Latrobe City: Economic Resilience and Outlook

When a major employer closes, councils usually ask whether their community will shrink. In Latrobe, population grows in every scenario we tested. The more useful questions are how much growth the closures take away, and when. The committed construction pipeline carries the region to 2030, then winds down just before the largest closure arrives. For any council facing structural change, the timing of the shock matters as much as its size, because it decides when support needs to be in place.

The Latrobe Valley has been here before. Hazelwood closed in 2017 with five months’ notice. This time the closures are known years ahead: Yallourn in 2028, Loy Yang A in 2035 and Loy Yang B scheduled for 2047, possibly earlier.

Council was preparing its Future Prosperity Plan. It needed evidence that would hold up with councillors and with State and Commonwealth partners, and numbers to back its case for support.

Council wanted to understand:

• How resilient is Latrobe’s economy today, and where does the exposure sit?
• What do the closures mean for local jobs and output once the effect on suppliers and household spending is counted?
• What can coordinated action realistically change, and where should effort go first?

The work had two stages. The Economic Resilience Report set the baseline: how the economy has performed over five years, which industries drive it, how diverse it is and the state of the local workforce. We compared Latrobe with Regional Victoria, its neighbouring councils and the other coal-transition regions identified by the Net Zero Economy Authority.

The impact analysis then tested three futures to 2046:

• no further closures
• closures proceed with only the committed project pipeline in response
• closures proceed with a coordinated package of action

We used cautious assumptions throughout, so the results don’t overstate the effect of any intervention. Each key assumption is an input Council can change and test for itself.

• Latrobe is adding people faster than economic value. Mining, health and utilities generate 58 per cent of local value added, and mining alone produces 36 per cent of value from under 3 per cent of jobs. Among Australia’s six coal-transition regions from 2016 to 2025, Latrobe-Gippsland ranked first for population growth but fifth for output growth. So the transition is more about output than population: it’s easier to replace the jobs than the value those jobs produce.
• The shock is about four times the size of Hazelwood’s, and it arrives in stages. Once the effect on suppliers and household spending is counted, the three closures remove about 4,500 local jobs and $2.7 billion of economic output a year. The city has about 37,600 jobs today. On the same basis, Hazelwood cost about 1,100 jobs. Most workers who received support found new jobs, but that relied on substantial one-off government funding. Hazelwood shows a closure like this can be managed, but it isn’t a model for one four times the size.
• The committed pipeline covers the first closure, not the second. Six committed projects, including Marinus Link, mine rehabilitation and transmission works, keep jobs growing through Yallourn’s closure in 2028. But they’re construction projects, with few ongoing roles once they’re built, and most finish by 2030. The gap opens in 2031 and widens when Loy Yang A closes in 2035. Support committed by 2027 arrives when it’s needed. If it waits three years, it delivers about a third less help when the need is greatest.
• Coordinated action recovers jobs faster than output, so it needs two tracks. In the modelling, a coordinated package closes about 60 per cent of the 2046 jobs gap but only about 11 per cent of the output gap. Unlocking housing land is the largest single contributor. It creates construction jobs first, then local service jobs as new residents arrive. Housing works as economic infrastructure, but rebuilding output needs a different kind of investment, in industries that produce high value per worker.

Three things could change the picture most: when Loy Yang B closes, whether major new energy projects proceed at scale and whether operations and maintenance jobs in offshore wind are based locally in the 2030s.

Under current conditions, population growth alone is unlikely to replace what the closures take away. Reaching Council’s long-term growth ambitions will depend on deliberate action. Community support also matters: our 2024 Community Views survey found Latrobe residents still have mixed views on how well local organisations work together.

• Council’s executive team was briefed with a single evidence base covering where Latrobe stands, what’s coming and what coordinated action can change
• Council has a scenario model it can adjust itself, to test its own assumptions about project timing, land take-up and the mix of actions rather than relying on fixed results
• The evidence gives Council a clear timing case for State and Commonwealth partners: the period that matters most is before 2031

If your region is heading into a transition, we can help you understand where the exposure sits, when it lands and what action can change. Get in touch to talk through what that evidence could look like for your community.

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