Deloitte Access Economics Business Outlook predicts ‘headwinds’ for local economy

Tasmania is in a weaker position than other states to face the “economic headwinds” ahead, the latest economic forecast predicts.

The Deloitte Access Economics Business Outlook predicts the state will have the slowest growth of any state.

Tasmania is in a weaker position than other states to face the “economic headwinds” ahead, the latest economic forecast says.

Labor and the Liberals have traded barbs over the Deloitte Access Economics Business Outlook — which predicts the state will have the slowest growth of any state — at just 0.4 per cent in 2023/24.

“A structurally weaker employment and population outlook puts Tasmania in a less resilient position to face economic headwinds in 2023, relative to other states and territories,” the report said.

“Tasmania has the lowest participation rate in the country, and the lowest employment to

population ratio.

“Additionally, a higher proportion of the population receives a majority of their income from government transfers — pensions, unemployment benefits, etc. — than other states.

“These factors lead to Tasmania’s households having lower average disposable incomes.

“In a high inflation, high interest rate environment, households with less disposable income typically have lower savings buffers and restrict spending more quickly on discretionary items. “This was seen in the December quarter of 2022, with no growth in household consumption across the state.”

The report also pointed to slowing interstate migration, a slowing housing market and slowing private business investment — partially offset by strong government infrastructure spending.

“But the relative strength of the public sector is unlikely to be sufficient to offset the decline in private demand in Tasmania in 2023,” it said.

“Overall, Deloitte Access Economics is projecting very limited growth for the Tasmanian economy through the calendar year.”

Labor’s Dean Winter said Deloitte Access Economics was “sounding the warning alarm for the Tasmanian economy’.

“It’s pointing out that Tasmania is expected now to have the slowest growth rate of any state in Australia over the next 18 months or so,” he said.

Labor MP Dean Winter speaks to the media at Parliament Square in Hobart on Thursday, March 30, 2023.

“We think that’s really concerning, because we know that the Tasmanian budget is no longer in the same state that it was 10 years ago.

“We know under the Liberals’ watch we’ve seen debt continue to grow, we’ll see it continue to grow up to around $30 billion by 2035 and we’re running the largest budget deficit in Tasmania history this financial year.”

Treasurer Michael Ferguson said Labor was cherry picking from the report to talk Tasmania down.

“Our sound economic management places Tasmania in an excellent position to deal with future economic challenges,” he said.

Transport and Infrastructure Minister Michael Ferguson speaks to the media at Tasmanian Shipping Supplies in Hobart on Wednesday, March 22, 2023.

“We know a strong public infrastructure pipeline helps support the economy and that’s why we’re delivering projects right across the State.

“It’s why Labor should get behind its leader-in-waiting and back the Macquarie Point urban renewal project and abandon their reckless policy to pay an extra $2.4 billion on public servant wages at the expense of Tasmanian taxpayers.”

Originally published as Deloitte Access Economics Business Outlook predicts ‘headwinds’ for local economy