ACT State of the Environment 2007

Indicator: Economy

Summary

The ACT enjoyed strong economic growth particularly during the latter part of the reporting period largely due to a boom in non-residential construction.

As the national capital, Canberra has been, and no doubt will continue to be, largely dependent on Australian Government spending for economic vitality. As such Commonwealth Government spending in the Territory will remain significant.  As a city-state the Territory's economy has a relatively narrow base, its vitality being largely dependent on the strength of its property market and urban development. Such dependence has implications for long-term sustainability.  Despite the significance of the government sector, around 70% of the ACT's economy is derives from industries other that government administration.

While there are opportunities to progress sustainability practices for water and energy in new greenfield and inner area developments, development by its very nature will continue to place pressure on biodiversity conservation and increase overall consumption of resources. The Territory's challenge therefore is to maintain a strong economy, diversify its economic base and concurrently reduce consumption of resources and impact on the natural environment. This has been, and still is, a challenge for ACT governments.

What the results tell us about the ACT

The ACT entered the four-year reporting period on the back of strong economic growth associated with construction activity, particularly housing.

During 2003–07 the economy, on the whole, remained strong and relatively stable, despite six increases in interest rates that decreased housing affordability, reduced income to spend on other things and, potentially, reduced the number of new housing developments. After dipping to a low level in 2004, new residential commencements recovered and in the latter part of the period non-residential construction also increased sharply.

The major employment issue during the period was demand exceeding supply of skilled workers. This is not just an ACT issue, but also one to be addressed nationally.

Business confidence boomed in a period when the Territory's trend unemployment rate was the lowest of any jurisdiction.

National measures of industry contribution showed little to no change in the major industry contributors to the Territory's economy, with government administration (both Commonwealth and ACT governments) and defence continuing to make up around 30% of employment.  At then end of the period however, private enterprise collectively accounted for 60% of employment.

The 2005–06 strategic and functional review of the ACT public sector and services was designed to uncouple the Territory's revenue base from land sales, be favourable to business and simplify regulation and government structures while providing savings to government from streamlined processes and changes to structures.

One of the review's effects was a reduction in programs to broaden the Territory's economic base in the 2004 Canberra Plan.  This concerned the business sector at that time.  However, the ACT Government released a new business prospectus in January 2007 and created the ACT Skills Commission to develop strategies and advice on the Territory's skills needs for the present and the future. The Skills Commission's Final Report contains a range of recommendations, many of which have been adopted by the ACT Government.  As part of the 2008–09 ACT Budget, the Government announced an investment of $51 million over 4 years for the ACT Skills Strategy with a focus on education and training as well as workforce migration and support.  The Government in the 2008–09 Budget has also made a concerted effort to address housing availability and affordability as part of a suite of actions for attracting business and skills to the Territory.        

The ACT (and more broadly the Australian Capital Region) has to be able to maintain its existing competitive advantages and establish new advantages to compete with other jurisdictions. Strong government leadership, and collaboration and cooperation between government and business are key requirements to achieving competitive advantage, particularly on a regional scale.

Changing our economic base – a long, slow process

Changing and expanding the Territory's economic base is a challenge. Canberra as the national capital was designed to have federal government business as its economic base. However, self-government in March 1989 brought with it an onus on the ACT Government to create and manage its own economy.

In terms of gross value added by various industry sectors, government administration and defence continue to be the largest industries in the ACT (contributing 31% of current price Gross State Product, above its long-term average of around 28%), followed by property and business services, ownership of dwellings and construction. Figure 1 demonstrates the relative contributions over a 10-year period.

Figure 1: ACT industry value added contribution to current price Gross State Product, 2006–07

Graph of ACT industry value added contribution to current price Gross State Product

Note: includes Agriculture, forestry and fishing, Mining, Manufacturing, Wholesale trade and Taxes less subsidies on products; Source: Australian Bureau of Statistics 2007c

The major non-government industries are all strongly related to property, construction and land development.

