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State Economic and Social Indicators
Tony Kryger
Statistics Group
9 March 1999
Contents
Major Issues
Introduction
Labour Market
Wages And Prices
National Accounts
Business Conditions
Financial Management
Export Orientation
Social
There is a striking diversity in terms of the level of
economic performance of the individual States and Territories. Northern
and Western Australia have generally performed significantly better than
southern and eastern Australia. This may be attributed to faster population
growth in the north and west generating larger markets and increasing
labour supply, an abundance of land and opportunities for the development
of export-oriented mining and agricultural industries, and the relative
unimportance of labour intensive manufacturing industries which as a sector
has been in decline.
Although it has the smallest economy, the Northern Territory
has performed considerably better than the national average. In the period
since 1993-94, the Northern Territory has experienced the highest rate
of economic growth and recorded the fastest increase in employment, motor
vehicle registrations and dwelling approvals of any State or Territory
in Australia. In 1997-98 the Northern Territory also had the lowest unemployment
rate and in 1996-97 (the latest period for which such data are available)
had the second highest level of business investment relative to the size
of its economy. On the negative side, however, the Northern Territory
has one of the highest levels of government indebtedness in the country.
The next smallest economy, the ACT, has not performed
nearly as well as the Northern Territory. The ACT has performed poorly
in terms of employment growth and economic growth over the reference period.
Dwelling approvals in the ACT have fallen steadily since 1993-94. In 1996-97
the ACT also had the lowest level of business investment in the country.
Areas in which the ACT has done better than most of Australia, however,
are lower unemployment and lower government indebtedness.
Of the States, the best performing economies are Western
Australia and Queensland. These States are characterised by small manufacturing
sectors, large export-oriented primary sectors and expanding tertiary
sectors. Economic growth rates recorded in each of these economies over
the reference period were considerably better than in any other State
of Australia. In addition, Western Australia has the highest level of
gross State product (GSP) per capita of all the States, the highest level
of business investment relative to the size of its economy and the lowest
unemployment rate of any State. Queensland has the lowest level of State
taxation and the lowest level of government indebtedness in the country.
Queensland also recorded the fastest increase in retail turnover over
the reference period.
The middle performing economies are NSW and Victoria.
The economic growth rate and ratio of business investment to gross State
product in each of these economies is behind that of Western Australia
and Queensland but significantly ahead of Tasmania and South Australia.
NSW has the highest level of average weekly earnings of any State but
also has the highest level of State taxation. Victoria's performance improved
significantly over the reference period, with (for example) motor vehicle
registrations and dwelling approvals growing faster than in any other
State and growth in retail turnover being second only to Queensland. Victoria
has substantially reduced its government debt over the reference period.
The worst performing economies in the country are Tasmania
and South Australia. Over recent years, these States have experienced
higher unemployment rates, higher average durations of unemployment and
lower labour force participation rates than any other State or Territory.
Economic growth rates and rates of business investment have also been
well below the national average. The performance of Tasmania and South
Australia over the reference period as measured by increases in motor
vehicle registrations and dwelling approvals has also lagged behind most
of the other States. Tasmania and South Australia are characterised by
high levels of government indebtedness.
The States and Territories were also compared across
a range of social indicators. In terms of population, the fastest growing
States over the reference period were Queensland and Western Australia;
the slowest growing State was Tasmania. Established house prices are highest
in Sydney and Melbourne and lowest in Hobart. Ability to finance a housing
loan on the other hand is hardest in NSW and Queensland and easiest in
the two Territories. With the exception of Tasmania, Year 12 retention
rates have fallen in all States and Territories between 1994 and 1997.
Utilisation of Medicare services is highest in NSW, followed by Victoria
and Queensland; the lowest utilisation rate is in the two Territories.
Statistics on victims of violent crime suggest that the safest places
in which to live are Victoria and Tasmania while the least safe places
are the Northern Territory, NSW and South Australia.
This is an update of a paper published
in January 1995. The purpose of the paper is to present a range of comparative
economic and social indicators for the States and Territories. Such information
is important because of increasing market attention to the economic performance
of individual States and because of the widening gap in the performance
of different parts of the country.
Annual data (either annual average or annual total) are
shown and cover a five year reference period, from 1993-94 to 1997-98.
Some tables also contain the latest monthly, quarterly or year-to-date
figures. Wherever possible, monthly data are shown in trend terms to eliminate
seasonal and irregular influences.
