A new business report says public service job cuts in Canberra will have a bigger economic impact than the closure of Holden’s car manufacturing operations in South Australia.
Deloitte Access Economics’ latest Business Outlook predicts lean years in 2014 and 2015 in Canberra, due to Federal Government cuts.
The forecaster says job growth has stalled with vacancies already at record lows.
It says a recent surge in housing construction has run out of steam and housing finance and building approvals are falling.
Vacancy rates are also continuing to climb, house prices are heading down, and business investment spending is on the slide.
Deloitte Access Economics director Chris Richardson says 6,000 public service jobs in Canberra could go, creating a bigger impact than the closure of Holden in South Australia, which has four times the employment base of the ACT.
“Holden will be a problem for the South Australian economy but chances are smaller job losses in a bigger economy than the ACT faces with public sector job cuts,” he said.
“Now it’s not the end of the world, we do see the ACT continuing to grow, but only just. It should be a modest couple of years in the local economy.”
Canberra Business Council CEO Chris Faulks says the report should prompt business and government to look for new economic opportunities.
She says the report is a challenge not a death sentence.
“We can walk around saying this is doom and gloom and the end of the world is coming,” she said.
“Or we can say there’s a challenging period ahead and we need to work together, governments and private sector, to make sure that we minimise the impact of the public sector job cuts but look at the opportunities,” she said.
“We should be looking at diversifying the economy and not relying so heavily on the public sector.”