Which part of Australia has the largest economic growth?
While most attention on the economic growth of the past decade has been on the resource segment and in particular the Pilbara, the Understanding the Economy From the Ground Up report (by Price Waterhouse Coopers- http://www.pwc.com.au/consulting/assets/analytics/Understanding-economy-ground-up-Jun15.pdf) showed that the greatest single contributor to the Australian economy between 2001 and 2014 was the Melbourne CBD (including Docklands and Southbank).
The report shows the Australian economy grew 46% ($461 billion) over this period with the Melbourne CBD contributing a whopping $24.4 billion of this growth, more than Sydney, the Pilbara or Ashburton mining areas.
The report is quite revealing in that growth is concentrated in a small handful of areas, with nearly a whopping 1 in 5 dollars of Australia’s income coming from just 10 (out of 2214) locations. Although, in our opinion, other indirect economic contributions may not have been truly explored, the report states “There are a very large number of locations in Australia that, from an economic perspective, matter very little”.
Sydney CBD’s economy grew 37% over the same period, constrained, in part geographically. Yet, this can only add to fuel the fire of the Melbourne v Sydney rivalry, especially with Melbourne’s population set to overtake Sydney’s by 2053.
In a period of general prosperity for our overall nation it is surprising that one in three locations actually went backwards over the same period. Does this issue require government intervention or should we allow natural economic forces allow the decline of these areas, and is this reflected by lower services, medical and education resources in these areas? As the report states “… from a social and equity point of view this creates unique challenges and potential conflcits between economic and social policy and investment imperatives.”
Overall it is these urban areas, rather than resource deposits that “…. have been steadily generating a larger share of economic output.”