Why Adelaide Is On A Downer


Legend has it that the great blues guitarist Robert Johnson sold his soul to the devil at a country crossroads for fortune and fame. Adelaide is at a crossroads too but its blues are debt and recession.

Adelaide faces the type of problems that confront many mid-sized cities across the western world. There’s tension between those who fear development will rob their city of its charm and lifestyle and those who embrace globalisation.

But the real fight is for jobs — to create them and hold on to them. Global economic forces, like a mastiff’s jaws, are shaking large sections of the Australian labour market and South Australians are feeling the maul.

More residents are leaving South Australia to live interstate than at any previous time. ABS figures state that in 2009-10 about 1000 croweaters moved to Melbourne alone, mainly in the 25-29 age group and the exodus is rising. Since 1971/72, there have only been four years when more people intra-Australia moved to South Australia than left. See the table below for an indication of net overseas migration gains in selected states.

Source: ABS Traveller Characteristics Database and ABS Migration Australia (cat. no. 3412.0)

About 30,000 working age people have left Adelaide over the last 10 years out of a working population of 500,000. That’s a big chunk out of the hull of the local economy. While new migrants arrive, many are on temporary visas or can not get jobs because they are not Australian citizens.

South Australia has record public debt levels. $2 billion of the debt will build a new hospital in the CBD. The debt to revenue ratio is worrying and GST revenues dropped in 2011 by $2.8 billion.

When BHP pulled out of the $30 billion Olympic dam development north of Adelaide recently, it killed off about 5000 potential jobs. Yet The Advertiser ran "don’t worry, be happy" stories which showed people celebrating local icons such as Farmers Union iced coffee and Coopers Ale. You wouldn’t find that in any other Australian capital city newspaper.

The Advertiser has excellent (over-worked) journalists but the pitch of the paper is so low in the market, except for the business section, that you need to decompress after reading it. It also has two opinion writers hired from the cackling cauldron of FM morning radio who simply cannot write. The newspaper badly needs to change its news values and market pitch before it suffers the fate of Channel Ten.

Channel Ten news is providing slapstick entertainment bordering on the surreal. When my young relatives ask me what LSD was like in the early 70s, I tell them to watch Channel Ten news. It lacks context, logic or reference and it repeats itself every 15 minutes. With this sort of news, you’d be better off asking your neighbour what’s going on. There are only a few journalists who are accurately reporting state economic matters and even fewer who can translate this in to human terms.

Alexander Downer recently claimed that South Australia had plenty going for it but he had reservations.

"The trouble with South Australia is it has become frighteningly complacent. There isn’t a battle of visions and ideas, just a bunch of Jeremiahs telling anyone with a commitment to progress why it can’t be done … The sad Olympic Dam decision may, at last, wake us up and remind us that societies without progress just wither and die," Downer said.

When privileged Tories start to complain, you know things are grim.

From the very beginning South Australia was unlike other states. They were descended from middle class free settlers from the UK who began arriving in the 1830s. Edward Wakefield, the man who planned Adelaide, did so from Newgate Prison, having copped a three-year sentence for abducting a schoolgirl heiress. From its conception, the City of Churches was different.

Today there is a stalemate between business developers and the conservation and heritage movements, who have turned environmental progressivism into an anti-growth campaign. Developers retaliate and lambast the state government or the Adelaide City Council for listening to feral hippies. Yet the anti-development movement has popular support.

South Australia last year closed its overseas trade offices causing a loss of face in Asia. The state’s exports fell 9.5 per cent during 2012, posting the nation’s worst performance. The state government also plans to effectively close down Education Adelaide in 2015. The agency is responsible for promoting the state to overseas students. These two facts are symptomatic of a government floundering. Unfortunately, the Liberal Opposition is currently not fit for government.

Food prices in Adelaide are 15 per cent cheaper than in the eastern capital cities. Houses in South Australia are about 20 per cent cheaper than in Sydney and skilled labour is plentiful although the state has an indifferent record on up-skilling.

Adelaide businessmen and women are much tougher than their eastern states counterparts. They have to be because they are bound by so much state government red tape and taxes. Just to trade on requires a superhuman effort.

Adelaide has an ageing population and a declining manufacturing sector. President John F. Kennedy said a rising tide floats all boats. But if a short painter ties the boats to the wharf, then a falling tide will sink all boats. Too many South Australia businesses are still tied to 1980s thinking. The real growth industry in Adelaide is aged care.

The Boomer retirement cliff in Adelaide will drop state productivity by about 1 per cent over 20 years but the real problem will be finding staff for small businesses and the corporate sector on current population growth rates.

Adelaide is getting a taste of what has been happening in America over the last 15 years. People are moving from the east coast to the South, Southwest, and Far West of the US in search of jobs.

The residents of Flint in Michigan, Cleveland in Ohio and Rochester in New York, are battling brain drain, falling populations and contraction of their traditional manufacturing bases. Those cities have failed to make the transition from a manufacturing-based economy to a service-based economy and the deserted city blocks — even before the GFC — tell a story of urban decline.

Adelaide has much to recommend it. It has a functioning port and an excellent rail link to Darwin. Indeed, there are early signs in Port Adelaide that they have learnt from previous development mistakes and are working to create a balance between resident, business and environmental issues.

Adelaide needs to produce high end manufacturing goods as well as bio fuels, specialist international education (allow the graduates to stay) and increase food production to Asia. But to do that, you need highly skilled people with national and international experience. You also need to change the nepotistic recruitment practices.

The continual leaching of some of Adelaide’s best brains and entrepreneurial spirit is dangerous. These people start up companies, they invent new technologies and contribute to the intellectual and culture life of the city. Adelaide’s future is at a crossroads. The future does not lie in whining or endless consultation but in direct action born from necessity — and it needs to happen now.

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