Mass unemployment stalks South Australia

South Australia is irrevocably moving towards massive unemployment and under employment, the likes of which no Australian state has suffered since the Great Depression.

Even without the fall of Arrium, Holden and the automobile manufacturing supply chain, unemployment in SA will hit 10 per cent (ABS) in SA by 2020.

The rise of algorithms in administrative and production processes, the decline of manufacturing, the toxic and unethical practices of Adelaide's private recruitment industry and the rise of the Asian economies, are herding tens of thousands of South Australians into casual employment or long-term unemployment. Young people not locked in to mortgages are fleeing the state.

I left Adelaide in the 1980's and spent much of my professional life working in Melbourne and Canberra in the media, federal politics and as an academic. Upon returning to Adelaide in 2008, I found a retrograde economy and organisations almost bereft of modern practice.

No amount of state government spin - and there's plenty, bordering on severe delusion - no nuclear waste dump or armada of submarines, can help now. The time to act was 20-30 years ago.

Failure of the two party system

There is little difference between the state Liberal Party or Labor Party in SA. The two major parties are neo-liberal 'light'. In fact, the Liberals have left the field completely. The traditional tension between the ALP and the Liberals is a historical hangover from the days when political parties stood for something.

The real interest is the growing Xenophon constituency, who is sick of the SA Treasurer Tom Koutsintonis saying 'shop around' for cheap power retailers when power goes up ten per cent across the board. It is sick of the Royal Automobile Association (RAA) saying the same when petrol spikes 20 per cent across the state. They want action and they want it now.

NXT wants a return to a high tariff economy to protect local jobs for the 150,000 unemployed and under employed people in South Australia. This is a move towards nationalism and isolationism. On current polling in the next state election, NXT will become a third force in SA politics.

Deflation

Weak consumer demand across SA is driven by unemployment and under employment, debt and an ageing population, which forces prices down. When a person loses their job, the family suffers. When a 1000 people lose their jobs, everyone suffers. Because jobs are being lost and/or threatened wholesale, families and individuals are givingdiscretionary spending the flick.

In the June quarter, the national inflationrate fell to1.0 per cent,well below the Reserve Bank of Australia's (RBA) target inflation band of 2 to 3 per cent. The RBA recently cut the cash rate from 1.75 per cent to a historic low of 1.5 per cent.