Tasmania Report 2019
CONTENTS From the Chair
1
About The Author
2
Social Forward
3
Chapter 1 OVERVIEW – TASMANIA IN THE NATION AND THE WORLD
5
Chapter 2 TASMANIA’S ECONOMY
17
Chapter 3 TASMANIA’S JOBS AND INCOMES 47
Chapter 4 TASMANIA’S POPULATION 63
Chapter 5 TASMANIA’S SOCIAL OUTCOMES 73
Chapter 6 TASMANIANS’ HEALTH 79
Chapter 7 TASMANIA’S EDUCATION SYSTEM 97
Chapter 8 TASMANIA’S PUBLIC SECTOR 107
Chapter 9 CONCLUSION – WHERE TO FROM HERE?
EVENT PARTNERS
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FROM THE CHAIR S U S A N PA R R
It is with great pleasure and pride that I introduce this fifth
and the costs of doing business in an island state with a
Tasmania Report to you. It is remarkable both in the quality
static population and limited transport options.
of the data, the analysis and the themes identified by Chris Richardson as well as the unique partnership that makes the funding of the report possible. The powerful concept, initiated by the TCCI, that a report combining economic and social aspects of the entire Tasmanian community are essential to informed debate on strategic goals and policy implementation for every Tasmanian. TCCI and TasCOSS together with Tasplan Super, Federal Group, TasNetworks
The Productivity Commission Report Shifting the Dial: 5 year productivity review (October 2017) highlighted the need for “a new agenda focused on individuals. Getting better outcomes involves new agendas involving the nonmarket economy (mainly education and healthcare), the innovation system, using data, creating well- functioning cities and re-building confidence in institutions.”
and The Mercury combine in a partnership that provides all of
As Tasmania enjoys the best economic situation for fifteen
us with key data and analysis to better inform all Tasmanians.
years, we must also commit to a clear strategic plan
As engaged Tasmanian leaders, you all know the significance of accurate data in measuring and managing
designed to achieve measurable outcomes in education and training, health and infrastructure.
key objectives and the benefits of positive relationships
This will require leaders with courage, vision and valour to
with stakeholders who join with us in striving to achieve a
see beyond political horizons to deliver policies that avoid
better Tasmania for all, and who recognise that prosperity
the future as described by the Productivity Commission.
and wellbeing are intrinsically linked at an individual
Mediocrity is not the future Tasmanians deserve.
and community level. It is gratifying to note that many organisations like Tasplan Super, are now using the Tasmania Report in their planning. The significance of economic indicators alone can cloud vision and judgement. The juxtaposition of social and economic indicators informs a fuller appreciation and prompts debate about the priorities that Tasmania must set. Of course, State Government plays a huge part in the achievement of community priorities, but Local Government, health and education institutions, industry,
The TCCI envisages Tasmania as the most successful state in the Commonwealth. The measures of that success include prosperity but depend on education standards and good health and confidence in our institutions. With the publication of the fifth Tasmania Report, the TCCI will continue to track Tasmania’s progress towards the attainment of improved results in jobs, construction, exports, new businesses, housing, health status and educational achievement.
businesses, community groups, households and individuals
I commend the report to you all.
have a responsibility to look beyond self- interest and
Susan Parr
professional empires, and understand and act for the
Chair
needs of Tasmania as a whole.
Tasmanian Chamber of Commerce and Industry
Tasmanians are the unhealthiest, oldest, worst educated, most under-employed and most dependent on government benefits in Australia. This is not sustainable and if it continues will condemn a large number of Tasmanians to unproductive lives with compromised opportunities for employment, personal fulfilment and community engagement. The flow on effects mean increasing health costs, more people who feel alienated from society, and who in turn, have no stake in developing communities. Traditionally, business has not examined the qualitative indicators of Tasmania’s success such as housing, education and health. The TCCI believes that the true measure of a successful Tasmania must include improved achievements in these areas as well as the quantitative indicators of employment, infrastructure development, levels of taxation
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ABOUT THE AUTHOR CHRIS RICHARDSON
Chris Richardson is a Partner of Deloitte Access Economics and is one of Australia’s best known economists. Chris heads Deloitte Access Economics’ forecasting and modelling unit. He is the author of three regular publications: Business Outlook, Employment Forecasts and Budget Monitor. Chris’ expertise includes the Australian and global economies, Federal budget analysis, property, ageing and industry trends and his comments on trends in the economy and their effect on business regularly appear in daily media coverage. Deloitte Access Economics is one of Australia’s most well recognised economics advisory services. The team provides economic advice and insight to public and private sector clients, to address questions relating to cost, pricing, revenue or markets, and is united by a passion for economics and a belief that it can create a better future for all. Deloitte Access Economics now has a dedicated team in Tasmania. Chris Richardson Chair Deloitte Access Economics
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SOCIAL FORWARD TA S C O S S C E O
Tasmania’s strong economy is something to be proud of.
In these examples, we are seeing more Tasmanians being
It’s the foundation we desperately needed and provides
able to fulfil their potential and experience economic
a strong base to be built on. The challenge is to construct
independence, sometimes for the first time — and on
an economy in these days of economic sunshine that is
their terms.
robust, flexible and innovative to shelter all Tasmanians from the storms and tempests that will surely come in the decades ahead.
We need the right investment now from government to open up opportunities for all Tasmanians to prosper. And we need the right policy settings and systems to
Describing a vision for Tasmania where everyone can have
make that happen. For Tasmania to thrive long-term,
a good life is the easy part. Making it a reality is another
we need governments at every level to clear the path,
matter entirely.
not build obstacles.
The investment over the past five years in infrastructure,
No matter what the current economy looks like, we will
tourism and a range of other industries has provided the
not prosper long-term if we don’t get this next investment
preconditions for a strong economy. But there is still an
target right. There are two streams to these challenges
uncomfortable reality. As the national economy starts to
that will create opportunity and provide the focus for
tighten, we still need to counterbalance the investment
where investment needs to be. First, for adult Tasmanians,
and consider different, more innovative ways of working
our greatest challenges and potential still exists in the
in education, health and wellbeing — in skills, transport
low levels of education, literacy and health outcomes of
and more than just the most basic of essential services.
our population. For our children and young people, the
If we don’t, the foundations will not support that vision.
opportunity for them to be the generation who no longer
The foundations will not support all Tasmanians, only
carry that ignominious Tasmanian legacy is our most
some of us.
golden. Improving outcomes for the next generation so
We need to look for and invest in opportunities where all Tasmanians can prosper. And we can only do that if governments at every level are flexible, open to ideas, set bold targets and strict deadlines, breach the bureaucratic
they never have to live a life of poverty like many of our fellow Tasmanians is a legacy to be proud of. And it is doable. But not without investment in our children, young people, their parents and grandparents.
walls that remain 20th century constructs in a 21st century
Leadership is the process of bringing new and often
racing ahead at warp speed. The Tasmanian Government
unwelcome reality to a discussion. So amongst the
can’t afford to keep doing things the same way we always
ongoing dialogue of a strong economy, the unwelcomed,
have and expect different results. That is why the long-
uncomfortable reality that requires leadership is that
awaited review into the Tasmanian State Service is key to
we have a long way to go to ensure everyone has the
unlocking our potential.
opportunity to participate. The beauty of the current
The other key is us. Tasmanians across our communities see the opportunities, they know what is needed. They have ideas but have not always had the right conditions
Tasmania is in the eye of the beholder, and not all see it the way you or I might. Leadership can expand the vision so the road ahead sees a good life for all of us.
to dare to aspire. For many, our history has been a lesson
Kym Goodes
in precarious employment and long periods of economic
CEO
downturn. Now however, where we have prototyped
Tasmanian Council of Social Service
models that enable community-led approaches and investment in what is needed to succeed, we are seeing improved outcomes in employment and training.
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Chapter 1 OVERVIEW – TASMANIA IN THE NATION AND THE WORLD
Chapter 1: OVERVIEW – TASMANIA IN THE NATION AND THE WORLD Tasmania had the fastest growing economy in the country in 2018-19. It’s a fair turnaround from just five years ago and reflects an ongoing transformation from the industrial and manufacturing focus of 30 years ago towards an economy where our strengths – clean food, pristine wilderness and a vibrant higher education sector – are in demand internationally. Population growth has returned and there is a level of confidence that hasn’t been seen for some time. But the Tasmanian economy is by no means perfect and we still lag behind the rest of the country in many areas. Growth is starting to look a little softer around the edges. Some of the drivers that powered this phase of better growth are on shakier ground, and there are more hurdles than there used to be. And the ‘gaps’ that have long existed between economic and social outcomes in Tasmania and the rest of the country are not closing at the rate they need to do despite our good economic performance. There is still a solid outlook for the State. But there is much to be learned from putting this period of growth, and the ground gained on structural challenges, into perspective.
The economy is performing well Before examining the future, it makes sense to assess where Tasmania is today. The State’s economy started to turn around in 2014, largely coinciding with a fall in the exchange rate as Australia’s mining construction boom cooled down. Since that time, growth in the State’s economy and its population has accelerated.
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Chapter 1: OVERVIEW – TASMANIA IN THE NATION AND THE WORLD Chart 1.1: Growth in gross state product (GSP) per capita Chart 1.1: Growth in gross state product (GSP) 6 per capita % on previous year 56
% on previous year
45
Chart 1.2: Growth in GSP per capita, 2018-19 Chart 1.2: Growth in GSP per capita, 2018-19 2.5
Mainland
2.5 2
Tasmania Mainland
1.52
Tasmania
34
0.51
12
0.5 0
01
-0.50
-10
-0.5 -1 00
02
04
06
08
10
12
14
16
18
-2 Source: Australian Bureau of Statistics (ABS) 5220.0, 00 02 04 06 08 10 12 14 16 18 2018-19
Source: Australian Bureau of Statistics (ABS) 5220.0, 2018-19
% change on previous year National average
1.5 1
23
-2 -1
% change on previous year
National average
-1 -1.5
NSW Vic Qld -1.5 ABS 5220.0 Source: NSW Vic Qld
Source: ABS 5220.0
SA
WA
Tas
NT
ACT
SA
WA
Tas
NT
ACT
The recent phase of better growth – in turn – has lifted Tasmanian incomes closer to the Australian average than they’ve been in decades. they’ve in decades. The been recent phase of better growth – in turn – has lifted Tasmanian incomes closer to the Australian average than they’ve been in decades.
The recent phase of better growth – in turn – has lifted Tasmanian incomes closer to the Australian average than
Chart 1.3: Primary income per capita, states and territories Chart 1.3: Primary income per capita, states and $110 territoriesprimary income per $100 $110 $90 $100
capita, $000s
primary income per capita, $000s
$80 $90
87 89 85 87 83 85 81 83
$50 $60
79 81
$40 $50 $30 $40
77 79 NSW Vic
Qld
SA
$30 Source: ABS 5220.0 and 3101.0 NSW Vic Qld SA
2
Source: ABS 5220.0 and 3101.0
2
%
89 91
National average
$60 $70
93 95
91 93
National average
$70 $80
Chart 1.4: Tasmanian household disposable income per capita, as a proportion of national Chart 1.4: Tasmanian household disposable 95 % income per capita, as a proportion of national
WA
Tas
NT
ACT
WA
Tas
NT
ACT
75 77
90 92 94 96 98 00 02 04 06 08 10 12 14 16 18
75 Source: ABS 5220.0 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18
Source: ABS 5220.0 T C C I TA S M A N I A R E P O R T 2 0 1 9
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Chapter 1: OVERVIEW – TASMANIA IN THE NATION AND THE WORLD This phase of better growth was aided by a range of factors: • Population growth lifted off the back of both international and interstate migration (the latter as sharply rising house prices in Melbourne and Sydney have encouraged people to move to Tasmania, and discouraged people from moving away) leaving today’s pace of population gains more than five times what it was in 2014-15). And, in turn, that pick up in people power boosted both construction and retail and gave business more incentive to invest locally. • Aided by the ramping up of the National Disability Insurance Scheme (NDIS), ageing displayed its positives as an economic driver, with health care being by far the largest single contributor to Tasmania’s job growth. • Asia’s rapid economic advance shifted gears away from industrial production to consumer spending, with Asia’s rising middle class boosting demand for travel, foreign education and ‘clean and green’ food – all areas where Tasmania has a comparative advantage. • And a falling Australian dollar turbocharged those trends, aiding export focused sectors to grow, and limiting the damage to the wider State economy from declines in manufacturing. That combination drove down the unemployment rate (despite recent small increases) and saw the State’s business investment lift to its largest share of national spending in a decade.
But we’ve seen better Yet that better news needs to be put in perspective: • first, because, as good as recent gains have been, they pale before the strength shown in the 1980s or in the decade leading up to the Global Financial Crisis (GFC), • second, because recent growth has largely been driven by government spending; and • third, because Tasmania still lags the nation on too many key indicators. On the first front, chart 1.5 shows Tasmania’s labour force – the ‘people power’ – available to the State’s economy. Although bigger isn’t necessarily better, the phases of strong gains in the 1980s and again in the 2000s were indicative of strength in the State’s economic trends across those periods.
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Chapter 1: OVERVIEW – TASMANIA IN THE NATION AND THE WORLD Chart 1.5: Total labour force, Tasmania 260 250
000s
240 230 220 210 200 190 180 170 160
78 81 84 87 90 93 96 99 02 05 08 11 14 17
Source: ABS 6202.0, October 2019
That can be contrasted with the tough slog of the 1990s, as well as a matching weak pe from when the GFC hit through to about 2014.
That can be contrasted with the tough slog of the 1990s, as well as a matching weak period from when the GFC hit through to about 2014.
Government spending droveAfter thestrong economy’s in 2018-19. After strong Government spending drove the economy’s growth in 2018-19. years ingrowth 2017-18, business investment
years in 20 18, business investment and household consumption growth in 2018-19 was relatively w and household consumption growth in 2018-19 was relatively weak. This slack was taken up by State and slackboth wason taken up by State and Commonwealth government Commonwealth GovernmentThis spending, infrastructure as well as wages and salaries. The latter was spending, both on andindividuals’ well as wages and salaries. Thefor latter was greatly boosted by the rise greatly boosted by the rise of infrastructure the NDIS, with many NDIS plans being funded the first time in 2018-19. Government fundingthe of infrastructure theindividuals’ NDIS is fine, but in the longerbeing term private sector NDIS, with and many NDIS plans funded for investment the first time in 2018-19. and employment needs to beGovernment stronger. funding of infrastructure and the NDIS is fine, but in the longer term privat sector investment and employment needs to be stronger.
And the gains of recent times leave us short on key benchmarks – And the gains of recent times leave us short on key benchmarks – there is still a there is still a gap
While there have been strong positives in recent years – and some of them represent While there have been strongstructural positives in shifts recent with years ongoing – and some of them represent structural shifts with potential – Tasmania continues to ongoing lag the nation as a who potential – Tasmania continues to lag the nation as a whole in a range of indicators: from social (such as health and a range of indicators: from social (such as health and education) to economic (such as w education) to economic (such as wages and participation in the labour force). and participation in the labour force). The chart below compares some key economic and social indicators for Tasmania with the national figures. A value of
The chart below compares some key economic and social indicators for Tasmania with t national figures. A value of greater than one indicates that Tasmania is doing better on of less than one is worse. On all indicators (except the international visitors/resident ratio) there is a clear gap between indicator than the rest of the nation, whereas a value of less than one is worse. On all Tasmania and the rest of the country. indicators (except the international visitors/resident ratio) there is a clear gap between Tasmania and the rest of the country. greater than one indicates that Tasmania is doing better on that indicator than the rest of the nation, whereas a value
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Chapter 1: OVERVIEW – TASMANIA IN THE NATION AND THE WORLD Chart 1.6: Select indicators, ratio of Tasmanian figure to national, 2018-191 International visitors/resident population Housing affordability Life expectancy Overweight/obesity rate Self-assessed Excellent/very good health rate Employment to population ratio Household disposable income per person Unemployment rate Total earnings per person % of population with bachelor degree or higher Full-time employment to population ratio Daily smoker rate Rate of year 12 completion Underemployment rate % of Australian DSS payments compared to Tasmanian Taxation share of State revenue Population growth (10 year CAGR to Mar-19)
ratio
Employment growth (10 year CAGR to Sep-19) 0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
Source: Tourism Research Australia International Visitor Survey; ABS 3101.0, 4130.0, 4364.0.55.001, 5220.0, 6202.0, 6227.0, 6253.0, 6291.0.55.001, 6302.0; Productivity Commission, Report on Government Services 2019 (RoGS) Part B Chapter 4 – School Education; DSS; State Budget Papers
The chart below shows how the ratio of certain indicators has changed from 2010 to 2019. These figuresdifference are calculated percentage between the 2018-19 ratio of an as the percentage betweenas thethe 2018-19 ratio of andifference indicator and its 2010 value. indicator and its 2010 value.
The chart below shows how the ratio of certain indicators has changed from 2010 to 2019. These figures are calculated
A positive value indicates that Tasmania has improved relative to Australia on that indicator while A positive value indicates thatisTasmanian a negative value indicates the gap widening. has improved relative to Australia on that
indicator while a negative value indicates the gap is widening.
The chart shows that Tasmania has narrowed the gap on some indicators:
The chart shows that Tasmania • our educational outcomes are lifting,
has narrowed the gap on some indicators:
• tourists are beating a path to our door,
our educational outcomes are lifting, tourists are beating a path to our door,
• a good run in the economy has lifted our incomes, and • we’re giving up smoking in increasing numbers.
1
1 = Department of Social Services. Housing affordability is defined as ‘housing costs as a proportion of gross household income (%) for owners SS D DSS = Department of Social Services. Housing affordability is defined as ‘housing costs as a proportion of gross with a mortgage’. DSS payments ratio is calculated as the number of DSS payments divided by the resident population. All figures are calculated household income for owners mortgage’. payments ratiowhich is calculated as divided the number of DSS % of by dividing the most recent(%) Tasmanian value with by theaAustralian valueDSS except the following, are Australian by the Tasmanian: Australians on DSS payments compared to Tasmanians, Underemployment Daily smoker rate, Unemployment rate, Overweight/obesity payments divided by the resident population. All figures are rate, calculated by dividing the most recent Tasmanian rate, Housing affordability. All figures are from 2019, except the following which are from 2018; Life expectancy Housing affordability, Overweight/obesity value by the Australian value except the following, which are Australian divided by the Tasmanian: % of rate, Self-assessed Excellent/very good health, and daily smoker rate.
Australians on DSS payments compared to Tasmanians, Underemployment rate, Daily smoker rate, Unemployment rate, Overweight/obesity rate, Housing affordability. All figures are from 2019, except the following which are from 2018; Life expectancy Housing affordability, Overweight/obesity rate, Self-assessed 1 0 Excellent/very T C C I TA good S M Ahealth, N I A and REP O Rsmoker T 2 0 rate. 19 daily
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Chapter 1: a good–run in the economyIN has lifted NATION our incomes,AND and THE WORLD OVERVIEW TASMANIA THE
we’re giving up smoking in increasing numbers.
Chart 1.7: Select indicators, improvements in Tasmanian outcomes since 2010 International visitors/resident population
% of population with bachelor degree or higher
Daily smoker rate
Rate of year 12 completion
Household disposable income per person
% change from 2010-19 0
5
10
15
20
25
30
35
40
45
50
Note: All figures are from 2010-2019 except ‘daily smoker rate’ which is 2012-18. Source: As per Chart 1.6
However, wefallen havebehind fallenonbehind on many However, we have many indicators asindicators well:
as well:
• Our labour force is becoming underutilised relative to the mainland, despite that the gap between Our labour forcemore is becoming more underutilised relative tothe thefact mainland, despite the educational attainments is closing. fact that the gap between
educational attainments is closing. • And despite a drop in smoking rates, our broaderrates, healthour outcomes are health becoming more challenging. And despite a drop in smoking broader outcomes are becoming • The success in the economy and a lift in population gains has eaten into our housing affordability. more challenging. The success in the economy and a lift in population gains has eaten into our housing affordability.
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Chapter 1: OVERVIEW – TASMANIA IN THE NATION AND THE WORLD Chart 1.8: Select indicators, declines in Tasmanian outcomes since 2010 Life expectancy Total earnings per person Employment to population ratio
Housing affordability Overweight/obesity rate Unemployment rate Self-assessed Excellent/very good health rate
% change 2010-19 -12
-10
Underemployment rate -8
-6
-4
-2
0
Note: All figures are from 2010-2019 except ‘life expectancy’, ‘overweight/obesity rate’, and ‘self-assessed excellent/very good health rate’ which are 2012-18; and ‘housing affordability’ which is 2009-18. Source: As per Chart 1.6 The good news is that there’s considerable growth potential left in some of the trends noted above – particularly the incentives driven by:
The good news is that there’s considerable growth potential left in some of the trends noted
• house prices (sure, they’ve risen, but they remain source of considerable comparative advantage), and by above – particularly the incentives drivena by:
• the ability to slipstream the rise of Asia’s middle class (yes, tourism is up, but we’ve only just begun to scratch the
ofhouse prices (sure, they’ve risen, from but they surface the gains on offer to a range of sectors Asia’sremain rise).
a source of considerable
comparative advantage), and by the ability to slipstream the rise of Asia’s middle class (yes, tourism is up, but we’ve through much of Australia in recent years. Tasmania’s labour force participation rate continues to slide ever so slightly, only just begun to scratch the surface of the gains on offer to a range of sectors from whereas the rest of the country has seen gains for most of the past five years. Asia’s rise). And the bad news? Perhaps most tantalisingly, Tasmania hasn’t seen the same lift in willingness to work evident
For example, while South Australia has seen a notable jump in the willingness to work of those aged 55 and older,
And the bad news? hasn’t seen same flat. lift Harnessing in Tasmania’s matching gains Perhaps have beenmost much tantalisingly, more modest –Tasmania with the participation ratethe remaining this willingness to has work muchadd of to Australia in recent latent people power theevident potentialthrough to significantly our economy.
years. Tasmania’s labour force participation rate continues to slide ever so slightly, whereas the rest of the country has seen gains for most of the past five years.
For example, while South Australia has seen a notable jump in the willingness to work of those aged 55 and older, Tasmania’s matching gains have been much more modest – with the participation rate remaining flat. Harnessing this latent people power has the potential to significantly add to our economy.
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Chapter 1: OVERVIEW – TASMANIA IN THE NATION AND THE WORLD Chart 1.9: Labour force participation rate 68
Chart 1.10: Tasmanian participation rate relative to the mainland 1.00
% of civilian working age population
67
0.99
66
0.98
65
0.97
64
0.96
Tasmania
63
0.95
Mainland
62
0.94
61
0.93
60
0.92
59
0.91
58
06
09
12
15
Ratio, 12-month moving average
18
Source: ABS 6202.0
0.90
78 82 86 90 94 98 02 06 10 14 18 Source: ABS 6202.0
Our State’s portfolio of industries Chart 1.11 shows which industries are relatively strong or weak in Tasmania from an employment perspective, relative to
Our State’s portfolio of industries
Australia as a whole. Those sectors close to the 100% line (such as manufacturing, retail and construction) are much
The chart below shows which the same share of employment bothindustries in this Stateare and relatively nationally.
strong or weak in Tasmania from an employment perspective, relative to Australia as a whole. Those sectors close to the 100% • We’re stronger than average in those sectors near the top of the chart such as agriculture, arts & recreation and line (such as manufacturing, retail and construction) are much the same share of accommodation & food services (which are a large part of our tourism industry), and health care, and employment both in this State and nationally.
• we have weaker than average employment in those sectors near the bottom of the chart such as mining, the finance sector, and the professions. IT, We’re stronger than
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average in those sectors near the top of the chart such as agriculture, arts & recreation and accommodation & food services (which are a large part of our tourism industry), and health care, and we have weaker than average employment in those sectors near the bottom of the chart such as mining, the finance sector, IT, and the professions.
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Chapter 1: OVERVIEW – TASMANIA IN THE NATION AND THE WORLD Chart 1.11: Tasmanian industry employment shares relative to Australia Agriculture, forestry & fishing Arts & recreation Accommodation & food services Health care & social assistance Public admin & safety Education & training Retail Other services Manufacturing Construction Electricity, gas & water Telecommunication Transport, postal & warehousing Rental, hiring & real estate Wholesale trade Admin & support services Professional, scientific & tech. services Mining Finance & insurance services
% 0
50
100
150
200
250
Source: ABS 6291.0, August 2019 These relative weaknesses are well known. Sydney and Melbourne dominate the finance sector, IT and the professions,
These relative weaknesses are known. Sydney and Melbourne while Western Australia, Queensland andwell the Northern Territory dominate mining.
dominate the finance sector, IT and the professions, while Western Australia, Queensland and the Northern That’s a challenging list, as those sectors – on average – have been among the fastest growing in the nation across the Territory dominate mining.
past decade. Other things equal, this means Tasmania (outside of the health care industry) has a portfolio of industries thatThat’s have grown relatively slowly. a challenging list, as
those sectors – on average – have been among the fastest growing in the nation across the past decade. Other things equal, this means Tasmania (outside of the health care industry) has a portfolio of industries that have grown relatively slowly.
