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The state of the state


Can South Australia, a state conceived in the 19th century and now shackled to a regressive political orthodoxy and failing economy, survive in the 21st century? Yes, but only if two serious defects are remedied, writes Malcolm King.

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My InDaily stories in the last two years have sought to answer this question by exposing some of the state’s hidden social and economic dynamics.

I’ve unpicked the ABS unemployment methodology and found an economy riddled with underemployment, as thousands of men from the working and middle classes bleed out of the workforce.

The stories looked at how casualisation keeps the working poor, poor; how high commercial rents in a deflationary retail environment kill small business; why aged prejudice – against the young and old – is a knife in the back of our keenest and most experienced job seekers.

I examined how the exodus of young people since the late 1970s compounds a trenchant orthodoxy, as self-interest ossifies along generational lines.

This creates serious ‘knock-on’ effects, as ‘third class brains’ in the remnant managerial class try, and repeatedly fail, to tackle complex first world problems.

There have been positives too: Sanjeev Gupta bought the Whyalla Steelworks, saving thousands of jobs. The iron ore price recently bucked the downward trend and copper has been on the rise since October last year. That may be good news for mining jobs in 2019/20.

Elon Musk’s giant lithium-ion battery in the state’s mid-north is up and running. There are plans to build a 150MW solar thermal power plant near Port Augusta and a $450 million wind farm project on the Eyre Peninsula.

Energy is vitally important but the real story is jobs.

It was said that every family in England at the end of World War One, had either suffered the loss of a loved one or knew of a family that had. In SA, the hope-deadening hand of unemployment and underemployment touches all working and middle-class families or they know of families where it has.

Consider the claims by the State Government that Project X will create 1000 jobs or Project Y will create 500 jobs. These are called ‘generator numbers’ where full-time, part-time and casual jobs are rolled into one figure over the life of the project and then multiplied by a factor of five or 10. The figures are false.

Last December pollster Roy Morgan, who uses door-to-door surveys, pegged SA’s unemployment rate at 10.9 per cent and underemployment at 9.1 per cent. The ABS, which counts one hour of work per week as employment, had it at 5.9 per cent. The ABS methodology is valid but presents a false picture.

The state’s employment and unemployment problems can be summed up with two statistics from the ABS. From January 1997 to 2007 about 107,200 jobs were created in SA. From January 2007 to 2017, 62,800 jobs were created. Those 45,000 jobs have disappeared as large companies moved interstate, went offshore or closed down.

The government and ALP fellow-travellers deny these numbers and they’re not the only ones. Business reports from Deloitte, NAB, Bank SA and university think tanks all state the local economy is showing ‘green shoots’ and ‘climbing out into the light’.

Yet State Domestic Demand is sliding, 102,000 South Australians a year are queuing for food at Foodbank SA, more than 35,000 people cannot pay their electricity bills last year and white collar retrenchment is on the rise.

There must be disclaimers where there are financial relationships between the reporting organisation and the SA government. There’s no room for appeasers in the war against unemployment and poverty.

The ‘dumbing down’ of our children in public primary schools over two generations is a tragedy. The 2017 NAPLAN results showed SA was well below the national average in every test at every participating year level, with thousands of students wallowing below the national minimum standard.

SA has the worst decline in writing and the second lowest gain in numeracy of all the states. This has real social ramifications as students, like their parents, under-achieve. It kills human potential while creating ghettos of ignorance – dry tinder for inflammatory racist and right-wing ideologues.

We are being spoon-fed ‘happy face’ stories on the economy by lobbyists and much of the media.

Whenever someone does put a cogent and critical article about the state of the state, the internet arcs up with asinine comments such as ‘we’re not as bad as Western Australia or Queensland’.

WA at the height of the mining boom in 2011 had a GSP per capita of $82,653 per year compared with the national average of $57,925. Back then SA’s average yearly income per capita was about $46,000. Thousands of South Australians were employed in those mines.

Why look interstate for assurance that our problems, which have festered for 40 years, lack dimension? We don’t measure ourselves against the misery of others.

Much political discourse in Adelaide makes morning TV chat shows look like a debate between Bertrand Russell and Ludwig Wittgenstein. Apparently, the ALP is still a socialist party, the unions are to blame for the demise of Holden and local politicians are to blame for falling international currency rates. Ignorance reigns supreme.

We are being spoon-fed ‘happy face’ stories on the economy by lobbyists and much of the media.

The level of denial in Adelaide is pathological. The ‘denialists’ are like the dinosaurs, who at twilight’s last gleaming, watch as a colossal meteorite punches through the earth’s atmosphere. Their last thoughts are, ‘she’ll be right’.

No, it won’t. The table below is South Australia’s GDP as a per cent of national GDP (ABS 5220.0).

If the state’s production and tax base keeps shrinking and the rate of recurrent and non-recurrent federally-funded monies keeps rising, then South Australia might as well become an incorporated, wholly owned subsidiary of the Commonwealth Government.

The state can prosper but it must correct two serious defects that have plagued it for 40 years: educational under-achievement and atrophied thinking in the public and private sectors.

There is a sizable expatriate community of South Australians interstate and overseas, especially in Asia. These are young professionals who left Adelaide in the 1990s and 2000s, to climb the career ladder. They are armed with best practice, the latest capabilities and contacts.

We must bring them home and put them in leadership and managerial positions with salaries to match. Their mission is to clear the decks and reset the economy for expansion.

There will be tears as unproductive managers are sidelined and as program-blocking political cliques are vaporised. That will be the price to be paid to be competitive in the 21st century.

Malcolm King, an Adelaide writer, works in generational change and is a regular InDaily columnist.

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