Economy of New South Wales
Encyclopedia
The economy of New South Wales
represents a significant proportion of the Australian economy
. The economy was valued at $382 billion in 2008-09, representing about 33% of Australia's total GDP.
was a free trading state (as opposed to protectionist) with a broad revenue base including income tax. The state earned more revenue than it needed to run its services. This situation was reversed during World War 2 when the Commonwealth took responsibility for the collection of income tax. Following the war, the states attempted to re-enter the income tax field but were rebuffed by High Court rulings (Income Tax decisions).
The loss of income tax collection meant NSW became totally dependent on Federal Government funding in order to deliver the services it was constitutionally entitled to do (e.g. health, primary/secondary education, transport). It also forced a greater reliance on indirect taxations such as excise duty on cigarettes, alcohol, and gambling. However, this was challenged by an individual who argued the constitution forbade the states from collecting taxation in this way. The High Court upheld the complaint and the Commonwealth was forced to collect these excises on behalf of the states. Since NSW expends far more than it can ever earn, it has little choice but to comply with Commonwealth demands.
, valued at $320 billion in 2005-06 or about 33% of Australia's GDP. This is one third larger than that of the next State and Sydney
alone accounts for almost one quarter of Australia's GDP.
The NSW economy is larger than each of the national economies of South Africa
, Thailand
, Malaysia, Colombia
, the Philippines
or Ukraine
. despite them all having a substantially larger population than New South Wales.
NSW has a diversified and knowledge intensive economy. In Australia it accounts for:
NSW has the largest manufacturing
industry in Australia, contributing $31.4 billion in 2005-06 to the State's economy.
The NSW Government has triple-A credit ratings from both Moody's
and Standard & Poor's
.
NSW is home to more than 65% of all Asia Pacific regional headquarters located in Australia, which accounts to more than 600 companies.
About 600 contact centre companies operate 60,000 seats in NSW, 42% of the total for contact centres in Australia. Of all international multilingual contact centres in the Asia Pacific, 32% are in NSW.
Employment in the financial services
industry in Sydney is now nearly half the size of London's
and more than one-third the size of New York City's
.
In Australia NSW is home to:
and fewer than 25,000 in Queensland
.
NSW also has many more companies overall than the other States. Over 510,000 companies are registered in NSW with the Australian Securities and Investments Commission
, almost 50,000 more than in Victoria and 269,000 more than Queensland.
Capital spending on machinery and equipment by NSW businesses rose by 8.3% to $20.5 billion, encouraged by high levels of capacity utilisation and strong profitability.
Engineering
and commercial building construction reached $14.1 billion in the 2005-06 financial year, an increase of 12.4% over 2004-05.
Businesses in NSW also increased their spending on intangible fixed assets, mostly in computer software and mineral exploration, with an investment of $4.3 billion, up by 7.7% in 2005-06.
Since April 1999, the Department of State and Regional Development (DSRD) has facilitated over $10.1 billion in new private sector investment, and helped to create and retain more than 49,100 jobs. This includes 29,600 jobs and over $6.3 billion worth of investment in regional NSW.
In 2005-06, total goods and services exports from NSW amounted to more than $44 billion, with the five largest exports being:
NSW merchandise (goods) exports for 2005-06 were worth A$26.8 billion, up 16.5 per cent on 2004-05.
In 2005-06, manufactured exports from NSW totalled $10.6 billion and accounted for 40% of the State's merchandise exports. Total elaborately transformed manufactures amounted to $7.1 billion in 2005, with significant contributions from medicinal and pharmaceutical products, and professional, scientific and controlling instruments.
produced in NSW and they have been present since their importation during the earliest days of European settlement. Economically the state is the most important state in Australia, with about a third of the country's sheep, a fifth of its cattle, and a third of its small number of pigs.
New South Wales produces a large share of Australia's hay, fruit, legumes, lucerne, maize, nuts, wool, wheat, oats, oilseeds (about 51%), poultry, rice (about 99%), vegetables, fishing including oyster farming, and forestry including wood chips. Bananas and sugar are grown chiefly in the Clarence, Richmond and Tweed River areas.
The world's finest wools are produced on the Northern Tablelands as well as prime lambs and beef cattle. The cotton industry is centred in the Namoi Valley in north western New South Wales. On the central slopes there are many orchards with the principal fruits grown being apples, cherries and pears.
Approximately 40,200 ha of vineyards lie across the eastern region of the state with excellent wines produced in the Hunter Valley with the Riverina being the largest largest wine producer in New South Wales. Australia’s largest and most valuable Thoroughbred
horse breeding area is centred on Scone in the Hunter Valley.
