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.”