Equine Sector Economic Impact Study FINAL

Transcription

Authors
Shashi Karunanethy
Reviewed by
Mike Ruzzene
Todd Denham
© Copyright, Urban Enterprise Pty Ltd, August 2008.
This work is copyright. Apart from any use as permitted under Copyright Act
1963, no part may be reproduced without written permission of Urban
Enterprise Pty Ltd.
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Disclaimer
Neither Urban Enterprise Pty. Ltd. nor any member or employee of Urban
Enterprise Pty. Ltd. takes responsibility in any way whatsoever to any person
or organisation (other than that for which this report has been prepared) in
respect of the information set out in this report, including any errors or
omissions therein. In the course of our preparation of this report, projections
have been prepared on the basis of assumptions and methodology which
have been described in the report. It is possible that some of the
assumptions underlying the projections may change. Nevertheless, the
professional judgement of the members and employees of Urban Enterprise
Pty. Ltd. have been applied in making these assumptions, such that they
constitute an understandable basis for estimates and projections. Beyond
this, to the extent that the assumptions do not materialise, the estimates and
projections of achievable results may vary.
TABLE OF CONTENTS
DEFINITION OF TERMS
II
EXECUTIVE SUMMARY
IV
EQUINE SECTOR ECONOMIC IMPACT ASSESSMENT
IV
WHAT IS THE EQUINE SECTOR?
IV
ECONOMIC IMPACT ASSESSMENT
V
1.
METHODOLOGY
7
1.1.
INTRODUCTION
7
1.2.
DEFINITION OF THE EQUINE SECTOR
1.3.
EXPENDITURE CATEGORIES
10
1.4.
METHODOLOGY OF THE ECONOMIC IMPACT ASSESSMENT
11
2.
3.
7
12
2.1.
INTRODUCTION
12
2.2.
EXPENDITURE ESTIMATIONS BY CATEGORY
12
ECONOMIC IMPACT FINDINGS
3.1.
18
SUMMARY
18
APPENDIX A
INPUT-OUTPUT MODEL
22
APPENDIX B
ESTIMATED EXPENDITURES BY CATEGORY AND INDUSTRY
24
APPENDIX C
CONSULTATION LISTS
25
FIGURES
FIGURE 1
ESTIMATED DIRECT EXPENDITURE BY CATEGORY (MILLIONS), 2009/10
FIGURE 2
EQUINE INDUSTRY SECTORS: EXPENDITURE FLOW DIAGRAM
10
VI
FIGURE 3
EQUINE SECTOR ECONOMIC IMPACT FLOW DIAGRAM
11
FIGURE 4
ESTIMATED EXPENDITURES BY EXPENDITURE CATEGORIES, 2009/10 ($MILLIONS)
18
FIGURE 5
23
TABLES
TABLE 1
EQUINE SECTOR ECONOMIC IMPACT, 2009/10
TABLE 2
EXPENDITURE ASSUMPTIONS, BREEDING
12
TABLE 3
ESTIMATED EXPENDITURE ASSUMPTIONS, HORSE RACING EVENTS
14
TABLE 4
EXPENDITURE ASSUMPTIONS, LEISURE HORSE RIDERS
15
TABLE 5
ECONOMIC IMPACT OF EQUINE SECTOR, 2009/10
19
TABLE 6
ESTIMATED EXPENDITURES BY CATEGORY, INPUT OUTPUT INDUSTRY GROUP ABS 2006
24
EQUINE SECTOR ECONOMIC IMPACT
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DEFINITION OF TERMS
Agistment – A contract or fee to pasture livestock, including horses.
Arabian (Or Arab Horse) – A breed of horse that originated on the Arabian Peninsula; Arabians dominate
endurance riding..
Consumption Induced Effects - The induced production of extra goods and services as a result of private
final consumption expenditure of households affected by the equine sector on which the economic impact
assessment is based.
Covering – To copulate with a female horse.
Economic Impact (or Economic Impact Analysis) – The effect of a policy, project, activity, event or industry
on the economy of a given area. Economic impact is usually measured in terms of changes in output and
associated changes in jobs.
Economic Output – The quantity of goods and services produced in a given time by a firm, industry or
region/country.
Eventing – The hosting of dressage, showing and jumping competitions with regards to local adult riding club
events.
Expenditure on Imports (also Expenditure outside Shire) – Direct Expenditure from the equine sector outside
Macedon Ranges Shire (e.g. expenditure on stallion service fees in the Hunter Valley by local thoroughbred
studs).
Foaling Down – To give birth to a young foal.
Initial Output Effects - The estimated initial expenditure of the equine sector on the general Macedon
Ranges Shire economy. This will be estimated through interviews with major stakeholders in the local
equine sector, supplemented by findings of the Macedon Ranges Equine Business Survey.
InputInput-Output
Output Model - An Input-Output (I-O) table fulfils two key functions; it is firstly a descriptive framework
for showing the relationship between industries and sectors and between inputs and outputs in an economy.
Secondly, it is an analytical tool for measuring the impact of autonomous disturbances on an economy’s
output, employment and income.
Local Expenditure – Direct expenditure from the equine sector within Macedon Ranges Shire industries.
Pony – A term encompassing several breeds of horses, including the Australian pony, Connemara Pony,
Dartmoor Pony, Fjord Pony, Hackney Pony, Highland Pony, New Forest Pony, Shetland Pony and Welsh
Ponies (A, B, C & D).
Production Induced Effects - This is the estimated impact of the Initial Output Effects on the general
economy.
Quarterhorse – A small powerful horse originally bred for sprinting in quarter-mile races held in America.
Stallion Sire Service Fees – A service fee to allow the covering of a mare.
Standardbred – A breed of horse best known for their ability to race in harness.
