

53 91 801

71 102 1,154

196 380 3,235

Table 20A

H o u s e C o s ts in S y d n e y a n d S e le c t e d C o u n tr y T o w n s ,

N e w S o u th W a les 1 9 6 8

A lb u r y A r m id a le B a th u r s t D u b b o G o u lb u r n G r a fto n L is m o r e L ith g o w O r a n g e T a m w o r th T a r e e W a g g a W a g g a T o ta l

H o u se costs h ig h e r th a n S ydney 64 23 8 19 55 17 17 10 29 25

H o u se costs equal to S ydney 102 79 4 54 63 24 29 20 89 69

H o u se costs low er th a n Sydney 303 132 65 52 252 216 180 233 212 194

N u m b e r of resp o n d en ts 469 234 77 125 390 257 226 263 330 288

10 48 325

31 106 690

155 226 2,220

196 380 3,235

Some sociological aspects of life in New South Wales country town

Table 21

S ig n if ic a n t A s s o c ia t io n s B e t w e e n S o c io - E c o n o m ic C h a r a c te r is tic s a n d M o d e o f T r a v e l t o W o r k , C o u n tr y T o w n s ,

N e w S o u t h W a le s , 1 9 6 8

1. Denotes Significant Relationship as 1% Level of Significance 0. Denotes Relationship not Significant at 1 % Level.

T ra v e l T im e F r o m

H o m e to W o rk P la c e M o d e o f T ra v e l

T o W o rk

Family size 0 0

Age 0 0

Occupation 0 1

Education 0 0

Home ownership 1 0

Number of workers in family 0 0

Number of workers with second jobs 0 0

Table 22

S ig n ific a n t A s s o c ia tio n s B e t w e e n S o c io - E c o n o m ic C h a r a c te r is tic s a n d A t t it u d e s T o w a r d s L o c a l E m p lo y m e n t O p p o r tu n itie s , C o u n tr y T o w n s , N e w S o u t h W a le s , 1 9 6 8

1. Denotes Significant Association at 1% Level of Significance 0. Denotes no Significant Association at 1% Level of Significance.

A v a ila b ility o f A lte r n a tiv e Jo b s A v a ila b ility o f S e c o n d J o b

Family size 0 0

Age 1 1

Occupation 0 0

Education 1 1

Home ownership 0 0

Number of workers in family 1 1

Numbers of workers with second jobs 1

424

1. Denotes Significant Association at 1% Level of Significance. 0. Denotes no Significant Association at 1 % Level of Significance.

Table 23

Significant Associations Between Socio-Economic Characteristics and Attitudes Towards Convenience, Range and Quality of Goods and Services, Country Towns, New South Wales, 1968

S h o p p in g S h o p p in g S h o p p in g L ive T h e a tr e s L ive L ive

C o n v e n ie n c e R a n g e Q u a lity F re q u e n c y o f T h e a tr e T h e a tr e R e s ta u r a n t

V isits R a n g e Q u a lity C o n v e n ie n c e

Family size 0 0 0 0 0

Age 0 0 0 0 0

Occupation 0 0 0 1 0

Education 0 0 0 0 0

Home ownership 0 0 0 0 0

Number of workers in family 0 0 0 0 0

Number of workers with second jobs 0 0 0 0 0

0 0 1 0 0 0 0

0 0 0 0 0

0 0

Table 23— c o n tin u e d

R e s ta u r a n t R e s ta u r a n t L ib r a r y L ib r a r y L ib r a r y P u b lic P u b lic

R a n g e Q u a lity C o n v e n ie n c e R a n g e Q u a lity T r a n s p o r t T r a n s p o r t

C o n v e n ie n c e R a n g e

Family size 0 0 0 0 0

Age 0 0 0 0 0

Occupation 0 1 0 0 0

Education 0 0 0 0 0

Home ownership 0 0 0 0 0

Number of workers in family 0 0 0 0 0

Number of workers with second jobs 0 0 0 0 0

1 0 0 0 0 0 0

0 0 0 0 0 0 0

Table 23— c o n tin u e d Public Transport Quality

Outdoor Recreation Convenient

Outdoor Recreation Range

Family size 0 0 1

Age 0 0 0

Occupation 0 0 0

Education 0 0 0

Home ownership 0 0 0

Number of workers in family 0 0 0

Number of workers with second jobs 0 0 0

T ab le 23—continued Sporting Events Quality

Holiday Resorts Convenient

Holiday Resorts Range

Holiday Resorts Quality

Family size 0 0 0 0

Age 0 0 0 0

Occupation 0 0 0 0

Education 0 0 0 0

Home ownership 0 0 0 0

Number of workers in family 0 0 0 0

Number of workers with second jobs 0 0 0 0

T ab le 23— continued Schools Range Schools

Quality

Schools Convenient

Family size 0 0 1

Age 0 0 0

Occupation 0 0 0

Education 0 0 0

Home ownership 0 0 0

Number of workers in family 0 0 0

Number of workers with second jobs 0 0 0

Outdoor Recreation Quality

0 0 0 0

0 0 0

Accom ­ m odation Convenient

0 0 0 0

1 0 0

Cinema Range

0 0 0 0

0 0 0

Sporting Events Convenient

0 0 0 0

0 0 0

Accom ­ modation Range

0 0 0 0

1 0 0

Cinema Convenient

0 0 0 0

0 0 0

Sporting §

Events §.

