SA needs to avoid another State Bank-style population exodus

Tuesday, 12 April 2016

South Australia must be careful to avoid more working families and young people from departing the State, and may need to rely more heavily on overseas migration to boost skills levels in an ageing population.

That's according to the South Australian Centre for Economic Studies (SACES) at the University of Adelaide, which has produced an Economic Issues paper on the age structure of South Australia's population and its impact on the economy.

"The age structure of the State's population and workforce is currently a very strong impediment to economic growth," says Associate Professor Michael O’Neil, Executive Director of SACES.

"South Australia is still feeling the effects of interstate migration and skills loss following the combination of the State Bank collapse and the restructure of the manufacturing sector in the 1980s and '90s. This was a time in which a number of headquartered companies and major offices of other companies were shut down, and a wave of manufacturing enterprises also closed their doors," he says.

"As a result, there was a sharp decline in population growth over the following decade. Most notably, young people and young families left the State from 1993-2002, adding to other states' younger populations and depleting our own."

In the 33 years from 1981-2014, South Australia's population grew by 350,000 or almost 27%, less than Victoria (46%) and less than half the rate of the nation as a whole (55%).

The paper shows that:
• South Australia's workforce across the ages of 15-64 is growing at half the national rate and well below the rate of Victoria;
• The absolute number of younger people who are potentially 'economically active' and contributing to the State is less now than it was in the early 1980s, and their share of population has declined;
• South Australia has a lower average employment-to-population ratio, with 58% of the population employed, beneath both Victoria and the nation;
• The number of South Australians aged 65 years and older who are not in the labour force has increased dramatically, from just 16% in 1981-82 to 26% in 2013-14.

"These figures represent a real challenge for our State, as they suggest our economy is not creating enough employment opportunities, which impacts on the level and growth rate of Gross State Product," Associate Professor O’Neil says.

"All economic analysis shows that increases in the population – and especially of young people and young families who are well educated – adds to economic growth through their consumption expenditure. Faster population growth adds demand for housing, schools, retail, household consumption expenditure; employment is generated through these private and public investments.

"Skilled migration is one important option for our State. While immigrants benefit from their employment in Australia, the Australian population as a whole benefits from their contribution to the economy."

Associate Professor O’Neil says South Australia has had a positive trend in net migration over the past 10 years. "Efforts focused on boosting skilled migration and reducing interstate migration will be greatly needed if South Australia is to be successful in boosting its economy," he says.


Contact Details

Associate Professor Michael O'Neil
Executive Director, SA Centre for Economic Studies
The University of Adelaide
Business: +61 8 8313 4545
Mobile: +61 (0)408 812 032

Mr David Ellis
Deputy Director, Media and Corporate Relations
External Relations
The University of Adelaide
Business: +61 8 8313 5414
Mobile: +61 (0)421 612 762