Like what you've read?

On Line Opinion is the only Australian site where you get all sides of the story. We don't
charge, but we need your support. Here�s how you can help.

  • Advertise

    We have a monthly audience of 70,000 and advertising packages from $200 a month.

  • Volunteer

    We always need commissioning editors and sub-editors.

  • Contribute

    Got something to say? Submit an essay.


 The National Forum   Donate   Your Account   On Line Opinion   Forum   Blogs   Polling   About   
On Line Opinion logo ON LINE OPINION - Australia's e-journal of social and political debate

Subscribe!
Subscribe





On Line Opinion is a not-for-profit publication and relies on the generosity of its sponsors, editors and contributors. If you would like to help, contact us.
___________

Syndicate
RSS/XML


RSS 2.0

Mass unemployment stalks South Australia

By Malcolm King - posted Monday, 15 August 2016


South Australia is irrevocably moving towards massive unemployment and under employment, the likes of which no Australian state has suffered since the Great Depression.

Even without the fall of Arrium, Holden and the automobile manufacturing supply chain, unemployment in SA will hit 10 per cent (ABS) in SA by 2020.

The rise of algorithms in administrative and production processes, the decline of manufacturing, the toxic and unethical practices of Adelaide's private recruitment industry and the rise of the Asian economies, are herding tens of thousands of South Australians into casual employment or long-term unemployment. Young people not locked in to mortgages are fleeing the state.

Advertisement

I left Adelaide in the 1980's and spent much of my professional life working in Melbourne and Canberra in the media, federal politics and as an academic. Upon returning to Adelaide in 2008, I found a retrograde economy and organisations almost bereft of modern practice.

No amount of state government spin - and there's plenty, bordering on severe delusion - no nuclear waste dump or armada of submarines, can help now. The time to act was 20-30 years ago.

Failure of the two party system

There is little difference between the state Liberal Party or Labor Party in SA. The two major parties are neo-liberal 'light'. In fact, the Liberals have left the field completely. The traditional tension between the ALP and the Liberals is a historical hangover from the days when political parties stood for something.

The real interest is the growing Xenophon constituency, who is sick of the SA Treasurer Tom Koutsintonis saying 'shop around' for cheap power retailers when power goes up ten per cent across the board. It is sick of the Royal Automobile Association (RAA) saying the same when petrol spikes 20 per cent across the state. They want action and they want it now.

NXT wants a return to a high tariff economy to protect local jobs for the 150,000 unemployed and under employed people in South Australia. This is a move towards nationalism and isolationism. On current polling in the next state election, NXT will become a third force in SA politics.

Advertisement

Deflation

Weak consumer demand across SA is driven by unemployment and under employment, debt and an ageing population, which forces prices down. When a person loses their job, the family suffers. When a 1000 people lose their jobs, everyone suffers. Because jobs are being lost and/or threatened wholesale, families and individuals are givingdiscretionary spending the flick.

In the June quarter, the national inflationrate fell to1.0 per cent,well below the Reserve Bank of Australia's (RBA) target inflation band of 2 to 3 per cent. The RBA recently cut the cash rate from 1.75 per cent to a historic low of 1.5 per cent.

In Adelaide, the inflation rate is at a very low .5 per cent. Why is demand so weak? Because unemployment in SA is not 7 per cent. It's closer to 12 per cent and under employment is soaring. The ABS counts working one hour a week as being employed. Job advertisements in SA were in free fall in the May quarter, down 11 per cent across the board and 13.8 per cent in the private sector, according to the ABS. The main problem is that small businesses can't pay fixed costs, such as rent, which in Unley and Semaphore, are astronomical.

Happy clappers

The most recent Deloitte Access Economics quarterly Business Outlook gives the SA economy a 'relaxed outlook'. BankSA says business confidence is up and he Adelaide University Centre for Economic Studies produces reports show 'green shoots' and 'considerable optimism'. If these organisations were a dog, they'd get a stomach scratch from the state government. The 'happy clapper' reports divert, disguise and conceal from the public, the true state of the economy, some of which I've listed below:

· SA has a real unemployment and under employment rate of 19 per cent (combined) – that's more than 150,000 people out of a workforce of 810,000.

