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The Forum > Article Comments > Tasmania on the up and up > Comments

Tasmania on the up and up : Comments

By Saul Eslake, published 10/1/2005

Saul Eslake argues that Tasmania’s economic recovery is good news, but no cause for complacency

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What was Richard Butler’s issue with Tasmanians, or was that the other way around?

What is all that Gay activism coming out of Tasmania all of a sudden?

I must read up on Tasmania. Sounds like things are starting to really happen there now.
Posted by Seeker, Monday, 10 January 2005 9:51:23 PM
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Dear Seeker

Richard Butler's appointment as Governor of Tasmania could have turned out to be an inspired choice, or a failure. In the end, history will probably judge it to have been a failure. My only real reservation was that the late Jim Bacon didn't choose a Tasmanian - it's no longer acceptable for a non-Australian to be appointed as Governor-General, and it shouldn't be acceptable to have as Governor of Tasmania someone who doesn't already have strong links with the island.

I don't think that 'gay activism' has come out of Tasmania 'all of a sudden'. For many years, Tasmania had the most stringent laws penalizing homosexual acts between consenting adults of any State or Territory, and at one stage this led to boycotts of Tasmanian produce (such as wine and cheese) in some parts of Australia. These laws were significantly liberalized during Liberal Tony Rundle's term as Premier in the mid-1990s (though much of the impetus for the changes originally came from the Greens); and the Bacon Government further eased discrimination against gay people in 2002.

Richard Florida's research on regional economic performance in the US (in his 2002 book, "The Rise of the Creative Class") suggests that the presence of a visible gay community is often a characteristic of cities that have succeeded in attracting members of what he calls the 'creative classes' - not because gays are themselves inherently more creative than anybody else, but because the willingness to accept gay people is symptomatic of the tolerance and embrace of diversity that attracts members of the 'creative class'.

From all reports, gay people do feel more welcome in Tasmania as residents and visitors and this, to my mind, is a good thing both in its own right and for the possible economic benefits it may bring to the Tasmanian economy.

Possibly in part for that reason, and in any case without doubt for the other reasons I mention in my article, Tasmania's economy is starting to look up. But, as I say there, it takes more than three years of above average growth to undo the effects of more than two decades of relative decline.

Saul Eslake
Posted by Saul Eslake, Monday, 10 January 2005 10:07:35 PM
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Hey, thanks Saul for the quick reply.

Hope I didn’t give … ahem, the wrong impression, with my gay activism question. I would of course be one of the other contributors to the Tasmanian “creative class”.
Posted by Seeker, Monday, 10 January 2005 11:15:32 PM
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Hi Saul,

Thanks for the article. I found it fascinating. I'm part of the Tasmanian diaspora that was educated in Tasmania but had to leave to pursue their career elsewhere (I left in 1994). I'm so used to thinking of Tasmania as a financial basket case, that it's hard to get used to the idea that it might actually have managed to pull itself out of its economic nose-dive.

I'm intrigued by your comment about the poor economic and fiscal policy from the 50s to the 80s. What are some examples of what you are thinking of here? My guess is dam building, but are there other spectacular examples that you have in mind?

Posted by PAB, Monday, 17 January 2005 2:30:51 PM
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By 'poor economic and fiscal policy' I mean essentially two things.

First, the heavy reliance on exports of unprocessed agricultural products to the UK (despite more than 10 years advance warning that this market would disappear when Britain joined the EC, as it then was) and on electricity-intensive processing of small quantities (by global standards) of resources products whose prices were (at the time) in a long-term downtrend. Successive State governments refused - despite considerable warnings from within and outside Tasmania - to take any meaningful steps to develop alternative sources of income and employment (with the partial exception of tourism), and instead continued to invest all of their political and economic capital in dam-building.

And second, the failure to come to terms with changes in Federal-State financial relations under the Hawke Government (which from the mid-1980s onwards cut payments to the States as one way of improving its own financial position). Most States responded to this by raising their own State taxes and /or cutting spending - but Victoria and Tasmania, alone, did neither, instead preferring to fund recurrent spending by borrowing. The Government led by Robin Gray was, in my opinion, second only to that led by John Cain in Victoria for fiscal incompetence in the post-war era in Australia.

Moreover, Robin Gray's government, despite being at the time the only Liberal (sic) government in Australia, refused to contemplate any privatization (which might have reduced the extent of the build up in State debt) - or, for that matter, any other pro-competitive, market-opening reforms. Indeed Robin Gray would from time to time make a point of saying to national audiences that his government didn't believe in such things, notwithstanding the policy direction that John Howard was trying to establish for the Liberal Party at the Federal level at that time.

The short-lived Labor government led by Michael Field (supported by the Greens) made a valiant effort to deal with the financial mess they inherited from Robin Gray's administration. They succeeded in preventing a crisis, but lost office before they could reap any political benefit from what were politically unpalatable measures.

Economic and fiscal policy then 'muddled through' under Ray Groom, before Tony Rundle as Premier and Treasurer set a new course with his 'Directions Statement' of 1997. Rundle of course lost office in the 1998 election, and between them Jim Bacon as Premier and David Crean as Treasurer cemented the platform for Tasmania's recovery by a combination of prudent financial management and sensible strategic intervention in the State's economy.

There is more continuity between the economic policies of the Rundle and Bacon/Lennon governments than the adversarial nature of politics allows either side to admit. Of course these policies need to be sustained, and new ones develop to confront unmet and new challenges, for a long time yet.
Posted by Saul Eslake, Monday, 17 January 2005 2:49:56 PM
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I agree with much of what you say and indeed you conceded Tasmania has along way to go yet.

Sadly the island state performs poorly in the major health indicators - on most in fact only the NT is worse and that is I suggest weighted by a large indigenous population; so health alone will really drag the anchor.

Again, Tasmiania is importing disabilty. There are many cashed up mainlanders buying up properties over there and possibly contributing to the economy with small busness ventures. At the same time housing affordability has also attracted increasing numbers of mailanders many of whom bring with them high and complex social and medicakl needs. With the help of the first home buyers grant, they have snapped up large numbers of cheap housing. And this is a phenomenon that has almost transformed the social fabric of a small town like Rosebery on the west coast. A 7k grant put to a house for sale at around 25-30k puts a mortgage in reach of most people - even those on a pension - for less than rent in the mainland.

Tasmania also needs to look past the trees for the forest. The tension between logging in the manner Gunns currently work and sustaining a clean green image is increasing. Logging is underway a mere 70ks from Cradel Mountain - in fact one route to the mountain via the Murchison highway splits a devastated terrain for nearly 100ks of the journey. Where the "Hydro" as locals refer to it, once built towns, these now stand remnant villages bereft of life and character - forestry is likely to leave a similar legacy unless its expansion can be reconciled with the needs of agricuture and tourism.

Mining again poses another threat - magnetic imaging of Tassie shows it to be virtually bristling with mining opportunitie - soon technology will make these sites accessable and economically worth while opening up. And here agian the raw materials of the island will bring development and conservation values into serious play.

Good on Tassie. But it will take very cautious developement to permit it to realise its real potential.

Posted by inkeemagee, Tuesday, 18 January 2005 4:43:38 PM
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