Lead Story
Issue No. 58 - April/May 2011
Mother Load
by Professor Richard Blandy
Overview
South Australia is in the middle of a two-year slump. The South Australian Government has clearly been forced to cut spending and sell assets because of straitened circumstances.
But, thanks to the likely 2012 start of the expansion of the huge Olympic Dam copper mine, the State and the Government’s fortunes are likely to take a dramatic turn for the better next year. History is repeating itself.
In 1845, a cash-strapped South Australian Government and a struggling State economy were saved by the discovery and development of the Monster copper mine at Burra. This century, a huge copper mine will save our bacon again.
Australians should never forget the intimate historical connection in Australia between mining booms and good economic times.
Table 1, below, summarises my views of the potential trajectories of South Australia’s, and Australia’s, economic activity over the next five fiscal years (as well as recorded outcomes for the 2008-09 and 2009-10 fiscal years).
The projections for South Australia assume that the expansion of Olympic Dam goes ahead in 2012 and that three Air Warfare Destroyers and twelve Future Submarines will be built at Osborne between 2014 and 2050.
National and international outlook
Australia’s rates of growth of GDP, and of employment, recovered rapidly in 2008-09 and 2009-10 from the effects of the Global Financial Crisis. Both are projected to return to pre-GFC trend rates of growth in the present financial year, notwithstanding the floods in Eastern Australia and the effects of Cyclone Yasi.
SA’s rates of growth of Gross State Product, and of employment, recovered strongly in 2008-09, but faltered in 2009-10 – and are continuing to falter (see Table 5, below) – compared with Australia’s as a whole.
SA’s GSP and employment growth ...
