Tasmania has by far the fastest growing economy in the country with a new report highlighting the state’s improvements and predicting future growth.
The state has made a successful transformation from an industrial and manufacturing focus 30 years ago to an economy where our strengths – clean food, pristine wilderness and a vibrant higher education sector – are in demand from the rest of the world.
We have strong population growth and a level of confidence that hasn’t been seen for some time.
But as the 2019 Tasmania Report demonstrates, our economy is by no means perfect and we still lag behind the rest of the country in many areas.
These ‘gaps’ between economic and social outcomes in Tasmania and the rest of the country are significant in some areas, and despite our good economic performance, many are not closing at the rate they need to. Supported by the TCCI, the Tasmania Report has this year been compiled by Deloitte Access Economics’ partner Chris Richardson. Mr Richardson and his Deloitte Access Economics team in Hobart have built on the report prepared in previous years by Tasmanian economist Saul Eslake.
The report confirms that the trend unemployment rate for Tasmania was 6.1% in October 2019 compared to 5.9% in October 2018.
Average weekly earnings (full time, ordinary time earnings) for Tasmania in May 2019 (the latest estimate) was $1419. In May 2018 it was $1378. This is a 3% increase, which is solid, but it only reflects full-time workers.
Including part-time workers, average wages only rose from $1037.30 in May 2018 to $1050.50 in May 2019, a 1.3% increase.
Tasmania’s GSP grew 3.6 per cent during the 2018-2019 financial year, which is almost double the national rate of 1.9.
When translated to growth per person, Tasmania’s 2.3% increase is almost double the second fastest growing economy of the ACT. Treasurer Peter Gutwein said the extraordinary result was the first time since the data collection series began in 1989, 30 years ago, that Tasmania’s economy grew the fastest in the nation.
Our nation-leading result reflects sound output growth across every one of the Tasmanian economy’s 19 sectors – led by construction, health and tourism.
But it also reflects the fact that the agricultural sector on the mainland has been decimated by drought. And it’s sobering that despite strong output, jobs growth in Tasmania is sluggish, and Tasmania still has the third highest unemployment rate in the nation. Tasmania has been losing full-time jobs in industries like retail and manufacturing and gaining part-time jobs in healthcare and tourism.
Tasmania has 10% less men in full-time employment than 40 years ago. While many people are happy to work part-time, underemployment remains 3% higher in Tasmania than on the mainland.
As on the mainland, wages are not growing rapidly and cost of living increases in Hobart – in part driven by higher house prices and rental costs – have been above the national average for some time. For many Tasmanians wage increases are not keeping pace with inflation.
Premier Will Hodgman, in his recent State of the State address, recognised the state’s strong economy but admitted too many Tasmanians were not directly benefiting from the boom.
The TCCI Tasmania Report notes that the construction industry was a highlight in 2018-19.
Spending on roads, hotels and particularly utilities – including water treatment plants, wind farms and other electricity assets was strong.
And the boom is likely to continue.
The pipeline of projects in Tasmania is huge. This includes committed expenditure on transport and education projects – UTAS spending in Burnie and Launceston alone will be almost half a billion dollars over the next ten years – as well as projects that are yet to get the go-ahead such as pumped hydro, Basslink II and renewable energy projects at Robbins Island and Jim’s Plains. With the Prime Minister announcing an acceleration of federally-funded projects this list may grow even longer.
An acceleration of infrastructure investment, combined with the need for more housing in the Hobart region in particular, puts pressure on our planning system to ensure that projects are not delayed by red tape or overly bureaucratic processes.
New UTAS campuses and new courses will help lift education attainment which is sorely needed in the State, but particularly in the North and North West.
The pipeline of construction projects creates an opportunity for Tasmania’s education system to ensure that students are given the opportunity to learn and join the construction industry.
The TCCI Tasmania Report also focuses on population and the labour force. Government projections suggest that population will fall in more than half of Tasmania’s LGAs over the next 20 years.
This highlights the case for local government reform – many small municipalities struggle to provide affordable services to their citizens at the moment and it will be even more difficult with a smaller and older population.
Mr Richardson will present the TCCI Tasmania Report at a breakfast function at the Hotel Grand Chancellor on December 2nd, with a live link at Wellers Inn, Burnie.
A 1pm lunch presentation will also take place at Country Club, Launceston.