Stockhorse – A hardy breed of horse noted for endurance, agility and good temperament. It is used today in
a wide variety of disciplines and is still value as a working horse by stockmen in Australia.
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Stud (or Horse Stud) – An establishment where horses are kept for breeding.
Thoroughbred – A particular breed of horses best known for its use in horse racing due to their known agility,
speed and spirit.
Warmblood – A particular breed of middle-weight horses, particularly suited for equestrian sports.
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EXECUTIVE SUMMARY
EQUINE SECTOR ECONOMIC IMPACT ASSESSMENT
Urban Enterprise was appointed to undertake research into the economic impact of the Macedon Ranges
Equine Sector.
The economic impact of the equine sector was assessed through analysis of its key expenditure categories,
including breeding, events, leisure horse riding, horse training and other equine activities. Assumptions on
spending in these categories were established through surveys and consultation with stakeholders in the
region and through a review of equine related literature. This information was used to determine the direct
spending attributed to the equine sector in the Macedon Ranges Shire. The secondary economic impact
attributable to this expenditure was calculated using a regional input-output model that estimates the impact
of spending in one industry segments across the Shire economy.
Economic impact will be defined as the effect of the direct expenditure by the Macedon Ranges equine
sector on the economy of the Shire as a whole. It is important to note that the economic impact is different to
economic output (defined as the value of the goods and services produced in a given time by the equine
sector). Economic impact will be measured through the change in the value of the Macedon Ranges
economy and the number of jobs supported by expenditure of the equine sector.
WHAT IS THE EQUINE SECTOR?
According to the 2004, Henley Centre Report of Research on the Horse Industry in Great Britain, the equine
sector is defined as:
“encompassing all activity that has the horse as its focus and activity that, in some reasonable capacity,
caters for such an industry”
Furthermore, the equine sector will be segmented into two key sub-sectors: the core equine sector and the
supplementary equine sector. The core equine sector will consist of:
•
Horse Breeding;
•
Equine Education;
•
Horse Training/Equestrian Coaching;
•
Private Leisure Horse Owners; and
•
Equestrian Clubs and Associations.
The supplementary equine sector will consists of:
•
Land-based equine business;
•
Equine Health;
•
Husbandry Services;
•
Fodder Suppliers; and
•
Other Sectors (e.g. retailers, wholesalers, trade and quarantine services, equine specialised insurance
services)
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OVERVIEW OF ECONOMIC IMPACT
The economic impact assessment found the equine sector to be an important contributor to the Shire’s
economy and employment level. The result of this study is that in the 2009/10 financial year, the
the equine
sector generated an economic impact of $140 million and supported 907 jobs in the Macedon Ranges
Shire,
Shire, as shown in Table 1. In addition the local equine sector broadly contributes to other Victorian regions
and New South Wales economies; the Macedon Ranges Equine Sector has spent an estimated $72.17
million outside the Shire.
TABLE 1
EQUINE SECTOR ECONOMIC IMPACT, 2009/10
Macedon Ranges Shire
Expenditure Outside the Shire
Direct Economic Expenditure
in the Shire
Shire
Total Economic Impact
Shire Employment Impact
$96,359,215
$139,997,646
907
$72,170,358
Source: Urban Enterprise 2011
DIRECT EXPENDITURE BY EQUINE SECTOR
The economic impact analysis has found that breeders are the primary contributing component of the local
equine sector to the Macedon Ranges Shire economy; horse studs (primarily thoroughbred breeders) have
generated over $27.6 million worth of expenditure in Macedon Ranges Shire. Breeders have also spent over
$22 million outside the Shire, primarily through purchase of high quality stallion services fees, transportation
and handling fees.
Second in direct spending, the leisure horse industry has generated an estimated $22.6 million in
expenditure. $21.3 million was spent by the horse training sector and $13.7 million has been generated by
equine events held within the Shire, primarily through race meets organised through the NMIT Kyneton and
Hanging Rock Racing Clubs. In particular, race meets attract over 30,000 per year to the Shire. Eventing
(dressage, showing and jumping events) held by the local pony and adult riding clubs also contributes to the
event component of the equine sector.
Other Equine Activities such as (primarily fodder, equipment retailers, wholesalers, husbandry services and
construction) contributed $11.1 million worth of expenditure in the Shire.
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FIGURE 1
ESTIMATED DIRECT EXPENDITURE BY CATEGORY (MILLIONS), 2009/10
$22.0
$19.2
$5.1
$17.5
$8.4
$27.6
$22.6
$21.3
$13.7
Breeder
Events
$11.1
Leisure Horse
Industry
Horse Training
Other Equine
Activities
Expenditure Outside Macedon Ranges Shire
Expenditure in Macedon Ranges Shire
EQUINE SECTOR ECONOMIC
IC IMPACT
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1.
METHODOLOGY
1.1.
INTRODUCTION
This section outlines the methodology of measuring the economic impact of the equine sector in
the Macedon Ranges Shire. Clear definitions of the industry are required to establish the
economic output and impact, as it must be possible to make distinctions between final output and
intermediate consumptions. The methodology is based upon an adaptation of the expenditure
approach to economic sizing used by the ABS.
1.2.
DEFINITION OF THE EQUINE
EQUINE SECTOR
The Henley Centre “Report of Research on the Horse Industry in Great Britain” defines the “horse
sector [or equine sector] as encompassing all activity that has the horse as its focus and activity
that, in some reasonable capacity, caters for such an industry”.
This report will divide the equine sector into two components: core equine sector and the
supplementary equine sector.
1.2.1.
THE CORE EQUINE SECTOR
The core equine sector represents individuals, organisations and activities that involve the direct
use of horses for the activity. The core equine sector consists of the following segments:
HORSE BREEDING
The horse breeding sector in the Macedon Ranges Shire plays a critical role as the main
economic contributor to the local horse industry. The climate, availability of land and
infrastructure and close proximity to race associations as well as Metropolitan Melbourne all
contribute to the strategic location of the breeding sector. Macedon Ranges Shire is a major
producer of thoroughbred horses; the Shire is also a producer of Arabians and several pony
breeds.
