The property industry is encouraging the Queensland Government to take action to close the gap on NSW, and establish the Sunshine State as the nation’s most attractive investment destination.
Property Council Queensland Executive Director, Chris Mountford, said that while Queensland’s population is once again growing at a faster rate, NSW and Queensland are diverging in terms of economic performance.
“With the NSW housing market coming off the boil, now is the perfect opportunity for Queensland to seize the economic initiative and entice new investment north,” Mr Mountford said.
New analysis, released by the Property Council ahead of 2018-19’s Mid-Year Fiscal and Economic Review, has revealed the changing attributes of both states’ economies.
Queensland’s population growth rate has retaken its traditional lead over NSW, after a two-year period of NSW strength.
Between September 2014 and June 2017 NSW’s growth rate exceeded Queensland – reaching a peak of 1.8%.
NSW’s rate of growth has now fallen to 1.4%, with Queensland reaching 1.7% in March 2018.
“Population growth has historically been the key ingredient to Queensland’s prosperity,” Mr Mountford said.
“What we saw over recent years was increased activity in NSW drawing people, investment and jobs south of the border.”
“While NSW enjoyed record high migration levels, Queensland was losing its competitive advantage.”
“The return of strong population growth in Queensland is very welcome and will drive stronger demand for goods and services and power the local economy forward.”
“As some of the heat comes out of the Sydney housing market, the challenge for Queensland policymakers will be to maintain this momentum and continue to attract new migrants.”
While population growth is back on track, NSW is continuing to outshine Queensland in relation to employment figures.
The gap between the two jurisdictions’ unemployment rates continues to diverge, with NSW now sitting at 4.4% unemployment nearly two percent clear of Queensland at 6.3%.
Queensland’s unemployment rate has remained fairly constant over the last three years, whereas NSW has fallen by over 1%.
“As more people move north, we must ensure that we’re creating enough jobs for them,” Mr Mountford said.
“The NSW unemployment rate continues to fall as the state enjoys the fruits of an infrastructure-driven boom, while Queensland remains far from the near full-employment enjoyed prior to the resources downturn.”
“Queensland needs to be doing all it can to support the private sector to create more opportunities.”
State Government infrastructure investment has been a major propellent of Queensland’s economic growth.
Between 1999 and 2014 Queensland invested a significantly higher proportion of Gross State Product in infrastructure development than NSW.
In recent years NSW has overtaken Queensland, with a substantial capital works program driven by revenue from asset leasing.
Based on economic outlooks provided in the latest budget papers, 2019-2022 will be the first four-year period in which NSW investment will be above Queensland as a proportion of GSP. NSW announced an $87.2 billion investment in infrastructure over the forward estimates, with Queensland delivering a $45.8 billion program.
“The key point of difference between the states recently has been infrastructure investment, with the NSW economy riding high from record investment programs and Queensland slipping behind with a sizable infrastructure deficit,” Mr Mountford said.
“The State Government’s investment in Cross River Rail is strongly supported by industry, but it is clear that fiscal constraints are hurting the Government’s capacity to fund other mid-range infrastructure projects.”
“Queensland’s fiscal balance sheet will need significant adjustment to facilitate any additional expenditure over and above current levels.”
Where to from here
Queensland’s property industry is calling on the State Government to utilise 2018-19’s Mid-Year Fiscal and Economic Review as an economic circuit-breaker, to establish the policy settings required to supercharge economic growth.
“Under the current policy settings, the gap between the Queensland and NSW only stands to widen over the long term,” Mr Mountford said.
“The fact that NSW is winning the economic game should sit uneasy with all Queenslanders.”
“If we are going to leapfrog NSW, the Government needs to commit to review and modernise Queensland’s property tax framework to make our state the most attractive investment destination.”
“The Queensland Government must also boost investment in infrastructure, and align it properly to land-use planning, to ensure we have the certainty required to draw more jobs, investment and economic uplift north.”
“A ‘business-as-usual’ MYFER response will only allow NSW to get further ahead.”
Source: Property Council of Australia