Indicators have been presented in such a way as to allow
comparisons to be made between the various States and Territories. Hence,
if an indicator merely reflects the size of a State economy (e.g. retail
turnover), then the basis for measuring State economic performance is
shown as the annual growth rate of the indicator. In some cases an indicator
has been presented as a ratio-such as employment to population or debt
to gross State product-to allow effective comparisons to be made between
the States.
It should be noted that each indicator measures only
one aspect of the economic or social performance of a State or Territory.
One must be careful not to infer too much on the basis of a few selected
indicators. For example, strong growth in motor vehicle registrations
and dwelling approvals is indicative, but not proof, that overall business
conditions are good.
At the beginning of each section of the paper a State
ranking table has been prepared. The table ranks each State across a range
of indicators according to whether it has performed better or worse than
the other States. The latest available information is used for each indicator.
Note that the table excludes the ACT and Northern Territory for the reason
that information is not always available for the Territories. Moreover,
as the Territories are significantly smaller than the States, large percentage
movements in an indicator can often result from small absolute changes.
This severely distorts comparisons with the States and for this reason
also the Territories have been excluded. There are, however, many instances
where comparisons between the States and Territories are possible and
these are included elsewhere in the paper.
This publication draws on material contained in Bureau
of Industry Economics, State Economic Performance, 1981-82 to 1991-92
(Occasional Paper 19). Readers are also referred to an article by Frank
Neri, 'The Economic Performance of the States and Territories of Australia:
1861-1992', The Economic Record, vol 74, no. 225, June 1998. For
a comparison, across jurisdictions, of government performance in the provision
of services such as education, health, housing, etc., see Steering Committee
for the Review of Commonwealth/State Service Provision, Report on Government
Services, 1999.
Selected Features
- In the period from 1993-94 to 1997-98, annual average employment in
Australia grew from 7.8 million to 8.5 million persons-an increase of
more than 9 per cent. The majority of States recorded strong (Northern
Territory, Queensland and Western Australia) or moderate (NSW and Victoria)
employment growth over the period, while growth was extremely weak elsewhere.
In recent years, employment in South Australia and Tasmania has fallen.
- Although NSW has more employed persons than any other State or Territory,
it has a low ratio of employed persons to working age population. The
highest employment/population ratios are to be found in the two Territories,
Western Australia and Queensland. This is no doubt a reflection of the
relatively young age structures of these States and Territories. Tasmania
is the only State in which the employment/population ratio in 1997-98
was lower than it was in 1993-94.
- Unemployment in Australia fell 16 per cent from 916 000 in 1993-94
to 768 000 in 1997-98. Significant falls were recorded in NSW and
Victoria, down 22 per cent and 24 per cent respectively over the period.
Since 1995-96, unemployment has been rising in Tasmania and South Australia.
- For several years, Tasmania has recorded the highest unemployment
rate of any State or Territory in Australia. At January 1999 it was
10.2 per cent compared with an Australian average of 7.5 per cent. The
next highest rate was 9.3 per cent in South Australia. The unemployment
rates in Western Australia and the two Territories have consistently
been very much below the other States. Significant reductions in the
unemployment rate in NSW and Victoria have occurred since 1993-94.
- Not surprisingly, those States with high unemployment rates also have
relatively high numbers of persons who are long-term unemployed. Hence,
43 per cent of all unemployed persons in Tasmania in December 1998 and
37 per cent of all the unemployed in South Australia were long-term
unemployed. This compares with 32 per cent for all Australia. Western
Australia has significantly reduced the number of its long-term unemployed-down
from 30 per cent of all unemployed persons in 1993-94 to 22 per cent
in 1997-98. Similarly, in Victoria the proportion of long-term unemployed
over this period has fallen from 40 to 33 per cent.
- The mean duration of unemployment for all Australia at December 1998
was around 55 weeks. This masks a considerable spread in the mean duration
from 38 weeks in Western Australia to more than 80 weeks in Tasmania.
- The Australian labour force grew by 6.6 per cent between 1993-94 and
1997-98. It grew at almost twice this rate in Queensland and one and
a half times this rate in Western Australia. Tasmania is the only State
in which the labour force did not increase in size over the period.
- The labour force participation rate is highest in the two Territories,
followed by Western Australia and Queensland (all above the Australian
average). The rate is lowest in Tasmania and South Australia. These
rates reflect both the age structures of the States and Territories
and the condition of their economies.
