Net interstate migration to Qld remains at low levels


Yesterday, the ABS reported (see the media release):

Queensland no longer outstripping nation

Queensland’s population growth has slowed to its lowest rate in 15 years, according to figures released by the Australian Bureau of Statistics (ABS) today.

“The sunshine state’s growth rate was 1.5 per cent in the year to September 2014.” said Phil Browning from the ABS. “While this is similar to the national growth rate, it is well below the state’s 15-year average annual rate of 2.1 per cent,”

“This slower growth is due to a nine year low in the state’s net overseas migration and one of the lowest net interstate migration increases in over 30 years.

I’ve been commenting for some time on how the big driver of our slower population growth has been the big fall in net interstate migration to Queensland. People from NSW and Victoria are no longer coming to Queensland in the large numbers they were, as job opportunities in Queensland have declined relative to other States, and the gap between our house prices and theirs is no longer as large.

Previous related posts include:

Interstate migration to Qld remains low – overall gain, but net loss to Victoria continues

When will interstate migration to Qld recover?

Also, Queensland Treasury’s information brief on the latest population data is useful:

Population growth, Queensland

Posted in Population | Tagged , , , , , , , , , , , , | Leave a comment

ABC radio interview on the fiscal challenges facing the new Qld Government

GT at PHChatting with Steve Austin about the fiscal challenges facing the new Government in the Legislative Council Chamber at Queensland Parliament House, Brisbane (Photo: Terri Begley)

On the first day of Queensland’s new Parliament, Steve Austin from 612 ABC Brisbane radio interviewed me regarding the fiscal challenges facing the new Queensland Government:

Queensland’s New Parliament (you’ll need to scroll down the page a bit to find my audio)

In our conversation, Steve and I and discussed points I’ve made in recent posts regarding the volatility and unreliability of royalties revenue and the challenge the Government faces in restraining expenditure growth enough to generate the surpluses it needs to achieve its fiscal strategy. Relevant recent posts include:

Qld Government will find it a big challenge to achieve its fiscal strategy

Queensland Treasury’s forecasting record on royalties

Qld Government increasingly dependent on volatile royalties revenue

Posted in Budget | Tagged , , , , , , , , , , | 2 Comments

Government should throw out Queensland Plan – it was a poor guide to future policy

site-name-v2I noticed that Mike Kaiser, labelled by the Courier-Mail as a “Queensland Labor stalwart,” has urged the new Queensland Government to retain the Queensland Plan that was developed by the previous Government. I disagree with Mr Kaiser that the Queensland Plan was a sound approach, and I would be very happy to see it go. The Queensland Plan contains a lot of high-level, motherhood statements and provides a very poor guide to future policy.

The development of Government policies requires detailed analysis on an issue-by-issue or project-by-project basis, and a glossy, high-level plan such as the Queensland Plan can’t do this. The lack of detailed analysis is apparent in one of the major policy targets set in the Queensland Plan: to double the regional population outside South-East Queensland. There is no real analysis in the Plan of what this would cost and what it would mean for State economic performance. Targets shouldn’t be set without undertaking detailed analysis of whether achieving the specified target is feasible and would yield net benefits to the community.

The Queensland Plan was a waste of taxpayers’ money and took valuable time away from the former Government – time that it should have spent on detailed policy analysis and development. I would be very pleased if the new Government threw out the Plan. Indeed, I was a critic of the Queensland Plan even when it was in its developmental stage:

Qld Plan survey – a mix of interesting philosophical and misguided questions

Posted in Population | Tagged , , , , | 2 Comments

PwC Budget breakfast tickets on sale – business sees need for budget repair, even if politicians don’t


Former PM John Howard, who will speak at PwC’s Federal Budget Breakfast in Brisbane on 13 May

On the morning after the night the Federal Budget is delivered, the most desirable tickets in Brisbane are to PwC’s Budget Breakfast, which this year will again feature former PM John Howard, the Queensland Treasurer (although a new one this time, Curtis Pitt), Peter Switzer, and a few PwC senior executives. If you’d like to attend, I’d recommend buying a ticket as soon as you can off the PwC website.

