The Tasmanian Government recently issued a media release from the Treasurer, Michael Ferguson, that the Tasmanian economy is in robust health. Unemployment is the lowest it has ever been, goods exports and retail trade are at record high levels, and State Final Demand is approaching its highest level too.
For example, for the year through March 2022, State Final Demand was up 8.5% compared to the year through March 2021. However, given the low level of economic activity in June 2020 – owing to the coronavirus lockdown – State Final Demand is markedly higher than the year through March 2020, at 6.9%.
Treasury forecasts for the 2022/2023 budget have estimated an annual GDP growth figure of 6% in 2021/2022. In addition, a modest growth rate of 3% is forecast for 2023/2024. Notable in the economy was the private investment, particularly in September 2021.
Due mainly to tax incentives announced by the Australian government, elevated levels of private investment occurred. Things like instant asset write-off dramatically impacted decision-making among business owners. The RBA (Reserve Bank of Australia) statement on monetary policies indicates that there has been an easing of supply shortages, helping to drive economic activity.
Components of the Tasmanian Economy
The Tasmanian economy is rich with tourist resources, natural afforestation, mineral wealth, and lots of water. The territory’s labour relations are stable, and there is significant diversity of economic activity. Given the size and scope of economic activity in Tasmania, the resource base is rather limited, with local markets responsible for production and consumption.
External markets can be problematic, given the transportation issues. However, local government continues to play an active role by providing subsidies and financial assistance to the manufacturing sector. In addition, lots of help is given to the trade and tourism sectors.
A notable shift has taken place in the Tasmanian economy. The number of jobs in primary and secondary industry has steadily declined while the number of jobs in the tertiary sector has spiked. As economic activity shifts from mining, forestry, fishing, agriculture, and processing & manufacturing, jobseekers are shifting to the services sector.
This sector has grown steadily over time and now contributes the lion’s share of employment opportunities in Tasmania. Indeed, some 75% of all jobs now feature in services. Retail and wholesale activities comprise most of the services sector, employing approximately 20% of the workforce in the territory. Similarly, health and wellness services use 10% of the workforce.
There is a high level of dependence on Australia regarding the Tasmanian economy. This is because Tasmania does not have its currency and relies heavily on trade with other Australian states. However, in terms of GDP, Tasmania only contributes around 2% to the national total. This means that any changes in the national economy can have a significant impact on Tasmania. For example, a recession in Australia will likely lead to job losses and a decline in economic activity in Tasmania.
The political economy of Tasmania is best described as a mixed economy. This means that the government plays an active role in the economy, providing subsidies and financial assistance to businesses while leaving room for the private sector to flourish. This system has helped create a robust and diverse economy, with plenty of opportunities for job seekers across various industries.
The Constitutional Framework of Tasmania
According to the Constitution Act of 1854, Tasmania has a bicameral state parliament, including a House of Assembly and a Legislative Council. The Tasmanian government has authority by the majority of votes in the House of Assembly. This comprises Non-Labour groups and the Labour Party. The Labour Party is made up of liberal professionals and trade unionists. The Non-Labour group includes Conservative professionals, business people, and farmers.
Tasmania embraces a proportional representation system of governance. In this territory, the Greens have a loud voice and enjoy full Parliamentary representation. There are 29 administrative areas in Tasmania, as well as six cities. These include Clarence, Devonport, Burnie, Glenorchy, Hobart, and Launceston. An elected government serves in each of these cities, and these governments are charged with the well-being of their territories.