13 october 2011 great hall parliament house. canberra … · 2012-03-07 · the australian economy...
TRANSCRIPT
Phil Ruthven, Chairman
The Australian Economy
2020 & Beyond
13 October 2011
Great Hall
Parliament House. Canberra
WHERE KNOWLEDGE IS POWER
Phil Ruthven, Chairman
Topics
1. Australia‟s Global Context
2. The Australian Economy, 2020+
3. Our Changing Society
4. The Tourism Market & Inbound Boom
1. Australia‟s Global
Context
World GDP Growth Real growth (PPP), 1950-2012(F)
-12
-10
-8
-6
-4
-2
0
2
4
6
8
10
121940
1945
1950
1955
1960
1965
1970
1975
1980
1985
1990
1995
2000
2005
2010
2015
2020
2025
2030
Pe
r c
en
t
1950-1969 growth in US$ market terms
Purchasing Power Parity (PPP) terms
IMF/Economist//IBISWorld: 11/09/11
2008 3.2%
2009 -0.7% *
2010 4.1%
2011 3.6% (F)
2012 3.7% (F)
* The world decline in 2009 was -2.0% when
measured in $US market price terms
World‟s 30 Largest Economies 2011 (F)
World‟s 228 nations
US$ 78.1 trillion
Mexico 2.1% S. Korea 2.0% Spain 1.8% Canada 1.8% Indonesia 1.4% Turkey 1.3% Australia 1.2% 17th Iran 1.1% Taiwan 1.1% Poland 1.0%
3.9%
11th – 20th Nations 14.6%
19.4% USA
Purchasing Power Parity (PPP) terms
Rest of World (198 nations)
16.1%
India
5.1%
2.3
%
IMF/IBISWorld 08/02/11
Netherlands 0.9% Argentina 0.8% Saudi Arabia 0.8% Thailand 0.8% S. Africa 0.7% Egypt 0.6% Pakistan 0.6% Colombia 0.6% Malaysia 0.6% Belgium 0.5%
World‟s 30 Largest Economies 2015 (F)
Includes H/K (0.4%)
and Taiwan (1.1%)
World‟s 228 nations
US$ 99.3 trillion
Italy 2.0% S. Korea 1.9% Canada 1.6% Spain 1.6% Indonesia 1.5% Turkey 1.2% Australia 1.1% 17th Iran 1.0% Poland 1.01% S. Arabia 0.8%
5.1%
18.7% China
Purchasing Power Parity (PPP) terms
Rest of World (198 nations)
13.7%
6.4%
2.6
%
Wikipedia & iBISWorld 08/02/11
Netherlands 0.8% Argentina 0.8% Thailand 0.8% S. Africa 0.7% Egypt 0.7% Pakistan 0.6% Colombia 0.6% Malaysia 0.6% Nigeria 0.6% Belgium 0.5%
The World‟s Economic Regions In 2011(F)
Share of World GDP (ppp basis)
2011 World GDP, $US 78.1 trillion
C&S America
6.3%
North
America 23.3%
W&C Europe 21.7%
Eastern
Europe 3.7%
Asia Pacific 28.9%
Africa 3.9%
ME 5.4%
Indian S-C 6.8%
IBISWorld 08/02/11
World Regions Importance Changing importance, % of World GDP (ppp terms)
Source: OECD 08/02/11
26.1% 17.0% 16.3%
31.8% 4.2%
7.7%
2.7%
3.6%
4.1%
7.6%
8.6% 9.6%
4.0%
33.6%
35.5%
27.3%
19.0%
2.0%
3.5%
6.7%
6.0%
12.7% 22.8%
30.5% 21.9%
1870 1913 1950 2015
Middle East
Africa
Indian S-C
Asia Pacific
5.5%
1.1 2.7 5.3 99.3 GDP (trillion)
1870 1913 1950 2015 (F) Year
Nth America
C & S America
Western Europe
Eastern Europe
12.2%
7.6%
3.6%
Asia Pacific Economy GDP ppp terms 2011
*Korea 7.0%
Source: International Monetary Fund, Oct 2010
Australia
4.1%%
Indonesia
Thailand 2.8%
Singapore 1.4% Vietnam 1.3% NZ 0.6% Myanmar 0.4% Cambodia 0.1% Laos 0.1% PNG 0.1% Other 1.1%
47.2% China
Malaysia
Phillipines
4.8%
Others 5%
*North Korea 0.19%
South Korea 6.93% $21.2 trillion total
Asia Economy Asia Pacific + Indian S-C
ppp terms 2015 (F)
$US 38.9 trillion (39.8% of world GDP)
Source: Wikipedia/ IBISWorld 18/02/11
India 16.4%
Other A-P
0.3%
NZ 0.4%
H/K 1.1%
Singapore 1.0%
Vietnam 1.1%
Philipp 1.2%
Malaysia 1.5%.
