Tasmania is booming: confidence and optimism have become infectious
Over the last 3 years, we have noticed a fundamental change in Tasmania. Confidence and optimism have become infectious. This was evident again with the front page of The Weekend Australian carrying an important article on how solid our local economy has become. Tourism, food, agriculture and education are booming based on long term underpinnings.
The property market in Hobart is very buoyant. With the strong impetus from State and Local Government to make Hobart a vibrant city, apartments are in high demand. And high quality design and visual amenity are top of mind.
Hobart is in fine fettle!
Island economy on the rocks no more
Tasmanian Walking Company head Zane Denmen and Daisy Lamont, his partner and co-manager at the Bay of Fires Lodge in Tasmania’s northeast. Picture: Peter Mathew
The Australian 12:00AM May 20, 2017 MATTHEW DENHOLM Tasmania correspondent, Hobart
Long the butt of jokes and dismissed as the mendicant state, Tasmania is having the last laugh.
The tourism, food and agriculture sectors are booming, propelling it ahead of the nation in several key economic indicators.
The Tasmanian Chamber of Commerce and Industry believes the former “basket case” has turned the corner, with the island enjoying higher business confidence and stronger capital city property price growth than the nation as a whole, and the second lowest unemployment rate of all states.
Tasmania’s cultivation of close ties with China and President Xi Jinping is also paying off. The Weekend Australian has learnt of Chinese investors buying into at least six tourism businesses in recent months and eyeing investments in wine, to add to existing agricultural assets in fruit and dairy. The shift appears cultural as well as economic, with business leaders stunned by a flood of entrepreneurial start-ups in tourism, agriculture, food and alcohol – wine, beer, whisky, gin, cider and vodka.
Even once-depressed traditional industries are resurgent.
Catamaran builder Incat is expanding to build ferries for Sydney Harbour and major European clients, while green shoots are emerging in the forest industry.
Walking tourism is booming, with new lodge- or hut-based walks planned, including on the Three Capes, Overland, Walls of Jerusalem and South Coast tracks.
Fewer young Tasmanians need to leave the state to find work, while some are returning.
Zane Denmen left Tasmania for Queensland when his lighthouse keeper father was made redundant in the mid-1990s, but a career as a guide and chef has led the 38-year-old back to the region of his childhood.
“I’ve come full circle,” said Mr Denmen, Tasmanian Walking Group’s consultant chef and co-manager at Bay of Fires Lodge, the latter role shared with partner Daisy Lamont.
“When we left in the 90s, Tasmania was in a grey zone; nothing much was going on, so it’s really good to return now with Tassie really booming.”
Michael Bailey, chief executive of TCCI, said Tasmania had “turned a corner, there is no doubt about that”.
“That appears to be driven by some exciting parts of our economy,” Mr Bailey said.
“Tourism is still very strong, as is agriculture, based on the quality of its food. There are clear shining lights in the Tasmania economy and I think that is sustainable. I do believe we are on the cusp of a couple of decades of very exciting times in Tasmania.”
The TCCI this month reported strong business confidence in all regions, not just the traditionally more prosperous south, and — remarkably — a higher level of confidence in the state economy than in the national economy.
National Australia Bank’s Business Survey confirmed the trend, showing Tasmania had the highest rate of business confidence of any state, and well above the country as a whole.
Business leaders and economists credit the lower Australian dollar for assisting strong growth in overseas tourism to Tasmania — increasing at 11 per cent a year and led by China, Taiwan and Hong Kong — and for helping the state’s exporters.
They also cite flow-on interest from Mr Xi’s 2014 visit to Tasmania, the economic and cultural fillip from Hobart’s Museum of Old and New Art and associated festivals, and a return to state majority government.
The island retains stubborn structural problems — poor levels of educational attainment and workforce participation and a slower-growing and faster-ageing population than the rest of the country — while gross state product still trails other economies.
However, Tasmania is now ranked fourth for economic performance by CommSec, ahead of Western Australia, South Australia, Queensland and the Northern Territory.
CommSec rates the strength of Tasmania’s job market as second, behind the Northern Territory. CoreLogic this month reported Hobart as having the strongest growth in property prices of any capital city (5.1 per cent for the quarter).
While critics like to dismiss Tasmania as “one big national park”, its extensive reserves are helping to generate serious income. The state last year attracted 1.24 million visitors, who spent $2.14 billion in the local economy, while holiday makers increased 17 per cent last year.
Major new hotels — including a Marriott International and two controversial sky-scrapers proposed by Singapore’s Fragrance Group — are planned. Chinese investors have recently purchased a swag of accommodation in Hobart, and several in regional towns, including the Fox and Hounds in Port Arthur and the Beachside Retreat, near Stanley.
Premier Will Hodgman said the turnaround was assisted by stronger budget management, allowing targeted investment. “We have backed our competitive strengths big time, in particular investing more into tourism marketing and infrastructure,” Mr Hodgman said. “We have (also) cut red and green tape.”
Tasmanian economist Saul Eslake urged further reform, such as asset sales, reducing payroll tax, and improving matriculation rates. “It’s unclear how sustainable the upturn is,” Mr Eslake said.