WHAT WAS CLAIMED
NSW has the fastest-growing economy in Australia.
OUR VERDICT
False. NSW’s economy grew by 1.8 per cent in 2021-22, the lowest growth of all states and territories.
NSW Premier Dominic Perrottet has put prosperity at the centre of his election pitch with the bold claim his state has the fastest-growing economy in Australia.
The claim is false. Two economists told AAP FactCheck that the economic growth of states and territories could be compared using a measure called gross state product (GSP), the state equivalent of gross domestic product (GDP).
By that measure, the NSW economy grew by 1.8 per cent during the 2021-22 financial year - the most recent annual data available at the time of writing - which was the lowest growth of all states and territories.
Mr Perrottet - whose coalition government will face a state election on March 25 - has made the claim on at least three occasions since he became premier in October 2021.
At a January 23, 2023 press conference, alongside NSW Treasurer Matt Kean, he said: "We can't go back to where New South Wales was before. We're the fastest growing economy that provides opportunity and prosperity for people right across New South Wales" (transcript here).
On October 9, 2022, the Daily Telegraph newspaper quoted the premier as saying: "NSW is standing strong and has the fastest-growing economy in the country…".
On November 16, 2022, the premier said in NSW parliament: "New South Wales has the fastest-growing economy, the lowest unemployment rate and the biggest infrastructure build anywhere in the country…".
The NSW premier's office did not respond to AAP FactCheck requests asking what measure of economic growth Mr Perrottet had used as the basis for his claims.
Dr John Hawkins from the University of Canberra and the Melbourne Institute's Dr Tim Robinson both told AAP FactCheck the most comprehensive way to assess states' and territories' economic growth was GSP, which is a measure of the total economic production of a state economy.
The Australian Bureau of Statistics (ABS) publishes GSP figures annually, as part of the bureau's national accounts data.
Data for the 2021-2022 financial year, released on November 18, 2022, showed NSW's economy grew by 1.8 per cent in 2021-22.
That made NSW the slowest-growing state or territory economy, with a GSP growth rate just below the 1.9 per cent recorded by ACT.
Victoria topped the table for economic growth in 2021-22, recording a GSP boost of 5.6 per cent over the 12 months.
However, Dr Hawkins warned not too much should be read into the 2021-22 figures as the year-on-year growth rates were heavily influenced by COVID lockdowns.
"These had been more severe in Victoria in 2020-21 so the 'bounceback' was larger in 2021-22," Dr Hawkins told AAP FactCheck in an email.
"How much the relative performance of the state economies is attributable to the skilful management of state governments is another question.
"My guess would be that it is more a reflection of their differing industrial compositions. So if mineral prices are high and mineral demand strong, Western Australia outperforms the others. When mineral prices are low, Western Australia underperforms," he said.
Additionally, COVID border closures had more impact on states that are more reliant on international tourism, Dr Hawkins said.
Historical GSP figures show the last time NSW had the fastest growing economy was in 2015-16, when the state recorded 3.5 per cent growth rate under the premiership of Mike Baird.
Dr Hawkins and Dr Robinson both told AAP FactCheck that a limitation of GSP data is that ABS only published figures annually.
They both pointed to an alternative ABS measure called 'state final demand', which is published quarterly but counts demand for goods and services spending rather than economic output.
"So it's really a measure of demand, rather than production," Dr Robinson said in an email.
At the time of writing, the ABS's most recent state final demand figures covered the quarter leading up to September 2022.
That data showed NSW's final demand increased 0.7 per cent over the quarter, which put Mr Perrottet's state in the middle of the pack when compared to Australia's seven other states and territories.
Historical data (table 25) shows the last time NSW returned higher state final demand figures than all other states and territories was in December 2021, at the beginning of Mr Perrottet's premiership.
Mr Perrottet's claims that NSW had the fastest-growing economy cannot, therefore, be justified by either GSP or state final demand data.
However, Dr Hawkins and Dr Robinson both told AAP FactCheck that economic growth did not necessarily equal economic wellbeing.
"Just because the 'size' of the economy is increasing does not mean the residents are better off," Dr Hawkins said.
"For that, you want to use data on a per capita basis and income rather than production, as well as recognising that there are many more aspects of wellbeing than just economic."
The ABS publishes annual GSP per capita figures as part of its national accounts datasets, calculated using state and territory population estimates.
In 2021-22, NSW's GSP per capita rose by 1.6 per cent, which was the second-lowest rise out of the eight states and territories.
The Verdict
The NSW premier's claim that his state had the fastest-growing economy in Australia is incorrect.
In 2021-22, NSW had the lowest increase in gross state product among all states and territories. However, economists told AAP FactCheck that the 2021-22 figures should be treated with caution as they were heavily influenced by the economic rebound from COVID.
The last time NSW had the fastest annual economic growth in Australia was 2015-16.
False - The claim is inaccurate.
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