Source: dfat fact sheet
New South Wales
New South Wales is a state of :Australia, located in the east of the country. It is bordered by Queensland, Victoria and South Australia to the north, south and west respectively. To the east, the state is bordered by the Tasman Sea, which forms part of the Pacific Ocean. New South Wales...
represents a significant proportion of the Australian economy
Economy of Australia
The economy of Australia is a developed, modern market economy with a GDP of approximately US$1.23 trillion. In 2011, it was the 13th largest national economy by nominal GDP and the 17th largest measured by PPP adjusted GDP, representing about 1.7% of the World economy. Australia was also ranked...
. The economy was valued at $382 billion in 2008-09, representing about 33% of Australia's total GDP.
Economic history
At the time of Federation, New South WalesNew South Wales
New South Wales is a state of :Australia, located in the east of the country. It is bordered by Queensland, Victoria and South Australia to the north, south and west respectively. To the east, the state is bordered by the Tasman Sea, which forms part of the Pacific Ocean. New South Wales...
was a free trading state (as opposed to protectionist) with a broad revenue base including income tax. The state earned more revenue than it needed to run its services. This situation was reversed during World War 2 when the Commonwealth took responsibility for the collection of income tax. Following the war, the states attempted to re-enter the income tax field but were rebuffed by High Court rulings (Income Tax decisions).
The loss of income tax collection meant NSW became totally dependent on Federal Government funding in order to deliver the services it was constitutionally entitled to do (e.g. health, primary/secondary education, transport). It also forced a greater reliance on indirect taxations such as excise duty on cigarettes, alcohol, and gambling. However, this was challenged by an individual who argued the constitution forbade the states from collecting taxation in this way. The High Court upheld the complaint and the Commonwealth was forced to collect these excises on behalf of the states. Since NSW expends far more than it can ever earn, it has little choice but to comply with Commonwealth demands.
Australia's largest economy
NSW has the largest economy in AustraliaAustralia
Australia , officially the Commonwealth of Australia, is a country in the Southern Hemisphere comprising the mainland of the Australian continent, the island of Tasmania, and numerous smaller islands in the Indian and Pacific Oceans. It is the world's sixth-largest country by total area...
, valued at $320 billion in 2005-06 or about 33% of Australia's GDP. This is one third larger than that of the next State and Sydney
Sydney
Sydney is the most populous city in Australia and the state capital of New South Wales. Sydney is located on Australia's south-east coast of the Tasman Sea. As of June 2010, the greater metropolitan area had an approximate population of 4.6 million people...
alone accounts for almost one quarter of Australia's GDP.
The NSW economy is larger than each of the national economies of South Africa
South Africa
The Republic of South Africa is a country in southern Africa. Located at the southern tip of Africa, it is divided into nine provinces, with of coastline on the Atlantic and Indian oceans...
, Thailand
Thailand
Thailand , officially the Kingdom of Thailand , formerly known as Siam , is a country located at the centre of the Indochina peninsula and Southeast Asia. It is bordered to the north by Burma and Laos, to the east by Laos and Cambodia, to the south by the Gulf of Thailand and Malaysia, and to the...
, Malaysia, Colombia
Colombia
Colombia, officially the Republic of Colombia , is a unitary constitutional republic comprising thirty-two departments. The country is located in northwestern South America, bordered to the east by Venezuela and Brazil; to the south by Ecuador and Peru; to the north by the Caribbean Sea; to the...
, the Philippines
Philippines
The Philippines , officially known as the Republic of the Philippines , is a country in Southeast Asia in the western Pacific Ocean. To its north across the Luzon Strait lies Taiwan. West across the South China Sea sits Vietnam...
or Ukraine
Ukraine
Ukraine is a country in Eastern Europe. It has an area of 603,628 km², making it the second largest contiguous country on the European continent, after Russia...
. despite them all having a substantially larger population than New South Wales.
NSW has a diversified and knowledge intensive economy. In Australia it accounts for:
- 46% of the Australia's financeFinance"Finance" is often defined simply as the management of money or “funds” management Modern finance, however, is a family of business activity that includes the origination, marketing, and management of cash and money surrogates through a variety of capital accounts, instruments, and markets created...
and insuranceInsuranceIn law and economics, insurance is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for payment. An insurer is a company selling the...
industry - 39% of the propertyPropertyProperty is any physical or intangible entity that is owned by a person or jointly by a group of people or a legal entity like a corporation...
and business services industry - 50% of the filmFilmA film, also called a movie or motion picture, is a series of still or moving images. It is produced by recording photographic images with cameras, or by creating images using animation techniques or visual effects...
and televisionTelevisionTelevision is a telecommunication medium for transmitting and receiving moving images that can be monochrome or colored, with accompanying sound...
production industry - 33% of the communicationTelecommunicationTelecommunication is the transmission of information over significant distances to communicate. In earlier times, telecommunications involved the use of visual signals, such as beacons, smoke signals, semaphore telegraphs, signal flags, and optical heliographs, or audio messages via coded...
s industry - 33% of the manufacturingManufacturingManufacturing is the use of machines, tools and labor to produce goods for use or sale. The term may refer to a range of human activity, from handicraft to high tech, but is most commonly applied to industrial production, in which raw materials are transformed into finished goods on a large scale...
industry.
