Pulped ... Tasmania’s future economic success is far more likely to be found in the production of highly differentiated goods and services.
Photo: Louie Douvis
My news analysis in last week’s BRW about the difficulties facing the Tasmanian economy caused quite a stir. The story was headlined ‘With Gunns on its knees what hope for Tasmania’s economy?’, and the huge loss reported by Gunns was indeed the catalyst for the piece. But Tasmania’s difficulties go much deeper than the fortunes of the once mighty Gunns and its ill-fated Bell Bay pulp mill.
That was the nub of the piece: that this tiny, fragile economy, with a population of just 512,000 and with the distinction of being the only state separated from the mainland by sea has challenges that are as unique as the Apple Isle itself.
There were many emails and calls in response to my piece and the most frequently asked question to me was: “How would you fix Tasmania’s economy?” As I explained to my correspondents, I have a soft spot for Tasmania. So, more from a position of affection than conceit, here’s my stab at what I’d do to fix Tasmania.
1. TASMANIA HAS A STORY TO TELL, BUT IT NEEDS UPDATING
Tasmania has a story to tell, but more work needs to be done on deciding what the story should be. Part of the narrative must of course include the attributes that are synonymous with Tasmania: its beauty, history, pristine environment and serenity. But most Australians already know those things. As state “brands” go, they don’t come stronger than Tasmania’s.
Tasmania’s strengths should be reinforced at every opportunity because they are part of the state’s story. But only a part. When it comes to convincing people to relocate to Tasmania – or indeed to remain – and businesses to invest, these attributes are not enough on their own.
Tasmania has to get the narrative right: what does Tasmania have to offer the rest of Australia?
2. WHAT WE NEED IS A PLAN … AND AN INDEPENDENT CHAMPION FOR GROWTH
Many of the things that can be done to revitalise the Tasmanian economy are no doubt being done by the state government and business groups. But many of the activities and agencies designed to attract investment, events and business relocations are disjointed and not part of a single strategy or integrated organisational structure.
Tasmania needs a detailed blueprint for growth, managed and implemented by a trade and investment supremo, with statutory independence from government and the political machinations which have become part and parcel of Tasmanian political life. The supremo would be seen as an independent champion for growth.
3. THE “MEGA PROJECT” SYNDROME HAS TO GO
Economist Saul Eslake says Tasmania must break free of its reliance on “mega-projects”, such as the Gunns pulp mill, as the solution to its economic problems.
“Tasmania’s resource base is simply too small and the costs of transport to principal markets too great for Tasmania to base its economy on selling large volumes of essentially undifferentiated commodities at the lowest possible price,” he writes. “Rather … Tasmania’s future economic success is far more likely to be found in the production of highly differentiated goods and services, embodying a significant intellectual content (for example in their design or branding) for which customers can be persuaded to pay premium prices.”
4. LET’S GET SOME IDEAS FLOWING
But which goods and services? What are the ideas that will get Tasmania moving again? Which are the policies that will ensure the creation of a sustainable, diversified economy (while also preserving the state’s lifestyle and environmental advantages)?
The reality is that a lot of the policies, plans and aspirations for Tasmania in recent years – most of which have emanated from predictable, self-interested or short-sighted sources – have come to nought. It’s time to broaden the base from which ideas are generated and considered.
While we should naturally be suspicious of summits that end up being nothing but expensive talk-fests – the less said about Kevin Rudd’s Australia 2020 Summit the better – an event that is properly structured, resourced and followed through may yet deliver some ideas that have so far eluded politicians, bureaucrats and other usual suspects.
And why not a public competition – open to anyone in the world – to generate some fresh thinking about revitalising the Tasmanian economy?
5. APPOINT A FEDERAL MINISTER FOR TASMANIA
The future prosperity – indeed viability – of Tasmania matters to all Australians, not just Tasmanians. Whatever the future course of Tasmania’s economy, it is unlikely that it can happen without federal government funding and policy support. The future of Tasmania is as much a function of federal will, concurrence and initiative as it is a local priority.
Modernising and strengthening Tasmania’s economy should not be confused with the economic ebbs and flows that affect other states. Tasmania’s unique circumstances requires a federal policy response, which is why there should be a federal Minister for Tasmania to provide a dedicated and co-operative response to Tasmania’s situation, to ensure that federal policies and laws do not burden Tasmania with unforeseen consequences, and to make sure that federal economic policies are in sync with local efforts to revitalise the state.
6. ONCE A TASMANIAN ALWAYS A TASMANIAN: SENDING AN SOS TO THE DIASPORA
Saul Eslake may be an eminently successful mainland economist, but he has not forgotten his Tasmanian roots. His regular commentaries, economic analysis and continuing local associations reveals an abiding affection for and interest in Tasmania.
A formal association of the Tasmanian Diaspora of successful professionals, company executives and entrepreneurs would be a way of harnessing some of the considerable talent – and wealth – that has left Tasmania’s shores. They can act as ambassadors for the state on the mainland and internationally, may be the source of counsel and fresh thinking, and the odd one may be prevailed upon to come back home.
7. ANY IDEAS?
And of course there are your ideas: what will it take to make Tasmania work again? Your ideas will be gratefully received.