The same old political solutions won’t fix Tasmania’s economic woes: what Tassie needs is a Gail Kelly

Tasmanians must be sick of hearing about their state being an “economy in decline”, a “basket case economy”, the “nation’s worst” economy and other choice epithets that leave little to the imagination.

Professor Jonathan West, founding Director of the Australian Innovation Research Centre at the University of Tasmania wrote a searing analysis of the state for Griffith Review:

“Tasmania ranks at the bottom among Australian states on virtually every dimension of economic, social, and cultural performance: highest unemployment, lowest incomes, languishing investment, lowest home prices, least educated, lowest literacy, most chronic disease, poorest longevity, most likely to smoke, greatest obesity, highest teenage pregnancy, highest petty crime, worst domestic violence. It seems not to matter which measure is chosen, Tasmania will likely finish last.”

That article was published in January 2013. Optimists might argue that Tasmania has since elected a Liberal government – Will Hodgman became Premier in March this year, ending 16 years of Labor government – a “pro-business” government, and a majority government at that.

The business community seems much happier with the Hodgman government than the previous government of Labor Premier Lara Giddings, and they certainly won’t miss the Labor-Green minority government.

And the Hodgman government seems to be sympathetic to the long-time and oft-expressed view of respected economist Saul Eslake that Tasmania’s economic salvation does not lie in a single “mega-project” – such as the aborted pulp mill project.

“A cargo cult mentality is not an economic development policy. And if Tasmanians can come to terms with that, there will be far fewer shattered hopes and dreams than there have been as a result of the economic development failures of the past three decades,” Eslake wrote in the Tasmanian Times.

(Eslake, chief economist at Bank of America Merrill Lynch Australia, has a particular interest in Tasmania. He was born in England in 1958 to Australian parents, originally from Sydney. The family settled in Tasmania when they returned to Australia in the 1960s. Eslake is an economics graduate from the University of Tasmania and was awarded an honorary doctor of laws degree by the university in 2012.)

But all this pre-supposes that Tasmania’s entrenched economic woes – which stem from its unique situation as an island state with a population of just 513,000 people – can be solved politically.

Barriers to change

The reality is that even a shiny new Liberal government with solid business credentials is going to find it hard going to solve Tasmania’s seemingly intractable problems.

Professor West argues that Tasmanians have grown so dependent on mainland financing that that the deep structural change that is required presents governments of any persuasion with barriers to change.

“Tasmania has developed a way of life, a mode of doing things, a demographic, a culture and associated economy, that reproduces underachievement generation after generation. …The reality is that Tasmania has bred a dominant social coalition that blocks most proposals to improve. Problems and challenges are debated endlessly, with no resolution. …Ultimately, Tasmania doesn’t change because its people don’t really want to.”

What is striking about this critique is that it could not be written about any other state. It is because Tasmania is so small – “both a region and a state”, writes West – that it is even possible to speak in such sweeping terms.

Political parties can promise to attract investment, create jobs and build a modern economy when in government – as the Liberals did in this year’s state election – but Tasmania’s issues don’t change, the challenges don’t change and the inadequacy of political solutions don’t change.

The mainland states have the critical mass, economic diversity and financial resources that provide governments with powerful levers to influence the course of economies.

The Hodgman government, like its predecessors, is limited in its options to revitalise the economy. Its “Change for a Brighter Future” economic blueprint was by and large more of the same.

In that document, the Liberals offered predictable platitudes – “growing our tourism industry”, “tackling Tasmania’s unemployment rate”, “backing small business”. Sometimes they were aspirational (if vague) – “building a stronger West Coast”, “looking to the future with energy”. But very often, with limited options, even the all-conquering Hodgman government has to make do with bland and piecemeal policy tidbits: “more tourists on TT-Line”, “unlocking the potential in our parks”, “growing jobs in the creative industries”.

Such a predictable laundry list of promises underlines the difficulties Tasmania has when it relies on political solutions: electorates to please, favours to curry, competing interests to balance.

Good public policy, democratic principles and pragmatic politics are as relevant in Tasmania as they are in any state, but given the depth of Tasmania’s economic malaise and the uniqueness of the region-state’s circumstances, an out-of-the-ordinary solution is essential.

This is a job for a CEO

On Twitter recently I made this suggestion: “An idea to toss around: Tasmania should appoint a bluechip CEO, responsible to the govt and the Plmt, with a 3/5yr brief to ‘grow Tasmania’.”

By “blue chip” I mean a CEO of, say, Gail Kelly’s ilk. Not a senior bureaucrat, not a businessman with an impressive LinkedIn profile, not an association executive or former politician, but the real deal. It wouldn’t be someone on $300,000 a year, it would more likely be someone on $3 million a year (which rules out Kelly, who is more than three times that, but you know what I mean).

This CEO would head an autonomous authority that operates within a democratic framework. The CEO would have a mandate that codifies powers and specifies objectives, budgets and community and environmental safeguards.

Within a defined mandate, the CEO would have the authority to pursue growth and development. (The CEO wouldn’t be the “CEO of Tasmania” – that remains the Premier; he or she would, for example, be the CEO of the Tasmanian Development Corporation.)

The Australian Innovation Research Centre recently identified six critical areas of economic opportunity for Tasmania: wine, dairy, aquaculture, horticulture, mining, and tourism. The CEO’s brief might specifically encompass some or all of these areas in fulfilment of the mandate for growth. Within a broad strategic framework set out by the government, the CEO would make the decisions required to make these profitable and sustainable sectors of the economy.

Former Victorian Premier Jeff Kennett, with characteristic immodesty, has offered his economic-revival services to Tasmania, but Kennett, not famous for his deft touch, is not the solution.

The Hodgman government has gone some way towards the CEO concept when it announced the creation of the Office of the Coordinator-General. The office, according to the Department of State Growth, is “responsible for attracting and securing investment in major development projects in Tasmania that maximises their contribution to Tasmania’s economic growth”.

“The Coordinator-General will help streamline the Tasmanian business environment, promote competitiveness and assist with the assessment and approval of investment opportunities.”

However, in what is a perfect illustration of the inadequacy of government and political processes to solve Tasmania’s economic troubles, eight months after being elected, the Hodgeman government has yet to appoint a Coordinator-General.

In anycase, the CEO would have more substantial responsibilities and would not be a glorified public servant. The CEO’s role would not be to act a conduit or to streamline processes, but to make decisions – to build the infrastructure required, to forge commercial relationships, to hire the people needed for the job, to implement plans: to achieve agreed outcomes.

This remains an idea to “kick around”. But the salient point is that innovative thinking is required to solve Tasmania’s problems. More of the same – the same ideas, the same political foibles, the same bureaucracies – will not work. The longer Tasmania’s depression continues, the harder it will be to build a sustainable future.

Tasmania’s unique beauty and magnificent natural wonders deserve to be recognised as a great national (and international) asset. Dishing up tired clichés and discredited ideas, however well intentioned, again and again, will be to squander Tasmania’s – and Tasmanians’ – potential. Tasmania deserves and requires a solution that is as unique as the state itself.

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One thought on “The same old political solutions won’t fix Tasmania’s economic woes: what Tassie needs is a Gail Kelly

  1. Excellent analysis and very poignant. Spending a considerable amount of time in Tasmania for work and speaking with Tasmanians in general, your description of there being an over arching malaise hits to the ‘heart of the matter’.

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