Thursday, June 28, 2012

How do I rate South Australia's economy?

Me on ABC Adelaide ABC 891 June 28, 2012

55 minutes, play or RIGHT CLICK to download mp3


. Peter Vaughan, CEO Business SA

. Jane Kittel, Managing Director, Bank SA

. John Spoehr, Executive Director, Australian Institute for Social Research

. Dick Blandy, Adjunct Professor of Economics, School of Management, Uni SA

The SA Report, now its second year, encourages healthy debate and discussion about our State. 891 ABC Adelaide and ABC Local Radio are inviting South Australians to join the discourse during a special day of broadcasting on Thursday June 28.

"If I could pick only one economic statistic to give me a picture of a state’s economic health I would use the unemployment rate. South Australia’s has been hovering around 5% for eight months. That’s a good sign in itself. But what’s even better is that it is almost exactly in line with what’s been happening to the nation. Despite all the talk about a “two-speed” Australian economy dispersion of unemployment rates across the nation is close to the lowest it has ever been. That’s because Australia (including South Australia, at the vangarde of demographic change) is running low on workers.

Yes, manufacturing firms are closing. But that’s been happening for a long time. And many of the workers in those firms are reaching retirement age. So too are teachers. The state Education Department has traditionally been the state’s biggest employer. South Australia is likely to be low on workers from here on.

If Olympic Dam gets the go-ahead, that will be an economic plus (although not necessarily an environmental plus). If it doesn’t, there are other smaller mining projects on the drawing board and even if they don’t all go ahead the rising tide of national demand for workers will lift the South Australian boat.

Weak GST revenues make things difficult for the state government, but it made the right decision in forgoing its top credit rating rather than savagely cutting spending.

South Australia’s fortunes are tied to Australia’s fortunes. It is a linkage many other parts of the world would love to have.

Peter Martin's score out of ten for South Australia’s economic prospects: 8/10

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