Page 5539 - Week 13 - Thursday, 17 November 2011
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the business-related insolvency level is low when compared to the number of businesses. This is despite a significant feature of the small business sector globally being a very high exit rate. It is notable given the composition of small businesses in the ACT, with our relatively high concentration of enterprises in the retail, accommodation and hospitality sectors.
A strong economy provides the public sector with sufficient revenue to operate high-quality services, to invest in productive infrastructure and to pay down debt. Each of these activities contributes to economic growth and services providing a productive, healthy and happy community; productive infrastructure to generate economic returns and meet future community needs; and paying down debt to balance the budget and remove the interest call on government revenue.
A strong economy generating strong returns to the community combines with an effective government policy to create a virtuous circle of public policy. This circle provides for productive and competitive businesses and a healthy and productive community.
MR SPEAKER: Dr Bourke, a supplementary question.
DR BOURKE: Can the minister give an indication as to what practical indicators are saying?
MR BARR: Whilst there is often a lot of talk in this place and in the commentariat around major economic indicators such as the consumer price index, unemployment rates and economic growth, it is important always to remember what this means in a practical sense out there in the real economy. There are a number of indicators which point to what is going on in the real economy and how this affects Canberrans.
Recent bankruptcy figures show a 25 per cent drop in the 2010 financial year compared to 2009-10. This is a good, practical indication of the level of pressure on Canberra households and businesses. It is particularly noteworthy that the level of non-business personal bankruptcy fell by a particularly large margin, falling to 130 from 215 in the previous financial year.
Retail trade figures have staged a recent rally and given an indication that there are signs of strong economic recovery. Given the Canberra population’s high disposable income, again, another good indicator of what is going on in the real economy. I should note, though, that the retail figures are based on retail trade growth and that the Canberra base is particularly high in this regard.
Consumer sentiment is also a practical indicator, although I should caution that, by any definition, it only considers sentiment and not actual conditions. Such measures can be very dependent on the methodology by which they are collected. But with those caveats, it is worth noting that in the recent Westpac Melbourne Institute survey, consumer sentiment went up 6.3 per cent nationally, and the ACT is, of course, a contributor to that.
All in all, practical measures as well as a range of theoretical ones indicate that the Canberra economy remains strong and healthy.
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