MAINLAND commentators have become accustomed to dismissing Tasmania’s economy as a basket case.
Indeed, so bad have many of the statistics on Tasmania’s economic performance been over most of the past 25 years that it is commonplace for commentators to ignore figures for Tasmania altogether, and refer to some other state as having the highest or worst result of any mainland state, as if to say, “Yes, well we know Tasmania is actually the highest or worst, or whatever, but it doesn’t really count”.
Since habits die hard, mainland commentators can, perhaps, in a spirit of charity, be cut a little slack for having in most cases failed to notice the recent improvement in Tasmania’s economic performance.
Ignored
However, a survey of some of the key figures from this year’s round of state budgets, which finished in Queensland on June 7, shows that Tasmania’s economic performance should no longer be dismissed or ignored as it has been for so long.
If all the forecasts for state and territory economic growth contained in these budgets are vindicated, then, over the five years to 2005-06, Tasmania’s economy will have grown at an average annual rate of 3.3 per cent — behind only the resource-boom states of Western Australia and Queensland, level with Victoria, ahead of the national average of 3.2 per cent, and nearly a full percentage point ahead of NSW.
Again, if the state and territory treasuries are right, over the same period employment in Tasmania will have grown by an average of 2 per cent a year, ahead of every other state except Queensland and WA; and in two years’ time Tasmania’s unemployment rate will be only a percentage point above the national average, the smallest margin in 25 years.
Grown
Besides which, during this period Tasmania’s population, rather than shrinking, as widely forecast a few years ago, will have grown by an average of 0.6 per cent a year, faster than either of the territories or South Australia.
Tasmania will still be Australia’s poorest state in a year’s time but by 2005-06 Tasmania’s per capita gross product will have risen to just over 73 per cent of the national average, from a low point of less than 71 per cent of the national average in 2000-01.
Proportionately, this is a larger rise in Tasmania’s relative standard of living than Victoria achieved over the five years after it hit rock bottom in 1991-92.
The improvement in Tasmania’s economic performance has been largely the result of good economic and fiscal policy at the state level — just as Victoria’s was in the years following its deep recession of the early 1990s. Tasmanian Government operating expenses will have declined by 1.9 percentage points of gross product over the five years to 2005-06, compared with a decline of just 0.5 percentage points on average for the mainland states.
Spendthrift Robin Gray
This partly reflects the success of the Government in paying off the debt inherited from the spendthrift Liberal government of Robin Gray.
By this time next year, Tasmania will have joined Queensland, Victoria and the ACT as net creditors — a considerable achievement considering that a decade ago, Tasmania’s general government net debt stood at 17 per cent of gross state product, higher than Victoria’s, and that 12 years ago Tasmania was paying more than 10¢ in every dollar of state revenue in interest.
And, although this year’s Tasmanian budget, like that of most other states, contains a significant lift in infrastructure spending, Tasmania is the only state that expects to record cash surpluses in each of the next four years.
All of this has been achieved without raising state taxes. Indeed, Tasmania has been the only jurisdiction not to have introduced any new taxes, or increased any existing ones, over the past five years.
Sustainable
And it has not been as a result of any greater generosity on the part of the Commonwealth Government — indeed Tasmania’s share of GST revenue and of total Commonwealth payments to the states and territories, has fallen by about 0.5 percentage points over the five years to 2005-06.
Other indicators support the view that Tasmania’s renaissance is sustainable.
For example, the retention rate of year 12 Tasmanian students, which 18 years ago was nearly 20 percentage points below the national average, is now higher than in NSW, South Australia and WA, an improvement that is now beginning to flow into the quality of the Tasmanian labour force.
So, it’s no longer accurate to dismiss Tasmania as an economic or social basket case. And it’s certainly not appropriate to leave Tasmania out of round-ups of state economic performances.
Saul Eslake is chief economist at ANZ Bank.
This article first ran in The Age, Friday, June 24. It is republished by permission of the author.
lhayward
June 26, 2005 at 02:57
Mr Eslake’s article illustrates the severe shortcomings of diagnosing society’s health on nothing but macro-economic figures.
