Queensland Treasury’s December quarter State Accounts estimates released earlier this week were encouraging, with gross state product (GSP) growth recorded at 0.9 percent for the quarter and 3.4 percent through-the-year, which are very respectable growth rates, particularly with population growth at only 1.4 percent per annum. A good part of the growth in GSP was due to a surge in overseas exports related largely to LNG being shipped in increasing volumes from Curtis Island off Gladstone. The surge in overseas exports is so significant that, over the last six months of 2016, Queensland ran a rare trade surplus, which is very likely to persist (see chart below). This is taking into account both overseas and interstate trade.
Traditionally, Queensland has had positive net exports (i.e. exports less imports) with respect to other countries, but has had negative net exports with respect to the rest of Australia. That is, Queensland has imported many more goods and services than we have exported to the rest of Australia. Until recently, this has meant that Queensland has had negative net exports overall.
The boost to Queensland’s overseas exports is great news for the Queensland economy. If we could improve our policy settings through reducing taxes and charges and making it much easier to do business in Queensland than in other States, we might be able to substantially boost our exports to the rest of Australia as well.