Queensland: Who’s up for round two? Deloitte report
Queensland can surf the next boom tooDOWNLOAD
8 October 2013: Five super-growth sectors worth an extra $250 billion to the national economy over the next 20 years hold the key to Australia’s future prosperity, according to a new report from Deloitte. The report, entitled Positioning for Prosperity? Catching the next wave, is the third edition of the firm’s Building the Lucky Country series.
A companion press release considers the national impacts. However, Deloitte has also extended the analysis to each State and Territory. That work finds that Queensland was able to sell into the demands generated by burgeoning Asian prosperity over the past decade. However, those benefits were very sector-specific, concentrated on the State’s coal industry, whereas the opportunities on offer across the next two decades will play to Queensland’s strength across a range of sectors.
Queensland has been an outsize beneficiary of the rise of emerging Asia. The first decade of emerging Asia’s climb saw the latter become very commodity hungry, and that was great news for Queensland’s coalfields – this State had what the world wanted.
However, the State’s economy has cooled more recently, with the rise of gas as an alternative fuel and some slowing in the breakneck pace of China’s growth leading to tough times on the Queensland’s coalfields. Add in a phase of reining back earlier unsustainable generosity in State public sector spending, and overall growth rates in Queensland have been more modest of late.
“That has been something of a wake-up call for this State – we’re not used to being anything other than close to the top of the State growth leader board” said Deloitte Queensland Managing Partner, John Greig. “However, Queensland is very well placed to tap into the next round of opportunities opening up for the State’s businesses. Even better, there will be a range of opportunities on offer across a number of sectors, particularly in agribusiness and tourism, as well as resources, aligning with much of the Queensland Government’s four pillar approach to strengthen our economy.”
Central to the Deloitte report is a Positioning for Prosperity map, which assesses where the next waves of prosperity are most likely to come from by plotting expected average global GDP growth rates over the next 20 years against the level of Australian competitive advantage for each sector. Below are two versions of the map, one for Australia as a whole and one for Queensland.
The rise of Asia means that Queensland will remain a major beneficiary of the State’s resources. Even the recent moderation in coal prices doesn’t stop the State having a great future in selling into Asian demand for coal.
Yet there are even greater growth prospects on offer in gas. Rapid industrialisation has affected the air quality of Asia’s cities, and Queensland’s gas potential offers a clean and green alternative that’s already in high demand. That has underpinned massive development in Queensland in recent years. And while the politics of stakeholder management around future gas projects will doubtless prove challenging, the economics are very clear – gas offers the State the opportunity to turbocharge its growth in coming years.
However, the opportunities expected to be on offer extend far more widely than just the resources sector. Although the latter will remain central to Queensland’s ability to slipstream the rise of Asia, it will be the State’s strengths in tourism, agribusiness and in international education which may be the new growth drivers for the State over coming decades.
The starter’s pistol has already fired on this front. The Australian dollar is already well off its peaks, and has the potential to fall further over time. That makes Queensland Pty Ltd much more competitive on world markets than it has been for years. And at the same time as the falling $A is making us more competitive, Asia’s boom is changing – that continent is commodity hungry now, but its demand momentum will swing in favour of tourism, international education and high value farm products.
Queensland excels in all three of these areas.
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