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