Report into the economic benefits of targeted land management stimulus

A new report released by Ernst and Young highlights the potential benefits of a targeted government land management sector stimulus to generate billions of dollars for local economies.

Covid-19 has had a profound effect on the Australian economy has been profound and governments are seeking options to reignite economic activity. Ernst and Young's ‘Delivering economic stimulus through the conservation and land management sector’ report examines the economic impacts of an economic stimulus proposal developed by a coalition of more than 70 conservation, farming and land management groups. Report findings suggest that government investment of $4 billion in a national conservation and land management program could raise economic output by $5.7 billion, reduce welfare costs by $620 million and generate 53,000 jobs over the next four years.

Australia’s conservation and land management sector has developed a broad-based program of environmental investment which governments could rapidly mobilise to stimulate the economy and support severely affected regions. The program involves a range of activities to improve Australia’s natural assets and agricultural land which can be scaled to requirements, get Australians into meaningful work quickly and may be targeted to areas where stimulatory assistance is most needed.

Three key program scale and timing options have been proposed. Two are national level programs involving significant levels of investment ($4 billion and $2 billion respectively). An alternative option is a smaller regionally focused program ($500 million) which could be deployed in severely affected regions. Each option may be rapidly mobilised to support Australia’s recovery from Covid-19.

Under each option, the program would be funded by government and recruit Australians who are currently out of work due to the crisis to undertake local environmental and land management activities in the following areas:

  • Managing environmental threats—Controlling invasive animals and weeds,environmental improvements to remove plastics and other forms of pollution from Australia’s waterways and marine environment and employing Indigenous rangers, bringing with them Traditional Ecological Knowledge.
  • Habitat restoration—Assisted natural regeneration in sensitive areas, restoring river, wetland and coastal habitats as well as native revegetation.
  • Infrastructure,building and maintenance—Building fences, repairing and installing new infrastructure to support bushfire and drought recovery, and enhancing infrastructure in Australia’s national parks, local councils and private estates.

The evidence of long-term economic and environmental benefits from these investments is encouraging. Research indicates that they can deliver meaningful gains in agricultural productivity, including by reducing costs and lifting the capacity of the land, improve water quality and natural disaster resilience, and preserve the country’s natural heritage.

The analysis indicates that the proposed conservation and land management stimulus program has the potential to generate substantial economic gains during the immediate economic crisis period and over the long term.

The $4 billion National Recovery program was estimated to raise economic output by around $5.7 billion and generate 53,000 jobs over the next four years to support Australia’s post Covid-19 economic recovery. Over the period to 2040, when long run gains from natural asset and land management investments may be realised, economic gains are estimated to be in the order of $9.3billion, with total employment expected to increase by around 62,000 workers.

The modelled impacts of the smaller program options, the $2 billion Accelerator Program and the $500 million regionally based Impulse Program are estimated to increase long term economic output by $4.7billion (31,000 jobs)and $1.2billion(8,000 jobs) respectively.

This study also assessed the potential maximum gains that may be achieved in the long run —assuming all productivity gains and cost savings from conservation and land management investments are fully realised. Under this scenario, the economic impacts under each proposal option are higher. In the case of the $4 billion National Recovery Program, the potential economic impacts increase to around $12 billion over a 20-year period.

 To read a copy of the report, click here.