The 2005–06 review of the ACT public sector and services also acknowledged that continued above average public spending on the back of, among other things, proceeds of land sales, is not sustainable. The government's intention with the review was to achieve structural reform to reduce expenditure, accompanied by revenue measures, so that land-based revenues would be a decreasing proportion of the overall revenues in the future (ACT Government 2007a:17).

Land-related economic activity has consequences outside of economic growth, leading to loss of significant biodiversity (see Conserving biodiversity issue).  However, Commonwealth and ACT legislation are in place to protect biodiversity.

A recent example is the proposed residential development in the Molonglo Valley. The Spatial Plan, adopted as part of the Canberra Plan in March 2004, identified land for future residential development in the short-, medium- and long-term. Propelled by demand, particularly in the latter part of the reporting period, the ACT Government made a concerted effort to release land for housing. As part of this program, development of the Molonglo Valley, identified initially in the Spatial Plan as a possible future urban area over the next 30 years, has been brought forward. While some of that proposed development will involve conversion to residential land of pine forest that had been burned in the January 2003 bushfire, other parts of it may affect threatened wildlife habitat unless a satisfactory resolution can be achieved. This reinforces the need for planning to be strategic, regionally focused and based on sustainability principles.

The ACT private sector is characterised by large numbers of small and micro business (Small Business Commissioner 2006, see About the data). The Australian Bureau of Statistics estimates at the time suggested small and micro-sized firms in Canberra accounted for around one-third of the Territory's total workforce, and represented over 96% of all private sector firms.

The Chief Minister's annual Export Awards highlight successful business ventures in the ACT (see www.business.act.gov.au). In January 2007 the ACT Government released a new business prospectus, Investing in Australia's Capital, designed to assist business development and investment in the ACT.

Actions to support private business, such as the Canberra Commercialisation Council, the ACT Exporters' Network and the 'Live in Canberra' campaign, have received strong support from the Canberra Business Council. In its annual report for 2005–06, the council acknowledged the benefits of the ACT Exporters' Network in establishing links with other strategic groups such as Austrade, the Australian Institute of Export and Australian Business Limited to harness opportunities to grow the Territory's export community.

The Canberra Business Council also strongly promotes the interdependence between the Territory and its neighbours in the Australian Capital Region as a way forward.

Non-residential construction boom

This reporting period followed the housing boom of 2002–03. The subsequent downswing had a soft landing without the crash some predicted. Average residential prices increased by more than 20% in both 2002–03 and 2003–04, easing to only a 5.4% increase in 2004–05. Development applications, approvals and housing loan application numbers as well as loan values all dropped. The low point in the ACT housing market was in late 2004. By June 2006 it had recovered considerably and its return to longer-run average levels of activity continued during 2006–07. See also the Housing indicator for comments about housing affordability in response to the increase in house prices and interest rates.

However, the major positive feature of the reporting period was a boom in non-dwelling construction.

In September 2005, the ACT Government's Department of Treasury reported significant private investment in dwelling and non-dwelling construction in the pipeline, including the Section 84 development in Civic, flow-on effects from the Defence headquarters at Bungendore, and a large number of additional units at the Kingston Foreshore and in other areas across Canberra.

In addition, proposed public investment in the Territory by the Australian Government included an extension of ASIO's central office, a new bioscience laboratory at the CSIRO, and refurbishment of the Royal Australian Mint. The ACT Government's proposed investment included the Gungahlin Drive Extension and the Alexander Maconochie Centre (ACT prison).

The volume of ACT non-dwelling construction work done in 2007 was $1.25 billion (in price adjusted terms). This surge in non-dwelling construction has been unprecedented in the Territory's history, it surpassed the previous record volume of activity during construction of the new Parliament House. Construction included commencement of work on the Marcus Clarke Street–London Circuit precinct; work for the Australian Sports Commission in Bruce; the Calvary Retirement Village in Bruce, and infrastructure work being undertaken by the telecommunications industry (ACT Government Treasury 2006).

