State Economic and Social Indicators
9 March 1999
Wages And Prices
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
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
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
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.
- 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.
- 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 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
- 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
1995-96 to 1996-97, South Australia, Tasmania and the ACT recorded
less than one per cent growth, compared with three per cent for
- 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
- 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
- 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
- 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
- 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.
- 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
- 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.
- 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
- 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).