Thailand 2.0%
Greater China
47.9%
44.0% China
13.0%
Japan
Other
Indian S-C
3.1%
2.8%
Economic Growth: China Real growth 1950-2012 (F)
-28
-24
-20
-16
-12
-8
-4
0
4
8
12
16
20
241
95
0
19
54
19
58
19
62
19
66
19
70
19
74
19
78
19
82
19
86
19
90
19
94
19
98
20
02
20
06
20
10
20
14
20
18
20
22
Pe
r c
en
t
SSBC/IBISWorld: 18/09/11
8.2%
average
Economic Growth India Real GDP growth 1950-2012 (F)
-12-10-8-6-4-202468
10121416
19
50
19
54
19
58
19
62
19
66
19
70
19
74
19
78
19
82
19
86
19
90
19
94
19
98
20
02
20
06
20
10
20
14
20
18
Pe
r c
en
t
SSBC/IBISWorld: 18/09/11
Economic Growth Indonesia Real GDP growth 1950-2012 (F)
-14-12-10
-8-6-4-202468
10121416181
95
0
19
54
19
58
19
62
19
66
19
70
19
74
19
78
19
82
19
86
19
90
19
94
19
98
20
02
20
06
20
10
20
14
20
18
Pe
r c
en
t
SSBC/IBISWorld: 18/09/11
6.0%
average
Economic Growth Japan Real GDP growth 1950-2012 (F)
-12-10-8-6-4-202468
101214161
95
0
19
54
19
58
19
62
19
66
19
70
19
74
19
78
19
82
19
86
19
90
19
94
19
98
20
02
20
06
20
10
20
14
20
18
Pe
r c
en
t
SSBC/IBISWorld: 27/09/11
1961-1976
8.5% pa 1977-1991
3.8% pa 1992-2007
1.4% pa
2.
Australia‟s
Economy
2020 & Beyond
-3
-2
-1
0
1
2
3
4
5
6
7
8
9
1960
1962
1964
1966
1968
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
Economic Growth Annual real GDP growth (%) progressed in quarters to June 2011 (and forecast to June 2016)
36 qtrs. 34 qtrs 34 qtrs 33 qtrs 38 qtrs 33 qtrs? 36 qtrs ?
Source: IBISWorld: 07/09/11
Average long business cycle is 34 quarters (81/2 years)
Years, ended June
Forecast
Ages Of Economic Progress GDP @ Constant F2011 Prices Australia 1788-2011 and onwards
GD
P $
bil
lio
n
Industrial
Age
0
200
400
600
800
1000
1200
1400
1600
1800
2000
22001
78
0
17
90
18
00
18
10
18
20
18
30
18
40
18
50
18
60
18
70
18
80
18
90
19
00
19
10
19
20
19
30
19
40
19
50
19
60
19
70
19
80
19
90
20
00
20
10
20
20
20
30
20
40
20
50
20
60
20
70
20
80
20
90
21
00
Hunting
Age Agrarian
Age Infotronics
Age
Industrial
Age
Year, ended June IBISWorld 26/05/11
An Industrial Age is when
Manufacturing and Construction
dominate the economy
(c. 30-50%+ of GDP)
Agriculture,
Mining,
Banking,
Commerce
Transport
the major
utility
Quaternary service
industries
Hunting,
trapping,
fishing,
crafts,
religion
Enlightenment
Age ?
Quinary service
industries
Imbedded
intelligence,
neural network
Programs.
More electronic
“guardian
angels” and
other new
technologies
Electricity, gas & water,
and telephony, the
Industrial Age utilities
IC&T the
Infotronics
Age utility
Fastest Growing Industry Themes New Age 1965-2040s
IC&T - the New Age all-pervasive utility.
Business Services - outsourcing non-core functions.
Financial Services - outsourcing of transactions/investment.
