Queensland Boom State 2012

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Queensland Boom State 2012

Growth Years Tipped for Queensland

Tony Grant-Taylor

QUEENSLAND can look forward to booming growth in the next four or five years, according to economic forecaster BIS Shrapnel, with mining and infrastructure investment leading the way.

“You’ll wake up next year in a much stronger economy than the one you went to sleep in at Christmas,” the forecaster’s chief economist told an economic outlook briefing in Brisbane yesterday.

Frank Gelber said a post-global financial crisis hiatus in state government spending as its “drought-proofing” water grid program wound up and other major public works were completed had seen Queensland’s economy slide in the past two years, though the downturn had been cushioned by federal stimulus spending and projects such as Brisbane’s Airport Link toll road.

But growth in construction in the next two years would be higher than pre-GFC “when government spending boosted the economy following a decade in the 1990s when the state government did very little”, Dr Gelber said.

“And the economy is not going to come out (of decline) softly. In two years you’ll be working so hard you won’t know what to do with yourself,” he told the briefing.

“There’s a boom coming, and it is going to take off next year.”

Adrian Hart, BIS Shrapnel’s senior manager infrastructure and mining, said the big LNG plants planned for Queensland and a renewed coal development boom – with associated rail, port and pipeline infrastructure spending – would underwrite the forecast growth he saw continuing for four or five years at least.

Indeed, Mr Hart said Queensland was “in for one almighty (positive growth) shock over the next five years – like what Western Australia went through five years ago”.

There were risks to their projections, both Dr Gelber and Mr Hart conceded.

They thought a world economic meltdown due to the current European debt crisis unlikely, however, and figured the US would avoid falling back into recession while Chinese and Indian demand for commodities would continue to underpin Australia’s economy.

Finding enough skilled workers would be a problem, as would the high Australian dollar, with both likely to push up costs.

But Mr Hart said the carbon and resource rent taxes were unlikely to have much negative impact given current high coal prices.

Spending in the coal-rich Bowen Basin, which had recently been running at $6 billion a year, could possibly rise to $18 billion annually.

Dr Gelber warned that though an imminent interest rate rise was unlikely, and rates could possibly go down over the next nine months if the European debt drama continued, rates were likely to be raised aggressively in two or three years if the mining and infrastructure boom came to pass.

He also pointed out the mining boom must end sometime, and Australia “should be fighting a rearguard action to protect jobs in trade-exposed industries” as they’d be needed “by our grandchildren” once the mining boom had passed.

Source: The Courier Mail
www.couriermail.com.au 14-9-11