Brisbane Times journalist Tony Moore has written an interesting piece based on a QEW post of mine from June on the regional distribution of Queensland Government capital spending in the 2017-18 Queensland State Budget:
Analysis shows booming south-east is losing funds to north Queensland
The article includes quotes from my June QEW post and some quick comments I made over the phone to Tony on Wednesday afternoon:
Mr Tunny said he believed the Queensland government was nervous of the regions and needed to win seats in in those regions to hold office.
“What I make of the figures is that the government is certainly overly conscious of feelings in the regions that they are being ripped off by George Street and over the past couple of years that is blatantly incorrect,” he said.
“However I think, on the basis of the figures I have seen, there are regions in the south-east corner that are being under-funded and I don’t think that is fair.
“There are the fast-growing areas that are not getting the funding that they need.”
Gene, I would not expect capex spending to be equal on a per capita basis for a single year. You would need to look over a much longer period. Also, some spending such as the Bruce highway upgrade benefits not only locals but any tourist and Truckie passing through regardless of where they are from. But, overall I understand the message and governments need to ensure they don’t shortchange areas who don’t elect them and porkbarrel the marginal electorates.
Very good point Russell. I should have linked to the follow up post I did in July where I extended the analysis back to 2012-13:
Gene would a larger volume market generally provide economies of scale that would supply a product cheaper anyway. 5 km of road in a region of 100,000 people would have a disproportionate expense against a 5km road in a region of 1 million people if all we focused on was the cost per head of population, if the 5km section of road needs to be built the surrounding population of that road is somewhat irrelevant, the road needs to be built regardless. I often use the highway west of Mackay as a perfect example, the road is a disgrace, large vehicles hauling massive machinery over the years has left the road in very poor condition, yet the road has been an essential part of creating billions of dollars in exports and royalties. To spend $1 billion on this road would seem a waste by many if only the surrounding population was considered in any analysis. Would it not be better to focus on discretionary spending in different regions rather than the cost of maintaining roads, public buildings, services etc which have to be provided regardless of the population.
Thanks Glen. That’s a great point about economies of scale. Yes, a more detailed analysis along the lines you suggest would be better. I simply took the regional breakdown of capex provided in the budget papers and divided the capex by population. I’ll investigate the feasibility of a more detailed analysis.