We need to spend more, not less, to get out of the slump

Infrastructure for future Alice. Some may argue, as indeed they have, that it is not the time for what appears to be lavish spending on infrastructure such as the proposed new court houses.

 

I would argue that exactly the opposite. There will never be a more economic time to construct major new buildings than right now! The building industry is in a state of almost complete collapse competition for any work is extremely competitive bringing management and labour cost right down while on the other hand the cost of building requirements and materials escalate daily.

 

At the bottom of a slump is the best time to build, provided of course you have faith in the town’s future.

 

Building now has a number of benefits; first of all it creates work, pays wages and lifts a wide cross section of the economy. Secondly, and even more importantly, large scale investment sends a strong signal of confidence in the town’s future growth. Such a signal in turn inspires confidence in those sitting on the sidelines thinking about investing, but a little hesitant about doing so.

 

As soon as some of these step into the ring, smaller investors, home builders, new retail, all start to jump on board riding the wave of confidence initiated by the original project.

 

We can of course do better still if the initial large infrastructure investment is into projects that will actually earn an income as opposed to simply being an ongoing overhead from now until eternity.

 

There are a couple of large scale projects for Central Australia that the Territory Government, along with private enterprise, could and should take on. The first is the development of an agricultural precinct. Roads pipelines and permissions are required. This has the potential to be a multimillion dollar industry for the Alice.

 

The other is a visionary development of the region’s enormous tourist potential by completing two loop roads, one to King’s Canyon, the other from Glen Helen through Haasts Bluff back onto the Tanami Road along with a series of gravel access roads to the many key points of interest in the surrounding ranges.

 

At all these points, we should be making available to private enterprise blocks of land on long term leases, subject to a development covenants. This will stimulate a rebirth of the Centre’s tourist product and reintroduce a raw edge of adventure while widening out the product on offer.

 

It will reinstate the level of excitement that a journey into the Centre once held you absolutely have to take risk. You have to believe with great certainty in a dream. Neither the nation’s nor the Territory’s economies can be repaired entirely by cutting costs.

 

If you go the cost cutting road you repay your debt by creating unemployment, leaving yourself with a bigger problem than you started out with. You repay your debt by growing your economy and sometimes that means you initially may have to go into further debt to provide the Infrastructure for growth.

 

Case in point: The Federal Develop the North policy. We quite obviously have available enormous areas of land and most of the nation’s water is vastly under-utilised. We first have to invest massively in infrastructure and I hope the Giles Government has both the imagination and the guts to do it.

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2 Comments (starting with the most recent)

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  1. Stuart Giles
    Posted May 8, 2014 at 10:59 pm

    Slump, oh, I thought you said dump.

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  2. Richard Bentley
    Posted May 5, 2014 at 7:05 pm

    Well said Steve. Other countries have pursued cost cutting economic rationalist approaches and driven their economies into recession. With low interest rates now is the time for investment, both public and private.
    Returning the budget to surplus is a sensible objective but should be pursued gradually over the longer term not by short term cuts and levies.
    I would put renewable energy investment and providing infrastructure to support electric cars above your choices but investment not cuts is what wee need now!

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