· The recent write down of $796 million in state tax revenue over the forward estimates, includes an expected loss of $416 million in payroll tax as the economy falters.

· Last year more than 140 people had their homes repossessed, up from 134 people in 2014. But according to a senior real estate source, the real figure is four times that number, especially in the state's north.

· SA's share of the national economy has shrunk from 7.3 per cent in 1990 to 6.3 per cent this year. Its share of national employment has fallen from 8.3 per cent to 7.0 per cent.

· 15 per cent of CBD prime office space and 20 per cent of non-prime is vacant.

'Print' media

If a newspaper is a complete product, by contrast, digital news is constantly updated, improved upon, changed, moved and developed. The Advertiserhas none of these former or latter qualities. It is static and committed to trivia. The 'Tiser' supports a deeply orthodox political mindset. It patrols the status quo like a Rottweiler, making it completely unfit to discuss how radical changes such as globalisation, deregulation, the rise of Asian manufacturing and online trading, is hitting South Australians. Too often it uses editorial to promote News Corporation business relationships. During the last 30 years, it has created a 'news divorce', from Australia and the rest of the world by wrapping what's left of the readership in parochialism.To be fair, no alternative political ideologies or business philosophies were savaged. They simply weren't reported.

InDailyhas successfully turned from the hard copy Weekly Independent to a Monday-Friday online 'newspaper'. It carries a variety of hard news, reviews and opinion. I occasionally write opinion articles for InDaily that examine 'unreported' Adelaide. InDaily has evolved from a newspaper in to a moderately profitable online news bureau. It's partnership with City Mag is driving deep in to the 20s and 30s inner suburban demographic.

Young people leaving

A few years ago I did some research in Canberra on the effects of ageing populations on the economy and what happens when young people leave. There are parallels. When young peopleleave Adelaide, the population ages. When tens of thousands of young people leave over a 30 year period, (and less than ten per cent return), there are a raft of cultural, social and economic issues. The most obvious effect is capability gaps in the workforce and an inability to recognise patterns. It's not a necessary condition that the population gets dumber – although that is a side effect. It's more a case that the states where the young people go, get smarter and profit from their tax dollars.

Currently, about 5000 people leave SA per year over those who arrive. Yet those aged between 20-30, rarely tell Medicare of a change of address, who in turn notify the ABS. I estimate that the real evacuation rate interstate is around 6000-7000 people per year. This tallies with the findings of SA's Adelaide-based universities, who can't fill many courses with domestic applicants, so they lower the entry scores.

One inconvenient truth, rarely reported, is that Adelaide's arts scene has been decimated over the last three years. The state government is pouring money in to major arts events such as the OzAsia festival and the Festival of Arts but smaller companies are closing, wiping out the 'ground floor' of performing arts in SA.

Conclusion

The lack of choice between the Tweedle Dum of the ALP and the Tweedle Dumber of the Liberals, means the only real political party is the pragmatic, isolationist and nationalist NXT party.

There are no federal or state government welfare plans for the men and their families at Holden and the automotive supply chain. This failure to plan ahead will cripple the state and create an economic blight that will haunt governments for two generations.

In 15 years of writing about economics, generational and organisational change, I have not seen such a raft of wicked and serious problems that now confront South Australia. If there is a devil in economics, it has made a home here. When the history of this state is written, there will be a large and damning chapter on this period.

  1. Pages:
  2. 1
  3. 2
  4. 3
  5. All


Discuss in our Forums

See what other readers are saying about this article!

Click here to read & post comments.

29 posts so far.

Share this:
reddit this reddit thisbookmark with del.icio.us Del.icio.usdigg thisseed newsvineSeed NewsvineStumbleUpon StumbleUponsubmit to propellerkwoff it

About the Author

Malcolm King is a journalist and professional writer. He was an associate director at DEEWR Labour Market Strategy in Canberra and the senior communications strategist at Carnegie Mellon University in Adelaide. He runs a writing business called Republic.

Other articles by this Author

All articles by Malcolm King

Creative Commons LicenseThis work is licensed under a Creative Commons License.

Article Tools
Comment 29 comments
Print Printable version
Subscribe Subscribe
Email Email a friend
Advertisement

About Us Search Discuss Feedback Legals Privacy