Good times for all in boomtown Perth?
By Philippa Fogarty BBC News, Perth
Courtesy of the BBC
Dean Hewitt arrived in the Australian city of Perth late last year to open a branch of a UK recruitment company.
He supplies personnel and training to the transport and logistics industry – which includes for example, the long “road-train” trucks that carry goods to remote mining regions.
In six months, he has exceeded his three-year business plan, taken on more staff and is expanding.
“Transport companies can’t get enough vehicles and when they are delivered, they can’t get enough drivers,” he says. “It’s not rare to get a call from a company saying ‘I need 300 diesel mechanics’ – and they need it tomorrow”.
Perth is a city on the move, as the country’s resources boom shifts wealth west. A recent “State of the States” report called Western Australia (WA) “clearly Australia’s best performing economy”, ranking it top in six out of eight categories.
Perth is Australia’s fastest-growing major city, in the state with the lowest unemployment. Average household income has risen 35% in five years.
The new wealth is on show – luxury retailers have arrived, so too restaurant chain Nobu. Roads are full of young miners driving flash cars.
Construction is ongoing – city-centre transport redevelopment, a high-profile waterfront project, a new hospital. Mining giant BHP Billiton is moving staff into a new 45-floor tower. And foreign workers – from New Zealand engineers to US veterans to UK drivers – want in.
“Those kinds of guys will be earning A$150,000- $200,000 (£99,000: $156,000) a year for driving a truck – compared to the UK where a top driver will be earning an equivalent of about A$60,000,” Dean Hewitt said.
But though Perth is growing and getting richer, not everyone is earning a resources sector salary.
Chris Twomey, of the Western Australian Council of Social Services, says the benefits of the boom are far from being shared equally.
“One of the things we have seen is a dramatic increase in the divide between those who have and those who have not,” he said.
“The rate of development that we’ve been seeing with the resources industry here has pushed up cost of living factors quite dramatically – because there is so much stress on the economy and community resources.”
Perth is now pricier than London and New York, according to a survey by the Economist. It feels expensive, from a coffee to a pint to a cinema ticket. A recent survey by TripAdvisor said it was Australia’s most expensive city for a night out.
But the biggest impact has been seen in the housing market. Across Greater Perth, average weekly rents have risen by almost 80% in the last five years. The average mortgage payment has more than doubled.
There is a city-wide housing crunch. Dozens of potential tenants are showing up for viewings in some areas and there are widespread reports of bidding wars.
Mr Twomey says the average family income is keeping pace with the cost of living. “But if you talk about people on the minimum wage or who are reliant on income support, or people who are in insecure work, those people have been really struggling.”
Marion Fulker of the Committee for Perth think-tank says the new factor is “the working poor – people who are in full employment but can’t afford the cost of living”.
“That would be people like nurses, teachers, fireys [fire fighters], admin assistants – people who are in absolutely gainful employment and many of those critical to our community. They are the new generation on capped, modest wages – and they are really going to find it difficult.”
Perth is a lifestyle city, with a long coastline and the Swan river running through it. Paul Cotton sells boats to the leisure market and he says times are tough.
“Brokers on the east coast think WA trade must be flying – well I can tell you what, it isn’t!” he said.
“There is always the report of WA driving the Australian economy – yes, but to the common man it ain’t making much difference. The recreational dollar is just not there, because of rents, food prices, the whole lot.”
The strength of the Australian dollar is not helping. In Mr Cotton’s industry, many of those who do want to buy are turning to cheaper US imports.
There’s another issue: people are not buying boats because there is nowhere left to berth them. And this taps into another key concern – can Perth’s infrastructure handle its growth?
In the past five years Perth’s population has swelled by 14.3% as the job market has boomed.
Many of the new arrivals have made their way to the city of Wanneroo, a coastal sprawl that is Perth’s fastest-growing suburb. In the last five years the number of residents has surged by almost 40% to over 150,000.
“We’ve got a lot of people who have moved from the UK, from South Africa, inter-state. We’ve also got a high Fifo [fly-in/fly-out] community,” said Mayor Tracey Roberts.
“We add a sizeable country town to our city every year,” she said. “It’s exciting, it’s challenging, there’s opportunity and it’s frustrating as well.”
The city is working to create community links to help new arrivals form local bonds. Schools are being built, land released for development and a train line is being extended. But city officials say more investment – and more co-ordination – is needed to keep pace.
“We’re the fastest growing local authority but we have one train station and zero freeway on our boundaries,” Ms Roberts said.
“We need money for roads, for support with our industrial area and economic development, additional money for hospitals. For the federal government, we’re looking once again for infrastructure… It needs to be an across-the-government approach.”
‘Growth brings pain’
Across the city, the pressure is being felt. Common complaints from residents include clogged roads, crowded trains, delays at the airport and in accessing healthcare.
Ms Fulker says Perth needs to focus on liveability issues so that it can continue to attract workers.
“We need these people to come and if they are hearing ‘it’s expensive to live here, it doesn’t matter how much you are getting paid’, it’s not great for our reputation.”
Some things, she says, will require a cultural shift, such as the preference for detached suburban living rather than apartments. But the critical thing is to formulate long-term strategy.
“The liveability for us is pulling all those things apart and saying, what are the problems? If Perth was a business, how would you invest in it, how would you make it the best city that it can be.”
Perth has always had a boom-bust mentality – “near enough has always been good enough”. But, she says, different philosophies and a shared vision are needed to tackle issues “that are really strategic to Perth” – and now is the time.
“Growth brings pain and we have certainly been seeing the pain over the last few years,” she said. “But we ain’t seen nothing yet.”
Article source: http://www.bbc.co.uk/news/world-asia-19222037