Prosperity and Distress
The Socio-Economic Vitality of Queensland Electorates
by Professor Scott Baum
Understanding issues around social and economic performance of electorates and the communities that form them has always been an important part of politics. In Queensland, as we approach the 2020 election, understanding the differential performance of electorates and communities has never been more important. This report presents an index of prosperity and distress for Queensland electorates. Built using the methodology adopted by the Economic Innovation Group in the United States, the index is a tool for measuring and understanding the vitality of electorates and communities and provides a means of examining the extent of place-based disparities across the state in the context of the election.
The context for understanding the differential performance across spatially aggregated localities lies in the significant body of regional science, economic geography and other spatially based fields (Ballas, Dorling, & Hennig, 2017; Baum, Mitchell, & Flanagan, 2013; Baum, O’Connor, & Stimson, 2005; Etherington & Jones, 2009; Florida & Mellander, 2016). These have demonstrated, among other things, that the social and economic context of place matters in so much that over and above the impacts of exogenous factors on social and economic performance, the impact of local or regional factors is also important. Consequently, a local community or region’s economic vitality will depend on circumstances at a national, state or international level, but also and importantly, on local circumstances.
In the context of the upcoming Queensland election, this means that understanding the ways that the social and economic vitality differs among different electorates shifts the focus from broader but important factors affecting the whole state based down to a more locally or regionally based agenda. Building this agenda and encouraging more regional dialogue informed by a regionally differentiated evidence base begins to address the many ‘one size fits all’ policy directives that often result many local communities and regions being left behind and the individuals in these places being further disconnected from the broader economy and society.
Within this context, the prosperity and distress index discussed in this paper helps to shed light on the electorates and their communities that have fallen away and that are less likely to be resilient to economic and social shocks. This focus is important at any time, but more so as we approach the 2020 election and the hangover from the recent economic slowdown begins to develop unabated.
Methodology
The prosperity and distress index is an indicator that rates areas across Queensland in terms of their relative economic prosperity and distress based on a range of economic performance factors. The simple methodological approach used to build the PDI follows a similar approach used by the Economic Innovation Group (EIG) in developing a similar index based on zip codes throughout the USA.
Seven indicators are used as follows:
- No post school qualification: proportion of the population 25 years and older without a post school qualification;
- Housing vacancy rate: change in the percentage of unoccupied dwellings from 2011 to 2016;
- Adults not working: proportion of the prime-age population (ages 25–64) not currently in work;
- Poverty rate: proportion of the population whose equivalised household income was below $500/week (approximate poverty measure — 50% of median range);
- Median income ratio: the median income of a community expressed as a percentage of the median income of its state/territory;
- Change in employment: proportional change in the number of jobs from 2011 to 2016;
- Change in business establishments: proportional change in the number of business establishments from 2012 to 2016
The prosperity and distress index is computed for Australian Bureau of Statistics Statistical Area Level 2s (SA2) using the indicators outlined above. SA2s are typically a suburb or a few suburbs in cities, while in regional areas they typically represent a town or a town and its surrounds, or a few smaller towns.
Initially 512 Statistical Area Level 2s (SA2s) are ranked on each of the seven metrics and then each SA2 is ranked by the average of their seven rank numbers. These ranks are standardised such that the index score lays between 0 and 100 allowing the index to be categorised by quintiles. Hence, the lowest ranked SA2, the most prosperous community, has a score approaching zero and the highest ranked SA2, the most distressed community has a score of 100. The SA2 with an index score close to 50 is the middle-ranked community in the state.
All SA2s are then assigned to a grouping depending on the quintile they are in. An SA2 is considered:
- Distressed if its distress score falls into the worst-performing quintile (fifth) of its peers. Since distress scores are normalized to reflect percentiles, scores over 80.0 are considered distressed.
- At risk if its score falls into the second-worst performing quintile (values ranging from 60.0 to 80.0).
- Mid-tier if its score falls into the middle quintile (values ranging from 40.0 to 60.0). • Comfortable if its score falls into the second best-performing quintile (values ranging from 20.0 to 40.0).