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Chapter 1: OVERVIEW – TASMANIA IN THE NATION AND THE WORLD Chart 1.12: Change in gross value added by industry, June 2009 to June 2019, Tasmania Rental, hiring & real estate Telecommunication Health care & social assistance Construction Professional, scientific & tech. services Agriculture, forestry & fishing Other services Wholesale trade Retail Arts & recreation Electricity, gas & water Education & training Accommodation & food services Transport, postal & warehousing Admin & support services Mining Finance & insurance services Public admin & safety Manufacturing
10 year to 2018-19 CAGR, % -1
0
1
2
3
4
5
Source: ABS 5220.0
Some longer term industry trends are in our favour There are hidden strengths: Some longer term
industry trends are in our favour
There areeconomy hidden used strengths: • Tasmania’s to be much more dependent on manufacturing – the nation’s slowest growing sector. Tasmania’s economy used to be much more dependent on manufacturing – the nation’s slowest growing sector. After two or three painful decades of adjustment, • Looking ahead, growth will be shifting away from both mining and the finance sector: Tasmania’s degree of reliance on manufacturing matches that of the nation as a - Away from mining as Asia gets older and richer, and shifts from the ‘smokestack’ to the ‘services’ phase whole. of its development. Looking ahead, growth will be shifting away from both mining and the finance sector: - And away from finance, where Australia’s banking sector looks bloated on world metrics o Away from mining as Asia gets older and richer, and shifts from the • Similarly, ageing and the continued rise of the NDIS will help growth in Tasmania. ‘smokestack’ to the ‘services’ phase of its development. • Asia’s rise is shifting its demand towards travel, education, and ‘clean and green’ food options. These are o And away from finance, where Australia’s banking sector looks bloated on some of Tasmania’s strengths. world metrics Similarly, ageing and the continued rise of the NDIS will help growth in Tasmania. Asia’s rise is shifting its demand towards travel, education, and ‘clean and green’ food options. These are some of Tasmania’s strengths.
After two or three painful decades of adjustment, Tasmania’s degree of reliance on manufacturing matches that of
the nation as a whole.
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Chapter 2 TASMANIA’S ECONOMY
Chapter 2:
Tasmania’s economy
Chapter 2: Tasmania’s GSP growth for in 2018-19 was the strongest in the nation, at 3.6%. This is higher TASMANIA’S ECONOMY than last year’s growth of 3.3%, and well above national growth of 1.9%. Whereas 2017-18 was the first time in nine years (and only the fourth time in 25 years) that Tasmania’s growth exceeded the national average, 2018-19 was the first time that growth Tasmania’s GSP growth forhad in 2018-19 was the strongest in the nation, at 3.6%. This is higher than last year’s Tasmania has topped thegrowth charts. highlights include: of 3.3%, and well above national of Particular 1.9%. Whereas2017-18 was the first time inof nine (and only the fourth time in 25 years) that Tasmania’s growth All industry sectors theyears economy grew.
had exceeded the national 2018-19 was the first timeTasmania that Tasmania topped the charts. Particular 2018-19 wasaverage, the second successive year hashas had the highest per capita highlights include: growth,
but in 2018-19 our growth of 2.3% was almost double the second highest jurisdiction (the ACT) at 1.2%. • All industry sectors of the economy grew. was Thethe construction and year health care sectors standout performers. • 2018-19 second successive Tasmania has had were the highest per capita growth, but in 2018-19 our growth of 2.3% was almost double the second highest jurisdiction (the ACT) at 1.2%.
In one sense Tasmania had an unfair advantage this year. The drought in eastern Australia reduced farm output in several states by more than 15% and resulted in higher commodity In one sensefor Tasmania had an unfair advantage this year. The drought in eastern reduced farmthis output in prices some products that our producers could capitalise on.Australia At the same time several states byamore than 15% and resulted higher commodity for some our producers could highlights strategic advantage forinTasmania. While prices the long termproducts impactthat of climate change capitalise on. At the same time this highlights a strategic advantage for Tasmania. While the long term impact of is yet to play out, it could be that Tasmania is hurt less than some other states. Unlike some climate change is yet to play out, it could be that Tasmania is hurt less than some other states. Unlike some parts of parts of the nation, climate change is unlikely to make any Tasmanian areas uninhabitable or the nation, climate change is unlikely to make any Tasmanian areas uninhabitable or less suitable for economic activity. less suitable for economic activity. Having said that, the ability for climate sensitive industries Having said that, the ability for climate sensitive industries such as agriculture and fisheries to adapt to changing such as agriculture and fisheries to adapt to changing conditions will become increasingly conditions will become increasingly important. important. • The construction and health care sectors were standout performers.
Chart 2.1: Growth in GSP, Tasmania and Mainland 6
4
% on previous year Mainland
5
Tasmania
4
3.5
2.5
2
2
1
1.5
0
1
-1
0.5
91 93 95 97 99 01 03 05 07 09 11 13 15 17 19
Source: ABS 5220.0
11
T C C I TA S M A N I A R E P O R T 2 0 1 9
% change on previous year
3
3
-2
18
Chart 2.2: Growth in GSP, 2018-19
0
National average
Tas
Vic
Source: ABS 5220.0
NSW
Qld
SA
WA
Chapter 2: TASMANIA’S ECONOMY Chart 2.3: Growth in GSP per capita, Tasmania and Mainland 5
2.5
% change on previous year
4
Mainland
1.5
2
1
1
0.5
0
0
-1
-0.5
-2
00
02
04
Source: ABS 5220.0
06
08
10
12
14
% change on previous year
2
Tasmania
3
Chart 2.4: Growth in GSP per capita, 2018-19
16
18
-1
National average
Tas
Vic
Source: ABS 5220.0
SA
NSW
WA
Qld
Chart 2.5 shows where most of the growth in the State’s economy came from. Whereas growth in trade, business
The chart below shows where most of the growth in the State’s economy came from. Whereas growth in trade, business investment and spending by families were the keys to infrastructure and spending on public sector wages joining family consumer spending as the drivers of growth. Tasmania’s success in 2017-18, in 2018-19 it was government infrastructure and spending on Infrastructure spending by government includes expenditure on roads, hospitals and by utilities such as TasNetworks, public sector wages joining family consumer spending as the drivers of growth. investment and spending by families were the keys to Tasmania’s success in 2017-18, in 2018-19 it was government
TasWater and Hydro Tas. University of Tasmania spending on campuses and accommodation was also significant.
Infrastructure spending by government includes expenditure on roads, hospitalsindustry, and bythat could Most importantly there is a strong pipeline of work, particularly in roads, education and renewable see the Tasmanian sector in good shape several years to come. utilities such asconstruction TasNetworks, TasWater and for Hydro Tas. University
of Tasmania spending on campuses and accommodation was also significant. Most importantly there is a strong Spending on residential construction in Tasmania was also strong. pipeline of work, particularly in roads, education and renewable industry, that could see the Government consumption spending in 2018-19 was greatly boosted by the NDIS, with many individuals’ NDIS Tasmanian construction sector in good shape for several years to come.
plans being funded for the first time. The number of approved NDIS plans rose by more than 54% in 2018-19 and is
Spending on residential construction in Tasmania was also strong. almost double that in 2017-18, and continuing to grow. NDIS payments totalled $290 million in Tasmania in 2018-19, significant in the context of an overall rise in GSP of $1.1 billion between 2017-18 and 2018-19.
Government consumption spending in 2018-19 was greatly boosted by the NDIS, with many
Household consumption continued contribute growth in 2018-19. Retail spending was fairlyplans strong individuals’ NDIS plans beingtofunded forpositively the firsttotime. The number of approved NDIS
rose by more than 54% in 2018-19 and is continuing to grow. NDIS payments totalled $290 million in Tasmania in 2018-19, almost double that in 2017-18, and significant in the context of an overall rise in GSP of $1.1 billion between 2017-18 and 2018-19.
in Tasmania during the year, particularly in comparison to New South Wales and Victoria where falling house prices dampened demand.
Household consumption continued to contribute positively to growth in 2018-19. Retail spending was fairly strong in Tasmania during the year, particularly in comparison to NSW and Victoria where falling house prices dampened demand. T C C I TA S M A N I A R E P O R T 2 0 1 9
12
19
Chapter 2: TASMANIA’S ECONOMY Chart 2.5: Components of GSP growth, Tasmania GSP - growth (%) Other Net external trade Public consumption
Jun-19
Public investment
Jun-18
Business investment Housing investment
Household consumption
percentage points -4
-3
-2
-1
0
1
2
3
4
Source: ABS 5220.0
And while Tasmania’s GSP per capita grew faster than the rest of the nation in 2018-19, it is sobering to note that it remains a full 20 percentage points below the national average – this remains a full 20 percentage points below the national average – this gap is roughly double what it was 30 years ago. gap is roughly double what it was 30 years ago. And while Tasmania’s GSP per capita grew faster than the rest of the nation in 2018-19, it is sobering to note that it
Chart 2.6: GSP per capita 80 70
$000s per capita
60 50 40 30
Tasmania Australia
20 10 0
90 92 94 96 98 00 02 04 06 08 10 12 14 16 18
Source: ABS 5220.0, 3101.0
20
13
T C C I TA S M A N I A R E P O R T 2 0 1 9
Chapter 2: TASMANIA’S ECONOMY Economic growth and the exchange rate Economic growth and the exchange rate Growth in the Tasmanian economy is increasingly driven by the exchange rate due to our
Growth in the Tasmanian economy is increasingly driven byand the exchange rate due to our risingAs reliance on international rising reliance on international trade, tourism international education. the Australian trade, tourism and international education. As the Australian dollar strengthened after global financial crisis, and dollar strengthened after the global financial crisis, and particularly asthe the mining
particularly as the mining took hold,economy Tasmania’swas economy Butdollar as the dollar started to fall construction boomconstruction took hold,boom Tasmania’s weak.was Butweak. as the started to fall in 2014 the resultant turnaround was relatively rapid – exports increased, international touristinternational numbers started to grow, in 2014 the resultant turnaround was relatively rapid – exports increased, tourist andnumbers international students started to discovered grow, andTasmania. international
students discovered Tasmania.
Chart 2.7: Tasmanian GSP growth and the tradeweighted index (TWI) of the A$ 6
Index (May 1970 = 100)
%
5 4
GSP growth (LHS)
45 50 55
TWI (RHS)
3
60
2
65
1
70
0
75
-1
02 04 06 08 10 12 Source: ABS 5220.0 and 5368.0
14
16
18
80
This close alignment of Tasmanian economic growth to the exchange rate appears to have largely broken the link between Tasmanian economic growth and that of Victoria and New South Wales. While economic conditions in these states (and that of the national economy) will remain critical, Tasmania’s fortunes are increasingly being
This close alignment of Tasmanian economic growth to the exchange rate appears to have largely broken the link between Tasmanian economic growth and that of Victoria and New the world wants, it is a blessing. And, given that the world grows faster – on average – than Australia does, our rising South Wales. While economic conditions in these States (and that of the national economy) internationalisation raises our potential growth rate too. will remain critical, Tasmania’s fortunes are increasingly being determined internationally. But it also means that our fortunes are increasingly out of our hands and that Tasmania is vulnerable to international This is both a strength and a weakness – to the extent that Tasmania has what the rest of the shocks such as trade wars and changing migration patterns. world wants, it is a blessing. And, given that the world grows faster – on average – than Australia does, our rising internationalisation raises our potential growth rate too.
determined internationally. This is both a strength and a weakness – to the extent that Tasmania has what the rest of
But it also means that our fortunes are increasingly out of our hands and that Tasmania is vulnerable to international shocks such as trade wars and changing migration patterns.
T C C I TA S M A N I A R E P O R T 2 0 1 9
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21
Chapter 2: TASMANIA’S ECONOMY Chart 2.8: GSP growth 5
% GSP growth Chart 2.8: Tasmania 5 4
Victoria + New South Tasmania Wales
%
Victoria + New South Wales
4 3 3 2 2 1 1 0 0 -1
02
04
06
-1 Source: ABS 5220.0 02 04 06
08
10
12
14
16
18
08
10
12
14
16
18
It is also important not to understate Commonwealth payments to Tasmania as a major Source: ABS 5220.0 of fortunes. As noted Commonwealth above, government spending wasasa akey driver It is driver also important not to understate payments to Tasmania major driverof ofgrowth fortunes.in As noted It is also important not to understate Commonwealth payments to Tasmania as a major 2018-19, and spending lower economic growth from in 2012-2014 islower also economic correlated withfrom low 2012-2014 growth inis also earlier, government was a key driver of growth 2018-19, and growth driver of fortunes. As noted above, government spending was a key driver of growth in Commonwealth payments. correlated with low growth in Commonwealth payments. 2018-19, and lower economic growth from 2012-2014 is also correlated with low growth in Chart 2.9: Tasmanian GSP growth and Commonwealth payments to Tasmania Commonwealth payments. % and change from 7 2.9: 25 % Tasmanian GSP growth Chart Commonwealth payments to Tasmania previous year
6 7 5 6
GSP growth (LHS) % change from previous year C'wealth payments (RHS) GSP growth (LHS)
4 5
C'wealth payments (RHS)
%
20 15 15 10
3 4
10 5
2 3
5 0
1 2
0 -5
0 1 -1 0
25 20
02
04
06
08
10
12
14
16
18
-5 -10
-1 -10 Source:02ABS04 5220.0 Paper 3 (various years) 06 and 08 Commonwealth 10 12 14 Budget 16 18
15
22
Source: ABS 5220.0 and Commonwealth Budget Paper 3 (various years) T C C I TA S M A N I A R E P O R T 2 0 1 9
15
Chapter 2: TASMANIA’S ECONOMY
So where are the wage increases and jobs?
Strong growth would normally be expected to lead to rising real wages and increasing employment, however this has not been the case in Tasmania. Weak wages growth is a So where are the wage increases and jobs? feature of the economy nationally (indeed, internationally). Although wage growth in Strong growth has would normally be expected to lead to risingaverage real wages increasing however Tasmania been slightly above the national atand around 2.3%employment, over the past fourthis has notyears been (compared the case in Tasmania. Weak wages growth is a feature of the economy nationally (indeed, internationally). to 2.1%), this barely matches Hobart Consumer Price Index (CPI) growth, Although wage growth in Tasmania been slightly above the national average at around 2.3% over the past four meaning purchasing power has is not increasing much.
years (compared to 2.1%), this barely matches Hobart Consumer Price Index (CPI) growth, meaning purchasing power
More surprisingly, is not increasing much.
and unlike the mainland, economic growth is not translating to jobs growth. Tasmania’s unemployment rate has increased over the past few years and, at 6.1% in More surprisingly, and unlike the mainland, economic growth is not translating to jobs growth. Tasmania’s October 2019, is around one percentage point higher than the national average and the unemployment rate has increased over the past few years and, at 6.1% in October 2019, is around one percentage point third highest in the nation. higher than the national average and the third highest in the nation.
Chart 2.10: Unemployment rates 9
% of labour force
8 7
6 5 Tasmania
4 3
Mainland 06
09
12
15
18
Source: ABS 6202.0
Industry analysis analysis ForIndustry the first time ever in Tasmania, all 19 ABS-defined industries experienced growth in gross value added (GVA) in
For the first time health ever in Tasmania, all(as 19reflected ABS-defined industries experienced growth in gross 2018-19. Construction, care and tourism in the arts and recreation, and accommodation and food valuesectors) added recorded (GVA) inthe 2018-19. Construction, careterms and (see tourism services most significant growth in health percentage Chart(as 2.11).reflected
in the arts and recreation, and accommodation and food services sectors) recorded the most significant growth in percentage terms (see Chart 2.11).
16 T C C I TA S M A N I A R E P O R T 2 0 1 9
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Chapter 2: TASMANIA’S ECONOMY Chart 2.11: Growth in Gross Value Added (GVA) by industry, Tasmania, year to June 2019 Construction
Chart 2.11: Growth Gross Value Added (GVA) by industry, Tasmania, year to June 2019 Health care &in social assistance Arts Construction & recreation Health carehiring & social assistance Rental, & real estate & recreation AccommodationArts & food services Rental, hiring & real Public admin & estate safety Accommodation &Other food services Public admin & safety Telecommunication Professional, scientific &Other tech. services AdminTelecommunication & support services Professional, scientific &Manufacturing tech. services Admin & support Education & services training Manufacturing Agriculture, forestry & fishing Education & training Wholesale trade Agriculture, forestry & fishing Retail Wholesale trade Electricity, gas & water Retail Mining gas & water Transport,Electricity, postal & warehousing Mining Finance & insurance services Transport, postal & warehousing Finance & insurance services 0
1
2
3
4
5
6
% change on previous year % change on 7previous8 year 9
0
1
2
3
4
5
6
7
Source: ABS 5220.0
8
9
Source: Over aABS ten5220.0 year period, the three standout sectors for growth have been rental, hiring and real estate services, telecommunications and health care. Two sectors have shrunk – public tenperiod, year period, threesectors standout sectors for growth rental, and OverOver a tenayear the threethe standout for growth have been rental,have hiring been and real estatehiring services, administration and safety, and manufacturing. real estate services, telecommunications and health care.administration Two sectorsand have shrunk – public telecommunications and health care. Two sectors have shrunk – public safety, and manufacturing. administration and safety, and manufacturing.
Chart 2.12: GVA by industry, 10 year compound average growth rate (CAGR) to 2018-19, Tasmania Chart 2.12: GVA byhiring industry, 10estate year compound average growth rate (CAGR) to 2018-19, Tasmania Rental, & real Telecommunication Health care hiring & social assistance Rental, & real estate Construction Telecommunication Professional, & tech. services Healthscientific care & social assistance Agriculture, forestry & fishing Construction Professional, scientific &Other tech. services Wholesale trade Agriculture, forestry & fishing Retail Other services Arts & recreation Wholesale trade Electricity, gas & Retail water Education & training Arts & recreation Accommodation & food services Electricity, gas & water Transport, postal & warehousing Education & training Admin & support Accommodation & food services Mining Transport, postal & warehousing Finance insurance Admin&& support services Public admin &Mining safety Manufacturing Finance & insurance services Public admin & safety Manufacturing -1
0
1
2
-1
0
1
2
Source: ABS 5220.0
24
10 year to 2018-19 CAGR, % 10 year to 2018-19 CAGR, % 3 4 5 3
4
5
Source: ABS 5220.0 However, the rental hiring and real estate sector is relatively small. In absolute terms, it has been the health care and social assistance industry (consistent with national trends) and However, the rental hiring and real estate sector is relatively small. In absolute terms, it has been 17 the health care and social assistance industry (consistent with national trends) and T C C I TA S M A N I A R E P O R T 2 0 1 9
17
Chapter 2: TASMANIA’S ECONOMY However, the rental hiring and estate sector is relatively small. In of absolute terms, of it has been the health care and agriculture, fishing andreal forestry industry (off the back expansion aquaculture) that have
social assistance industry (consistent withover national and agriculture, fishing and forestry industry the back driven the Tasmanian economy thetrends) past 10 years. Growth in output from these(off two
of expansion of aquaculture) driven the Tasmanian economy over the past 10 years. Growth in output from sectors has exceeded that thathave of the other 17 put together. these two sectors has exceeded that of the other 17 put together.
Chart 2.13: Industry, GVA, 10 year change to 2019, Tasmania Health care & social assistance Agriculture, forestry & fishing Construction Telecommunication Retail Professional, scientific & tech. services Rental, hiring & real estate Education & training Wholesale trade Other services Electricity, gas & water Transport, postal & warehousing Accommodation & food services Arts & recreation Admin & support services Mining Finance & insurance services Public admin & safety Manufacturing -200
$m 0
200
400
600
800
1000
1200
1400
Source: ABS 5220.0
Investment Investment
business investment in Tasmania stayed strong inan 2018-19, with anprofile almost NewNew business investment in Tasmania stayed strong in 2018-19, with almost identical as inidentical 2017-18, despite the profile inherently nature ofdespite this spending. aslumpy in 2017-18, the inherently
lumpy nature of this spending.
T C C I TA S M A N I A R E P O R T 2 0 1 9
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25
Chapter 2: TASMANIA’S ECONOMY Chart 2.14: Business investment by major category, Tasmania 3.5
$2016-17 bns
3 Equipment & machinery Intellectual property Engineering construction Non-residential building Biological resources
2.5 2 1.5 1 0.5
0
90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19
Source: ABS 5220.0
Non-residential rebounded in 2018-19 after aThe fallkey indriver 2017-18. key in driver wason a Non-residential buildingbuilding rebounded in 2018-19 after a fall in 2017-18. was aThe doubling spending
doubling in spending ontofactories andbywarehouses, offsetconstruction. to some extent by on a reduction in factories and warehouses, offset some extent a reduction in office Spending building hotels, officeseveral construction. Spending onHobart building hotels, including including under construction in the CBD, increased slightly. Hobart CBD, increased slightly.
26
T C C I TA S M A N I A R E P O R T 2 0 1 9
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several under construction in the
Chapter 2: TASMANIA’S ECONOMY Chart 2.15: Private non-residential building work done by sector, Tasmania, year to June 450
$m
400 350
Hotels, etc
300
Offices
250
Shops
200
Factories & warehouses
Aged care facilities
150
Education buildings
100
Other
50 0
12
13
14
15
16
17
18
19
Source: ABS Building Activity 8752.0, June quarter 2019
of non-residential buildingfell approvals fell in 2019, potentially indicating softer TheThe valuevalue of non-residential building approvals in 2019, potentially indicating softer conditions ahead. At the same ahead.high At the same time it remains relatively high by historical standards and timeconditions it remains relatively by historical standards and anecdotal evidence suggests that, with a number of major anecdotal withofaTasmania numberexpansions), of major projects waiting in the wings projects waiting evidence in the wingssuggests (including that, University any downturn is likely to be temporary. (including University of Tasmania expansions), any downturn is likely to be temporary.
Residential building approvals have stayed relatively strong in Tasmania, avoiding the falls on the mainland and reflecting strong population and demand for housing in Hobart. Residential building growth approvals have stayed relatively strong
in Tasmania, avoiding the falls on the mainland and reflecting strong population growth and demand for housing in Hobart.
20
T C C I TA S M A N I A R E P O R T 2 0 1 9
27
Chapter 2: TASMANIA’S ECONOMY Chart 2.16: Value of non-residential building approvals, Tasmanian and mainland 1000
$m
$bn
900 800
60
4
50
3.5
000s
000s
260 240 220
700 600 500 400 300
02
04
06
08
10
12
14
3
30
2.5
20
2
10
Mainland (RHS)
100
40
200 180 160
140
Tasmania (LHS)
200
0
Chart 2.17: Residential building approvals, Tasmanian and mainland
1.5
Tasmania (LHS)
Mainland (RHS) 16
Source: ABS 8731.0, September 2019 (trend)
18
0
1
07 08 09 10 11 12 13 14 15 16 17 18 19
120 100
Source: ABS 8731.0 (trend)
Engineering work for the public sector grew modestly in 2018-19. One notable increase was in relation to recreational
Engineering work for the public sectorand grew modestly in 2018-19. notable assets. In part this reflects concerns that facilities related infrastructure was notOne keeping up withincrease growth inwas visitor in relation to recreational assets. InMountain part thisvisitor reflects concerns that facilities and related numbers. Construction started on the Cradle precinct, where the State Government is contributing
infrastructure notMountain keepingMaster up with in visitoronnumbers. Construction started on bike $56.8 million into thewas Cradle Plan.growth In total, spending recreational assets – including mountain trails on Cradle the East Mountain Coast and walking and facilities parks elsewhere – more than doubled from $34.2 the visitortrails precinct, whereinthe State Government is contributing $56.8million in 2017-18 to $70.3 in 2018-19. million intomillion the Cradle Mountain
Master Plan. In total, spending on recreational assets – including mountain bike trails on the East Coast and walking trails and facilities in parks elsewhere – more than doubled from $34.2 million in 2017-18 to $70.3 million in 2018-19.
28
T C C I TA S M A N I A R E P O R T 2 0 1 9
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Chapter 2: TASMANIA’S ECONOMY Chart 2.18: Engineering work done for the public sector 1000
$bns
900
Roads, highways and subdivisions Bridges, railways & harbours
800
Water, sewerage & drainage
700
Telecommunications
Utilities
Heavy industry
600
Recreation & other
500 400 300
200 100 0
06
07
08
09
10
11
12
13
14
15
16
17
18
19
Source: ABS 8752.0, June quarter 2019
Trade Trade
The value of Tasmanian merchandise exports plateaued over the past year, settling at around $3.65 billion in the year to September 2019. This contrasts with merchandise exports from to September 2019. This contrasts with merchandise exports from the mainland, which continued to grow strongly. the mainland, which continued to grow strongly.