Saudi Arabia, Brunei, or Venezuela would also look pretty idyllic from this perspective. While Tasmania has been the unwitting beneficiary of a national property boom, it is also the worst victim of the blight that stunts so many potentially prosperous countries in the Third World — a sell-out by their governments to corporate interests. The illustrations, such as the pulp mill, have been playing on a giant screen. Even more unambiguous evidence of a comprehensive breakdown in governmental probity can been seen in the recent report on the land swap.
If it proves nothing else, the Auditor-General’s report on the Forestry Tasmania land swap demonstrates that the thickest whitewash can never cover the size and multitude of holes in the government’s explanation of the affair.
The report leaves us to swallow that Forestry Tasmania has purchased plantation assets worth over $200,000,000 with land which cannot be located or described. Moreover, we are asked to accept that this phantom land was FT’s private property despite being purchased with public money by a government institution, the Forestry Commission, and classified as Crown land.
Underpinning the above are further contortions. One is the Au-G’s unique definition of “land vesting” which adds the notion that vesting confers an “absolute right to title and ownership”. Nonsense: assets are often vested in managers or trustees.
The stated rationale for giving FT freehold, that private investors require it, is another furphy belied by every other situation where there is private investment on public land. Most of the trees on the plantation land deeded to FT were in fact owned by private interests. The swap’s plantation valuation of around $400 per ha is an extreme bargain compared to the industry’s own minimum charge of over $3000 simply for the seedlings on a hectare.
Mr Blake’s big problem is that no plausible explanation of the affair was probably ever foreseen as necessary. The alienation of nearly 1000 km2 of public land, not even hinted at by the Deed of Arrangement, only became known through a leak from an alarmed Land Services employee in 2000. Lacking that, we would likely know nothing about the whole affair . The employee was not given any argument for the legality of withholding the land from the Valuation Roll. He was reportedly just told to keep his mouth shut.
The Au-G also wishes us to believe that the 121,409 ha which disappeared from the State Forest in FT’s 2000-01 annual report is now reserves under the management of Parks & Wildlife. If so, neither P&W or DPIWE seem aware of this, as my FOI on the issue was handballed to the black hole of FT.
The Au-G’s report does dramatise how desperately this state needs a judicial enquiry into the increasingly blatant control of the Tasmanian Government by the woodchip industry on an even greater scale, namely regarding the pulp mill.
The land swap itself could perhaps be most succinctly explained by the bumper sticker with the image of a tree and the legend “- Your Corrupt State”.
John Hayward
Weegena
Saul Eslake
June 26, 2005 at 10:27
Mr Hayward is perfectly entitled to his views about forestry operations in Tasmania, and since I have no particular expertise in that area I don’t propose to debate them with him.
However his opening two sentences warrant a response.
In the first place, I do not judge a society’s health solely by macro-economic figures; in this article or in my other writings about Tasmania (on TT: http://oldtt.pixelkey.biz/index.php/weblog/C38/) — even when, as in this particular case, the article was limited to 800 words and was specifically about the Tasmanian economy, rather than society as a whole. Hence the reference in my penultimate paragraph to the significant improvement in the retention rates to Year 12 of Tasmanian students — hardly a “macro-economic indicator”.
Earlier in the article I explicitly acknowledge that even with the recent and prospective improvements in Tasmania’s economic performance Tasmania will “still be Australia’s poorest state”. And in other writings about Tasmania (including some of those published on this site (http://oldtt.pixelkey.biz/index.php/weblog/C38/ and, http://www.oldtt.pixelkey.biz/jurassic/) I’ve drawn attention to indicators such as health statistics, the proportion of persons of non-English speaking background in the population, births where no father is acknowledged, and educational attainment in making comparisons between Tasmania and the mainland.
His second assertion that “Saudi Arabia, Brunei and Venezuela would look pretty idyllic” from the perspective of my article is simply fatuous, as can be illustrated by making one of the comparisons which Mr Hayward invites readers to draw.