Business confidence

Overall, it was a good period for business confidence in small to medium enterprises. Strongly related to employment intentions and perceptions of the local and national economies, business confidence reached a number of historically high levels during the reporting period, including for the January 2004, April 2006 and April 2007 quarters (Sensis(r) Business Index).

Not surprisingly, around the same time as the Territory's economic growth eased following the 2003 housing boom, business confidence declined and, for the first time since November 1998, fell below the national average during the July 2004 quarter.

Business confidence also declined in the August to October 2006 quarter. This followed the second increase in the official cash interest rate in a short time. It also followed the ACT Government's 2006–07 Budget which, among other things, withdrew funding for certain business programs, export growth and tourism development in response to recommendations of the 2005–06 review of the ACT public sector and services. The Canberra Business Council Annual Report 2005–06 was unequivocal about the reaction of Canberra business to the government's actions (Canberra Business Council 2006).

Strong finish for investment and consumption

For the reporting period, the trend value of capital investment and consumption of goods and services in the ACT (otherwise known as demand, as measured by State Final Demand) increased from $7122 million in the June 2003 quarter to $8,500 million in the June 2007 quarter.

The growth in trend demand in each financial year was consistently positive. In the last two years – when the strongest growth in the reporting period was recorded – the Territory's growth exceeded that recorded nationally. Table 1 shows the Territory's State Final Demand compared with that of Australia. It also shows the Territory's annual percentage change in each of the components used to measure State Final Demand.

Table 1: Annual percentage change in ACT State Final Demand and its components, 2003–04 to 2006–07 (%)
Year Public
Consumption
Public
Investment
Private
Consumption
Private
Investment
SFD ACT DFD Australia
2003–04 5.4 18.2 2.2 -4.2 3.9 5.7
2004–05 6.4 3.6 2.3 2.7 4.5 4.9
2005–06 2.4 12.6 4.9 16.5 5.0 4.1
2006–07 4.4 n/a 5.1 12.8 5.7 4.1

Notes: n/a = data not available; SFD = State Final Demand; DFD = Domestic Final Demand (the national equivalent of SFD)
Source: ACT Department of Treasury, derived from Australian Bureau of Statistics cat. no. 5206.0 Trend data

Government investment and consumption (particularly that of the Australian Government) continues to have a significant impact on the ACT economy. Figure 2 demonstrates the variation in the components used to measure State Final Demand, in particular, the large fluctuations in the amount invested in capital works by government.

Figure 2: Annual change in components of State Final Demand, September 2003 to June 2007

Graph of annual change in components of State Final Demand, September 2003 to June 2007

Source: ACT Department of Treasury, derived from Australian Bureau of Statistics 2008

The negative growth in private investment during 2003–04 reflected the declining investment in both dwelling and non-dwelling construction. That situation changed significantly during 2005–06 resulting in an annual increase of 16.5% in trend private investment in non-dwelling construction. In 2006–07, the level of non-dwelling construction for new buildings, in real terms, grew by 48% to $1, 194 million, the highest level on record. This led to a 12.8% increase in private investment over that year. Private investment is discussed in more detail below.

While the Territory's economy is sensitive to Commonwealth Government investment and consumption, it is generally protected against greater fluctuations to which the national economy is subject.

Inflation was generally contained

In order to kept inflationary pressure in check, the Reserve Bank of Australia raised cash interest rate targets several times during the reporting period (Figure 3).

Figure 3: Reserve Bank of Australia cash rate targets, July 2003 to June 2007

Graph of Reserve Bank of Australia cash rate targets, July 2003 to June 2007

Source: Reserve Bank of Australia 2007

Only in 2005–06 did the Consumer Price Index (CPI) exceed the Reserve Bank's target band of 2–3% (Table 2) when the price of bananas exploded as a result of Tropical Cyclone Larry in North Queensland in March 2006.

Costs of transportation in general, and the price of petrol at the pump in particular, were major contributors to increases in CPI during the period. These factors affected the cost of living across Australia.

