Economy
Tasmania struggles
A new report shows Tasmania is one of the nation’s worst economic performers.
Commsec’s State of the States report released today has Tasmania firmly ranked in the bottom performing states in terms of economic growth.
Only New South Wales was given a worse report card.
Retail spending in Tasmania is 3.3 per cent lower than a year ago, the weakest performance of the states and territories.
Housing finance and construction work are also down.
But Commsec’s Craig James says Tasmania has one of the strongest job markets in the nation.
The trend jobless rate at 5 per cent is well below the long-term average of 6.2 per cent.
“The unemployment situation in Tasmania is very good and it may just be a matter of time before the good unemployment figures are translated into better retail spending figures,” he said.
The state Opposition says the report shows there is a lack of confidence in the economic management of the Labor-Greens Government.
The Liberals’ Peter Gutwein says the Government’s focus should be on boosting the economy.
• What CommSec says:
State of States – Western Australia loses momentum
According to CommSec’s State of the States report, a detailed analysis of each state’s economic performance based on eight key indicators.
While still ahead of the pack, Western Australia gave up some of its lead, with population growth slowing, causing a knock-on effect in the housing sector. And while still lower than the other states, unemployment also drifted up. It’s not all doom and gloom in the west, though – commercial and engineering building still remains high, investment is strong and the state still boasts the strongest overall economic growth.
The ACT was the stellar performer this quarter, with housing activity, construction and economic growth all above average. Unemployment is low, and ACT workers are doing best in terms of real wage gains (that is, wages growing faster than prices). The only weak areas in the ACT are retail spending and private business’ spending on machinery.
There is less to differentiate the performances of the other states:
Victoria leads the states in the housing market, with dwelling starts 20% above decade averages and housing lending also rising. On the downside, Victorian unemployment is slightly above decade averages, compared to the other states.
South Australia is experiencing historically high population growth, spurring activity in sectors like construction, which is a massive 47% above decade averages. Annual growth in construction is up 20%, second only to the ACT.
The Northern Territory recorded strong retail spending over the quarter, with a very low unemployment rate of 3.1% continuing to buoy its economy. Areas of weakness include construction work and housing finance.
New South Wales, while being dragged down by slow dwelling starts, is still a major improver, due to above-average population growth and stronger business investment. It outperforms the other states in business investment in equipment and machinery.
Tasmania continues to enjoy relatively low unemployment and greater-than-average dwelling starts. However, it is comparatively weak in business investment and retail spending.
In Queensland, building and construction activity have been affected by sluggish population growth, which is at a historic low. On the positive side, business investment in plant and equipment is 28% above longer-term averages, and retail spending was relatively strong. Reconstruction after the state’s string of natural disasters will definitely give construction activity a boost over the coming months.
• COMMSEC REPORT PAINTS AN INCOMPLETE PICTURE
Tim Morris MP
Greens Treasury Spokesperson
The Tasmanian Greens said today’s Commsec State of the State report paints an incomplete picture of Tasmania’s economic performance, leaving out critical data on the level of public savings, which appear to have increases significantly in recent times.
Greens Treasury spokesperson Tim Morris MPs said that anecdotally savings levels in Tasmania have increased since the global financial crisis, which is a good indication of longer-term resilience in the economy.
“Retail spending has flat-lined to a degree, but this report does not include any data to indicate how much of that is due to consumers working harder to save money,” Mr Morris said.
“Personal savings are an economic guarantee for the future, and when Tasmanian consumers do start to feel more confident about their situation that money will start to flow back through to spending.”
“It’s puzzling that a report produced by a bank would fail to include such a critical piece of economic data, and further evidence of the need for State Parliament to have access to an independent statistician to provide reliable economic figures.”
“Too often the public debate on the economy is undermined by the Liberal and Labor Party’s attempts to skew the statistics, and the Greens believe that having an independent statistician seconded part time from Treasury would take some of the vested-interest politics out of the economic debate.”
Mr Morris said that overall the report shows Tasmania’s economy is doing reasonably well given the global context, but that it’s important to continue to look for improvements in productivity and workforce participation.
“The unemployment rate for Tasmania is historically very good, however there are ongoing concerns regarding the participation rate.”