The Megatrends and the Victorian Environment 2018 report was prepared by Deloitte Access Economics. The report analyses the anticipated key trends that will influence and impact natural capital, and our management of it, in Victoria to 2030 and beyond. In this section, an abridged version of the Deloitte report is presented with a focus on the key insights.
These ‘megatrends’ have informed the Future Focus priorities and recommendations arising from each of the scientific assessments in this report. The megatrends have enabled a top-down analysis, while the scientific assessments have provided a foundational, bottom-up evidence-base. Combined, these analyses have identified the most important priorities for Victoria’s environment over the next decade and beyond.
The five megatrends identified are:
- the physical impacts of climate change
- reducing our carbon footprint
- clued-up citizens shaping business and government practices
- disruptive technologies
- natural resource constraints.
For more detail, download the summary report.
At the end of 2017, Victoria had a population of 6.4 million. Latest Victorian Government projections indicate that Victoria’s population will grow at an average rate of approximately 1.5% per annum to almost 8 million by 2031, and to 10 million by 2051. Victoria’s population growth has outpaced projections for much of the past decade, and with actual observed population growth of 2.3% in 2017, these projections appear relatively modest.
Regardless of projection accuracy, what is clear is that Victoria’s population is likely to continue to grow, and as it does, so too will its ecological footprint.
With a Gross State Product (GSP) of almost $399 billion in 2016–17, Victoria accounts for almost one-quarter of Australia’s Gross Domestic Product (GDP), making it the second-largest state economy.
Whereas various other Australian states are rich in natural mineral resources, the Victorian economy has a greater reliance on knowledge-intensive industries. As such, the major sectors contributing to Victoria’ GSP are services-based. Meanwhile, the state’s strong population growth has underpinned a strong construction sector.
Victoria has shifted, and in some ways is continuing to shift, towards a services-based and more environmentally sustainable economy. Relative to 30 years ago, there are fewer major heavy industry and manufacturing sites. Recent years have seen the closure of sites such as the Ford and Toyota factories in Geelong and Altona, the Point Henry aluminium smelter and the Hazelwood coal-fired power plant.
Looking forward, Deloitte Access Economics forecasts show that Victoria’s services sector is likely to continue to be the engine room for growth.
Global economic and political conditions are also shaping Victoria
Victoria’s population and economy are not growing in a vacuum. Global economic and political forces have and will continue to influence Victoria’s growth trajectory.
The balance of global economic power is shifting with many reports noting that the coming decades will likely see a shift in global leadership, typically from traditional western economic powers to emerging economies across Asia, South America and Africa. Meanwhile, political sentiment in traditional economic powers is also shifting – seeing a return to trade protectionism and reduced multilateral collaboration on global issues such as climate change, poverty and terrorism. Among some economies, there is currently a backlash against globalisation which may disrupt the alliances and trade partners that traditionally defined Australia’s place in the global economy.
The growth in Asian economies, particularly China, should continue to have a powerful influence on the Victorian economy. China’s growth has seen incomes and purchasing power increase for hundreds of millions of its citizens, resulting in stronger demand for goods and services. This trend should eventually see up to two-thirds of the global middle class residing in Asia by 2030. This presents a significant opportunity for the Victorian economy to grow further. It is also likely to continue to underpin strong tourism and population growth in Victoria, placing growing demand on the environment and our natural resources.