The value of Tasmanian merchandise exports plateaued over the past year, settling at around $3.65 billion in the year
22
T C C I TA S M A N I A R E P O R T 2 0 1 9
29
Chapter 2: TASMANIA’S ECONOMY Chart 2.19: Value of merchandise exports, Tasmania and mainland 4.0
$bn (12-month moving total)
3.5
$bn (12-month moving total) Tasmania (LHS)
Chart 2.20: Growth in value of merchandise exports, Tasmanian and mainland 450 400
350 300 250
2.5
40
Tasmania Mainland
20 10 0 -10
200
2.0
%
30
Mainland (RHS)
3.0
50
09 10 11 12 13 14 15 16 17 18 19
Source: ABS 5368.0.15
150
-20 -30
09 10 11 12 13 14 15 16 17 18 19
Source: ABS 5368.0.15
Merchandise exports to China continued to grow and now comprise over 30% of all exports, exceeding that of all other ASEAN nations. Total merchandise exports to China into the year to September 2019 wasover $40330% million, up from $361 Merchandise exports to China continued grow and now comprise of all exports,
million in the previous year. considerable in exports to China contrasts with exports to destinations exceeding that of allThe other ASEAN growth nations. Total merchandise exports to China in the yearsuch to Hong Kong, Japan2019 and Europe, whichmillion, have fallen since 2009. September was $403 up sharply from $361 million
in the previous year. The considerable growth in exports to China contrasts with exports to destinations such Hong Kong, Japan and Europe, which have fallen sharply since 2009.
30
T C C I TA S M A N I A R E P O R T 2 0 1 9
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Chapter 2: TASMANIA’S ECONOMY Chart 2.21: Value of merchandise exports by Tasmania, ending Septemberexports by Chart 2.21:year Value of merchandise
Chart 2.22: Tasmanian GSP growth and exports to China, year-ending 30 June Chart 2.22: Tasmanian GSP growth and exports to
Tasmania, year ending September 1400 $m 1400 1200
China, year-ending 30 June 6 % 6 5
$m
1200 1000
2019
1000 800
5 4
2009
2019
%
China (RHS)
4 3
2009
% change on GSP growth previous year % change on (LHS) GSP growth previous year (LHS) Exports to China (RHS) Exports to
3 2
800 600
-1 -2
0
-2
0 -20 01 03 05 07 09 11 13 15 17 19
05 and 07 5368.0 09 11 13 15 17 19 Source:01ABS035220.0
Source: ABS 5368.0
80 60
20 0
0 -1
200 0
100 80
40 20
1 0
400 200
120 100
60 40
2 1
600 400
120
-20 -40 -40
Source: ABS 5220.0 and 5368.0
Source: ABS 5368.0
TheThe strongest featurefeature of Tasmania’s recent export performance continued growth in services exports, strongest of Tasmania’s recent export was performance was continued growthnotably in international education and travel. The strongest feature of Tasmania’s recent exportand performance services exports, notably international education travel.
services exports, notably international education and travel. Chart 2.23: Value of services exports, Tasmania and Chartmainland 2.23: Value of services exports, Tasmania and 1.2 mainland 1.2 1.1 1.1 1.0 1.0 0.9 0.9 0.8
$bn (4-qtr moving total) $bn (4-qtr
$bn (4-qtr moving total) $bn (4-qtr
moving total)
moving total) Tasmania (LHS) Tasmania (LHS) Mainland (RHS) Mainland (RHS)
70
0.7 0.6
60 60
0.6 0.5
0.5 0.4
13 14 0.4 12 Source: ABS 5302.0 12 13 14 Source: ABS 5302.0
24 24
50 50
15 15
16 16
17 17
18 18
Chart 2.24: Composition of services exports, Tasmania mainland, of 2018 Chart 2.24:and Composition services exports,
110 Tasmania % 50 and mainland, 2018 110 % 50 45 100 45 40 100 40 35 90 35 30 90 30 25 80 25 20 80 70
0.8 0.7
was continued growth in
40 19 40 19
Tasmania Tasmania Mainland Mainland
20 15 15 10
105 5 0 0
Source: ABS 5368.0.55.004 Source: ABS 5368.0.55.004 T C C I TA S M A N I A R E P O R T 2 0 1 9
31
Chapter 2: TASMANIA’S ECONOMY International student enrolments continued to surge and are now more than three times that International student enrolments and are nowstudent more than three times in that of five ago.have Recent of five years ago. Recent continued increasestoinsurge international enrolments the VETyears sector increases international student enrolments in the VET sector have been significant. beeninsignificant. Chart 2.25: International student enrolments, Tasmania and mainland 16
000s
000s
14 12
Tasmania (LHS) Mainland (RHS)
10
1,200 1,000 800
8
600
6
400
4 2
1,400
07 08 09 10 11 12 13 14 15 16 17 18 19
200
Source: Australian Government Department of Education and Training, International Student Data 2019
Housing and rental affordability Housing and rental affordability
Tasmania’s housing market story is a story tale of is halves. Prices in Hobart increased rapidly in 2017 and 2018 in particular, Tasmania’s housing market a tale of halves. Prices in Hobart increased rapidly in 2017with median an averagewith 9.8%median per annum over the pastan three years. Recent growth in house prices matched andprices 2018rising in particular, prices rising average 9.8% per annum over thehas past thatthree of Sydney andRecent Melbourne. Population growth, low interest rates, cashed migrants and a shortage of years. growth in house prices has matched that up of interstate Sydney and Melbourne.
Population growth, low interest rates, cashed up interstate migrants and a shortage of stock contributed to price rises. Rents rose strongly on the back of population growth, and vacancy of Perth ($480,000) Adelaide ($470,000) and Darwin ($478,000). This is a significant turn-around from June 2016 rates fell sharply. ABS data shows that in June 2019 the median price of established houses in when prices in Hobart were only 70% of those in Perth. Hobart at $490,000 was now ahead of Perth ($480,000) Adelaide ($470,000) and Darwin New($478,000). data from CoreLogic that Hobart house prices risen faster than income with Hobartwere households This is aconfirms significant turn-around fromhave June 2016 when prices in Hobart only spending 6.5those times their income to purchase the median value dwelling, up from 5.9 in 2009. This ranks behind only 70% of in Perth. stock contributed to price rises. Rents rose strongly on the back of population growth, and vacancy rates fell sharply. ABS data shows that in June 2019 the median price of established houses in Hobart at $490,000 was now ahead
Sydney (8.2) and Melbourne (7.2). And it means that despite interest rates being at historically low levels, Hobart
New data from CoreLogic confirms Hobart house prices(33.8% have risen faster than income households spend an average of 34.3% of theirthat income on a new mortgage ten years ago). Again this is behind Hobart households onlywith Sydney and Melbourne.
spending 6.5 times their income to purchase the median value dwelling, up from 5.9 in 2009. This ranks behind only Sydney (8.2) and Melbourne (7.2). And it means that despite interest rates being at historically low levels, Hobart households spend an average of 34.3% of their income on a new mortgage (33.8% ten years ago). Again this is behind only Sydney and Melbourne.
32
T C C I TA S M A N I A R E P O R T 2 0 1 9
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Chapter 2: TASMANIA’S ECONOMY Chart 2.26: Median house sales price, Hobart, Sydney, Melbourne 1,200
$000s
1,000 800
Sydney
600 Melbourne
400 Hobart
200 0
02
04
06
08
10
12
14
16
18
Source: ABS 6416.0, July 2019
However, on a state-wide basis, mean house prices in Tasmania remain the lowest in the country, reflecting much cheaper prices outside Hobart. The median house sales price in cheaper prices outside Hobart. The median house sales price in Hobart in June 2019 was $520,000, compared to Hobart in June 2019 $520,000, $335,000 in Launceston, and $279,000 on $335,000 in Launceston, andwas $279,000 on thecompared North-Westto Coast. the North-West Coast. However, on a state-wide basis, mean house prices in Tasmania remain the lowest in the country, reflecting much
26
T C C I TA S M A N I A R E P O R T 2 0 1 9
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Chapter 2: TASMANIA’S ECONOMY Chart 2.27: Mean residential house price, all states and territories $000s
Thousands
900
Chart 2.28: Median house sales price, Tasmanian regions
800 700
National average
550 500
400
500
350
400
300
300
250
200
200
100
150
0
100
Source: ABS 6416.0
Qld
SA
WA
Tas
NT
ACT
Hobart
450
600
NSW Vic
$000s
Launceston
North-West Coast
04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19
Source: Real Estate Institute of Tasmania (REIT), September 2019
Population growth, a relative shortage of new supply, and the use of inner city properties for short-term rentals has made conditions very difficult for renters in Tasmania, but particularly in Hobart. By some measures Hobart is the most
Population growth, a relative shortage of new supply, and the use of inner city properties for short-term rentals has made conditions very difficult for renters in Tasmania, but particularly rents,By relative to household that Greater Hobart is the least affordable in in High Hobart. some measuresincomes, Hobartmean is the most unaffordable capital city inmetropolitan Australia toarea rent. 2 Australia. Affordability has nosedived further since the last release. For the first time ever, rental affordability has According to a November 2019 report:
unaffordable capital city in Australia to rent. According to a November 2018 report:2
dropped below the critical threshold of 100. At 93, its [Rental Affordability Score] score indicates that even an
relative to household incomes, mean that Greater Hobartmedian is therent. least average High incomerents, household in Hobart would be placed in rental stress if paying the current The average affordable metropolitan area inrents Australia. Affordability nosedived rental household in Greater Hobart now faces at around 32 per cent ofhas its total income. further
since the last release. For the first time ever, rental affordability has dropped below the critical This situation needs to be addressed if Hobart is to remain attractive to students and other low income groups. threshold of 100. At 93, its [Rental Affordability Score] score indicates that even an The most obvious long-term way of doing so is to increase housing supply, particularly in inner city areas, through average income household in Hobart would be placed in rental stress if paying the medium density developments. However evidence to date suggests that, aside from some specific-purpose student current median rent. The average rental household in Greater Hobart now faces rents accommodation initiated by University of Tasmania, this is yet to occur. Planning restrictions and opposition from at around 32 per cent of its total income. residents groups have in some cases prevented the larger developments necessary to improve rental affordability. This situation needs to be addressed if Hobart is to remain attractive to students and other low income groups. The most obvious long-term way of doing so is to increase housing supply, particularly in inner city areas, through medium density developments. However evidence to date suggests that, aside from some specific-purpose student accommodation initiated by University of Tasmania, this is yet to occur. Planning restrictions and opposition
2
National Shelter, Community Sector Banking, SGS and Brotherhood of St Laurence Rental Affordability Index, November 2019.
2 National Shelter, Community Sector Banking, SGS and Brotherhood of St Laurence Rental Affordability Index, 3 4 November T C C I TA SMANIA REPORT 2019 2019.
27
Chapter 2: from residents groups have in some cases prevented the larger developments necessary to TASMANIA’S ECONOMY improve rental affordability.
Chart 2.29: Rental vacancy rates, Tasmanian regions 6
5
4-quarter moving average %
500
North-West Coast
450
$ per week (4-quarter moving average)
400
Hobart
350
4
300
Launceston
250
3
North-West Coast
200
2
Hobart Launceston
1 0
Chart 2.30: Median rents, three-bedroom houses, Tasmanian regions
150 100 50 0
04 05 06 07 08 09 10 11 12 13 14 15 15 16 17 18 19
Source: REIT, September 2019
06 07 08 09 10 11 11 12 13 14 15 16 16 17 18 19
Source: REIT, September 2019
Tourism A strong tourism industry is a key component of Tasmania’s recent economic success. Increasing visitor Tourism
A strong tourism industry is a key component of Tasmania’s recent economic success. Increasing visitor numbers, particularly from Melbourne and Sydney, are boosting jobs, Theincreasing number of visitors and visitor expenditure in Tasmania continue to grow, with some variation by source markets. investment and strengthening regional economies. numbers, particularly from Melbourne and Sydney, are boosting jobs, increasing investment and strengthening regional economies.
Total visitor spending reached $2.5 billion in the year ending June 2019.
The number of visitors and visitor expenditure in Tasmania continue to grow, with some variation by source markets. Total visitor spending reached $2.5 billion in the year ending June 2019.
28 T C C I TA S M A N I A R E P O R T 2 0 1 9
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Chapter 2: TASMANIA’S ECONOMY Chart 2.31: Visitors to Tasmania, year ending June 1200
000s
1000 800 600 400
Domestic International
200
0
08 09 10 11 12 13 14 15 16 17 18 19
Source: Tourism Tasmania, National Visitor Survey and International Visitor Survey, June 2019 The number of interstate visitors to Tasmania grew by 3.2% in the year to June 2019. Tasmania’s interstate visitors are primarily from Victoria and New South Wales, by their large by populations, closeyear proximity and 2019. relative ease and The number of interstate visitors todriven Tasmania grew 3.2% in the to June
affordability of access. The number of South Australianfrom visitors to Tasmania slightly between 2015-16 andby 2018-19, Tasmania’s interstate visitors are primarily Victorian andfellNew South Wales, driven despite new non-stop flight between Adelaide and launching in late-2017. theirthelarge populations, close proximity andHobart relative ease and affordability
of access. The number of South Australian visitors to Tasmania fell 2015-16 andnumbers 2018-19, Tasmania remained a popular destination for tourists from Asia, UKslightly and the between US, albeit in slightly lower in despite the new non-stop flight between Adelaide and Hobart launching in late-2017. 2018-19 than 2017-18. The number of international visitors declined by 1.7%, but when combined with increases in
interstate visitation overall visitor numbers increased 2.2%. In 2018-19, South East Asia3 and the USA overtook China as
Tasmania remained a popular destination for tourists from Asia, UK and the US, albeit in slightly lower numbers in 2018-19 than 2017-18. The number of international visitors declined by 1.7%, but when combined with increases in interstate visitation overall visitor numbers increased 2.2%. In 2018-19, South-East Asia3 and the USA overtook China as Tasmania’s largest source of international visitors.
Tasmania’s largest source of international visitors.
3
South-East Asia includes Singapore, Malaysia, Indonesia, Taiwan and Thailand.
3 6 3 South-East T C C I TA SM A N I ASingapore, R E P O RMalaysia, T 2019 Asia includes Indonesia, Taiwan and Thailand.
29
Chapter 2: TASMANIA’S ECONOMY
Chart 2.32 : Interstate visitors to Tasmania by state of origin
Chart 2.33: Overseas visitors to Tasmania by country of residence
500 2.32 Chart 000s: Interstate visitors to Tasmania by state of origin
50 2.33: Chart 000s Overseas visitors to Tasmania by Year ending June 2014 country of residence
450 500 400
000s
50 40
Year ending June 2014
450 350 400 300
Year ending June 2019
45 35
Year ending June 2019
35 25
Year ending June 2019
000s
Year ending June 2014
Year ending June 2019
40 30
Year ending June 2014
350 250
45
30 20
300 200
25 15
250 150
20 10
200 100
15 5
150 50 100 0
Vic NSW QLD SA WA ACT NT 50 Source: Tourism Tasmania, Tasmanian Visitor Survey, 0 June 2019 Vic NSW QLD SA WA ACT NT
10 0
5 SE Asia USA China
UK
HK
NZ
Japan
Source: Tourism Research Australia, International Visitor 0 Survey, June 2019 SE Asia USA China UK HK NZ Japan
Source: Tourism Tasmania, Tasmanian Visitor Survey, Source: Tourism Research Australia, International Visitor June 2019 Survey, and June GSP 2019 in Tasmania than in any Tourism represents a higher proportion of employment
other state oraterritory. Direct of and indirect economic activity accounts 10.3% GSP, upDirect Tourism represents higher proportion employment and GSP in Tasmania than in anyfor other state of or territory. andfrom indirect economic accounts for 2010-11. 10.3% ofof GSP, up from the lowest pointinofTasmania 7.8% in 2010-11. the lowest activity point of 7.8%proportion in Tourism represents a higher employment and GSP than
in any other or territory. and indirect economic activity accountsGSP foras10.3% GSP,2006-07 up Chartstate 2.34: Tourism GSP Direct as a % of total, 2017-18 Chart 2.35: Tourism a % ofoftotal, to from the lowest point of 7.8% in 2010-11. 2017-18 12
Chart 2.34: Tourism GSP as a % of total, 2017-18 12 10 10 8
Direct Indirect
10 11
Direct Indirect National
8 9 7 8
National
6 4
6 7
4 2
5 6
2 0
4 5 NSW Vic
%
9 10
8 6
NT
ACT
Source: Tourism Research Australia, State Tourism 0 Satellite Accounts, 2017-18 NSW Vic Qld SA WA Tas NT
ACT
Qld
SA
WA
Tas
30 Source: Tourism Research Australia, State Tourism Satellite Accounts, 2017-18
30
11 Chart 2.35: % Tourism GSP as a % of total, 2006-07 to 2017-18
Tasmania National Tasmania National
07 08 09 10 11 12 13 14 15 16 17 18
Source: Tourism Research Australia, State Tourism 4 Satellite Accounts, 2017-18 07 08 09 10 11 12 13 14 15 16 17 18 Source: Tourism Research Australia, State Tourism Satellite Accounts, 2017-18 T C C I TA S M A N I A R E P O R T 2 0 1 9
37
Chapter 2: TASMANIA’S ECONOMY Direct and indirect tourism tourism employment represents 17.2% of employment state. This hasinincreased from Direct and indirect employment represents 17.2% in ofthe employment the state. This 13.0% 2006-07. hasin increased
from 13.0% in 2006-07.
Chart 2.36: Tourism employment as a % of total, 2017-18
Chart 2.37: Tourism employment as a % of total, 2006-07 to 2017-18
18
20
16
Direct Indirect
18 16
14
14
12 10
%
12
8
8
6
6
4
4
2
2
0
0 NSW Vic
Tasmania
10
National
Qld
SA
WA
Tas
NT
Source: Tourism Research Australia, State Tourism Satellite Accounts, 2017-18
ACT
National
07 08 09 10 11 12 13 14 15 16 17 18
Source: Tourism Research Australia, State Tourism Satellite Accounts, 2017-18
Interstate contributes (or for) accounts grossbut value added, but initpercentage Interstate travel travel contributes (or accounts 47% of for) gross47% valueof added, in percentage terms is the terms itfrom is the contribution from tourists that haslast increased rapidly contribution international tourists thatinternational has increased most rapidly in the four years,most doubling from in fourtoyears, doubling $145last million $291 million.
38
from $145 million to $291 million.
T C C I TA S M A N I A R E P O R T 2 0 1 9
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the
Chapter 2: TASMANIA’S ECONOMY Chart 2.38: Direct tourism GVA by category 600
$m
500 400 300
Same-day travel
Interregional
Interstate
International
200 100 0
06-07
07-08
08–09
09–10
10–11
11–12
12–13
13–14
14–15
15–16
16–17
17–18
Source: Tourism Research Australia, State Tourism Satellite Accounts, 2017-18 Another example of the positive trajectory of the tourism sector is Hobart’s hotel market. Hotel occupancy has
Another example ofpast thedecade positive thearound tourism sector is Hobart’s hotel market. increased steadily over the andtrajectory now rangesof from 70% in winter to over 90% in summer, with
over the past decade and now from around the Hotel averageoccupancy nightly roomhas rate increased rising to oversteadly $180. Tourism promotions encouraging travelranges at off-peak times, as well as 70%such in winter overhave 90% in summer, the average nightly room rising to over festivals as Darkto Mofo, helped to bolsterwith the market in the historically quieter rate winter months.
$180. Tourism promotions encouraging travel at off-peak times, as well as festivals such as Dark Until recently a large proportion of visitor-nights, particularly in peak months, has been soaked up by AirBnB and other Mofo, have helped to bolster the market in the historically quieter winter months. home-stay providers. However, over 900 new hotel rooms will open in Hobart over the next three years, most at the top endUntil of therecently market. This will decrease occupancy, at least temporarily, but room aremonths, expectedhas to hold firm. a large proportion of visitor-nights, particularly inrates peak been
soaked up by AirBnB and other home-stay providers. However, over 900 new hotel rooms will open in Hobart over the next three years, most at the top end of the market. This will decrease occupancy, at least temporarily, but room rates are expected to hold firm.
32
T C C I TA S M A N I A R E P O R T 2 0 1 9
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Chapter 2: TASMANIA’S ECONOMY Chart 2.39: Hotel room occupancy and room rates, Hobart (dotted lines – original figures) 100%
95%
$
%
200 180
90%
160
85%
140
80%
120 100
75%
80
70%
60
65%
40 20 Dec 22
Jun 22
Dec 21
Jun 21
Dec 20
Jun 20
Dec 19
Jun 19
Jun 18
Room Rate trend (RHS) Dec 17
Jun 17
Dec 16
Jun 16
Dec 15
Jun 15
Dec 14
Jun 14
Dec 13
Jun 13
Dec 12
Jun 12
Dec 11
Room Occ% trend (LHS)
Dec 18
60% 55%
220
0
Note: Prior to 2013, data was based on ABS’ Survey of Tourist Accommodation, STR data was used from 2013 onwards. Rates are exclusive of GST. Source: Deloitte Access Economics based on STR data Tourism is particularly important to regional economies, with over 40% of employment on the East Coast attributable to the tourism is sector. Tourism particularly
important to regional economies, with over 40% of employment on the East Coast toand theemployment, tourism sector. Table 1: Tourism shareattributable of regional GVA region
Full-time Employment employed
Table 1: Tourism share of regional GVA and employment, region
GVA
Hobart and the South
4.8%
GVA
19.5% Hobart and the South 4.8% North West 3.8% 19.5% East Coast North West Northern Tasmania 4.7% 3.8% Northern Tasmania 4.7% West Coast 6.5% West Coast 6.5%
East Coast
Employment 7.3%
41.7% 7.3% 6.8% 41.7% 6.8% 7.8% 7.8% 9.8% 9.8%
Full-time 4,208 employed 641 4,208 6411.450 1.450 2,134 2,134 122 122
Part-time employed
Part-time 5,136 employed 808 5,136 8081,735 1,735 2,768 2,768 109 109
Note: This table refers to the direct shares of GVA and employment.
Note:Tourism This table refers toAustralia, the directRegional shares ofTourism GVA and employment. Source: Research Satellite Account, 2016-17
Source: Tourism Research Australia, Regional Tourism Satellite Account, 2016-17
Regional Tasmania has seen rapid growth in holiday trips in recent years. Regional visitation by interstate visitors has
Tasmania seen rapid growth in holiday trips in recent years. Regional visitation seenRegional some of the strongesthas growth in the country, and international visitation to regional areas in particular more than
by interstate visitors has seen some theseen strongest growth the country, international doubled between 2014 and 2019. Tasmania hasof also a large amount of in growth (37.4%) inand regional visitation from visitation toinregional areas inbut particular than doubled between 2014from andthis 2019. interstate visitors the last five years, there wasmore more growth (62.4%) in trips to Hobart group. This Tasmania has shorter also seen a large amount of growth (37.4%) in regional visitation reflects the typically duration of visits from interstate visitors compared to overseas.
from interstate visitors in the last five years, but there was more growth (62.4%) in trips to Hobart from this group. This reflects the typically shorter of duration of visits from interstate visitors compared to overseas. 4 0 T C C I TA S M A N I A R E P O R T 2 0 1 9 33
Chapter 2: TASMANIA’S ECONOMY
Chart 2.40: Domestic overnight holiday trips by state, year to June 2019 and 5 year % change 16 Visitor trips (millions) % cities Chart 2.40: Domestic overnight holidayCapital trips by state, year to June 2019 and 5 year % change 14 Rest of State 16 Visitor trips (millions) % 12 5Capital year %cities change in regional visitation (RHS) 14 Rest of State 10 12 5 year % change in regional visitation (RHS) 8 10 6 8 4 6 2 4 0 New South Victoria Queensland South Australia Western Tasmania Northern 2 Wales
Australia
Territory
Wales
Australia
Territory
50
45 50 40
45 35 40 30 35 25 30 20 25 15 20 10 15 5
10 0 5
0 Capital cities includes the Gold Coast, capital city for Tasmania is defined as ‘Hobart and Southern Tasmania’. 0 Note: New South Victoria Queensland South Australia Western Tasmania Northern Source: Tourism Research Australia, National Visitor Survey, June 2019 Note: Capital cities includes the Gold Coast, capital city for Tasmania is defined as ‘Hobart and Southern Tasmania’. Source: Tourism Research Australia, National Visitor Survey, June 2019
Chart 2.41: International overnight holiday trips by state, year to June 2019 3 Visitor trips (millions) Chart 2.41: International overnight holiday trips by state, year to June 2019
2.5 3
Visitor trips (millions)
Capital cities
%
140
%
120 140 100 120
Rest of State
2 2.5
5Capital year %cities change in regional visitation (RHS)
1.5 2 1 1.5
Rest of State
80 100
5 year % change in regional visitation (RHS)
60 80 40 60
0.5 1 0 0.5
20 40 New South Wales
Victoria
Queensland
South Australia
Western Australia
Tasmania
Northern Territory
0 20
0 Capital cities includes the Gold Coast, capital city for Tasmania is defined as ‘Hobart and Southern Tasmania’. 0 Note: New South Victoria Queensland South Australia Western Tasmania Northern Source: Tourism Research Australia, International Visitor Survey, June 2019 Wales
Australia
Territory
Note: Capital cities includes the Gold Coast, capital city for Tasmania is defined as ‘Hobart and Southern Tasmania’. Source: Tourism Research Australia, International Visitor Survey, June 2019
The outlook for the tourism sector continues to be strong. Over the next decade the number of international visitors is
The outlook fortothe tourism sector continues bethan strong. Over the next Growth decadeinthe number expected to continue grow although at a more subduedto rate the previous ten years. interstate visitors to isof also forecast to increase. international visitors
is expected to continue to grow although at a more subdued rate than the previous ten years. sector Growthcontinues in interstate visitors to Over is also forecast to increase. The outlook for the tourism to be strong. the next decade the number of 34 international visitors is expected to continue to grow although at a more subdued rate than the previous ten years. Growth in interstate visitors to is also forecast to increase.