Property Services - outsourcing property ownership/services.
Knowledge Industries - databases & multi-media services.
Health - outsourcing home doctoring.
Education - outsourcing pre-school, plus universities.
Personal & Household Services - outsourcing chores.
Hospitality & Tourism - outsourcing the kitchen and travel
Recreation & Cultural Services - outsourcing leisure.
Mining - energy minerals (oil, gas, coal, uranium)
Construction - stronger growth of infrastructure than buildings
Biotechnology & Nanotechnology - New Age technologies
Environmental Services - testing, assessment, amelioration
Australia‟s Industry Mix Shares of GDP in constant F2009 price terms Year to June 2011
ABS 5206-26 IBISWorld 07/09/11
Agriculture
2.6% Utilities 2.0%
GDP $1308 billion (constant F2009)
Finance & Ins.
Mining 9.0%
Govt. Adm. 4.8%
O‟Ship Dwells. 7.4% 7.3% Construction
3.0%
Communications
& Media
11.3% Prop. & Business Services
Cult & Rec. Serv.
0.8%
Pers. & Other Serv. Hospitality
(2.0%)
Sectors Primary
Secondary
Tertiary
Quaternary
Quinary
Prof., Scient. & Tech Services 6.4%
Rental, Hiring & Real Estate 2.5%
Admin. & Support Services 2.4%
Note 1: includes stat. discrepancy (-0.3%)
Changing Importance of Australian Industry Share of GDP* by Industry Division
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
18
00
18
20
18
40
18
60
18
80
19
00
19
20
19
40
19
60
19
80
20
00
20
20
20
40
20
50
Agriculture
Mining
Manufacturing
Utilities
Construction
Wholesale trade
Retail trade
Transport &storage
Communication
Finance &insurance
Prop &business
Dwelling O'Ship
Govt admin
Education
Accom, cafes &rest
Health &community
Cult &recreation
Personal &other
Note: *At market prices to 1940, at factor cost thereafter Source: N.G Butlin, ABS & IBISWorld 28/07/08
3.
Social Change
In The New Age
Our Changing Society In The New Age
Living longer
More living in coastal cities
More generations co-existing
Changing household structures
Smaller households
Changing ethnic mix (Eurasian)
New tribalism (less local)
Very slowly rising divorce rate
Fast rising incomes & wealth
Apartment living rising
Home leasing on the rise
More spending on services
Outsourcing tasks and chores
Rise of virtual shopping
Living with leisure
Living with IC&T
Increasing knowledge
Increasing financial literacy
New entertainment & sports
Electronic “guardian angels”
Working differently
New industries/ occupations
Changing spirituality
Outlawing discrimination
Changing politics (ideologies)
Ecological sensitivity
Australian Population 1850-2051
02468
10121416182022242628303234363840
1850
1860
1870
1880
1890
1900
1910
1920
1930
1940
1950
1960
1970
1980
1990
2000
2010
2020
2030
2040
2050
Forecasts
(IBISWorld)
Million
37.8
29.3
25.6
22.7
33.4
Year, ended June
Living Longer And Working Longer Life Expectancy And The Retirement Age of Male Australians
0
10
20
30
40
50
60
70
80
90
100
110
120
18
00
18
10
18
20
18
30
18
40
18
50
18
60
18
70
18
80
18
90
19
00
19
10
19
20
19
30
19
40
19
50
19
60
19
70
19
80
19
90
20
00
20
10
20
20
20
30
20
40
20
50
20
60
20
70
20
80
20
90
21
00
Source: ABS, Australian Historical Statistics, IBISWorld
Who would want to be retired for 30+ years
in 2100; and could the nation afford it?