NSW has the largest manufacturing
Manufacturing
Manufacturing is the use of machines, tools and labor to produce goods for use or sale. The term may refer to a range of human activity, from handicraft to high tech, but is most commonly applied to industrial production, in which raw materials are transformed into finished goods on a large scale...
industry in Australia, contributing $31.4 billion in 2005-06 to the State's economy.
The NSW Government has triple-A credit ratings from both Moody's
Moody's
Moody's Corporation is the holding company for Moody's Analytics and Moody's Investors Service, a credit rating agency which performs international financial research and analysis on commercial and government entities. The company also ranks the credit-worthiness of borrowers using a standardized...
and Standard & Poor's
Standard & Poor's
Standard & Poor's is a United States-based financial services company. It is a division of The McGraw-Hill Companies that publishes financial research and analysis on stocks and bonds. It is well known for its stock-market indices, the US-based S&P 500, the Australian S&P/ASX 200, the Canadian...
.
NSW is home to more than 65% of all Asia Pacific regional headquarters located in Australia, which accounts to more than 600 companies.
About 600 contact centre companies operate 60,000 seats in NSW, 42% of the total for contact centres in Australia. Of all international multilingual contact centres in the Asia Pacific, 32% are in NSW.
Employment in the financial services
Financial services
Financial services refer to services provided by the finance industry. The finance industry encompasses a broad range of organizations that deal with the management of money. Among these organizations are credit unions, banks, credit card companies, insurance companies, consumer finance companies,...
industry in Sydney is now nearly half the size of London's
London
London is the capital city of :England and the :United Kingdom, the largest metropolitan area in the United Kingdom, and the largest urban zone in the European Union by most measures. Located on the River Thames, London has been a major settlement for two millennia, its history going back to its...
and more than one-third the size of New York City's
New York City
New York is the most populous city in the United States and the center of the New York Metropolitan Area, one of the most populous metropolitan areas in the world. New York exerts a significant impact upon global commerce, finance, media, art, fashion, research, technology, education, and...
.
In Australia NSW is home to:
- 81% of Asia Pacific finance and insurance regional offices
- 80% of domestic and foreign bank headquarters
- 73% of property and business services regional offices
- 60% of manufacturing regional headquarters
- 76% of all information and communications technologies (ICT) regional headquarters
- 46% of information and communications technology (ICT) businesses
- 80% of multinational pharmaceutical companies in Australia and 70% of pharmaceutical companies with regional headquarters
- about 48% of the national market capitalisation of ASXASXASX may refer to:* Australian Securities Exchange, the primary stock exchange of Australia* Advanced Stream Redirector, a computer file format listing Windows Media files * Armstrong Siddeley ASX, a British experimental turbojet* John F...
listed biotechnologyBiotechnologyBiotechnology is a field of applied biology that involves the use of living organisms and bioprocesses in engineering, technology, medicine and other fields requiring bioproducts. Biotechnology also utilizes these products for manufacturing purpose...
companies. These 41 companies have a market value of $11.65 billion.
Growing economy
In 2005-06, just under 39,000 new companies registered in NSW, compared with 38,000 in VictoriaVictoria (Australia)
Victoria is the second most populous state in Australia. Geographically the smallest mainland state, Victoria is bordered by New South Wales, South Australia, and Tasmania on Boundary Islet to the north, west and south respectively....
and fewer than 25,000 in Queensland
Queensland
Queensland is a state of Australia, occupying the north-eastern section of the mainland continent. It is bordered by the Northern Territory, South Australia and New South Wales to the west, south-west and south respectively. To the east, Queensland is bordered by the Coral Sea and Pacific Ocean...
.
NSW also has many more companies overall than the other States. Over 510,000 companies are registered in NSW with the Australian Securities and Investments Commission
Australian Securities and Investments Commission
The Australian Securities & Investments Commission is an independent Australian government body that acts as Australia's corporate regulator...
, almost 50,000 more than in Victoria and 269,000 more than Queensland.
Investment climate
Business investment in NSW reached $39.5 billion in the 2005-06 financial year, a rise of 9.2% compared with the previous year. Over the same period NSW represented 28% of Australia's total business investment.Capital spending on machinery and equipment by NSW businesses rose by 8.3% to $20.5 billion, encouraged by high levels of capacity utilisation and strong profitability.
Engineering
Engineering
Engineering is the discipline, art, skill and profession of acquiring and applying scientific, mathematical, economic, social, and practical knowledge, in order to design and build structures, machines, devices, systems, materials and processes that safely realize improvements to the lives of...
and commercial building construction reached $14.1 billion in the 2005-06 financial year, an increase of 12.4% over 2004-05.