T C C I TA S M A N I A R E P O R T 2 0 1 9
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41
Chapter 2: TASMANIA’S ECONOMY
Chart 2.42: International visitors to Tasmania, historical and forecast growth
Chart 2.43: Interstate visitors to Tasmania, historical and forecast growth
Chart International visitors to Tasmania, 10 2.42: CAGR, % historical and forecast growth
Chart Interstate visitors to Tasmania, 10 2.43: CAGR, % historical and forecast growth Total Holiday
9 Total Holiday 10 CAGR, % 8 9 7 Total Holiday 8 6 7 5 6 4 5 3 4 2 3 1 2 0 1 2008-18 2021-25 2026-30 2018-30 Source: Tourism Research Australia, Deloitte Access 0 Economics 2008-18 2021-25 2026-30 2018-30 Source: Tourism Research Australia, Deloitte Access Economics
9 10 CAGR, % 8 Total Holiday 9 7 8 6 7 5 6 4 5 3 4 2 3 1 2 0 1 2008-18 2021-25 2026-30 2018-30 Source: Tourism Research Australia, Deloitte Access 0 Economics 2008-18 2021-25 2026-30 2018-30 Source: Tourism Research Australia, Deloitte Access Economics
Visitor spending is also forecast to increase – in fact annual expenditure from international and interstate visitors could reach– more than $5.2 billion from by 2030. This is and driven primarily bycould Visitor spending is also forecast to increase in fact annual expenditure international interstate visitors reach more than $5.2 billion by 2030. This is driven primarily by increasing numbers of interstate tourists. increasing numbers of interstate tourists. Visitor spending is also forecast to increase – in fact annual expenditure from international and interstate visitors could reach more than $5.2 billion by 2030. This is driven primarily by Chart 2.44: Total tourism expenditure outlook, increasing numbers of interstate tourists. Tasmania, 2019-2030 6 Chart 2.44: $bn Total tourism expenditure outlook, Tasmania, 2019-2030 6 5 5 4 4 3
Interstate
$bn
International Interstate Total International Total
3 2 2 1 1 0
10 12 14 16 18 20 22 24 26 28 30 Source: Tourism Research Australia, Deloitte Access 0 Economics 10 12 14 16 18 20 22 24 26 28 30 Source: Tourism Research Australia, Deloitte Access 35 Economics
42
T C C I TA S M A N I A R E P O R T 2 0 1 9
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Chapter 2: TASMANIA’S ECONOMY However, considerable investment will be necessary to make these growth forecasts a reality.
Aside from spending on accommodation this includes investment in training, additional aviation and sea transport capacity, and continued investment in facilities at major tourist However, considerable investment will be necessary to make these growth forecasts a reality. Aside from spending on attractions. Skill shortages in hospitality, particularly in regional areas, are already becoming accommodation this includes investment in training, additional aviation and sea transport capacity, and continued apparent.
investment in facilities at major tourist attractions. Skill shortages in hospitality, particularly in regional areas, are already
And with most becoming apparent.
major tourism attractions being owned and operated by government, public funds will need to continue to be spent to increase capacity and keep the visitor experience And with most major tourism attractions being owned and operated by government, public funds will need to continue ‘fresh’. to be spent to increase capacity and keep the visitor experience ‘fresh’.
Business conditions Business Growth inconditions the State’s economy is also correlated with business confidence, and this has been
a feature of Tasmanian sector over the last five years. Growth in the State’s economy isbusiness also correlated with business confidence, and this has been a feature of Tasmanian business sector over the last five years.
Chart 2.45: Tasmania GSP growth and SME business confidence, year ending 30 June 6
Index GSP growth (LHS)
%
5
Business confidence (RHS)
4
90 80 70 60
3
50
2
40 30
1
20
0 -1
10 02
04
06
08
10
12
14
16
18
0
Source: ABS 5220.0 and Sensis Business Index, August 2019 Recent data from the Sensis Business Index show that small and medium enterprises (SMEs) in Tasmania have high
Recent data from the Sensis Business Index show that small and medium enterprises (SMEs) in Tasmania have high regard for the Tasmanian Government’s policies for small businesses. that they thought the State Government’s policies were supportive of small business, the highest of any state or Some 31.7% of Tasmanian respondents indicated that they thought the State Government’s territory. In addition, only 17.1% of Tasmanian respondents indicated that they thought the State Government’s policies policies were supportive oflowest smallofbusiness, the highest of any state or territory. In addition, worked against small business, the any state or territory. only 17.1% of Tasmanian respondents indicated that they thought the State Government’s policies worked against small business, the lowest of any state or territory.
regard for the Tasmanian Government’s policies for small businesses. Some 31.7% of Tasmanian respondents indicated
36 T C C I TA S M A N I A R E P O R T 2 0 1 9
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Chapter 2: TASMANIA’S ECONOMY Chart 2.46: SME perception of state or territory government policies (%) 100 90
80 70
12.6 17.8
13.1 26.6
10.9
15.9
19.3
20.7
18.6
19.3
7.3 31.7
60
50 40
45.2
30 20
10 0
24.3 NSW
42.5
17.8 Vic
26.3
30.3
Qld
SA No impact
Source: Sensis Business Index, August 2019
44
T C C I TA S M A N I A R E P O R T 2 0 1 9
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29.4
23.5
23.5
29.4
29.4
39.5
37.1
Work against small business
29.4
43.6
43.9
18.6
17.1
17.6
17.6
WA
Tas
NT
ACT
Supportive of small business
I don't know
Chapter 2: TASMANIA’S ECONOMY
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T C C I TA S M A N I A R E P O R T 2 0 1 9
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Chapter 3 TASMANIA’S JOBS AND INCOMES
Chapter3:3: Tasmania’s jobs and incomes Chapter The labour market in Tasmania remained weak for much of the past year, with roughly TASMANIA’S JOBS AND has INCOMES the same numbers of jobs in the economy now as a year ago, and spare capacity in the employment market. This follows relatively strong conditions over the previous two years.
The labour market in Tasmania has remained weak for much of the past year, with roughly the same numbers of jobs in the economy now as a year ago, and spare capacity in the employment market.
Consistent with the rest of country, wage growth has remained weak.
This follows relatively strong conditions over the previous two years.
Employment in of Tasmania Consistent with the rest country, wage growth has remained weak.
Employment growth remained subdued over the past year, with seasonally adjusted growth over the year to 2019 at 0.3%. While the data is volatile – an important caveat – the Employment in October Tasmania past year has seen relatively weak employment growth. There are currently just 700 more Employment growth remained subdued over the past year, with seasonally adjusted growth over the year to October jobs in the economy relative to the same period in 2017-18. Comparatively, Tasmania posted 2019 at 0.3%. While the data is volatile – an important caveat – the past year has seen relatively weak employment the second weakest employment growth in Australia in 2018-19. growth. There are currently just 700 more jobs in the economy relative to the same period in 2017-18. Comparatively, Tasmania posted the second weakest growth in growth Australia and in 2018-19. This has followed a period ofemployment strong population elevated
both of which helped to support employment growth.
participation rates,
This has followed a period of strong population growth and elevated participation rates, both of which helped to support employment growth.
Chart 3.1: Employment, Tasmania 260 250
000s
3.5 3.0
240
2.5
230 220
National average
2.0
210
1.5
200 190
1.0
180
0.5
170 160
Chart 3.2: Employment growth, year to October 2019
0.0 78 81 84 87 90 93 96 99 02 05 08 11 14 17
Source: ABS 6202.0 (trend)
Vic
Qld
NSW
WA
Tas
SA
Source: ABS 6202.0 (seasonally adjusted)
In total there there are approximately 252,000 jobs in the State, While there was relatively change In total are approximately 252,000 jobs ainnew therecord State,high. a new record high. Whilelittle there was
relatively little change in the overall number of people employed, this masked change in the underlying structure of the workforce. Over the two years to October 2019 around 3,000 jobs around 1,300 full-time jobs were lost while the part-time job gains more than offset this. were added to the economy (in trend terms), but throughout this period around 1,300 fulltime jobs were lost while the part-time job gains more than offset this.
in the overall number of people employed, this masked change in the underlying structure of the workforce. Over the two years to October 2019 around 3,000 jobs were added to the economy (in trend terms), but throughout this period
38
48
T C C I TA S M A N I A R E P O R T 2 0 1 9
Chapter 3: There are approximately 155,000 full-time employed. Disappointingly, that is around 13,000 fewer than the peak which occurred prior to the GFC more than a decade ago. Full-time TASMANIA’S JOBS AND INCOMES
employment in Tasmania is generally flat. This contrasts with full-time employment on the mainland, which has continued to grow in recent years, making a full recovery from the GFC, sitting approximately 17%full-time higheremployed. than its post-crisis low. There are approximately 155,000 Disappointingly, that is around 13,000 fewer than the peak which occurred prior to the GFC more than a decade ago. Full-time employment in Tasmania is generally flat. This contrasts
In contrast, growth in part-time employment in Tasmania has broadly kept pace with the mainland. the GFC, sitting approximately 17% higher than its post-crisis low.
with full-time employment on the mainland, which has continued to grow in recent years, making a full recovery from
Chart 3.3: Full-time employment 170
Chart 3.4: Part-time employment millions
000s
165 160 155 150 Tasmania (LHS)
145 140
Mainland (RHS) 06
09
12
Source: ABS 6202.0 (trend)
15
18
8.8
110
8.6
105
8.4
100
8.2
95
8.0
90
7.8
85
7.6
80
7.4
75
7.2
70
7.0
65
6.8
60
4.2
millions
000s
4.0 3.8
3.6 3.4 3.2 3.0
Tasmania (LHS)
2.8
Mainland (RHS) 06
09
12
15
2.6
18
Source: ABS 6202.0 (trend)
In contrast, growth in part-time employment in Tasmania has broadly kept pace with the mainland.
Full-time employment makes up a smaller share of total employment in Tasmania than any other region in Australia. According to the latest data, 62% of the Tasmanian labour force is According to the latest data, 62% of the Tasmanian labour force is employed full-time, which is around 6% less employed full-time, which is around 6% less than the national average. This gap has than the national average. This gap has continued to widen over the course of the past few decades, moving from a continued to widen over the course of the past few decades, moving from a proportion proportion which was commensurate with then national average in the mid-1980s to well below today. which was commensurate with then national average in the mid-1980s to well below today.
Full-time employment makes up a smaller share of total employment in Tasmania than any other region in Australia.
The lower share of Tasmanians working full-time is partly demographic, partly due to the structure of the economy, and
The lower share choice. of Tasmanians working full-time is partly demographic, partly dueofto the and partly due to individual On the demographic side, Tasmania’s population is older than the rest Australia,
structure of the The economy, and partly due to individual choice. Onyears theatdemographic side,five years is ageing more rapidly. ABS estimated that Tasmania’s median age was 42.3 30 June 2018, some Tasmania’s population isThe older thanofthe of Australia, is ageing more rapidly. TheofABS higher than the national average. number 40 rest year old Tasmaniansand – people starting to enter the prime their
working life – fellthat by about 25% between 1998 andwas 2018.42.3 Nowyears approximately 20%2018, of thesome population over the age of estimated Tasmania's median age at 30 June five isyears 65, while in the restthe of Australia number The is justnumber 16%. Older work less hours than younger workers. higher than nationalthis average. ofworkers 40 yeartend oldtoTasmanians – people starting to
enter the prime of their working life – fell by about 25% between 1998 and 2018. Now approximately 20% of the population is over the age of 65, while in the rest of Australia this number is just 16%. Older workers tend to work less hours than younger workers.
39 T C C I TA S M A N I A R E P O R T 2 0 1 9
49
Chapter 3: of Tasmania’s economy is also important. Those industries which have seen the The structure strongest growth employment Tasmania are those industries which rely most heavily on TASMANIA’S JOBS ANDinINCOMES part-time employment:
Health care and social assistance is roughly half part-time employment and has been the largest contributor of employment in the State over the past decade. employment in Tasmania are those industries which rely most heavily on part-time employment: Accommodation and food services made the second largest contribution to • Health care and social assistance is roughly half part-time employment, has been theoflargest contributor of employment over the same period, and also has theand lowest share full-time workers employment in the State over the past decade. employed in Tasmania of all industries. • Accommodation andwholesale food services made the sectors second largest contribution to employment over employment the same period, Finance, and utility all have a high share of full-time and also has the lowest share of full-time workers employed in Tasmania of all industries. but have seen falls in employment.
The structure of Tasmania’s economy is also important. Those industries which have seen the strongest growth
• Finance, wholesale and utility sectors all have a high share of full-time employment but have seen falls in employment.
Chart 3.5: Full-time share of employment
Chart 3.6: Full-time share of employment, October 2019
Source: ABS 6202.0 (trend)
Source: ABS 6202.0 (seasonally adjusted)
40 50
T C C I TA S M A N I A R E P O R T 2 0 1 9
Chapter 3: TASMANIA’S JOBS AND INCOMES Part-time work also may be a preference for many Tasmanians. Underemployment is only slightly higher in Tasmania than Australia, suggesting a relatively higher proportion of Part-time work also may be a preference for many Tasmanians. Underemployment is only slightly higher in Tasmania people in Tasmania prefer part-time work. than Australia, suggesting a relatively higher proportion of people in Tasmania prefer part-time work. Chart 3.7: Underemployment rate, Tasmania and Australia 12
%
10 8 6 4 Tasmania
2
0
Australia 06
09
12
15
18
Source: ABS 6202.0 (trend)
Long term and youth unemployment Long term and youth unemployment
Long-term unemployment remains an issue for Tasmania with the incidence of people unemployed for more than one
Long-term unemployment remains an issue for Tasmania with the incidence of people unemployed for more than one year about 5% higher than the national average.
year about 5% higher than the national average.
41
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Chapter 3: TASMANIA’S JOBS AND INCOMES Chart 3.8: Incidence of long-term (>1 year) unemployment
Chart 3.9: Median duration of job search, longterm unemployed (>1 year)
Chart 3.8: Incidence of long-term (>1 year) 40 % of total employed (12 unemployment
Chart 150 3.9: Median duration of job search, longweeks term unemployed (>1 year)
month moving average)
35 40
140 150
% of total employed (12 month moving average)
30 35
weeks
Tasmania
130 140
25 30
Australia Tasmania
120 130
20 25
Australia
110 120
15 20
10 15
100 110
Tasmania
5 10
Mainland
90 100
Mainland
80 90
Tasmania
0 5
06 08 10 12 14 16 Source: ABS 6291.0.55.001, September 2019 0 06
08
10
12
14
16
18 18
06
09
12
15
18
Source: ABS 6291.0.55.001 80 06 09 12
15
18
Youth Tasmania is 3.1 percentage points than the mainland. This is Source:unemployment ABS 6291.0.55.001,in September 2019 Source: ABShigher 6291.0.55.001 a considerable gap, and while it narrowed from 2014 to 2018, much of this good work has Youth unemployment in Tasmania is 3.1 percentage higher than the mainland. This is a considerable Youth unemployment in Tasmania is 3.1points percentage points higher than the mainland. gap, Thisand is been undone. while it narrowed from 2014 to 2018, much of this good work has been undone. a considerable gap, and while it narrowed from 2014 to 2018, much of this good work has been undone. Chart 3.10: Youth unemployment rates 20
Chart 3.10: Youth unemployment rates % of 15-24 y.o. labour force (12-month moving average)
20 18
% of 15-24 y.o. labour force (12-month moving average)
18 16 16 14 14 12 12 10 10 8
Tasmania Mainland
06
09
12
Source: ABS 6291.0.55.001 8 06 09 12
Tasmania Mainland 15 18
15
Unemployment and participation Source: ABS 6291.0.55.001
52
42
T C C I TA S M A N I A R E P O R T 2 0 1 9
42
18
Chapter 3: TASMANIA’S JOBS AND INCOMES Unemployment and participation
Despite a small increase in theofnumber employed persons, the trend unemployment Despite a small increase in the number employedofpersons, the trend unemployment rate in Tasmania was rate 6.1% in
in Tasmania was 6.1% points in October 2019, percentage than the same time a the October 2019, 0.2 percentage higher than the0.2 same time a yearpoints ago (buthigher 0.3 percentage points lower than
yearaverage). ago (but 0.3 percentage points lower than the decade average). Tasmania remained decade Tasmania has remained above the mainland unemployment rate for the majorityhas of the past decade andabove currently hasmainland the third highest rate of unemployment of allmajority states and the unemployment rate for the ofterritories. the past
decade and currently has the third highest rate of unemployment of all states and territories. Traditionally, unemployment in Hobart has been lower than other regions in the State. However, more recently this Chart 3.11: Unemployment rates 9
Chart 3.12: Unemployment rates
% of labour force
8
%
6
National average
5
7
4
6
3
5
2 Tasmania
4 3
7
1
Mainland
0 06
09
12
15
18
Source: ABS 6202.0 (trend)
NSW Vic
Qld
SA
WA
Tas
NT
ACT
Source: ABS 6202.0 (trend)
trend appears to have disappeared. Small area employment is quite volatile, employment levels outside Traditionally, unemployment in Hobart has beendata lower than otherhowever regions in the State. Hobart have notmore increased significantly. The most probable causedisappeared. is that people have been moving to Hobart to take However, recently this trend appears to have Small area employment advantage bettervolatile, employment opportunities. Anotherlevels possible reason is a reduction the size of the labour force data isofquite however employment outside Hobart havein not increased outside Hobart as the State’s population significantly. The mostregional probable causeages. is that
people have been moving to Hobart to take advantage of better employment opportunities. Another possible reason is a reduction in the size of the labour force outside Hobart as the State’s regional population ages.
43
T C C I TA S M A N I A R E P O R T 2 0 1 9
53
Chapter 3: TASMANIA’S JOBS AND INCOMES Chart 3.13: Regional unemployment rates 12
% of labour force
10
North West
South West
Launceston
8 6 Hobart
4 2 0
10
12
14
16
18
Source: Small area labour markets, March 2019 The participation rate in Tasmania has fallen over the past year by approximately 0.2 percentage points, easing to 60.4%. has seen therate gap in ratesfallen between thethe mainland and Tasmania widen. This has TheThis participation inparticipation Tasmania has over past year by approximately 0.2 cushioned the percentage increase in thepoints, Tasmanian unemployment havegap beenin greater had participation rates remained easing to 60.4%.rate Thiswhich has would seen the participation rates between the the mainland same.
and Tasmania widen. This has cushioned the increase in the Tasmanian which would have been greater had participation rates remained thebut still Theunemployment proportion of thoserate not in the labour force or full-time education peaked in early 2017 and has since fallen, same. remains well above the national average. It is increasingly men who are not in the labour force or full-time education: there are 9,450 additional men in this category since October 2009 compared to just 5,291 additional women.
The proportion of those not in the labour force or full-time education peaked in early 2017 and has since fallen, but still remains well above the national average. It is increasingly men who are not in the labour force or full-time education: there are 9,450 additional men in this category since October 2009 compared to just 5,291 additional women.
54
T C C I TA S M A N I A R E P O R T 2 0 1 9
44
Chapter 3: TASMANIA’S JOBS AND INCOMES Chart 3.14: Labour force participation rate 68
Chart 3.15: Employment to population ratio 64
% of civilian working age population
67
63
66
62
65
61
64
60
Tasmania
63
57
60
56
59
55 06
09
12
15
Mainland
58
61
58
Tasmania
59
Mainland
62
% of civilian working age population
18
Source: ABS 6202.0 (trend)
54
06
09
12
15
18
Source: ABS 6202.0 (trend)
Part of this difference in participation is due to Tasmania’s older labour force. This, in part, contributes to the lower participation rate difference in the State, while the remainderisisdue driven the lower participation ratesforce. acrossThis, otherin age cohorts. Part of this in participation tobyTasmania’s older labour part,
Perhaps most frustratingly, Tasmania hasn’t seen rate the same liftState, in willingness work evident through much Australia contributes to the lower participation in the while to the remainder is driven byofthe in recent loweryears. participation
rates across other age cohorts. Perhaps most frustratingly, Tasmania hasn’t seen the South sameAustralia lift in willingness to work evident much of Australia in aged recent For example, whereas has seen a notable recent jumpthrough in the willingness to work of those 55 and years. older, Tasmania’s matching gains have been more modest. For example, whereas South Australia has seen a notable recent jump in the willingness to
Changing labour (employment by industry) work of those agedmarket 55 and older, Tasmania’s matching gains have been more modest.
The national economy has undergone significant structural change over the past few decades, moving from an
Changing labour market (employment by industry)
economy of production of primary products to one that is more serviced based. Tasmania is no different, although its
The national economy has undergone significant structural change over the past few decades, moving from an economy of production of primary products to one that is more Half a century ago the largest industry in Tasmania in terms of employment share was manufacturing, accounting for serviced based. Tasmania is no different, although its rate of change has been slower, as 14% of all jobs. It is now half the size. Similarly, agriculture, forestry and fishing – which for a long time was a key driver illustrated in Chart 3.16. rate of change has been slower, as illustrated in Chart 3.16.
of the employment - has shrunk from 8% of total state employment in 1985 to 6% today.
Half a century ago the largest industry in Tasmania in terms of employment share was manufacturing, accounting for 14% of all jobs. It is now half the size. Similarly, agriculture, moving from third largest in 1985. forestry and fishing – which for a long time was a key driver of the employment - has shrunk from 8% of total state employment in 1985 to 6% today.
The largest employer in Tasmania is now health care and social services, which accounts for 16% of total employment,
The largest employer in Tasmania is now health care and social services, which accounts for 16% of total employment, moving from third largest in 1985. A number of factors are driving these changes, and although these are not specific to Tasmania the structural characteristics of the State exacerbate these to some extent. An ageing population and increased participation in the workforce has seen demand for aged45
T C C I TA S M A N I A R E P O R T 2 0 1 9
55
Chapter 3: TASMANIA’S JOBS AND INCOMES A number of factors are driving these changes, and although these are not specific to Tasmania the structural characteristics of the State exacerbate these to some extent. An ageing population and increased care, health, education and child-care services rise. The industrialisation of eastparticipation Asia and in the
move towards a more globally integrated economy, has placed greater competitive pressures on domestic production, particularly around manufacturing where Asian countries production, particularly around manufacturing where Asian countries typically have a comparative advantage driven by typically have a comparative advantage driven by lower labour costs. Technical change and lower labour costs. Technical change and economic reform4 has also improved labour productivity, reducing the need economic reform4 has also improved labour productivity, reducing the need for labour. workforce has seen demand for aged-care, health, education and child-care services rise. The industrialisation of east Asia and move towards a more globally integrated economy, has placed greater competitive pressures on domestic
for labour.
Chart 3.16: Employment shares, select industries 18
% share of total employment
16
Health care & social assistance
14 12
Retail
10
Manufacturing
8
6
Agriculture, forestry & fishing
4 2 0
86
90
94
98
02
06
10
14
18
Source: ABS 6291.0.55.003
From a more contemporary perspective, jobbeen growth hasfocused been primarily focussed in the From a more contemporary perspective, job growth has primarily in the services industries. The largest contribution the past decade has been in the healthover care and industry, has addedcare servicesover industries. The largest contribution thesocial past assistance decade has beenwhich in the health more jobssocial that the next three industry, largest industries (Chart 3.17). As noted the health and social and assistance whichcombined has added more jobs than above, the next three care largest
assistance industry relies more heavily on part-time employment, which explains a large extent why the increases industries combined (Chart 3.17). As noted above, the health caretoand social assistance in employment have been part-time than full-time employment.which Other industries made extent a significant industry relies moremore heavily on part-time employment, explains which to a large why
contribution to employment growth were accommodation food services, arts and recreation and education the increases in employment have been more and part-time than full-time employment. Other and
industries which made a significant contribution to employment growth were and infood services, arts and recreation education and training; all of bigger Theaccommodation greatest job losses were wholesale trade, agriculture and retail. and Notably, all of these industries experienced fallswhich in full-time than in part-time employment. alsoemployment contributed more part-time jobs than full-time jobs. training; all of which also contributed more part-time jobs than full-time jobs.
The greatest job losses were in wholesale trade, agriculture and retail. Notably, all of these industries experienced bigger falls in full-time employment than in part-time employment. 4
This includes reduction to tariffs designed to promote free trade, deregulation of industry (including the deregulation of the finance industry in the 1980s, introduction of compulsory superannuation) and reduced subsidies.
5 6 4 T C C I TA S M A N I A R E P O R T 2 0 1 9 This includes reduction to tariffs designed to promote free trade, deregulation of industry (including the deregulation of the finance industry in the 1980s, introduction of compulsory superannuation) and reduced subsidies.
