2 November 2021
Peter Gutwein, Premier & Treasurer
CEDA State of the State Address
I will begin by paying my respects to the Tasmanian Aboriginal people, and pay my respects to elders past, present and emerging and, Adam, note the very good work that's going on in Western Australia in terms of one of the first treaties that has been signed.
As I understand it, and I think most in the room would understand, that we currently have a body of work underway at the moment with Professors Warner and McCormack that are working across the State and will bring a report to Government very shortly in terms of what the next steps are for Tasmania in terms of reconciliation. But, importantly, to hear from Tasmanian Aboriginals themselves, what their views are on what the pathway to treaty might look like and what's important from their perspectives, and as it’s indicated, we'll have that very soon.
Before I move to discuss matters relating to the State, I want to touch on one very important matter, first and foremost, and that is in terms of COVID. I'll say more as we move forward, but I do want to make these points, I'm saying this to every group that I speak to now.
We have done very well in terms of our response to COVID, and life generally here in Tasmania has been pretty much almost normal.
But we've set a date now, the 15th of December, to reopen, and in doing that, we know that at some stage COVID will come to Tasmania. And if you look across the country, more than 165,000 cases of COVID, 1,600-plus deaths. And whilst we've unfortunately had 13 deaths here in Tasmania at the beginning of the pandemic, we have largely been untouched.
It will be important as we move forward, that we move forward as a community but, importantly, that we ready ourselves for when COVID arrives.
In setting that date of the 15th of December, I know full well, as I'm sure many in the room do, that COVID will arrive here, and we will need to deal with that. And so, every group that I speak to, I'm speaking in similar terms, because we need to ready ourselves for that.
Today I want to touch on a number of things.
Firstly, Tasmania's current economic position, in fact, I might say, Jason, very ably explained by yourself, it's going beautifully. I'll touch on some of those matters in a moment.
Our plan to reconnect Tasmania with the rest of the country, and, importantly, to the world as well, some of the key strategies that we're working on for growth and then, obviously, we'll take some questions at the close.
Where I want to start is just in terms of some of the outcomes that we had seen and in terms of State Final Demand. As Jason mentioned a moment ago, it has been outstanding, and when you look at the graph, in terms of where the country and all the states and territories ended up in at the end of 2019-20 financial year, the bounce has been extraordinary.
And I don't mind saying that during the course of the last 18 months, and especially over the course of last year, there were many economists that had many views about what might occur. I do recall Federal Treasury at the time, and now State Treasury, making the point that we could, or they could, foresee ongoing recession and unemployment at above 12.5 per cent by the end of the last calendar year.
Now, importantly, that hasn't happened, and our economy bounced back extraordinarily well, as it did across the country. I expect that we're going to see another bump, another increase, as we see the loosening of restrictions in New South Wales and Victoria, especially in coming months.
In terms of goods exports, we hit a record of over $4 billion, which was an extraordinary outcome. The world had a great appetite for our metals and manufacturing products towards the end of last year, and we can't see that abating at the moment. And, our service exports, we will see an increase again over the coming 12 months, as we reopen to international students moving forward.
In terms of dwelling approvals, the circumstance in Tasmania has been extraordinary in a Tasmanian context, similar to what has occurred across the rest of the country in terms of the stimulus that was brought to bear by the Federal Government, and matched by this State Government and other state governments around the country.
We've seen a rapid growth in the number of dwellings being built, and in fact, if you can get a plumber or an electrician or a builder at the moment, you're one of the fortunate few, because they are flat out. But, importantly, what we're seeing has been a significant increase in our dwelling approvals.
In a normal year, around 25 to 2,600 dwelling approvals would go across the desks of councils. Over the last 12 months, they’ve seen over 4,200 dwelling approvals, and that appetite isn't abating.
Over the weekend, I had the pleasure of being back in Launceston, which is unusual, and with my wife. We went and had a drive around the suburbs of Launceston, and I was staggered by the amount of building that is going on and the development that's occurring and, importantly, it's a phenomenon that we see continuing to occur.
As well, as the borders reopen, one of the things that hasn't driven the demand for housing has been an absence of population growth. They're knocking on the door now, and they've been knocking loudly, and as we open up, we're going to see population growth, I think, well above the Treasury forecasts that are in the budget at the moment.
