Will Hodgman

Premier of Tasmania

CEDA State of the State Address

Will Hodgman - Premier

1 December, 2017

I am delighted to have the opportunity to talk about my favourite subject, the state of Tasmania.

I reflect on the fact that it was just four years ago when, a few months before a state election, I spoke at a CEDA event like this as the Leader of the Opposition, and I outlined why I believed Tasmania needed to change to a majority Liberal Government.

The last thing Tasmania needs now is a return to Minority Government, and today I will outline why, just months away from the next State election.

Tasmania is now in much better shape than when we came to Government in 2014.

And while I will always point out it’s not just due to the work of your Government, and is typically the result of a very strong and buoyant business community.

But Tasmania is undoubtedly a very much a different place now than when we came to Government.  It’s a stronger, prouder, more confident place, and our economy is one of the strongest performing in the country. Back then, it was in recession.

Today, there are more than 10,000 Tasmanians in work. Back then, under minority government, 10,000 jobs were lost.

Confidence in Tasmania’s business community now ranks amongst the highest in the nation.

Back then, two out of three Tasmanian businesses reported that they felt that the Labor-Green policies were working against them.

Today, our population is growing at the fastest rate in six years. Back then, people were leaving our state, looking for opportunities elsewhere.

When we came to Government, hospital waiting lists were the longest in the country. Today, they are the shortest ever on record.

When we came into Government, our education system was falling way short. Now there are more kids at school getting better results.

Now, none of this has happened by chance.  It’s happened because we’ve stuck to that plan that I spoke about here four years ago, and it’s delivering positive results.

And it’s happening because we have delivered strong, stable Government to get things done, rather than the uncertainty, the instability and the policy paralysis that comes with minority Government, which is based on political deals.

Tasmania is certainly in much better shape now than when we came to Government. But I want to make another important point, and that is I don’t believe it’s anywhere near as good as it can get.

I believe our best days are ahead of us, and we are outlining our plan as to how we can take Tasmania to the next level.

It’s a plan for a re-elected Majority Government. It is a plan to continue the momentum in our economy while protecting all that’s special about our state.

And it’s a plan that’s about making sure that all Tasmanians get to share the benefits of a strong economy.

It’s a plan with very bold targets, and it aims high, with 43 specific ways to improve the lives of Tasmanians and their families.

It has six priorities: a strong economy and more jobs; taking action on the cost of living; investing more into education and health and the services Tasmanians need; keeping Tasmanians safe in their communities’ protecting our way of life; and building the infrastructure that our state needs into the future.

And, as our record shows, it’s a plan that Tasmanians can trust us to deliver and that will deliver positive results.

It does have a firm commitment to building a strong economy and to strong financial management.

These things are critical because they allow us to better invest into essential services like health and education, into infrastructure, and to also provide the confidence for Tasmanian business to invest and to grow.

When we came into Government, we inherited a budget with one billion dollars of deficits and net debt was heading towards $400 million. We made some tough decisions, and we reined in expenditure.

And just this week, Standard & Poor’s have confirmed that our AA+ stable credit rating and stable outlook continues reporting; “we consider the state of Tasmania to have very strong financial management, a strong economy, and the Tasmanian Government has demonstrated fiscal discipline and successfully constrained expenditure”.

In fact, for the period in which we’ve been in Government to the end of the Forward Estimates, annual expenditure growth is forecast to be 2.4 per cent. Under the former Government, it got as high as eight.

We’ve returned the budget to surplus four years ahead of schedule, and we have forecast surpluses for this year and each year of the Forwards Estimates. This is the first time that has happened in a decade.

We’ve eliminated net debt and I can confirm today, that for the first time ever, total state sector – that’s  the general Government sector, including our state-owned companies and GBEs – is  net debt free, with negative net debt of $811 million.

And even if you account for the one-off payment we secured from the Commonwealth to fund the Mersey Hospital, which is the largest ever cash transfer from the Commonwealth to the State, net debt would still be negative $81 million, and would still have delivered a healthy surplus as well.

It hasn’t happened by accident. It is the result of strong financial management and discipline in implementing our fiscal strategy which we designed to improve public sector efficiency, constrain Government expenditure and maintain tax competitiveness.

And it’s important to note as well that we have delivered a strong financial result, despite unexpected and unprecedented challenges, including one of the longest and worst fire seasons last year, severe flooding which was declared a national natural disaster, and an energy crisis, the result of historically low rainfalls and the first ever extended outage of the Basslink cable. All of which had a devastating impact on our communities and which came at a considerable cost to our budget, exceeding hundreds of millions of dollars, as have write-downs in our GST receipts.

