High skilled jobs further set back in Western Sydney

News just in that the CBA, who the Parramatta Council were banking on to make their plans for the Parramatta Square Development project have decided not to proceed with having offices in Parramatta; instead favoring offices closer to the city. What does this have to do with the new proposed airport though? Well a lot actually.

One of the major arguments for Badgery's Creek airport is that we need "higher skilled" jobs here in Western Sydney. In fact one of the main lobbyists for this airport David Borger wrote an article about why we need this airport - because it would deliver "Western Sydney's knowledge jobs".

As someone that arguably possesses these types of "higher skills" mainly in the tech industry I would love more jobs locally that were both innovative and high paying. However as someone who does work in this industry I can tell you it's not happening anytime soon for quite a number of reasons.

The heart of it is this; "If Parramatta, Sydney's second CBD, does not warrant these jobs what makes a whole new area even further remote do so?". This is especially true because:

• Knowledge jobs like to be based in areas where the "talent" lies and they are in close proximity to other businesses of the same caliber; the pool of talent in those areas outweighs the cost of the extra rent the company is paying for being in the city.
• Quoting the article the words of CBA's CTO himself: ""Moving to the transformed Australian Technology Park will put 10,000 of our people in the heart of a growing technology hub, providing us with a significant opportunity to partner and collaborate with universities, start-ups and other innovative companies,"".
• With a company earing +$6 billion a year (Commonwealth Bank) the cost advantage of moving out west is small; conversely recruiting for startups is extremely important and hard.
• Collaboration and knowledge sharing, meetup's and the like are extremely important to tech professionals. They would prefer to be localised with each other as much as possible.
• Higher skilled jobs earn higher incomes which is obvious; what that means of course is that many of the company owners live in prestigious areas as a result.
• An example being one of the founders of Atlassian; arguably one of the most sucessful Australian tech companies and where his house is located. Do you expect him to travel from Paddington to Badgery's to see how his company is doing?
• Similarly their staff mostly live near these places of work. Increasingly the workforce of the tech industry is globally sourced - if you moved to a new city for a high skilled job would you move to its outskirts or try the inner city first? There's a lot of inertia here to expect them to change to working on the complete other side of the city.
• There's a lot of competition for technology and science areas. Everyone knows that these are the jobs of the future.
• The one mentioned in the article near Redfern
• One just announced by Mark Baird our NSW premier at the former industrial Bays Area precinct
• Macquarie Park (near North Ryde) is already a technology area and will develop even futher due to its better location. Anecdotally Macquarie Park is already considered a remote place to work from some of the technologists I know and work with.
• There's more in Sydney but I think you get the hint thus far.

As said before by myself; I don't think it's airports that encourage these sorts of jobs anyway. Baggage handlers, logistics workers and tourists vans maybe; but not someone who has enough money to value their sleep at night and has to concentrate at work the next morning. They do serve existing cities however.

Western Sydney should stick to what it's best at; especially the Blue Mountains. Embrace what you are good at:

• Open Spaces
• Less Congestion
• Outdoor areas and backyards for family members
• Quiet and peace a simple drive away if your not there already
• A place "away from the hustle and busle"
• A more "laid back" atmosphere

Unfortunately a 24/7 airport with flight paths over the Mountains and over many Western Suburbs probably conflicts with most of these things. You will never be able to compete against the city with what it is good at on its own terms. It has the advantage not just its scale; but with the fact that it is in a place that people desire to live not just for jobs and amenities; but because it still has preserved its heritage and its environment more so than other cities. This of course attracts people with higher incomes. It's no coincidence that the most livable suburbs according the Census are right near a big National Park in the middle of our city; what other cities can claim having nature like that in the middle of them! 

For a good reason why workers in these higher skilled jobs may want more than "just a job" see this link.

If Parramatta won't do it for some time yet; what hope do we have for the area around Badgery's Creek to do it anytime soon? Will leave you to think about that question.

New draft EIS released today

After quite some time the Federal Government has finally released an EIS (Enviromental Impact Statement) for the new proposal of Badgerys Creek Airport on their website. Thought I would write a quick "first impressions" I found when reading the report - I hopefully will have time in future posts to do a more detailed comparison. I will note though that this report was released quite some time after giving the project the "go-ahead" (at least a year and a half since then) which says quite a bit on its own.