In terms of retail trade, slides up there, retail trade, in my view, has always been the best litmus test for the strength of your economy. If people have the confidence to spend, then that indicates an underlying strength broadly across your whole economy, and what we've seen is record numbers in terms of our retail spend.
And when I look back to the plan that we laid out last year, one of the key things that we knew that we had to do in terms of, one, keeping people safe but, secondly, was to ensure that people had confidence.
Confidence levels in the State have been at record levels. In fact, the most recent NAB survey indicated that not only were we the most confident jurisdiction in the country, people viewed our business conditions as the best as well. And, consistently, confidence has remained high, and for a small jurisdiction, it's something that as a Government – as a Premier and as a Treasurer – we will work hard to hang on to, because confidence is fragile, but when you've got it, it will drive your economy, and we're seeing that in our underlying numbers.
Employment. We're at a record level of employment, some 263,000 people employed in Tasmania at the moment.
I’ll just come back to those comments I made a moment ago about the Federal and State Treasury forecasts last year. Ongoing recession and 12.5 per cent unemployment was forecast by the end of the last calendar year.
What we've seen is our unemployment rate dropped to 4.8 per cent, one of the lowest numbers that we've seen in this State in a long period of time, with record employment.
Our biggest challenge, and one I'll touch on as we move through the presentation, is that we've got more jobs than we have people to fill them. And that is both a challenge, but also a fantastic opportunity for this State as we move forward.
Job vacancies are at record levels, 6,500, in fact, the growth in job vacancies has led the country in terms of growth terms. So, there are jobs available in Tasmania at the moment and, in fact, the few people that I've spoken to today in the lead-up to sitting down for lunch, indicated to me that the biggest challenge that they have, is that they're busy, but they need skilled people, and that's certainly something that I think that not just this jurisdiction but other jurisdictions are going to find a challenge, but also an opportunity as we move forward.
If we look at the overall state of the economy, importantly, our economy last year, for the period to the end of 30 June, and I say last year, when we were expected to be in recession – that ourselves, and WA were the only two states or jurisdictions in the country that actually had growth over that period.
Now, it was below what we'd forecast, .3 per cent was our growth rate, but it never dipped into negative territory and, likewise, WA had a strong outcome as well, which is quite extraordinary when you think back to where we were during the March quarter of last year, and for those of you that were in private business, those of you that are in working corporations, most of you would have been at home because we had stay-at-home orders on and we closed the vast majority of businesses that were operating in the state for a period as we worked our way through that, and therefore took a significant economic hit.
But we bounced back and bounced back very strongly, and Treasury at the moment of forecasting 4 per cent growth this current year, and employment growth of a further 2 per cent as well.
Now, I want to just chat about our Reconnecting Tasmania plan.
At the moment, as it stands today, we've got more than 89.3 per cent of Tasmanians fully vaccinated. We will hit that in this coming week. We've always said our target was Melbourne Cup Day, and then it became apparent in terms of the timing of the second doses that we would hit the 80 per cent of target in the Melbourne Cup week. As the second doses are now provided over coming days, we will hit that target and be in a very strong position moving forward.
But we've taken our own path in terms of the reopening and our Reconnecting Tasmania plan.
From Day One, it was concerning that we as a jurisdiction had an older and more challenged jurisdiction in terms of health outcomes and underlying health conditions, and therefore we walked a different path to other states and territories.
Tasmania was the first state to ban cruise ships.
We were the first state, and ridiculed for a period, for closing our borders. The bloke in WA seems to have doubled down on that in recent times, he made an art form of it, but we were obviously cognisant that we needed to do everything that we could to protect our older and more vulnerable population.
And in terms of the national plan, that national plan had an ambition to be open by Christmas, after going through certain gates, 70 per cent and 80 per cent.
We added our own gate at 90 per cent which we expect that we will achieve by early December. In fact, we should hit 90 per cent of over 16 year olds, the eligible cohort, by the last week of November, and the 12 to 15 year old cohort in the first week of December being 90 per cent vaccinated.
The other test, or the other key matter, that I needed to be comfortable with, and the Government needed to be comfortable with, was that 100 per cent of those eligible had the opportunity to be vaccinated.
