Tasmania remains the nation's poorest state and its government's lack of appetite for reform is helping keep it that way, a prominent economist says.
Saul Eslake said the Liberal state government led by Will Hodgman and now by Peter Gutwein had "minded the store very competently".
"But they show very little interest in spending the political capital they've earned in order to build a bigger and better store," Mr Eslake said in a presentation prepared for Friday's Economic Society of Australia Tasmanian Economic Forum.
The Tasmanian-based former ANZ chief economist said the government had:
Mr Eslake said sustained improvement in Tasmanians' material wellbeing relative to other Australians required willingness to spend political capital "in order to make sustainable inroads into the things that explain why Tasmania remains Australia's poorest state, despite the improvement in Tasmania's economic performance over the past five to seven years".
Political capital is the public goodwill governments can accumulate, and can lose though their decisions annoying various people or groups.
Mr Gutwein said Mr Eslake's report confirmed the state economy had significantly improved since the government was elected in 2014.
"We entered the pandemic in a position of strength and have come through the other side with our economy still leading the nation as we continue to draw closer to reopening on December 15," Mr Gutwein said.
"These results reflect the confidence and hard work of Tasmanians, our flexible and adaptive response to COVID-19 and the strong reforms we have implemented since the 2014 election to secure Tasmania's future across a number of areas, including in education through extending every school to years 11 and 12 and investing $8 billion in education, training and skills.
"This has set Tasmania up for the future and resulted in record job figures and, importantly, returning the budget to surplus.
"While Mr Eslake has made his opinions known over many years, we will let the record speak for itself, and we will continue to deliver the strong plan we took to the recent election to keep the momentum going and secure Tasmania's future."
Mr Eslake also had praise for the government.
"The Tasmanian economy's performance has improved considerably on their watch and, although that's partly due to good luck, they can also legitimately claim that it is partly due to good management," he said.
"They have responded competently and effectively to major challenges, especially COVID-19.
"There have been none of the scandals or infighting that have dogged other state governments and the federal government and they have been prudent, responsible stewards of Tasmania's public finances."
Mr Eslake said Tasmania's economy had done well in comparison to the rest of Australia in recent years.
He said healthcare, primary industry, construction, professional and business services and information and media had been the strongest performing sectors and the better economic performance had been reflected in better labour market outcomes.
"Stronger population growth and greater confidence has boosted the property market, although that's not been a good thing for everyone," he said, referring to Tasmania's growing problems with housing affordability and availability.
"Housing supply has begun to increase in Tasmania, but it will need to be sustained at recent or higher levels for some years to make a difference."
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