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Boomtime in SA? « Previous | |Next »
October 12, 2003

The pundits are beginning to crow in Adelaide. They are saying that SA is no longer a basket case because it's economic growth over the past year has been awesome.

Professor Richard Blandy from the University South Australia is one of the state boosters. He says that SA had become a basket case because of the national decision to move to free trade when SA was the most heavily protected state. It had taken a long, long time to downsize, increase productivity and efficiency in a global sense. But now, it seems as if rebuilding the economic basics is paying off. Blandy says:


'...the northern and southern suburbs were no longer "wastelands".These are the new economic heartlands of SA due to growth in industries such as cars, wine, electronics and defence...The economic centre of gravity is moving towards the north.'

And it is all looking so bright for SA:


"Industries such as car manufacturing were doing "phenomenally while defence still had an undeveloped potential and wine was doing extremely well. Education and health are areas where we will have very large potential to develop, particularly in export areas. "

Investment is up, consumers are spending up big, the housing boom is moving along nicely and a crane can be seen in the CBD skyline. Optimism is the order of the day. The declining political influence of the state---indicated by the ongoing abolition of federal seats in the House of Representatives such as Hawker and Bonthyon ---is displaced by the economic news five minutes of economic sunshine.

The message says that the market is doing a great job in revitalising the state. So why my skeptical tone about the state boosters? Two reasons. Another newspaper report says that people are unable to pay their power bills. They are taking measures to reduce power use, such as watching tv in the dark, not baking, showering three times a week and using candles. However, the free marketeers don''t miss a beat. The trickle down of wealth created by the boom will sort that poverty out.

And the other reason for remaining gloomy? A lot of the optimism is driven by a household debt binge supported by a never-ending rise in home equity rather than addressing unemployment by building new exporters. The Rann Labor Government is obsessed with pleasing the money markets and the international credit agencies, and is very unwilling to take the path of higher levels of public investment in strategic social and physical infrastructure projects. Modernizing and greening the infrastructure is needed.

SA pleasing the financial sector means accepting the policy prescriptions of this power bloc: cutting "unproductive" government expenditure; reducing the regulatory burden on business; speeding up the pace of labor market reform; reducing the top marginal rate of tax; budget surpluses and repaying public debate. The anti-egalitarian policy agenda of Finance is intrinsically hostile to social spending, repairing the environment and regulating the market for the sake of the public good.

| Posted by Gary Sauer-Thompson at 11:43 AM | | Comments (4)
Comments

Comments

The poor will always be with us.

That doesn't mean we should lend a helping hand in the name of equality.

But you don't chop down the cherry trees either.

Scott, Who is suggesting we chop down the cherry trees?

I'm questioning the spin around the SA is booming bigtime. It is there in The Advertiser today---a property lead boom from office construction this time.

It will create a larger economic pie for all to share.Adelaide will out-perform Brisbane and even Perth. And so on and so on.

In other words development is a good thing for the city.That's the message.

What is totally ignored is the kind of development in Adelaide. The development has nothing to do with greening our buildings so they are compatible with climate change---more sun, less water----and more expensive electricity.

The Rann Government is not serious about water proofing Adelaide. It is spin.