Table 2: Percentage change in CPI from previous financial year, 2003–04 to 2006–07, Canberra and weighted average of eight capital cities
Period Canberra Weighted average of eight capital cities
2003–04 2.6 2.4
2004–05 2.3 2.4
2005–06 3.5 3.2
2006–07 3.0 2.9

Source: Australian Bureau of Statistics 2006

Employment rates bolstered the economy

Overall, a great period for job seekers

Trend data for ACT employment levels in the period June 2003 to June 2007 show a rise from about 173,600 employed civilians at the start of the reporting period to about 188,100 in June 2007. During most of this period the rise in employment was steady. However, skills shortages became a recurrent and increasingly major concern for both the ACT Government and private sector bodies such as Canberra Business Council, particularly in relation to attracting business to both the ACT and the Australian Capital Region.

The skills shortages in the Territory and regionally were exacerbated by a strong rise in the number of employment opportunities nationally. The Territory's difficulties in attracting skilled workers were compounded by housing affordability problems and a demand for new land/housing that could not easily be met (see also Housing indicator).

In 2006–07 the ACT Government responded to the skills shortage by establishing the ACT Skills Commission and undertaking the 'Live in Canberra' campaign with dedicated resources and in partnership with the private sector (Canberra Business Council 2006:6).  Further, in response to the recommendations by the ACT Skills Commission, in the 2008–09 Budget the ACT Government invested $51 million over 4 years to address the skills challenge in the Territory. 

Table 3 shows trend participation rates continuing higher in the ACT than for Australia as a whole. This is characteristic of the Territory's labour pattern because of the traditionally higher female participation rate compared to the national rate (see also the Socioeconomic equity indicator).

Table 3: Labour force participation rate, ACT and Australia, June 2003 to June 2007
Gender June 2003 June 2004 June 2005 June 2006 June 2007
ACT Aust ACT Aust ACT Aust ACT Aust ACT Aust
Persons (%) 71.2 63.5 71.2 63.4 72.0 64.4 73.1 64.6 72.9 64.9
Males (%) 76.7 71.3 76.8 71.5 76.8 72.1 77.7 72.1 78.7 72.3
Females (%) 66.0 55.8 66.0 55.5 67.5 57.0 68.7 57.4 67.4 57.7

Source: Australian Bureau of Statistics 2007e

Labour Force Survey results show that for all of the reporting period the ACT exhibited a lower rate of unemployment than national rates (Table 4). However, the average difference between the Territory's unemployment rates and those of Australia as a whole has narrowed marginally compared with what was reported in the 2003 State of the Environment Report.

Table 4: Unemployment rate, ACT and Australia, June 2003 to June 2007 (%)
Gender June 2003 June 2004 June 2005 June 2006 June 2007
ACT Aust ACT Aust ACT Aust ACT Aust ACT Aust
Persons 4.3 6.0 3.6 5.5 3.1 4.5 3.0 4.8 2.9 4.3
Males 4.4 6.1 3.8 5.4 3.1 4.8 3.5 4.7 2.9 3.9
Females 4.2 6.0 3.4 5.6 3.1 5.3 2.4 4.9 2.9 4.8

Source: Australian Bureau of Statistics 2007e

Teenage unemployment in the ACT improved during the reporting period. In February 2003 the rate of unemployment for teenagers was 22.0%; by 2006–07 it had improved to 13.7%, slightly increased from 13.3% in 2005–06. However, this is marginally lower than for Australia (13.9%) (Australian Bureau of Statistics 1995:181).

Increase in full-time trends

Labour Force Survey results show that over reporting period the percentage of all ACT full-time workers remained above the national average (Table 5) with the proportion of full-time workers increasing notably.

The gap between ACT and national proportion of both full-time male and female workers was generally maintained.  The higher proportion of female full-time workers in the Territory may be associated with the high proportion of email professionals working in the ACT relative to other jurisdictions.