- The number of unemployed persons per job vacancy improved greatly
from 21 in 1993-94 to 13 the following year, remained stable for two
more years and then fell to 11 in 1997-98. All States and the Northern
Territory have recorded significant improvements in their unemployment
to vacancy ratio since 1993-94. The deterioration that has occurred
in the ACT is a reflection of cutbacks in the Australian Public Service
and its flow-on effects to the rest of the community.
- With the exception of an upturn in 1995-96, industrial disputation
in Australia has remained fairly stable over the past few years, averaging
between 80 and 90 days lost per thousand employees per year.
Selected Features
- Average weekly earnings have consistently been higher in the ACT than
elsewhere in Australia and this is attributed to its large professional
workforce (one-third of the ACT workforce is professional compared to
one-quarter for all Australia). At $861 per week in August 1998, average
weekly earnings in the ACT were $125 higher than the Australian average
and $168 higher than the lowest earning State of South Australia. The
ACT, NSW, Northern Territory and Western Australia are all characterised
by earnings figures that for a number of years have been above the Australian
average.
- Average annual inflation rates rose across all capital cities in the
period 1993-94 to
1995-96, falling sharply in the two years following. The average annual
inflation rate for all capital cities in Australia in 1997-98 was zero
per cent. This was made up of small increases in Sydney and Brisbane,
and small decreases in all other capital cities.
Selected Features
- NSW and Victoria have significantly larger economies (measured in
terms of their gross State product) than any other State or Territory
in Australia. The next largest State, Queensland, is less than half
the size of NSW and less than two-thirds the size of Victoria. Since
population size is a major contributing factor to the size of each State's
economy, it is more appropriate to compare States on the basis of their
gross State product per head of population (a reasonable proxy for average
living standards). On this basis, living standards are highest in the
ACT, followed by Western Australia, Victoria, the Northern Territory
and NSW.
- Economic growth (or the increase in gross State product at constant
prices) since 1993-94 has been quite strong in the Northern Territory,
Western Australia and Queensland. Growth has been moderate in NSW and
Victoria but weak elsewhere. In the period
1995-96 to 1996-97, South Australia, Tasmania and the ACT recorded less
than one per cent growth, compared with three per cent for Australia
overall.
Selected Features
- Retail turnover in Australia increased by 23 per cent from $110 billion
in 1993-94 to $135 billion in 1997-98. Most States and the Northern
Territory recorded a rate of increase about equal to or in excess of
this amount over the period. The exceptions were the ACT (19 per cent),
Western Australia (18 per cent) and Tasmania (11 per cent).
- Following two years of fairly weak growth, motor vehicle registrations
grew very strongly in all States and Territories in the period 1996-97
to 1997-98. Rates of growth ranged from 12 per cent in Tasmania to 20
per cent in South Australia and 49 per cent in the ACT.
- Dwelling approvals slumped dramatically across all States and Territories
in the period from 1993-94 to 1995-96. Approvals rose again after 1995-96
except in Tasmania and the ACT where they continued to fall. Only the
Northern Territory and two States, NSW and Victoria, had more approvals
in 1997-98 than was the case in 1993-94.
- Australia-wide, the level of bankruptcies rose significantly from
14 166 in 1993-94 to 24 408 in 1997-98, or an increase of
72 per cent. The largest increase in bankruptcies occurred in Queensland-up
143 per cent over the period. In the period 1996-97 to
1997-98, bankruptcies rose by between 15 and 20 per cent in NSW, Victoria
and Queensland, recorded no change in Western Australia and fell in
South Australia and Tasmania.
- Business investment measured as a per cent of gross State product
(GSP) has consistently remained higher in Western Australia than in
any other State or Territory of Australia. In 1996-97 it measured 14
per cent of GSP compared with 11 per cent for Australia as a whole.
Above average business investment figures in 1996-97 were also recorded
in Queensland, Victoria and the Northern Territory.
Selected Features
- State taxes per capita rose in all States and Territories between
1993-94 and 1997-98, the largest increases occurring in the Northern
Territory (up 40 per cent), NSW (up 27 per cent) and South Australia
(up 24 per cent). The lowest increase was recorded in Victoria-up 11
per cent.
- The two largest States-NSW and Victoria-are the heaviest taxing States,
raising $2375 and $2113 per head of population in taxes in 1997-98.
The lowest taxing State is Queensland, raising only $1576 per head in
1997-98.
