Leading independent economics firm ACIL Allen has released a report into the long-term economic and social benefits of Ichthys LNG’s operations over the next decade.
The report, a Social and Economic Impact Assessment: Ichthys LNG 2020–2030, which was commissioned by the INPEX-led Ichthys joint venture, estimates the extent to which the Territory economy and the broader community benefits from the operations.
The report found that for every full-time job created by Ichthys LNG a further two additional jobs were generated in the NT.
Each year, Ichthys LNG will directly pay $132 million in wages and salaries to its Territory-based workforce.
In addition, a further $118 million in indirect wages and salaries will be earned by workers across other sectors of the economy in roles created as a result of Ichthys LNG’s operations in the NT.
Other key economic and social benefits identified in the report included:
$7.1 billion in total tax revenue to be generated, with an average of
$649 million going to the Australian and Territory governments each year
$2.8 billion of income to be generated, or $251 million each year
$84.3 billion in exports to be contributed, equating to $7.7 billion each year
$2.8 billion to be contributed indirectly to the local economy, equating to $251 million each year of benefits to Northern Territory businesses
2056 full-time equivalent jobs to be supported each year
more than 1000 individuals relocated to the Territory for work associated with Ichthys LNG’s operations, supporting a population and economic boost
50,862 hours volunteered time by INPEX workers, contractors and their families at local sports clubs and associations on an annual basis, valued at approximately $1 million
ACIL Allen Executive Director John Nicolaou says the report shows that the INPEX-operated Ichthys LNG energy development has had a transformational impact in the NT.
“It has helped anchor the Northern Territory as an emerging gas province, which has the potential to become a world-class production, manufacturing and services hub,” he says.
“Ichthys LNG provides the economic base to support a range of other industry sectors, thereby creating employment opportunities and supporting population growth in the Territory.”
The report recognises local community views that the labour-intensive construction phase had significant, but short-term, economic and social benefits and highlighted the long-term employment and service and supply opportunities that Ichthys LNG will provide the Northern Territory population and local businesses.
These benefits and opportunities are expected to continue throughout Ichthys LNG’s 40-year operational life.
“The size and scale of Ichthys LNG has had a disproportionate benefit on the growth and development of the Northern Territory economy over the past decade,” Mr Nicolaou says.
“While the transition of the project from construction to operations has had temporary side effects, over the longer term Ichthys LNG will support lasting benefits to the NT.
“This includes reducing the Territory’s reliance on Australian Government-funded sectors to drive economic opportunities for businesses and individuals.”
The report highlights that the employment created by Ichthys LNG has helped boost the Territory’s population by more than 1000 since it commenced operations.
A growing number of families in the Territory generates demand for important social services, including childcare, primary and secondary school enrolments, as well as health services.
In 2019–20, Ichthys LNG generated an economic output across a range of sectors that was equal to one quarter of the Northern Territory’s entire economy.
While the primary benefit of Ichthys LNG is through the billions of dollars in exports generated each year, there are significant benefits that accrue to local industry in the Territory.
ACIL Allen’s study found that Ichthys LNG would generate on average:
$48.8 million each year in activity for the transport and logistics sector
$46.2 million each year for the professional, technical and scientific services sectors
$43 million each year for the rental, hiring and real estate services.