Thursday 29 May 2003
BUDGET - ECONOMIC GROWTH PREDICTIONS
MrFINCH (Question) - Mr President, a question without notice to the Treasurer. As economic growth predictions are vital to the State Government's budget policy over the next 12 months, I would like to ask the Treasurer how confident is he that predictions in last week's Budget are correct. The Budget apparently was greatly helped by a revenue windfall partly because of the property boom in Tasmania connected to growing interest in Tasmanian real estate from mainlanders. Does the Treasurer expect this to continue?
Dr CREAN - I thank the honourable member for his question.
Mr Fletcher - I bet you do.
Dr CREAN - No, I thought he was going to ask something else. He has completely taken me by surprise. The reasons for Tasmania's economic resurgence, as I have indicated on a number of occasions, are numerous. It is not just down to one particular aspect because the economy is indeed firing on a number of cylinders. It is true that –
Mr Wilkinson - Can't you just say, 'Refer to debate 28 May, 2.30 p.m. through to 3.30 p.m.'?
Dr CREAN - I do not think that I have ever used that term before, 'firing on cylinders'. But it is true that half of total private investment is indeed in the building and construction industry. That is not only housing, that is total construction which is commercial buildings and other structures related to that.
Mr Fletcher - Wind farms, pipelines and the like.
Dr CREAN - That is right. Total investment, which is about $2.2 billion, is at record levels. It is not just from housing and it is not just building and construction; it is as a result of the largest, most diverse range of infrastructure projects in the State's history that is contributing to it. The Government's strategy, as I have indicated before, is about a more competitive business environment which involves a range of policy directions but the infrastructure developments are an important part of that. They have delivered already but, importantly, there is more direct and indirect opportunity to come in the future, which is really going to underpin our economic future. Even Access Economics and Econtech now agree, along with the ABS that claim their economic growth, which is production, is an experimental series and the major commentators agree that in small economies it is not the best indicator, even though Treasury are predicting a very good outcome.
The best indicator and the bottom line for the State is what is called 'State final demand' which is a measurement by the Australian Bureau of Statistics and that measures consumption and investment; it is total demand, if you like, in the Tasmanian economy. We have had that at record levels over the last two years, significantly outstripping the rest of the nation for the first time in 12 years. We are confident that is going to continue into the future. The end result of that, of course, is more jobs. There are a range of generators of economic activity and jobs in the Tasmanian economy, well beyond just the real estate market, that are going to underpin our future. I have explained on a number of occasions, and reiterated in a general sense here, why that is going to be the case.