Tourism and gold in Kakadu

This monograph is a revised version of two reports presented in late 1990 to the Commonwealth Government’s Resource Assessment Commission Inquiry into the Kakadu Conservation Zone, and includes a literature review undertaken by the authors for the same inquiry (Knapman et al 1990; Stanley & Knapman 1990). Kakadu National Park is recognised nationally and internationally as a place possessing outstanding natural and cultural values. Largely because of this, it is one of Australia's major tourist magnets. Rapidly increasing numbers of visitors from overseas, interstate and within the Northern Territory (NT) have come to the Park since the declaration of Stage 1 in 1979. From an economics perspective, it provides onsite services to these people, while simultaneously providing offsite benefits to non-visitors who gain satisfaction from knowing that the environmental and cultural resources of the Park are protected. The latter group may exhibit willingness to pay for the right to use Kakadu at a later date (so-called option value), or they may have no intention of visiting but be willing to pay just to know that Kak:adu is preserved (so-called existence value). The total economic value of the Park, then, consists of actual use value derived from visiting plus option value plus existence value (Pearce et a/1989). A cost-benefit analysis of the Park as a national environmental resource would seek to estimate these values. Additionally, use of Kakadu by visitors generates secondary or regional economic impacts. Expenditures by tourists and tourism-associated expenditure within the private and public sectors become gains to the regional suppliers of the relevant goods and services, so that another major aspect of the economic significance of the Park is its contribution to the economic development of the Northern Territory. It is this aspect which is addressed here. Chapter 2 presents quantitative estimates of the regional economic impact of Kakadu National Park generated by the use of newly acquired expenditure data and a model of the NT economy known as ORANI-NT. The chapter goes on to examine past, present and prospective tourism and recreation use of the 1986 Stage 3 extension of the Park, focusing on the regional economic impact of alternative development plans, and utilising qualitative data gained from interviews with operators in the tourist industry as well as other interested parties. An outline of the broader debate concerning tourism and recreation use in Kakadu is found in an up-to-date literature review in Appendix 1. Kakadu's natural resources also include non-renewable stocks of minerals. Uranium has been mined at Ranger since 1980; and there is an on-going controversy over, and a Commonwealth inquiry into, a proposal to mine gold, platinum and palladium at Coronation Hill in the so-called Conservation Zone, a 47.5 km2 area of Crown land within Stage 3 but presently excluded from the Park (RAC 1990). A cost-benefit analysis of the Coronation Hill project would be the standard means for establishing its worth from a national perspective: if every social benefit and social cost associated with the project were identified and appropriately evaluated, and if there were an excess of benefits over costs, then the project would make society as a whole better off in the sense that it would be possible to increase every individual's welfare. <...