Media release – Michael Ferguson, Treasurer, 1 June 2022
Tasmania’s economy in robust health
Tasmania’s economy is in robust health – retail trade and goods exports are at record highs, and unemployment is at the lowest level on record.
In the March 2022 quarter growth in State Final Demand has eased slightly exactly as forecast, reflecting capacity constraints in the economy and a moderation in private investment after sustained boom times.
State Final Demand remains at near record levels, and in the year to March 2022 it was 8.5 per cent higher than the year to March 2021. Although this comparison is influenced by the very low June 2020 result due to the first lockdown, State Final Demand is still 6.9 per cent higher than the year to March 2020, at the beginning of the pandemic.
These results are consistent with Treasury forecasts in the 2022-23 Budget, which forecast annual growth of 6 per cent in 2021-22 and a return to more normal levels of growth with 3 per cent in 2023-24.
In particular, as noted by Treasury, private investment experienced an exceptionally strong September 2021 result, which was expected to moderate during the remainder of the financial year. The September result was influenced by the impact Australian Government tax incentives, particularly the Instant Asset Write Off, had on business decision making, bringing forward investment in plant and machinery – with resulting investment in these items having now eased but remaining at a very elevated level.
In addition, capacity constraints have reduced dwelling investment from a series high, and normalised at very strong levels. The ABS considers that this is easing due to supply shortages of construction materials and labour, which echoes the Reserve Bank of Australia’s recent Statement on Monetary Policy.
Instead of talking down our State with relentless negativity and fabricated definitions, the Shadow Treasurer Dr Broad needs to celebrate the strength of our Tasmanian businesses and the record numbers of people employed.
We have an incredibly strong economy, record employment and high demand for goods and services in Tasmania. This is a very positive time for our economy and community.
Shane Broad MP, Shadow Treasurer, 1 June 2022
Liberals drive Tasmania into technical recession
It has taken just two months for Jeremy Rockliff and his Treasurer to drive Tasmania into a technical recession.
For the second quarter in a row, State Final Demand has gone backwards. After shrinking 1.5 per cent in the December quarter, Tasmania’s domestic economy has fallen another 0.6 per cent.
As Peter Gutwein used to repeatedly say, State Final Demand is the key measure of Tasmania’s economic performance.
Tasmania is the only state to go backwards and our economy is now $220 million smaller than it was last September.
This result has been caused by falling business investment—down $261 million compared to the September quarter—and falling household spending driven by Tasmanians tightening their belts because of the cost-of-living crisis.
This comes on the back of Tasmania’s population shrinking for two quarters in a row, as our young people once again move to the mainland seeking better pay and cheaper housing.
Business confidence is also down, the budget is in deep trouble—with the Government borrowing three and a half million dollars every day for the next four years on the way to record debt of $5.2 billion—and consumer confidence has taken a battering.
As these figures make abundantly clear, Jeremy Rockliff has dropped the ball on the basics of economic management.
He is too weak to make the tough calls, and his Treasurer is too incompetent to make the right ones.
