Research piece – Bansi Madhavani, Adelaide Timbrell & Catherine Birch, Economist, Economist & Senior Economist, ANZ, 25 February 2021
The Recovery Continues
The bulk of Australia’s states and territories continued their recoveries in the final quarter of 2020, the ANZ’s Stateometer index shows, after the country’s technical recession brought on by COVID-19 related restrictions came to an end in the third quarter.
The rapid recovery from the short but transformative COVID downturn in the first half of 2020 led to above-trend economic growth in New South Wales, Western Australia and the Australian Capital Territory, the ANZ Stateometer Index found. Most states saw their economic recovery accelerate, with Tasmania and the Northern Territory exceptions.
Some restrictions persisted into the fourth quarter and beyond, particularly in Victoria, and the risk of future restrictions may weigh on growth for some time. Since Victoria’s long lockdown there have been additional short, targeted versions in SA, Perth, Brisbane and Sydney’s northern beaches, and then again in Victoria.
Interstate border closures may also continue to limit economic growth in some states, particularly on the east coast, where international tourism has contributed more to economic growth in the past.
Interestingly, the report found regional Australian economies held up better than their metro counterparts through the pandemic, with activity in regional areas recovering more quickly than outbreak-prone and tourism-exposed capital cities.
Regional housing outperformed capital cities in both price growth and building approvals growth. ANZ-observed spending showed a clear gap between city and regional spending which has persisted since May 2020.
Up and down
The unemployment rate in NSW fell to 6.0 per cent in January, below the national average of 6.4 per cent, helping drive growth in the state to above-trend acceleration, as found by ANZ’s Stateometer index. However, state border changes from late December to early 2021 may weigh on NSW’s recovery, particularly for tourism-exposed businesses.
The state’s domestic tourism spend fell less than the national average between January and November 2020, as regional demand filled at least some of the gap left by international and interstate tourists in Sydney.
Victoria’s economy was hit hard by the state’s second wave of COVID-19, which closed much of the economy until November, but the recovery has since been rapid. Employment and household spending both bounced, although longer-term indicators for growth, like housing construction and capital expenditure, are yet to recover.
In Queensland, the labour market improved more than any other state in the final quarter, but other indicators were less impressive.
Interestingly, the negligible impact of the pandemic on the NT compared with the east coast states led to Darwin recording the strongest housing price performance across capitals and strong retail sales growth, at 4.5 per cent quarter-on-quarter compared to a national average of 2.5 per cent.
Media release – David O’Byrne MP, Shadow Treasurer, 25 February 2021
Tasmania’s economy going backwards under the Liberals
A major report tracking Australia’s economic recovery shows Tasmania is faring worst of all the states.
The ANZ Stateometer judged Tasmania to be the only state where the economy is “performing below trend and decelerating”, highlighting the Gutwein Government’s inability to deliver the economic recovery and jobs it promised Tasmanians.
The report shows regional job losses in Tasmania are the worst in the nation, retail is performing worse than anywhere in the country, and interstate tourism spending is down by nearly 40%.
“This should be a massive wakeup call for Peter Gutwein and the Liberal Government,” Mr O’Byrne said.
“Alarm bells should be going off in the Premier’s office, but instead it seems we’ll be getting more of his complacency and inaction.
“The Liberals’ claim they are building Tasmania out of recession simply doesn’t stack up.
“The mid-year budget update shows the Government is likely to underspend by nearly $600-million on new infrastructure that Peter Gutwein promised would be built this year.
“On the Government’s own numbers that’s 3,000 fewer jobs across Tasmania.
“We haven’t seen one major project get off the ground and now our economy is running out of steam. The Premier needs to accept responsibility for this massive failure and he needs to tell Tasmanians how he’s going to get the promised infrastructure program back on track.”
Labor’s plan for jobs lays out an ambitious program of projects, direct investment and skills training especially targeted at the regions.
“Tasmania needs Labor’s economy-wide recovery plan to create 35,000 jobs and get our state back to work.”
Media release – Peter Gutwein, Premier and Treasurer, 25 February 2021
Economic recovery continues according to new data
New ABS data released today has confirmed our economy is continuing its recovery from COVID-19 and our plan to rebuild a stronger Tasmania is working.
Private new capital expenditure for the December 2020 quarter grew 17.2 per cent in real seasonally adjusted terms, the highest growth of any State, and over five times higher than the national growth of just 3 per cent.
Incredibly, and despite still recovering from the pandemic, private investment grew 10.2 per cent over the year, bucking the national trend that saw nearly all other states and territories decline over the same period.
Private investment was underpinned by the highest annual growth in Equipment, Plant and Machinery in Australia, increasing 43.5 per cent over the year, and state-leading quarterly growth of 26.9 per cent. This is a great vote of confidence in our State and demonstrates the resilience and confidence of our business sector as it continues to invest and grow.
Confident businesses hire more workers, and this is exactly what we are seeing in the jobs data. Employment is now back to pre-pandemic levels, and we have the lowest unemployment rate of the states.
The data coincides with the ANZ Stateometer Report also released today which notes our “booming” housing market, exports that “surged” in the December 2020 quarter and are well above pre-pandemic levels, as well as forecasting strong economic growth next year.
And contrary to David O’Byrne’s false and misleading assertions today, Tasmania’s economy is actually performing above the national average and better than four other jurisdictions, as measured by the Stateometer index.
Mr O’Byrne may want to talk down our State at every opportunity but despite his constant whingeing, negativity and attempts to undermine business confidence, these results are yet more evidence that our Plan is clearly working, but we know there is more to do.
That’s why we will continue to focus on growing our economy and creating even more jobs as we rebuild a stronger Tasmania.
Latest ABS data on private capital expenditure, average weekly earnings and labour force.
David O’Byrne MP, Shadow Treasurer, 25 February 2021
Liberals continue to mislead on state of the economy
Tasmanian workers continue to do it tough with the latest ABS data confirming high regional unemployment and that wages across Tasmania are stuck well below the national average.
Shadow Treasurer David O’Byrne said the Liberals cannot continue to spin their way out of the COVID recession and the Gutwein Government must act to address the crisis in regional Tasmania.
“Today’s figures reveal job losses in many of our state’s regional communities over the past month, including 200 in Launceston and the north east and 700 in the south east. Alarmingly, Tasmania’s unemployment rate outside Hobart is now 7.7 per cent.
“Behind each one of these numbers is a Tasmanian who deserves better.
“For those with a job, the latest data shows they’re getting paid nearly $12,000 less than the national average yearly income and there’s been zero growth over the past six months.
“The wage gap has grown by nearly $1000 under this State Liberal Government.
“The Government cannot continue to cherry pick data and ignore the growing number of Tasmanians who are struggling under its go-nowhere policies.”
Labor has a plan to create 35,000 new jobs with an ambitious program of projects, direct investment and skills training especially targeted at the regions.
“Labor will build a better and fairer Tasmania.”
