Boosting health, education key to coronavirus recovery: Tasmania Report

In the report to be launched today and prepared for the Tasmanian Chamber of Commerce and Industry, leading economist Saul Eslake questions whether it is time to rethink Tasmania's dependence on tourism, China and revenue from the federal government.

With just over a year to the next state election, Mr Eslake says that with many challenges ahead he hopes Tasmania will be "bold and imaginative" rather than hunkering down and being "timid".

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TCCI chair Paul Ranson said Tasmanians were "the unhealthiest, oldest, worst educated, most under-employed and most dependent on government benefits in Australia".

"This is not sustainable and if it continues will condemn a large number of Tasmanians to unproductive lives with compromised opportunities for employment, personal fulfilment and community engagement," Mr Ranson said.

"The flow-on effects mean increasing health costs, more people who feel alienated from society, and who in turn, have no stake in developing communities."

Mr Eslake said Tasmania would be less successful than it could be in attracting migrants and retaining its own inhabitants while its education and health systems were seen to be inferior to other states.

"Families with children will be less likely, all else being equal, to choose Tasmania as a place to live if they have reason to be concerned - as they do - that their children will be less likely to obtain an education of the same quality as they could in other parts of Australia," he said.

"Those families, and arguably even more so people contemplating moving to Tasmania as a retirement destination, will be less likely to do so if they fear - as well they might - that they will be less able to access appropriate hospital or other health care, within an acceptable time-frame, than in other places which they may also be considering."

Mr Eslake said Tasmania's hospital system was inefficient and emergency department waiting times at the Launceston General Hospital were the longest in Australia.

"Tasmania's hospital system employs about 20 per cent more staff per patient days than the national average, in part because it has a significantly higher proportion of very small hospitals (with 10 beds or fewer) than any other state or territory.

"But this above-average level of staffing per patient has not resulted in better treatment for Tasmanians: on the contrary, the Launceston General Hospital and the Royal Hobart Hospital have the longest, and third-longest, respectively, emergency department waiting times of any of the 294 public hospitals in Australia, while Tasmanian public hospitals have the highest rate of 'adverse events' in Australia.

"It has been estimated that Tasmania has at least 200, and perhaps as many as 300, fewer public hospital beds than required to provide services equivalent to those available in the rest of Australia."

Mr Eslake took aim at the education system.

"Tasmania's persistently under-performing school education system also imposes a drag on Tasmania's capacity to thrive in the post-Covid economy.

"The proportion of Tasmanians aged 15-74 who have a bachelor's degree or higher is still more than 6 percentage points below the national average, while the proportion of Tasmanians who have no qualifications beyond Year 10 of high school is still by far the highest of any state or territory, and almost 9 percentage points above the national average.

"These considerations simply underscore the importance which ought to attach - but which to date hasn't - to improving Tasmania's school education and health systems in the interests of those who already live here."

Mr Eslake emphasises the importance of addressing the "digital divide" in the North-West and West Coast by providing better digital access and skills for people wanting to expand their education.

He also questioned Tasmania's reliance on federal financial support, the tourism sector and China as an export market.

"Crucial though it has been to the improvement in Tasmania's economic performance over the past five years, have we now become 'too dependent' on tourism, given the challenges which that industry faces as a result of Covid-19?

"Have we become 'too reliant' on China as an export market, given the rapid deterioration in the bilateral political relationship between Australia and China?

"Are we 'too comfortable' with the extensive fiscal support Tasmania receives from the Federal Government - and if so, what are we prepared to do, including by way of reform to our state tax system, to reduce the risks we might face if that support were to be lessened?"

He said before COVID-19 hit Tasmania had the fastest economic development per capita, an unemployment rate below the national average and the strongest residential property market in Australia.

"Despite all these favourable developments, the Covid-19 recession appears to have hit Tasmania's economy more severely than that of any other state or territory, with the obvious exception of Victoria, with it's unique (in the Australian experience) 'second wave' of infections.

"In particular, Tasmanians have encountered greater difficulty in getting back to work after the job losses incurred during the early part of the recession, than people anywhere else in Australia other than Victoria."

Mr Eslake believes the fundamental problem is that Tasmania's economy is much more narrowly-based than the rest of Australia.

"Five sectors - agriculture, forestry and fishing; retail trade; accommodation and food services; public administration and defence; and health care and social assistance - accounted for 38 per cent of Tasmania's gross product and 48 per cent of Tasmania's employment in 2019-20, as against 22 per cent of gross product and 36 per cent of employment for Australia as a whole," he said.

Mr Eslake fears that Tasmania will be slow to recover from the recession.

"The fact that Tasmania's economy was doing well going into the Covid-19 recession, and the State Government has provided and will continue to provide significant fiscal policy support, unfortunately does not guarantee that Tasmania will emerge from the recession ahead of, or more rapidly than, the rest of Australia.

"Tasmania's experience during each of the last three recessions, over the past four decades, counsels strongly against such hopes."

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