- Prosperous if its score falls into the best performing quintile (values below 20.0).
It should be noted that the underlying modelling used to compute the index takes into account individual characteristics at an aggregate level. Hence, any one person who resides in what may be a highly distressed community may not themselves be in economic distress. Similarly, a person who may reside in a relatively prosperous community may in fact be in high economic distress. But in aggregate, the communities with higher index scores we expect to lack vitality and be alienated from the benefits of the overall economy, while prosperous communities are able to take advantage of the overall economy.
The index is based on the economic performance and characteristics of constituents of SA2s. In addition, it is possible to obtain index numbers for other spatially aggregated units including state electoral divisions (SEDs). SEDs are an Australian Bureau of Statistics approximation of the official electoral boundaries designed by the Australian Electoral Commission. They are based on Statistical Areas Level 1 (SA1s). Each SA1 has been allocated once to a Commonwealth Electoral Division based on the largest population contribution. For the purposes of this paper each SA1 has been allocated the index score of their SA2 and then for each SED a population-weighted average is calculated. The resulting average is used to rank the SEDs against each other across Queensland.
Prosperity and distress across Queensland Electorates
The 93 Queensland State Electorates are classified into the five categories of prosperity and distress as outlined above. Figures 1 and 2 present maps illustrating the location of seats distributed across the five index categories. The overall impression from these maps is that distressed and at-risk seats are a feature of regions outside the southeast corner, while around South-East Queensland a greater variety of seats exist.
To consider the distribution of seats further, Figure 3 provides information regarding the relative share of electorates held by each major party (ALP and LNP) categorised across the five index types. The information provided in the graph is similar to a concentration ratio which determines the extent to which a particular party is over or under-represented in the electorates held buy any given index grouping. The ratio is calculated by considering the percentage distribution of electorates held by a party relative to the distribution of total electorate held by that party. A ratio greater than 1indicates that the number of electorates in that grouping is overrepresented. A ratio less than 1 indicates the opposite. An interactive version of the graph is available here.
The 20 per cent of electorates with the highest index numbers across Queensland are considered in aggregate as being distressed. Overall, considering the distribution of electorates, aggregate distressed electorates are overwhelming held by the LNP (concentration ratio = 1.38) compared to the distressed electorates held by the ALP (concentration ratio = 0.61). An almost opposite picture emerges when we consider the ‘at-risk’ category. Here, the ALP holds a higher relative share of electorates (ratio= 1.01) versus the LNP with a ratio of 0.75. Considering the other end of the index, for both prosperous and comfortable the ALP holds a greater relative share of electorates, when compared to the LNP. The LNP hold a greater share of mid-tier electorates with a ratio pf 1.45.
To compliment the ratios provided in Figure 3, tables 1 to 5 present a list of each seat across the five categories, together with the status of the seat. Additionally, as each electorate’s index number and overall ranking is a combination of the ranking of smaller communities within them, details are provided indicating the percentage of population living in either distressed or at-risk communities in each electorate, regardless of the electorates aggregate index score.
Not surprisingly, many of the electorates located at the top of the ranking for distress (Table 1) have a large percentage of their populations living in communities that have themselves been identified as distressed. In the electorate of Bundaberg, held by the LNP’s David Batt, 86.5 per cent of the population live in distressed communities. Similarly, the seats of Nanango held by Deb Frecklington (LNP), Maryborough held by Bruce Saunders (ALP) and Hill held by Shane Knuth (Katter’s Australia Party) all had significant proportions of their populations living in communities deemed as distressed. The distressed electorates also contain communities classified as at risk. Of particular interest are the electorates which while in aggregate are classified as distressed, have a large proportion of their populations residing in communities that are classified as ‘at risk’. The seat of Warrego, held by the LNPs Ann Leahy has almost 70 per cent of its population living in ‘at risk communities, even though in aggregate it is classified as being distressed. Similarly, the seat of Mackay, held by the ALPs Julieanne Gilbert has 66 per cent of its population living in ‘at risk’ communities.
