Presented by John Mangan. Australian Institute for Business and Economics, University of Queensland

1. Policies for State Recovery
Parliamentary Briefing
John Mangan
Australian Institute for Business and Economics
University of Queensland

2.  The COVID-19 recession changes the balance between
Public and Private sectors
 In the short term Governments have to lead the Private
sector by example and strategic funding
 Below I suggest 3 policy areas that will make a
difference in the short term and one that won’t
 And one long term strategy that should be re-opened for
debate
State Governments face changed circumstances
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3. 1. Training
2. Robotics and
Automation
3. Service delivery
efficiency
Three policies for benefit
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Labour market policies - Covid and its aftermath will mean short term
through reduced migration at both the lower and high skill level.
This will require:
Ramped up training
Emphasis on IT competency for all levels of workforce; replacement for reduced migrant intake,
utilise under-subscribed University places, stream line courses to reduce training times and cost
Speed up transition to robotics & automation
Emphasis on robotics - to augment skill mix and create jobs [multifaceted – training, skills shortage,
export growth (e.g. agriculture) and provides focus to reshoring efforts] Synergies/QUT report
predicted
Under conservative assumptions the Queensland Economy after 10 years of the rapid uptake of
automation could benefit by a minimum of A$37.4 Billion in GSP and approximately 492950 Jobs
(Synergies/QUT 2018)
Achieve efficiency in service provision -
 Direct Government funds to most efficient use
 Avoid crowding out of Private sector and duplication of activities
Current situation overstates power and proper role of the State - focus on local business revival not
displacement!

4. Growth potential for Queensland economy from 10 years of accelerated automation
Scenario Direct Growth
contribution
from
Automation
GSP Growth 115
$billion
New jobs created 116 Jobs displaced 117 Net job creation
1. Conservative 1% 108.20 978000 -485950 492950
2. Very likely 1.5% 148.00 1118780 -392970 725810
3. Optimistic 2% 188.30 1463420 -297590 1165830

5. The Sequential Impact of Technological Obsolescence
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• Initial impact on traded goods and services sector
• A loss in competitiveness and decline in the terms of trade
• Lower productivity growth
• Increased imports, particularly competing imports
• Reduced growth and job opportunities loss of tax revenue base,
reduced Government services

6.  Relying on infrastructure - all states and Commonwealth will look to expanding infrastructure
at the same time - in a skill constrained labour market with reduced migration this will lead to
bottlenecks, inflation and budget over runs
 Better approach is to bring forward repairs and upgrades to existing infrastructure - less fixed
costs, more likely to employ local labour, greater involvement with local government
 Avoid competition with Private Sector
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What not to do Pyramid Solution will not work
(In the short term)

7. Implications
forRegional
Economies
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The suggested policies have particular implications for the
regions:
 Labour supply issues at all skill levels - shortage of seasonal
labour for agriculture and tourism due to migration and travel
restrictions
 Lower IT and online skills in regions need to be addressed
“In the short term Queensland’s comparative robotics advantage
lie in Mining and Manufacturing” (Synergies 2018)
Infrastructure direct towards repair and maintenance (except
priority projects) - ease any regional unskilled labour problems
and free up limited skilled labour

8. CRICOS code 00025B
Thank you
Professor John Mangan
Director Australian Institute for Business and
Economics (AIBE)
jmangan@bel.uq.edu.au
07 3346 1630