Lets be frank - the EIS was never going to give opponents the ammunition they need to highlight anything bad about the airport development.  No EIS report has ever blocked a project that I'm aware of. Logically anyone writing the report is not going to bite the hand that feeds them and contracted them to write it; this is especially so since the Government as said earlier announced that this was going to be the airport site and made the commitment before the report was even commissioned.

It's still worth looking at however; it may illuminate us as to who will be the winners and losers from the proposal. To be honest it's the first real bit of information we have received about the airport that relates to the most current proposal. It's the main reason I haven't written for so long; there just wasn't the information out there to comment on.

In any case the draft EIS as released seems to give us information on preliminary flight paths and what they see the noise impact to be from their point of view.

What's interesting to me is that the flight paths chosen potentially impact quite a number of people particularly in the lower Blue Mountains where most of the approaching flight paths seem to overlap. They are also somewhat different from what was proposed in the previous EIS last time Badgerys was announced. Departing flight paths this time around go over St Marys, St Clair, Erskine Park, Blacktown and the Penrith CBD. They seem to think however there won't be noise impact that's worth mentioning from this which for me seems quite strange and goes against intuition. In fact comparing actual exposures like I did in previous posts (see my North Ryde comparison on a previous post) I would imagine the noise in decibels to have been quite understated and/or optimistically estimated in order to get the night time N60 maps they did.

These statistical models are just that though; statistics which have the usual problem of garbage-in-garbage-out. They are vulnerable to a number of tweaks in their assumptions including but not limited to estimated traffic, aircraft noise from future aircraft, types of future development, estimated climb rates of aircraft, etc. Lots of variables they can individually tweak to get them closer to the result they want.

Some interesting points that jumped at me:

• The first has to do not just with absolute noise but the frequency of it; I wouldn't be buying a house in the lower Blue Mountains right now for example. Having just enough noise to wake me up at 3am doesn't sound very appealing especially with all the approaching noise paths converging over this area between Penrith and Springwood. It's feels like the Government wanted to punish this area maybe?
• The flight paths seem very "all over the place" mainly due to the airspace that needs to be reserved for three airports that surround Badgerys including Camden, Richmond and Bankstown airports. This leads to some very interesting flight path layouts including paths from St Marys to Penrith CBD and onwards.
• The noise maps don't seem to follow the flight paths all too much; this might have just been a first glance mistake by me. What I do know is that with N60 maps stretching at least 20km from the current Sydney airport these maps particularly with their curved flight paths (planes can't climb as quickly) seem very suss to me.

I hope that I will soon have more time to analyse these documents and do some analysis. From first impressions however I will be honest; it doesn't totally add up especially when compared to data from other airports. My fear is that this document could be more of a political exercise to sell the proposal rather than a true honest assessment of how this development (which will eventually rival the size of JFK airport) will affect local residents. 

Jobs Jobs Jobs

Many of the proponents of the airport proposal in Badgerys Creek cite one major benefit - that being "jobs" hopefully closer to home for local residents. I've seen in articles, forums, presentations, lectures and more all spruiking the job benefits that the airport can bring. In fact for the local community this probably is the only potential benefit an airport they can sell; airports as a whole are normally a negative on the local communities around them (a quick Google search showed at least one but there's plenty of research on the subject).

There's quite a few questions that need to be answered to verify the proponents arguments. For me these are:

1. Are the jobs really going to come from this?
2. Are the jobs the kind of jobs we want? Do they come at the expense of other jobs?
3. Overall are the surplus in jobs created by this proposal vs using the land for other purposes enough to really be worth the cost?

It's the second question that really got me thinking especially knowing that the NSW Government had recently asked the Federal Government whether they could include the Badgerys land as part of their BWSEA (Broader Western Sydney Employment Area). The idea of a technological park similar to say Macquarie Park or an employment centre similar to Norwest with the added benefit of easy transit links made me believe at the time that there may be a possibility I and other technical workers could work closer to home.

Of course with Qantas closing maintenace facilities at Avalon - the other secondary capital city airport in Australia - I doubt the technical job opportunities will continue to be locally based if this airport arrives. While Qantas and Virgin Blue have recently recovered their profits for many years they were experiencing losses of a large scale; avidation generally hasn't achieved a good rate of return as an industry. Even Warren Buffet being the famous investor he is doesn't believe in investing in air travel. Aviation is the most globalised industry on the planet due to its nature; there is no real reason why routine maintenance can't be conducted at other sites or by other contractors offshore.

