Tasmania looks to Asia to fix economic problems

Tasmanian Premier Lara Giddings says she is looking to Asia to drive the next economic boom after the collapse of the once mighty timber company Gunns.

Gunns’ voluntary administration and the closure of the only abattoir on King Island has left more than 200 workers in the island state facing an uncertain future.

It has forced Tasmanians to refocus their attention on the state’s ailing economy.

Economist and consultant Dr Paul Blacklow has done some quick calculations, and says the job losses amount to almost half a per cent of Tasmania’s GDP.

“It’s not that great but it’s been a lot worse in the past,” he said.

“I mean, you can use the level of unemployment as a bit of a guide to the level of economic activity and, you know, it’s about 7.5 per cent, approaching 8 per cent, which isn’t, it’s not great, but it has been up at 10, 11 per cent in the past.” Also the state’s Treasurer, Ms Giddings says she is all too aware of the fiscal situation facing her state.

“I understand Tasmania is facing some challenges,” she said.

“There’s no denying that.

We’ve got to be careful that we don’t slip back when, in fact Tasmania has come such a long way.” But Ms Giddings says she has a strategy to see through the tough times, and the focus is Asia.

“When you have a middle class with about 500 million people now that’s going to expand to about 3 billion over the next 20 years,” she said.

“People who have disposable income, who want to ensure that they are feeding their children with the best food that they can give their children.

“They’re educating their children in the most positive way for their future, and that they can travel the world, these are the opportunities that are there for Tasmania to grab hold of.” Changing the outlook The Premier says she is looking to grow the economy, in a variety of sectors.

“On my recent trade mission we focused on primary industries with dairy and irrigation and cherries, but we also looked at the mining industry, we looked at tourism, we looked at international education, we looked at renewable energy,” she said.

Mr Blacklow says it sounds like the right idea, but the Government could only do so much.

“A lot of economists always propose adopting a particular strategy they would like to see, so set the business environment so it’s easy to do business and then let firms decide what the next best thing is,” he said.

“It’s not really up to governments.” The head of the Farmers and Graziers Association, Jan Davis, says hundreds of Tasmanian farmers have been earning money by leasing their land to grow forestry plantations.

The demise of Gunns has left them without as much as $20 million.

“We need to see an environment where farming is encouraged in Tassie, rather than discouraged,” she said.

“So that instead of putting more and more red and green tape barriers up, we can actually streamline some of the things that make it difficult to do business here.”

 

Yahoo Finance