PRIVATE LEISURE HORSE OWNERS
Private leisure horse owners defined as owners for whom the horse is not part of a business
enterprise. Private leisure horse owners are numerically the largest proportion of the industry,
although they do not directly produce economic output. This sector exacts economic contribution
through acquiring horse equipment, suppliers, utilising husbandry and health services; all of
which contribute a significant portion to sustaining the Macedon Range Equine Sector.
RACING CLUBS
The Macedon Ranges equine sector has one thoroughbred racing association, the Kyneton and
District Racing Club, which holds race days at the Hanging Rock Racecourse and at NMIT
Kyneton Park. The Racing Club contributes significantly to the local economy; in total, the Race
Club will hold over 16 meets within the 2010/11 year and attract over 30,000 visitors and
considerable tourism expenditure to the Shire.
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Unlike other sectors, racing events create economic impact through non-riders; race day
spectators contribute through betting, purchase of food & drinks, transport and accommodation.
CLUBS AND ASSOCIATIONS (ADULT RIDING AND PONY CLUBS)
Equestrian clubs, centres and associations are primarily non-profit organisations, providing a
platform for community and social interactions. Based on consultations with Horse Riding Club
Association of Victoria (HRCAV) and Pony Club Victoria (PCV), there are approximately 8 adult
riding and 8 pony club associations within Macedon Ranges Shire. These clubs and associations
hold events (such as dressage, eventing, jumping and horse events at agricultural shows) that
contribute to the local economy and also contribute to the social wellbeing of the community.
HORSE TRAINING/COACHING
Thoroughbred and harness horse training (conducted at the NMIT Kyneton Racing Club) is a key
facilitator in providing essential skills across the thoroughbred racing and training industry. The
racing club facilitates 80 horse trainers, drawing on jockeys and horses from all over Victoria to
train within the Shire. Furthermore, between 100 and 120 horses train at NMIT Kyneton Park
every day. The Shire also holds a number of horse trainers and equestrian coaching schools as
well that provide training for club and association riding members as well as other notable riders
keen in specific fields of horse riding.
EQUINE EDUCATION
NMIT Kyneton it is the first Victorian TAFE to introduce a degree specialised for the equine
sector. However, NMIT does not currently utilise the Kyneton Racing Club for educational
purposes (except for conference and meeting room facilities); plans have been put into place to
consolidate programs within NMIT Kyneton in the future. This activity does not currently have a
direct economic impact within the Shire, and is not included in further analysis.
HORSE RIDING TOURISM
Trail riding tourism services play a prominent role in drawing non-owning riders to the equine
industry by offering products such as leisure-riding and day-trekking. However, consultations
have revealed that trail riding / hire horses are not available in the Macedon Ranges. As
such, this activity does not currently have a direct economic impact within the Shire, and is not
included in further analysis. Infrastructure needs to facilitate growth in this sector will be analysed
in the strategy.
1.2.2.
THE SUPPLEMENTARY EQUINE SECTOR
The Supplementary Equine Sector includes the services that support the region’s core equine
sector including land-based businesses, equine health, husbandry services and fodder suppliers.
These activities are vital to the sustainability of the equine sector and also generate economic
impact within the Shire.
LAND-BASED BUSINESSES
The land-based equine sectors include businesses that particularly provide land and
infrastructure for the accommodation of horses through agistment and other paid-for equine
properties. This industry is crucial in providing accommodation for training horses, horses used
for special events and races, brood mares / foaling down services and some leisure horses.
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EQUINE HEALTH
The supplementary equine sector also includes equine health services, specialised veterinarians
and dentists that cater to the surrounding horse population. The Macedon Ranges Business
Register indicates that there exist a number of specialised veterinarians and dentists that service
the equine sector in the region. The equine health industry is crucial in ensuring the health and
sustainability of the Shire’s horse population, and though small in size, contributes significant
structural roles in ensuring the well-being of the industry.
HUSBANDRY SERVICES
Farriers and barehoof trimmers are the major husbandry service for the equine sector and are
responsible for the maintenance, care and shooing of the horses hooves. Other husbandry
services would include horse therapists, manipulators and masseurs.
NMIT in particular provides for the Certificate III in Farriery, critical in supplying farriers to not only
the general Victorian horse industry but the local Shire as well, however, the courses are
currently held outside the NMIT Kyneton campus.
FODDER SUPPLIERS
Fodder suppliers provide the food and nutritional source for the Macedon Ranges horse
population. Fodder is distributed through local retailers and wholesalers. Hay consumed by
horses is sourced locally; however the raw stocks of grains and pellets are sourced outside the
Shire.
OTHER SECTORS
Other supplementary sectors include trade and quarantine services (for importing/exporting of
horses), equipment retailers and wholesalers, equine specialised insurance providers, horse
product manufacturing and transportation.
Figure 2 provides a graphical depiction of the Equine sector; more specifically the expenditure
flows within and outside the industry that will inform the economic impact assessment.
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FIGURE 2
EQUINE INDUSTRY SECTORS: EXPENDITURE FLOW DIAGRAM
1.3.
EXPENDITURE CATEGORIES
Research reveals that a number of establishments partake in several activities across the core
equine and supplementary equine industry; for example, a horse breeder or horse training school
may provide agistment services. As such, for the purposes of the assessment, expenditure of the
equine sector (both core and supplementary sectors) will be simplified and compartmentalised
into the following categories:
•
Breeders – this reflects the expenditure of the horse breeding industry;
•
Events – this reflects the expenditure of race course facilities to host events, and expenditure
by visitors to these events;
•
Leisure Horse Riders – this reflects the expenditure by the leisure horse riding community, in
particular the adult riding club members and pony club riding members;
•
Horse Training/Coaching – this reflects the expenditure to host horse training within the
Shire, as well as expenditure by horse trainers and riding instructors themselves;
•
Other Services – this reflects the expenditure of components of other sectors including landbased businesses, insurances, husbandry services and horse product manufacturing.