Businesses in NSW also increased their spending on intangible fixed assets, mostly in computer software and mineral exploration, with an investment of $4.3 billion, up by 7.7% in 2005-06.
Since April 1999, the Department of State and Regional Development (DSRD) has facilitated over $10.1 billion in new private sector investment, and helped to create and retain more than 49,100 jobs. This includes 29,600 jobs and over $6.3 billion worth of investment in regional NSW.
Exports
In 2005-06 NSW recorded $17.4 billion or 42 per cent of Australia's total services exports.In 2005-06, total goods and services exports from NSW amounted to more than $44 billion, with the five largest exports being:
- travel services (19%) – goods and services purchased by travellers and foreign workers
- coal and coke (11.4%)
- transportation services (7.5%) - freight and domestic travel for non-residents
- non-ferrous metals (5.4%) – largely copperCopperCopper is a chemical element with the symbol Cu and atomic number 29. It is a ductile metal with very high thermal and electrical conductivity. Pure copper is soft and malleable; an exposed surface has a reddish-orange tarnish...
and aluminiumAluminiumAluminium or aluminum is a silvery white member of the boron group of chemical elements. It has the symbol Al, and its atomic number is 13. It is not soluble in water under normal circumstances.... - metal ores and metal scrap (4.7%).
NSW merchandise (goods) exports for 2005-06 were worth A$26.8 billion, up 16.5 per cent on 2004-05.
In 2005-06, manufactured exports from NSW totalled $10.6 billion and accounted for 40% of the State's merchandise exports. Total elaborately transformed manufactures amounted to $7.1 billion in 2005, with significant contributions from medicinal and pharmaceutical products, and professional, scientific and controlling instruments.
Agriculture
Agriculture is spread throughout the New South Wales state, except in the western third. Cattle, sheep and pigs are the predominant types of livestockLivestock
Livestock refers to one or more domesticated animals raised in an agricultural setting to produce commodities such as food, fiber and labor. The term "livestock" as used in this article does not include poultry or farmed fish; however the inclusion of these, especially poultry, within the meaning...
produced in NSW and they have been present since their importation during the earliest days of European settlement. Economically the state is the most important state in Australia, with about a third of the country's sheep, a fifth of its cattle, and a third of its small number of pigs.
The world's finest wools are produced on the Northern Tablelands as well as prime lambs and beef cattle. The cotton industry is centred in the Namoi Valley in north western New South Wales. On the central slopes there are many orchards with the principal fruits grown being apples, cherries and pears.
Approximately 40,200 ha of vineyards lie across the eastern region of the state with excellent wines produced in the Hunter Valley with the Riverina being the largest largest wine producer in New South Wales. Australia’s largest and most valuable Thoroughbred
Thoroughbred
The Thoroughbred is a horse breed best known for its use in horse racing. Although the word thoroughbred is sometimes used to refer to any breed of purebred horse, it technically refers only to the Thoroughbred breed...
horse breeding area is centred on Scone in the Hunter Valley.
See also
- Economy of SydneyEconomy of SydneyThe economy of Sydney is notable for its importance in the areas of trading, finance and distribution in Australia. Sydney has the largest economy in Australia....
- Economy of AustraliaEconomy of AustraliaThe economy of Australia is a developed, modern market economy with a GDP of approximately US$1.23 trillion. In 2011, it was the 13th largest national economy by nominal GDP and the 17th largest measured by PPP adjusted GDP, representing about 1.7% of the World economy. Australia was also ranked...
- New South Wales wineNew South Wales wineNew South Wales wine is Australian wine produced in the state of New South Wales, Australia. New South Wales is Australia's most populous state and its wine consumption far out paces the region's wine production...
- NSW Business ChamberNSW Business ChamberNSW Business Chamber is NSW's leading member-based business organisation providing businesses with information, advice, products and services they need to grow and stay competitive...
Data
| Recent Economic Indicators | 2004/05 | 2005/06 | 2006/07 |
|---|---|---|---|
| Estimated Resident Population | 6,768,941 | 6,888,014 | 6,967,199 |
| Real Gross State Product growth (%) | 0.8 | 1.9 | 2.8 |
| Real GSP per head growth (%) | 0.2 | 0.9 | 1.7 |
| GSP (current prices) (A$m) | 305,859 | 335,828 | 359,883 |
| Proportion of Australian GDP (%) | 34.1 | 32.1 | 31.8 |
| Change in real final demand (%) | 3.3 | 2.2 | 4.4 |
| Unemployment rate (%) | 5.3 | 5.0 | 4.6 |
Source: dfat fact sheet
Footnotes
- Source: NSW Economy
- Source: Economical and Financial Statement Morris Iemma MP 23 February 2006.