Table 5: Full-time employment, ACT and Australia, 2003–04 to 2006–07
Category 2003–04 2004–05 2005–06 2006–07
ACT Aust ACT Aust ACT Aust ACT Aust
Persons employed full-time as % of total employed 73.0 71.6 73.9 71.6 74.6 71.4 75.5 71.5
Males employed full-time as % of total males employed 82.4 85.3 85.1 85.2 84.7 85.2 85.1 84.9
Females employed full-time as % of total females employed 62.9 54.5 62.0 54.8 63.6 54.4 65.0 55.2

Source: Australian Bureau of Statistics 2007e

Where people are employed

Private sector leading employer

While the economy of the ACT is heavily influenced by Commonwealth and ACT Government spending, when employment is split simply between the public and private sectors, Australian Bureau of Statistics data show the main source of employment is the private sector (Table 6).

Table 6: Employment by industry sector, 2001 and 2006 Census
Employer 2001 Census 2006 Census
Persons % of total Persons % of total
Public sector 67,280 41.7 70,595 40.0
Private sector 93,920 58.3 105,689 60.0
Total 161,200 100.0 176,284 100.0

Source: Australian Bureau of Statistics 2001 and 2006 Census of Population and Housing (after distribution of 'not stated')

These figures represent a reasonable increase over the 5 years to 2006 in the role of private enterprise in the ACT.  This is a result of employment in the private sector increasing at a faster rate then that of the public sector.

Main industry employers

From Australian Bureau of Statistics Labour Force surveys, government administration and defence was the strongest industry employer, with substantial increases since May 2003 (Table 7). In the 10 years since 1997 government administration and defence employment increased by around 12,700. Some 10,500 of those appointments were made in the last two years.1

The next five top employing industries were property and business services, retail trade, health and community services, education and construction. While there was some fluctuation in each of these major industries, retail trade experienced a reduction in employment, in the last year of the four-year reporting period.

However, the value of retail trade has not diminished. On the contrary, annual growth in ACT gross value added of the retail trade industry over the past 10 years in real terms has averaged 4.2%, while over the same period the national average annual growth rate has been 3.9%.

Some other interesting observations may be made from Table 7, such as substantial increases in employment in both health and community services and education over time, as well as in accommodation, cafes and restaurants.

Increases in employment in health and community services are consistent with attempts to resolve increasing problems with delivery of services; a problem not confined to the ACT (see Health indicator).

As well as general growth in population, the increases in employment in education may be related to the increasing trend towards private schooling in the ACT and lower teacher-to-student ratios (see Education indicator).

The rise in the accommodation, cafes and restaurants industry can be explained in part by the rise of the 'cafe culture' in the ACT over recent years; for example, the number of small businesses in cafes and restaurants grew from an estimated 400 in 2000–01 to 805 in June 2006 (Australian Bureau of Statistics 2003:136; Australian Bureau of Statistics 2007a:144).

Table 7: Employment by industry, 10 years ago, 5 years ago and May 2003 to 2007
Industry May-1997 May-2002 May-2003 May-2004 May-2005 May-2006 May-2007
Agriculture, Forestry and Fishing 500 600 500 400 1,300 800 300
Mining 100 - 200 - 200 - 200
Manufacturing 4,200 4,700 6,700 5,200 3,800 5,200 4,800
Electricity, Gas and Water Supply 400 800 1,500 1,700 800 1,300 1,700
Construction 11,500 8,100 10,600 9,600 12,500 13,900 13,300
Wholesale Trade 4,000 2,800 2,800 3,000 2,600 3,900 2,800
Retail Trade 22,200 24,000 21,300 21,900 21,800 21,100 21,400
Accommodation, Cafes and Restaurants 7,900 8,100 8,800 10,100 9,600 8,300 11,000
Transport and Storage 4,400 4,300 3,600 4,600 3,700 3,600 4,100
Communication Services 1,600 2,500 3,200 2,200 3,100 2,900 2,400
Finance and Insurance 3,000 4,300 2,100 2,700 3,800 3,300 3,700
Property and Business Services 19,900 25,500 25,300 25,900 26,900 23,300 23,800
Government Administration and Defence 39,700 40,500 44,200 45,000 41,200 50,300 51,700
Education 13,300 14,400 14,600 16,400 14,500 16,500 16,400
Health and Community Services 12,200 16,900 13,400 14,000 16,700 166,200 16,200
Cultural and Recreational Services 5,600 5,800 6,700 6,400 7,700 6,300 6,300
Personal and Other Services 6,200 9,600 8,800 7,500 8,800 7,800 7,500
Total (Industry) 157,500 172,800 174,300 176,600 178,900 184,600 187,600

