PERTH (miningweekly.com) – Australia could add about A$250-billlion to its national economy over the next 20 years if it were to tap five so-called super growth sectors, in addition to mining, which is delivering prosperity at a slower rate.
This is according to Deloitte’s ‘Positioning for Prosperity’ report, which identified agribusiness, gas, tourism, international education and wealth management as the next “super growth waves”.
“Exceptional growth in these five sectors could add an additional A$250-billion to Australia’s gross domestic product (GDP) in 2033 or a boost of about 1% to an economy turning over A$2.6-trillion in today’s dollars,” co-author Chris Richardson said.
He noted that mining would continue as a major driver of prosperity over the next two decades and beyond, but cautioned that Australia had to look at how it could extend its ability to ride the mining wave.
“Success as a nation cannot be built on natural resources alone. That boom is slowing and our competitive advantage is being challenged,” he said.
“The reality is that we need new growth drivers. We need another wave – or several – to create more diversified growth. And the first place to look is markets that can be expected to grow significantly faster than the global economy as a whole over the next 10 or 20 years, or by more than about 3.4% per year.”
The report found that Western Australia had been the biggest single beneficiary of the initial phase of emerging Asia’s development, which was characterised by a striking leap in demand for industrial inputs such as Australian iron-ore.
The state exported about 200-million tonnes of iron-ore a decade ago, but five years from now the developments already in the pipeline meant that figure could rise to be as high as 900-million tonnes.
However, Deloitte warned that Asia’s boom was changing shape.
Although that posed some challenges, it also generated new opportunities, as Asia’s demand for clean energy increased, putting Western Australian gas at the top of the global ‘most wanted’ list.
“Our gas is a clean and green alternative to coal that points to major development potential for this state in coming decades,” said Western Australian managing partner of Deloitte, Mike McNulty.
Deloitte further noted that the recent decline in coal prices would also have little effect on Queensland’s ability to sell its resources into the Asian market, but pointed out that the state also had great growth prospects on offer in the gas sector.
During the last decade New South Wales was caught on the wrong side of the two-speed economy, Deloitte added, noting that the rise of emerging Asia generated a burst of mining construction projects, most of which were in other states.
However, the analysis pointed out that in future, the five super sectors would make up a larger share of New South Wales’ economy than of any other state or territory.
“The next two decades can be a good news story for Australia – but a great news story for our state. The last boom didn’t play to New South Wales’s strengths – but the next one looks like being a perfect fit,” said NSW managing partner John Meacock.
Deloitte chief strategy officer and Building the Lucky Country series co-author, Gerhard Vorster, said business had to take the lead in positioning Australia as a competitive global force in these growth sectors.
“Governments will play a supportive role in managing the challenges of labour markets, providing more efficient regulation and tax regimes and a stable and clear set of policy rules for business, in order to enable growth,” he said.
“But ultimately, it is up to business leaders to put in the hard work, to think hard about their own proximity to prosperity and about how best to position themselves closer to these prosperity opportunities.”