Economic pain continues for Townsville

With the nickel refinery at Yabulu outside Townsville now in administration, following the sacking of hundreds of workers last week, Townsville residents are right to be very concerned about the economic impact of a possible refinery shutdown, and the loss of another 550 jobs, which would be a significant economic shock to the region. It would be a significant adverse shock to a region that is already struggling. The Townsville region has had a weak economy in recent years, and, as mining-related jobs have gone away, total employment in the region has fallen (see chart below) and the unemployment rate is now at around 8 per cent.

Townsville_employment

At the same time, employment in the rest of Queensland has increased and Townsville appears to have had four lost years (chart below).

Townsville_v_Qld

The State Government’s jobs plan for North Queensland, which involves the bringing forward of public works programs, might provide a temporary employment boost of 200 or more jobs (see this Townsville Bulletin report), but will not do much to counteract the long-term decline in jobs. The region will certainly get more of a long-term boost from the Energex-Ergon merger, which should see the gradual relocation of hundreds of professional jobs to the region, but the region will continue to suffer from a profound lack of economic opportunities, particularly considering Cairns has a much superior tourism offering.

The Government may need to accept that the Townsville economy needs to undergo some restructuring, and that employment growth may remain non-existent or very low in the region for some time. It needs to resist calls for dubious public investment projects, such as the Townsville Super Stadium, to which regrettably it has already committed its support. Instead, the Government needs to get the economic basics right, minimising regulatory restrictions on economic development and cutting inefficient taxes such as payroll tax.

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5 Responses to Economic pain continues for Townsville

  1. Glen says:

    Gene the lack of foresight by community leaders across the North has been coming for years. The failure in Townsville has been across all levels of govt, but a special mention has to be for the Townsville City Council who have been the most anti developement administration any of us can remember. To have the Mayor on TV talking about the effect these job losses will have while over the last 3 years she has voted against many developements in the city is hard to fathom. On many occasions she has even voted against developements that the councils only planning department have approved.
    The economy has to be transformed and will take little effort to change with a few well placed investments, the city still has good private wealth spread throughout the community, very affordable housing, a solid education base and over $1 billion dollars a year direct into the economy from the Defnce force presence in the town.
    In regards to the stadium I believe it is a vital part of the transformation the city requires. The Cowboys do not have the funds to survive the loss of revenue a redevelopment on its current site would create and would look to relocate if a new venue can’t be secured. I don’t see how losing the Cowboys out of the town would help the economy in any way.

    • Gene Tunny says:

      Thanks for the comment, Glen. Shame about the Council’s attitude toward development.

    • NSSft says:

      Hi Glen, I cannot support a $300,000,000 debit funded white elephant (12 homes games p.a.!) for a football team. There is a reason the (2) business cases have never been made public, it has a negative RoI… This would be on top over >$200M spend on dud projects like a cruse ship terminal (>$55M – 4 ships to date and counting, very, very slowly), $35M for a V8 track – one race p.a., >$50M on Flinders Street (the CBD is deader than ever), $40M for a foreshore development that has no shade an will only benefit oncologists in the future. The list of stupid, self-centred, developer led idiocy goes on and on here. There is a failure of leadership at all levels and stripes, but there we are.

  2. pathession says:

    Hi Gene. How does the graph look when you compare south east Queensland to the rest of the state? It’s feeling like a different kind of two speed economy is developing – SEQ performing well, but regional areas struggling.

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