Tasmania’s per capita income, at roughly 73% of the Australian average, would be around US$22,650 according to the IMF’s latest estimates. Yes, Brunei is higher at US$24,826 per head (all that oil spread over a population less than three-quarters of Tasmania’s comes in handy there); but Saudi Arabia (even with all its oil) only comes in at US$14,000 per head, and Venezuela (with nearly as much oil, and a “Bolivarian revolution” to boot) has only US$5,800 per head.
I could quote a ream of other figures on educational attainment, health standards, the position of women, etc.; If anyone really wants to know, I recommend a perusal of the most recent edition of the UN’s Human Development Report, which is available at http://hdr.undp.org/reports/global/2004/, or the World Bank’s World Development Indicators, at http://www.worldbank.org/data/wdi2005/.
Of course, you don’t need statistics to tell you that in Brunei and Saudi Arabia you’re not allowed to spend any of your income on grog, and in Venezuela you probably can’t afford to. Hardly idyllic!
If Mr Hayward was trying to be satirical, he really needs to try harder.
Ragla Hanavak
June 27, 2005 at 04:38
Saul Eslake is typical of the blind academics that feel that their viewpoint of the world is real and reality is an illusion.
Looking at success or progress throught the narrow illusionary eyes of economics is basically the reason we have such divides between academia and real people. How can anyone say that Tasmania is looking good and getting better when you have wholesale destruction of native flora and fauna. How can you say that we are progressing when we have 3 monopolies that control the state, Gunns, Woolworth/Coles and Federal Hotels.
Economists see progress according to multinational profits that are shared by a very few and most don’t even live in the state.
Progress comes from better conditions and economic security for the majority, not the moronic elite. To say that we are getting better when literacy is declining and job prospects mostly fall in a part time casual setting, our health system is collapsing and energy costs are going through the roof, is totally stupid.
Saying that Tasmania will be debt free in the next year or so is (wrong). What about the debt for the ever declining cattle ships (TT line), what about the debt we will have for the support of the chipmill when the state ends up paying for the infrastructure like land, dams, roads, effulent piping and dredging required to support it. Then there is the growing debts for the huge sums of our money that they have given to the racing industry ($20 million), the gas pipe line (unknown and unending), the fibre optic cable (care to guess), with no return to the people, but lots of return to the academics, beaurucrats and rich.
Then we come to the $20-40 million to the ABT only to have Federal Hotels get it for virtually nothing; will they pay all that money back to us, not on your life. We as people have to pay back everything we earn in the form of taxes and huge rip offs from companies that keep Saul Eslake and those like him in luxury, whilst we struggle to make ends meet and the government gives our money to themselves and their mates.
To say that we have economic progress when farms are shutting down, local industry is being destroyed, independent shops and small business are closing down in the name of what they call competition, but is really monopolisation, is a total illusion.
Prince of Darkness
June 27, 2005 at 10:29
How can someone afford to be positive? Mr Eslake is stating that the situation is improving; he is not saying that things are perfect in Tasmania.
Many people in this site are trying to get political benefits of a very negative picture of the State. However, if anybody analyses the economic performance of Tasmania together with social and environmental indicators, this State is certainly improving. We still have the largest proportion of forests and land protected, unemployment is diminishing and more people are thinking of staying in Tassie rather than moving interstate.
Do I imply that we live in an idyllic situation? Not at all, but it is nice to see positive news in this site, so I congratulate Saul Eslake for an interesting update.
This reality may contradict what the supporters of the negative vision gospel would like us to believe, but hey, tough. With some luck they will manage to do even worse in the next elections.
Brenda Rosser
July 1, 2005 at 04:07
For what shall it profit Tasmania if it gains in economic growth and loses its soul?
– unsafe drinking water
– corruption
– lethal accidents
– loss of landscape
– loss of biodiversity
– dramatic increase in cancers and other illnesses
– inadequate bushfire buffers
– loss of agricultural land and water
– greater economic inequality
– criminal capitalism
– polluted air
Further reading: ‘The Law of Diminishing Marginal Significance of Economics’
Brenda Rosser
July 7, 2005 at 07:55
In response to your comment, Geoff Rollins:
“It is indeed a shame that an economic expert is unable to post an insightful and interesting article without being attacked by the Hanavak’s and Rossers of the world..”