Like the distressed seats, the ‘at risk’ seats contain a mix of communities that can be classified as distressed or at-risk. The Griffith University Seats to Watch electorate of Thuringowa, held by Aaron Harper for the ALP has 51.8 per cent of its population in at-risk communities and a further 7.2 per cent residing in communities classified as distressed. Other seats such as Bancroft, held by Chris Whiting (ALP) have the majority of their population living in communities considered at risk with no population living in distressed communities. The seat of Glass House, help by the LNPs Andrew Powell has only 19.2 per cent of its population living in at risk communities, with the remainder residing in other community types. As with other similar seats, Glass House may be a marginal at-risk electorate.
Mid-tier seats, sitting between distress and prosperity are similarly spread between both major parties (Figure 1). Notable seats include the Griffith ‘seat to watch’ of Mundingburra held by the ALP’s Coralee O’Rourke and the seat of Inala, held by Premier Annastacia Palaszczuk.
Sitting at the opposite end to seats considered distressed and at-risk are those classified as comfortable (table 4) and prosperous (table 5). Only the seats of Sandgate and Barron River (a Griffith seat to watch) had residents living in at risk communities, despite being classified as comfortable. The seat of Sandgate held by Stirling Hinchliffe (ALP) had 16.80 per cent of its population residing in at risk communities, while the seat of Barron River had 20.32 per cent of its population living in at-risk communities. The notable feature of the prosperous electorates was that none of these seats recorded any communities classified as either at risk or distressed.
Concluding comments
This report has presented the findings of an analysis of the Index of Prosperity and Distress for Queensland state electorates. Its main aim was to highlight the differentials that exist in the social and economic vitality of electorates and the communities within them and draw out some implications for policy focus. The importance of the index and the analysis presented here is in understanding the differing ability of communities and electorates to benefit from economic growth, to effectively bounce back in the face of economic shocks and to remain resilient to future changes.
It should be clear that those electorates and the communities within them who are classified as distressed or at risk will be less able engage in broader economic growth and bounce back from the current economic shock. On average these electorates, especially those identified as distressed, are characterised by relatively poor performance across economic indicators (i.e. jobs growth or housing vacancies), lower levels of income and poorer human capital outcomes (education and employment). This poorer performance is likely to result in the economies, communities and the individuals residing in these electorates being left behind in economic and social terms.
The consequences of such left behind places extend far beyond the communities and individuals at the coal-face. The patterns identified have not happened by accident, but have been an outcome of failed past policies that have acted to reinforce geographically exclusive growth. By excluding communities from full participation in the broader economy we limit the state’s larger economic potential and raise the spectre of further decline.
The electoral challenge to reconnect distressed electorates and their communities should be front-and-centre of the current policy debate. Clearly a one size fits all policy will not work effectively. Nor will rolling out ‘shovel ready’ infrastructure project, which while important and a good photo opportunity for those hoping to win our vote, will not benefit everyone. The idea that some-how constructing infrastructure projects will have such an impact on the economy so as to trickle down to everyone, everywhere is discredited thinking. Rather, we will continue to see the same exclusion of some places that has led to where we are today. The Queensland election is an opportunity to develop a just and sustainable transition towards the society and economy we want. Rather than following tied old approaches that have failed in the past, politicians should be thinking outside the box. What is needed as a matter of urgency is a suite of joined-up and well-planned place-based policies that are tailored to meet local need. These could include local programs to help kick-start stalled economies and spread the benefits across a broader base not just to the few, well focused training opportunities for local youth, or programs that build a community’s social capital. Although many communities across the state are characterised by indictors of social and economic fragility, they are also, thankfully, characterised by many hard working, ingenious and entrepreneurial individuals which, with a little smart policy thinking and government support and intervention can be empowered to revive local economies in ways that benefit everyone.
ABOUT THE AUTHOR
SCOTT BAUM
Professor Scott Baum is a member of Griffith University’s Cities Research Institute and Policy Innovation Hub. He is trained in economics and sociology. His research focuses on understanding the economic and social outcomes of change across the settlement system. Most recently he has been involved in studying the impacts of local labor markets on the individual socio-economic outcomes.
