ABC pic of Jan Davis
There’s a reason they call economics ‘the dismal science’. If you spend too much time around the practitioners, the doom and gloom can be overwhelming.
This is nowhere more so than here over recent weeks.
The latest national economic report is scathing in its assessment of Tasmania’s performance ( TT: The Parlous State ). The CommSec State of the States report shows Tasmania locked at the bottom of the Australian economic performance table. It is lagging behind all other states on seven of the eight indicators, including population growth, retail spending and housing finance.
Tasmania has the highest unemployment rate of 7.2 per cent.
The State Treasury also recently issued an information paper on structural change in the Tasmanian economy. I won’t depress you with the detail because, as you can imagine, the picture is not pretty: business and industry hit by the high Australian dollar, cyclical factors affecting our economic performance, high unemployment, our aging population, etc, but this will give you some idea.
“Tasmania’s key economic indicators such as employment, investment and economic growth have deteriorated, relative to the national economy…the divergence between the national economic performance and the state’s economic performance has encouraged workers to migrate to mainland states, which has further dampened private demand.”
What disappoints me, the eternal optimist, is that too often these reports deliver a dire narrative or commentary on where we are at, but don’t offer much in the way of suggestions about how we can improve the outcomes.
For example, the Treasury report says nothing about what we could do to broaden the state’s economic base or what might be done to create more wealth by attracting more business investment in a more competitive environment – thereby reducing some of the pressures – such as those caused by the demography of the aging population.
It certainly identifies the growth sectors of the economy – construction and agriculture – but doesn’t give any thought to what can be done to drive them harder or to providing any justification for greater urgency in reducing public service non-frontline services. It covers the increasing importance of Asian markets and Asian investment but not what can be done to expedite their growth.
Overall, there is much more explaining about why things are the way they are than what can be done to address them.
For instance, education of overseas students is seen as one of the bright lights although it notes that Tasmania has a lower percentage of such students than other states. (George Megalogenis in The Australian Moment notes the lack of fresh blood in Tasmania and equates this with a lack of fresh ideas.)
Treasury observes the structural support being devoted to primary industry and other productive sectors (I think we’ll accept both interpretations of “productive” in that comment) and the decline in forestry and forest products.
It says we are impotent to control the global and national economic forces that have reduced the competitiveness and worsened the market conditions for them.
In a sense that might be right, but, given the acknowledgement that the Tasmanian economy is subject to cyclical influences, should it not have applied its mind to the state of the market when the shift occurs?
Instead we get: “…state-level policies can make a significant difference to the future longer-term growth prospects of the economy through their impacts on both the investment climate and the productive capacity of the Tasmanian economy. Examples include sustainable management of the State’s finances, investment in education and skills, public infrastructure investment and planning reform.”
We read nothing about the fact that, as the economy goes into a form of lock down, the government exacerbates the situation by locking up the resources we do have that give us a natural advantage.
Our farmers are among the best in the world, but they work on very thin margins? So why does the government continue to impose more and more red and green tape that increases our costs exponentially? We grow trees very well. Why excise them from the business plan for Tasmania?
The Business Spectator website recently addressed its mind to the future of primary industry in Australia and noted the southerly drift of Australia’s productive climate. That will bring Tasmania more and more into its own.
The important point it makes is that Australia is never going to be the food bowl of Asia, we can’t produce that much,. However, we should be looking at feeding 20 million mouths instead of 50 million. We produce high value, high quality, value-added food but we need to maximise our returns from these fabulous products.
“Because while we cannot provide the food, in calorific terms, to feed many more people at present, there are massive business opportunities on the horizon for greater value-added food exports,” Business Spectator said.
That’s the sort of advice the government should be getting from Treasury.