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1.4.
METHODOLOGY OF THE ECONOMIC IMPACT ASSESSMENT
The economic impact assessment is based on the input-output analysis framework. The method
focuses on the impact on the economic expenditure and employment at a local Shire and state
level.
Input-Output (I-O) analysis is a widely used technique for estimating economic impacts of an
activity in a region, it examines how the industry affects an economy through its linkages between
all other sectors in the industry. For the detailed economic methodology, refer to Appendix A.
The Total Economic Impact of the equine sector is constructed through three categories:
•
Initial Output Effects – the estimated initial expenditure of the equine sector on the general
Macedon Ranges Shire economy. This is be sourced through the interviews with major
stakeholders in the local equine sector supplemented by findings of the Macedon Ranges
Equine Business Survey;
•
Production Induced Effects – this is the estimated impact of the Initial Output Effects on the
general economy. The Production Induced Effects are made up of two components:
•
The First Round Effects – is the amount of output required from all industries of the
economy to produce the Initial Output Effect; and
•
Industrial Support Effects – the effects of the second and subsequent rounds of
induced production;
•
Consumption Induced Effects – the induced production of extra goods and services as a
result of private final consumption expenditure of households affected by the equine sector.
Coupled together, the Production Induced Effects and Consumption Induced Effects are known
as the Indirect Expenditure Effects.
Figure 3 graphically depicts the flow of the economic impact of the Macedon Ranges equine
sector, based on the expenditure categories defined in section 1.3.
FIGURE 3
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2.
2.1.
INTRODUCTION
The section presents the economic impact in Macedon Ranges Shire from each of the equine
expenditure categories. Assumptions drawn from findings from the Macedon Ranges Equine
Business Survey and consultation are made to construct the estimated expenditure of the equine
sector. Refer to Appendix C for the list of consulted stakeholders.
2.2.
EXPENDITURE ESTIMATIONS BY CATEGORY
BREEDING
Consultations with Stud Book Australia revealed over 537 thoroughbred foals were born in
Macedon Ranges Shire (in 2010) through 70 studs; furthermore, the data revealed that there are
approximately 15 operating thoroughbred stallions within the Shire, which have covered over
1,250 mares in 2010. Data on the number of brood mares could not be obtained from Stud Book
Australia. Utilising anecdotal evidence of the number of brood mares of consulted studs, we will
assume that an average stud consists of 35 mares per thoroughbred stud. Therefore, 2,450
thoroughbred brood mares are estimated in the Shire.
The following are key assumptions of Macedon Ranges Shire horse stud expenditure:
TABLE 2
EXPENDITURE ASSUMPTIONS, BREEDING
Breeding Expenditure
$
Source
Average Imported Stallion Service Fees
$31,952
Australian Stud Book,2010 (NSW and VIC)
Average Local Stallion Service Fees
$16,229
Australian Stud Book,2010 (Eliza Park)
Foaling down charges
$450-$650
Arabian Horse Society of Australia
Extra Veterinary Medical Expenses
$700-$1,200
Consultations
Agistment Fees
$80-$85
Consultations
Other Husbandry Fees (e.g. farriers, worming)
$650
Consultations
Castration
$400-$500
Consultations
Average Sire Fees
$400
Australian Pony Stud Book Society
Handling Fees
$50
Agistment
$20
Agistment Fee (Wet Mare)
$25 per day
CJ Park Warmbloods
Handling Fees
$450
CJ Park Warmbloods
Average Sire Fees
$2,750
Warmbloods-australia.com and CJ Park
Warmbloods
Thoroughbred and Arabian
Pony and Stock Horses
Warmblood
Warmblood
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Horse studs primarily produce foals up to 5 types: yearlings (for sale), adult stallions (for
resourcing stallion fees), geldings (castrated adult males), adult mares (adult females for
breeding) and race horses (for attaining prize money through racing competitions).
According to consultations with Joe Vella (Wingrove Park) an average total operating expenditure
to produce a thoroughbred foal to an adult costs approximately $20,000, while producing a
yearling costs $12,000. Extra expenses will be incurred for castration (ranging between $400 and
$500); for the purposes of this report, we assume 25% of foals produced will be castrated.
The Macedon Ranges Shire is also a prominent producer of Arabian horses with 18 major
1
Arabian stud establishments . There are currently 211 standing stallions within the Shire (of
which 157 are active) and 465 standing mares (incorporating both purebreds and hybrids). For
the purposes of this report, thoroughbred foal producing costs will be applied to the Arabian stud
sector.
2
Furthermore, consultations reveal there are currently 18 pony studs operating within the Shire .
Although data on the existing pony horse population within the Shire is not available; for the
purposes of this report, we will assume that the size of the pony breeding population is equal to
the Arabian breeding population (as both groups have 18 breeders). Further research indicated
there are approximately 50 stockhorses standing and there are an existing 4 warmblood studs in
the Shire. Data on the number of warmbloods standing is unavailable, however, average
thoroughbreds standing per stud and existing prices of warmblood agistment and stallion service
fees will be applied to the industry.
EVENTS
This expenditure category analyses pony and adult riding club association events, and racing
meets held at the NMIT Kyneton and Hanging Rock racing facilities.
