SOUTH Australia now has fewer 15-34 year olds than in the mid-1980s, and the state desperately needs to double its rate of population growth or face dire consequences, a major Deloitte report has warned.
The global firm has singled out the sectors it believes can put the state back on the path to economic prosperity — but rapid population growth is the key to success.
Deloitte will today release its Make it big Adelaide report, as figures released yesterday show SA’s surging jobless rate of 7.3 per cent is defying national trends and is clearly the worst in the country.
The report draws on six months of research and analysis to deliver a blueprint on how to transform the state’s economy.
The eight sectors it believes are the key to SA’s revival are international education, energy and gas, tourism, agribusiness, defence industries, creative industries, health and medical industries
and professional and IT services.
Deloitte says the state already performs well in the first four sectors, and has great potential in the second four.
Deloitte Access Economics director Aaron Hill said it was not enough that Adelaide and SA were seen as “a nice place to live’’.
“We know there are many positive things about living in a smaller population state like South Australia and city like Adelaide, for example, the lifestyle offered.
“But without people and their skills and ideas, economies just don’t thrive, as public and private investment and the creation of jobs follow where people choose to live.
He said that for many years, too many young South Australians had left seeking better futures elsewhere, taking their skills, ideas and passion with them.
“Yes, they leave a lot behind, but this hasn’t been enough to stop them,” he said.
“This simply has to change. We want our young people to be able to stay, and we want them to raise their children here with the confidence that they too can make it in Adelaide.”
Deloitte argues that SA needs to double its population growth rate between now and 2027 and bring in an extra 290,000 people — or 142,000 above government forecasts — to reach a population of two million. The state is currently on track to reach that level by 2039.
This ambitious target coincides with damning figures that show only 1 per cent of the jobs created in Australia in the last five years were in SA.
Deloitte South Australian managing partner Andrew Culley said population growth would be the measure of success that the state was doing the right things to grow the economy broadly across various sectors.
“It’s no secret that South Australia’s economy has been growing more slowly than the rest of mainland Australia over the last three decades at least, with annual growth of 2.3 per cent between 1990 and 2016 compared to 3.1 per cent nationally.
“And the same goes for population growth, which is half that of Australia as a whole, as young South Australians choose opportunities in other states and not enough other young people choose to move to South Australia to replace them.
“We believe investment in the right industries, and the resulting job opportunities, will be key to keeping more of our young people here, and to attracting more of the best and brightest to make South Australia home.
He said that for Adelaide to compete nationally and globally, it needed to attract more than its fair share of the world’s best and brightest via appropriately targeted migration.
“Ultimately, the return of strong population growth will be the most robust indicator of a return to growing and sustainable economic health,” he said.
The report is the first step for Deloitte. which will be consulting with the public, government and business over the next year. It will then release findings, actions and solutions resulting from that process.
Unemployment rate falls to 5.7 per cent
The firm has argued that South Australians have previously hoped for a “silver bullet”, such as a major project to bail out the economy, or placed the full responsibility at the feet of government.
In contrast, Deloitte says a revival needs to be “fuelled mainly by new private sector investment”.
One idea which could grow the population in the right way would be a targeted migration scheme, which “could … impact those sectors of the South Australian economy where we have a comparative advantage, like energy and gas or tourism’’.
“The reality is that both public and private capital chase where people choose to live,’’ the report says.
“Ensuring our existing jobs continue to be based in Adelaide and that we’re able to attract the best and brightest will be ever more reliant on scale in the future.
“Without scale, we won’t develop our services sectors. And without services, we miss our opportunity to fill the hole left by traditional manufacturing and decades of slower growth.
That’s why we need 2 million people by 2027.’’