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No comment necessary: SA's economic blueprint from 1981


An economic blueprint for South Australia from more than 35 years ago shows that government and business leaders were concerned we might become a “stagnant backwater”. Did South Australia act on their recommendations? You be the judge.

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Looking for a travel folder in the storage hole under our stairs at home, I came across a glossy 48-page, A4 booklet entitled South Australia – A strategy for the future, published by the State Development Council of South Australia in November 1981, more than 35 years ago, when David Tonkin was Premier of South Australia.

There were 16 members of the Development Council, which was chaired by Mr J.D. Rump, Chairman of the State Transport Authority. Also on the council were other heads of government departments and business figures, such as Bob Hill-Ling from Hills Industries (among other South Australians of note).

I was also a member as a Professor of Economics from Flinders University.

The booklet begins as follows:

“Probably the most pressing question in the minds of thinking South Australians is this:

Does the State have a chance of a prosperous future or is it destined to be a parochial, stagnant backwater in Australian life?

What are South Australia’s strengths?

The view of its location is changing from one of isolation to one of being advantageously placed in relation to the rest of Australia and to the Asian-Pacific region.

It has a lean, competitive agricultural industry, which is capable of further development and diversification.

It has a wealth of manufacturing experience, a stable, educated and skilled workforce with a good industrial relations record, lower direct and indirect manufacturing costs.

There is a renewal of industrial development though it is not yet occurring at a rate fast enough to reduce the present disturbingly high 8 per cent unemployment rate.

The rewards from resource development and exploitation are closer and the possibilities are expanding.

The State offers low-cost housing, a good education system, excellent community facilities and, in general, a fine lifestyle.

And the weaknesses?

Conservatism about change and a general reluctance by too many people, including political, business and union leaders, to see opportunity in change.

An industrial base which is too narrow, too vulnerable to the whims of consumers in other States and too dependent on protection.

The tendency to place too much hope on future resource development in the State for the salvation of the economy. The resource sector will only contribute to prosperity. It will not determine it.

The failure to realise that for there to be prosperity and high levels of employment, industry has to be restructured to lift its growth rate.

An over reliance on regulation by Government.

Insufficient emphasis by Government on activities which will strengthen the economic base relative to those ailing existing areas which have limited and decreasing potential.

Lack of realisation by Government and the community of the need for a consistent set of policies.

A lack of entrepreneurial spirit, except in some notable cases.

Constraints on growth such as high levels of regulation, ad hoc decision making and anomalies, which needlessly hamper the development of opportunity.

Uncertainties about future electricity costs, natural gas supplies and the availability of quality water.

What should be South Australia’s broad long-term objective?

The Development Council believes it should be to:

Encourage new investment.

Increase employment opportunities.

Improve the living standards of the whole community.

Other steps should involve:

Encouragement of the diversification of the manufacturing sector towards capital and skill-intensive export commodities.

Encouragement of business and industry to capitalise on existing opportunities, such as those presented by resource development in other States.

Continued diversification and development of the agricultural sector coupled with emphasis on techniques which will preserve the soil and improve its fertility.

Acceptance of new technology and encouragement of new growth enterprises.

Expansion of interstate and overseas exports.

The steady expansion of the mineral and energy resources sector.

Increased efforts to realise the long-touted potential of tourism.

The steady removal of unnecessary regulation and other impediments to growth in the economy.

Concerted action to overcome uncertainties about power costs and water supply quality.

Containment of the cost of Government and improvement of its efficiency and effectiveness.

Strengthening of South Australia’s relatively peaceful industrial relations situation.

Development and implementation of a marketing program and general education plan for those affected by change as well as the community generally.

Development of plans and procedures to ensure consistent decision making and action in line with the development strategy.

Development of a monitoring program for the strategy to evaluate progress, keep the community informed and revise procedures and plans as the need arises.

Detail from the economic analysis.

In concluding, the State Development Council noted that: “In formulating its approach, the State Government has to choose between the proposals of two major lobbies. One advocates heavy emphasis on Government involvement, protection of industry and regulation. The other prefers minimal Government involvement and emphasis on individual enterprise and initiative.”

The council chooses the second approach. because it “believes they offer the best means of covering the widest range of development possibilities and therefore the best chance of finding success”.

“Nobody knows the exact formula for prosperity for South Australia. In the course of the search many ideas will have to be tried. Some will be winners and some losers.

“The Development Council believes the private sector is better equipped than the public sector to take the risks which will be necessary and to handle the percentage of failures which will be inevitable.

“The public sector cannot spread itself as broadly as the private sector. It tends to become involved in bigger enterprises and it seems to find it more difficult to be rational about mistakes and failures.

“Government regulatory functions should be constrained to ensuring that private enterprise is acting legitimately and fairly.”

With respect to Government regulation, the booklet cites, approvingly, the following 1980 quote from Gao Zhihua, “What is the Best Economic Setup for China?”, Social Sciences in China, Journal of the Chinese Academy of Social Sciences, Peking:

“(In China) there is a regulation of production by State planning … people have gradually come to realise that the present economic set-up is too weighty and clumsy for a modernising nation. While feathering the nests of bureaucracy, authoritarianism and inefficiency, this system of management doesn’t take proper care of the varying economic-financial interests of the collectives and individuals. … In effect, their initiative is dampened.”

Richard Blandy is an Adjunct Professor of Economics at the University of South Australia, an Emeritus Professor of Economics at Flinders University, and a regular contributor to InDaily.



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