Regular readers will know I am a relatively new Tasmanian. I moved here from Queensland; and I moved to Queensland from Western Australia. It didn’t take me long to notice a very big attitudinal difference here. Queensland and WA want economic development: they relentlessly pursue it, and they deeply resent stifling paternalistic regulations perceived as being instigated from the remote national capital. In short, they go for it, as far and as fast as they can – and it pays off.
I soon realised that Tasmania is very different. Any proposal for almost any sort of change or development is almost always met with loud and instant opposition. Overnight, a committee springs up, and interest groups with no skin in the game essentially make decisions on behalf of all Tasmanians that will stymie development and stall projects virtually forever.
Of course, no-one would argue for a Rafferty’s rules type situation here in Tasmania – our island is far too special to allow that. However, it is time we all acknowledged the elephant in the room. Tasmania’s economic elephant is called structural dysfunction. In its simplest terms, this means that one-third of our potential workforce is in the public service, one-third is on social welfare, the other third is in private enterprise.
Mainland states are becoming increasingly resentful of our expectation of continued increases in GST funding to support our comfortable lifestyles – as they see it, at their expense. WA Premier Colin Barnett said recently, “If they (Tasmanians) continue to reject any sort of development, well, what right is there to simply take the spoils of hard work in other states?”
Objectively, you can see their point. For every dollar raised in GST in the west, WA will receive only 71c. Tasmania is reliant on federal taxpayers to prop up almost 70 per cent of its budget; and our lack of self-sufficiency is rewarded by receiving $1.60 per $1 raised in GST.
Tasmania has more public servants per head of population than any other state – one for every 16 people as against one for every 21 in Victoria for example. The public sector has increased by almost 34 per cent in the past 10 years. One financial analyst has calculated that the state sector wages bill has risen from $1.32 billion in 2003-04 to $2.23 billion in the current financial year.
These levels of imbalance are simply not sustainable.
The response to this structural dysfunction has been to snip around the edges of the problem: take some mobile phones away from police officers, threaten small schools with closure, trim the health budget, and shy away from reunifying the three electricity authorities to achieve/restore economies of scale.
Difficult as it may be to accept, none of these things will address the real problem. This is the modern equivalent of fiddling while Rome burns. If we are to move beyond this unsustainable structure, we need to totally rebuild our economic model – and that means growing our state’s income, as well as reining in costs.
Late last year, former Labor minister Julian Amos interviewed 60 Tasmanian CEOs, union leaders, heads of peak industry bodies, economists, heads of government agencies and political commentators and came up with a damning assessment of the state’s economy. On the front page of the report, Dr Amos said, “Tasmania is wallowing in the comfort of mediocrity, a mendicant state, fast becoming an aged care facility in a national park”.
Tasmanian private enterprise has recognised these challenges and seized the initiative last week by establishing a Peak Bodies’ Roundtable. The TFGA is one of sixteen separate industry groups that came together in a collective effort to identify sustainable ways forward for Tasmania’s economic future.
Convened by the TCCI, the Roundtable includes major industry associations, small business organisations, professional associations, chambers of commerce and so on. The members of these groups represent the bulk of the private sector economy in this state. The Roundtable will identify key economic priorities seen as essential for Tasmania to flourish and grow.
Reform is inherent in the solutions we seek: reforms in the public service, planning, red tape, infrastructure, taxation, our overall economic development strategy and a rethink of the ‘Big Bang Theory’ – the cargo cult mentality that one big project will solve our economic ills.
We say, “Wake up, Tasmania”.
Change on the scale necessary will require political courage and community support. No-one thinks it will be easy. However, unless we take our destiny into our own hands, the future looks very bleak.
