Youth exodus bedevils Adelaide's economy

South Australian 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. Education Adelaide has been extraordinarily successful in bringing overseas students to the City of Churches.

Adelaide has some great selling points. Food prices relative to Sydney and Melbourne are about 15 per cent cheaper. Houses in South Australia are about 20 per cent cheaper than in other capital cities except Hobart. A new three-bedroom house 25 kilometres north of Adelaide (a 40 minute drive) would set buyers back about $320,000. In Sydney, they would pay $700,000.

The only daily newspaper is the News Ltd owned, The Advertiser. Like newspapers around the world, it is dropping in circulation (The Sunday Mail dropped 4.6 percent in the last 12 months). The Advertiser desperately needs competition and to start motivating people to debate some of these serious economic issues.

The Advertiser has some excellent journalists and its Business section is first class. The reporters have been let down by the editorial pitch of the paper. The confected conflict and impact stories are 'so yesterday' that young readers have stopped reading printed news. The large media providers have pitched the news so low in the Adelaide market, that no one of average intelligence can tolerate the insult without having a brain hemorrhage.

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 neighbor what's going on.

I call a lack of industry diversity or a large ageing population, 'tide problems'. They manifest themselves over long time periods. For example, SA's manufacturing sector has been contracting for more than 20 years and the Boomers are only now reaching retirement age. Both of these factors will need to be accounted for in terms of declining tax revenues.

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. Unfortunately too many South Australia businesses are still tied to the wharf. The Boomer retirement cliff in Adelaide will drop productivity by about one per cent over 20 years but the real problem will be finding staff for SMEs and the corporate sector on current population growth rates.

According to the ABS, more residents are leaving South Australia to live interstate than are arriving. About 3,000 'croweaters' left between June 2009 and June 2010. This has been the average departure rate since 2000.

That's about 30,000 people not replaced over the last decade from a working population of around 500,000 people. While some might be retirees, the bulk is young people in their late teens, 20s and 30s. That's a corrosive working slowly on the hull of the local economy.

Since 1971/72, there has only been four years when more people have moved to SA than left.

Net overseas migration gains – selected states