The Queensland election this Saturday is one of the most fascinating state elections for a long while. The Newman government is in danger of losing, despite winning the last election with a 67-seat majority in a parliament with only 89 seats.
Three years ago, after being elected, the premier, Campbell Newman, set about following an austerity agenda that saw public service numbers drastically cut and public spending slashed. It was some very harsh medicine, and given the Queensland economy remains weak, Newman might have a tough time convincing voters he has the cure.
Queensland’s economy – like the state itself – is rather different to the rest of Australia. First there is the size of the place – something often forgotten by southerners.
No other state has cities as large as Townville and Cairns as far away from the capital city. To give it some context, Cairns is not that much smaller than Geelong, and yet rather being than just an hour’s drive from Melbourne, Cairns is about as far from Brisbane as Brisbane is from Melbourne.
Therefore services outside the capital city are much more important and challenging to deliver than in other states where outlying regions are far less populated (and thus contain far few voters).
The size of state brings with it a rather different economy to other states. Yes it is a mining state, but not really in the way that Western Australia is.
The mining industry accounts for about 30% of the WA economy, whereas in Queensland it accounts for only 9%. Queensland’s biggest industry in terms of output is actually the construction industry – it’s the only state where that is the case.
It was an economy that Campbell Newman decided needed to be run by a much smaller government.
He embarked on a series of austerity measures and is now campaigning to privatise a number of assets.
Newman’s Liberal National party (LNP) plan to lease its ports, power generators, and electricity transmission and distribution businesses for 50 years, with an option to extend, in the hope of using the proceeds to pay off some debt and to build infrastructure such as roads, rail hospitals and schools and for a “cost of living fund” which will be used to remove the cost of the solar bonus scheme from electricity prices.
Privatisation in Queensland – mostly due to fear in regional areas of a large drop in quality of services and a large rise in price – has had a history of being about as popular as poison. And certainly the Bligh government achieved that level of popularity when it privatised the Port of Brisbane Authority, Queensland Motorways, forestry plantations, the Abbot Point coal terminal and some of Queensland Rail’s rail lines.
The arguments for privatisation are quite contested – especially those related to the electricity generation and network. The belief that it will lead to lower prices seems a lot stronger in theory than it does in practice
But the Newman government also has to overcome the view that its cuts to the public service and overall handling of the economy have left Queensland in worse shape than it was three years ago.
The Commsec annual State of the States report for 2015 doesn’t provide much joy for the LNP.
It suggests that overall “Queensland remains close to Victoria in the performance rankings, retaining fifth position”.
The only points where the state seems to be doing well are in “equipment investment and overall construction work done” – a must for Queensland given the importance of construction to its economy.
But it comes in sixth “on the leading indicators of population growth and dwelling starts” and also, most damningly, “sixth on unemployment”.
Employment was set to be a huge election issue – and a key aspect of the ALP’s campaign. But then the December unemployment figures released two weeks ago showed a big drop in the state’s seasonally adjusted unemployment rate from 6.8% to 6.1%:
The seasonally adjusted measures of state unemployment are notorious for their wild fluctuations and they are ignored by anyone with any sense. Even the Queensland treasurer, Tim Nicholls, has in the past called the trend rate “more reliable”.
The trend rate stayed flat at 6.6%. But with the media all reporting the seasonally adjusted drop, the ALP big unemployment campaign was stymied.
But Queensland’s employment situation is not good. The 6.6% rate is the second worst on the mainland – only Victoria with 6.7% is worse. And over the course of the Newman government, Queensland’s unemployment has been worse than the national rate.
While the state had benefitted from investment and growth of jobs in the mining sector, in 2012 – the same time Newman moved to begin his austerity plan that saw government consumption and expenditure in infrastructure decline – the mining boom came off the boil:
It saw employment growth plummet during 2012 and stay low until mid-late 2013:
But the curious thing about Queensland’s resurgence of employment growth was that it was almost entirely a part-time employment growth:
Usually total and full-time employment grow around the same pace, and certainly in the same direction. But from the start of 2013, while full-time employment in Queensland stagnated or fell, total employment grew strongly – because of a growth in part-time employment.
The bad news for Newman is even this growth has now dimmed. Queensland’s employment growth in the past 12 months is second worst only to South Australia, and similarly second worst over the past three years:
It’s not a picture that suggests the austerity measures have produced wonderful economic gains. The limited employment growth that Queenslanders experienced was short-lived and mostly for part-time work only – hardly the thing that is promised when politicians tell voters that the pain will be worth it.
The LNP is still the favourite to get over the line on Saturday, but if it does, it won’t be because of any great economic performance that has been achieved in the past three years. Thus far, for Queensland workers it seems all pain, no gain.