But despite these challenges, we have been determined to maintain our strong fiscal position, because a balanced budget with modest surpluses also allows us to better future-proof the state from unexpected events.

And I’ll take this opportunity to acknowledge Treasurer Peter Gutwein who has overseen this dramatic turnaround and who in my opinion will undoubtedly go down as one of the greatest Treasurers our state has had.

And I will also argue that Tasmanians can certainly trust us to continue to manage our budget and our economy well into the future.

Our economy’s in much better condition now than we came to Government, state final demand has grown every quarter since we’ve been in Government, that’s 13 quarters of growth. The most recent quarter state final demand was 8.2 per cent higher than when we were elected.

Under the former minority Government, state final demand went backwards for seven quarters in a row. That’s two years in recession.

10,300 more Tasmanians in jobs. Our unemployment rate is now at six per cent. Back then, it got as high as 8.6 per cent.

Tasmania’s has had the second strongest annual growth of any state in employment, and we’ve got the third-highest retail turnover and the strongest growth of any state in dwelling approvals.

Tasmania does now feel and look very different.  There are cranes dominating the skylines. Our airports are bursting with the fastest growth in tourism in the country. Our roads are becoming congested, and investors are testing the boundaries, proposing high-rise developments in a market where business investment in new capital is 15 per cent higher than last year.

Our salmon industry, which is now bigger than our dairy and beef industries combined, is surging; house prices are climbing rapidly, and we’ve one of the strongest housing markets in the country.

So, as our economy grows strongly, we are experiencing some growing pains, and we are facing new challenges for Government to manage, as well as opportunities to seize.

So, we are investing more into our roads, and we are advancing new transport options for commuters, including ferry services on the River Derwent.

We’ve developed a sustainable growth plan for our salmon industry.

We’re developing a new framework under which major projects could be considered, which streamlines the approvals process, provides greater certainty and enables independent assessment of major projects where a project is complex or there have been unreasonable delays; further cutting red tape and providing certainty of process to ensure that Tasmania remains a great place to invest, while also protecting what makes our state so special.

And we are a Government that’s committed to cutting red and green tape. We’ve already removed 140 unnecessary or inefficient regulations, we’ve reformed planning laws, delivering faster council approvals, and reduced permit requirements.

The local benefits test that we introduced on coming into Government has resulted in a dramatic increase in business going to local Tasmanian businesses over the last year, from from 63 per cent to 81 per cent.

We’ve developed a new housing incentive package to make it easier for Tasmanians to build their own home, which includes extending the First Home Owners Grant, reducing stamp duty on land and house packages, and the building of 900 new affordable housing options.

And we’re responding to the demand in our growing economy for more skilled Tasmanian workers.

Under our plan, we will increase the focus on giving more Tasmanians, young Tasmanians, the opportunity to work.

Statewide our youth unemployment rate is down. It’s lower now than when we came into Government, but it’s still higher than the national average.

Under the former Government, the number of apprentices and trainees in the private sector went down by 40 per cent.

Under our plan, we want to ensure that more young Tasmanians are equipped with the skills they need for a good job. We’ll provide local businesses with the incentive to take on young Tasmanians through a targeted payroll tax rebate and business grants for businesses, so that they employ more apprentices and young trainees.

We’ll partner with business, with industry and the community organisations to remove barriers that keep people from work, and we’ll invest in areas of strong growth, for example in returning Drysdale to its rightful place as a centre for excellence to train Tasmanians to work in our booming visitor economy.

And the building and construction sector is also a very important part of our economy. We do need more people to literally help build our future. We intend to increase the number of people employed in the building and construction sector by 25 per cent over the next five years, and we’ll support this through increased Government expenditure on public infrastructure in schools, hospitals, our roads, and through our nation-leading affordable housing action plan.

Our building and construction sector is a pillar of our economy, and we are a Government that will strongly support it, as we will the industry sectors that are our key competitive strengths - like agriculture and aquaculture, tourism, mining and forestry.

We plan to double the amount of water available through new irrigation schemes.  We’ve released our plan for the sustainable growth of our valuable salmon industry.

We’re planning to increase not just the number of visitors who come to our state, but how long they stay here, how much they spend while they’re here with a focus on spreading the growth of our visitor economy more into our regions.

We’ve restored confidence in forestry and mining and we’re planning a 50 per cent-increase in new mining ventures and to double the amount of production from our hardwood plantations.

