Queensland Economy Watch

The Bundaberg News Mail ($5,000 an hour goes on pokies) reports:

More than $44.3 million has been spent on pokies in the region in the past 12 months, according to figures published on the Office of Liquor and Gaming Regulation’s website.

This equates to $5058 being poured into the machines every hour.

This amounts to more than your usual slow news day media beat-up.  The figures from the Queensland Office of Liquor and Gaming Regulation (EGM Statistics by Local Government Area) suggest Bundaberg has serious issues with the pokies.  Consider the annual per capita (15+ population) spending on pokies in Bundaberg and major Queensland council areas:

• Bundaberg:  $582
• Brisbane:  $463
• Gold Coast:  $568
• Ipswich:  $555
• Sunshine Coast:  $512
• Townsville:  $548

With the exception of the Sunshine Coast, Bundaberg has proportionately many more mature-aged and retired residents than other council areas.  It’s a big social welfare concern if it’s pensioners who are responsible for Bundaberg’s high average spending on pokies.

N.B. the figures used in this post are based on the reported money returned as wins, which is around 90% of the money going into the pokies.

The old State Library is a charming old building, but it’s occupying prime Brisbane CBD land and should be re-developed, preserving as much of the original building as possible, of course.  The National Trust of Queensland, however, has signalled “widespread protests” against plans to re-develop the old State Library into a 400-room hotel, which will involve constructing a hotel tower behind it:

Heritage group ‘up in arms’ over tower plan

Brisbane is a mature, modern and growing city, and we need to recognise that a lot of these 19th century buildings aren’t terribly special and are hindering progress.  Back in the late 1870s, when the old State Library was built, Brisbane had a population of around 30,000 people.  Now it has a population of around 1.7 million.  Let’s forget about the past and look to the future.

fyi – really useful historical data from Qld Treasury’s Office of Economic and Statistical Research (OESR):

Historical tables, Demography, 1823 to 2008

The Business Council of Australia (BCA) is rightly skeptical about the Commonwealth Government’s banking reform package.  At best it’s a collection of token reforms that won’t do much harm.  At worst it will lead to unfairness and a lack of transparency in banking charges, with the costs of people switching home loans passed on to other bank customers.  In a media release today the BCA has made the correct call that:

Economy too important for hasty regulatory action

If the Government believes the banks are abusing their market power then they should subject them to proper economic regulation by the ACCC and have the banks justify their charges through a rigorous and independent process, as public utilities have to do with the state competition regulators such as the Queensland Competition Authority.

Unsophisticated approaches such as banning mortgage exit fees strike the observer as politically convenient, knee-jerk reactions to what may be a serious lack of competition in the banking sector – a problem which may not warrant a full-blown inquiry (a good way to delay making decisions) but certainly deserves more serious consideration from the Government than has been given to date.

Anyone working in Brisbane CBD is likely to have witnessed the pathetic sight of a police officer leaping out from a hiding place to book some poor unsuspecting pleb for jaywalking across a quiet city street (the George St-Queen St mall intersection is one of their favourite spots).  At $30 a ticket, this is a nice little earner for the State Government.

It’s little surprise then that the latest Report on State Finances reveals a big increase in fines revenue to the Queensland Government – with fines revenue up 17% to $285 million in 2009-10 (p. 6-34 of the Report).  Based on CPI and population growth, you would expect total fines to have increased by 5%, so the Queensland Police Service deserves a commendation from Andrew Fraser.

With $285 million of total fines, that’s an average of $63 in fines for each Queenslander, which is roughly about two jaywalking tickets each.

One great piece of advice in Richard Carlson’s Don’t Sweat the Small Stuff is “if someone throws you the ball, you don’t have to catch it”.  Judging from today’s front page headline in the Australian newspaper (Treasury swamped by demands) it is advice that the Treasury econocrats need to follow.

Treasury should be glad there are so many demands for its advice, because it is a reflection of the department’s prestige and reputation.  With demand for Treasury’s advice exceeding its capacity to provide it, however, Treasury needs to assert itself and have a robust dialogue with the Government about where it should direct its limited resources.

It’s likely that significantly less than 100% of what Treasury does is either absolutely critical to national economic management or is required by law, so there certainly would exist scope for the Treasury to push back on some demands from the Government.  For example, Treasury would have a large volume of correspondence from the public that it has to draft replies to for sign off by ministers or their staffers.  Given that many of these replies simply recycle tired lines from budget documents or media releases, the value of this significant effort is questionable.

