A game changer for Tasmania: Deloitte report
Tasmania is set to surf Australia’s next boom sectorsDOWNLOAD
8 October 2013: Five super-growth sectors worth an extra $250 billion to the national economy over the next 20 years hold the key to Australia’s future prosperity, according to a new report from Deloitte. The report, entitled Positioning for Prosperity? Catching the next wave, is the third edition of the firm’s Building the Lucky Country series.
A companion press release considers the national impacts. However, Deloitte has also extended the analysis to each State and Territory. That work finds that Tasmania’s economy has struggled over the past decade. Whereas the resources boom channelled most of its benefits to the likes of Western Australia and Queensland, Tasmania’s resources sector was much smaller, and this State also had to deal with the blowback of the strength in interest rates and exchange rates which accompanied the resources boom.
The very strong $A was a particular problem for this State’s manufacturing, forestry and tourism operations, while higher interest rates ate into housing construction.
Accordingly, it is no surprise that unemployment in Tasmania is higher than in any other State.
But a game changer for Tasmania’s economic prospects is in the offing. The winds of change are now blowing through Australia’s economy. Tasmania may have been on the wrong side of Australia’s ‘two speed economy’ in recent years, but the $A is already off its peaks, and it has potential to fall further, while interest rates are now at historic lows.
More importantly still, whereas Tasmania was notably under-represented in the resources sector – and hence had limited capacity to capitalise on the last boom – this State is much better represented in the five super sectors that the Deloitte analysis has identified as key growth drivers over the next two decades.
Central to the Deloitte report is a Positioning for Prosperity map, which assesses where the next waves of prosperity are most likely to come from by plotting expected average global GDP growth rates over the next 20 years against the level of Australian competitive advantage for each sector. Below are two versions of the map, one for Australia as a whole and one for Tasmania.
Tasmanian Managing Partner of Deloitte, Carl Harris, said: “A whole range of new opportunities are already starting to open up for our State. After some tough years, it is positive and exciting that Tasmania is well placed to take advantage of the next waves of prosperity.”
Tasmania is not particularly well represented in the gas sector, one of the fantastic five. However, it has superb strengths in agribusiness, tourism and education, as well as opportunities in the wealth management sector.
Tasmania’s farm outputs are clean and green. They are also high value, commanding top dollar on world markets. But those world markets will themselves massively increase in size, with the biggest increases in demand for the high value food products in which this State specialises. The first phase of Asian economic development might have seen that continent hungry for coal and iron ore from Western Australia and Queensland, but coming decades will see Asia hungry for Tasmania’s seafood, meat, and dairy, as well as its fruit and vegetables.
Similarly, Tasmanian tourism offers unique and high value experiences to the world’s globetrotters. Numbers of the latter will grow exponentially in the next two decades and, provided this State can get the airline capacity (seats into and out of the State), it is particularly well placed to ride the next boom on offer to Australia.
More than one in ten students in Tasmania are already from the rest of the world, and the rise of Asia’s middle class has the potential to send that proportion rather higher. It is fair to say that other universities around the country currently have a greater percentage of international students, so this coupled with the growth of potential Asian candidates present Tasmania with some significant potential upside in this sector.
Finally, our wealth management industry may be small in comparison to the rest of the country, but change and disruption are already being embraced locally across the industry. They are rightfully readying themselves to take full advantage of this next wave.
NB: See our media releases and research at www.deloitte.com.au
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