Today’s Courier-Mail reports some punchy comments from CCIQ spokesman Dan Petrie regarding the news that Queensland has the highest number of bankruptcies in Australia:
CCIQ spokesman Dan Petrie said the level of private sector investment in the state had fallen dramatically in the past decade.
“(It has lead) to Queensland’s poor job outcomes and elevated levels of financial distress,’’ Mr Petrie said.
Dan attributes Queensland’s problems partly to “confused policy settings around mining projects” and the drought. The whole set of Dan’s comments is worth reading so I recommend you pick up today’s Courier-Mail.
Dan’s certainly correct about our disappointing levels of private sector capital investment. The latest ABS data on new private capital expenditure show a decline in private sector capital expenditure in June quarter in Queensland of 5.9% compared with a nationwide decline of 0.5% (see chart below). In real terms, June quarter 2019 private sector CAPEX in Queensland was 2.3% lower than it was in June quarter 2009. More than ever, Queensland will be relying on an expanding public sector to keep the economy growing. The June quarter National Accounts to be released next week by the ABS could be very sobering.
Update – Here is a link to CCIQ’s analysis of the bankruptcies data prepared by Dr Marcus Smith:
Queensland – Perfect one day, the bankruptcy capital of Australia the next
It will be interesting to see if the negativity then can be attributed to the expected Labor Federal election win. Many of us were enacting strategies to bring up the draw bridge and go to cash thinking we were heading for a big jump to the Left. Investing was the last thing on our minds. The state Labor government seems to also have an anti business outlook. Is it any wonder that people are not prepared to risk their precious capital for themselves or give it back to shareholders? I think sovereign risk did give a kick up for many.
I’d say it would be very hard to determine whether the prospect of a change of federal government had a macroeconomic impact, but I admit it’s a possibility. Thanks for the comment Russell.