When we open our borders, COVID will come. And when COVID comes, we know that some people will get sick. We know even if you're vaccinated, you could get very sick and, unfortunately, those that aren't vaccinated, some of them might die. And so, we need to be very comfortable that in taking that decision to reopen on the 15th of December, that every Tasmanian had the opportunity to be vaccinated. And I'm very comfortable, as we work our way forward, in terms of the mobile buses that we've got, in terms of the outreach that we provide, in terms of the state clinics, the GPs, the pharmacies that are on board, that Tasmanians have that opportunity to get vaccinated. If there's anybody in this room that isn't, I would encourage you to get vaccinated. Because on the 15th of December, we will open our borders and with it COVID will come.
Now, I just want to make this point as well, in terms of how we're going to manage that moving through, because we will again be slightly different to the other states.
If you want to come to Tasmania, and Jason, I can't wait until you and your partner come down and start spending money, I know it always provides a blip on the economic activity, a bit of an uplift, but you will need to be tested and you'll need to provide a negative COVID test within 72 hours of travel, and you'll need to be double vaccinated to enter the State.
If you don't meet that criteria, then there'll be quarantine arrangements in place.
We will run that for the first four weeks.
The reason that I want to do that, is that we have not had the experience with COVID that other states have had, but we know that once this thing arrives here, if we don't manage it carefully, it will get away from us. And we need to ensure that both our health system, but also our community, many Tasmanians are anxious about the reopening, that we manage it carefully. And so, for that first month, at least, those rules will be in place, and then we will review it and we'll see where we move to from then.
In terms of our health preparedness, in terms of our Public Health preparedness, I'm very comfortable that we have the systems in place and the surge capacity available.
But the most important thing that we can all do as individuals, and I think it's telling when you look at the numbers out of Victoria today. For the first time as their vaccination rates have increased, their case load is now below a thousand. They're still seeing hospitalisations, they're still seeing people in ICUs and they’re still seeing deaths, unfortunately, but the caseload’s coming down.
Likewise, we haven't seen the surge that was expected in New South Wales and, again, all that's changed in those two jurisdictions has been the level of vaccination. And so I cannot stress strongly enough the need to vaccinate and to ensure that we protect both ourselves and our community.
Now, last year, our plan was based around if we kept people safe, we kept confidence high; if we supported our economy where we needed to, that we would see strong economic growth, that we would say our jobs maintained or increased and, importantly, that we would see our way of life continue.
As we move forward from here, that same strategy is going to be important. We want to ensure that we keep people safe, and we’ve taken the steps that we can, and we think that our plan for reopening will provide us with that opportunity. But it's the other opportunities as we move forward that will provide real opportunities for growth, as we take these steps.
And I want to touch on our infrastructure investment. I know that there's been a bit written by some in the room in recent days about infrastructure, and it's interesting. I'll talk about our plan in that regard, and what our thinking was last year when we rolled out record levels.
I want to talk about skills and education, and workforce growth, renewables, climate and Future Industries Tasmania. And I know we’ve Bess here and her very strong interest in Marinus, and that work that's been undertaken by TasNetworks over time. You know, that is a fantastic project and something that I think will provide great opportunities not just for this State, but for the country.
I want to talk about growing our export markets, also taking our place on the national stage. And, I've been a strong advocate for our own AFL team, for our own NBL team. I see great opportunities for Tasmania in that space, and for the life of me, I cannot understand why as a State of this Federation, when they call something a national game that one of the states of that Federation doesn't have its own team in it, and I'll talk more about that in a moment. And then also welcoming back visitors.
Now, we have a $5.7 billion infrastructure program over four years. It's a significant program.
Last year, when framing the budget, and bearing in mind, it was a light budget in November, December for the 2020, for the 2019-20 financial year, one of the challenges that we faced, or for the 2021 financial year, one of the challenges that we faced was, based on the advice that we had in terms of where the country could be, where our economy could be, and where the broader Australian economy could be. There was a view that during 2020, that the private sector would withdraw from the market, that banks may not have been as supportive as what they could have been and that there may have been a collapse in terms of construction. So, as a Government, like other Governments around the country, we stepped up and we provided the largest infrastructure program that we could. And, importantly, what occurred was that confidence remained high and, importantly, what occurred was that the private sector remained in the place, in its place, and we saw continued investment and growth in private sector development as well.
