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Mass unemployment looms over Adelaide

By Malcolm King - posted Monday, 27 July 2015


While other states built modern, diversified and robust economies, South Australia debated, formed committees and engaged in endless rounds of self-reflection.

SA's net debt as a percentage of the state economy is 7.3 per cent - the highest in Australia with 8700 job losses in May and 6000 jobs in June.That's four times the number of jobs created by the state government since 2011.

Although why people believe the state government should create jobs is part of the problem. Here's the timeline from the ABC on the major job losses.

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Instead of attacking Asian markets after the State Bank collapse in the early 1990s, and bringing new expertise in to help rebuild the economy, SA did nothing. Now it has a projected debt of $14 billion. It's living off defence contracts and GST revenues from the other states, as unemployment soars.

The business community has become a hand fed arm of the state treasury. School children demonstrate more free will. Rent seeking lobbyists from the construction and building industries, are sucking expenditure from the body politic, even though there is a 20 per cent vacancy rate for D Grade office space (old or lower quality commercial buildings) and a prime office vacancy rate of 14 per cent.

Holden will close in 2017, if not before and the future of the Australian Submarine Corporation is in doubt. In the next five years, 15,000 jobs in the northern and western suburbs will disappear forever, hitting mainly men in their 40s and 50s. Half of them will never work again. Add another 5000 more if the ASC goes belly up. SA is heading towards double digit unemployment.

Rising endemic unemployment

I have written a number of articles on South Australia, examining various aspects of the economy. Some have accused me of 'talking the town down' - an anti-intellectual euphemism for publishing critical research and commentary.

It's a refrain reminiscent of the 1993 'SA Great' media campaign to boost South Australians' flagging self-confidence after the State Bank debacle. The TV ads showed shots of hard-working people giving viewers the thumbs up and telling them, "It's our state, mate."To attack the state was to attack the Festival of Arts, Coopers Ale or fritz. You were either with Premier John Bannon – one of the architect's of the state's demise - or you were against the state. If you want to know more about this technique, see Elisabeth Noelle-Neumann's 'Spiral of Silence' theory.

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There are now 67,000 unemployed and 85,800 under employed people subsisting in SA, with an extraordinary 22 per cent of the adult population welfare dependent. One in four job seekers are long term unemployed. According to the Commonwealth Department of Employment, long-term unemployment has doubled in SA since the onset of the GFC in 2008, rising to 14,800 in February 2015. More than a third (2,600) of this increase is youth (15-24 year olds).

Foodbank SA, the state's largest charity food organisation, is now supplying a record 7500 meals a day to battlers compared with 5800 in late 2013. It cannot cope with rising demand. Every month more than 8000 people (including 3000 children) miss out on a decent feed. This is the gathering storm.

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An edited version of this story appeared in InDaily.



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About the Author

Malcolm King works in generational workforce change. He was an associate director at DEEWR Labour Market Strategy in Canberra and the senior communications strategist at Carnegie Mellon University. He also runs a professional writing business called Republic.

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