When we think of the quality of our life and what makes this state so special, the low cost of living is something that we need to work on to preserve.  Rising costs of living are an issue for many Tasmanians. So, with the budget back into good shape we are better able to reduce the cost of living, for example by reducing motor vehicle premiums, and by capping power prices.

Under Labor and the Greens, power prices rose by 65 per cent. Under us, household power prices are actually lower than when we came to Government. But these figures are cold comfort to a pensioner who might struggle with a power bill, or a family struggling to make ends meet.

So, under our plan we are committed to ensuring that Tasmanians have the lowest regulated power prices in the country, and we’re committing to keeping increases for Government services at or below the rate of inflation for things like car regos, national park fees and bus fares.

And like any good Liberal Government should, we are committed to no new or increased taxes.

We understand Tasmanians are feeling the pressure of the increased cost of living, and the benefit of a stronger economy and a much stronger budget is that we are able to take real action to do more about it, as we can in important areas of Government services, in education, in health and supporting Tasmanians in need.

We are rebuilding the Royal Hobart Hospital, increasing services at the Launceston General Hospital and we’ve secured the future of the Mersey Hospital.

Elective surgery waiting lists are at record lows, and we are demonstrating our commitment to health through an increased investment in our budget to build a better health system. But we need to do more to ensure that Tasmanians to get their health care and off waiting lists sooner.

Providing Tasmanian kids with the best possible education is one of the strongest commitments of my Government.  It gives our kids the best shot in life, but it also will lift the productivity of our state.

We have made great progress in extending Tasmania’s high schools to provide Years 11 and 12, and have surpassed our first term target of 30 schools having extended. We’ve got eight planned for next year.

Our retention rates are up and there are more students achieving their TCE. We’re increasing education funding to record levels, employing more teachers, investing in our schools and into a modern, more effective education system. And we’re working with key partners, like the University of Tasmania, to achieve our shared economic and social objectives.

We’ll keep our communities safer by increasing police numbers. By the end of our first term in government we will restore police numbers to the levels they were before they were cut under the former Government.

Under our plan we will invest in the infrastructure our state needs. We are committing to increasing the long-term average investment in public infrastructure by 20 per cent over the next four years, and that means about an additional $70 million into important public infrastructure like our roads, our schools, and our hospitals.

We will seize our great advantage, and invest in one of our greatest competitive strengths - renewable energy.

Last week marked an important point in our vision with a commitment by my Government and the Australian Government to progress the next stage of a business case development for a second Bass Strait interconnector which would unlock new renewable energy development opportunities. It will help us to achieve our goal of making Tasmania renewable energy self-sufficient, and to export our excess energy to increase our revenues.

Hydro Tasmania plans to significantly expand generation capacity with a billion-dollar investment over the coming 10 years. We’re continuing to investigate pumped hydro opportunities with a unique opportunity to capitalise and leverage off our historic investment in renewables by providing cheap, affordable and renewable energy to Tasmanians to reduce the cost of living pressures, but also to help provide the renewable energy that our nation needs and become the battery of the nation.

So, while it is important to reflect on how far we’ve come, as you can see, my Government is very much focused on the future.

We have outlined our plan, and what I’ve spoken about today is literally just a snapshot – there is much policy substance behind it.  It’s a plan that captures our vision for the state, the priorities of a re-elected Majority Liberal Government, and which recognises the fact that there is still a lot more to be done.

Tasmania has come a long way in the last four years or so, and the upcoming election will be a very important choice, because it will determine the future direction of our state.

As they say, if you change a Government, you change the direction of the country.  If you change the Government here, it will change the direction of our state.

So, my pitch will be, if you’re happy with the way the state is heading and if you want to see a continued and stable majority Government, then you will need to vote Liberal. A vote for any other party will inevitably mean another Minority Government.

And when I spoke at CEDA four years ago on the eve of the 2014 election, I did speak a little about minority Government. I said my Party would not govern in minority and would never enter any deals with any political party.  It’s the same pledge I made in 2010 and which I stuck to.

I said no deals, I made no deals, and I will never do any deals. And I repeat this promise today, because I will not compromise Tasmania’s interests.

And I do so because it’s clear, particularly from the last four years, that a stable majority Government is absolutely the best thing for our state.

It provides the certainty and stability that our state needs and that business needs to have the confidence to invest. And it allows a Government with a plan for the future to take Tasmania to the next level, and that’s exactly what we plan to do.