Mackay asks why is Townsville getting special treatment?

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.

Emplgrowthbyregion_Nov15

I will post a link to the audio recording of the interview once it is available on the ABC website.

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6 Responses to Mackay asks why is Townsville getting special treatment?

  1. Glen says:

    Great point about Mackay Gene, if any town was taken for granted during the mining boom it was Mackay. The roads down there were left in a disgaceful state after years of massive machinery driving on them and yet nothing from the govt to restore and repair them. I have friends who had to move from Mackay to Brisbane to get a job at Cavill Ridge FIFO mine. Unfortunately for Mackay it only has 3 state seats in the region where Townsville has 6, the political reality.

  2. Gavin King says:

    Great post Gene. As you say, no single region should get special attention. The Treasury chart tells the story: if Townsville gets special attention and help, why not here in Cairns (and all the other regions!).
    Tourism is going strong here in FNQ but it’s not trickling down to the broader economy and new job creation. The lack of economic enabling infrastructure is hurting Cairns.
    Keep up the great work with QLD Economy Watch.

    • Gene Tunny says:

      Thanks heaps, Gavin. I hope the book sales are going well!

    • No dispute that each region should be treated equally, rather than on the basis of whether a high-profile pollie happens to own a failing plant in your town (would most people have even heard of Queensland Nickel outside of Townsville had it not been for Mr Palmer’s interest?).
      However, on your point about Cairns, today’s regional data from the ABS and our own Conus Trend analysis, shows the Trend unemployment rate in Cairns at its lowest level in more than four years in Dec 2015. At 7.2% it’s still too high, but it’s certainly moving in the right direction. This suggests that the tourism “boom” is starting to trickle down to other sectors in the local economy. Let’s hope so!

      • Gene Tunny says:

        That’s great news about Cairns Pete and I agree about the tourism boom. I’ll aim to post on this soon and reference your data. Thanks heaps for the comment, Pete.

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