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26 July 2010

NSW’s largest business organisation, NSW Business Chamber, says the latest research that claims NSW was coming last in the economic stakes was a misrepresentation of what is actually happening in the NSW economy. 

“I don’t accept the concept that NSW is coming last, or is anywhere near last”, said Stephen Cartwright, CEO of NSW Business Chamber. 

“Nor do I accept that there are more and better economic opportunities in small economies like the Northern Territory and Tasmania then there are in a large and diversified economy like NSW. 

“If we take dwelling starts as an example, according to CommSec, NSW is ranked last and the ACT is ranked 1st. However, according to the latest ABS data, housing finance commitments in NSW were at 15,250 compared to 950 in the ACT. The 6th ranked Northern Territory had just 374, or one fortieth the size of NSW. 

“We see the same flaw in unemployment – NSW is ranked 7th compared to the Northern Territory which is ranked 1st. If we look at total employment, the total number employed in the Northern territory is 119,000, compared to 3.46 million in NSW. Again, we see total employment 30 times the size of the Northern Territory. 

"Also, according to the ABS, full time adult weekly earnings is $1,310 in NSW compared to $1,249 in the Northern Territory. 

“In economic growth, CommSec has rated NSW last and Western Australia 1st even though according to the ABS, NSW has experienced a growth in Final State Demand of 0.6% compared to -0.5% in Western Australia. Indeed, the Access Economics report, also released today, said “…for the first time in a while, the Premier State is now growing as fast as Australia.” 

“My view is that the survey is being too clever by half by ignoring the benefits that come from size, by ignoring the skewed impacts of the mining boom and by using a comparative time frame that is too long. 

“I am very upbeat about NSW. The state’s economy is in better shape than its critics suggest. That is not to say we don’t face challenges, we do, but we have weathered the economic storm better than was expected.

“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. 

“If Tasmania, South Australia 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? 

“NSW is a diversified economy which means it won’t experience the booms and busts of less diversified economies. For example, Western Australia is profiting from a rebound in the resources sector and the ACT has been sheltered from the GFC and its impacts due to its large government sector.” 

Mr Cartwright said the increase in population, the pickup in housing construction and passing of the drought all represented positive developments for the NSW economy. 

“Business is neither a nay-sayer nor an apologist for NSW. We simply believe the State is performing better than this survey suggests. The State still represents one third of national production so it is the first place to consider when starting a business.”