And so, what we have now is, I think, a wealth of opportunities. We have a Government that has a supercharged infrastructure program that sits there being rolled out. But at the same time, we have significant interest and activity in the private sector market as well. And that provides us with, as I've said, I think a wealth of opportunities. A challenge on one front, that we don't have enough people to do the work, but an opportunity on the other to ensure that we can provide those Tasmanians that want the skills and that want to grasp that opportunity with the option to do so.
If we look at the broader growth and infrastructure, when I first became Treasurer back in 2014-15, which seems a long time ago, our infrastructure program was about $1.4 billion over four years. The infrastructure program that was included in the 2021-22 budget which we've recently just brought down was $5.7 billion. That included around a billion dollars’ worth of new investments in ports and hydro generation, as well as further equity investments in the Government Businesses and a $3.8 billion general government sector spend.
So, we have a significant program moving forward which will underpin the civil, the residential and the commercial construction sectors moving forward, because not only are we building houses, we're building schools, we're building hospitals, we're building roads, we're building bridges, right across the sector. And, importantly, as the private sector remains strong, and there will be some competition that we'll need to manage our way through with this, it provides great opportunity for Tasmanians moving forward.
In terms of skills, training and workforce growth: $8 billion worth of investment across the four years into education, skills, and training. It’s the largest investment ever by a Government, but we need to make it. Importantly, I know that TasTAFE is in the room. We want to see TasTAFE pivot, remain in Government hands but, importantly, become more like the businesses that it's there to serve in terms of being nimble, in terms of being able to make decisions quickly, in terms of being able to look at a skills challenge and deal with it effectively and efficiently and quickly.
And, importantly, we've also partnered in this space with the MBA, the HIA and the civil contractors, and provided significant investment to work with them to ensure that we can grow the base of those people that are working in those industry sectors. That we can have greater reach out into the regions, greater reach in terms of our young people, greater reach in terms of those that may be thinking of leaving the industry or maybe looking at reskilling and provide them with an opportunity to take part in what will be one of the most aggressively growing sectors, not just in Tasmania, but in the country in terms of our infrastructure.
In terms of renewables, climate and future industries. In the budget, we took the view that we needed to put in place a new structure that brought together from across Government all of those parts of Government that were working on renewable energy or climate, to provide them with the opportunity to have a focus-strategic approach.
I believe right now that we have a moment. We have a moment that's been built on 100 years of investment into hydro electricity by successive Governments over time and communities. We have a moment because we have one of the best emissions profiles, not just in this country, but in the world. We're out of, six out of seven years we've been able to achieve net zero emissions, which is something that other states and territories can only dream about. In fact, many countries can only dream about it.
So, on one hand, we have the renewable energy base, we also have the emissions profile which others are so envious of. That's why recently we've set, and put out for public consultation, a net zero target of 2030, the reason being that we've achieved it already, importantly, we can work with our industry sectors to ensure across the board that we improve our outcomes and we become even more emissions negative, if I can call it that, in terms of our standing.
And what's happened as a result of the position that we have is that the eyes of the world are on us. Right now, if we were a country, we'd be in the top five countries in terms of renewable energy generation. If we were a country, we'd be in the top five in terms of our emission profile. And so, for Tasmania, a small jurisdiction the bottom of Australia, dislocated from markets, we have an opportunity and the world is looking at as, and I think that capital and smart people will flow here as a result of that.
Project Marinus. As I've said, TasNetworks is working on that. That provides this small state with the opportunity to assist the rest of the country as it transitions to more renewable energy options. It's bold; it's brave; but, importantly, we can play a real part in the architecture of the country moving forward.
At the moment, in terms of hydrogen, the eyes of the world are on us, we have a range of proponents – some louder than others – looking at the opportunity here. But we've never been in this position before where, on one hand, we have proponents for projects and proponents looking to build new energy together at the table, and as a Government, what we've got to do is to find the right architecture, the right pathway, so that Tasmanians can see real benefits and that the State's best interests are taken care of. You know, it is a fantastic position. We are in rude good health in that regard, and it's something as a Government we're working very hard on, and Anton Voss, without mentioning you, you’ve got a big job in front of you.
In terms of growing export markets, we had a fantastic outcome for exports over the previous year. In fact, better than what we had expected. The appetite of the world remains strong, which we had not expected that it would, but it did. Importantly, we're looking at how we can diversify. We're putting people on the ground and into Japan, into Singapore, into the States. Obviously, with free trade agreements being struck with the UK, there are opportunities that will come and, again, the world wants what we make, what we produce, and in terms of our service exports, the world wants to be educated here as well.