I’ve noticed that PwC has labelled this year’s Budget breakfast “Prepare for repair”, which appears a bit optimistic, given the PM’s recent worrying comment that, more-or-less, our debt really isn’t so bad after all. Although the business community and the majority of economists see a clear need for budget repair, sadly the Government appears to have given up. After the political debacle of last year’s Budget, it’s pretty clear that the Federal Government won’t be proposing any major budget repair measures this time, which is a real shame—given the recent Intergenerational Report basically confirmed Australia has a large structural budget deficit, and we’ll have to get used to permanent deficits and growing debt.

I expect this year’s Budget will be very poorly received by the various speakers at the Budget breakfast. Indeed, Peter Switzer in particular will be very disappointed with the Government. To those who were in the audience last year, he will need to explain why his prediction that last year’s budget was a “Blackadder Budget”, with a cunning plan afoot, turned out to be so wrong (see my post on last year’s PwC Budget breakfast).

Posted in Budget | Tagged , , , , , , | Leave a comment

Addressing youth unemployment requires reform of workplace relations policies


Youth unemployment has re-emerged as a significant problem in recent years (see chart above), partly as a result of the general economic sluggishness since the financial crisis. Also, Australia’s inflexible workplace relations regulations are likely playing a role, and youth unemployment would be lower with a more flexible regime. Workplace relations is a big issue for Queensland businesses. Regarding a joint submission with other industry bodies to the Productivity Commission’s workplace relations inquiry, Nick Behrens from CCIQ commented (see Qld industry bodies join to call for IR overhaul):

“This will be the biggest issue for businesses for 2015…We have to move away from a regime that seeks to protect employees against the worst case of the employer – to the detriment of the vast majority who do the right thing by their workers.”

I’ve previously commented on the youth employment boost that could come from deregulation in a number of areas:

Reduce youth unemployment through improved regulation – e.g. of penalty rates, taxis

Posted in Labour market | Tagged , , , , , , , , | Leave a comment

Cafe culture prevents employment slump

I recall Alan Kohler observing a while ago that everyone is eating out for breakfast on the weekends nowadays. It’s a good thing that people are, from an employment perspective, given that employment growth in cafes, restaurants and hotels has basically prevented the labour market from completely stalling in Queensland, which it may have done, due to the contraction in mining and mining-related construction (see chart below, particularly the bar for accommodation and food services, which includes cafes). I expect the recovery in tourism due to the lower exchange rate has had something to do with employment growth in the accommodation and food services sector, too.


Posted in Labour market | Tagged , , , , , , , , , | Leave a comment

Qld Government will find it a big challenge to achieve its fiscal strategy

Queensland Treasurer Curtis Pitt has rightly labelled the upcoming 2015-16 Budget as “no frills” (see ABC news report). The Government cannot afford any frivolous expenses, because the budget challenge it faces is massive. The major problems the Government has are:

  • limited funding for new infrastructure – the previous Government had relatively low capital expenditures budgeted for in the forward estimates, because it was expecting to use money from leasing out assets, which hadn’t been accounted for in the budget yet, to pay for a lot of new spending (see New Government faces big fiscal challenges); and
  • the Government has committed to paying down around $1.7 billion of debt per annum from 2018-19 onwards, which will require it to maintain the previous Government’s expenditure restraint and assumes no write downs in revenues over the forward estimates.

The 2015-16 Budget will include estimates for 2018-19 in its projections, and the Government will need to show how it will achieve the $1.7 billion surplus it will need in 2018-19 (see my comments on why a surplus is required and the debt reduction trust is a gimmick in my Black hole election presentation). This was always going to be a challenge. Recall the previous Government was only projecting a surplus in 2017-18 of $634 million, so the commitment in the Government’s fiscal strategy assumes favourable trends continue into 2018-19 and the surplus grows even larger.

Now, achieving the Government’s fiscal strategy appears to be an even bigger challenge, given the Treasurer’s speech yesterday can be interpreted as expectations management, preparing us for a Budget in which there is even less money to spend in the future due to revenue write downs, particularly of royalties.

The Treasurer is in an unenviable position. Revenue may not live up to expectations, but expenses, particularly in health, will rise inexorably. Health accounts for nearly 28% of the budget and the share is ever-increasing, as health expenditure typically rises much faster than other expenditure items (see chart below). Indeed, health wasn’t always the function the Government spent the most money on; once that was education. The Government will need to take a hard look at health spending and see if further savings are possible, if it is to give itself a good chance of achieving its fiscal strategy.


Posted in Budget | Tagged , , , , , , , , , | 2 Comments