Comments in Courier-Mail on Qld regional economies and structural change

Today, the Courier-Mail is re-launching its GoQld campaign, this time with a focus on regional economies. It has rightly identified the large divergence in employment growth between SEQ and the rest of Queensland, and it is reporting a loss of 43,000 full-time employed persons in regional Queensland in the last twelve months, based on Pete Faulkner’s trend estimates (see Queensland in shock as 43,000 jobs vanish).

Given the large sampling error in the ABS Labour Force Survey at the regional level, it is hard to be precise about regional employment estimates, but it is very likely the regions have lost jobs in net terms, particularly in the Townsville and Queensland outback regions. That said, there is a large variation in economic performance across regions, with the Gold Coast and Toowoomba regions performing strongly. Also, Central and Northern Queensland regions dependent on mining are now starting to feel the benefits of the recovery in coal prices in the second half of last year, as mines are increasing production and taking on new workers.

Partly, the divergence in employment outcomes between the regions is a result of long-term structural factors (e.g. automation, technological change, and rising labour costs making Australian manufacturers less competitive). Hence, we may not see a strong recovery in some regions, and government policy measures to revive these economies may prove ineffective. As I have noted before, I am concerned particularly about the Townsville economy, and I am also worried about the economic viability of many towns in western Queensland. I emphasised the importance of structural change in comments reported by Paul Syvret in today’s Courier-Mail (Voter sentiment reflects economic divide making change key to a bright future):

Economist Gene Tunny attributes the downturn in many regions to lower commodity prices (which he notes are recovering) and the end of the mining investment, but stresses longer term structural change is the most important factor.

“Quite simply, we don’t need as many people in mining, manufacturing and agriculture as we used to,” he said.

He stresses that as economies evolve over time, it is inevitable that there will be winners and losers.

Mr Tunny stresses that even though many in the regions think that “if we get more money for dams, roads, power stations and so on everything will be fine … there is no magic bullet”.

Ultimately, Mr Tunny says: “There may even be a case for regional government and re-examining state boundaries that reflect a very different era.”

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3 Responses to Comments in Courier-Mail on Qld regional economies and structural change

  1. Craig Wilson says:

    Yo Gene I write from TajikistanA state of NQ?C

  2. Glen says:

    No magic bullet indeed Gene, Townsville is testament to that, lots of govt money at both state and federal level has been thrown at Townsville for very little result, and more govt money won’t fix the problem either, private investment is what has collapsed and the confidence that goes with it. The Townsville council is the greatest impediment to a recovery the city has, it is pointless to throw money at a city where the govt at local level has comepletely failed. Further to this $20 million has just been given to Townsville council for non determined and unspecified projects by the state govt , this is dangerous territory if govt start handing out money without adequate procedures to ensure the money is spent on new projects to create jobs and not simply rolled into general revenue. There is growing evidence to support the fact that Townsville City council is in deep financial strife and is struggling enormously with its budget. Ironically much of the shortfall in revenue is from a colllapse in building applications, ( self inflicted) and a massive drop in revenue from water. It would be grossly irresponsible of the state govt to continue to throw money at Townsville until a complete and thourough examination of the cities finances is carried out.

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