What I presented in this blog was a simple presentation of a different point of view with a list of the reasons why I thought that way. It was not meant to be an attack on any individual.
When you learn to know the difference between the above and what actually constitutes an attack against another writer you might begin to understand the reasons behind the widespread disillusionment with much of what you have written on this forum.
Saul Eslake
July 8, 2005 at 17:30
I´m in Salvador, Brazil at the moment so I´ve only just seen the last few posts.
“Prince of Darkness”, whoever you are, and Geoff Rollins, thank you for your support.
Ragla Hanavak, I´m not an academic, and although I wear glasses I´m not blind, and I´m not “kept in luxury” by the taxes that you pay (if you indeed pay any). As “PoD” affirmed, I didn´t say, and I don´t believe, that everything in Tasmania is perfect, but I do believe, and sought to demonstrate, that things are getting better for at least a majority (though obviously not all) Tasmanians. But I would encourage you not to characterise people who don´t agree with you 100% as being “stupid”, something other than “real people” or part of a “moronic elite”. Surely it’s possible to be passionate about your beliefs without being abusive?
Brenda, I didn´t take anything in your post personally, though I (and perhaps others) would like to see you provide some evidence for some of your views. I accept without demur that there has been some loss of biodiversity, understandable concerns about the safety of drinking water in some rural towns, and conversion of agricultural land to forest plantations. But I´m not aware of any evidence to show (notwithstanding the widespread belief) that there has been any increase in inequality in Tasmania (indeed work by Ann Harding´s National Centre for Social and Economic Modelling suggests, much to her surprise, that at least at the national level there has not been any increase in inequality in recent years). And I´m certainly not aware of any evidence of an upsurge in “criminal capitalism” – unless, of course, one starts from the premise (as, regrettably, some do) that capitalism is “criminal” by definition.
Bom dia,
Saul Eslake
Brenda Rosser
July 11, 2005 at 04:37
Thankyou for your questions, Mr Eslake.
There have been dramatic social and economic changes in Tasmania in the last 10 years that are seeming to continue unabated.
Under one mechanism or another many hundreds (perhaps thousands) of land titles have been transferred from ordinary families and commonly-owned land to private and government corporate entities. This modern enclosure movement forms part of the Federal and State Government’s ‘Plantation 2020 Vision’.
It is a vision of social and economic inequality that is the origin of many of the maladies listed in my original response to you. That is:
– unsafe drinking water
– corruption
– lethal accidents
– loss of landscape
– loss of biodiversity
– illness
– inadequate bushfire buffers
– loss of agricultural land and water
– greater economic inequality
– criminal capitalism
– polluted air
All of these problems are described and acknowledged in the Senate Committee Report on Australian forest plantations.
http://www.aph.gov.au/senate/committee/rrat_ctte/completed_inquiries/2002-04/plantation_forests/report/
I am trying to further elaborate on one aspect of this problem – unsafe drinking water – at my website: http://www.geocities.com/rosserbj
John Hayward’s posting was relevant to the criminal nature of much of the ‘Plantation 2020’ process which is essentially a ‘feudal’ vision for Tasmania.
The revolutionary economic and social implications of widespread corporate land ownership and control should not be overlooked.
Brenda Rosser
July 13, 2005 at 02:59
I wonder, Mr Rollins, why you follow me from blog to blog to belittle everything I have to say about the forest industry.
Why did the Senate Inquiry report recommend an independent investigation of the forest industry to be held by September this year … or else?
Why did they recommend:
“deleting all references to trebling the acreage” of plantations.
“an evaluation of prospectus asssumptions”
“studies to support sustainable plantation development”
funding for ‘Private Forestry devt committee’ be subject to the delivery of outcomes against Action 13 of the 2020 Vision
stakeholder involvement and measures of stakeholder satisfaction
consultation details with Regional Catchment Mgt authorities
details of social and community responses to further plantation devt
and so on. (see the list of Recommendations at the front of the document.
