Adelaide is dying

In the movies, we want the hero to win. Likewise, we believe that western cities will always thrive. But what happens if over 40 years, the best and the brightest minds leave a city; if laziness, nepotism and incompetence rules?

What happens if the business sector is addicted to government handouts and if the media becomes jaded and partial? What if the senior public service operates like a blundering colonial squattocracy addicted to perks?

This story is about Adelaide and it is dying.

Back in 2014, I had left the Department of Employment in Canberra and returned to Adelaide. I started seriously looking at Adelaide's economy. I was motivated by two factors. One was to question why international bands were bypassing Adelaide (a story in itself) and a quote from a former Adelaide Thinker-in-Residence, Charles Landy.

"Decline mostly takes time and happens by imperceptible steps. Each small moment in itself does not matter, but when the steps are taken together it matters dramatically … Adelaide must avoid this fate… It will do so only if it recognises there is a crisis, even though it mostly does not feel like one."

Behind the smiley face Festival of Arts and wine stories, I uncovered alarming statistics - none of which were reported in the local media - which showed serious economic decline, not only in relative terms but in absolute terms.

Thousands of people have been thrown out of secure full-time work and into precarious employment or underemployment. Much of this is hidden by the old-fashioned ABS methodology.

Roy Morgan conducts door-to-door surveys, which shows SA's unemployment rate at about 9 per cent (not 6.3 per cent as per ABS) and under employment around 11 per cent (Morgan).

The workforce is being carved to pieces due to unrelenting economic contraction.

Gross State Product (GSP) is the total value of goods and services produced in a financial year. The above graph plots the state's economic decline. The 2007-08 blip upwards is the Federal Government pump-priming the national economy during the Global Financial Crisis.

In the last five years, more than 1500 SMEs have closed. I have included a very small sample below.

Hassell (leaving Adelaide) Edit Salon, Hills (OSullivan Beach), Emerald Custom Homes, D&C Homes, Edit Super Salon, Coast to Coast Homes, Brand SA, Hillgrove Copper Mine, Phil McMahon Real Estate, Unique Urban Built, Clevertar (in administration), Bradken Foundry, Cubic Homes, JML Home Constructions, Yeoman & Haskell (kitchens), ABF Solutions, Feast! Fine Foods, Carter Holt Harvey (Nagwarry), OAS Group, Platinum Fine Homes, Coca Cola Amatil (production), Hydro Services SA, Paesan Cucina, Red Door Bakery, San Churro, Chocolat, Panoramic Homes, Champion Travel, J&H Williams, McCoys Services, Curious Squire, Hummingbird Homes, Adelaide Central Electrical, Dowling Homes, Whistles Clothing, Inghams (McLaren Flat), Accolade Bottling Plant (Reynella), Sanitarium (production), Archer Hotel, Trident Tooling, Bridgestone (production), Autodom, Carr Components, RPG Group, Bridgestone, Clyde-Apac, Priority Engineering Services, Krome Studios, Modular Furniture, Sheridan, ADCIV, PSG Elecraft, Tenneco (Walker Exhausts), Mary Martins, Henry Austin (restaurant), Qantas catering, the Port Lincoln Tuna Cannery, Red Ochre construction, Angas Park, Marshall Thompson Homes, Big Star Records, Heading Contractors, McCain Foods (Penola), Hills (Antennas), Bowland, Linke Contracting (Barossa), Leane Electrical, RS Burbridge, LeCornu, Charter Construction, Mid Coast Surf, Kitchen Connection, St Morris Home Timber & Hardware, and many, many more.

This is indicative of major ongoing contraction in SA's economy and labour market.

Adelaide is also mind-manacled by dire sociological problems.

Greater Adelaide's population is barely growing at 8000 people per year, according to the ABS. The good news is that only 5200 people left the state in 2018-17, compared to more than 7000 the year before.