Range *5.

---------------- δ

Accom - Λ»· m odation ^

Quality |-

0 0

Cinema Quality

0 0 0 0

0 0 0

1. Denotes Significant Association at 1 % Level of Significance. 0. Denotes Lack of Significant Association at 1% Level of Significance.

Table 24

Significant Associations Between Socio-Economic Characteristics and Evaluation of Provision of Local Goods and Services Compared with Sydney, Country Towns, New South Wales, 1968

C in e m a S h o p p in g L ive R e s ta u r a n ts L ib r a r y P u b lic

T h e a tr e T r a n s p o r t

Family size 0 0 0 0

Age 0 0 0 0

Occupation 0 1 0 0

Education 0 0 0 0

Home ownership 0 0 0 0

Number of workers in family 0 0 0 0

Number of workers with second jobs 0 0 0 0

0 0 0 0

0 0 0

0 0 0 0

0 0 0

Table 24— c o n tin u e d

O u td o o r S p o rtin g H o lid a y A c c o m - S ch o o ls

R e c re a tio n E v e n ts R e s o r ts m o d a tio n

F a c ilitie s

Family size 0 0 1

Age 0 0 0

Occupation 0 0 0

Education 0 0 0

Home ownership 0 0 0

Number of workers in family 0 0 0

Number of workers with second jobs 0 0 0

0 0 0

0 0 0 0

0 0 0 0

0 0 0

Table·.

Some sociological aspects of life in New South Wales country town

T ab le 25

S ig n ific a n t A s s o c ia t io n s B e t w e e n S o c io - E c o n o m ic C h a r a c te r is tic s a n d A t t it u d e s T o w a r d s R a n g e a n d Q u a lity o f L o c a l

J o b O p p o r tu n it ie s a n d C o m p a r is o n o f L o c a l J o b O p p o r tu n itie s w it h S y d n e y

1. Denotes Significant Association at 1% Level of Significance 0. Denotes Non-Significant Association at 1 % Level of Significance.

R a n g e o f Jo b s

Q u a lity o f Jo b s C o m p a r is o n w ith S y d n e y

Family size 0 0 0

Age 0 0 1

Occupation 0 0 0

Education 0 0 0

Home ownership 0 0 0

Number of workers in family 0 0 0

Number of workers with second jobs 0 0 0

T ab le 26

S ig n ific a n t A s s o c ia t io n s B e t w e e n S o c io - E c o n o m ic C h a r a c te r is tic s a n d F r e q u e n c y o f V is it s t o R e la tiv e s , C o u n tr y T o w n s ,

N e w S o u t h W a le s , 1 9 6 8

1. Denotes Significant Association at 1% Level of Significance. 0. Denotes lack of Significant Association at 1 % Level of Significance.

F re q u e n c y o f V isits to R e la tiv e s

Family size 0

Age 0

Occupation 0

Education 0

Home ownership 0

Number of workers in family 0

Number of workers with second jobs 0

428

Tables

N e w S o u t h W a le s , 1 9 6 8

1. Denotes Significant Association at 1% Level of Significance. 0. Denotes Lack of Significant Association at 1 % Level of Significance.

Table 27

Significant Associations Between Socio-Economic Characteristics and Frequency of Visits to Church, Country Towns,

F re q u e n c y o f V isits to C h u r c h

Family size 0

Age 1

Occupation 0

Education 0

Home ownership 0

Num ber of workers in family 0

Num ber of workers with second jobs 0

T able 28

S ig n ific a n t A s s o c ia t io n s B e t w e e n S o c io - E c o n o m ic C h a r a c te r istic s a n d A t t it u d e s T o w a r d s R e la tiv e C o s ts o f L iv in g in S y d n e y a n d

C o u n tr y T o w n s , N e w S o u t h W a le s , 1 9 6 8

1. Denotes Significant Association at 1% Level of Significance. 0. Denotes Lack of Significant Association at 1% Level of Significance.

C o s t o f L iv in g in

L o c a l C e n tr e s a n d S y d n e y

Family Size 1

Age 1

Occupation 0

Education 0

Home ownership 1

Number of workers in family 0

Number of workers with second jobs 0

T ab le 29

S ig n ific a n t A s s o c ia t io n s B e t w e e n S o c io - E c o n o m ic C h a r a c te r istic s a n d A t t it u d e s T o w a r d s C o m p a r a tiv e H o u s in g C o s ts in S y d n e y an d C o u n tr y T o w n s , N e w S o u t h W a le s , 1 9 6 8 1. Denotes Significant Association at 1% Level of Significance.

0. Denotes Lack of Significant Association at 1% Level of Significance.

C o st o f H o u sin g in

L o c a l C e n tr e s a n d S y d n ey

Family size 1

Age 1

Occupation 1

Education 0

Home ownership 1

Number of workers in family 0

Number of workers with second jobs 0

R 72/503 429