Readers of this document need to see for themselves the nature of evidence provided. Much of it backs up the 30 years’ experience of the single forest auditor in Tasmania — Bill Manning. He is explicit about the bullying, corruption and lies. The Senate Inquiry did – after all — result in a demand for an independent investigation into the industry, as mentioned above.
In the meantime maybe you could provide an outline of your beliefs regarding the forest industry in Tasmania and the reasons you have formulated them. All you seem to do is target anyone who speaks out on this topic.
Brenda Rosser
July 16, 2005 at 16:52
No time to write a thesis, Geoff. Only you can address the problem of your selective reading of reports.
More on the topic of ‘criminal capitalism’in Tasmania:
The Senate document goes on:
Footnote 5: ” Evidence of Mr Bill Manning Regrettably, the committee’s Launceston hearing, where Mr Bill Manning was scheduled to give evidence, was abandoned. This situation arose when, on a motion moved by Senator O’Brien, the large public gallery was asked to leave without explanation. The purpose was to hear the witness, Mr Manning, in camera. No reason was provided. Moreover, Mr Manning, who had not been consulted, did not agree to be heard in camera. It was his refusal and not the lingering public or MP which led to the suspension of the hearing. It should be noted that the committee later heard Mr Manning in open session in Canberra, with the Tasmanian public effectively prevented from attending. It is regrettable that the decision to have Mr Manning denied a public hearing in Launceston was not made until after the hearing began and a large number of citizens had come along with a number of journalists. I apologise for the inconvenience which resulted.”
Why was there an attempt to cover up Manning’s testimony??
And then the elaboration on the nature of Mr Manning’s testimony:
“8.121 Mr Manning, who had worked in the forestry industry for over 30 years, told the Committee that, in his opinion, both the implementation of the Tasmanian Regional Forest Agreement and the 2020 Vision had led to:
• the weakening of the Forest Practices Code;
• corruption of forest management in Tasmania, with little or no enforcement of a weakened code of practice and no silvicultural outcome other than clear felling of native forests for plantation establishment of exotic, introduced, plantation species;
• an internal audit system, designed to deliver fraudulent results and to mislead the Tasmanian Parliament;
• a forestry culture of bullying, secrets and lies.108
8.122 However, the Committee notes that Mr Manning failed to substantiate his allegations of corruption. (BR: Although other witnesses to this Senate Inquiry did substantiate what Manning had said).
The Committee also notes that although Mr Manning claimed the Tasmanian Ombudsman failed to investigate his allegations at the time Mr Manning gave evidence to the Committee in October 2003, he had still not complied with the Ombudsman’s request that his complaint be lodged in writing as prescribed by the Tasmanian Ombudsman Act 1978.
8.123 Mr Manning indicated he had not done so as he was of the opinion that there was a conspiracy between the Ombudsman and the then Governor of Tasmania.
THE REASON FOR MR MANNING’S BELIEF: the Ombudsman recontacted me and asked me to go and see her, which I did with my solicitor. We had a meeting and she still wanted me to put in a complaint in writing. But, as a public servant, I was not protected and I could not do that. The documentation, as you have seen, is very sensitive. The whistleblower legislation, for want of a better name, was in parliament (had been through) and I expected that that would be enacted. But a year later, even though it has been through both houses of parliament, it is still waiting for the governor’s signature.
Senator HEFFERNAN: Do you think they were trying to set you up?
Mr Manning: They were trying to set me up, yes. 109
[* The Tasmanian Ombudsman’s office ‘investigated’ the alleged corruption of the Forest Practices Board’s ‘audit’ system on the coupe next door. This consisted of a call to the Forest Practices Board, a declaration that the Board’s version was accepted over that of my family and a mere two weeks to provide a response when I was ill and unable to do so. On the other hand the Ombudsman had taken 12 months to respond to complaints submitted against the FPB.’]
Question:
Is Tasmania’s problem economic? Or is it a moral problem whereby the denial of universal morality has led to the rise of a criminal state.