Deloitte, one of the big four professional services firms, has recently released a very interesting and informative report titled Confidently Queensland, which presents Deloitte’s goals for Queensland in 2027: liveable communities, a diversified economy, and inclusive growth. The report was co-authored by Deloitte Partner Dr Pradeep Philip, who has recently returned to Queensland. Pradeep’s career so far has included time as a departmental secretary in the Victorian public service and as an economic adviser to Prime Minister Kevin Rudd. Confidently Queensland was guided by a steering committee of Queensland business, public service and NGO luminaries, including John Wagner, Raynuha Sinnathamby and Michael Roche among others. Given these facts, it is certainly a report worthy of serious consideration.
Deloitte sees Queensland’s economy and society being transformed by five mega trends—emerging markets, digital disruption, increased urbanisation, environmental challenges and demographic change—and it sees four industries as supplementing the resources sector and being critical to our State’s economic prospects:
A diversified economy would mean that over the decade to 2027, industry growth in Queensland would not only be recorded in energy and natural resources, but also in tourism, international education, agribusiness and aged care. (from p. 46)
Deloitte has an aspiration for a bigger Queensland, stating an aspiration of boosting Queensland’s annual population growth by 30,000 people per annum and Queensland’s annual GSP by around $50 billion by 2027. It considers that this will require a broad range of policy measures, including investments in Queensland’s education system, improving the health system with a greater focus on prevention, and making Queensland communities more liveable, particularly in the regions, and facilitating the development of a more diverse economy. Deloitte appears to be suggesting that, during the mining investment boom, our State Government was too focused on that sector to the detriment of others.
One of the reports clearest and most concerning messages is that Queensland receives particularly low marks in terms of educational attainment (see chart below). Deloitte notes (on p. 23):
…education has not been a strong point for Queensland in recent years. In fact, Tasmania is the only State with a lower proportion of the population attaining higher education qualifications than Queensland. In a knowledge economy, this just won’t cut it. There is much more work to be done here…
I completely agree. The report later contains some high-level policy prescriptions for improving education in Queensland, through improving funding certainty for State and Territory governments (but that is largely dependent on the federal government), encouraging value for money in delivery, improving workforce capabilities, and creating an integrated higher education system where VET is not seen as the inferior option to university, and one with more “short-cycle” qualifications. No doubt many readers will have heard these prescriptions before.
Regarding liveability, Deloitte are correct to identify this as important for our own well being and for attracting people to Queensland, but I think Deloitte might be too focused on the regions and neglectful of SEQ (see p. 86). As I have commented before, State Government capital works spending appears skewed towards the regions already (see my post from last month and the Tropic Now report Economist says TNQ gets more state funding than South-East corner). There are some very substantial State Government investments planned for regional Queensland, including the Townsville Super Stadium and Cairns Convention Centre upgrade, for example.
One of the things I really like about Confidently Queensland is its analysis of Queensland’s economic challenges. For example, the report discusses how our rising energy costs are adversely affecting many industries, and are particularly bad for our minerals processing industry. The report notes (on p. 51):
Queensland’s competitive advantage in energy will never be like it was 30 years ago when governments specifically attracted resource processing to the State. Questions remain over the economic sustainability of minerals processing once legacy contracts cease in coming years.
The report is not specific about what minerals processing plants it has in mind, but I suspect they have in mind the Boyne aluminium smelter at Gladstone, which has recently trimmed its workforce (see this ABC News report), and the Mt Isa Mines Copper Smelter and Townsville Copper Refinery, which are at risk of shutting down (see this Townsville Bulletin report). The closure of these plants would be heavy blows to the Mt Isa and Townsville economies, bringing about the loss of many hundreds of jobs. Deloitte appears to be suggesting that the Queensland Government should plan ahead for these closures, which would involve investigating future training and worker relocation measures.
Deloitte’s three goals—liveable communities, a diversified economy, and inclusive growth—are all worthy goals, but achieving these goals is a great challenge. In this regard, I would have liked more from the report. The report was written at a very high-level and lacked the detail I would have liked to have seen in its policy recommendations. For example, Deloitte could have been harder hitting on retail trading hours’ restrictions, which are still excessive despite recent changes. It mentions the benefits that “expanded hours” could bring (on p. 64), but it does not directly criticise current restrictions. Also, Deloitte could have commented on whether payroll tax should be cut. At least it did recommend reducing stamp duty, which all economists know is a terrible way to raise revenue and should be abolished.
That said, I accept it is the nature of such a broad-ranging report as Confidently Queensland that issues often cannot be dealt with in the depth they deserve. Perhaps Deloitte could release a sequel to Confidently Queensland and have a closer look at those policy settings that are preventing our economy from reaching its full potential, providing more specific policy recommendations.
All things considered, Confidently Queensland is an excellent report and well worth reading. The reader is regularly rewarded with a variety of incredibly interesting facts, including that of the international travel habits of Chinese millennials (see p. 61). And for those needing to get up to speed with current economic policy issues in Queensland, it is an excellent introduction.