Yesterday afternoon I spoke with Elly Bradfield on ABC Radio’s Statewide Drive program about Queensland Nickel entering administration and the likely economic fallout. I reiterated the points I made in this blog yesterday that this could be a big economic shock for Townsville, particularly if administration takes the natural course to liquidation, and that the Government’s efforts to stimulate the region, via accelerated infrastructure works, will provide some short-term temporary jobs but will not address the long-term lack of economic opportunities.
Also, I noted that the State and Federal Governments have done the right thing in resisting calls for a bailout or bridging finance, as providing such assistance would open the floodgates and get the government in the business of propping up struggling businesses across the country. I hope the State Government maintains its economic rigour and does not rashly commit to new possibly dubious infrastructure investments with the aim of stimulating the Townsville economy. (While the Super Stadium is almost inevitable, I mentioned to Elly Bradfield there are likely much better ways to spend the money in the region, including possibly on a co-located high school at James Cook University I undertook a feasibility study for a few years ago.)
Finally I have to note that I was impressed by the Mackay Mayor Deirdre Comerford more-or-less asking on ABC radio why Townsville was getting special treatment from the Government when the Mackay region has also experienced job losses, indeed many more than the Townsville region in the 12 months to November 2015 according to Queensland Treasury estimates (see chart below)? That is a very good question. Due to the mining downturn and the drought, there are many regions in Queensland doing it tough. We should not be giving any region special treatment and generally should let the market determine the flow of resources and economic activity. As I noted yesterday, it may be that Townsville has to undergo a period of structural adjustment and that government efforts to stimulate its economy will ultimately be futile.
I will post a link to the audio recording of the interview once it is available on the ABC website.