Economic ‘wake-up call’

Warnings as Hobart records highest inflation rate

TASMANIA’S peak business body has warned of economic headwinds bearing down on the state after Hobart recorded the highest level of inflation of all capital cities in the September quarter.

Tasmanian Chamber of Commerce and Industry CEO Michael Bailey said the latest CommSec State of the States report and the Deloitte Business Outlook should be seen jointly as a “wake-up call” for the state and federal governments.

The CommSec report showed that Tasmania dropped from first to second place in terms of overall economic performance and that Hobart had the highest annual inflation rate in the last three months of 2022 at 8.6 per cent, ahead of Adelaide (8.4 per cent) and Brisbane (7.9 per cent).

“The reports highlight some of the strong achievements of the private sector and strong demand for our produce and especially in tourism,” Mr Bailey

said. “But we can’t rest on our laurels.”

“Both of these reports point to inflation, the rising cost of living and power prices as really significant issues.

“I think the Premier’s New Year’s resolutions should include action on all of these issues, especially power prices, which are hurting businesses around the state.”

Retail spending was down 0.9 per cent in Tasmania in the September quarter, according to CommSec, behind the Northern Territory (up 0.7 per cent) and Western Australia (up 1.8 per cent).

Government minister Felix Ellis said it was “really exciting news” that Tasmania had again been recognised as one of the leading economies in the country.

“It’s really important, as well, we recognise that cost of living is an issue for people right across Australia but also here in Tasmania,” Mr Ellis said. “That’s why we’ve brought out a range of different supports, particularly for those doing it tough – $305m when it comes to additional cost of living support, particularly in the energy space, and a range of other matters.”

Tasmanian Labor has a policy to cap power price increases at 2.5 per cent each year for the next three years, which it says would save the average Tasmanian household $500 a year.

Opposition Leader Rebecca White said the cost of living was “really starting to hurt Tasmanians and take more of their income than it has in the past”.

“These two reports have verified that [cost of living] continues to be a real pinch point for many families and the state government has dropped the ball on this and are not doing enough to ease that burden,” Ms White added.