Note: estimates are rounded; Source: Australian Bureau of Statistics 2007a, Time Series data based - Original

The rise and rise of small business

While there are many 'exits', the net number of small businesses in the ACT has been slowly growing. The high proportion of business operators working on their own is noteworthy, with around 70% of small businesses home-based (various ACT in Focus, Australian Bureau of Statistics cat. no. 1307.8).

At June 2003, 23,826 businesses were actively trading in the ACT, of which 95.7% were small or micro businesses; 16,182 business proprietors were working on their own and 6630 employed fewer than 20 people (Australian Bureau of Statistics 2007d).

At June 2007, the total number of actively trading businesses in the ACT had increased to 24,492, with the proportion of small or micro businesses still amounting to 95.8% (Australian Bureau of Statistics 2007d). In that time, there appears to have been growth in the size of many of these businesses, with numbers of non-employing business decreasing to 13,737 and the number of businesses employing 1–19 people increasing to 9732.

In June 2006, most small and micro businesses were in property and business services, finance and insurance, retail trade, construction and transport and storage (Table 8).

Table 8: Counts of business by industry, ACT, June 2006
Industry (ANZSIC Division) Employment size ranges Total employing Non-employing Total
0–19 20–199 200+
Agriculture, Forestry and Fishing 129 6 135 513 648
Mining 5 5 17 22
Manufacturing 340 46 5 391 470 861
Electricity, Gas and Water Supply 16 16
Construction 1,250 71 1,321 3,198 4,519
Wholesale Trade 260 45 305 289 594
Retail Trade 1,267 269 9 1,545 1,008 2,553
Accommodation, Cafes and Restaurants 413 197 9 619 186 805
Transport and Storage 204 16 3 223 959 1,182
Communication Services 83 13 96 172 268
Finance and Insurance 409 22 4 435 998 1,433
Property and Business Services 2,898 243 15 3,156 4,554 7,710
Education 106 18 124 213 337
Health and Community Services 729 87 6 822 680 1,502
Cultural and Recreational Services 211 46 3 260 458 718
Personal and Other Services 343 30 373 453 826
All Industries 8,643 1,104 57 9,804 14,187 23,994

Notes: ANZSIC = Australian and New Zealand Standard Industrial Classification; – = nil or rounded to zero (including null cells)
Source: Australian Bureau of Statistics 2005a; Australian Bureau of Statistics 1993

At this stage, data do not appear to be available on the financial contribution to the Territory's economy of small and micro business, other than through the value of wages paid. However, in addition to small business numbers and numbers of employees, ACT in Focus (Australian Bureau of Statistics 2007a) from time to time reports industry income, turnover or value of production generated by industry and employer size group.

As an adjunct to the data in Table 8, total employment in the environment industry in 2002 was estimated at 2704, but, consistent with the pattern for business in the ACT, most firms had fewer than 10 staff (Thorburn and Houghton 2002). Such data highlights the weak sustainability aspect of the local business sector and exemplifies the sort of regular reporting needed to trace change in diversity of industry in a small jurisdiction like the ACT.

Data sources and references

Data for this indicator were obtained mostly from the Australian Bureau of Statistics at www.abs.gov.au; from economic briefs based on Australian Bureau of Statistics data provided by the ACT Department of Treasury, Economics Branch; and from ACT Government Budget Papers published periodically and available at www.treasury.act.gov.au.

Cash rate target is set by the Reserve Bank of Australia is the basis for banks to set their interest rates. Typically, and depending on the bank, the interest rate paid by the consumer is at least 1.0% to 1.5% higher than the Reserve Bank's cash rate target.

