Townsville Bulletin report on funding feud: Brisbane economist “under fire”

Tony Moore’s recent Brisbane Times article featuring my chart on per capita State Government capital spending by region has prompted responses from the Townsville Mayor Jenny Hill and Queensland Treasurer Curtis Pitt. As reported in Domanii Cameron’s article Feud over Townsville Funding (pay-walled, alas) in today’s Townsville Bulletin:

A BRISBANE economist has come under fire for claiming regional centres received an “excessive” amount of funding at the State Budget compared with the southeast corner.

In an article published by the Brisbane Times on Thursday, economist Gene Tunny said a “strong case” could be made for considering that some areas in the southeast were underfunded.

More than $20 billion was allocated to the regions during May’s 2017-18 Budget for the next four financial years.

Mayor Jenny Hill hit back.

Cr Hill said Mr Tunny, who is Adept Economics’ principal, had made calculations off a one-time snapshot.

“I don’t know why they’re saying they get nothing,” she said.

“I could do an interesting one (story) based around three years ago when we hardly saw any money spent outside the southeast corner,” she said.

“Don’t show me one year’s budget, show me 10 years.”

Treasurer Curtis Pitt said the Palaszczuk Government had always supported regional communities not transitioning to a post-mining boom economy as strongly as others.

“I make no apology for that, it’s what any responsible government would do and puts Labor in stark contrast to the hack and slash ideology of the LNP that pushed our economy to the precipice,” he said.

Regarding the Townsville Mayor’s criticism, I accept it would be desirable to examine the data over a longer time period, and indeed I did so in a July QEW post:

Is North Qld under-funded by the State Government relative to the South East?

I wasn’t able to do this for ten years, as official Treasury estimates based on the new ABS statistical areas only appear to be available back to 2012-13. My calculations based on the official figures reveal Townsville has received a higher share of State Government capital spending than its population share since 2012-13 (see chart below).

Regional_shares_Chart2

I accept there are many issues with this simple comparison, including the issue of economies of scale, and it is important to consider the economic contribution of each region as well. I intend to explore these issues in more depth in the future. So it is important not to read too much into the figures at this stage. That said, it appears to me that the traditional complaint about North Queensland being under-funded is inconsistent with the available data at the broad regional level (i.e. Townsville and Cairns regions). Of course, there may be specific localities with high needs within these broad regions.

Also on this issue, see the Tropic Now article:

Economist says TNQ gets more state funding than South-East corner

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2 Responses to Townsville Bulletin report on funding feud: Brisbane economist “under fire”

  1. Alexander Dixon says:

    Don’t forget the unprecedented spending on flood reconstruction for the road network in regional areas could potentially skew results.

    • Gene Tunny says:

      Yes, thanks Alexander. It certainly would. I couldn’t see how I could quantify that impact, but I’ll recheck to see if Queensland Treasury has provided a breakdown of reconstruction spending by region. Thanks for your comment.

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