State of the States

Every quarter CommSec ranks Australia’s states and territories against each other. The report is an institution — journalists quote it, treasurers spin it, and everyone else watches their state’s rank bounce around. But the methodology underneath it is quietly weird: CommSec doesn’t rank states on how they’re doing. It ranks them on how they’re doing relative to themselves over the previous decade.

This is that report, but detrended.

What CommSec actually does

CommSec’s State of the States scores each of the eight states and territories on eight economic indicators — economic growth, retail spending, equipment investment, unemployment, construction work done, population growth, housing finance, and dwelling commencements.

For each indicator, a state isn’t compared against the other states. It’s compared against its own ten-year average. The current value is expressed as a percentage deviation from that average, the deviations are combined into a score, and the states are ranked by the score.

That sounds technical and neutral. It is not.

Why that’s dodgy

Ranking by deviation from a ten-year average measures change, not level. A state can be the best in the country by every absolute measure and still come last — if it was even better ten years ago. And a state that’s the worst in the country can win the report — if it was even worse before.

Think about what that does to the results. A state riding a once-in-a-generation resources boom for a decade scores terribly on the deviation test, because its ten-year average includes the boom. The further above its own history it climbs, the worse it looks. Meanwhile the basket case that was terrible and is now merely bad scores beautifully. The report’s winner and the country’s best-performing state are often different things entirely.

It’s a methodology that rewards fallers and punishes stayers. A state that has been good for a very long time gets penalised for being good for a very long time. The ranking is, in a very literal sense, detrended — and the trend it strips out is the thing most people actually care about.

The Detrended version

Instead of measuring each state against its own past, this version measures states against each other, on the level. Same indicators, same data sources, but the scores reflect where each state stands today relative to the rest of the country — not relative to where it happened to stand a decade ago.

The result is a ranking that answers the question people actually ask when the report comes out: which state is doing best now?

• Levels, not deviations. No ten-year-average normalisation, no “relative to yourself” scoring. A state is compared with its peers, on the actual numbers.
• Same indicators. The eight CommSec indicators are the ones we keep, because the public data exists and the coverage is consistent.
• Transparent. Every indicator, every value, and every score is on the page. You can see exactly why a state ranks where it does — and whether your state is the victim of a dodgy deviation or genuinely going backwards.

The disclaimers

Ranking eight economies on a handful of indicators is reductive by construction — no single number captures the health of a state, and this report doesn’t pretend otherwise. It’s a snapshot, not a verdict. If your state finishes last, take it as a prompt for questions, not an answer.