State fragmentation & the meaning of NSW economic statistics

Today an article one of Sydney's local newspapers, the Sydney Morning Herald,  quoted the latest Commonwealth Securities' State of the States report placing NSW in eighth place behind both Tasmania and Victoria in a league dominated by Western Australia and the ACT on measures of economic momentum. Those who are interested can find the report here.

I will comment on the report in a moment. But first, some background, background that also fulfils a promise I made to Greg in response to a comment. 

Back in February 2010 I discussed The fragmentation of NSW. There I was concerned with the way economic and demographic change had changed the structure of NSW and the nature of Government responses to those changes. My argument was that NSW as an entity increasingly made less sense and that as a consequence Government approaches to the planning and management of the state had become increasingly fragmented and ad-hoc.

I suppose the overall drivers to this fragmentation can be summarised this way:

• While Sydney still gains wealth from its governing role in NSW, the city has become increasingly disconnected in economic terms from the rest of the state. A lot of NSW State planning is Sydney centred and focuses on ways of managing and controlling its immediate hinterland in areas like residential development. To this end, the definition of metropolitan has been progressively expanded.
• In the far north, the growth of south east Queensland has spilled over into the adjoining areas of Northern NSW, further drawing the area into Brisbane's field. Sydney Government policy here has simply been reactive.
• Something similar is happening in the far south along the Murray.
• And then there is Canberra, the tiger in the room, whose growth has spilled over into surrounding areas effectively extending Canberra's economic sphere of influence. In the case of both the far south and the Capital Territory Region, NSW policy has again been largely reactive.
• Take Sydney, the Richmond-Tweed, the Capital Region and the Murray corridor out of the equation, and you are left with pretty fragmented territory dealt with in a fragmented way.

Turning now to the report.

Taking the above analysis into account, what does the report tell us beyond the obvious fact that the spread of the ACT's economic influence continues? What is this NSW economy?

Pretty obviously it doesn't tell me anything about New England. After all, we don't exist!

Beyond that?

Just as a matter of curiosity, I looked at the latest ABS (Australian Bureau of Statistics) workforce stats released today. This includes various workforce performance data for Sydney and the rest of NSW. Sydney, by the way, is not Sydney as we normally think of it, but the Sydney Statistical Division. This includes the Blue Mountains and the Central Coast. From memory, this includes about 62 per cent of the State population, so effectively dominates the rest in statistical terms.

Now when we look at the workforce data, and this is impressionistic because I have only scanned the numbers, we find:

• The participation rate (the proportion of the working age population seeking work) is lower in the rest of NSW than Sydney, especially for women.
• The proportion of unemployed seeking work is higher than in Sydney.
• The proportion of employed seeking full time work is higher than in Sydney.

So if you look at it this way, the rest of the state appears something of a basket case dragging Sydney down.

Is this true? Well, it's not quite as easy as that. In my next post I will look at the reasons why, focused on New England.