Page 1939 - Week 06 - Wednesday, 6 May 2009
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In fact, I do not think I have ever heard anyone arguing against it. But it is important to understand what Mr Smyth means when he calls for it. Does he mean a larger share of the private sector in the economy? I think he does, based on the comments he has just made.
Government administration and defence account for around 31 per cent of the ACT economy. It would be unrealistic to think that this proportion would change in any significant way, even with major government intervention. For example, if the government set a diversification task of increasing the share of sectors other than public administration and defence from the current 69 per cent to just 75 per cent, and, one would assume, while not cutting the public sector, the ACT would require an increase in population of 188,000 and an increase in employment of about 103,000 if national productivity rates were assumed. This would present an average annual increase in population of about 4½ per cent for the next 10 years.
The ACT will have a large government sector for a long time to come. It is the seat of the national government and it provides a strong and generally stable source of economic activity. In fact, the role of government in the ACT economy is essentially cushioning us from the full effects of the global financial crisis compared to other jurisdictions.
The government recognises the contribution that the private sector makes to the territory economy. We have a strong and vibrant private sector, accounting for about 53 per cent of the territory’s total employment. It is supported by the highest educated workforce with the highest participation rate in the country. The December quarter of the ABS quarterly business indicator survey shows that both sales and wages and salaries in the ACT private sector are growing more strongly than in almost every other state or territory.
The ACT economy is significantly more productive than the national average, with the output per person employed being around 15 per cent higher than the national average. The ACT has relatively greater shares of property and business services, education and construction and relatively lower shares than other jurisdictions of manufacturing, finance, insurance and wholesale trade.
It is unclear, when there are calls made for a more diverse economy, what it means for a capital city like Canberra. Is it a call for greater manufacturing and wholesaling sectors for the ACT with less emphasis on business services and education? It is important to recognise that there are some industries that the ACT economy simply cannot support. For example, mining and agriculture are highly unlikely to ever be sources of economic activity in the ACT.
The government will continue to ensure that its economic and financial policies contribute to a strong private sector in the ACT. I think you can see that in decisions we have taken and that are reflected in the budget announced yesterday. We are actively supporting private business growth in the ACT. We have announced an extensive business and economic development package, valued at over $3 million, in this year’s budget. This package aims to support a range of measures to assist ACT exporting firms to access overseas exporting markets. This government is about
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