The bad news is that these figures rely on departing individuals notifying Medicare of a change of address. The true number of emigrates is closer to 9000 per year. Less than seven per cent return and of those, four percent leave again.

Last year, South Australia lost a House of Representatives seatdue to falling population. This is very dangerous because the state gets almost 50 per cent of its monies from Federal Government coffers. Diminished representation holds the threat of diminished revenue. The Marshall Liberal government is trying to raise unpopular taxes to fund budget shortfalls.

The flight of human capital has created a closed system, driving an extraordinary decline in organisational standards. A lack of new thinking in Adelaide's public and private sector organisations, has led to staff and group regression, bullying, white-anting, nepotism, blame shifting, groupthink and passive aggression. It's a graveyard for the entrepreneurial mind.

To compound this blight, private recruitersare eliminating candidates of merit, because they're perceived to be "too old" or else they have international or interstate qualifications and experience, and therefore pose a threat to their immediate senior reports.

If they do land a job, they're confronted with the fallout of 40 years of inaction and comments such as, "but this is the way we've always done it". They stay less than a year or two before hightailing it to organisations operating in the 21^st century.

Considering these factors, is it wise to build Australia's new submarine force at a cost of $50B in Adelaide? While the state has excellent tradesmen and women, it is utterly bereft of competent mid-level and senior managers. You can't grow flowers in a desert.

The media

I used to joke that The Advertiser was conducting a sociological experiment on what's left of its readership.Its boosterism does not refer to any independent economic indicators, indexes or external measures of well-being. This is par for the course.

Spare a thought and pass the Xanax as print journalists battle cognitive dissonance. They must produce stories based on a contrived and relentless optimism, but also report real news about South Australian families imploding due to unemployment, under employment and soaring divorce, debt and suicide rates, as petrol prices rise and power bills soar.

There's a historical analogy for the plethora of 'happy face' stories in Adelaide. In the 1960s, the US Secretary of Defence, Robert McNamara, introduced 'war by statistics'. Every military action was measured in terms of killed or missing Viet Cong guerrillas, across a raft of nonsensical indexes. Quantification was used to measure the progress of the war and to pacify American citizens. It was an abject failure.

The same bogus methods are used to pacify South Australia's citizens.

Before I left Adelaide, I tried and failed to get researched and sourced stories placed in the local print media. These included the role the Shop, Distributive and Allied Employees Associationand the Catholic Church play in the Labor Party, the extraordinary power large consultancy groupssuch as Deloitte and KPMG have in the state, and the true number of Holden workers who found ongoing work after the closure (it's about 35 per cent not 80 per cent).

These stories challenged the networks behind Adelaide's status quo. Some editors seethed with thin-skinned anger, incensed that I should question their mole-like news sense.

Young people

The real victims of Adelaide's fall will be young people. Around 1978, the first major exodus of young people moved to Melbourne and Sydney. Unfortunately, many large corporate headquarters followed them.

Today, less than half of 25-34-year-olds own their own home, compared with 61 per cent back in 1981, according to the Australian Housing and Urban Research Institute.

The competition for graduate jobs is worst in South Australia, with 46 university graduates fighting for each job.

According to the Commonwealth Department of Education and Training, there were 11,895 domestic bachelor degree graduates from the three major South Australian universities in 2016. Including postgraduates, this figure rose to a whopping 19,680 graduates.

Many students do find a job two or three years after graduating but it's not the same as career-targeted employment. Some are graduating in to poverty.

I've never seen so many systemic blockers to progress. Adelaide people are fighters but they're not given a chance. The combination of an unrelenting economic spiral downwards and a raft of punitive psycho-social factors, is pauperising them.

As Landy wrote, "Decline mostly takes time and happens by imperceptible steps … but when the steps are taken together it matters dramatically…"

Australians can be so smug when we see the economic problems of our South Pacific neighbours. Yet in our backyard, Adelaide is an economic 'shame job', worthy of international attention.