Gross State Product (GSP) is a measure of the value added by economic production in the states and territories. At the national level the equivalent concept is Gross Domestic Product (GDP). GSP differs in concept from State Final Demand (SFD; see below) in that it measures 'value added' rather than total final expenditure. Estimates of GSP using the Production approach (GSP(P)) have been published for the first time in 2007. The headline measure of GSP has also been changed to be a simple average of the previous income/expenditure measure of GSP and the new GSP(P) measure.

Gross value added (GVA) by industry is the value of output at basic prices minus the value of intermediate consumption at purchasers' prices. The term is used to describe gross product by industry. Basic prices valuation of output removes the distortion caused by variations in the incidence of commodity taxes and subsidies across the output of individual industries.

Industry of employment – The classification of 'industry of employment' is coded according to the Australian and New Zealand Standard Industrial Classification (ANZSIC; Australian Bureau of Statistics 1993). Industry of employment is classified based on the industry of the person's employer and relates to the main job the person held during the reference period of survey.

Australian Bureau of Statistics cat. no. 2068.0 contains industry of employment data by sex for the Canberra–Queanbeyan (ACT) statistical district from the 2006 Census of Population and Housing in various forms: full classification, group, subdivision and division. It is for employed persons aged 15 years and over, is based on place of usual residence, and the industry classifications are based on the 2006 Australian and New Zealand Standard Industrial Classification (ANZSIC 2nd edn; Australian Bureau of Statistics 2006b).

The full classification reported numbers employed in Canberra–Queanbeyan in 585 separate industries. At the next level, those industries were grouped into 265 industry classifications.

Long-term view of cash rate targets – A feature article on interest rates in the ACT Quarterly Economic Review (ACT Department of Treasury, 2003) describes three distinct periods in interest rate levels in Australia since December 1959.

The first period, from December 1959 to May 1973, saw relatively low and stable interest rates. The second period, spanning June 1973 to December 1989 (including the floating of the Australian dollar in December 1983), was one in which interest rates were substantially higher and subject to far greater fluctuation than in the periods before and after. The third period, from January 1990 to December 2003, has seen a return to lower interest rates and relative stability.

The 20-year period shown in this state of the environment report includes and extends that third period. In 1993 the Reserve Bank adopted an inflation target of 2% to 3% per financial year. It adjusts the cash rate target with a view to keeping inflation under control.

Public/private employment – Data sourced from Australian Bureau of Statistics 2001 Census of Population and Housing and Census Tables (cat. no. 2068.0), and Australian Bureau of Statistics 2006 Census of Population and Housing.

State Final Demand – In this report, State Final Demand (SFD) is the average annual change since the previous June quarter. Figures are the trend figures taken from the September quarter (Australian Bureau of Statistics 2008). SFD is an estimate of the level of spending in the local economy by the public and private sectors and is a fundamental measure of economic activity. SFD is conceptually equivalent to the Australian level aggregate domestic final demand. It is the aggregate obtained by summing government final consumption expenditure (public consumption), household final consumption expenditure (private consumption), private gross fixed capital formation (private investment) and the gross fixed capital formation of public corporations and general government (public investment).

Teenage employment data are influenced by the number of people aged 15–19 years who are also still at school. For example, in 2006–07, 13,300 people in this age bracket were employed either full-time (3900) or part-time (9500). Some 8400 also attended full-time education. ACT in Focus (Australian Bureau of Statistics 2007a) has more detail.

References

Components of ACT State Final Demand reported in ACT Department of Treasury, Economics Branch, Australian National Accounts: State Final Demand (SFD), reports from September Quarter 2003 to September Quarter 2007 were analysed for this information.