Female life expectancy
Source: IBISWorld 09/06/11
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
50000
55000
60000
65000
70000
75000
800001
950
19
55
19
60
19
65
19
70
19
75
19
80
19
85
19
90
19
95
20
00
20
05
20
10
20
15
20
20
20
25
20
30
20
35
20
40
Year, ended June (Australia), December (China)
SO
L $
A (
2011 c
onsta
nt pri
ces)
Australia‟s SOL
Australia and China Standard Of Living GDP/capita ($A, 2011 prices) 2050-2011
China‟s SOL (one-eighth of
Australia in 2011)
Household Income Average/household 1986-2011(F)
Source: ABS/IBISWorld 30/09/11
0 10 20 30 40 50 60 70 80 90
100 110 120 130 140 150 160 170 180 190 200
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
2022
2024
Actual prices
Year, ended June
Inco
me (
$„0
00) Constant 2009 prices (CPI)
Growth 1.7% pa , last 10 years
Average F2011
$131,900 per
household
Changing Household Expenditure % of total basis
6.913.2
7.4 7.9 10.06.6
1.26.9
9.3
10.3
14.7 13.9 10.9 15.4
11.9
14.21.0
2.0 3.9 5.1 5.96.5
6.8
8.8
8.0
7.0 6.07.9 10.1
11.2
12.6
12.3
1.5
3.3 7.16.5
6.3
6.6
8.5
6.9
2.5
3.0
6.75.9
5.1
4.4
5.3
4.0
3.5
3.0
3.03.4
3.6
3.54.5
5.7
7.8
10.6
9.7 8.5 7.26.5
6.3
5.8
54.0
36.230.3
26.423.3 20.0
20.7
16.7
2.06.8 7.3
10.713.8 15.0 16.3
13.2
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
0.3 4.8 14 30 118 360 543 1161 $ billions
1900 1950 1960 1970 1980 1990 2000 2011
Taxes (direct)
Non-durables
Durables
Health & Education
Hospitality
Entertainment/Recn
Communications/fares Other services
Rent
Finance & Ins Serv
Capital Related
Savings
Household Outsourcing In The New Age1 F2011 (E)
$263 billion $29,900 per Household ($575 per week)
Source:IBISWorld 06/06/11
26.7%
12.9%
Entertainment & Recreation
Other 2.4%
11.2%
Note: 1 Spending on services,
new since 1965
Entertainment
Recreation
Gambling
Clubs
Transport
Accommodation
Miscellaneous
(excludes business tourism)
Increasing Leisure Time How various generations have spent, or will spend, their lifetimes
33 33 33
33 33
33 33
0
10
20
30
40
50
60
70
80
90
100
38 43 53 59 72 88 100
Sh
are
of
Lif
eti
me
(%
)
Year born
Leisure Time
Paid Work
Unpaid Work
Education
Travel to Work
Sleep
46% 42% 38% 35% 29%
25% 23%
Source: IBISWorld
21.8% 19.8% 15.6% 12.4% 10.4% 9.1%
23.7%
1788 1838 1888 1938 1988 2038 2088
Life Expectancy
(years)
4.
The Tourism
Market And An
Inbound Boom
A Big Market
Nearing $100 billion revenue (2.5% of nation)
Over $35 billion value added (2.6% of GDP)
Over 500,000 employees (4.5% of workforce)
Fourth most profitable industry
Over 6 million inbound tourists
73% domestic, 27% inbound, but 50/50 in the 2020s?
Over 70 million visitor nights
Export value much greater than Agriculture
Could rival mining exports within two decades
A great contributor to international relations & peace
Australian Tourism Market F 2012 (F)
Revenue
$ 95 billion (Net contribution, 2.6% of GDP)
Source: IBISWorld 05/10/11
Cafes &
Takeaway
14.7%
15.1%
Australians 73%
Inbound 27%
Travel /Tour
Agencies
Other transport
Bus/other 0.7%
Taxis 0.9%
Fuel 7.8%
Motor vehicles 2.3%
R&M 0.5%
Hire cars 1.6%
15.6%
Air, Sea, Rail, Coach
Cultl. & Recn 3.7%
Shopping
13.5%
Long Distance
Transport
Commercial 11.0%
Dwellings 3.7%
4.9
4.9
7.1
8.1
8.6
9.6
9.7
11.2
12.2
14.1
14.7
17.2
17.3
21.0
22.2
29.2
0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36
Government Admin.
