The Weatherill administration’s 2015 “Economic Statement”, to be published today, paints a grim picture of the state’s employment outlook.
It presents three potential scenarios for SA’s unemployment rate by the end of 2017 – the most optimistic of which is 7.5 per cent, virtually unchanged from the nation-lagging figure published by the Australian Bureau of Statistics this month.
Alarmingly though, the statement says that to hold steady at 7.5 per cent unemployment by the end of 2017 “SA would need to nearly double the rate of employment growth over the next two years”.
The worst-case scenario modelled “depicts what would happen if employment growth stopped”.
“Under this scenario, we could expect the unemployment rate to rise to around 9.3 per cent by the end of 2017,” says the document.
A third scenario, which sits between the other two, “factors in net growth in employment of 10,000 people by 2017, even after the loss of the automotive sector”.
The Government considers this scenario consistent with the forecasts of the 2015-16 mid-year budget review, due to be published within weeks.
It would see unemployment rise to 8.2 per cent within two years.
“The Holden closure, Alinta Energy’s closure of the Leigh Creek mine and the Port Augusta power stations and the gap between the current and future defence projects suggest that unemployment will rise from its current trend rate unless new jobs can be generated,” the statement says.
It considers the three scenarios “feasible given the current economic outlook and labour market conditions”.
“There is no doubt our unemployment rate is too high and the Economic Statement details how our manufacturing and construction sectors are suffering,” Premier Jay Weatherill said in a statement.
“But there are strengths in new and growth industries such as tourism, arts and health care.”
In his introduction to the economic snapshot, the Premier details the “need to be innovative and entrepreneurial”, talking up his Government’s efforts to “reduce barriers to investment, build our capabilities and drive growth in key sectors”.
“Despite these efforts, unemployment in our state has been trending upwards,” he writes.
“We have laid a solid foundation and must now accelerate our efforts to overcome the challenges we face.”
As InDaily forecast in September, the Government has today revised a suite of its economic objectives to reflect the changed outlook.
Of the original 68 targets:
- five have been decreased;
- five have been increased or expanded;
- four have been revised;
- five have been added; and
- 54 remain unchanged.
Weatherill said that two of the Government’s objectives for 2017 had already been achieved, but a further 12 “would now be a challenge”.
“The biggest downgrades we have made to our 2017 targets relate to the mining sector which has suffered dramatically due to a collapse in commodity prices and over the past 12 months,” Weatherill said.
“However, the targets set for our premium food and wine, tourism and vibrant city agendas are well progressed with some having being revised upward.”
He said additional objectives had been added in the health and ageing sectors.
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