Chapter 3: TASMANIA’S JOBS AND INCOMES Chart 3.17: Change in employment by industry, by employment type, 2008-09 to 2018-19 Health care & social assistance Education & training Accommodation & food services Arts & recreation Other services Professional, scientific & tech. services Construction Admin & support services Electricity, gas & water Mining Rental, hiring & real estate Transport, postal & warehousing Telecommunication Agriculture, forestry & fishing Public admin & safety Finance & insurance services Manufacturing Retail Wholesale trade
Employed, full-time Employed, part-time
000s employed -4
-2
0
2
4
6
8
10
12
Note: The above chart shows the change in average employment across August, November, February and March of 2008-09 and 2018-19 respectively. Source: ABS 6291.0.55.003, May 2019
a result the structural change that has occurred, care and may social assistance As aAs result of the of structural change that has occurred, health care andhealth social assistance soon contributemay soon contribute the sameastothe the State’s employment the next approximately the sameapproximately to the State’s employment next two largest employingas industries. employing industries.
two largest
T C C I TA S M A N I A R E P O R T 2 0 1 9
47
57
Chapter 3: TASMANIA’S JOBS AND INCOMES Chart 3.18: Gross value added and total employment by industry, share of respective totals Health care & social assistance Retail Education & training Accomadation & food services
Construction Public admin & safety Manufacturing Agriculture, forestry & fishing
Professional, scientific & tech. services Other services
Employment share
Transport, postal & warehousing
GVA share
Arts & recreation
Admin & support services Wholesale trade Finance & insurance services Telecommunication
Rental, hiring & real estate Electricity, gas & water
%
Mining
0
5
10
15
20
Source: ABS 5202.0 and ABS 6291.0 Differences in shares of the economy and of jobs reflect the relative labour productivity of the sectors. The finance and mining industries are the mostofproductive in terms of output perreflect worker.the Thisrelative reflects alabour numberproductivity of factors, including Differences in shares the economy and of jobs of that
the sectors. The finance and mining industries are the most productive in terms of output per worker. This reflects a number of factors, including that workers in these industries are At the other end the spectrum, in arts recreation accommodation and food contribute usually full of time, and thatjobs there is aand high level ofand capital inputs (mining) orservices relatively high the leastwages output(finance per worker, largely reflecting the fact they are typically part-time. and insurance).
workers in these industries are usually full-time, and that there is a high level of capital inputs (mining) or relatively high wages (finance and insurance).
At the other end of the spectrum, jobs in arts and recreation and accommodation and food services contribute the least output per worker, largely reflecting the fact they are typically agriculture, forestry and fishing is likely to reflect the high contribution of the seafood sector. On the other hand, rental part-time. Compared to the rest of the country Tasmania is more productive (that is, an average worker produces more output) in just six of the 19 sectors, led by agriculture, forestry and fishing and telecommunications. Our leading position in
hiring and real estate services, professional scientific and technical services and the construction sector are barely half as productive as the rest of theof country. Compared to the rest the country
Tasmania is more productive (that is, an average worker produces more output) in just six of the 19 sectors, led by agriculture, forestry and fishing and telecommunications. Our leading position in agriculture, forestry and fishing is likely to reflect the high contribution of the seafood sector. On the other hand, rental hiring and real estate services, professional scientific and technical services and the construction sector are barely half as productive as the rest of the country.
58
T C C I TA S M A N I A R E P O R T 2 0 1 9
48
Chapter 3: TASMANIA’S JOBS AND INCOMES Chart 3.19: Simple labour productivity (output per worker) June 2018-19 Mining Telecommunication Finance & insurance services Electricity, gas & water Agriculture, forestry &… Wholesale trade Rental, hiring & real estate Manufacturing Health care & social… Public admin & safety Transport, postal &… Education & training Admin & support services Construction Professional, scientific &… Retail Other services Arts & recreation Accommodation & food…
$2017-18 per worker
0 100 Source: ABS 6291.0 and ABS 5206.0
200
300
400
Chart 3.20: Relative labour productivity Tasmania relative to Australia Agriculture, forestry &… Telecommunication Health care & social… Education & training Manufacturing Electricity, gas & water Wholesale trade Retail Accommodation & food… Public admin & safety Finance & insurance… Other services Arts & recreation Transport, postal &… Construction Admin & support services Professional, scientific &… Mining Rental, hiring & real estate
0.0 0.5 Source: ABS 6291.0 and ABS 5206.0
ratio 1.0
1.5
2.0
Labour earnings and income Labour earnings and income
Over the past four years or so Tasmania has seen strong wage growth relative to the rest of Australia. Over this period,
Over the past four years or so Tasmania has seen strong wage growth relative to the rest of Australia. Over this period, wage growth has averaged around 2.3%, a little higher than the percentage points lower than the average seen over the past two decades, which is consistent with the broader trend national average of 2.1%. At the same time this is 0.8 percentage points lower than the seen across Australia. The slowdown has been broad based across sectors, although the private sector has seen slightly average seen over the past two decades, which is consistent with the broader trend seen stronger growth in the past few years. across Australia. The slowdown has been broad based across sectors, although the private As noted, the slowdown in wage growth has come during a period of relatively strong economic growth. More recently sector has seen slightly stronger growth in the past few years. wage growth has averaged around 2.3%, a little higher than the national average of 2.1%. At the same time this is 0.8
national economic growth has manifested in job growth rather than higher wages. Spare capacity in the labour market
As noted, theunemployment slowdown inand wage growth has come duringthat a period of relatively strong – reflected in both underemployment – has meant output can be increased without needing to offer higher wages. Other reasons includenational globalisation and the tradability of some services as lower labour economic growth. More recently economic growth has manifested inwell jobas growth bargaining revenue to capacity profits, and change. ratherpower than which higherpushes wages. Spare intechnical the labour market
– reflected in both unemployment and underemployment – has meant that output can be increased without needing to offer higher wages. Other reasons include globalisation and the tradability of some services as well as lower labour bargaining power which pushes revenue to profits, and technical change.
49
T C C I TA S M A N I A R E P O R T 2 0 1 9
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Chapter 3: TASMANIA’S JOBS AND INCOMES Chart 3.21: Growth in ordinary hourly rates of pay
5
6
% change on year earlier
Chart 3.21: Growth in ordinary hourly rates of pay 4.5 5 4
Chart 3.22: Growth in total hourly rates of pay % change on year earlier
Chart 3.22: Growth in total hourly rates of pay 5.5
5 6
% change on year earlier
% change on year earlier
4.5 5.5
4.5 3.5
4 5
4 3
3.5 4.5
3.5 2.5
3 4 Tasmania
3 2
Australia
2.5 1.5
2 3 1.5 2.5
Tasmania
Private sector
Public sector
2.5 3.5
Private sector 16 18
Public 10 sector 12
06 08 14 07 09 11 13 15 17 19 2 01 03 05 Australia 2 Note: Excludes bonuses Note: Excludes bonuses Source: ABS 6345.0, August 2019 Source: ABS 6345.0 1.5 1.5 06 08 10 12 14 16 18 01 03 05 07 09 11 13 15 17 19 Note: Excludes Note: bonuses the rest of the nation in While growthbonuses in pay has been stronger, Tasmania stillExcludes lags behind Source: ABS 6345.0, August 2019 Source: ABS 6345.0
terms of earnings. Total average weekly earnings in Tasmania were $1,051 in May 2019, $187 While growth payaverage has been stronger, Tasmania still behind rest of thethan nation terms of (which earnings.has Total less thaninthe across Australia, andlags $400 lessthe per week ininthe ACT the While growth in pay has been stronger, Tasmania stillless lags behind the rest of Australia, the nation average weekly earnings in Tasmania were $1,051 in May 2019, $187 than the average across andin$400 highest total average weekly earnings). lessterms per week than in the ACT (which has the highest total average weekly earnings). of earnings. Total average weekly earnings in Tasmania were $1,051 in May 2019, $187 less than the average across Australia, and $400 less per3.24: weekAverage than inemployee the ACT compensation (which has the Chart 3.23: Average weekly earnings Chart highest total average weekly earnings). 1,500
80
$
Chart 3.23: Average weekly earnings 1,400 1,500
1,300 1,400 1,200 1,300
Chart 3.24: Average employee compensation 70 80
$ National average
50 60 National average
40 50 30 40
NSW Vic
Source: ABS 6302.0
1,000
50
NSW Vic
Source: ABS 6302.0
60
50
Qld
Qld
SA
SA
$/hr
60 70
1,100 1,200 1,000 1,100
$/hr
WA
WA
Tas
Tas
NT
NT
T C C I TA S M A N I A R E P O R T 2 0 1 9
ACT
ACT
20 30
National average
National average
NSW Vic
Qld
SA
WA
Tas
NT
ACT
WA
Tas
NT
ACT
Source: ABS 5220.0, 6202.0
20
NSW Vic
Qld
SA
Source: ABS 5220.0, 6202.0
The difference between average weekly earnings in Tasmania and the rest of the country is Chapter 3: primarily driven by the lower private sector wages in Tasmania. TASMANIA’S JOBS AND INCOMES
Across Australia, average public sector pay is higher than in the private sector, in part because public sector employees are more likely to be tertiary qualified and more likely to be Theemployed difference between average weekly earnings inof Tasmania and the rest of the country is primarily by retail the lower full-time. A high proportion lower paid workers – for example thosedriven in the private wages in Tasmania. andsector accommodation sector – are in the private sector. Nationally average weekly earnings in theAustralia, public sector 25% higher than the private sector.sector, in part because public sector employees Across averageare public sector pay is higher than in the private However here in Tasmania, public sector weekly earnings are 41% higher than the private sector. While this, in part, reflects the State’s high levels of private sector part-time earnings in the public sector are 25% higher than the private sector. employment, when an adjustment is made for hours worked, average public sector weekly However here in Tasmania, public sector weekly This earnings are 41% higher the it private this, inthan part, earnings are still significantly higher. differential doesthan make muchsector. moreWhile difficult reflects the rest State’s of private sector part-time employment, adjustment is made for hours in the of high the levels country for the private sector to attractwhen skillsanand resources. At the sameworked, average sector weekly earnings are still significantly higher. does make it muchthe more difficult time,public private sector wages have increased ahead of This the differential public sector, narrowing gap a than in the rest of the country for the private sector to attract skills and resources. At the same time, private sector wages little. are more likely to be tertiary qualified and more likely to be employed full-time. A high proportion of lower paid workers – for example those in the retail and accommodation sector – are in the private sector. Nationally average weekly
have increased ahead of the public sector, narrowing the gap a little.
Household income
Tasmania’s income lower weekly wages has an effect on primary household income, which is the Household lowest nationally.
Tasmania’s lower weekly wages has an effect on primary household income, which is the lowest nationally.
Chart 3.25: Primary household income per capita $110
$100
primary income per capita, $000s
$90 $80
National average
$70 $60 $50 $40 $30
NSW Vic
Qld
SA
WA
Tas
NT
ACT
Source: ABS 5220.0 and 3101.0
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Chapter 4 TASMANIA’S POPULATION
Chapter 4:
Tasmania’s population
Population growth Chapter 4: in Tasmania has historically lagged behind that of the mainland states, particularly Victoria and New South Wales. This is largely due to migration patterns, with TASMANIA’S POPULATION larger, more densely populated hubs being able to offer better job prospects as well as having a higher profile on the international stage.
Population in Tasmaniahas hasseen historically laggedstrong behind population that of the mainland Victoria and New In sayinggrowth this, Tasmania relatively growthstates, over particularly the past few years, South Wales. This is largely to migration migration. patterns, withWhile larger, still morestrong, densely in populated hubs being able to offer fuelled increasingly bydue international 2018-19 interstate better job prospects as well as having a higher profile onathe international stage. migration was lower than 2017-18, reversing trend of the last few
years. Looking forward, growth has is expected to fall as natural growth becomes negativeby Inpopulation saying this, Tasmania seen relatively strong population growth(births over theless pastdeaths) few years, fuelled increasingly over the next decade. international migration. While still strong, in 2018-19 interstate migration was lower than 2017-18, reversing a trend of the last few years. Looking forward, population growth is expected to fall as natural growth (births less deaths)
Tasmania’s overall population growth masks a different story in regional areas. Population growth is stronger in Hobart than elsewhere in the State – in the Launceston and North East, Tasmania’s overall population growth masks a different story in regional areas. Population growth is stronger in Hobart and the West and North West areas, growth is lower and is already shrinking in some areas than elsewhere in the State – in the Launceston and North East, and the West and North West areas, growth is lower due to interregional movements and declining natural increase. becomes negative over the next decade.
and is already shrinking in some areas due to interregional movements and declining natural increase.
State population growth
Tasmania’s populationgrowth growth was 1.2% over the past year. That is the strongest in almost a State population
decade, and represents a significant closing of the gap, but is still below the national average. It was the fifth strongest growth of all states and territories – putting it below the significant closing of the gap, but is still below the national average. It was the fifth strongest growth of all states and growth of some other states that receive far higher levels of overseas and net interstate territories – putting it below the growth of some other states that receive far higher levels of overseas and net interstate migration – and ahead of South Australia and the Northern Territory. Tasmania’s population growth was 1.2% over the past year. That is the strongest in almost a decade, and represents a
migration – and ahead of South Australia and the Northern Territory.
Chart 4.1: Population growth
Chart 4.2: Population growth, March 2018 to 2019 2.5
%
2.0
National average
1.5
1.0 0.5 0.0 -0.5 -1.0
Source: ABS 3101.0, March 2019
55
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NSW Vic
Source: ABS 3101.0
Qld
SA
WA
Tas
NT
ACT
This growth has been due to an upswing in migration patterns into the State. A reversal in Chapter 4: the interstate migration outflows which occurred around 2013 has seen interstate migration TASMANIA’S POPULATION making a strong positive contribution to population growth, rather than detracting. The reasons for the increasing interstate migration are many, but the relatively strong ofdue thetoTasmanian economy theinto affordability the housing market Thisperformance growth has been an upswing in migration and patterns the State. A of reversal in the interstate migration compared to Sydney and Melbourne both contribute. Net interstate migration was in outflows which occurred around 2013 has seen interstate migration making a strong positive contribution2254 to population growth, than detracting. the rather year to March 2019, slightly higher than the 2196 recorded in 2018. TheA reasons the increasing interstate migration are many, but the relatively strong performance of the Tasmanian strongforpick up in international migration has also supported growth, and international
migration is now the strongest component of population growth. Of an additional 6,400 people over the last year, around 5,300 were migrants. Of this, roughly 3,000 or 60% came A strong up in international migration has also supported growth, and international migration is now the strongest frompick overseas. economy and the affordability of the housing market compared to Sydney and Melbourne both contribute. Net interstate migration was 2254 in the year to March 2019, slightly higher than the 2196 recorded in 2018.
component of population growth. Of an additional 6,400 people over the last year, around 5,300 were migrants. Of
The remaining component, natural increase, has generally declined since around 2007, weighing on overall growth in the state’s population. Births are falling and deaths are The remaining component, natural increase, has generally declined since around 2007, weighing on overall growth increasing. ABS data shows that the natural increase improved in the year to March 2019 in the state’s population. Births are falling and deaths are increasing. ABS data shows that the natural increase compared to 2018. This was by both deaths being lower, and births being higher, however it improved in the year to March 2019 compared to 2018. This was by both deaths being lower, and births being higher, also appears to reflect a statistical anomaly in the 2018 data whereby the September 2017 however it also appears to reflect a statistical anomaly in the 2018 data whereby the September 2017 quarter figure is quarter figure is unrealistically low. this, roughly 3,000 or 60% came from overseas.
unrealistically low.
Chart 4.3: Population growth components 7
000s
6
Natural increase
8
International
6
Interstate
Population change
5
4
000s
4 2
3 2
0
1
Deaths Births Natural increase
-2
0 -1
-4
-2
-3
Chart 4.4: Natural increase in Tasmania
06 07 08 09 10 11 12 13 14 15 16 17 18 19
Source: ABS 3101.0
-6
02
06
10
14
18
Source: ABS 3101.0
The population forecast The population forecast
Going forward, some of the migration swings towards the State are expected to moderate, bringing population back towards its long-term trend. Deloitte Access Economics estimates around 0.5%. This is partially driven by forecasts of weaker net migration into the State, but also due to the impact of that over the next decade, population growth will be around 0.5%. This is partially driven by Going forward, some of the migration swings towards the State are expected to moderate, bringing population back
towards its long-term trend. Deloitte Access Economics estimates that over the next decade, population growth will be natural increase in the population, which is forecast to turn negative. While the contribution to population growth from
53
natural increase has declined across Australia, the trend is far more pronounced in Tasmania.
T C C I TA S M A N I A R E P O R T 2 0 1 9
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forecasts of weaker net migration into the State, but also due to the impact of natural
Chapter increase in4: the population, which is forecast to turn negative. While the contribution to population growth from natural increase has declined across Australia, the trend is far more TASMANIA’S POPULATION pronounced in Tasmania.
Chart 4.5: Tasmania's population outlook 7
000s
6
Chart 4.6: Population growth forecasts
Natural increase Interstate International Population change
5 4
% change from previous corresponding quarter
2
Tasmania Australia
1.5
3 2
1
1
0.5
0 -1
0
-2 -3
2.5
06
10
14
18
22
26
30
34
Source: ABS 3101.0, Deloitte Access Economics
38
-0.5
06
10
14
18
22
26
30
34
38
Source: ABS 3101.0, Deloitte Access Economics
This poses a significant risk to Tasmania’s economy. With a negative natural increase, the reliance on interstate and international migration to provide a labour force is pronounced. international migration to provide a labour force is pronounced. And these two sources of workers can only be relied on And these two sources of workers can only be relied on to the extent that Australia’s to the extent that Australia’s migration levels and policies do not change, and that the Tasmanian economy continues migration levels and policies do not change, that the Tasmanian economy to to perform strongly. Interstate working age people will onlyand come to Tasmania if they are confident continues of getting a job. perform strongly. Interstate working agehave people only come Tasmania if they are should In the past, periods of negative interstate migration been will outweighed by theto natural increase. However, confident of getting job. In thelevels past,experienced periods offrom negative migrationwith have been natural interstate migration return toathe negative 2012 to interstate 2014, and if combined a negative outweighed bydepopulation the naturalcould increase. However, increase, Tasmania’s be quite notable. should interstate migration return to the negative levels experienced from 2012 to 2014, and if combined with a negative natural The Tasmanian population is also ageing. Again, this is not dissimilar to the rest of the nation, but the degree to increase, Tasmania’s depopulation could be quite notable. which the population is ageing is far greater. Chart 4.7 illustrates the dramatic transformation the population has This poses a significant risk to Tasmania’s economy. With a negative natural increase, the reliance on interstate and
experienced. In 1971, approximately of the population wasthis under of 30 years. June 2017, The Tasmanian population55% is also ageing. Again, is the notage dissimilar to In the rest ofthis theshare
nation, but the degree to which the population is ageing is far greater. Chart 4.7 illustrates the dramatic transformation the population has experienced. In 1971, approximately 55% of the population was under the age of 30 years. In June 2017, this share was around 35%. While this trend is expected to continue, Chart 4.8 shows that the rate at which the population is ageing is forecast to slow.
was around 35%. While this trend is expected to continue, Chart 4.8 shows that the rate at which the population is ageing is forecast to slow.
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Chapter 4: TASMANIA’S POPULATION Chart 4.7: Demographic change, 1971 to 2017
Chart 4.8: Projected demographic profile, 2017 to 2047
100+
100+
90
% females
% males
Jun-2017
80
Jun-1971
70
90
50
50
40
40
30
30
20
20
10
10
0
0 0.5
0.
0.5
1.
1.5
2.
2.5
Jun-2047
Jun-2017
70 60
1.
% females
80
60
2.5 2. 1.5 Source: ABS 3101.0
% males
2.5
1.5
0.5
0.5
1.5
2.5
Source: ABS 3101.0, Deloitte Access Economics
Regional population growth On a regional basis, unsurprisingly, Hobart has seen the strongest overall population growth in recent years. The
Regional population growth migration. largest component of this is international
On a regional basis, unsurprisingly, Hobart has seen the strongest overall population growth in recent years. The largest component of this is international migration. although it is by far the dominant factor in the South East. Interregional migration is a key factor in Hobart’s growth, Somewhat surprisingly, direct interstate migration makes a fairly minimal impact on the Hobart region population,
Somewhat surprisingly, direct interstate migration makes a fairly minimal impact on the Hobart region population, although it is by far the dominant factor in the South East. Natural increase makes close to is noaimpact in the South East and West and Northall West the State. Interregional migration key factor in Hobart’s growth, while theofother regions have a strongly negative interregional migration, meaning all the interregional movement is to Hobart.
while all the other regions have a strongly negative interregional migration, meaning all the interregional movement is to Hobart.
Natural increase makes close to no impact in the South East and West and North West of the State.
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Chapter 4: TASMANIA’S POPULATION Chart 4.9: Hobart 4.0
000s
3.5 3.0
International Interstate Interregional Natural increase Population change
2.0
000s
1.5
0.5
1.5 1.0
0.0
0.5
0.0
-0.5
-0.5
-1.0
-1.0 06 07 08 09 10 11 12 13 14 15 16 17 18
Chart 4.11: South East 0.8
2.0
1.0
2.5
-1.5
Chart 4.10: Launceston and North East
000s
0.6
-1.5
06 07 08 09 10 11 12 13 14 15 16 17 18
Chart 4.12: West and North West 1.5
000s
1.0
0.4
0.5
0.2
0.0
0.0
-0.5
-0.2 -0.4
06 07 08 09 10 11 12 13 14 15 16 17 18
Source: ABS 3101.0
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-1.0
06 07 08 09 10 11 12 13 14 15 16 17 18
Chapter 4: TASMANIA’S POPULATION Regional forecast
Looking forward, the prospects for population growth outside Hobart are limited. Hobart is Regional forecast expected to continue to see net interregional growth. Negative natural increases combined Looking the prospects forwill population Hobart are limited. Hobart is expected continue to with netforward, interregional losses weigh growth heavilyoutside on population in Launceston and the to North see net interregional growth. Negative natural increases combined with net interregional losses will weigh heavily on East, and the West and North West in particular. population in Launceston and the North East, and the West and North West in particular.
Chart 4.13: Hobart region, population change by component 4.0 3.5
000s
3.0 2.5
International Interstate Interregional Natural increase Population change
2.0 1.0
1.5 1.0
-0.5
0.0 -0.5
-1.0
-1.0 06 09 12 15 18 21 24 27 30 33 36 39
Chart 4.15: South East region, population change by component 000s
0.6
-1.5
06 09 12 15 18 21 24 27 30 33 36 39
Chart 4.16: West and North West region, population change by component 1.5
000s
1.0
0.4
0.5
0.2
0.0
0.0
-0.5
-0.2
-1.0
-0.4 -0.6
000s
0.0
0.5
0.8
2.0
0.5
1.5
-1.5
Chart 4.14: Launceston and North East region, population change by component
06 09 12 15 18 21 24 27 30 33 36 39
Source: ABS 3101.0, Deloitte Access Economics
-1.5
06 09 12 15 18 21 24 27 30 33 36 39
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Chapter 4: TASMANIA’S POPULATION
Chart 4.17 illustrates the University of Tasmania Institute for the Study of Social Change’s forecast proportional change in residential population by local government areas (LGAs) Chart 4.17 illustrates the University of Tasmania Institute for the Study of Social Change’s forecast proportional change between 2019 and 2042. Along a similar vein to the previous charts, seven of the nine largest in residential population by local government areas (LGAs) between 2019 and 2042. Along a similar vein to the previous gains in population are expected in LGAs in the Hobart region. The other significant LGAs charts, seven of the nine largest gains in population are expected in LGAs in the Hobart region. The other significant with high growth – Latrobe and West Tamar – are relatively small in population so the actual LGAs with high growth – Latrobe and West Tamar – are relatively small in population so the actual population growth population growth will be small. will be small.
Chart 4.17: Increase in size of residential population by 2042, % West Coast Dorset Tasman King Island Break O'Day Central Highlands Waratah Wynyard Circular Head Burnie Southern Midlands Central Coast Meander Valley Glamorgan / Spring Bay George Town Kentish Devonport Flinders Derwent Valley Northern Midlands Launceston West Tamar Glenorchy Clarence Kingborough Hobart Huon Valley Latrobe Sorell Brighton
-40 -30 -20 -10
0
10
20
30
40
Source: University of Tasmania Institute for the Study of Social Change. Note that the Huon Valley LGA has been considered to be in the Hobart region, given the share of workers that travel to work in the Hobart LGA.
These population forecasts highlight the need for local government reform. Tasmania has around 17,600 residents per
These population forecasts highlight the need for local government reform. Tasmania has around 17,600 residents per LGA, which is the lowest of any Australian state apart from WA. 2,400km2 per LGA, Tasmania’s LGAs are the smallest in the nation. And in terms of area, at an average of approximately 2,400km2 per LGA, Tasmania’s LGAs are the smallest in the nation. LGA, which is the lowest of any Australian state apart from WA. And in terms of area, at an average of approximately
70
T C C I TA S M58 ANIA REPORT 2019
Chapter 4: TASMANIA’S POPULATION Chart 4.18: Average area per LGA 30
Chart 4.19: Average residents per LGA 80
km-squared (000s)
70
25
residents (000s)
60 20
50
15
40 30
10
20 5 0
10 Tas
Vic
Source: ABS 3201.0
NSW
SA
WA
Qld
0
WA
Tas
SA
NSW
Qld
Vic
Source: ABS 1410.0
Many of Tasmania’s LGAs, particularly in regional areas, have limited financial strength, provide a relatively limited range of services to residents, and heavily rely on State or of services to residents, and heavily rely on State or Commonwealth grants for much of their funding. This situation is Commonwealth grants for much of their funding. This situation is only going to become only going to become more difficult, again particularly in regional areas, as populations fall and become older. more difficult, again particularly in regional areas, as populations fall and become older.