Australian Bureau of Statistics Australian Bureau of Statistics 1993, Australian and New Zealand Standard Industrial Classification (ANZSIC), cat. no. 1292.0, available at <http://www.abs.gov.au/ausstats/Australian Bureau of Statistics@.nsf/66f306f503e529a5ca25697e0017661f/7cd8aebba7225c4eca25697e0018faf3!OpenDocument>

Australian Bureau of Statistics Australian Bureau of Statistics 1995, Australian Capital Territory in Focus, cat. no. 1307.8, pp. 70–71, quoted in OCE 1995, ACT State of the Environment Report, p. 181

Australian Bureau of Statistics Australian Bureau of Statistics 2003, Australian Capital Territory in Focus, 2003, cat. no. 1307.8, available at <http://www.abs.gov.au/ausstats/abs@.nsf/mediareleasesbyReleaseDate/B144FBA7773744C8CA256DDA00759A1C?OpenDocument>

Australian Bureau of Statistics Australian Bureau of Statistics 2005a, Business Register, Counts of Businesses – Summary Tables, cat. no. 8161.0.55.001, available at <http://www.abs.gov.au/ausstats/abs@.NSF/7d12b0f6763c78caca257061001cc588/b34a6c8a585479f0ca25709200750356!OpenDocument>

Australian Bureau of Statistics Australian Bureau of Statistics 2005b, Characteristics of Small Business 2004, cat. no. 8127.0, p. 44, quoted in the Office of the Small Business Commissioner's Annual Report 2005–06, Australian Capital Territory, 2006 available at <http://www.cmd.act.gov.au/Documents/annual_reports/SBC-Annual-Report-2005–06.pdf>

Australian Bureau of Statistics Australian Bureau of Statistics 2006a, Consumer Price Index, Australia June 2006, cat. no. 6401.0, available at <http://www.abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/6401.0Jun%202006?OpenDocument>

Australian Bureau of Statistics Australian Bureau of Statistics 2006b, Australian and New Zealand Standard Industrial Classification (ANZSIC), cat. no. 1292.0, available at <http://www.abs.gov.au/AUSSTATS/abs@.nsf/ allprimarymainfeatures/A77D93484DC49D63CA25712300056842?opendocument>

Australian Bureau of Statistics Australian Bureau of Statistics 2007a, Australian Capital Territory in Focus, cat. no. 1307.8, available at <http://www.abs.gov.au/ausstats/abs@.nsf/ mediareleasesbyReleaseDate/B144FBA7773744C8CA256DDA00759A1C?OpenDocument>

Australian Bureau of Statistics Australian Bureau of Statistics 2007b, 2006 Census of Population and Housing, cat. no. 2068.0, available at last updated 8 February 2008

Australian Bureau of Statistics Australian Bureau of Statistics 2007c, Australian National Accounts: State Accounts, 2006–07, cat. no. 5220.0, available at <http://www.abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/5220.02006-07?OpenDocument>

Australian Bureau of Statistics Australian Bureau of Statistics 2007d, Counts of Australian Businesses, including Entries and Exits, June 2003 to June 2007, cat. no. 8165.0, available at <http://www.abs.gov.au/AUSSTATS/abs@.nsf/Lookup/8165.0Explanatory Notes1Jun 2003 to Jun 2007?OpenDocument>

Australian Bureau of Statistics Australian Bureau of Statistics 2007e, Labour Force Australia, October 2007, cat. no. 6202.0, Trend data, available at <http://abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/6202.0Oct%202007?OpenDocument>

Australian Bureau of Statistics Australian Bureau of Statistics 2008, Australian National Accounts: National Income, Expenditure and Product, March 2008, cat. no. 5206.0, available at <http://www.abs.gov.au/ausstats/abs@.nsf/mf/5206.0/>

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ACT Government 2007b, ACT Skills Commission Interim Report, available at <http://www.actskillscommission.org.au>

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Thorburn L and Houghton J 2002, Environment Business in the ACT: Mapping the Landscape, unpublished

Notes

1 These figures are not just for the Australian Government - they also include ACT Government employment figures.  The increases are not comparable with the private/public split in Table 6.  They refer to different data sources, timeframes.  In addition government administration and defense is not the only component of the public sector.
2 The Office of the Small Business Commissioner was created under legislation from 1 March 2005 to facilitate the operation of small business in the ACT. It was eliminated as part of the strategic and functional review of the ACT public sector and services, effective from 30 June 2006.

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