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11 January 2010

NSW’s largest business organisation, NSW Business Chamber, says the latest research that claims NSW’s “economic ranking” was below that of all the other States and Territories represents a potentially misleading assessment of how NSW is performing.

“Whilst there is a perception that NSW has had its problems in recent years due to political instability, the fact is that NSW, which is Australia’s largest and most diversified State economy, is in better shape than its critics suggest,” said Stephen Cartwright, CEO of NSW Business Chamber.

“Whilst no-one disputes NSW could be doing better, we believe NSW is performing better than its critics and the naysayers are claiming.

“Today’s economic rankings fail to contextualise the current state of the NSW economy. Whilst no one disputes the actual ABS data, we do dispute the interpretation given to the data.

“NSW is performing well given the impact of the GFC on the banking sector and the impact of the dollar on the tourism and manufacturing sectors.  Despite these significant international crosswinds, NSW is growing, employment is steady and its AAA credit rating is intact. 

 “If Tasmania and the Northern Territory were the powerhouses of the Australian economy, why do these economies need extensive GST subsidies from NSW and Victoria each year?

“The economic rankings report uses construction as an example of where NSW is ranked last.  Yet such rankings fail to detail the size of the NSW economy.  For example, according to the ABS, in October finance for the purchase of new dwellings in NSW stood at 729, which is more than the combined numbers for Western Australia (315) South Australia (177), Tasmania (23), Northern Territory (19) and ACT (58).

“NSW is a diversified economy which means it won’t experience the booms and busts of less diversified economies.   Clearly, Western Australia is profiting from a rebound in the resources sector and the ACT economy is somewhat sheltered by its large government sector.

“The fact is NSW has the most diversified economy in Australia, it has preserved its AAA credit rating, and is growing despite the impact of the GFC on the finance sector and the impact of the high Australian dollar.”

Mr Cartwright said it was important that commentators separated their views about NSW politics from their perceptions of the NSW economy.

“Yes we all agree NSW can do better, that’s why NSW Business Chamber is undertaking its NSW - Reclaiming 1^st program which will detail a policy agenda focused on growth and creating sustainable prosperity.  However, we do not subscribe to the view that NSW is a ‘basket case’ or in dire straits. 

“We do agree that NSW politics has been a distraction over recent years.  The infighting of the Government and the lack of policy direction from the Opposition has been a concern to business.  Nevertheless, businesses are getting on with creating growth, profits and jobs.”