Transport
Health & Community
Education
Manufacturing
Cult & Recn Serv
Utilities
Other Services
Agriculture
Prop & Bus Serv
Average
W'Sale Trade
Construction
Finance & Ins
Hospitality
Communications
Retail Trade
Mining
3.0
Percent
Australian Profitability By Major Industries
Return on Shareholder Funds (after tax), Top 1350 businesses 5 years to F2010
Source: IBISWorld 22/11/10
8.2
Includes private and
government enterprises 4.1
Australia‟s International Tourism Numbers („000) to 2011(F)
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
10000
11000
1200019
25
19
30
19
35
19
40
19
45
19
50
19
55
19
60
19
65
19
70
19
75
19
80
19
85
19
90
19
95
20
00
20
05
20
10
20
15
20
20
20
25
Nu
mb
er
('000)
Potential
Inbound
Outbound
The overvalued $A has led to more outbound than inbound tourists over the past several years The falling value of recent months may see a $US 0.80 within a few years that should begin to reverse the above pattern. However, over the long term we may see a stronger $A than was the case in recent decades, so innovation and productivity will be vital
Exchange Rate - TWI To $A Monthly average, to September 2011
Source: Reserve Bank of Australia/IBISWorld forecasts 29/09/11
0
10
20
30
40
50
60
70
80
90
100
110
120
1301
96
9
19
71
19
72
19
74
19
75
19
77
19
79
19
80
19
82
19
83
19
85
19
86
19
88
19
90
19
91
19
93
19
94
19
96
19
98
19
99
20
01
20
02
20
04
20
05
20
07
20
09
20
10
20
12
20
13
20
15
20
17
20
18
20
20
TW
I
-11.0
-8.4
-2.2
-1.9
-1.4
-0.1
0.0
0.2
0.3
0.3
0.6
0.6
0.8
1.1
1.2
1.3
2.4
3.5
4.8
5.2
-12 -11 -10 -9 -8 -7 -6 -5 -4 -3 -2 -1 0 1 2 3 4 5 6
Mining
Utilities
Real Estate/Rent
Hospitality
Other Services
Education
Health
Govt Adm/Def
Prof & Tech Serv
W'Sale Trade
GDP
Transport
Arts & Recn
Construction
Manufacturing
Admin Serv
Retail Trade
Finance & Ins
Agriculture
Communications/Media
Source: ABS 5204.25 07/09/11
Percent Growth
Australian Industries Productivity 5 year growth to F2011, % p.a (IGP / hour worked)
o
Long term average productivity 1.8% pa
The shortfall of 1.2% pa over the past 5 years
fully explained by Mining and Utilities which
were both shockingly negative
Oops
7.5million
Source: ABS
14.1% NZ
M East
2.6%
Outbound Tourists By Destination Short term residents F2011 Share of total basis
11.4%
Other SE Asia
Asia 68% C& S America 1.2% 4.4%
Africa
& Other
1.8% C&E
Europe
4.6%
US
A
10
.1%
Outbound Tourists By Destination Share of total basis
16.2% 3.60%
58.0%
2.6%
11.6%
63.9%
2.1 million 7.5 million
Asia Pacific
Indian S-C
N America
C&S America
W Europe
C&E Europe
Middle East
Africa & Other
Source: IBISWorld 29/09/11
1991 2011
15.6%
5.0%
10.7%
4.6%
Australia‟s International Tourism Inbound Numbers („000) to 2011(F)
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
10000
11000
1200019
25
19
30
19
35
19
40
19
45
19
50
19
55
19
60
19
65
19
70
19
75
19
80
19
85
19
90
19
95
20
00
20
05
20
10
20
15
20
20
20
25
Nu
mb
er
('000)
Potential
Inbound
5.9 million (Value $34.4 billion)
Source: ABS 3401-04
20.0% NZ
M East
1.9%
Inbound Tourists By Origin Short term arrivals F2011 Share of total basis
Other Oceania 2.9%
5.4% Singapore
11.4%
Asia 65%
C& S America 0.5%
Africa
& Other
1.5%
6.1%
Japan
China is expected to
be the biggest single
source of tourists well
before 2020
Changing Of The Guard Inbound Tourists („000)
Source: IBISWorld/ABS 29/09/11
0
200
400
600
800
1000
1200
1400
1600
1800
2000
2200
2400
2600
2800
3000 1
98
0
19
82
19
84
19
86
19
88
19
90
19
92
19
94
19
96
19
98
20
00
20
02
20
04
20
06
20
08
20
10
20
12
20
14
20
16
20
18
20
20
20
22
20
24
China
Year, ended December
Inb
ou
nd
to
uri
sts
(‟0
00)
Japan
NZ, 2011
1.2 mm
(No 1)
Then add South Korea, India and Indonesia
And a recovered USA and EU
Do we want - and will we be
ready for - 20 million inbound tourists before 2030?
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