27 July 2015
by Malcolm King

Mass unemployment looms over Adelaide

While other states built modern, diversified and robust economies, South Australia debated, formed committees and engaged in endless rounds of self-reflection.

SA's net debt as a percentage of the state economy is 7.3 per cent - the highest in Australia with 8700 job losses in May and 6000 jobs in June.That's four times the number of jobs created by the state government since 2011.

Although why people believe the state government should create jobs is part of the problem. Here's the timeline from the ABC on the major job losses.

Instead of attacking Asian markets after the State Bank collapse in the early 1990s, and bringing new expertise in to help rebuild the economy, SA did nothing. Now it has a projected debt of $14 billion. It's living off defence contracts and GST revenues from the other states, as unemployment soars.

The business community has become a hand fed arm of the state treasury. School children demonstrate more free will. Rent seeking lobbyists from the construction and building industries, are sucking expenditure from the body politic, even though there is a 20 per cent vacancy rate for D Grade office space (old or lower quality commercial buildings) and a prime office vacancy rate of 14 per cent.

Holden will close in 2017, if not before and the future of the Australian Submarine Corporation is in doubt. In the next five years, 15,000 jobs in the northern and western suburbs will disappear forever, hitting mainly men in their 40s and 50s. Half of them will never work again. Add another 5000 more if the ASC goes belly up. SA is heading towards double digit unemployment.

Rising endemic unemployment
I have written a number of articles on South Australia, examining various aspects of the economy. Some have accused me of 'talking the town down' - an anti-intellectual euphemism for publishing critical research and commentary.

It's a refrain reminiscent of the 1993 'SA Great' media campaign to boost South Australians' flagging self-confidence after the State Bank debacle. The TV ads showed shots of hard-working people giving viewers the thumbs up and telling them, "It's our state, mate."To attack the state was to attack the Festival of Arts, Coopers Ale or fritz. You were either with Premier John Bannon – one of the architect's of the state's demise - or you were against the state. If you want to know more about this technique, see Elisabeth Noelle-Neumann's 'Spiral of Silence' theory.

There are now 67,000 unemployed and 85,800 under employed people subsisting in SA, with an extraordinary 22 per cent of the adult population welfare dependent. One in four job seekers are long term unemployed. According to the Commonwealth Department of Employment, long-term unemployment has doubled in SA since the onset of the GFC in 2008, rising to 14,800 in February 2015. More than a third (2,600) of this increase is youth (15-24 year olds).

Foodbank SA, the state's largest charity food organisation, is now supplying a record 7500 meals a day to battlers compared with 5800 in late 2013. It cannot cope with rising demand. Every month more than 8000 people (including 3000 children) miss out on a decent feed. This is the gathering storm.

The Murdoch media and commercial TV news has fed South Australians bulldust for 30 years. It's mindless obsession with sex murders, endless 'I'm OK/You're OK' feel good pieces and monopolistic monomania, has undermined public confidence in the very product they sell – the news. Some commercial TV news stories are 48 hours old. The sooner The Advertiser closes and its journalists set up their own online niche newspapers, the better.

Indeed, News Corporation's Sunday Mail - which is almost finished as a newspaper - created a 19 page liftout called 'Inspire SA'. It was chock full of boosterist stories on 'how the future is looking good for us Croweaters'. Some suggest this is brand positioning. I suggest its mollification and pacification of the populace. The message is – 'don't worry. Be happy.' It's a propaganda technique that both Aldous Huxley and George Orwell included in their dystopia novels.

One wit wrote in The Advertiser blog:

"At least were not as badly off as Greece", we'll say. We'll still be engaging in ongoing parochial frog-cake boosterism and blaming Abbott/the "GFC"/planetary alignment or something else. We'll be stoked that the desperately poor can live in repurposed, otherwise-vacant office buildings. "We're Australia's education hub", we'll say, "because one of our remaining two universities is ranked in the top 200 for cleanliness." Our top business leaders, being the state managers of Woolworths and Centrelink, will be local celebrities. And we'll celebrate our 100th plan/vision/strategy/round-table/blueprint to lift SA out of its "temporary economic doldrums".

Once people get angry – angry enough to do something about their own backyard – these ridiculous soft sell stories and self-serving PR reports by Deloitte and others, will disappear.

With the exception of InDaily and the ABC, much of the Adelaide media, its readers and listeners, are trapped in binary thinking. People either blame the ALP or the Liberals; they blame the unions or the public service. It's either this or that. Binary thinking is now so common, it's difficult to remember when there were multiple and competing explanations for social and economic phenomena. None of these institutions by themselves has any hope of countering the micro and macroeconomic forces which are besieging the state. They have been so drained of kinetic energy, vision and ideas, they are husks of their former selves.

Ageing of population: effects
The state has also failed to consider the economic and social effects of high numbers of old people living in its environs. The late and great Prof Graeme Hugo's research showed that the number of people in Adelaide aged 65 and over will double by 2050 - to about 370,000 compared to 183,300 in 2011. Young people aged 15-24 will increase by about 23 per cent or 197,100 people compared to 160,400 over the same period. Here comes the zimmer frame empire.

The good news is that many expatriate Boomers with national or international experience are returning to Adelaide, usually to look after ageing parents. The bad news is when they apply for local positions, young recruiters knock them back because they are too experienced. They're too good. They are not only knocking back those with national or international experience and their business contacts but also potentially millions (if not billions) in superannuation spends. It's a non-virtuous circle, which has created a closed environment.

Retrograde organisational cultures
The operating standards of many SA organisations – and I include the public service – are so low and regressive, that executives especially hired from interstate, stay less than a year as they battle incompetence, white anting, nepotism and group think, before hightailing it back to Sydney or Melbourne.

Seven CEO's and program directors of large organisations such as TAFE SA, the Adelaide Market and the new hospital, quit their positions recently. I interviewed three of them. They fled the 'Punch and Judy' antics and reactionary mindset of their senior staff and boards. There can be no more punitive action on the state's brand, than to hire opinion leaders in one state, get them to Adelaide, humiliate and degrade their professionalism for a year or so, then effectively force their resignation.

Democracy at cross roads
Think now of the young man or woman who has just turned 18 and can vote in a South Australian election for the first time. With fire in their eyes and ideals in their hearts, they have the opportunity to vote for Dumb or Dumber. They also have the dubious privilege of voting for candidates in SA's upper house – the Legislative Assembly, those wallet fatteners who say little and do even less.

This is not democracy. This is a photocopy of a photocopy of the Westminster system. The state's political leadership over the last 30 years has been the worst in the Federation's history. It makes the Bjelke-Peterson years in Queensland look enlightened. Young people in their teens and 20s – if they haven't fled to NSW or Victoria - will curse this and previous government's cowardice for failing to make the hard decisions after the State Bank fiasco.

Neither can the government keep relying on one-off cash injections from privatisations such as selling the Motor Accident Commission. You're selling the future from under the feet of the next generation.

The state's rising unemployment calls for radical measures. We must put the state on a war footing by getting the two major parties, the Greens, business leaders and union heads, to sit together and co-jointly pursue a major international and national jobs initiative. Throw the whole weight of the state against the problem. Forget about the Upper House. Turn the public service in to the active implementers of policy with assistance from business. Meanwhile, those storm clouds are gathering.