In particular to the clubs and association sector, there are over 741 members in pony and adult
3
riding clubs in Macedon Ranges Shire . Flow on expenditure occurs mainly through eventing
dressage, jumping, showing competitions and monthly rallies. Approximately 180 rallies and 84
competitions were held in Macedon Ranges Shire last year. Consultations reveal that primary
expenditure on items include:
•
Judges - an average of $150 per 8 pony riders and $1,642 per adult riding event; most
judges are sourced locally.
•
Canteen – food and beverages costing over $5 per participating rider (sourced locally);
•
Ribbons – costing an average $550 per event (sourced locally);
•
Horse Floats – assumed to be an average of $99 per float hire (with tack box and breaching
gates). Expenditure will be allotted according to the number of estimated participants.
Purchases of horse floats have been accounted for in the Other Equine Services
expenditure category;
•
Instructors – costing approximately $1,467 per adult riding event and $150 per 9 pony riders
in pony riding events. Expenditure on instruction and private riding lessons outside
competition occurs as well (and these will be allotted into the Horse Training/Coaching
1
2
3
Arabian Horse Society of Australia (AHSA) Stud Book
Australian Pony Society (APS) Stud Book
Pony Club Victoria and Adult Riding Club Victoria
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Expenditure Category); consultations reveal that over half of the members undertake
consistent weekly training (including private lessons);
•
Maintenance, equipment and capital expenditure – steel poles costing $80 a pair; clubs
usually spend on 5 pairs per event (we assume these are sourced through local
distributors). An average of $1,000 is necessary to maintain the arenas; consultations reveal
that an average of $8,000 has been spent on other maintenance expenditure of courses per
club; and
•
Insurance – an average cost of $70 per rider in insurance fees are made to state bodies for
local pony and adult riding clubs;
Through data provided by Mark Graham (CEO of NMIT Kyneton and Hanging Rock Racing Club)
and the 2006 Economic and Social Contribution of Thoroughbred Horse Racing in Country
Victoria (prepared by Victoria University), over $12.7 million was spent on hosting country racing
in Macedon Ranges Shire; expenditure was allocated into items based on industry estimates
provided by the ABS Sports and Recreation Services 2004-05 Report. Application of cost growth
rates at 3% p.a. will be applied to these figures to allow for adjustment to an estimated 2010
expenditure figure.
TABLE 3
ESTIMATED EXPENDITURE ASSUMPTIONS, HORSE RACING EVENTS
Estimated Thoroughbred Racing Event Expenditure
Expenditure
$
Wages & Salaries
$3,401,411
Super Contributions
$273,300
Compensation Costs
$171,788
Fringe Tax Benefits
$48,413
Payroll Tax
$142,116
Prize
$5,664,332
Liquor
$440,403
Food
$271,738
Animal Feed
$412,292
Animal Medicines
$42,166
Other
$452,897
Payment to Broadcasting
$188,967
Advertising
$593,451
Sponsorship
$121,814
Rent leasing
$174,912
Total
$12,400,000
Source: 2006 Economic and Social Contribution of Thoroughbred Horse Racing in Country Victoria, allocated according to
industry proportions provided by ABS Sport and Recreation Services 2004-05 Report.
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Furthermore, horse racing events in the Macedon Ranges have attracted over 30,000 visitors to
4
the Shire per year . Using event industry estimates from another Victorian regional shire, there
occurs an estimated expenditure of $281 per day from overnight visitors and $163 per day from
5
day trip visitors .
LEISURE HORSE RIDERS
According to consultations with the Pony Club Victoria and Adult Riding Club Victoria, there are
approximately 1,292 horses (an estimated 720 horses and 572 ponies) used for adult and pony
6
riding activities within the Shire . However, anecdotal evidence reveals that the figures may be
significantly higher than this, as many households (who are not members of clubs and
association) own at least one horses (paddock ornaments/other recreational uses). Riding club
managers estimate that over a quarter of households own horses on their properties; according
to ABS 2006 data, there are over 8,003 separate houses in Macedon Ranges Shire (excluding
the urban centres of Woodend, Gisborne and Kyneton); assuming a third of these residential
properties own an average of 1 horse. There are approximately 2,667 leisure horses in Macedon
Ranges Shire (of which 1,292 are for pony and adult riding club activities and the remaining 1,376
as paddock ornaments and other recreational uses). Furthermore, research through the
Australian Stock Horse Society Stud Book revealed that there are approximately 50 standing
7
stock horses . Expenditure on ponies and adult riding horses, stock horses, paddock
ornaments/other recreational horses will be accounted into the economic impact analysis.
Literature review and consultations with clubs and associations have been used to estimate
industry expenditures of the leisure horse rider expenditure category. According to the 2010
report on the Contribution of the Pet Care Industry to the Australian Economy, an average of
$5,010 is spent on horse and riding equipment per horse; these costs will be accorded to leisure
horses utilised for pony and adult riding clubs.
TABLE 4
EXPENDITURE ASSUMPTIONS, LEISURE HORSE RIDERS
Horse and Riding Equipment and Products
Indicative Costs (Range)
Helmet
$99.00
-
$695
Boots
$49.95
-
$350
Chaps
$44.95
-
$225
Saddle
$449.00
-
$5,995
Rug
$59.95
-
$230
Reins
$20.00
-
$85
Halter (leather)
$23.95
-
$150
Leads
$5.95
-
$17
Bridle
$39.95
-
$220
Bit
$36.95
-
$47
Stirrupirons
$24.95
-
$90
4
http://kyneton.countryracing.com.au/
Bass Coast Shire Coail and Economic Impact of Events Study 2011 (Draft) – Urban Enterprise
720 adult horse and 572 ponies, assumption of 2 horses per club member as anecdotally provided by consultations.
7
99 stock horses standing in the postal code regions 3200 to 3499 (detailed data for the Macedon Ranges were not available; as such, we
will assume half these stock horses are standing in the Macedon Ranges Shire).
