Speaking in Hobart at the state’s Economic and Political Overview, Mr Gutwein said the state’s economy was the fast growing in the country.

“In terms of Gross State Product our economy is now more than $30 billion in size,” he said.

“We grew in the last 12 months at around 3.3 per cent which was the strongest, the highest rate of growth in the decade. 

“Growth was higher than what was occurring in the country and that was the fourth time it’s occurred in a quarter of a century.

“On a per capita basis we’ve got the fastest growing economy in the country, almost double the Australian average.

“We are in a situation where our economy is strong and importantly it’s very broad based.

“We have a diversity in our economy and almost every sector bar one is growing strongly.

“In terms of retail trade, we’ve had 50 consecutive months of growth, which has been fantastic.

“Exports have been particularly strong and again we’ve got a lot of macro influences that are playing very strongly to that.

“The low Australian dollar is certainly helping but in terms of the previous year we have had the highest level of exports ever recorded for the state.”

Mr Gutwein said that on the back of this lift in economic activity was an increase in tourism, business confidence, population growth and infrastructure investment in the state.

“Tourism over the last five years, over 30 per cent growth, around 1.3 million visitors to the state now, around 80 per cent coming from interstate and a growing component of international visitors as well,” he said.

“China has been a massively important market for us and growth has been over 170 per cent in visitation over the past five years, no doubt flying off the back of the President’s visit and some very strong work that’s been done by both Tourism Tasmania and the Department of State Growth.

“The revised budget estimate report indicated that our economy will grow at a faster rate than we brought in the budget.

“Tasmanian businesses are the most confident in the country and what we’re seeing has been a strong increase as well in regional Tasmania.

“Private new capital expenditure was 32.4 per cent higher over the previous 12 months, the highest annual growth rate in the country and significantly outperforming the national average.

“Our population is a fantastic turnaround story.

“The long-term average growth rate to 2014, the previous 20 years it was growing at around 0.4 per cent per annum and the last 12 months it grew at 1.1 per cent, almost three times the long-term rate of growth that we were seeing up until 2014.

“We saw a significant uplift in terms of both international and interstate visitors that are calling Tasmania their home.

“Demand is going to continue to increase as population growth underpins the economic story here.

“When we came to government in 2014/15 our response was at a time when we were fiscally tightening the expenditure.

“Across the public sector the view was that we should invest in infrastructure, that investment would hopefully encourage increases in confidence.

“If it were well placed it would lead to private sector investment coming off the back of it, which I’m pleased to say broadly speaking is what we’ve seen occur.

“We’ve got a $2.6 billion infrastructure program and in the mid-year update we invested and brought forward around $88 million worth of additional infrastructure spending in the Revised Estimates Report.

“The growing population that we’ve got, the demand for additional services, the need to improve our productivity, as a government we will continue to stay the course in terms of that infrastructure investment.

“The last budget, over $1 billion was included for roads and bridges, around $500 million on health infrastructure, significant investment into human services and housing, including affordable housing and we’ve maintained what has been the largest infrastructure spend into our schools at around $50 million a year each year over the forward estimates to upgrade our high schools broadly speaking.”

Mr Gutwein acknowledged however that as larger mainland economies such as Victoria and New South Wales experience decreasing house prices, future GST carve ups will result in smaller GST payments to Tasmania.

“They’ve already written down their budgets considerably,” he said.

“What this means for a state like ours that’s doing better – and the GST has that unfortunate outcome where the better you do the less you get, in terms of the next couple of years we will see significant change in our GST receipts on the basis that the larger states will take more out of the pool and it’s something that as a government we’re going to need to be very cognisant of.

“There is no doubt that our revenue situation will change and as a government we are determined not to become the next WA, nor the next NT.”

Following his address, the Treasurer took part in a Q&A with the audience.

 
2019 Economic and Political Overview: download report
Also speaking at the event was Commonwealth Bank of Australia Chief Economist and Managing Director, Economics, Michael Blythe who contributed to the 2019 Economic and Political Overview report. Read his chapter on the Economic Overview as well as chapters on the Domestic political overview, and overviews for the US and Europe here.
 

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