Economic knives sharpening for Adelaide

Competition? No thanks

Earlier this year, cheapie Asian airline AirAsiaX, was hailed as a godsend by the state government as it will fly through Adelaide as part of its Asian leg. Unfortunately AirAsiaX had the audacity to run an advertising campaign, which encouraged Crow eaters to travel abroad rather than holidaying in Crow land. The SA government was not amused. Who would have thunk an airline would run a promotion like that? So I can fly to KL cheaper that flying to Kangaroo Island? That's called competition. The advertisements were quietly removed.

Power off

10,100 South Australian dwellings had their power disconnected because they could not pay their power bills from July 2013-July 2012. This is a jump of 50 percent from ten years ago (accounting for population growth). There are 643,889 occupied dwellings in South Australia, which means that 6.37 per cent of properties had their power turned off. This is an extraordinarily high figure for a state that claims to be progressive. It is indicative of larger and deeper structural problems.

Exodus costing SA millions

SA is losing more than 3000 residents each year. Lured by better job prospects, and a more cosmopolitan lifestyle in cities such as Melbourne and Sydney. Earlier this year, Census data collated by Adelaide University demographer Professor Graeme Hugo, showed that 59,222 people left the state between 2006 and 2011 - 9000 more than who came to SA over the same period. But this exodus rate has been going on since 1979. It's a guestimate but since then, Adelaide has lost 200,000 of its best and brightest to Melbourne, Sydney and offshore. Less than five per cent return.

Charles Landry, cultural planner and the state's second Thinker in Residence, estimated that of Adelaide's one million inhabitants, "perhaps 250,000 are underachieving". In his report Rethinking Adelaide: Capturing Imagination, he said that "Adelaide people with a high level of ambition find it hard to realise their potential. It feels as though the pool of risk takers and thinking people is too small to stimulate people to achieve more." The sociobiological results of this kind of thinking are not appealing.

A declining share of working age population will directly reduce the total size of the labour supply and it will indirectly affect the work force participation rate. That's a double whammy.The migration of young people is a major economic loss costing millions in lost revenue because the state is losing its future taxpayers. If the state loses people in there 20s - and that's often the case in SA - the South Australian taxpayer has funded their schooling. When it comes to those people paying back to the community by way of tax, it goes to Sydney or Melbourne instead.

An ageing population and slowing workforce growth means councils' ability to provide services will be outstripped by demand. An ageing community means fewer ratepayers, less taxpayers, less volunteers, less people to work with. For the first time in living memory, South Australia's population growth slipped below one percent (.9) as of March 2013.

The number of people in Adelaide aged 65 and over is set to double by 2050 to about 370,000 compared to 183,300 in 2011. The number of people aged 15-24 is expected to increase by about 23 per cent - to about 197,100 compared to 160,400 over the same period.

The youth flight and the ageing of the population will create some very serious 'knock-on' effects for the state but I will mention only one, and it is probably a minor effect. Pirating of staff will become intense. Businesses will notice a drop in performance and efficiency as staff leave for retirement or as young people continue to 'brain drain'. Pirating of human capital creates a ricochet effect through the political economy of organisations. Productivity falls away.

A fast cooking frog - newspapers