As an ex Safstrine I have to agree. The people SA should hang on to are leaving in droves. In the next 5 years Holden will close, the ASC will downsize and thousands of support industry workers will lose their jobs. From next year Moomba gas will cost the 'international' price since it can go to the export LNG plants in Queensland. That will push up electricity prices (Torrens Island power station is the country's biggest gas user) making it even harder to attract new industry.

The stupid thing is that SA is potentially wealthy as it has perhaps a third of the world's easily mined uranium. Some 70 new nuclear power stations are under construction around the world. Japan seems set to restart many of its nukes due to the cost of fossil fuel imports. Yet bizarrely Olympic Dam mine cannot get the power and water it needs to expand. It seems SA is being run by a clique of dreamers who want things to stay as they are even as it disappears under their gaze.

What about something really radical, cut costs! Public service pensions not increased every year but reduced, in line with how our "Super" is supposed to work. Cap pensions at a max of say $70k. Cap salaries at $100k. This would save millions, anyway eventually this will happen when we hit the inevitable world depression.
Starve these parasites out or if you prefer pay them what they are worth.
Teachers do not bother me with your pig like squealing! You have done a demonstrably rubbish job for the last 40 years and you would be top of my list to be rewarded for your efforts by having your pay cut.

The mutiny of the sheep - I'd like to see that day: Bah Bah, we shall no longer eat grass...

You raise the right questions but your answers are silly.
The only way to reduce unemployment is to bring cost of labour in line with the market. Make the cost of labour such that a profit can be made from the employment of labour.

When the safety net is so high that the rewards for work are not substantially above the receipt of unemployment benefits, the young will not work.
Eventually we will not be able to keep the safety net at such heights and the "cure" will come in the form of inflation and poverty-- the Argentinian "cure".

The cost of labour?

This is always a contentious issue, that it doesn't matter if a worker is paid $1 a day or $100 a day.

There will always be some who will still complain that a $1 a day is still too high.

Saw an interesting cartoon about foreign workers, working in the gulf states and how the employer will splurge money on themselves and family members, yet fail to pay their employees.

Not do sure about 'cost of labour' being a primary factor Old Man.

SA wages across the board are 10-15 per cent lower than the rest of the country. It's actually one of the reasons why employers from interstate advertise in SA - they trump local wages. We have kids working off award in hospitality for as little as $7.00 ph. Less than 30 per cent of the state's workforce is unionised.

I liaise with employers every day and none are talking about a wages blow out. They're talking about moving interstate or closing down.

I probably should have written that this economic contraction has been happening for 30 years or so, with repeals every now and then. It's both a local and macroeconomic phenomenon.

Yes Malcolm, but when and how?
Crying in the pretzels hasn't worked too well thus far!
Rhrosty.

Its always a pleasure to read Malcolm King's portents of doom about the City of Churches or is that the City of Desiccated Shrubberies?

Adelaide appears to have caught the British disease of rusty yet dreary UK midlands towns of the 1970s. The head of ASC was a Brit until levered out.

Its no coincidence that the Greens Party thrive in South Australia - proving that if you shrink an economy (eg. hopefully to reduce Global Warning) then that economy and its people suffer.

Bright young thing politicians who are forever Upper middle class can always fly away.

"graveyard zombies straight out of Stephen King's Pet Sematary" is a hoot. Not talking about RSVP or Eharmony?

You sound too imaginative for dusty Adelaide Malcolm. Get your Ticket of Leave and escape before they razor-wire Adelaideistan.

Pete

OK Malcolm, that's the easy bit. You've enunciated the situation. So now how about the reason, & perhaps a cure.

I'll have a go. To start with the place should never have existed. A little bit of arable land in the middle of a huge desert, It can't actually exist unless the eastern states are generous enough to send a heap of their water, which they could use more effectively themselves, down that big drain the Murray.

The only thing it ever offered without subsidy, was a living for a few subsistence farmers. It produces a few grapes, a bit of milk, a little wheat, & catches some fish. Still it is doubtful it could feed itself, without eastern help.

Yes it could have developed a nuclear industry, but ratbag greenies somehow prevailed to stop that. The population must have a suicide complex to have allowed that to happen. About the only useful thing they have done was supply an atomic testing area.

What to do about it? Well to start with we must stop wasting good eastern rainfall being used to fill a bloody great fresh water waterski dam, for Adelaide's unemployed to play in.

Then we must stop the ridiculous make work schemes, like building bad submarines in such a ridiculous part of the country.

Then we must rescind it's status as a state, [along with Tasmania of course], as it's population & usefulness only warrants territory status. Time to stop it, [& Tasmania], effecting the numbers in our national parliament.

Then harden our hearts & let it fade into history as a failed settlement in a hopeless area.

Perhaps have Israel rule over Adiladistan?

Then hook up a huge desalinator to a nuclear reactor - along with untold but efficient arms industries?

Now you're talking plantagenet, apart from the Efficient bit, the SA workforce has been feather bedded & over paid for too long to become efficient this centaury.

