Queensland voters punished the Labor Party severely in Saturday’s poll, and perhaps a weak state economy played a much bigger role in the outcome than many commentators realise.

The ALP’s losses were greater than those in NSW where the current ALP state government was installed and nurtured by the same people who brought you Julia Gillard. But in Victoria, South Australia and Western Australia, the ALP did relatively better — not much, but the loss of seats wasn’t as dramatic.

Some argue that Victoria swung less because the prime minister was from there, and yet in NSW, and especially in Sydney and along the central coast, the ALP did much better than expected against a party lead by a Sydney politician in Tony Abbott who wasn’t from the ALP. (The ALP did suffer big swings in Sydney, it’s just they were not enough to unseat more sitting members).

Lots of reasons have been advanced for the carnage in Queensland, many pinning it on the failures of Anna Bligh’s government (which surely are not as bad as those we live through daily in NSW). But was there another more basic reason, an economic one, that drove Queensland voters to reject Labor and inflict a bad defeat on the party?

Queensland’s economic performance in the past year was much weaker, noticeably so, than the economies of other states, Victoria in particular. A speech by Reserve Bank deputy governor Ric Battellino made on Brisbane’s outskirts on Friday and overshadowed by the rush to Saturday’s poll contains much of the details confirming the sluggishness in Queensland

It shows quite clearly Queensland underperformed compared to the national economy and those in other states in the 12 months to the March quarter, thanks to a deep slump in business investment. Which is hard to understand when you read reports of a coal boom, LNG from coal seam gas and lots of minerals exploration.

The most telling statistic is the low growth in state final demand, or SFD, in Queensland in the year to March. (SFD is an estimate of the level of spending in the local economy by the private and public sectors. Spending is reported on the basis of consumption of goods and services and capital investment. It’s similar but not strictly comparable to GDP in the national economy).

The national accounts for the year to March show that SFD grew 0.3% in Queensland, the slowest of any state. That compared with the nation-topping 6.2% growth in Victoria, 4.7% in NSW (which is supposed to be the black hole economy in the country), 5.2% in South Australia, 3.1% in Tasmania and 6.1% in WA where the iron ore and LNG booms are the strongest. (Incidentally, it was up 4.9% in the ACT).

When you examine the list of factors driving this performance, a 17.8% plunge in business investment in Queensland stands out and was by far the worst in any mainland state, while Tasmania saw a collapse of 24%. That fall in Queensland has a lot to do with the fall in spending on property, especially on the Gold and Sunshine coasts and in other centres along the coast linked to tourism. That’s also fallen off as more Australians travel overseas thanks to the strong dollar, which in turn has cut the number of foreign visitors to the state.

Queensland was more impacted by the slump in commercial property with groups like MFS, Raptis and City Pacific all collapsing (and ABC Learning which invested in child care centres in the state as well as elsewhere in Australia and offshore). Some of these failures were significant, involving a billion dollars or more in debts. It’s why the state’s largest locally-based financial group, Suncorp Metway, was a basket case and came close to collapse under the GFC with more than $US16 billion in non-performing assets at one stage on its balance sheet.

Interestingly Queensland created 66,000 new jobs in the year to March, more than WA (61,000), but Victoria led with 98,000 new positions. NSW saw 47,000 new jobs created in the same time. Employment growth in Queensland was therefore okay at 2.9% — faster than NSW at 1.4% but slower than Victoria on 3.6% and WA on 5.2%. Besides NSW, Queensland did better than Tasmania (-.01%) and South Australia, up 2.2%.

Dwelling investment grew 1.3% in Queensland, better than NSW, Victoria and South Australia, but nowhere near as strongly as WA (5.0% growth ) and Tasmania (6.8%).

Consumption in Queensland was the weakest of any state, growing by 1.8% in the year to March. Even NSW saw stronger consumption at 2.8%; Victoria recorded 3.3%, 5.9% in WA, 3% in Tasmania and 3.3% in South Australia. Queensland’s retail sales growth was flat in the year to June, against a 2.8% rise nationally, in seasonally adjusted numbers. Victoria and NSW saw stronger sales growth. In original terms, retail sales in Queensland were lower in June than there were last July. In NSW and Victoria they were higher.

But the final component growth was perhaps the most telling: in Queensland in a year where government spending at a national and state level was a major contributor to growth, sustaining and then boosting employment, the northern state was the weakest at 10.6% in the year to March. In fact, Battellino succinctly outlined the underperformance of Queensland in the year to March:

“Queensland is lagging the other states, with relatively weak growth in retail sales and consumption, and particularly business investment.

“Over the past year, Queensland has experienced little growth in final demand, whereas in the rest of Australia demand grew by close to its highs of the past decade. Part of the problem is that Queensland seems to be suffering from an overhang in the property market after a period of exuberance in the lead-up to the financial crisis.

“Apartment building outside Brisbane is especially weak, as is commercial building. The high exchange rate is, of course, also affecting the tourism industry in Queensland, as Australians are taking advantage of cheaper foreign holidays.”

So perhaps there is a greater irony here. Kevin Rudd is from Queensland and was a senior public servant in the state government working for former Labor premier Wayne Goss. A combination of factors, but especially weak government support of the local economy during the GFC and afterwards and low investment and retail sales growth, seems to have contributed in some way to the undermining of the ALP vote in Queensland.

The clichéd adage from the 1992 US presidential election campaign when Bill Clinton was first elected was “it’s the economy, stupid”. It’s a message that seems to have fallen on deaf ears in Queensland and in the Bligh government.