Despite having the best lifestyle in Australia, South Australians have long been regarded as the poor economic cousins of their east coast – and in recent times, west coast – cousins.
The good news for South Australians is that the uranium boom which may unfold in South Australia has the potential to do for the state what the oil industry boom has done in recent times for the province of Alberta, Canada.
The similarities are striking. While Alberta has always had a significant oil industry, most of its oil reserves are contained within its oil sands.
Alberta theoretically has the largest oil reserves after Saudi Arabia. However, due to the cost of extracting oil from sand, it has only been in recent years that it has made economic sense to exploit this resource.
The subsequent boom period in Alberta has had many of the features that Western Australians would be familiar with – massive appreciation in property prices, unemployment at record low levels, migration from the eastern states and newfound national influence.
Such has been the prosperity that in 2005 all Albertans received a cheque from the government – the so-called “prosperity dividend”.
Alberta saw a staggering 6.8% real economic growth in 2006. Canada’s largest province Ontario could only manage 1.3%.
South Australia looks set to experience a similar boom given that an estimated $10-24b of resource capital expenditure alone may occur over the next decade.
With a uranium boom about to unfold, investors should be taking a long hard look at property from Adelaide’s inner south to north of the city in the Clare Valley and business opportunities from recruitment to equipment rental.
Given that the New South Wales economy continues to be mismanaged by economically incompetent party machine men masquerading as a government, it is not inconceivable that a decade from now Sydney economically may find itself looking more like Toronto, the capital of Ontario and Adelaide more like Calgary.
Ten years ago if you lived in Toronto, you’d only fly to Calgary if you wanted to get to a ski-field. Now people from Toronto cannot pack themselves up quickly enough to relocate to Calgary.
This should make South Australians feel that the good times are just around the corner.