Airports encourage certain industries to flourish nearby; I side with the opinion that most of them are not technical in nature. Warehousing, transport, retail and tourism are normally the industries to benefit from aviation facilities; not technical or office jobs. There are many reasons at present to believe that technical orientated jobs are not really orientated around airports per se but the technological parks around them; in fact with this airport proposal it could very well be that the land acquired for warehousing, hotels and the like could crowd out the potential of much higher paid skilled work.

Avalon's airport economic benefit summary states that the main job centers created nearby are airport construction (not permanent), hotels, industrial warehousing, service stations and retail outlets. If you drive in the employment lands in the WSEA (the biggest employment land by hectare in Sydney) that's about the only industries in the area and unfortunately at this stage they aren't the massive providers of jobs that locals desperately need. This will only probably be encouraged by the development in my opinion.

The other point is that the land marked locally for the airport had alternate uses; some of which may have given more long term employment of a better caliber than an airport would. Plans for employment lands there have been  before the airport announcement (dated June 2013); in fact the linked FAQ shows these industries were planned to settle there; planning was commencing with or without the airport for the "Western Sydney Employment Area". It pays with this airport proposal to think about the "net" effect on jobs rather than quoting the "gross" job numbers; the smaller the net number the less benefit the airport has on jobs. This point of comparing "net benefits" that may of come anyway is especially important when compared against the costs that an airport brings to the local community such as noise, congestion and pollution. Admittedly jobs may come sooner due to the airport proposal; however since the land would of been used for employment lands anyway at some stage the extra benefits of an airport to me are questionable.

Interestingly another person in a very pro-airport article agrees with me(see http://www.smh.com.au/nsw/deadlines-loom-for-badgerys-creek-airport-at-last-20140912-10ftpo.html) - a professor from UWS (the local university to Badgerys) thinks that unless the development is supercharged into a large major airport it won't deliver the benefit that is being espoused; at best it will cater to freight and budget flights with its lack of curfew status being its main appeal.  This coming from an article that is supporting the development; it therefore has to assert that airports are where the productivity is which I would also question; correlation is not causation. I would assert that airports derive their economic benefit from their location as is the case with the current Sydney Airport; the the fact that it serves a very productive CBD and therefore can tap into and serve this market is its main economic contribution. Cities in economic terms are much more relatively productive than other areas due to their economies of scale and its where this scale is that airports are best positioned. In other words they serve economic CBD areas; many of which were developing organically way before air travel became a big thing. Supercharging the airport development by making Badgerys a CBD in it's own right is an option but has a lot of other concerns in terms of over investment (i.e a potential white elephant development) and the increased community impact of noise and pollution. After all how much money should we invest in yet another Sydney CBD especially when arguably we've haven't made our second CBD work as of yet (i.e Parramatta)?

In conclusion new jobs in the employment lands of South West of Sydney are mainly of the warehouse kind. An article summarises the current problems in the South West of Sydney - although the same local paper mentions Badgerys Creek as a saviour. I would instead assert that given the anticipation of the airport development what's happening currently with the employment lands in Western Sydney is exactly what's to be expected - warehouses upon warehouses of land with a small amount of sparsely populated jobs. I wouldn't be surprised if the likes of Toll and DHL - among just some of the companies building large warehouses out here - are part of the lobby pushing for this proposal; a freight based local airport will make their lives easier even if it doesn't provide more work.

The jobs promised in the area would have eventually arrived anyway with the plans for the area. They would of come without the usual community costs that an airport delivers. I am particularly concerned that the "net" job numbers long term are actually negative as low density industries that prefer locating themselves near an airport crowd out more job dense and high tech industries although at this stage I have no way of quantifying this.

On a side note it seems both the local newspapers are really supporting this development which really shows - unfortunately the statements made to support the airport are usually just thrown into the article without any real support to back them up; I wonder how many jobs say Avalon airport - another secondary Australian airport - has created? (Hint: It's not many). In fact it's going to reverse with most engineering and maintenance jobs moving offshore.

UPDATE: This update was written some time ago but unfortunately/by accident was not posted. Since then Qantas has recovered its profit mainly due to low oil prices. I wonder however whether this is a blip in generally what is a one of the worst industries historically in terms of profitability and return on capital.