Tassie must stay on course

Promising economic pointers but hard work ahead

TASMANIA’S challenge is to improve and sustain its economic performance, prominent economist Saul Eslake says.

Mr Eslake comments come in the wake of a CommSec State of the States report, which showed booming house prices in Hobart had been unable to prevent Tasmania slipping to fifth spot on the ladder.

He said the report showed Tasmania was on a par with South Australia and would have been fourth but for one indicator.

“We are not going to match NSW and Victoria, but we should be doing better than South Australia if we are going to solve our longer-run problems,” Mr Eslake said.

He said the state was doing better than it had been. “It is still not satisfactory, we still have unemployment higher than the national average, a smaller proportion of employees in work and lower wages and poor educational outcomes — but we are heading in the right direction,” he said.

Mr Eslake said sustaining Tasmania’s economic performance had proven difficult in the past because the econ- omy was exposed to factors over which the state had no control — such as the value of the dollar, interest rate movements and commodity prices.

Commsec chief economist Craig James said the state’s economic growth was on a par with SA, with the lowest annual growth rate of 2.9 per cent.

‘Tasmania slips from fourth spot to fifth with some softening in the relative position on retail spending and overall construction work done,” Mr James said.

Tasmania ranks second on unemployment and third on population growth and the improvement is leading to stronger retail and home building.

The State of the States economic performance report compares eight economic indicators — economic growth, unemployment, retail trade, business investment, dwelling starts, construction work, population growth and housing finance.

The state’s retail spending was 9.9 per cent above averages for the past decade despite a gap widening between wage growth of 2 per cent and consumer price index growth of 2.3 per cent.