5
6
ASSESSMENT
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URBAN ENTERPRISE
JULY 2011
Horse and Riding Equipment and Products
Indicative Costs (Range)
Brushes
$12.95
-
$30
Clippers
$99.00
-
$689
Coatcare and polishes
$15.95
-
$34
Groomingkits
$19.95
-
$30
Hoof picks and scrapers
$2.95
-
$6
Hoof polish
$10.25
-
$34
Shampoo (1 litre)
$10.95
-
$20
Flyveils
$12.95
-
$35
Source: Contribution of the Pet Care Industry to the Australian Economy, 2010
Furthermore, the cost of veterinary and grooming suppliers (including wormers and shampoos)
range between $200 and $1,000 per annum. Consultations with pony and adult riding club
managers reveal that an average of $5,200 is spent on fodder per horse per year. In summary,
approximately $10,010 is spent per annum on pony and adult riding horses, while approximately
$6,000 will be spent on paddock ornaments.
Existing equine education also encompasses horse training, particularly race horse training within
the NMIT Kyneton Racecourse (facilitated by the club) and other training establishments (e.g.
horse training conducted at Wadham Park). Research shows that between 100 to 120 horses are
8
training daily within NMIT Kyneton racecourse . Consultations with the Kyneton race course show
that costs of training horses are $70 to $100 a day. Other expenditure includes an average of $10
per week on supplements, rugs costing $133 per horse and veterinary fees (at an average of
$100). Anecdotally, wages and salaries are the primary source of expenditure; other economic
impacts occur outside the Shire including transportation fees (particularly for interstate horses),
retail expenditure on fodder and grain and husbandry fees.
OTHER EQUINE SERVICES
Other assumptions drawn from findings of the equine sector include the following:
FODDER AND RETAIL
Horses consume an average of 5 kilos of feed/hay per day; 3 kilos of fodder is sourced retailers
and 2 kilos consists of hay (locally sourced). Furthermore, consultations show over 90% of local
horse owners source their fodder within Macedon Ranges Shire. Consultations with local feed
suppliers show that over 75% of fodder is sourced from local feed wholesalers and
manufacturers. Some raw materials for fodder cannot be sourced within the Shire (additional
vitamin and mineral supplements, barley, oats, etc.); as such, a large part of the fodder supply
chain takes place outside the Shire, with key elements of retailing and wholesaling services
occurring within Macedon Ranges.
8
http://kyneton.countryracing.com.au/
ASSESSMENT
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URBAN ENTERPRISE
JULY 2011
Furthermore, purchases of horse floats have been accounted through an assumed expenditure of
$35,000 per item / per club member in the Shire (as an assumed estimated population of persons
owning a horse float); the purchases will be amortised across a 10 year usable life period,
whereby depreciation expenses per annum will be accounted into the economic impact of
purchases horse floats in the Shire.
AGISTMENT
The agistment services industry is relatively smaller within Macedon Ranges Shire (compared to
other local government areas closer to Metropolitan Melbourne); this is mainly due to the
availability of relatively larger parcels of land for households to accommodate their own horses.
Agistment services are also a relatively larger industry in Shires closer to Metropolitan
Melbourne, providing city dwellers with easier accessibility to their horses. However, there may
be opportunities to facilitate the provision of agistment services in areas of the Shire with
accessible linkages to Metropolitan Melbourne (e.g. Gisborne and Romsey). Within Macedon
Ranges Shire itself, agistment services are typically offered as secondary services by studs and
horse training schools, as value-added services to sustain their businesses.
EQUINE HEALTH
Interviews show that horse studs are able to source on-going health services through the local
veterinary and health equine services, however, there is a lack of specialist horse services (e.g.
embryonic transferring services, ultra sound scanning, heavy operations). Horse breeders must
transport their horses to hospitals at Werribee and Shepparton, contributed to outside
expenditure of transport and specialist medical treatment.
HUSBANDRY
Expenditure by husbandry services (sourced from the Equine Sector Business Survey) on new
buildings/renovations, plant/machinery and other capital expenses have been accounted for in
the economic impact assessment.
CONSTRUCTION
Furthermore, expenses on construction have been sourced through the Macedon Ranges
Building Approval Database. Data in the 2009/10 financial year were sorted according to
category to account for the economic impact of this expenditure.
ASSESSMENT
17
URBAN ENTERPRISE
JULY 2011
3.
ECONOMIC IMPACT FINDINGS
3.1.
SUMMARY
In 2010, the Macedon Ranges equine sector had an estimated economic impact of $140 million
in the local Macedon Ranges
Ra
Shire’s economy, of which $96.3 million was sourced from direct
expenditure of the equine sector.
The Macedon Ranges equine sector also spent an estimated $72.2 million outside the Macedon
Ranges Shire (on goods and services from other regions of Victoria and New South Wales).
W
Comparative data on the expenditure leakages outside the Shire were difficult to source,
source due to
the lack of available small regional area studies on the equine sector.
sector. However, the 2008
Economic Impact and Review of the Equine Industry in the City of
of Greater Bendigo may offer
some perspective. The report notes that for every $1 dollar spent by the local equine sector, an
estimated $0.51 was spent outside the City of Greater Bendigo to support its operations. This is
compared to the
he Macedon Ranges equine
equine sector, whereby a $1 dollar spent by the local
loc equine
sector will allow for $0.42 to be spent for goods and services outside the Shire.
The following table is a summary of expenditure by category (refer
efer to Appendix B for full details).
