Economy of New South Wales

The economy of New South Wales represents a significant proportion of the Australian economy. The economy was valued at $557.9 billion in 2016–17,[1] representing 33.0% of Australia's total GDP.[2]

Economy of New South Wales

The Sydney Opera House and CBD at dusk from Jeffrey Street, Kirribilli in December 2008.
Currency	Australian Dollar (A$ or AUD)
Fiscal year	1 July - 30 June
Statistics
GDP	A$557.9 billion - 2016/17 [1]
GDP growth	2.9% (2016-17) [1]
GDP per capita	A$67,841 (2016/17)
Unemployment	4.6% (December 2017) [3]
Main industries	Services, mining, industrial and transportation equipment, food processing, chemicals, steel
External
Exports	A$60.4 billion (2008-2009)
Export goods	coal, Aluminium, Refined petroleum, Copper ores & concentrates, Medicaments (incl veterinary), iron ore, wheat, machinery and transport equipment
Main export partners	Japan 32.5%  South Korea 8.6%  United States 6.9%  China 6.9%  New Zealand 6.4%
Imports	A$100.8 billion (2008-2009) [4]
Import goods	Medicaments (incl veterinary), Telecom equipment & parts, Passenger motor vehicles, Crude petroleum, Computers, Refined petroleum, Monitors, projectors & TVs, Office machines, Goods vehicles, Medical instruments (incl veterinary)
Main import partners	China 22.5%  United States 12.7%  Japan 7.4%  Germany 5.4%  United Kingdom 4.0%
All values, unless otherwise stated, are in US dollars.

Economic history

Aboriginal Australians generally lived within a hunter-gatherer economic system. The European settlement of New South Wales began in 1788 as a convict economy, with human capital hired out to private entrepreneurs, and government and the military dominating the colony.[5] Successive commodity booms (and busts) in whaling, sealing, wool, gold and wheat characterised the 19th century and fostered a thriving colonial capitalism.

Revenue

At the time of Federation in 1901, 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 reversed during World War II (1939-1945) 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 taxes - such as excise duty on cigarettes, alcohol, and gambling. This was challenged by an individual who argued that 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 Australia, valued at $558 billion in 2016-17 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.[6]

NSW has a diversified and knowledge intensive economy. In Australia it accounts for:

• 46% of the Australia's finance and insurance industry
• 39% of the property and business services industry
• 50% of the film and television production industry
• 33% of the communications industry
• 33% of the manufacturing industry.

NSW has the largest manufacturing industry in Australia, contributing $31.4 billion in 2005–06 to the State's economy.

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:

• 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 ASX listed biotechnology 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 Victoria 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.

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 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 copper and aluminium
• 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 livestock 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.

Murray Grey cows and calves

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%),[7] vegetables, fishing including oyster farming, and forestry including wood chips.[8] Bananas and sugar are grown chiefly in the Clarence, Richmond and Tweed River areas.

Wools are produced on the Northern Tablelands as well as 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 wines produced in the Hunter Valley with the Riverina being the largest wine producer in New South Wales.[9] Australia's largest and most valuable Thoroughbred horse breeding area is centred on Scone in the Hunter Valley.[10]

See also

• Economy of Sydney
• Economy of Australia
• New South Wales wine
• NSW Business Chamber

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

References

1. Australian Bureau of Statistics (ABS) (17 November 2017). "Australian National Accounts: State Accounts, Cat. No. 5220.0, Canberra". Retrieved 16 February 2018.
2. Department of NSW Trade & Investment (2012). "State economies". Retrieved 22 April 2013.
3. Commsec (2013). "State of the States" (PDF). Archived from the original (PDF) on 3 May 2013. Retrieved 22 April 2013.
4. Market Information and Research Section DFAT (December 2012). "New South Wales (fact sheet)" (PDF). Based on DFAT STARS database and ABS Catalogue Nos 6291.0.55.003, 5220.0, 3101.0 and 5368.0. Archived from the original (PDF) on 10 April 2013. Retrieved 22 April 2013.
5. "Proof of history's rum deal". The Sydney Morning Herald. 28 January 2006. Retrieved 25 November 2020. The early governors wanted to keep NSW as a large-scale open prison, with a primitive economy based on yeomen ex-convicts and run by government fiat.
6. The World Factbook
7. Agricultural Production Retrieved on 7 March 2009
8. Agriculture - Overview - Australia Archived 21 May 2013 at the Wayback Machine
9. "From paddock to plate". Tourism New South Wales. New South Wales Government. 1 July 2003. Archived from the original on 3 February 2009. Retrieved 7 March 2009.
10. SMH Travel - Scone Retrieved on 7 March 2009

External links

• Agriculture - Statistics - New South Wales
• NSW Economy
• Economical and Financial Statement Morris Iemma MP 23 February 2006.