On the other hand, if all of Treasury’s work is of the highest importance, it should push for more resources from the Government.  If Treasury can’t find suitable staff, it should contract the work out.  There are plenty of economic consultants across Australia who would gladly take it on.

According to today’s ABS Housing Finance release, the number of new home loans grew at a decent rate in October: 3.6% in Qld and 1.9% across Australia (seasonally adjusted). Of course, this growth occurred prior to the Melbourne Cup day rate rise, so market observers are cautious about its implications for the economy (see the AAP report Home loans stabilise and grow).

The Queensland construction sector is currently pretty flat, although the medium to long-term prospects are good due to the mining boom and government investment in the regions, as confirmed by a report in today’s Townsville Bulletin (Construction eases):

CONSTRUCTION activity continues to ease at Townsville with the possible development of office space for the State Government providing hope of stimulus in the long term, a survey has found.

Meanwhile, major mining and energy projects in Central Queensland are expected to act as a drain on the region’s labour pool but still increase construction costs.

Building and construction consultant Davis Langdon, AECOM company, has released its latest Tender Level Index survey for 2010, which paints a patchy picture for construction and development.

It was great to read in today’s Courier-Mail that the big retailers (Coles, Woolies, etc) are leading a push for deregulated trading hours in Queensland, which would bring us into line with most other States:

Queensland trading hours to be expanded in push by retail giants

This would be a big win for consumers who are inconvenienced by our antiquated regulations around trading hours, but the push will be strongly resisted by both smaller retailers (e.g. IGA), motivated by self-interest, and unions, who (sincerely) are worried about family un-friendly working hours, although community attitudes toward what working hours are acceptable have shifted in recent decades.

It’s probably not a good sign for the big retailers that the Attorney-General (and Premier-in-waiting) Cameron Dick has stated:

“Our current system strikes the right balance between the interests of retailers and the interests of workers, with any decision being made by the independent umpire and without any interference from politicians.”

Of course it comes down to a judgment about what the community believes is the right balance between our desire to shop 24/7 and concerns about the viability of corner stores and family un-friendly working hours.  At the very least, the Government should launch a public inquiry into retail trading hours to consider all the facts and different viewpoints in the Queensland community.

Previous Queensland Economy Watch post:

Time to deregulate retail trading hours

While our State and Commonwealth Governments have been trying to encourage bio-tech and advanced manufacturing companies through R&D tax concessions and commercialisation grants, it’s possible they have overlooked more prosaic companies that can generate practical innovations, such as Mackay’s Shipping Container Rentals. Mackay’s Daily Mercury reports (Introducing ‘The Pissa’):

MACKAY men can kiss goodbye the days of ‘watering the grass’ behind the shed thanks to ‘The Pissa’, a shipping container converted into what is believed to be Mackay’s first portable male toilet block.

Shipping Container Rentals created the aptly named toilet block by modifying a six-metre shipping container to include four mirrors, four hand basins and windows, two urinary troughs and two doors.

The Mackay-based company’s sales and leasing manager Murdo Macdonald says the Pissa is the perfect accompaniment to the popular 15-person Chillroom container, which can also be rented for parties and other events.

Let’s hope Shipping Container Rentals gets a Smart State Award in the near future.

By the way, according to Wikipedia there are a number of other uses for retired shipping containers:

Shipping container architecture is the use of containers as the basis for housing and other functional buildings for people, either as temporary housing or permanent, and either as a main building or as a cabin or workshop. Containers can also be used as sheds or storage areas in industry and commerce.

Containers are also beginning to be used to house computer data centers, although these are normally specialized containers.

Residential building approvals have rebounded in NSW and Victoria, growing at 14.0% and 4.6% respectively in October, while building approvals in Queensland declined by 0.7%, according to today’s ABS building approvals data (see the seasonally adjusted data). Across Australia, building approvals increased 9.3%.

But the good news in the rest of Australia may be short-lived, as the recent interest rate increase may restrain future building approvals, according to some economists:

Building approvals surge not likely to last

It appears that the demand for residential properties will be relatively weak in the near term, and this will impact on both building approvals and property prices, which are also being driven lower by the recent large build up in housing stock:

Australian house prices relatively stable but falls expected in the coming year say experts