Tasmania Report: heavy lifting ahead

The raw side of Tasmania’s demographics hit hard today when it was revealed Tasmanians are the poorest, oldest and least educated in the nation.

The average household income in Tasmania is $43,600, or 32 per cent below the national average of $135,300.

Tasmania has more people per capita over 65 years of age than any other state and, aside from the Northern Territory, our levels of education, participation and attainment are Australia’s worst.

Add the full-time employment rate 8.5 percent lower than before the Global Financial Crisis and productivity now 18 percent lower than the Australian average, it’s  understandable Tasmania is facing long term economic and social challenges.

The facts on Tasmania’s economic situation were released this morning in the Tasmanian Chamber of Commerce, Tasmania Report, prepared by highly respected Tasmanian independent economic consultant, Saul Eslake.

Of course, the report highlights improvements in many sectors, however Mr Eslake’s findings are a strong reminder there is plenty of heavy lifting ahead and a warning of what might happen without planned action.

Hopefully by laying out the facts this will facilitate a stronger appetite for change and a greater probability of identifying and implementing strategies in narrowing the large gaps in economic performance and living standards.

“An unwillingness by Tasmanians to lift their participation in employment and productivity from current levels – then the willingness of other Australians to continue to cushion Tasmania’s standard of living through both the national tax transfer systems and the  mechanism for allocating revenue from GST, may be increasingly called into question,” Mr Eslake said.

Consistent with last year’s inaugural Tasmania Report, Mr Eslake again connects the need for major improvements in the education system to develop opportunities for the Tasmanian workforce.

Mr Eslake summarised the main reasons for Tasmania’s poor economic performance;

1) Employment participation gap – only 46.2 per cent of the population is employed, 3.4 per cent below the national average.

2) Hours worked gap – Tasmanian workers averaged 30.7 hours per week, 1.5 hours less than the national average and equivalent to 12 days per year.

3) Productivity gap –  Tasmanian workers produced $15 (or 18 per cent) less per hour by way of goods and services than the Australian average.

Despite the challenges, the report does identify the strength and growth of the Hobart real estate market with prices rising at a faster rate than any capital city except Melbourne and Sydney.

A positive outcome for Launceston is the University of Tasmania’s Northern Transformation Program, which will see the Launceston campus moved from Newham to Invermay.

“The University of Tasmania’s Northern Transformation Program is a potential ‘game-changer’ for the North and North-West – in the short term, via the more than 2500 jobs it is expected to create (directly and indirectly) in the construction phase; and in the longer term by bringing up to 12,000 more students into higher education through Associate Degrees,” said Mr Eslake.

The similar but smaller relocation in Burnie would also be a positive outcome for the North West.

Mr Eslake said the North West and West region had shown remarkable resilience in the past few years despite the loss of manufacturing jobs. The North West and West region was the only one of Tasmania’s three regions to record positive growth in 2015-16.

Recognising the relatively strong public sector financial position, Mr Eslake said the one big exception was the unfunded superannuation liability.

“As a proportion of gross product, [unfunded superannuation liability] is more than three times as large as the average of all states and territories, and expected to get larger over the next nine years,” he said.

“The liability is one of the main reasons why Tasmania’s credit rating is lower than might be expected and represents a significant constraint on Tasmania’s ability to borrow more in order to fund higher levels of infrastructure investment.”