Deloitte report tips economic decline for Tasmania

Tasmania’s economy is bucking a positive national trend — with a report saying it will shrink this financial year. Here’s why.

Tasmania’s economy is in decline, a new report says.

Tasmania’s gross state product will shrink by 1.1 per cent in 2024/25 as slow population growth contributes to weak household spending and even slower housing construction, the latest Deloitte Business Outlook report predicts.

Tasmania is the only state expected to go backwards as national growth slows to 1.2 per cent.

The root cause of Tasmania’s problem is slow population growth — particularly a low birthrate and slow housing construction.

“Despite some positive signs, Tasmania’s economic outlook remains weak,” the report said.

“Declining dwelling investment and subdued household consumption continue to weigh heavily on growth.

“Weaker population growth has contributed to slower household consumption growth in Tasmania.

“In real terms, spending by households fell by 1.2 per cent over the year to September 2024.

“That is contributing to Deloitte Access Economics’ forecast for household spending to

contract by 0.5 per cent in 2024-25 – the slowest expected growth among all Australian states and territories.”

TCCI chief executive Michael Bailey. Picture: Linda Higginson

The Tasmanian Chamber of Commerce and Industry said it was time for political leadership.

“Tasmanian businesses are resilient and are dealing with the challenges of higher interest rates, inflation, higher business costs and the broader cost of living,” CEO Michael Bailey said.

“But we need both Labor and the Liberals to engage in a battle of ideas to help improve business conditions and raise confidence levels.

“Tackling the cost of doing business is one critical area. Insurance costs, energy costs, skills shortages and challenges with the State’s GBEs are all having an impact. We would like to see both Labor and the Liberals focus on these issues.

“We would also like to see a contest of ideas when it comes to planning and approvals.

“The uncertainty around major industries like salmon and major projects like Robbins Island are having a negative impact on business confidence.

“A war of words isn’t going to fix anything. We need a strong plan to tackle these challenges to improve confidence and we are looking to both major parties at a state and federal level to provide that clear leadership this year.”

Labor leader MP Dean Winter.

Labor leader Dean Winter said the state was on the brink of a crisis.

“More jobs have been lost since Jeremy Rockliff took his government into minority than were lost during Covid, and that’s just the tip of the iceberg according to the figures.

“In all 8,700 full time jobs have been lost since Jeremy Rockliff took his government into minority.

“Tasmania is the only state forecast to have GSP go backwards in 2024-25, and we are forecast to have the weakest economic growth in the nation through to 2030.

“Instead of trying to spin the story and ignore what’s right in front of them, Jeremy Rockliff’s government should see this as a red alert.

Treasurer Guy Barnett. Picture: Linda Higginson

Treasurer Guy Barnett accused Labor of “relentless negativity” and “talking Tasmania down”.

“The latest NAB December Business Survey shows business conditions have continued to significantly improve in Tasmania – which is now ranked the 3rd highest and above the national average,” he said.

“This is a good sign for businesses across the state – it shows that Tasmania is a place that encourages investment and new opportunities.

“But Mr Willie can’t help himself – he takes every opportunity to talk businesses down.”

Originally published as Deloitte report tips economic decline for Tasmania