Three Coalition premiers are running the east coast states. A Crikey analysis of their economies shows Barry O’Farrell is streets ahead, while Victoria marks time and Queensland is in the doldrums.
The Barry O’Farrell government in NSW has significantly lifted the state’s economic performance since coming to office, in contrast to its conservative Victorian and Queensland counterparts, a range of economic indicators show.
In the death throes of Ted Baillieu’s premiership, the Victorian government was forced to reject claims the state was in recession after national accounts figures for the December quarter showed state final demand (which doesn’t include production inputs or exports) contracting by 0.7%, on top of a 0.4% fall in the September quarter. However, multiple indicators drawn from ABS economic data show it is the Coalition government in Sydney that has topped the economic honours on the east coast.
In the December quarter national accounts, NSW final demand grew at 0.4% and has averaged 0.6% growth per quarter since O’Farrell came to office — matching the performance of the NSW economy in the last year of the Keneally government. However, Victoria’s final demand has averaged just 0.3% per quarter, compared with 1.1% a quarter in the last year of the John Brumby government.
In Queensland, where final state demand fell to 0.2% growth in the December quarter, it has averaged 0.5% per quarter in the three quarters after Campbell Newman was elected, compared with 2.3% per quarter in the last year of the Anna Bligh government.
It’s a very similar story on employment. Under O’Farrell, unemployment in NSW has fallen in trend terms from 5.5% to 5.1%, driven by jobs growth of 60,000 jobs (again, trend numbers) since he was elected, although under the last year of Labor 100,000 jobs were created. However, the participation rate in NSW has held more or less steady since March 2011. In Victoria, the Baillieu government oversaw a rise in unemployment from 5.4% to 5.7%, with only 40,000 jobs created since the end of 2010, compared with 79,000 in the last year of the Brumby government. Worse, Victoria’s unemployment rate has only been held down by a significant fall in participation, of 1.1 points.
But Newman’s performance has been worse still — just 8000 jobs have been created in Queensland in trend terms since his government was elected, compared with 27,000 in the final year of the Bligh government (though that’s a full year compared with just 10 months for Newman’s government). Unemployment has risen 0.3 points to 5.8% off a 0.7-point fall in participation.
Unemployment in Queensland has been particularly affected by the Newman government’s public service cuts — the number of both public servants and medical professionals has fallen significantly in the past nine months, whereas their numbers have stayed the same or increased slightly in NSW and Victoria.
In retail sales, despite the rise (and, now, fall) of the “cautious consumer”, retail sales growth has averaged 1.4% per month since the O’Farrell government was elected, compared with 1.3% per month in the final year of the Kristina Keneally government. In Victoria, however, retail sales fell from a healthy 4% per month growth in the last year of Labor to 1.2% under the Baillieu government, including several quarters of negative or flat growth. And in Queensland, retail sales growth has fallen from an average of 3.8% growth per month in the last year of Labor to 3% a month under Newman.
In commercial finance, monthly investment has increased by nearly 6% on average under the Baillieu government from the last year of his predecessor, and about 5% under the O’Farrell government. But in Queensland, monthly average commercial finance commitments have actually fallen by 4.5%.
As Australia’s largest state economy, the performance of NSW is critical to Australia’s overall economic performance. O’Farrell has got the state moving again from its dark times under Labor. The performance of the Liberal government in Victoria, however, is decidedly mixed, and Campbell Newman has been taking Queensland backwards.