FIGURE 4
ESTIMATED EXPENDITURES BY EXPENDITURE CATEGORIES,, 2009/10 ($MILLIONS)
$27.6
$22.6
$22.0
$21.3
$19.2
$17.5
$13.7
$11.1
$8.4
$5.1
Breeder
Events
Leisure Horse
Horse Training
Industry
Expenditure in Macedon Ranges Shire
Other Equine
Activities
Expenditure Outside Macedon Ranges Shire
EQUINE SECTOR ECONOMIC
IC IMPACT
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JULY 2011
TABLE 5
ECONOMIC IMPACT OF EQUINE SECTOR, 2009/10
Economic Impact
$
Direct Expenditure of Equine Sector
$96,359,215
Total Economic Impact
$139,997,646
Total Shire Employment Impact
907
The study has found the Macedon Ranges Equine Sector has contributed over $140 million in
total economic impact to the Shire. The on-going operations of the industry sustain over 907 jobs
in Macedon Ranges Shire economy.
BREEDING
Consultation with the local equine sector suggests that the breeding sector is of significant value
to the Macedon Ranges Shire economy. The combination of soil rich in mineral content, proximity
to Melbourne and its international airport and linkages to the broader horse racing industry has
enabled the Macedon Ranges Shire to become a prime producer and international exporter of
high quality thoroughbred horses.
The breeding sector contributed an estimated $27.6 million in expenditure in the 2009/10
financial year. Furthermore, horse breeders spent $22 million outside the Shire. Consultations
suggest that leakage in expenditure outside the Shire primarily due to:
•
Fees from covering mares through high quality stallions (located within other Victorian
regions and New South Wales);
•
The purchase of fodder raw materials sourced outside Macedon Ranges Shire are the
primary components behind these leakages; and
•
Husbandry services (farriery) and specialist health care services in Werribee and
Shepparton (x-ray services, embryonic transfer technologies, etc.).
EVENTS
The events industry contributed an estimated $13.7 million in expenditure in 2009/10. A large
contributor can be attributed to thoroughbred racing events held in the NMIT Kyneton and
Hanging Rock race courses. The race meetings attract over 30,000 visitors to the Shire every
year, also contributing a large portion of local tourism expenditure. Consultations show that
expenditure outside the Shire occurs through visiting horses (for races) who source husbandry
and transportation services, equipment and fodder supplies from outside the Shire. Furthermore,
the races draw in expenditure on broadcasting, advertisements, wholesale liquors, food and
beverages (spent outside the Shire). Dressage, eventing, jumping and showing competitions by
local pony and adult riding clubs also contribute a portion to the events expenditure.
Consultations indicate that expenditure outside the Shire occurs through horses visiting for
events that source husbandry, transport, equipment and fodder supplies from outside the Shire.
Expenditure by Racing Victoria and local race course facilities through purchases of
broadcasting, advertisements, equipment, wholesale liquors, food and beverages also contribute
to expenditure outside the Shire.
ASSESSMENT
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URBAN ENTERPRISE
JULY 2011
LEISURE HORSE RIDERS
This report finds that the leisure horse rider expenditure category contributes an estimated $22.6
million in expenditure to the Macedon Ranges economy through direct expenditure. The
availability of appropriately sized and zoned residential land has allowed households to maintain
a number of horses on their properties, increasing the number of horses in the region and
associated expenditure.
The horse training sector provides an estimated $21.3 million of local expenditure within the
Macedon Ranges Shire. The economic impact of this sector is mainly due to the thoroughbred
and harness training at the NMIT Kyneton race course and other major horse training
establishments (e.g. horse training conducted in Wadham Park). This training draws in a large
number of horse trainers, jockeys and stable hands from across Victoria, and provides
employment opportunities to the local community. The Shire also has a number of horse riding
schools, trainers and instructors that provide key educational opportunities to the local dressage,
showing and jumping competitors, as well as other interested residents.
The sector has also generated over $19.2 million worth of expenditure outside the Shire (sourced
primarily through purchases of fodder and transportation fees of horses).
OTHER EQUINE SERVICES
Other equine services have an estimated $11.1 million in direct expenditure to the Shire. The
expenditure is primarily driven by purchases of equipment, feed retailers and wholesalers. The
local equine health and husbandry services (eg. Masseurs, farriers) also provide local
expenditure as well as maintaining an important role in servicing the general horse population in
Macedon Ranges.
Raw materials purchases of fodder contribute to the large $17.5 million spent outside the Shire.
ASSESSMENT
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JULY 2011
APPENDICES
ASSESSMENT
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JULY 2011
APPENDIX A
INPUT-OUTPUT MODEL
INTRODUCTION
The following section provides the description of use and methodology of the economic impact
assessment through a regional input-output table.
WHAT IS AN INPUT-OUTPUT TABLE?
An Input-Output (I-O) table fulfils two key functions; it is a descriptive framework for showing the
relationship between industries and sectors and between inputs and outputs in an economy. It is
also an analytical tool for measuring the impact of autonomous disturbances on an economy’s
output, employment and income. Utilising the Leontief Inverse and several other augmentation
methods, the economic impact of expenditure in Macedon Ranges Shire can be depicted through
the I-O model.
INPUT-OUTPUT MODEL METHODOLOGY
As regional input-output models are not readily available, top-down techniques drawing and
modifying direct import coefficients from the most recent 2006-2007 Australian National I-O
tables are necessary to study the economic affects within small regional areas.
The report will further utilise input-output model technique from Flegg and Webber (2000), the
9
Augmented Flegg Location Quotient (AFLQ) adjustment technique to construct a Macedon
Ranges Input-Output Table. The AFLQ adjustment technique will allow for accounting the
regional industry mix of the Shire, the relative size of the Shire’s economy and cross industry
relationships.
The report will utilise the ABS 2007 Input-Output Industry Groups (IOIG) consisting of 111
industry sectors for the economic impact analysis (refer to Appendix B Summary of Expenditure).