Many of Tasmania’s LGAs, particularly in regional areas, have limited financial strength, provide a relatively limited range
Small councils mean broader regional co-ordination is less comprehensive than it could be, and where it exists it comes
Small councils mean broader regional co-ordination is less comprehensive than it could be, and where it exists it comes at a realised cost. Inasareas such planning, different interpretations and state-wide planning scheme are not being fully as theyas could. Co-ordinated delivery of social services – such processes across LGAs mean that the goals of a single state-wide planning scheme are not as housing and health – will be supported by larger, more effective councils. being realised as fully as they could. Co-ordinated delivery of social services – such as Although outcomes have perhaps been a little slower to achieve than might have been envisaged, it is clear that the housing and health – will be supported by larger, more effective councils. at a cost. In areas such as planning, different interpretations and processes across LGAs mean that the goals of a single
transfer of council water services to the regional water entities, and ultimately TasWater, has been a success. Significant improvements drinking water quality have been and wastewater disposal now being tackled. Although inoutcomes have perhaps beenachieved, a little slower to achieve thanis might have beenThis is not
to suggest that we a single council, far from it, but Tasmania to stillwater have 29 LGAs in ten envisaged, it need is clear thatstate-wide the transfer of council water servicescannot to theafford regional entities, years’ time. and ultimately
TasWater, has been a success. Significant improvements in drinking water quality have been achieved, and wastewater disposal is now being tackled. This is not to suggest that we need a single state-wide council, far from it, but Tasmania cannot afford to still have 29 LGAs in ten years’ time.
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Chapter 5 TASMANIA’S SOCIAL OUTCOMES
Chapter 5: Chapter 5: Tasmania’s social outcomes TASMANIA’S SOCIAL OUTCOMES
Strong social outcomes are fundamental to quality of life for individuals – and they underpin future economic success. Issues such as housing affordability and digital inclusion directly and indirectly impact economic growth. But on many indicators the sound economic growth Strong social outcomes are fundamental to quality of life for individuals – and they underpin future economic success. of recent years has not translated into improvements in social outcomes for much of the Issues such as housing affordability and digital inclusion directly and indirectly impact economic growth. But on many population. indicators the sound economic growth of recent years has not translated into improvements in social outcomes for much population. And of asthe with some of
the economic indicators – Tasmania remains behind the national average keyofsocial indicators. And as withon some the economic indicators – Tasmania remains behind the national average on key social indicators.
Socio-economic status and welfare payments Socio-economic status welfare payments status of Tasmanians and other There continues to be a divideand between the socioeconomic
Australians, the outer ends of the spectrum. Commonwealth There continuesparticularly to be a divideat between the socioeconomic status of Tasmanians and otherGrants Australians, particularly at Commission (using the Socio-Economic for Areas index of relativeIndex sociothe outer ends ofdata the spectrum. Commonwealth GrantsIndex Commission data (SEIFA) (using the Socio-Economic for Areas
(SEIFA) indexdisadvantage) of relative socio-economic disadvantage) Tasmania has a disproportionately highof proportion economic shows that Tasmania shows has a that disproportionately high proportion of thepopulation population inin thethe most disadvantaged quintile,quintile, and a disproportionately low proportionlow of the population in the the most disadvantaged and a disproportionately proportion least disadvantaged of the populationquintile. in the
least disadvantaged quintile.
Chart 5.1: Population by SEIFA quintile 35
%
30
Tasmania
Mainland
25 20 15 10
5 0
Least
2nd least
Level of disadvantage
Middle 2nd most
Most
Source: Commonwealth Grants Commission, ABS, December 2017 Tasmania also has a higher proportion of recipients of the primary welfare payments than the average for other states
Tasmania also has a higher proportion of recipients of the primary welfare payments than the average for other states and territories. Some 13.4% of Tasmanians receive the Age 5.1% of Tasmanians receive the Disability Support Pension (DSP), significantly higher than the proportion of other Pension, compared to 9.3% of other Australians. And 5.1% of Tasmanians receive the Australians (2.9%). Disability Support Pension (DSP), significantly higher than the proportion of other Australians (2.9%). and territories. Some 13.4% of Tasmanians receive the Age Pension, compared to 9.3% of other Australians. And
60 74
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Chapter 5: TASMANIA’S SOCIAL OUTCOMES Chart 5.2: DSS payment recipients as a proportion of the population 14
%
12
Tasmania
10
Mainland
8 6 4 2 0
Age Pension
Disability Support Pension
Health Care Card
Newstart Allowance
Commonwealth Rent Assistance
Source: Department of Social Services, March 2019
The high proportion of people on the DSP is equivalent to about half of the gap between the
Theparticipation high proportionrate of people on the DSPand is equivalent to about halfrate of the gap betweenThis the participation rate in in Tasmanian the participation nationwide. has implications
Tasmania and the participation rate and nationwide. This has implications for economic productivity, and thewelfare State’s for economic productivity, the State’s reliance on Commonwealth Government reliance on Commonwealth Government welfare payments. payments.
Housing affordability Housing affordability
Studies make clear that housing affordability is significant to the overall health of the economy. And any decrease in housing affordability, due to higher housing prices without housing affordability, due to higher housing prices without an equivalent increase in incomes, particularly excludes low an equivalent increase in incomes, particularly excludes low socio-economic groups. Studies make clear that housing affordability is significant to the overall health of the economy5. And any decrease in 5
socio-economic groups.
Although home ownership is still more achievable compared to Sydney and Melbourne, housing affordability has dropped sharply in recent years, particularly in Hobart. In fact dropped sharply in recent years, particularly in Hobart. In fact strong population growth and sluggish housing supply strong population growth and sluggish housing supply increases have resulted in Hobart increases have resulted in Hobart having the least affordable capital city rental market in the country, particularly when having the affordable capital city rental market in the country, particularly when housing costs areleast compared to income. housing costs are compared to income. Although home ownership is still more achievable compared to Sydney and Melbourne, housing affordability has
Unemployed persons are particularly vulnerable to housing cost increases. In southern Tasmania as at June 2019 a
Tasmanian under 24persons in a shared house is around vulnerable $85 per weekto short of meeting basic needs of housing, utilities, Unemployed are particularly housing costtheir increases. In southern food, transport, as health, clothing andafootwear, education care. In December 2018, that $63 a Tasmania at June 2019 Tasmanian underand 24personal in a shared house is around $85figure per was week
5
ustralian A Housing and Urban Research Institute (2006) Housing affordability and the economy: A review of macroeconomic impacts 5 Australian Housing and Urban Research Institute (2006) Housing affordability and the economy: A review of and policy issues.
macroeconomic impacts and policy issues.
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Chapter 5: TASMANIA’S SOCIAL OUTCOMES week, with the change entirely due to increased housing costs. This analysis is based on a national methodology for minimum budget standards for individuals and families in different economic circumstances6 coupled with recent rental information data.7 Work by TasCOSS8 highlights the change in a range of social indicators over the past five years. Some have improved – but despite good economic conditions a larger number of indicators have deteriorated.
Indicator
2014
2019
88,430
92,863
Departing Emergency Department (ED) within 4 hours at RHH
60.3%
57.0%
Elective surgery waiting list
7,438
9,601
Proportion of people deferring access to GPs due to cost
6.9%
8.7%
Oral health wait list
15,333
12,113
TAFE/VET enrolments
63,400
55,700
School retention rate (Yr 7-12)
68.4%
74.0%
Number of unemployed
18,900
16,000
Number of underemployed
25,700
29,600
21,149
20,081
Number on housing register
2,054
3,330
Average wait time for priority applicants
19 weeks
67 weeks
1,054
1,325
86.6%
88.0% (2016-17)
50.4%
58.1%
Energy Number on energy concessions
Health
Education
Jobs
Newstart Number on Newstart
Housing
Out-of-Home Care Number of children in OOHC
Taxable income Proportion of taxpayers earning less than $80,000 p.a
Australian Digital Inclusion Index (ADII) Score Tasmania
6
ew Minimum Income for Healthy Living Budget Standards for Low-Paid and Unemployed Australians, UNSW SPRC 2017, pp. 83- 89. For all areas N except housing, these standards date from 2016; as a consequence, actual expenditure needs are likely to have risen by 6-7%.
7
http://tutas.org.au/wp-content/uploads/2018/12/Tasmanian-Rents-December-2018.pdf.
8
https://www.tascoss.org.au/measuring-progress-in-tasmania/
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Chapter 5: TASMANIA’S SOCIAL OUTCOMES Low income consumers are vulnerable to changes in the cost of living and price inflation in Hobart has been more rapid than the national average for several years. The CPI for Hobart rose 2.2% in the year to September 2019, compared to an average of 1.7% across all capital cities, the highest of all the capital cities.9
Digital inclusion10 Digital inclusion is a concept which refers to the ability of people or groups to enjoy the benefits of being online and using technology. It has three elements: • Access – the availability of the internet and connected devices. • Affordability – the financial means to get online. • Digital ability – skills to use the internet confidently and safely. Digital inclusion is an important enabler – for example of employment, but also of people’s ability to access health information and post-secondary or retraining education services. The ability to access basic services such as the internet opens opportunities for networking, innovation and productivity – key components of a productive economy. Given the challenges faced in regional Tasmania, improving digital inclusion could have potentially significant gains. The Australian Digital Inclusion Index (ADII) suggests that Tasmania’s digital inclusion is improving, but at the same time falling further behind the rest of Australia. It is below the national average and lowest out of all states and territories. Groups within the State that are more excluded are low income households, people aged 65 plus, people who did not complete secondary school, and people who are not in paid employment. Additional analysis by TasCOSS has estimated that 17% of household in Tasmania do not have access to the internet – the highest in Australia. This is as high as 32% in some areas.
9 10
ABS 6401.0 Consumer Price Index Australia September 2019. TasCOSS (2019) Policy Fact Sheet: Digital Inclusion.
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Chapter 6 TASMANIANS’ HEALTH
Chapter 6: TASMANIANS’ HEALTH Tasmania spends about the same per capita as other states on health – but Tasmania’s health system woes are regularly front page news. Despite the comparable spending, Tasmania’s health outcomes are poor compared to the rest of the country – and there is no clear indication that the gap is closing. And health outcomes are much worse in regional areas than in Hobart. Poorer health outcomes are highly correlated to poorer education and lower income. This is a key reason why Tasmania’s health outcomes are generally worse than the mainland, and why regional Tasmanian health is worse than in Hobart. Aside from the strain that poor health puts on individuals and families from a quality of life perspective, ultimately, the health of Tasmania’s population has major implications for Tasmania’s future economic success – for a number of reasons: • The health care and social assistance industry is Tasmania’s largest industry, its largest employer, and its fastest growing sector. • Our ageing population and higher levels of disability mean a well-functioning health system is increasingly important for an increasing number of people. • The health budget is an increasing drain on the government’s revenue. • An unhealthy population means a smaller and less productive workforce.
Cost of the health system Health spending per person in Tasmania is largely in line with the rest of the country. Around 70% of this cost is borne by the public sector.
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Chapter 6: TASMANIANS’ HEALTH Chart 6.1: Government and non-government health expenditure per capita 12
10
$000s
9
Government
10
$000s Local & State Government
8
Non-Government
7
8
Australian Government
6 5
6
4
4
3 2
2 0
Chart 6.2: Health expenditure per capita by level of government
1
NSW Vic
Qld
SA
WA
Tas
NT
ACT
Source: AIHW, Health expenditure Australia 2017-18, supplementary tables
0
NSW
Vic
Qld
SA
WA
Tas
NT
ACT
Source: AIHW, Health expenditure Australia 2017-18, supplementary tables
In health spending accounted for 30.8% of 30.8% total state This is largely consistent with other states In2018-19, 2018-19, health spending accounted for of expenditure. total state expenditure. This is largely
consistent with other states and territories. The breakdown of total health sector spending by category is similar to other states, with most money being spent on primary health care and hospitals (although there is relatively less spent on research in Tasmania).
and territories. The breakdown of total health sector spending by category is similar to other states, with most money being spent on primary health care and hospitals (although there is relatively less spent on research in Tasmania).
65
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81
Chapter 6: TASMANIANS’ HEALTH Chart 6.3: Health as a proportion of total state or territory expenditure 35
Chart 6.4: Government and non-government health expenditure by category 12
%
Capital expenditure Research Other services Referred medical services Primary health care Hospitals
$000s
30 25
8
20 15 4
10 5 0
NSW Vic
Qld
SA
WA
Tas
NT
ACT
Source: State Budget Papers 2018-19
0
NSW
Vic
Qld
SA
WA
Tas
NT
ACT
Source: AIHW, Health expenditure Australia 2017-18, supplementary tables
And health spending has grown in Tasmania at an average annual rate of 3.4% over the past decade, below the
And health spending has grown in Tasmania at an average annual rate of 3.4% over the past national average of 3.9%. Indeed, expenditure on health in Tasmania has grown more slowly in the last decade than all decade, below the national average of 3.9%. Indeed, expenditure on health in Tasmania has other states and territories apart from South Australia. On a per capita basis, however, the story is different: growth has grown more slowly in the last decade than all other states and territories apart from South been the second highest in the nation (at 2.8% compared to the national average of 2.2%). Australia. On a per capita basis, however, the story is different: growth has been the second highest in the nation (at 2.8% compared to the national average of 2.2%).
82
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Chapter 6: TASMANIANS’ HEALTH Chart 6.5: Growth in total health expenditure, 2007-08 to 2017-18 5.0 4.5
Chart 6.6: Growth in total health expenditure per capita, 2007-08 to 2017-18 4.0
%
3.5
National
4.0
3.0
3.5 3.0
2.5
2.5
2.0
2.0
1.0
1.0
0.5
0.5
NSW
Vic
Qld
WA
SA
Tas
ACT
Note: Constant prices; average annual growth. Source: AIHW, Health expenditure Australia 2017-18, supplementary tables
67
National
1.5
1.5
0.0
%
NT
0.0
NSW Vic
Qld
WA
SA
Tas
NT
Note: Constant prices; average annual growth; ACT data included in national average but not shown separately. Source: AIHW, Health expenditure Australia 2017-18, supplementary tables
T C C I TA S M A N I A R E P O R T 2 0 1 9
83
Chapter 6: TASMANIANS’ HEALTH Our ratio of health expenditure to state taxation revenue is among the lowest in the country, reflecting our reliance on federal funding.
Our ratio of health expenditure to state taxation revenue is among the lowest in the country, reflecting our reliance on federal funding.
Chart 6.7 Ratio of health expenditure to tax revenue, 2017-18 40
30
%
%
28
35
National
26
30
24
25
Tasmania
22 20
20
18
15
16
10
14
5 0
Chart 6.8: Ratio of health expenditure to tax revenue, 2008-2018
12 NSW Vic
Qld
WA
SA
Tas
ACT
NT
Source: AIHW, Health expenditure Australia 2017-18
10
08
09
10
11
12
13
14
15
16
17
18
Source: AIHW, Health expenditure Australia 2017-18
Chart 6.9 shows changes in the source of expenditure over time. The Australian Government contribution is higher
Chart 6.9 shows changes the source of expenditure over time.contributions The Australian Government and faster growing than the in combined Tasmanian and Local Government (compound annual growth of contribution is higher and faster growing than the combined Tasmanian and Local 3.3% compared to 2.3% from 1990-2018). This means Tasmania is particularly reliant on Commonwealth funding and Government contributions therefore exposed to national (compound policy changes.annual growth of 3.3% compared to 2.3% from 19902018). This means Tasmania is particularly reliant on Commonwealth funding and therefore And individuals are increasingly bearing the brunt of health care costs in Tasmania. In 1996-97, less than 12% of total exposed to national policy changes. health spending was funded by individuals, but this has risen to around 20% in recent years.
And individuals are increasingly bearing the brunt of health care costs in Tasmania. In 1996-97, less than 12% of total health spending was funded by individuals, but this has risen to around 20% in recent years.
688 4
T C C I TA S M A N I A R E P O R T 2 0 1 9
Chapter 6: TASMANIANS’ HEALTH Chart 6.9: Total health expenditure by source, Tasmania 2
$ billions
1.8 1.6
Australian Government
State & Local Government
Health insurance funds
Individuals
1.4 1.2 1 0.8 0.6 0.4 0.2 0
97
98
99
00
01
02
03
04
05
06
07
08
09
10
11
12
13
14
15
16
17
18
Note: Constant prices Source: AIHW, Health Expenditure Australia 2017-18
Structure of the health care sector Structure of the health care sector Tasmania has the largest health care and social assistance sector as a proportion of gross state product of all
Tasmania has the largest health care and social assistance sector as a proportion of gross reststate of the product country: of all states and territories, and this gap has increased in recent years. The composition of this industry differs from the rest of the country:
states and territories, and this gap has increased in recent years. The composition of this industry differs from the
• Of the employees in Tasmania’s health care and social assistance industry, 22% are within the residential care
subdivision, Of the employees health care and social assistance 22% areand services higher thanin theTasmania’s national average of 15.3%. This subdivision includes industry, aged care, hospices community mental health hostels. Our ageing population is likely ahigher factor here. within the residential care services subdivision, than
the national average of • Of the employees Tasmania’s healthincludes care and social industry, 24% are within the medicalhealth and other 15.3%. in This subdivision aged assistance care, hospices and community mental health care servicesOur subdivision, below the national of here. 30.6%. This subdivision includes general hostels. ageingwell population is likelyaverage a factor practitioners, specialists, allied health and ambulance. Of the employees in Tasmania’s health care and social assistance industry, 24% are within the medical and other health care services subdivision, well below the national average of 30.6%. This subdivision includes general practitioners, specialists, allied health and ambulance.
T C C I TA S M A N I A R E P O R T 2 0 1 9
69
85
Chapter 6: TASMANIANS’ HEALTH Chart 6.10: Health care and social assistance industry share of total GVA 14
%
12
Tasmania National
10
Chart 6.11: Components of health care and social assistance employment, 2019 35
Tasmania
National
30 25 20
8
15
6
10
4
5
2
0
-
%
90 92 94 96 98 00 02 04 06 08 10 12 14 16 18
Source: ABS 5220.0
Hospital
Medical and Residential Social other health care services assistance care services services
Source: ABS 6291.0
Population health indicators and regional impacts Population health indicators and regional impacts
When it comes to some of theof keythe illnesses affecting Australians, Tasmania generally has higher rates ofhas affliction When it comes to some key illnesses affecting Australians, Tasmania generally
higher rates of affliction than the rest of the country. Some chronic illnesses are more common in the elderly, but the differences for arthritis and asthma remain even after age and prevent the individual from working, meaning there are implications for the level of welfare payments, health structures are taken into account.11 These illnesses often require ongoing treatment and expenditure and productivity in the State. prevent the individual from working, meaning there are implications for the level of welfare payments, health expenditure and productivity in the State.
than the rest of the country. Some chronic illnesses are more common in the elderly, but the differences for arthritis and asthma remain even after age structures are taken into account.11 These illnesses often require ongoing treatment
11
ABS National Health Survey Results, Key Findings, Tasmania.
11 Survey Results, Findings, Tasmania. 8 6ABST National C C I TAHealth SMAN IA RE P O R TKey 20 19
70
12
6
8 6
Chapter 6: TASMANIANS’ HEALTH
Chart 6.12: Proportion of population with arthritis Chart 6.12: Proportion of population with arthritis
20 % 20 % 18 Chart 6.12: Proportion of population with arthritis 18 16 20 16 % 14 18 14 12 16 12 10 14 10 128 8 106 6 4 8 4 2 6 2 0 4 0 NSW Vic Qld WA SA Tas NT ACT SA Tas NT ACT 2 NSW Vic Qld WA
Chart 6.13: Proportion of population with Chart 6.13: Proportion of population with 0 hypertension Chart 6.14: population with NT asthma hypertension NSW Proportion Vic Qld of WA SA Tas ACT 16 14
%
16 % Proportion of population with Chart 6.13: % hypertension 14
14 12 16 12 12 10 14 10 10 8 12 8 8 10 66 6 8 4 4 6 22 2
NT
ACT
%
4 0 0 NSW Vic Qld WA SA Tas NT ACT 2 NSW Vic Qld WA SA Tas NT ACT Source: ABS 4364.0.55.001, 2017-18 Source: ABS 4364.0.55.001, Chart 6.15: Proportion of2017-18 population with mental or 0 behavioural conditions NSW Vic Qld WA SA Tas NT ACT
4
4
2
2 0
th arthritis
th
8
10
NSW
Vic
Qld
WA
SA
Tas
NT
0
ACT
Chart 6.13: Proportion of population with hypertension Chart 6.14: Proportion of population with asthma Chart 6.14: Proportion of population with asthma 14 16 14
25
% % %
15
10
4 4 6 2 2 2 4 0 0 2
5
NSW Vic Qld WA SA Tas NT ACT NSW Vic Qld WA SA Tas NT ACT Source:6.15: ABS 4364.0.55.001, Chart Proportion of2017-18 population with mental or Chart 6.15: Proportion 0 behavioural conditionsof population with mental or behavioural conditions NSW Vic Qld WA SA Tas NT ACT 25 These high rates of illness in the State partially % 25 Chart 6.15: Proportion of population withare mental or %
0
NSW
V
explained b factors. The rates of obesity, daily smokers, excess alcohol con behavioural conditions 20 25 20
%
15 20 Exceeds the 2009 NHMRC Alcohol Lifetime Guidelines of no more than tw at least monthly or weekly. 10 7115 10 1215
5 105 0 5 0 0
NSW NSW
Vic Vic
Qld Qld
WA WA
SA SA
Tas Tas
NT NT
ACT ACT
NSW
Vic
Qld
WA
SA
Tas
NT
ACT
20 These high rates of illness in the State are partially explained by the prevalence of health risk factors. The rates of obesity, daily smokers, excess alcohol consumption12 and inactive
C C two I TA SMAN I A Ron E any P Oday R Teither 2019 the 2009 NHMRC Alcohol Lifetime Guidelines of no moreTthan standard drinks Exceeds the 2009 NHMRC Alcohol Lifetime Guidelines of no more than two standard drinks on any day either at least monthly or weekly. at least monthly or weekly.
71
%
20
%
These high rates of illness in the State are partially explained by the prevalence of health risk Source: ABS 4364.0.55.001, 2017-18 25 % These high rates of illness in the State are partially explained by the prevalence of health risk factors. The rates of obesity, daily smokers, excess alcohol consumption12 and inactive factors. The rates of obesity, daily smokers, excess alcohol consumption12 and inactive
1215 Exceeds 12
V
Chart 6.15: P behavioural
Chart 6.14: Proportion of population with asthma 14 12 12 14 12 10 10 12 10 8 8 108 6 6 6 8
NSW
87
Chapter 6: TASMANIANS’ HEALTH individuals are higher in Tasmania than the rest of the country, although pleasingly this gap has closed between 2011-12 and 2017-18 (with the exception of obesity) (Chart 6.16). Also obesity, daily smokers, excess alcohol consumption12 and inactive individuals are higher in Tasmania than the rest of the pleasingly, there have been substantial reductions in smoking and overuse of alcohol, both country, although pleasingly this gap has closed between 2011-12 and 2017-18 (with the exception of obesity) (Chart in absolute terms and relative to the rest of the country. This will have long term benefits for 6.16). Also pleasingly, there have been substantial reductions in smoking and overuse of alcohol, both in absolute terms the health system and the economy. These high rates of illness in the State are partially explained by the prevalence of health risk factors. The rates of
and relative to the rest of the country. This will have long term benefits for the health system and the economy.
Chart 6.16: Prevalence of health risk factors Overweight/
Current daily
Overweight/ obese BMI Obese BMI 80
60 50
90
20
20
15
15
10
10
5
5
20
0
0
0
70 60 50
40 30
20 10 National
Sedentary/low exercise levels
exercise levels
80
70
0
Sedentary/low
Exceeded lifetime alcohol risk alcohol risk guidelines guidelines 25
25
2012
Exceed lifetime
Current daily smoker smoker
Tas
National
Tas
40 30
10 National
Tas
National
Tas
Note: In 2017-18, the definition of ‘Sedentary/Low exercise level’ changed to ‘Physical activity – did not meet guidelines’. Source: ABS 4364.0.55.001, 2017-18
Health risk factors also vary greatly acrossFor Tasmania. ForHobart example, the Hobart LGAonperforms Health risk factors also vary greatly across Tasmania. example, the LGA performs the best three of the best on three of the four indicators (smoking, physical activity, obesity) hasconsumption one of fourthe indicators (smoking, physical activity, obesity) but has one of the highest levels of lifetime but alcohol
highest levels of lifetime alcohol riskand amongst its residents. risk the amongst its residents. Hobart performs bestconsumption on the overweight inactive indicators, while Hobart nearby Brighton fares performs bestOnly on 6.4% the overweight and inactive indicators, whilecompared nearby Brighton amongst the worst. of Hobart residents do not get enough activity, with 21.9%fares for Brighton and amongst the Coast. worst. 23.9% on the West
Only 6.4% of Hobart residents do not get enough activity, compared with 21.9% for Brighton and 23.9% on the West Coast.
