Tasmania still Australia’s best-performing economy

  • By Zilla Efrat

Tasmania has managed to hold onto the title of best-performing economy for the seventh quarter in a row, according to CommSec’s October State of the States report.

Because of its success in suppressing the COVID-19 virus, Tasmania hasn’t been forced to lock down its economy to the same extent as other economies although it has had to close borders, says CommSec.

When it comes to the eight assessment indicators used in the CommSec report, Tasmania ranks first on construction, retail spending, relative unemployment and dwelling starts. It also ranks second on equipment investment, relative economic growth and relative population growth.

CommSec says there’s little to separate the other economies. ACT is second; Western Australia and NSW are equal third; South Australia and Victoria are equal fifths; Queensland is seventh; and the Northern Territory is eighth.

“When assessing overall economic performance, the important point to make is that all state and territory economies are performing well, supported by highly stimulative fiscal and monetary policies,” the report states.

“Despite constant challenges from COVID-19 and lockdowns, construction is solid, while job markets are fundamentally in good shape.”

CommSec finds it remarkable that unemployment rates are historically low across much of Australia, considering the COVID-19 challenges and that the broader economy was in recession just over a year ago.

It says the ACT leads on equipment investment. NSW is number one on housing finance. The Northern Territory leads on relative population growth. And, Western Australia continues to lead on relative economic growth.

CommSec says economic activity in Western Australia in the year to June 2021 was 30.9 per cent above its “normal” or decade average level of output.

Tasmania is second, with output 22.7 per cent above the “normal” level of output. It was followed by the ACT, (up 22.6 per cent), Victoria (up 16.6 per cent), South Australia (up 16 per cent) and NSW (up 15.96 per cent).

At the other end of the scale, economic activity in the Northern Territory in the June quarter was 9.6 per cent above its decade average, behind Queensland (up 11.9 per cent).

CommSec says retail spending remains strong across the country, supported by ongoing fiscal and monetary stimulus, record wealth and re-direction of money from blocked foreign travel.

Tasmania leads the way in unemployment, which at 4.8 per cent, is 26.2 per cent below its decade average.

Conversely, employment in all states and territories was above decade-average levels in September, except for the Northern Territory (down 1.7 per cent). Queensland was strongest on this measure with employment 10.4 per cent higher than the decade average.

Looking ahead, CommSec says much will depend on vaccination rates and the reopening of state and foreign borders. The stimulus applied by state and territory governments will also be important.

Queensland, it says, would be a key beneficiary of the opening of borders as inter-state and overseas tourism would drive up spending and employment.

In addition, Queensland and Northern Territory look set to benefit from population growth and higher commodity prices going forward.