Economic blue skies ahead for NSW and VIC: Tourism, education, wealth management, gas, agribusiness
Economic blue skies ahead for NSW and VIC: Tourism, education, wealth management, gas, agribusiness; Australia may be the lucky country. But following the mining boom, NSW is poised to be the luckier state.
Tweet Topic Started: 8 Oct 2013, 08:04 AM (786 Views)
Australia may be the lucky country. But following the mining boom, NSW is poised to be the luckier state.
NSW is set to gain a disproportionate share in the next phase of Asia's economic boom because of its strength in five super-growth sectors forecast to be worth an extra $250 billion to the national economy over the next 20 years.
A report by Deloitte Access Economics says Asia's impact on Australia is changing in ways that play to NSW's economic strengths. Five key sectors - tourism, international education, wealth management, gas and agribusiness - are forecast to grow more than 10 per cent more quickly than the global economy over the next 20 years. Each of these sectors is bigger in NSW than in any other state or territory, making the next phase of the Asia boom a perfect fit for the premier state. NSW is "ready for take off", Deloitte Access Economics says.
State and federal governments face thorny policy challenges in at least two of the sectors identified in the report - gas and agribusiness. While NSW has significant gas reserves, there is considerable community opposition to the use of new extraction techniques. Opposition to the foreign ownership of farming land could also hamper the big investments needed if Australia is to make the most of Asian demand for its agricultural products and farming know-how.
For Australia as a whole, the five super-growth sectors could be collectively as big as the mining boom which has re-shaped the Australian economy in the past decade. But for NSW the five sectors outweigh mining by a factor of 2½.
"The next boom will be much better distributed than the last one and it is going to be in sectors where NSW has an absolute advantage," said the report's co-author, Chris Richardson.
Victoria's economic strengths will sweep it ahead in the next 20 years, positioning it to capture the demand from Asia's middle class for everything from better food to better education and better returns on its savings, a report by consultancy firm Deloitte forecasts.
The report, Positioning Australia for Prosperity? Catching the Next Wave, predicts that six ''super-sectors'' will grow faster than the rest of the global economy. It says Australia generally, and Victoria specifically, has unique advantages in almost all of them.
''The next wave of Australia's prosperity will come from sectors that are much more evenly distributed across Australia than the minerals are,'' co-author Chris Richardson told Fairfax Media. ''Asia's demands will widen out from iron ore and coal to a bunch of other things.
''The times will suit Victoria. It is superbly positioned to capitalise on Australia's next boom.''
The Deloitte report forecasts that around the world, six sectors will outpace other industries in growth over the next 20 years: gas, tourism, agriculture, health, international education and wealth management.
It assumes that Australia's world-class health system will remain focused on serving Australians, but sees the other five sectors as having strong export potential.
Five "super growth" industries could boost the national economy by $250 billion over the next 20 years.
Mining is expected to remain a major driver of prosperity, according to a new Deloitte Access Economics report released on Tuesday, with agribusiness, gas, tourism, international education and wealth management well-placed to join it.
In the third of Deloitte's Building the Lucky Country reports, co-author Chris Richardson says Australia's economy cannot be built solely on natural resources.
"The boom is slowing and our competitive advantage is being challenged," he says.
"It's all about catching the next wave. We need another wave - or several - to create a more diversified growth."
Australia already has a comparative advantage.
The report cites world-class resources in land, minerals and energy; proximity to the world's fastest growing markets in Asia; use of English as the world's business language; a temperate climate; and well-understood tax and regulatory regimes.
Agribusiness, gas, tourism, international education and wealth management offer high growth and could give Australia a further advantage as the global population grows, Asia's middle-class expands and cleaner energy is sought.
Global markets for gas, tourism and agribusiness alone are each expected to grow over the next 10 to 20 years at least 10 per cent faster than global gross domestic product at 3.4 per cent a year.
"Exceptional growth in these five sectors could add an additional $25 billion to Australia's GDP in 2033 or a boost of about one per cent to an economy turning over $2.6 trillion in today's dollars," Mr Richardson said.
He also expects a retreat in the Australian dollar to 80 US cents in the longer term will further help these sectors.
Deloitte chief strategy officer and co-author Gerhard Vorster said business has to take the lead in positioning Australia as a competitive global force in these sectors.
He said governments play a supportive role in managing the challenges of labour markets, providing more efficient regulation and tax regimes and a stable and clear set of policy rules for business.
"But ultimately, it is up to business leaders to put in the hard work."
Were facing the end of a never-before-seen mining boom and anything short of another ‘boom’ to balance the ledger would be inappropriate.
This country is skating on thin ice.
The positive pronouncements about the future of houses, services, construction and even the idea the mining boom isn’t really over after all (thanks to the new govt) seem like desperate attempts at diverting attention away from what’s ahead.
The US, Europe, Japan are all insolvent. Its no longer business as usual for any of them, we have free money trying to kick start moribund economies, and failing by all accounts.
We’ll all soon have to wake up to this very nasty fact.
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