12
Exceeds the 2009 NHMRC Alcohol Lifetime Guidelines of no more than two standard drinks on any day either at least monthly or weekly.
88
T C C I TA S M A N I A R E P O R T 2 0 1 9
72
ents)
tivity idents)
15 10 5
Chapter 6: TASMANIANS’ HEALTH Chart 6.17: Daily smokers (% of residents) Chart 6.17: Daily smokers (% of residents) Chart 30 6.17: Daily smokers (% of residents) 30 30 25 25 25 20 20 20 15 15 15 10 10 10 5 5 5 0 0 0
Chart 6.18: Did not meet physical activity 6.18: for Didadults not consumption meet physical activity lifetime Chart 6.19: Alcohol causing guidelines 18-64 (% ofactivity residents) Chart 6.18: Did not meet physical guidelines for adults 18-64 (% of residents) harm (% of guidelines forresidents) adults 18-64 (% of residents) 25 25 40 25
35 20 20 2030 15 25 15 15 20 10 10 1015
105 5 5 5 0 0 0
Source: Department of Health and Human Services Source: Department of Health andBMI Human Services Tasmania, Report on Tasmanian Population Health Chart 6.20: Overweight/obese (%Services of residents) Source: Department of the Health and Human Tasmania, Report on the Tasmanian Population Health Survey 2016 Tasmania, Report on the Tasmanian Population Health 80 2016 Survey Survey 2016
0
Chart 6.19: 6.18: Alcohol Did not consumption meet physicalcausing activity lifetime Chart 6.19: Alcohol consumption causing lifetime harm (% ofAlcohol residents) guidelines for adults 18-64 (% ofcausing residents) Chart 6.19: consumption lifetime harm (% of residents) harm 40 (% of residents) 25 40 4035 35 20 3530 30 3025 15 25 2520
20 2010 15 15 1510 5 10 10 5 5 50 0 0
Source:6.20: Department of Health and BMI Human Chart Overweight/obese (% Services of residents) Tasmania, Report on the Tasmanian Population Health Chart 6.20: Overweight/obese BMI (% of residents) Chart 80 6.20: Survey 2016Overweight/obese BMI (% of residents)
25 20 15 10 5 0
Chart 6.20 80 70 60 50 40 30 20 10 0
80 8070 All70these factors combined result in worse self-assessed hea 7060 mainlanders. Tasmania has a higher proportion of populatio 60 6050 proportion of population with excellent/very good health (C 50 50 prevalence of both excellent/very good and fair/poor health 40 40 decreased between 2011-12 and 2017-18, meaning that the 4030 in 30 the other category (the ‘good’ category). The rest of the 3020 7320 2010 10 10 0 0 0
All70these factors combined result in worse self-assessed health for Tasmanians relative to All thesefactors factors combined result worse self-assessed healthfor forTasmanians Tasmanians relative mainlanders. Tasmania hasresult a higher proportion of population fair/poor health,relative and a lower All these combined ininworse self-assessed health toto 60 mainlanders. Tasmania haswith higher proportion population fair/poor health, and lower proportion of population excellent/very good health (Chart 6.21 and Chart 6.22). The mainlanders. Tasmania has aahigher proportion ofofpopulation fair/poor health, and aalower 50 proportion of population with excellent/very good health (Chart 6.21 and Chart 6.22). The prevalenceofofpopulation both excellent/very good and good fair/poor health individuals Tasmania proportion with excellent/very health (Chart 6.21 andinChart 6.22). The prevalence of both excellent/very good and fair/poor health individuals in Tasmania 40 decreased between 2011-12 and good 2017-18, there is now a in higher representation prevalence of both excellent/very and meaning fair/poorthat health individuals Tasmania decreased between 2011-12 and 2017-18, meaning that there is now a higher representation in 30 the other category (the ‘good’ category). The restthat of saw a 1.2 decreased between 2011-12 and 2017-18, meaning there isSnow aN higher representation T Cthe C I country TA MA IA R Epercentage P ORT 2019 89 in the other category (the ‘good’ category). The rest of the country saw a 1.2 percentage in73the other category (the ‘good’ category). The rest of the country saw a 1.2 percentage 20 73 73
Chapter 6: TASMANIANS’ HEALTH All these factors combined result in worse self-assessed health for Tasmanians relative to mainlanders. Tasmania has a higher proportion of population fair/poor health, and a lower proportion of population with excellent/very good health (Chart 6.21 and Chart 6.22). The prevalence of both excellent/very good and fair/poor health individuals in Tasmania decreased between 2011-12 2017-18, meaning there is now higher representation the other category (the point increase in theand population rating that their health asaexcellent/very goodin and a slight
increase of those rating their health as fair/poor.
‘good’ category). The rest of the country saw a 1.2 percentage point increase in the population rating their health as excellent/very good and a slight increase of those rating their health as fair/poor.
Chart 6.21: Self-assessed health status, 2011-12 60
50
60
% of population 54.7
56.0
50 Tasmania
40
30 27.9
National
% of population 57.2 52.5
Tasmania
40
30
29.9
20
31.2
National
28.6
20 17.4
10 0
Chart 6.22: Self-assessed health status, 2017-18
Excellent/Very good
Good
14.1
Fair/Poor
Source: ABS 4364.0.55.001
10 0
Excellent/Very good Good Source: ABS 4364.0.55.001
16.3
14.2
Fair/Poor
Our high rates of illness and risk factors, and deferral of treatment due to cost are likely factors in Tasmania’s relatively
Our high rates of illness and risk factors, and deferral of treatment due to cost are likely factors in Tasmania’s relatively low life expectancy. In 2015-17, the life expectancy at birth in average of 82.5. Only the Northern Territory has a lower life expectancy. Tasmania was 80.8 years, 1.7 years lower than the national average of 82.5. Only the TheNorthern rate of emergency presentations in Tasmania is similar to the national average; 312.3 presentations per 1,000 Territory has a lower life expectancy.
low life expectancy. In 2015-17, the life expectancy at birth in Tasmania was 80.8 years, 1.7 years lower than the national
population in 2017-18 compared with 321.3.
The rate of emergency presentations in Tasmania is similar to the national average; 312.3 presentations per 1,000 population in 2017-18 compared with 321.3.
90
T C C I TA S M A N I A R E P O R T 2 0 1 9
Chapter 6: TASMANIANS’ HEALTH Chart 6.23: Life expectancy at birth
Chart 6.24: Emergency department presentations per 1,000 population
84
700
years
National
83
600
82
500
81 80
National
400
79
300
78
200
77 76
100
75 74
per 1000
0
NSW
Vic
QLD
SA
WA
Tas
Source: ABS 3302.055.001, 2016-17
NT
ACT
NSW
Vic
Qld
WA
SA
Tas
ACT
NT
Source: AIHW, Health expenditure Australia 2017-18, Supplementary tables
In 2017-18, waiting times in Tasmanian emergency departments (ED) were higher than national averages. The median
In 2017-18, waiting times Tasmanian emergency departments were higherwaiting than time national waiting time in Tasmania was 27in minutes, compared with 19 nationally. The 90th percentile was 111 averages. The median time minutes, compared with 99 waiting nationally.
in Tasmania was 27 minutes, compared with 19 nationally. The 90 percentile waiting time was 111 minutes, compared with 99 nationally. th
A study by the Australian College of Emergency Medicine found that 2% of all presentations to the Royal
Hobart Hospital EDAustralian experiencedCollege greater than 24 hours waiting times, far higherthat than 2% the national average of 0.6%. A study by the of Emergency Medicine found of all presentations This has increased since 2015, and number of Tasmanians waitingthan more24 than 24 hours was 300% thehigher national to the Royal Hobart Hospital ED experienced greater hours waiting times,offar
than the national average of 0.6%.13 This has increased since 2015, and number of Tasmanians waiting more than 24 hours was 300% of the national level in late 2019.
level in late 2019.
13
Australasian College for Emergency Medicine (2019), Overcrowding and Wait Times in Tasmanian Emergency Departments.
Australasian College for Emergency Medicine (2019), Overcrowding and Wait Times in Tasmanian Emergency T C C I TA S M A N I A R E P O R T 2 0 1 9 Departments. 13
75
91
Chapter 6: TASMANIANS’ HEALTH Chart 6.25: Emergency presentation waiting time (minutes), 2017-18 50
180 Median (LHS)
45 40 35
90th percentile (RHS)
160 140
90th percentile - National (RHS) Median - National (LHS)
120
30
100
25
80
20
60
15 10
40
5
20
0
NSW
Vic
Qld
WA
SA
Tas
ACT
NT
0
Source: AIHW, Health expenditure Australia 2017-18, Supplementary tables Unsurprisingly, the data is clear that areas of lower relative socioeconomic disadvantage assess themselves as healthier than those of higher relative disadvantage and vice versa. A report by the Tasmanian Department of Health and
Unsurprisingly, the data is clear that areas of lower relative socioeconomic disadvantage assess themselves as healthier than those of higher relative disadvantage and vice versa. A excellent/very good, compared with 48.1% of individuals in the least disadvantaged quintile. report by the Tasmanian Department of Health and Human Services found that only 26.8% Conversely, 27.2% of in individuals in the most disadvantaged quintile assessed theirhealth health as of individuals the most disadvantaged SEIFASEIFA quintile assessed their asfair/poor, compared with 15.8% of individuals in the least disadvantaged quintile. excellent/very good, compared with 48.1% of individuals in the least disadvantaged quintile.
Human Services found that only 26.8% of individuals in the most disadvantaged SEIFA quintile assessed their health as
Conversely, 27.2% of individuals in the most disadvantaged SEIFA quintile assessed their health as fair/poor, compared with 15.8% of individuals in the least disadvantaged quintile.
92
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76
Chapter 6: TASMANIANS’ HEALTH Chart 6.26: Self-assessed health by SEIFA Quintile, Tasmania 50
%
Excellent/Very Good
45
Fair/Poor
40
35 30
25 20
15 10 5 0
1st (most disadvantaged)
2nd
3rd
4th
5th (least disadvantaged)
Source: Department of Health and Human Services Tasmania (2016), Report on the Tasmanian Population Health Survey 2016, Hobart
way in which Tasmanian’s relatively low income directly contributes to poorer healthin the OneOne way in which Tasmania’s relatively low income directly contributes to poorer health outcomes is reflected
inisthe fact thetocost of health care is other moreAustralians. of a barrier factoutcomes that the costisofreflected health care more of athat barrier Tasmanians than it is to In ato 2017-18 patient
Tasmanians than it is to 8.7% otherofAustralians. In a 2017-18 patient survey administered by thehealth survey administered by the ABS, Tasmanians indicated that cost was a factor in delaying or not seeking of Tasmanians indicated cost care,ABS, more8.7% than double the national average ofthat 4.0%.
was a factor in delaying or not seeking health care, more than double the national average of 4.0%. In addition, 8.2% of Tasmanians indicated that they delayed or did not get prescribed medication due to cost in 2017-18, compared with 7.0% nationally. The lower disposable of Tasmanians to the of the country is likely In addition, 8.2% of Tasmanians indicated income that they delayed orrelative did not getrest prescribed
medication due to cost in 2017-18, compared with 7.0% nationally. The lower disposable income of Tasmanians relative to the rest of the country is likely the key factor in this.
the key factor in this.
77
T C C I TA S M A N I A R E P O R T 2 0 1 9
93
Chapter 6: TASMANIANS’ HEALTH Chart 6.27: Respondents who delayed or did not go Chart 6.28: Respondents who delayed getting or to see a general practitioner because of the cost, did not get prescribed medication because of the Chart 6.27: Respondents who delayed or did not go Chart 6.28: Respondents who delayed getting or 2017-18 cost, 2017-18 to see a general practitioner because of the cost, did not get prescribed medication because of the 9 2017-18 2017-18 cost, 10 % % 9 10 9 % % 9 8
8
8 7
8
7 6 6 5
7
National
4 3
6
3 2
6
2 1 1 0 0
National
7
National
5 4
National
NSW
Vic
Qld
WA
SA
Tas
ACT
NT
5 5
NSW Vic
NSW Vic Qld WA SA Tas ACT NT NSW Source: ABS (unpublished), Patient Experience Survey, various year, 4839.0Vic
Qld Qld
Source: (unpublished), Patient Experience various year, 4839.0 This ABS proportion of people deferringSurvey, GP appointments worsened
WA WA
SA SA
Tas ACT Tas ACT
NT NT
between 2015-16 and 2017-
This18 proportion of people deferring GP appointments worsened between 2015-16 and 2017-18 in Tasmania, while the in Tasmania, while the national figure has improved slightly.
This proportion of people deferring GP appointments worsened between 2015-16 and 201718 in Tasmania, while the national figure has improved slightly.
national figure has improved slightly.
Chart 6.29: Proportion of respondents who delayed or did not go to see a general practitioner because of the cost, Tasmania and Australia. Chart 6.29: Proportion of respondents who delayed or did not go to see a general practitioner because 9 of the cost, Tasmania and Australia. % 9 8 7 6 5 4
8
%
7
Tasmania Tasmania National National
6 5 4
3 2012-13
2013-14 2014-15 2015-16 3 2012-13 2013-14 2014-15 2015-16 Source: ABS (unpublished), Patient Experience Survey, various years, 4839.0
Source: ABS (unpublished), Patient Experience Survey, various years, 4839.0 9 4 78T C C I TA S M A N I A R E P O R T 2 0 1 9
78
2016-17 2016-17
2017-18 2017-18
Chapter 6: TASMANIANS’ HEALTH Slightly fewer Tasmanians have private health insurance than other Australians. Data from APRA shows that in the March 2019 quarter, 42.7% of Tasmanians held a private health insurance policy, compared to 44.6% of mainlanders.
Risks and opportunities for the economy Several factors contribute to significantly worse health outcomes in Tasmania, including lower income, and lower levels of education. This means that compared to the mainland people do not manage their health well and do not always access health services. In addition, a larger proportion of people living in rural areas and employed in agriculture, forestry and fishing than most states leads to higher rates of accidents. In addition to the impact on individual lives, poor health is costly to the economy. It leads to worse employment outcomes, lower income and higher unemployment – and in that sense it is a brake on economic productivity and growth. However, there are also opportunities. The health industry is a significant employer, and there are likely to be skills gaps – this is an opportunity for training providers and jobseekers. There are market opportunities such as the new disability services market (NDIS), and potential for investment in innovation and efficiency in health services delivery. Getting the labour force right and maximising opportunities has potential to increase productivity of the industry and economic growth for the State.
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95
Chapter 7 TASMANIA’S EDUCATION SYSTEM
Chapter 7: Chapter 7: EDUCATION Tasmania’s education system TASMANIA’S SYSTEM
Tasmania has historically suffered from low educational attainment, typified by the number of students progressing to year 12 being substantially lower than the rest of the nation.
Tasmania historically from low attainment, typified by having the number students progressing Currenthas policies aimsuffered to reverse thiseducational – and trends show these are an of impact – and by a to
number of measures Tasmania now has a much stronger education system.
Year 12 being substantially lower than the rest of the nation.
Current policies aim to reverse this – and trends show these are having an impact – and by a number of measures
It is critical that these trends continue, and that the State Government and education providers are increasingly responsive to the needs of the economy. Post school qualifications It is critical trends continue, and that the State andsubjects educationneeds providers increasingly need tothat be these accessible to all and the pipeline ofGovernment courses and to are reflect our responsive to the needs of the economy. Post school qualifications need to be accessible to all and the pipeline of economy’s evolving demand for skills. Tasmania now has a much stronger education system.
courses and subjects needs to reflect our economy’s evolving demand for skills.
Importance of educational attainment to social and economic outcomes
Educational attainment is closely attainment associated withon better labour market outcomes such as Importance of educational social and economic outcomes
employment and earnings. A failure to achieve year 12 translates to unemployment rates around three times that of people with graduate degrees. It is also closely correlated with A failure to achieve Year 12 translates to unemployment rates around three times that of people with graduate degrees. better health and social outcomes. Educational attainment is closely associated with better labour market outcomes such as employment and earnings. It is also closely correlated with better health and social outcomes.
Chart 7.1: Unemployment rate by level of educational attainment 10%
50
9%
45
8% 7% 6% 5%
Chart 7.2: Median wage by level of educational attainment
Average
4% 3% 2% 1% 0%
Source: ABS 6227.0, May 2019
$ per hour
40 35
Average
30 25 20
Source: ABS 6333.0, August 2018
Educational outcomes and attainment in Tasmania Educational outcomes and attainment in Tasmania
Relative to the rest of Australia, Tasmania has low rates of educational attainment and achievement.
Relative to the rest of Australia, Tasmania has low rates of educational attainment and achievement.
Tasmania has a lower proportion of the population with a Bachelor Degree or higher than the national average by (4.3 percentage points), although it does rank higher than 80 98
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Chapter 7: TASMANIA’S EDUCATION SYSTEM Tasmania has a lower of the population with the a Bachelor Degree or closing higher than national average by Queensland andproportion South Australia. However, gap has been in the recent years. Recent
interstate and international immigration into Tasmania has helped almost double the proportion of population with a Bachelor Degree since 2002, and the gap between Tasmania the proportion of population with a Bachelor Degree since 2002, and the gap between Tasmania and the rest of the and the rest of the country has narrowed in the past few years in particular. (4.3 percentage points), although it does rank higher than Queensland and South Australia. However, the gap has
been closing in recent years. Recent interstate and international immigration into Tasmania has helped almost double country has narrowed in the past few years in particular.
Chart 7.3: Proportion of population with Bachelor Degree or above 45
Chart 7.4: Proportion of population with Bachelor Degree or above 30
%
40
%
25
35
20 National average
30
15
25
10
20
Tasmania
10
Australia
5
15
NSW Vic
Source: ABS 6227.0
Qld
SA
WA
Tas
NT
ACT
0
02
04
06
08
10
12
14
16
18
Source: ABS 6227.0
Despite the above, Tasmania has a higher proportion of people aged 15-74 with no schooling past Year 10 – higher than any other state and 7.2 percentage points above the national average. On this indicator, there has also been
Despite the above, Tasmania has a higher proportion of people aged 15-74 with no schooling past Year 10 – higher than any other state and 7.2 percentage points above the national average. On this indicator, there has also been improvement in recent years but the gap is not closing as fast as it needs to.
improvement in recent years but gap is not closing as fast as it needs to.
T C C I TA S M A N I A R E P O R T 2 0 1 9
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99
Chapter 7: TASMANIA’S EDUCATION SYSTEM Chart 7.5: Proportion of population with no schooling past Year 10 30
Chart 7.6: Proportion of population with no schooling past Year 10 50
%
45
25 20
40 National average
35 30 25
15
20
10
15
Tasmania
10
5 0
%
Australia
5 NSW Vic
Qld
SA
WA
Tas
NT
ACT
Source: ABS 6227.0
0
02
04
06
08
10
12
14
16
18
Source: ABS 6227.0
Tasmania’s retention rate from Year 10 to 12 remains the lowest in the country, other than in the Northern Territory. From 2020, the new Tasmanian Education Act will require young 12, achieve a Certificate III, or turn 18. This is being supported by the roll-out of extension high schools across the State people to stay in education and training until they finish Year 12, achieve a Certificate III, or – providing young people and their families an alternative to separate colleges for Year 11 and 12. It aims to make Year 11 turn 18. This is being supported by the roll-out of extension high schools across the State – and 12 more attractive to students and their families by reducing the amount of social dislocation and travel required to providing young people and their families an alternative to separate Colleges for Year 11 and continue their study. 12. It aims to make Year 11 and 12 more attractive to students and their families by reducing the amount of social dislocation and travel required to continue their study.
Tasmania’s retention rate from Year 10 to 12 remains the lowest in the country, other than in the Northern Territory. From 2020, the new Tasmanian Education Act will require young people to stay in education and training until they finish Year
100
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Chapter 7: TASMANIA’S EDUCATION SYSTEM Chart 7.8: Retention rate, Year 10-12, 2008-2018
Chart 7.7: Retention rates, Year 10-12, 2018 95
85
%
90
80
National average
85
75
80
70
75 70
65
65
60
60 55 50
55 NSW Vic
Qld
SA
WA
Tas
NT
Note: X refers to NT non-indigenous population. Source: ABS 4221.0, Schools, Australia 2018
ACT
50
Tasmania Australia
08 09 10 11 12 13 14 15 16 17 18
Source: ABS 4221.0, Schools, Australia 2018
Retention is improving, and the Year 12 completion rate is also the highest it has ever been. Nevertheless it remains well
Retention is improving, and the Year 12 completion rate is also the highest it has ever been. Nevertheless it remains well below the national average. Growth in the Year 12 completion published by the Office of Tasmanian Assessment, Standards and Certification (TASC)14 putting the completion rate rate appears to have slowed, with more recent figures published by the Office of Tasmanian slightly below the nationally consistent figure (that is, the figure which is published by the Productivity Commission Assessment, Standards and Certification (TASC)14 putting the completion rate slightly below in the Report on Government Services). This gap may be something which requires further attention – it implies that the nationally consistent figure (that is, the figure which is published by the Productivity students are staying at school but may not be successfully completing Year 12. Commission in the Report on Government Services). This gap may be something which requires further attention – it implies that students are staying at school but may not be successfully completing Year 12. below the national average. Growth in the Year 12 completion rate appears to have slowed, with more recent figures
14
ASC is responsible for the development of standards, accreditation of courses, and the assessment and certification of student achievement in T 14 secondary schooling across all educational sectors in Tasmania. senior TASC is responsible for the development of standards, accreditation of courses, and the assessment
and certification of student achievement in senior secondary schooling across all educational sectors in Tasmania.
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Chapter 7: Chart 7.9: YearEDUCATION 12 completion ratesSYSTEM in 2017 TASMANIA’S 95
Chart 7.10: Year 12 completion rates 85
%
National average Chart 85 7.9: Year 12 completion rates in 2017 95
Chart 7.10: Year 12 completion rates
%
75
National average
85
65 75 55
65 45 55 35
NSW Vic Qld SA 45 Source: RoGS Table 4A.58 35
NSW Vic
Qld
SA
WA
WA
Chart RoGS 7.11 Table shows the Source: 4A.58
Tas
Tas
NT
NT
%
80
ACT
ACT
75 85 70 % 80 65 75 60 70 55 65 50 60 45 55 40 50 35 45 10
Australia
Tasmania TASC
Australia 16 17 18 Tasmania Source: RoGS Table 4A.58, and TASC (Office of 40 TASC Tasmanian Assessment, Standards & Certification) 35 10 11 12 13 14 15 16 17 18 11
12
13
14
15
gap between the Tasmanian and national attainment Source: RoGS Table 4A.58, and TASCrates (Officefor of Year 12 Assessment, Standards & Certification) is most noticeable for students with low levelsTasmanian of socio-economic status. This highlights the Chart 7.11 shows gap between the Tasmanian and national attainment rates for Year 12 is students. most noticeable for need forthe a renewed focus on improving aspiration and access for these The gaps students low levels of high socio-economic status. This highlights the need for a renewed focus on improvingbut aspiration forwith medium and socio-economic students are below the national average, are Chart 7.11 shows the gap between the Tasmanian andalso national attainment rates for Year 12 and access for these students. The gaps for medium and high socio-economic students are also below the national is less mostpronounced. noticeable for students with low levels of socio-economic status. This highlights the average, but are less pronounced.
need for a renewed focus on improving aspiration and access for these students. The gaps 7.11 and Yearhigh 12 attainment rates, by students socio-economic status for Chart medium socio-economic are also below the national average, but are less100 pronounced. 100 100 Medium SES
90
90
NT
Tas
SA
ACT
T C C I TA S M A N I A R E P O R T 2 0 1 9 Source: RoGs, Table 4A.58
WA
20
30
Qld
NT
ACT
Tas
SA
WA
Vic
Qld
102
NSW
20
Vic
30
Source: RoGs, Table 4A.58
NSW
20
NT
NT
Tas
ACT
SA
WA
Qld
Vic
NSW
30
NT
40 20
Tas
40 20
ACT
40 20
ACT
50 30
SA
50 30
Tas
50 30
WA
60 40
NSW
60 40
NT
60 40
Tas
70 50
ACT
70 50
SA
70 50
WA
80 60
Vic
80 60
National averages
80 60
Qld
90 70
NSW
90 70
High SES
SA
90 70
100 80
Medium SES
WA
10080
Vic
averages
Low SES
Qld
10080
Qld
Chart 7.11 Year 12 attainment rates, by socio-economic status National
NSW
90
High SES
Vic
Low SES
Chapter 7: TASMANIA’S EDUCATION SYSTEM
Tasmania tends to achieve lower outcomes than other states in standardised testing in schools.15 As an example of this, Chart 7.12 shows the proportion of Year 3 students at or above the minimum standard on the NAPLAN domains of reading, writing and numeracy, Tasmania tends to achieve lower outcomes than other states in standardised testing in schools.15 As an example of compared to the national average. Looking at this indicator, outcomes in Tasmania for this, Chart 7.12 shows the proportion of Year 3 students at or above the minimum standard on the NAPLAN domains of reading and arecompared and remain than the national although thisinyear’s reading, writing andwriting numeracy, to thelower national average. Looking ataverage, this indicator, outcomes Tasmania for results narrow the gap by 1.1 percentage points on reading, and one percentage point onby 1.1 reading and writing are and remain lower than the national average, although this year’s results narrow the gap writing.points Numeracy results for percentage this age group have typically been close averages, percentage on reading, and one point on writing. Numeracy results forto thisnational age group have typically but have recently dropped below. been close to national averages, but have recently dropped below. Chart 7.12: Proportion of Year 3 students at or above the national minimum standard on select NAPLAN domains 98 97 96 95 94 93
Tas - Reading
92
Tas - Writing
91
Tas - Numeracy
90
National
89
National National 2013
2014
2015
2016
2017
2018
2019
Note: Results between jurisdictions are not strictly comparable, due to differences in jurisdictions. This table represents a subset of NAPLAN results only, and 2019 results are considered preliminary. Source: Australian Curriculum, Assessment and Reporting Authority, NAPLAN 2019 summary results
15
15
Australian Council for Educational Research (2017) PISA 2015: Reporting Australia’s Results.
