Tasmanian economy powers along

Government among the most disciplined the state has seen, says Lyndal Kimpton

AS the Premier quite rightly pointed out in his CEDA State of the State address on Friday, Tasmania and the Tasmanian economy is going from strength to strength.

I won’t bore you with the statistics, but suffice to say, the three big motors that drive an economy — jobs growth, population growth and public and private investment — are all powering along.

And while there are some factors driving this that are out of the Government’s control — things like global economic trends and exchange rates — Premier Hodgman’s Government definitely deserves its share of the credit for the economic transformation that Tasmania has enjoyed over the past five years.

In particular, the decision to pivot our economy towards Asia, building on the work started by the previous Giddings Government and especially this Government’s hard work to further develop Tasmania’s ties with China is paying dividends.

Tasmania, of course, has seen economic good times before. But what makes this latest surge particularly interesting is the fact that so many mainlanders, and importantly, expatriate Tasmanians are taking the opportunity to move or return to Tasmania.

Tasmania’s economic growth in decades past was always fragile, always fleeting. What we are seeing now is that so many people actually have confidence about Tasmania’s future.

It is such a significant step to pack up and move and if you take that step it means that you believe in the future of the place that you are moving to.

That is the sort of longterm confidence that enables a government to form and implement long-term, strategic policies knowing that they can be backed in by the economic and community strength needed to make them a success.

And of course, as an accountant I believe that one of the most important factors in the positive steps that Tasmania has taken over the past five years is because the Government’s finances are in excellent shape.

Under this government we have seen small, but responsible surpluses over the past four years.

In preparing these remarks, I went back and had a look at the Government’s financial performance, recorded in both the budgets and also in the Treasurer’s Annual Financial Reports. The picture it paints is encouraging.

On the expenditure side, the Hodgman Government would have to be amongst the most disciplined Tasmania has ever seen. In the four financial years between 2014-15 and 2017-18, the Government budgeted to spend some $21.9 billion and managed to spend $22.2 billion.

In other words, the difference between what was forecast and what was spent was just 1.34 per cent.

Over the same period, the Government forecast revenues of $21.7 billion and actually received nearly $23.2 billion.

While that’s an increase in revenue of 6.6 per cent, or additional revenue of nearly $1.5 billion, it should be noted that $700 million of that related to the Federal Government handing over responsibility for the Mersey Hospital to the State Government.

However, the point remains that the state has enjoyed a windfall of additional revenue mainly related to the fact that our economy is so strong. The challenge now is to use that windfall to set Tasmania up for a prosperous future that anticipates the needs of a growing and increasingly more successful state. Lyndal Kimpton CA is chair-elect of Chartered Accountants Australia & New Zealand’s Tasmanian Council. This is a transcript of Ms Kimpton’s vote of thanks speech at the CEDA Tasmania State of the State lunch on Friday, which featured a keynote address by Premier Will Hodgman.