Australia’s growing liquefied natural gas sector will provide the biggest boost to Australia’s economy over the next 20 years, advisory firm Deloitte says.
Deloitte Access Economics’ report titled Catching the next Wave identifies five ‘super growth’ sectors for the next 20 years, including natural gas, agri-business, tourism, international education, and wealth management.
Rapid growth in emerging economies has seen pollution levels in major cities grow; Deloitte says this will underwrite demand for gas, a cleaner energy alternative.
“Our gas is a clean and green alternative to coal that points to major development potential for this State [WA] in coming decades,” Western Australian managing partner of Deloitte, Mike McNulty said.
But realising the gas sector’s potential hinges on Australia’s ability to improve productivity, invest in infrastructure and streamline the regulatory environment.
McNulty said a foolish takeaway would be to think Australia is the only country looking to ride the gas wave.
"There is competition around the world, there's a lot of gas around the world.
“If we don't actually provide an environment to implement projects quickly, efficiently and reliably, then companies will invest elsewhere.
"I think that's a reality that many people don't realise."
Deloitte explains Australia’s abundant conventional and unconventional gas reserves and over $200 billion worth of infrastructure currently being developed and due to come online in the next five years, gives the country an international advantage.
"I think gas is one of the most exciting things developments that we've had in this country for a very, very long time," McNulty told the ABC.
"What we've seen in gas over the last five years is enormous investment, but very few of those projects have come onstream yet.
"So the production and output of LNG over the next four or five years is going to go up two and a half times.
"That is a huge transition. It's going to pay enormous dividends back to the country.
"We will actually be producing more gas than Qatar in the Middle East."
Report co-author Chris Richardson said that growth in these five sectors could add an extra $250 billion to Australia’s GDP over the next 20 years.
“As the mining wave continues to deliver prosperity for Australia, albeit at a declining rate, our analysis shows there is vast potential to be tapped in five additional super-growth waves,” he said.
The report analyses challenges and opportunities for maintaining our current wave of prosperity beyond the mining boom as well as how to make the most of the next five ‘super-waves’.
“It’s all about catching the next wave,” Richardson said.
“Mining will continue as a major driver of our prosperity over the next two decades and beyond.
“We need to look at how we can extend our ability to ride the mining wave.”
But Deloitte warns growing costs, regulatory burden, and falling productivity could all impact Australia’s ability to reap the benefits of mining in the next two decades.
Richardson said a slowdown in the mining sector means Australia cannot rely on natural resources alone, adding that Australia needs to create more diversified growth.
“That boom is slowing and our competitive advantage is being challenged,” Richardson said.
“Global markets for gas, tourism and agribusiness are each expected to grow at rates at least 10 per cent faster than global GDP as a whole.”