Matt Grudnoff of the Australia Institute has a provocative piece in the Courier-Mail this morning (Newman is digging in wrong hole) in which he calls for the Government to slow down the resources boom due to its adverse impacts on other sectors. Mr Grudnoff notes:
In Queensland, the effects of Dutch disease are clear for all to see. The Queensland manufacturing sector has been shedding jobs for the past four years. The accommodation and food services industry, which includes a large portion of the tourism industry, has not had positive economic growth in five years. The continued growth in exports of Australia’s resources has pushed up the exchange rate and, as a result, other industries are declining.
Mr Grudnoff is correct that the resources boom, through its impact on the exchange rate, has had adverse impacts on tourism and manufacturing. But the Australia Institute’s recommendation to slow down the resources boom doesn’t make a lot of sense, as I’ve discussed in these previous posts:
And while some industries such as manufacturing and retail trade have performed poorly in recent times, others such as health care and finance and insurance have had strong employment growth (see chart below based on May 2012 ABS Labour Force data). Overall, the Queensland economy is still slowly gaining jobs, and I expect the labour market will pick up strongly over the next year as the money generated from the resources boom increasingly flows through to other sectors in the Queensland economy.