With election season finally coming to a close on March 3, the business community can now get back to concentrating on growing and improving.
While the state has been travelling in the right direction for several years, there was a noticeable pause in economic activity during the campaign.
Bi-partisan support for the Office of the Coordinator General was settled early, which alleviated investor concern, but the spectre of a hung parliament still clouded a previously clear horizon.
The general view was that the state was strongly headed in the right direction, but until the election was decided, many local developers were content to sit tight and wait for the outcome.
But what does an increase in business confidence actually look like in the real world?
It isn’t an abstract concept – business confidence translates into economic activity.
The potential for residential development in the central business district of Launceston is a clear example.
The Launceston Chamber of Commerce has for some years championed the conversion of vacant upper-level heritage buildings into prime residential space.
In June 2014, the chamber conducted a case study into the conversion of one such property into a residential space.
In 2014, property values were far below their current level, demand for inner-city living was similarly low and the state was just beginning to show the first green shoots of recovery after a severe economic downturn.
In short, business confidence was very low.
The case study showed that a combination of regulatory impediments, low property values and high construction costs led to the project being marginal at best.
Fast forward to 2018 and things are vastly different.
Property demand has strongly increased, bringing with it higher prices.
Many regulatory issues have been resolved, taking significant cost out of development budgets.
Professional employment levels are rising, injecting money into the economy and with it the attractiveness of living in the Launceston CBD.
Increased residential development results in population growth in the CBD, increasing vibrancy and economic activity.
This is economic activity driven by confidence – confidence that the economy will continue to grow, employment will rise and people will be paid more to do higher skilled jobs.
Of course, government investment helps to drive confidence, but the best thing government can do to really drive confidence is to balance a budget. That way business knows that there are no nasty surprises or risks.
When business confidence flows, the economy grows.
- NEIL GROSE, LAUNCESTON CHAMBER OF COMMERCE EXECUTIVE OFFICER