- All States and Territories decreased their overall debt levels between
June 1994 and June 1998. Victoria recorded a dramatic fall in its net
debt position from $31 billion to $2 billion over the period. State
debt also fell significantly in Queensland which went from a net debt
of $2.5 billion at June 1994 to a net credit of $4.1 billion at June
1998.
- Net government debt as a percentage of GSP expresses the debt burden
carried by each State. In this respect, the most debt ridden area is
Tasmania, with a debt to GSP ratio in 1997-98 of 27 per cent. High debt
to GSP ratios were also recorded in the Northern Territory and South
Australia with ratios of 20 and 17 per cent respectively.
- In 1997-98 the Northern Territory was the only jurisdiction to have
an underlying budget surplus. Relative to its population size, Western
Australia in 1997-98 had the highest underlying budget deficit, followed
by South Australia and the ACT.
- While currently the Commonwealth has access to the major sources of
revenue (income tax; sales tax; and customs and excise duties), the
States and Territories have to derive their revenues from a much smaller
tax base (payroll tax, stamp duties, business franchise fees, land tax,
taxes on motoring and dividends from their trading enterprises). Consequently,
the States and Territories are very reliant upon Commonwealth financial
assistance, although some States are more reliant than others. In 1997-98,
NSW was the only State to raise more than 60 per cent of general government
revenue from its own sources, the balance taking the form of Commonwealth
grants. The Northern Territory was the most dependant jurisdiction,
raising only 23 per cent of revenue from its own sources.
Selected Features
- Exports (not interstate trade) from Western Australia accounted for
26 per cent of Australia's merchandise exports in 1997-98, followed
by NSW at 22 per cent, and Queensland and Victoria at 19 per cent and
18 per cent respectively. The absence of service exports from these
figures is likely to understate the export earnings of NSW which has
the largest services sector of any State, and Queensland which, with
NSW, is a popular destination for overseas tourists.
- The export to GSP ratio is a measure of the export orientation of
an economy. On this basis, the most export oriented economies are Western
Australia, which exported 42 per cent of its output in 1997-98, the
Northern Territory which exported 22 per cent and Tasmania and Queensland
which each exported 20 per cent of their output. Apart from the ACT,
which has negligible exports, the most inward looking economy is NSW,
followed by Victoria and South Australia. Significantly, the most export
oriented economies are those with relatively large primary sectors,
while the more inward looking economies are those with relatively small
primary and large manufacturing and service sectors.
Selected Features
- Population growth in Australia has remained fairly
steady over the past few years averaging around 1.2 per cent per year.
The fastest growing States are Queensland and Western Australia while
the slowest growing States are Tasmania and South Australia. Tasmania
has recently experienced a slight decrease in its population number.
- Established house prices in Sydney are considerably
higher than in any other capital city of Australia. Averaging $260 000,
house prices in Sydney at September 1998 were $69 000 higher than
the next most expensive city of Melbourne. House prices in Sydney and
Melbourne have also increased faster than in any other city, thus widening
the differential between these two cities and the rest of Australia.
- The home loan affordability indicator measures
the relationship between median weekly family income and average monthly
home loan repayments on new loans. The indicator reveals that houses
are least affordable in NSW, followed some distance behind by Queensland.
Houses are most affordable in the two Territories.
- With the exception of Tasmania, school retention
rates to Year 12 fell in all States and Territories between 1994 and
1997. Australia-wide retention rates fell from 75 to 72 per cent over
the period. Retention rates in the ACT exceed 90 per cent and have consistently
been higher than anywhere else in the country. High retention rates,
in excess of 75 per cent, have also been recorded in Queensland and
Victoria. South Australia experienced a dramatic reduction in its retention
rate from 82 per cent in 1994 to 67 per cent in 1997.
- Utilisation of Medicare services by Australians
has gradually crept up from 10.1 services per head of population in
1993-94 to 10.8 in 1997-98. The people of NSW make the greatest use
of Medicare services, followed by the people of Victoria, Queensland,
South Australia, Tasmanian and Western Australia. The people from the
two Territories are the lowest users of Medicare services. These figures
reflect in large part the different age compositions of the States and
Territories.
- In 1997 there were 867 victims of violent crimes
(defined as homicide, assault, sexual assault, kidnapping/abduction
and robbery) per 100 000 of the Australian population. Of the States
and Territories, the Northern Territory had the highest figure (1548)
followed by NSW (1175) and South Australia (1100). Figures for Victoria
and Tasmania were markedly lower than elsewhere (481 and 491 respectively).
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