South Australia needs education and research, not industry crutches, says productivity commission chairman

South Australia is stuck in the slow lane, but successive governments have been handing out the wrong medicine, the chairman of the SA Productivity Commission says.

Ploughing funds into education and research rather than $437m annually into unproven industry policies would better build jobs and long-term economic growth, says South Australian Productivity Commission chairman Adrian Tembel.

Declaring the state could not rely on luck forever, Mr Tembel detailed challenging statistics showing SA workers had been earning comparatively less than other Australians for the past 25 years.

He told an Adelaide economic forum that SA had a low-growth economy that would be $29bn larger if the state had merely kept pace with the rest of Australia.

Arguing SA had a wages problem and a growth problem, Mr Tembel questioned successive state governments’ interventionist industry and trade development policies. These included bureaucrats preparing industry plans, marketing, trade missions, investment attraction and building precincts like Lot Fourteen.

Thomson Greer chief executive partner, Adrian Tembel. Picture: Hollie Adams/The Australian

“Given the evidence I’ve just presented and the cost, these policies should only continue if credible evidence can be produced that demonstrates they have worked,” Mr Tembel said.

“Otherwise, we should adopt a new industrial development philosophy and orthodoxy that will.”

Mr Tembel, also the chief executive partner of Adelaide-based national law firm Thomson Geer, argued the state government should focus on education and research, moving from trying to help business attract capital and customers to building the state’s “human capability”.

This would include diverting spending and focus to teacher quality rather than buildings, while also lifting the public sector workforce’s digital skills and diverting inefficient administrative spending towards “actual direct research jobs”.

Originally published as South Australia needs education and research, not industry crutches, says productivity commission chairman