Flee Sydney: A Prospectus on Human Capital Competition between New South Wales and Queensland

Abstract

On 13 August 2005 the head of the Reserve Bank of Australia, Mr Ian Macfarlane, proposed that young people “Flee Sydney”. He reasoned housing prices, cost of living and congestion were making Sydney unliveable for young and talented people. The Reserve Bank of Australia Chief is not alone in wondering whether Sydney is sustainable or competitive. Sydney's dominance as Australia's global entrepôt is clearly in danger. By all accounts, both the young and the not so young are taking the Reserve Chief's suggestion and abandoning Sydney and its environs for the State of Queensland and elsewhere. From an urban planning point of view, this is not a trivial matter that can be shrugged off as a momentary transition. If Richard Florida (2005) and others are correct, cities, regions and nations can lose their most vital resource—talented people—by misguided public policy and poor planning. This article seeks to uncover the myth and reality of the internal migration of New South Wales (NSW) and its Sydneysiders to Queensland. One can argue this migration of Sydneysiders and others from NSW to Queensland is merely a spill over effect of a very buoyant economy. On the other hand, the loss of critical human skills may be the harbinger of things to come for Sydney and NSW in regards to global competitiveness. Our analysis finds that NSW lost valuable human capital to Queensland between 1991 and 2001 with some small variations in net losses over the years. The most recent data based on the Australia Post Redirection Database confirms a strong and continuing migration of NSW residents to Queensland.

Keywords:

• Brain drain
• human capital
• regional economic development

Notes

1. www.australiapost.net