Australian Council for Educational Research (2017) PISA 2015: Reporting Australia’s Results.
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Chapter 7: TASMANIA’S EDUCATION SYSTEM Despite some relatively lower results, there are some indications that show the Tasmania education system is performing relatively well in terms of achieving and improving results, when socio-economic factors are controlled for.16, 17
Supplying skills for the economy Changes to the State economy, and fluctuations in macroeconomic conditions, mean the skills needed for a productive economy are always changing. The ability of industries to understand trends and future needs, and work with training providers to ensure the supply of skills is a determinant of growth. Similarly, the capacity to realise potential in the existing labour force and workforce depends on increasing access to training. The past year in Tasmania has seen skills shortages bite – including in hospitality, nursing, and paramedics. Around 17,300 new jobs have been added over the past decade in Tasmania, with the many of these in health care and social assistance. Nationally, wages in the health care sector have been rising, reflecting wider shortages. The tourism industry has also been hampered by a lack of a suitably skilled local workforce. Deloitte Access Economics forecasts predict that more than 5,000 additional workers will be required by 2030 across Tasmania to meet tourism demand. The construction sector appears to be the next industry for which skills shortages are only likely to get worse. The Tasmanian Building and Construction Industry Training Board noted in 2018 there was a chronic and endemic skill shortages in the construction trades. And with a large pipeline of work - and the recent Federal Government decision to fast track $173 million of predominately roads projects this situation is not going to get any better. TasTAFE has been actively trying to recruit construction industry teachers, including by offering scholarships to assist people from industry attain their teaching qualification. But this will continue to be difficult while industry shortages exist and wages are strong. Attracting skilled interstate and international workers to Tasmania will need to be a big component of our construction industry strategy. Better long term partnerships between industry and training providers are also needed. Success on this front is demonstrated by the aquaculture industry which partners with training providers, including the University of Tasmania and TasTAFE. Successful partnering is probably easier to achieve in an industry with three main players – Huon, Tassal and Petuna – than other more fragmented sectors. But Tasmanian industry needs to become better at working together – not only when it comes to education and training, but other areas such as marketing, technology development and resource sharing. This will help provide the scale we need to compete with interstate and international competitors.
16
Deloitte Access Economics (2017) Drivers of School Quality.
17
Grattan Institute (October 2018) Measuring student progress: A state-by-state report card.
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T C C I TA S M A N I A R E P O R T 2 0 1 9
Chapter 7: TASMANIA’S EDUCATION SYSTEM We also know that technology is shaping the nature of jobs – skills that can’t be automated are likely to be more in demand across all industries. These include cognitive and interpersonal and emotional skills over manual skills, and non-routine over routine skills. In Tasmania – by 2030 – the five skills that will be in greatest shortage will be: customer service; organisation and time management; health; digital literacy; and, leadership18. The ability to access training for these skills will be critical for workers, business and the economy.
We’re a proud supporter of the TCCI and Tasmanian businesses. The trustee of Tasplan Super (ABN 14 602 032 302) is Tasplan Pty Ltd (ABN 13 009 563 062). AFSL 235391. © 2019 Tasplan Pty Ltd. All rights reserved.
18
Deloitte Access Economics (2019) The Future of Work.
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105
Chapter 8 TASMANIA’S PUBLIC SECTOR
Chapter 8: Chapter 8: PUBLIC Tasmania’s public sector TASMANIA’S SECTOR
Government consumption, employment, and investment in Tasmania is large by most measures when compared to other states and territories. Tasmania relies more heavily on GST distributions than most other meaning that the State’s fiscal situation is compared less in itsto Government consumption, employment, andstates, investment in Tasmania is large by most measures when own hands and more at the mercy of the Australian Government and spending patterns inthat other states and territories. Tasmania relies more heavily on GST distributions than most other states, meaning theother State’sstates. fiscal situation is less in its own hands and more at the mercy of the Australian Government and spending patterns in other states.
Size of the public sector
In 2018-19, combined expenditure on investment and consumption attributable to the State, local and federal government was 31% of GSP. On the mainland, this figure was 24%.
Size of the public sector
In 2018-19, combined expenditure on investment and consumption attributable to the State, Local and Federal
The share of the economic activity attributable to the government has increased by around three percentage points in Tasmania since 1990, while on the mainland the share has not The share of the economic activity attributable to the government has increased by around three percentage points changed significantly. Nationally and in Tasmania the public sector has been growing; but in Tasmania since 1990, while on the mainland the share has not changed significantly. Nationally and in Tasmania because Tasmania’s private sector has not grown as fast as the mainland, the relative share the public sector has been growing; but because Tasmania’s private sector has not grown as fast as the mainland, the of the public sector is increasing. Government was 31% of GSP. On the mainland, this figure was 24%.
relative share of the public sector is increasing.
Chart 8.1: Government consumption and investment as a share of GSP 33
Chart 8.2: Total public sector employment as a share of total employment, 2018-19 50
% of GSP
31
45
40
29
35
27
30
25
25
23
20
21
National average
15
19 17 15
%
90
Mainland
10
Tasmania
5
94
98
02
06
10
14
Source: ABS 5220.0
18
0
NSW Vic Qld
SA
WA Tas
Source: ABS 6248.0.55.002, ABS 6202.0
NT ACT
Employment in the public sector as a share of total employment is the largest of any state; a little over one-fifth of total
Employment in the public sector as a share of total employment is the largest of any state; a little over one-fifth of total employment in 2017-18. This is around five percentage points much higher wages bill than other states and territories as a percentage of operating expenditure. higher than the national average. This translates into a much higher wages bill than other states and territories as a percentage of operating expenditure.
employment in 2017-18. This is around five percentage points higher than the national average. This translates into a
88 108
T C C I TA S M A N I A R E P O R T 2 0 1 9
Chapter 8: TASMANIA’S PUBLIC SECTOR Chart 8.3: Public sector wages as a % of total state/territory government operating expenditure, 2019-20 48
%
46 44 42 40 38
36 34 32 30
NSW Vic
Qld
SA
WA
Tas
NT
ACT
Source: State Budget Papers, 2019-20 A large portion of the activity in the portion economyof attributable to the sector is consumption expenditure, that is, the A large the activity in public the economy attributable to the public sector
is
purchase of goods and services (primarily wages). Indeed,that this accounts for approximately 78%and of total government consumption expenditure, is, the purchase of goods services (primarily
wages). to GSP. coming from the Federal Government. Around two-thirds of this expenditure is by State and local government with the remainde coming from the Federal government. contribution to GSP. Around two-thirds this expenditure is by State and 78% Local of Government with the remainder Indeed, thisofaccounts for approximately total government contribution
89
T C C I TA S M A N I A R E P O R T 2 0 1 9
109
Chapter 8: TASMANIA’S PUBLIC SECTOR Chart 8.4: Spending per capita, general government – state and local 35 30
% of GSP
Investment
Consumption
Chart 8.5: Government consumption as a share of GSP, 2018-19 60 50
25
40
20
30
15 10
20
5
10
0
% government consumption share of GSP
90 93 96 99 02 05 08 11 14 17
Source: ABS 5220.0
0
National average
NSW Vic
Qld
SA
WA
Tas
NT
ACT
Source: ABS 5220.0
Tasmania’s government consumption share of GSP is the third largest in Australia, behind the two territories. This high spending by government on consumption expenditure matched by a slightly below average Tasmania’s government consumption sharehas oftypically GSP is been the third largest in Australia, behindspending per the person onterritories. infrastructure. Government investment 2018-19 was $350 per capita, or 12%, below the national two This high spending by in government on consumption expenditure has average. At nobeen time inmatched the last 30 has it been above the national average. typically byyears a slightly below average spending per
person on infrastructure. Government investment in 2018-19 was $350 per capita, or 12%, below the national average. At no time in the last 30 years has it been above the national average.
110
90
T C C I TA S M A N I A R E P O R T 2 0 1 9
Chapter 8: TASMANIA’S PUBLIC SECTOR 8
% ofInvestment GSP Chart 8.6: share of GSP by source, Tasmania 7 8
National % of GSP State and local
6 7
National
5 6
State and local
Chart 8.7: State and local investment
Thousands Thousands
Chart 8.6: Investment share of GSP by source, Tasmania
4 5
1.8 8.7: State and local investment Chart $billions 1.6 1.8 1.4 1.6 1.2
1.4 1 1.2 0.8
$billions General government GBEs
General government GBEs
1 0.6
3 4
0.8 0.4
2 3
0.6 0.2
1 2
0 1 90
0.4 0
94
98
Source: ABS 5220.0 0
90
94
98
02
06
10
14
18
0.2 91 94 97 00 03 06 09 12 15 18
Source: ABS 5220.0 0
02
06
10
14
18
Source: ABS 5220.0
91 94 97 00 03 06 09 12 15 18
Source: ABS 5220.0
Chart 8.8: General government gross fixed capital formation per capita, Tasmania and Australia 3000 per Chart 8.8:$General government gross fixed capital capita formation per capita, Tasmania and Australia 2500 3000
$ per capita
2000 2500 1500 2000 1000 1500 Tasmania
500 1000 0 500
Australia Tasmania Australia 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18
Source: ABS 5220.0, 3101.0 0 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 Source: ABS 5220.0, 3101.0
91 91
T C C I TA S M A N I A R E P O R T 2 0 1 9
111
Chapter 8: TASMANIA’S PUBLIC SECTOR Sources of revenue The majority of the Tasmanian government’s budget is funded from Commonwealth grants. Sources of revenue
In 2018-19, 60% of these grants were untied funding in the form of GST. In 2018-19, GST accounted for 39% of total Tasmanian government revenue. Tasmania received 1.75 times grants were untied funding in the form of GST. In 2018-19, GST accounted for 39% of total Tasmanian Government whatTasmania it wouldreceived otherwise receive ifitGST was distributed a per capita basis, equated revenue. 1.75 times what would otherwise receiveon if GST was distributed onwhich a per capita basis, to an additional $1.1 billion of revenue. which equated to an additional $1.1 billion of revenue.
The majority of the Tasmanian Government’s budget is funded from Commonwealth grants. In 2018-19, 60% of these
Chart 8.9: Tasmanian government revenue by source 7,000
Forward estimates
$m
6,000
Dividend, tax and rate equivalnet income
5,000
Interest income
4,000
Fines and regulatory fees Sales of goods and services
3,000
Taxation
2,000
Commonwealth grants
1,000 0
12
13
14
15
16
17
18
19
20
Source: Tasmanian Budget, Budget Paper Number 1 – The Budget.
112
92
Other revenue
T C C I TA S M A N I A R E P O R T 2 0 1 9
21
22
Chapter 8: TASMANIA’S PUBLIC SECTOR Chart 8.10: GST revenue shares per head of population, 2019-20 8 7
$000 per head, 2019-20
Chart 8.11: GST revenue shares as a proportion of total ‘operating revenue’, 2019-20 45
$11,405
40 35
6
30
5 4
3
%
25
Notional equal per capita distribution
Average of all States and Territories
20 15
2
10
1
5
0
0
NSW Vic
Qld
SA
WA
Tas
NT
ACT
NSW Vic
Qld
SA
WA
Tas
NT
ACT
Source: Australian Government, Budget Paper No. 3, 2019-20; State and Territory Government 2019-20 Budget Papers Conversely, Tasmania’s share of revenue derived from local taxation is the lowest of all states and territories with the
exception of the Northern Territory. Rates taxes such as payroll tax,local land tax and stamp duty are typically Conversely, Tasmania’s share ofofrevenue derived from taxation is the lowest of allrelatively states low and and/or have high thresholds or exemptions. These thresholds and exemptions encourage and territories with the exception of the Northern Territory. Rates can of taxes suchindividuals as payroll tax, businesses to and movestamp to the state, mean that the state is less able to generate in times land tax dutybut arethey typically relatively low and/or have highrevenue thresholds orwhen the economy is strong, These such asthresholds now. exemptions.
and exemptions can encourage individuals and businesses to move to the State, but they mean that the State is less able to generate revenue in times when the economy is strong, such as now.
93
T C C I TA S M A N I A R E P O R T 2 0 1 9
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Chapter 8: TASMANIA’S PUBLIC SECTOR Chart 8.12: Estimated taxation share of general government revenue, 2019-20 45 40
Taxation share of revenue
35 30 25
20 15 10 5
0
NSW Vic
Qld
SA
WA
Tas
NT
ACT
Source: State Budget Papers 2019-20
On the spending side the Government’s biggest ticket item is health expenditure, which has been growing at 5.8% over the past decade. The Government notes that between 2008-09 the past decade. The Government notes that between 2008-09 and 2018-19 (estimated) health expenditure as a and 2018-19 (estimated) health expenditure as a share of total general government share of total general government expenditure grew from 25.3% to 30.8% and is projected to grow to 42.1% by 2033expenditure grew from 25.3% to 30.8% and is projected to grow to 42.1% by 2033-34 if 34 if historical trends continue. Unsurprisingly the Government has identified it as the “single most significant driver of historical trends continue. Unsurprisingly, the Government has identified it as the “single the projected future fiscal challenges for the State.”19 most significant driver of the projected future fiscal challenges for the State”.19 On the spending side the Government’s biggest ticket item is health expenditure, which has been growing at 5.8% over
19
Tasmanian Government Fiscal Sustainability Report 2019, p. 7.
114
19 S M A N I A R E P O R T 2 0 1 9 T C C I TA Tasmanian Government Fiscal Sustainability Report 2019, p. 7.
94
Chapter 8: TASMANIA’S PUBLIC SECTOR And it is clear that this increase in health expenditure has not been matched by Andimprovements it is clear that thisin increase health expenditure has performance not been matched by improvements in health outcomes. healthinoutcomes. A recent audit by the Auditor-General noted A recent by thesystem Auditor-General noted that systemdemand was ineffective that performance Tasmania’saudit hospital was ineffective inTasmania’s meeting hospital the growing for in meeting the emergency growing demand for emergency department care, inpatient beds and associated ED access and patient department (ED) care, inpatient beds and associated ED access and patient flow. flow. It remains to be seen whether community needs can be met if budget projections of close to zero increases in It remains to be seen whether community needs can be met if budget projections of close to spending to be achieved. zero are increases in spending are to be achieved. Chart 8.13: General government expenditure by transaction purpose
Chart 8.14: Change in select components of general government expenditure
8,000
250
7,000 6,000
$m
Other
Public safety Health
Forward estimates
Education
Health
200
All other
150
5,000
100
4,000 3,000
50
2,000
0
1,000 0
$m
-50
14 15 16 17 18 19 20 21 22 23
Source: Tasmanian Budget, Budget Paper Number 1 – The Budget
15 16
17
18 19
20
21 22 23
Source: Tasmanian Budget, Budget Paper Number 1 – The Budget
factor that strengthens the Tasmanian government’s handgovernment is that general government OneOne factor that strengthens the Tasmanian Government’s hand is that general debt has historically been
zerodebt (or negative). Although Government Business Enterprise (GBE) debt is comparatively high, largely because unlike has historically been zero (or negative). Although Government Business Enterprise (GBE) many other and territories Tasmania’s portsmany businesses public ownership, total public debt is states comparatively high, largelyelectricity becauseand unlike otherremain statesin and territories sector debt (i.e. general government debt plus GBE debt) is still lower than average. Tasmania’s electricity and ports businesses remain in public ownership,
total public sector debt (i.e. general government debt plus GBE debt) is still lower than average.
95
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Chapter 8: TASMANIA’S PUBLIC SECTOR Chart 8.15: General government net debt as a % of GSP, 30 June 2019 18
16
8
%
6
14 12
4
10 6
Tasmania All States and Territories
0
4
-2
2 0
-4
-2 NSW Vic Qld SA WA Tas Source: ABS 5220.0, State Budget Papers
%
2
8
-4
Chart 8.16: General government net debt as a % of GSP, 2008-19 (2020-22 forward estimates)
NT
ACT
-6
08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 Source: ABS 5220.0, State Budget Papers
This low debt provides the capacity for the Government to invest in infrastructure and/or support operating deficits, if required.
This low debt provides the capacity for the Government to invest in infrastructure and/or support operating deficits, if required.
While budget estimates project a set of small operating surpluses the Tasmanian Government’s Financial Sustainability Report notes that a continuation of historic revenue and expenditure trends would see a series of increasing deficits out While into thebudget future. This is due to additional associated withsurpluses major projects, estimates project aexpenditure set of small operating the adjustments Tasmanian to revenue
including GST receipts following Sustainability the expiry of the Report GST guarantee lower returnsof from GBEs. revenue This highlights Government’s Financial notes period, that aand continuation historic
the and challenge facing the trends Tasmanian Government – ‘business as usual’ will not beout sufficient to keep the budget expenditure would see a series of increasing deficits into the future. This isin check,
todecisions additional expenditure associated anddue tough will need to be made.
with major projects, adjustments to revenue including GST receipts following the expiry of the GST guarantee period, and lower returns from GBEs. This highlights the challenge facing the Tasmanian Government – ‘business as usual’ will not be sufficient to keep the budget in check, and tough decisions will need to be made.
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Chapter 8: TASMANIA’S PUBLIC SECTOR Chart 8.17: Net operating balance scenarios, Tasmanian Government, 2008-09 to 2033-34
Source: Department of Treasury and Finance (Tasmania), Tasmanian Government Fiscal Sustainability Report 2019, pp.5 In the 2019-20 Tasmanian State Budget, the Treasurer announced record levels of spending on infrastructure,
the 2019-20 Tasmanian State Budget,particularly the Treasurer announced record spending andIn proposed borrowing to do so. This is welcome, at a time when interest rates levels are lowof and where on infrastructure, proposed borrowing to dodemographic, so. This is welcome, infrastructure is under theand pressure of a changing and growing particularlyparticularly in Hobart.
at a time when interest rates are low and where infrastructure is under the pressure of a changing and Previous iterations of the Tasmania Report have discussed the millstone associated with obligations to fund nowgrowing demographic, particularly in Hobart. closed defined benefits public sector superannuation schemes. At the end of 2018-19, the present value of the
Tasmanian Government’s liability was estimated at $8.8 billion.20 Offsetting this liability is $1.9 billion in accumulated
Previous iterations of the Tasmania Report have discussed the millstone associated with obligations to fund now-closed defined benefits public sector superannuation schemes. At expected to peak in 2023-24, and decline thereafter until June 2080 when the last remaining beneficiary is assumed the end of 2018-19, the present value of the Tasmanian Government’s liability was estimated to become deceased. While the annual payments under the scheme are manageable, and will peak in 2033-34, this at $8.8 billion.20 Offsetting this liability is $1.9 billion in accumulated assets, bring the total liability does affect the Tasmanian Government’s ability to borrow. And actual payments will depend on a range of superannuation liability to $6.9 billion. According to Treasury estimates, the net present value factors including returns on investments and wage rises within the public sector. is expected to peak in 2023-24, and decline thereafter until June 2080 when the last This is another example of history catching up with Tasmania. Just as our economy is currently hampered by the remaining beneficiary is assumed to become deceased. While the annual payments under significant migration of younger people away from the State 20-30 years ago, the relatively late closure of the defined the scheme are manageable, and will peak in 2033-34, this liability does affect the Tasmanian benefits scheme in 1999 compared to some mainland states (although not the Commonwealth Government) will have government’s ability to borrow. And actual payments will depend on a range of factors impacts for years to come. including returns on investments and wage rises within the public sector. assets, bring the total superannuation liability to $6.9 billion. According to Treasury estimates, the net present value is
This is another example of history catching up with Tasmania. Just as our economy is currently hampered by the significant migration of younger people away from the State 2030 years ago, the relatively late closure of the defined benefits scheme in 1999 compared to
20
Tasmanian Budget, Budget Paper Number 1 – The Budget. 20
Tasmanian Budget, Budget Paper Number 1 – The Budget.
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Chapter 9 CONCLUSION – WHERE TO FROM HERE?
Chapter 9: CONCLUSION – WHERE TO FROM HERE? Tasmania’s economic performance is strong. It had the fastest economic growth in the nation over the past year in absolute terms, and was streets ahead on a per capita basis. All industry sectors grew for the first time ever. But it’s no time to get carried away. There have been longer and stronger periods of growth in Tasmania in the past, and these have often been followed by sustained stagnation. Some real underlying challenges remain and the fortunes of a state can change surprisingly quickly. The Tasmanian economy has strengths. These are well known. The world wants what we have, including in tourism, agriculture, aquaculture and international education. Business confidence is strong, the population is growing and there is a big infrastructure pipeline. The first phase of Asian economic development might have seen that continent hungry for coal and iron ore from Western Australia and Queensland, but coming decades will see Asia hungry for Tasmania’s seafood, meat and dairy, as well as its fruit and vegetables. These are areas where we have strengths; our agricultural output per person is well ahead of the rest of the country. Tasmanian tourism offers unique and high value experiences to the world’s globetrotters. International tourism will continue to grow strongly in the next two decades and – provided infrastructure such as airline capacity, accommodation and facilities at destinations can keep up – Tasmania is well placed to continue to ride this boom. More than one in ten students in Tasmania are already from the rest of the world and the rise of Asia’s middle class has the potential to send that even higher. Other universities around the country currently have a greater percentage of international students. Combined, these mean there is still significant potential for growth in this sector. And weaknesses. Tasmania has structural challenges such as an ageing population, weak health and education outcomes, and in an economy where, despite the fact that Hobart and to a lesser extent Launceston are thriving, regional areas are at risk of being left behind. These weaknesses show up as poor outcomes on a number of economic and social indicators. And the boom in Hobart has created significant stress for renters and home owners on low incomes. Key industries have benefited from a low Australian dollar but are at risk should there be significant upward movement in the exchange rate. Finally, Tasmania still relies too much on Local, State and Federal governments to drive its economy.
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Chapter 9: CONCLUSION – WHERE TO FROM HERE? How do we make the good times last? There are never any silver bullets for an economy, and the authors of this report are not so conceited as to think they have all the solutions. However, some actions are more obvious than others. Here’s seven things that should help: 1. As previous iterations of the Tasmania Report have also noted – people power is a key. Our demographic structure means we need to keep attracting younger, skilled people (retaining our own, and getting more from interstate and overseas) in order to keep the workforce and broader population strong. Tasmania will never grow as rapidly as Melbourne and Sydney (and hurrah to that) but we will need to do better on the people front. Keeping the economy strong is the most important factor here, but government can have a role in helping attract people and providing them with support they need once they arrive. 2. Invest in physical infrastructure. On a per capita basis Tasmania has historically spent less than the rest of the country. We need to turn this around. We need to invest not just on transport but on water, utilities, tourism assets and ports. This doesn’t mean throwing money at white elephants, but it does mean spending on projects that will have clear long term benefits to the State. If necessary the Tasmanian government should have no hesitation in borrowing to do so – its debt is negligible and world and Australian interest rates are at historic lows. 3. Tasmania should play to its strengths. That means understanding and capitalising on – and actively protecting – the value of its clean and green brand. Renewable energy is a strong suit here. Brand Tasmania is an excellent initiative. But protecting the brand also means not doing things that might endanger it. Decisions about, say, opening up new areas to timber harvesting, need to be very carefully thought through. 4. Health. Our relatively poor health is a handbrake on the economy and reduces people’s quality of life. It’s obvious, but prevention rather than cure is the solution. The secret to a better health system doesn’t come from treating people quicker when they come into the health system – it comes from keeping them out of the health system in the first place. While funding for treatment and care is obviously critical, there needs to be a greater focus for health spending on preventative measures. 5. Local government reform. By any measure Tasmania has too many councils. Simple as that. Greater co-operation across councils is nice but ultimately not as effective as larger, stronger entities that can have a broader regional focus. We need more co-ordinated and consistent planning, regional tourism promotion and regional housing policies. This will probably require bipartisan political support to become a reality, but it’s too important to ignore. 6. Education and training. It will be critical to continue to lift the Year 12 completion rate, ensure the vocational training system is well funded and that training is directed to jobs that Tasmania needs. Not every Tasmanian needs to go to university, but there are skills and knowledge critical for future employment that just aren’t learnt by Year 10. Extension of high schools to cover Year 12 will help but the results need to be monitored and if they don’t show the improvements needed, new strategies will need to be considered. 7. Embrace our visitors. Tasmania is now highly connected to and reliant upon the rest of the world for our future prosperity. International student numbers have grown hugely in the past three years. Subject to national migration policies, some of these people will want to stay in Tasmania once their studies are completed. We need to make sure that they have the support and services to do so.
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