The planned closure of Holden's manufacturing operations in 2017 will slow but "won't crash" South Australia's economy, according to a new economic report.
Despite the local car maker's impending exit, Deloitte Access Economics' quarterly Business Outlook report predicts continued annual economic growth in the state of around one per cent for the next four years – about half that of the rest of the country.
While significant, the report says the anticipated impact of Holden’s exit from the market has been “often exaggerated”, given that automotive and component manufacturers account for less than 1.5 per cent of the state’s economy.
“Let’s make one thing clear up front. Holden may crash, but SA won't,” the report reads.
“Growth is projected to be weak, not negative. The economy is already weak and the hit to it may be relatively concentrated in time, rather than spaced out over a number of years.”
Deloitte highlights education and agriculture as potential growth industries for South Australia over the coming years, identifying the expansion of the Olympic Dam mine and continued exploration of shale oil and gas reserves near Coober Pedy.
South Australian Premier Jay Weatherill told reporters Deloitte’s findings emphasised the necessity of his ‘Our Jobs Plan’ announced last week, which includes a four-year, $60 million state government commitment to 14 different initiatives designed to prepare SA for Holden’s manufacturing exit and asks for an additional $330 million commitment from the Commonwealth.
Federal Industry Minister Ian Macfarlane last week dismissed Weatherill’s plan as a pre-election stunt with no substance, and said the Coalition government was working on a plan that would “serve South Australia well for a decade, not for two months just to get a Labor government re-elected”.