What’s wrong with Tasmania, Australia’s freeloading state?
For most Tasmanians a darker reality lies behind the seductive tourism brochures showcasing the state’s pristine wilderness, gourmet-magazine articles celebrating its burgeoning food culture, and newspaper stories gasping at a world-leading art museum. Tasmania ranks at the bottom among Australian states on virtually every dimension of economic, social, and cultural performance: highest unemployment, lowest incomes, languishing investment, lowest home prices, least educated, lowest literacy, most chronic disease, poorest longevity, most likely to smoke, greatest obesity, highest teenage pregnancy, highest petty crime, worst domestic violence. It seems not to matter which measure is chosen, Tasmania will likely finish last.
Why Tasmania is such a long-term underperformer, and what might done to improve, are important questions — not only for Tasmanians but also for the nation as a whole. In fact, it can be argued what’s happening in Tasmania is not an exception but a microcosm for a major part of Australia; it is already typical of non-metropolitan regions and might represent more of Australia’s future. One advantage in Tasmania, however, is that because it is both a “region” and a state, data and other information are available that allow us more clearly to see patterns that remain buried among bigger aggregates in other states, which elsewhere combine the big cities with non-urban regions into a comforting average.
The underlying problem is simple but intractable: Tasmania has developed a way of life, a mode of doing things, a demographic, a culture and associated economy, that reproduces underachievement generation after generation.
Everyone knows the problems; they are manifest, reported day after day. The reality is that Tasmania has bred a dominant social coalition that blocks most proposals to improve. Problems and challenges are debated endlessly, with no resolution. Most discussion avoids mention of the uncomfortable truths at the source of underperformance.
Ultimately, Tasmania doesn’t change because its people don’t really want to. They don’t need to change because their way of life is mainly financed by the mainland. Far from helping overcome this pattern, the nation’s resource-boom prosperity is enabling and cementing Tasmania’s under-achievement. It’s allowing the government to pay an ever-expanding proportion of the population not to work; it’s driving up wages, materials, transport, regulation, exchange rates, and other costs that make Tasmania’s traditional industries uncompetitive; and it’s allowing government to subsidise non-performing industries.
The result is that Tasmanians face little incentive or pressure to change. Unlike New Zealand, which has no rich big brother and must find ways to earn its own living, Tasmania enjoys a permanent and ongoing transfer from mainland cousins that reinforces failure.
The difficulties are most obvious in the economy. Tasmania’s unemployment rate in October 2012 stood at 7.7%, by comparison to the Australian average of 4.9% — a difference of nearly three percentage points or, expressed more starkly, a rate of joblessness more than a third greater. In 2012, the poor performance of the Tasmanian economy was a dominant topic in local public discussion. It felt depressed. Traditional industries, particularly forestry and energy-intensive manufacturing based on hydro-electricity were in sharp decline, while tourism and service sectors were sluggish and appeared unable to pick up the slack.
The fate of the forest-products industry was emblematic of Tasmania’s challenges. Plunging global wood chip prices, rising Australian exchange rates, wages set by booming mining industries, tightening environmental regulation, and internationally effective campaigns by environmentalists, combined to lose customers in high-paying markets such as Japan and Europe and make the industry uncompetitive in growth markets such as China. The industry collapsed as revenue dived and costs spiralled. It had became increasingly uneconomic to harvest the trees, transport them for processing, transform them into sawn timber, plywood, or wood chips, freight them to markets and replant the harvested areas. It was estimated in 2012 that Tasmania would lose $50-100 per tonne on exported wood chips at prevailing world market prices, and the industry needed to export two million tonnes to break even. The state-owned entity that managed the public forests, Forestry Tasmania, was haemorrhaging cash, at the rate of an estimated $30 million a year.
“It is important to understand what it is about Tasmanian culture and society that permits such an abrogation of responsibility, a refusal to confront reality.”
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