Oh & the arms industry. They have proved they can't build subs, or cars for that matter, so manufacturer is out, but they may be able to develop a nuclear industry, with imported labour.

So lets say, "I'd like to see that" but you'll have to swing it past the radical lefties & greenies.

Any future strategies involving change will be resisted strongly to maintain the status quo (most places including Australia).

Many phenomena in Australia and elsewhere are viewed negatively in Australia e.g. pay rates, the dole, immigration, population growth, environment etc. but such dog whistling keeps the media and citizens away from underlying causes.

Ageing (permanent) populations who live longer and are committed to voting, with politicians often now having two generations above them (vs one in the past). This means politicians (media etc.) are absolutely beholden to the baby boomers and oldies (while the growth of youth in Australia's population are largely temporary immigrants, with no voting rights nor access to benefits).

Related, this week Prospect from the UK commenting on the Tory Conference described the over 65s as the pampered generation who have locked up their benefits, rebates and pensions, possibly at the expense of younger generations http://tinyurl.com/ke8f7n3

Concern for democracy is that it becomes dominated by insider oldies versus outside young ones, whereby Greens, LNP and Labor = conservative, or the DLP.

Seems clearer that there appears to be strong inter generational issues emerging in the first world and elsewhere, but it seems that one still gets the benfits, while the young can expect something much less in future....

Adelaide holds a special place in my heart, I spent 11 years there, from 1983-1994, starting off as a long term unemployed to someone who got a career in the public service in 1990, through persistence, meeting the right people at the right time with the right advice esp. with regard to public housing, then later community housing through CHASSA (Community housing association of S.A.), where I wound up with excellent housing with Turtle Housing Coop. I remember the premier John Bannon for 2 things mostly: the failed State Bank, and the failed 'multi-function polis.'
But Malcolm is right, wages are lower than in Vic or NSW but it's hardly an incentive. South Australia can continue being the 'cinderella state', going on and on about its 'victim' status and asking for special dispensation or extra subsidies, or start becoming more assertive, reaching out to empower everyone, esp. the worst off, through at least decent housing, and some hope of work, maybe even in small business.S.A. started off as a noble experiment by Col. Light of free men and free women, not having to rely on convict labor.
There are only 2 options available now: to become more self assertive and self reliant, become more pro-life by closing down all those abortion clinics (after all, Adelaide is already losing many of its best and brightest through emigration, and it continues to allow abortion on demand: how suicidal is that?) and inclusive by reaching out to everyone, esp. those in Elizabeth and Christie Downs,
or foreclose on itself, surrender its statehood to Canberra and turn itself into a territory (non-self-governing), and privatise every single entity available.
Doing nothing is not an option: it's just forestalling the inevitable.

Struth, what a silly article!

It criticises The Advertiser for not being a newspaper, but completely swallows the Murdoch Press's lies about the Rudd and Gillard governments "spending like a drunken sailor" and 'creating new entitlement programs without the ability to pay for them'. Or are those the Liberal Party's lies? Either way Malcolm's contributing to the promotion of bogus problems which politicians damage SA's interests in an attempt to fix.

And the drop in iron ore prices may actually be good for Olympic Dam, as it's forcing our overvalued dollar down, which makes mining of copper, gold and uranium more viable (although the effect is slight because short term factors have limited influence in long term investment decisions).

SA's biggest problem by far is a lack of investment, and a big reason for that is that interest rates are set to control inflation in the eastern states. Hypothetically if they were set to control inflation in SA, they'd be much lower. But we're not getting much compensation for interest rates being set too high, and the government's completely ignoring the fact that spending in SA is less inflationary than spending the same amount elsewhere.

Not so sure Adelaide folk can blame the eastern states and especially Sydney and Melbourne for inflation taming interest rates. Bit of an odd comment, mate.

Aidan

Oy be agreein wid Paddy.

Saemus O'Bignob

Malcolm, the truth may appear odd because you've fallen for the economic myths that the Liberals and the Murdoch press promote. But in reality the significance of balanced budgets is quite low for governments (and for sovereign currency issuers such as the Federal government, the zero point is of zero significance).

Public and private spending (including investment spending) have the same inflationary effect, which is low if unemployment is high (as it reduces unemoloyment instead), and high if unemployment is low (though what counts is real unemployment and underemployment, not the headline unemployment figure). Interest rates are meant to control inflation by influencing private spending decisions (as when interest rates rise, businesses and people may regard it as preferable to save or not borrow) but they also have the short term effect of pushing up the value of the dollar.

For twenty five years, interest rates have been set too high for SA. In the past five years having higher interest rates than other countries has pushed our dollar unsustainably high, crippling our manufacturing sector. And to add insult to injury, this was initially triggered by a fall in the headline unemployment rate without any signs of real inflation, and more recently we've suffered inflation from the dollar falling back to its natural level (pushing up the price of imports).

And now the RBA is refusinng to cut interest rates because it's worried about house prices in the eastern states, the PUPpies are the only political party challenging the narrative that Australia should aim for a balanced budget (an objective the Federal government tend to pursue by cutting spening in SA) and the state government's reluctant to invest because of paranoia about debt levels and credit ratings, partly fuelled by the state opposition's bogus claims about how much interest we're paying.

