Tuesday, 19 June, 2018


The NSW budget will raise once again the question of whether the Hunter is receiving its ‘fair share’ of state government investment. How fair is it to have multi-billion dollar investments in roads, tunnels, stadiums, and the like in the Sydney metropolitan area without similar investment here? That question ties into multi-layered historical and political arguments as well as economic assessments. These factors all point to the important question about what constitutes an appropriate amount to invest to see long-term benefits in the Hunter region, and in the state.

To take part in this debate, it is useful to assess the economic horsepower of the Hunter. The region is touted as having the largest regional economy in Australia, ‘regional’ meaning – outside a capital city’s metropolitan area. A common measure of the economy of a region is the year’s gross regional product (GRP). That is an estimated market value of all ‘final’ goods and services. The GRP does not count the value of goods that are being produced for resale. So, a finished railroad car counts, but not the wheels for that rail car, if they are produced here. The GRP figures employed here are public, estimated from government statistics by the commercial firm, REMPLAN.

The Hunter’s GRP is estimated to be $48 billion, more than three times the size of Wollongong’s $13 billion. However, it is only 35 per cent of the GRP of Greater Western Sydney, which is $139 billion.

The Hunter’s GRP is less than half of the City of Sydney’s $116 billion. The Hunter GRP constitutes less than 10 per cent of the NSW gross state product (GSP), estimated at $560 billion.

So, with 10 per cent of the state’s economy, should we expect 10 per cent of the state’s infrastructure investment? Should the Hunter receive one-third of the amount invested in Greater Western Sydney? Should the Hunter also land 10 per cent of the state’s social welfare spending and 10 per cent of its drought support for agriculture? Clearly, no.

Economic output is not the only statistic that needs to be considered. An area with a relatively small economic output per person may be ideal for retirees. An area with a high economic output per person may have localities facing entrenched economic disadvantage, such as long-term unemployment. Such localities could be seen as more worthy of government investment.

That leads to a question about what is meant by ‘fair’? Is ‘fair’ assessed in terms of need, the opportunity to avoid future costs, or the potential for economic growth? That is, to what extent is government investment stimulating benefits for portions of the population or economy identified as being a high priority in the near-term and long-term future? The identification of such priorities can be seen to be a question of values and aspirations, about opportunities and intergenerational wellbeing. It is not an issue of mere dollar figures of economic output.

Do we agree on what criteria to employ in setting such priorities? Do we know what criteria have been considered elsewhere, particularly in settings where strategic long term aims have been pursued effectively?

In assessing the NSW budget, let us avoid saying that it is not ‘fair’. Let us, instead, agree on criteria for prioritising long-term economic and social aspirations, which government investment could stimulate in the region.

In this way, we can pursue economic and social wellbeing here, and support its growth across the state.


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