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National Infrastructure Audit

Tasmanian Government submission to the National Infrastructure Audit, (PDF), 2.36MB) 

Submission Executive Summary

The Tasmanian economy has undergone significant structural change in the past decade, which has contributed to the State's long-term recovery in economic performance characterised by strong employment growth, a substantial reduction in unemployment, high levels of private sector investment and population growth. These structural changes include:

  • growth in Tasmania's total productive capacity, and the potential to improve Tasmania's productivity, through increased private and public investment;
  • increased household wealth due, in part, to the realignment of Tasmanian house prices with those on the mainland;
  • an expanded tourism sector due to the budget airline market;
  • the development of a natural gas market in Tasmania and increased competition in the electricity and gas retail markets;
  • closer integration with the national and international economies; and
  • a transformed fiscal position, including the elimination of State net debt, which has led to improved tax competitiveness and higher levels of business confidence.

The effect of these structural changes has been a change in Tasmania's industrial base, with high productivity industries such as mining, finance and insurance, and some high value manufacturing growing at a faster average rate in the five years to 2006-07 than experienced nationally. These industries have, in recent years, also accounted for a greater share of total factor income than previously.

Essential to sustaining this economic growth over future decades is further infrastructure investment targeted at maximising Tasmania's competitive advantages and facilitating productivity improvements and industry investment.

An interpretation of 'nationally significant infrastructure' that focuses solely on urban congestion and bottlenecks in the major cities ignores the potential productivity gains to be realised by investing in nationally significant regional infrastructure.

Tasmania has a diverse range of agricultural, mining, forestry resources and significant potential for additional value adding service industries if key infrastructure challenges can be overcome.

While Tasmania shares many of its challenges with other regional jurisdictions, it is important to highlight that we are in many ways unique. The State's infrastructure needs stem from a number of factors including:

  • the nature of its transport and freight task;
  • a small, dispersed population;
  • 'island-based disadvantages';
  • historic investment patterns that have failed to achieve economies of scale;
  • challenging topography; and
  • a legacy rail system.

Tasmania has always been an outwardly focused export-oriented part of the Australian economy.

The Tasmanian economy is going through a major period of sustained growth and diversification and is currently playing a more vibrant role in the economic development of Australia than it has for decades. It is critically important to the economic and social health of the State and to sustaining our contribution to national economic progress that there is investment in infrastructure to underpin this.

Tasmania has demonstrated that a regional economy can change and grow through targeted infrastructure investment that fosters continued and sustained regional economic growth. It is important that Tasmania and other regional economies can continue to contribute to, rather than be a burden on, national productivity growth.