So how do you think we should get anyone to invest in SA?

"For twenty five years, interest rates have been set too high for SA."

I think you mean Australia and I agree with you. Currently the state is predominantly focused on agricultural and mining.

But you could lower it all you liked and people still won't invest in SA or at least not on the scale we need to. There simply isn't the ability to generate revenue in SA for international investors. Although that might change.

I maintain that considerably more economic drive can come from international students as well as offshore alumni partnerships. This is an area that has hardly been explored.

You've got to laugh. I cross posted this article on a pro-development site in Adelaide called Sensational Adelaide late last week. I'm generally pro-development but on a case-by-case basis.

I got back from holiday and found some very curious comments, including one from an old client, who appears to have lost the plot too.

http://www.sensational-adelaide.com/forum/viewtopic.php?t=5348&start=20#p129857

My satirical article (with some facts) was met with, "ignore him", "why don't you just leave", "please, F-off", and "ban these pricks."

Sensational Adelaide? Most of the time. I have been generally pro growth but it's time we had a look at the formation of attitudes in Adelaide over the last 30 years - the good and the bad

Yup,

12 years of state labor tends to wreck the economy in any state.

Interest rates are far too low! I think it disgusting that my savings are someone else's extravagence!
Socialism relies on other people's money and do not forget Margaret Thatchers advice "Socialism is OK until you run out of other people's money".

JBowyer, higher interest rates benefit the idle rich while making it harder for those who aren't already rich to make money. Rather than encouraging people to do nothing with their money, it's better to encourage people to do something useful with it, like installing solar panels.

Thanks for the advice Aiden but I already have six panels on my roof and they gave me neglible savings. Also only a socialist who abhors work would use the term "Idle". I had my first part time job at 11 and retired this year aged 67. My taxes paid for you and my savings prop you up but I would never expect anything but abuse from you lot!

JBowyer, I understand how you could think that anyone who would use the term "idle" is a socialist, but I'm rather puzzled as to how you can come to the conclusion they abhor work. Please explain?

Aiden, socialists are lazy and just want the rewards of others work without doing any themselves. You are confusing work with whining and telling everybody how hard it is and how dreadfully under appreciated you are. As my kids say Boo bleeping hoo (They do not say bleeping)

JBowyer, that stereotype of socialists comes from people who've never attempted to understand them. Obviously there are a few socialists of that view (because some lazy people are attracted to socialism by the stereotype) but it's neither an objective of socialism nor even a widespread view among socialists. Socialists generally aim for full emoloyment with as high as possible a proportion of highh value work.

Where have I been whining and telling everybody how hard it is and how dreadfully underappreciated I am? It all seems to be an assumption based on an assumption based on one word I used!

Come off it Aidan. Our socialists congregate in the public service, universities, schools, the media particularly the ABC, & heavily unionised places like the construction & auto industries.

I think it is a pretty long shot to call any of these areas "hard working". In fact they have the most work shy people in the country.

Malcolm, I do mean South Australia. Over the past 25 years Australian interest rates have sometimes been too high for Australia (including all the last 5 years) but have constantly been too high for SA. Obviously there has to be the same interest rate for all of Australia otherwise the RBA would lose out as everyone chases arbitrage. However there's no good reason why concessional loans, with prearranged repayment terms, can't be made to state governments for specific infrastructure projects. And doing so would help the state government get over its debt phobia and build the infrastructure that would make business investment in our state far more atrractive.

As for the reaction on Sensational Adelaide, what do you expect? Your attempt satire isn't funny and doesn't make any serious suggestions. Including facts isn't much use when you also include lies. And you do have a track record of writing what appear to be Adelaide-bashing articles.

Interest rates ain't where it's at Aiden. Creating specialist loan mechanisms in SA hasn't been a great success in the past.

In fact, most of my articles have been critical of the 'no growth' and anti-population movements in SA and nationally. None of the articles 'bash Adelaide' but they certainly do pull apart and deconstruct some of the problems, especially in the recruitment and the media sectors.

As a post graduate student at UniSA, you would appreciate that research and open discussion is very important.

The comments in the blog 'Sensational Adelaide' which you copied and pasted your first comment from, have prompted me to examine the role of the construction and development industry in SA and associated lobby groups.

Malcolm, I'm a bit puzzled by your comments about specialist loans in SA not having been a great success, as I'm struggling to think of examples.

Where did you discover I was a postgrad student at UniSA? I ask because it may mean my profile somewhere needs updating.

By all means criticise "no growth" movements (and anyone else who deserves it), and it's good that you pull apart and deconstruct some of the problems. But your claim about none of the articles bashing Adelaide is rather dubious – you've certainly exaggerated Adelaide's problems in this one. And as was pointed out on the Sensational Adelaide board, most of them have titles prococative to Adelaide residents..

Hasbeen, it's a very long shot to call the people in those occupations "work shy". I think a more accurate description would be "underpaid", as most of those areas are high value work but that's not usually reflected in how much they earn