We have a fantastic opportunity in front of us.
I’ll talk briefly about the national stage.
In terms of the fundamental proposition, in terms of Tasmania being on the national stage is this: we are a State in a Federation. There is a national game that is being played, and we don't get to play our part in that. Yet what we have done for decades, since the inception of the game is we have provided some of the best players that have ever graced a field to play for other clubs and other states and other jurisdictions.
Our time is right now. I've never been more confident that we are in a position where we can achieve our own AFL team, and in doing so, what that will do is act as a magnet, it will draw more people to the game, it will improve our health outcomes because we'll have more people playing sport, and it can underpin our game of football here in Tasmania, which for many decades, in fact the last two decades, has been dislocated.
And I see it as a fantastic opportunity both for a men's team and also for a women's team. And, again, these things are not driven by the revenues that you generate at the gate. They are driven by outbound marketing, and when you've got the fantastic ovals that we have in Tasmania and the opportunity for national sponsors to advertise, we have an opportunity and a right, I believe, to be on that national stage.
We've done it with basketball. We've got negotiations underway with the A League. And I must say my conversations with Gil McLachlan in recent months, at times have been challenging. He's had a pandemic to deal with, and I give this nod to the AFL, they have done an unbelievable job of ensuring that there was some normality in a sporting sense in this country as we've managed through the pandemic. They got players on the ground, albeit many of them out of COVID bubbles, but they kept the game going and, again, I'll give a nod to WA.
Who would have thought that they could have held a Grand Final as good as they did? But they managed it, and it was, I think, a good outcome for the country, because it demonstrated that, even when the hallowed grounds of the MCG couldn't be trodden on on Grand Final Day, this country found a way to put the biggest show on earth on, and we did it, and I think it should provide everybody with great heart.
Importantly, we'll continue to pursue those options. I think that every young Tasmanian that has an aspiration should have the same opportunities as other people that live in this country.
And I'll make this final point on this: football clubs have aspirations, they have aspirations to win games, they have aspirations to win flags. But, importantly, football clubs, like every sporting club, have a broader aspiration than that. And that is to ensure that young people become better people as a result of the time that they have spent in that club or that organisation. As I've said to Gil McLachlan, our aspiration is that we simply want that same opportunity for young Tasmanian men and women to have the opportunity to become better young men and women, to live better and more fulfilled lives, by having a similar pathway to those in other states and territories.
Now, welcoming back visitors, I've touched on it, and we're going to do it cautiously as we move our way through our plan. And I'm sure there will be some criticism as we do so.
The tourism sector will obviously want visitors to flood in as quickly as they can. There will be issues and bottlenecks that will be created, as we manage our borders over that first month, because the demand for Tasmania is very strong.
But the most important thing, and the thing that has driven me for the last 18 to 20 months, has been that we need, first and foremost, to be able to keep people safe, and we will step back into this cautiously. The demand is there, we will manage that as best we possibly can and ensure that as we do so and the virus is introduced to Tasmania, that we do it in a way that we can manage and, importantly, keep people safe.
As for our operators, we've already provided significant support, and we'll continue to do so. The aim of this is to ensure that we keep our borders open, we allow people in, we keep their businesses open, as we manage our way through this. And, importantly, I think that we can have a win-win as a result.
So, in closing, I make the point that COVID-19 will continue to challenge us, as we move forward, but if we continue to work together, as we have done over the course of this last 18 months. And I remind everyone of this – when we were at our worst last year, when we were closing down hospitals, when we had challenges and, 5,000-6,000 people were sequestered in their homes, and we had stay-at-home orders in place. The thing that filled me with great heart was that Tasmanians, regardless of race, religion, circumstance or background, held out their hands to each other in what was, I thought at the time, was the most extraordinary example of a common humanity that I've ever seen.
And as we move forward through this, there will be twists and turns, and we will need to do that again. And so I would encourage us all, to simply just be Tasmanians, as we work our way through this, because we will get through it and, importantly, life will return to a level of normal sooner than what people think.
Importantly: get vaccinated.
Our businesses are strong, our economy remains strong, the opportunity remains very strong.
Thanks very much.
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