The Total Economic Impact of the equine sector is constructed through three categories:
•
Initial Output Effects – the estimated initial expenditure of the equine sector on the general
Macedon Ranges Shire economy. This will be sourced through the interviews with major
stakeholders in the local equine sector supplemented by findings of the Macedon Ranges
Equine Business Survey;
•
Production Induced Effects – this is the estimated impact of the Initial Output Effects on the
general economy. The Production Induced Effects are made up of two components:
•
The First Round Effects – is the amount of output required from all industries of the
economy to product the Initial Output Effect; and
•
Industrial Support Effects – the effects of the second and subsequent rounds of
induced production;
9
Flegg. A.T., Webber, C.D., and Elliot, M.V., 1995, On The Appropriate Use of Location-Quotients In Generating Regional
Input-Output Tables, Regional Studies, Vol. 29, No. 6,
ASSESSMENT
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URBAN ENTERPRISE
JULY 2011
•
Consumption Induced Effects – the induced production of extra goods and services as a
result of private final consumption expenditure of households affected by the equine sector.
Figure 5 graphically depicts the flow of the economic impact of the Macedon Ranges equine
sector.
FIGURE 5
Source: Urban Enterprise, 2011
ASSESSMENT
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URBAN ENTERPRISE
JULY 2011
APPENDIX B
ESTIMATED
STIMATED EXPENDITURES
XPENDITURES BY CATEGORY AND INDUSTRY
Note that the following table excludes a further 95 Input-Output Industry Groups (ABS 2006) that did not
10
generate any expenditure .
TABLE 6
ESTIMATED EXPENDITURES BY CATEGORY, INPUT OUTPUT INDUSTRY GROUP ABS 2006
Breeder
Events
Leisure Horse
Industry
Horse
Training//
Training
Equestrian
Coachers
Other Equine
Services
Total Local
Expenditure
Total Imports
Expenditure
Total Industry
Expenditure
$0.0
$0.0
$0.0
$0.0
$4.3
$4.3
$22.9
$27.2
$8.5
$0.0
$0.0
$0.0
$0.0
$8.5
$18.6
$27.1
Retail Trade
$7.5
$4.9
$7.5
$1.2
$0.0
$21.1
$1.8
$22.9
Road Transport
$0.9
$0.2
$0.0
$3.1
$0.0
$4.2
$16.1
$20.3
Sports and Recreation
$0.0
$4.0
$0.0
$12.4
$0.4
$16.7
$0.0
$16.7
$0.3
$0.2
$11.5
$1.5
$0.2
$13.8
$0.0
$13.8
$4.8
$0.0
$0.5
$1.2
$0.0
$6.5
$1.8
$8.3
Health Care Services
$3.6
$0.0
$0.6
$0.2
$0.0
$4.5
$3.4
$7.9
Other Food Product
Manufacturing
$0.0
$0.0
$1.3
$0.0
$5.9
$7.3
$0.0
$7.3
Gambling
$0.0
$0.0
$0.0
$0.0
$0.0
$0.0
$5.7
$5.7
Accommodation
$0.0
$3.5
$0.0
$1.7
$0.0
$5.3
$0.0
$5.3
$1.9
$0.0
$1.1
$0.0
$0.2
$3.2
$0.4
$3.6
$0.0
$0.8
$0.0
$0.0
$0.0
$0.8
$0.7
$1.5
$0.0
$0.0
$0.0
$0.0
$0.0
$0.0
$0.6
$0.6
$0.0
$0.0
$0.0
$0.0
$0.0
$0.0
$0.2
$0.2
Wholesale Trade
$0.0
$0.0
$0.0
$0.0
$0.0
$0.0
$0.0
$0.1
Ceramic Product
Manufacturing
$0.0
$0.0
$0.0
$0.0
$0.0
$0.0
$0.0
$0.0
Total
$27.6
$13.7
$22.6
$21.3
$11.1
$96.4
$72.2
$168.5
Input Output Industry
Group ABS 2006
Sheep, Grains, Beef and
Dairy Cattle
Poultry and Other
Livestock
Non-Residential Building
Construction
Agriculture, Forestry and
Fishing Support Services
Auxiliary Finance and
Insurance Services
Food and Beverage
Services
Professional, Scientific and
Technical Services
Broadcasting (except
Internet)
10
Table 8: Industry by Industry Flow Table (Indirect Allocation of Imports);
http://www.abs.gov.au/AUSSTATS/[email protected]/DetailsPage/5209.0.55.001Final%20release%202006-07%20tables?OpenDocument
ASSESSMENT
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JULY 2011
APPENDIX C
CONSULTATION LISTS
Person
Organisations
1
Brad Perry
Perry's Feed Store (Retailer, Wholesaler & Manufacturing Division)
2
Connie Pullella
Equestrian Risk Solutions
3
Phil Jones
NMIT
4
Shannon Lee
Advanced Equine Dentistry
5
Teresa Edwards
Arabian Horse Society of Australia Ltd.
6
Dale Sutton
Wadham Park
7
Joe Vella
Wingrove Park
8
Maureen Milburn
Sha-lite Arabians
9
Karen Grieve
Macedon Ranges Dressage Club
10
Leonie Lang
District Commissioner of Pony Club Victoria
11
Sally Mizzi
Horse Riding Club Association of Victoria
12
Barry Turner
Horse Trainer (NMIT Kyneton)
13
Mark Graham
NMIT Kyneton Club
14
Judi Tainsh
15
Karen Middlebrook
Gisborne Adult Racing Club
16
Jacqueline Stewart
Australian Stud Book
17
Michelle Gray
Department of Primary Industries, Victoria
18
Leigh Brooks
Equine Lingerie Australia
19
Annie Lavelle
Lancefield Equestrian Group
20
Mary McBurnie
Australian Warmblood Horse Association
21
Australian Stock Horse Society
22
Australian Quarterhorse Association
ASSESSMENT
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Equine Sector Economic Impact Study FINAL

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