SAUL ESLAKE

Economist

SAUL ESLAKE

‘Welcome to my website …
I’m an independent economist, speaker, company director
and Vice-Chancellor’s Fellow at the University of Tasmania’

Take a look beyond the numbers


Publications, Tasmania | 24th October 2017

Saul Eslake | Hobart Mercury |24th October 2017

Op-ed piece published in the Hobart Mercury newspaper on 24th October 2017, discussing Tasmania’s ranking in a recent analysis of the economic performance of Australian states and territories, and suggesting some priorities for the next Tasmanian State Government

Talking Point: Take a look beyond the numbers

THE CommSec State of the States Report is one of a number of regular “snapshots” comparing the economic performance of Australia’s eight states and territories produced by a range of financial institutions and consulting firms, using a variety of different methods. CommSec ranks the performance of each state and territory across eight indicators relative to their respective 10-year averages, then assigns a ranking based on the average of each state or territory’s ranking on those eight indicators.

The advantage of CommSec’s approach is its simplicity. For example, its most recent report, released this week, shows NSW doing “the best” of all the states and territories, followed by Victoria, all the way down to Western Australia which ranks last. Tasmania’s ranking slipped to fifth, having ranked fourth in each of the three previous CommSec reports this year. But the margin between Tasmania and South Australia, which moved into fourth spot, was very small. And Tasmania’s ranking remains much better than the seventh or eighth spot, which we occupied throughout 2016.

The CommSec report has some quirks which are worth noting. Arguably, it assigns more importance to housing than it should — with two of its eight indicators (housing finance commitments and dwelling starts) and one-third of another (construction, including residential construction) relating to a sector which accounts for less than 6 per cent of gross domestic product, GDP.

It uses a peculiar combination of state final demand (spending by households, businesses and government) and international trade (in goods), unadjusted for inflation, as a proxy for overall economic growth (in the absence of quarterly measures of real gross state product). In the latest report, this gives the Northern Territory a number one ranking for economic growth, even though the NT ranks last on five of the other seven indicators.

And it judges labour market performance solely by reference to the unemployment rate, without considering jobs growth or labour force participation. Thus, NSW has “the strongest job market in the nation”, because its unemployment rate is lower relative to where it has been over the past decade — even though the fall in the NSW unemployment rate over the past year is entirely due to a decline in its participation rate, and employment growth in NSW over the past year has been below the national average (and below that in Tasmania).

Notwithstanding these quirks, Tasmania’s fourth placing in the latest CommSec rankings isn’t an unreasonable assessment. We’re clearly not doing as well as NSW or Victoria. We are doing better than Western Australia and the Northern Territory. You can argue over whether we are doing better than South Australia (which is not setting the bar very high) or Queensland. But, importantly, we are doing better than we have done for most of the past five years. The key economic questions in the lead-up to next year’s state election are can we sustain this improvement, and can we do even better? The answer to each of those questions is yes, provided that whoever wins government has a mandate to pursue economic and other policies which can make our economic performance stronger and more sustainable, in the face of unpredictable forces beyond the control or influence of any state government.

Of these policy areas, by far the most important is education. Despite spending considerably more per student and as a proportion of our state’s income on school education than the rest of Australia, Tasmania’s education system has consistently delivered poorer results in participation and attainment. This isn’t the fault of students, or teachers. It isn’t an inevitable result of Tasmania having a larger proportion of students from rural and regional areas, or from low socio-economic status households, than the rest of Australia. Students from Hobart are less likely to complete Year 12 than students from provincial or rural areas of any other state; and students from high socio-economic status households are less likely to complete Year 12 than students from low socio-economic status households in any other state.

The fault lies, rather, in a system which, for five decades, has failed to offer students entering high schools the same pathways and opportunities to a full secondary education as are available, almost universally, everywhere else in Australia. The Hodgman Government’s program of extending Year 11 and 12 courses to high schools in rural and regional areas is now showing welcome results. But those opportunities need to be extended to urban areas, where around three-quarters of Tasmanian students live — a step which would require an explicit mandate.

A government which wished to sustain and improve on Tasmania’s recent economic performance would also be aided by mandates to emulate other states in selling or leasing “poles and wires” or ports in order to invest more in growth-enhancing infrastructure, and to pursue growth-enhancing state tax reform, such as broadening the base and lowering the rate of payroll tax.

In other words, Tasmania’s medium-term economic prospects would be best served by having a government which sought, and received, a mandate to do more than simply “mind the store”.

Saul Eslake is an independent economist and Vice-Chancellor’s Fellow at the University of Tasmania.

SPEAKING ENGAGEMENT

Speaking Engagement | Boardroom Advisory | Commissioned Report | Expert Witness



Saul Eslake online presentation


“You are the best economic thinker in the country hands down”

Sheryle Bagwell, recently retired Senior Business Correspondent (and sometime Executive Producer),
ABC Radio National Breakfast


“Just want to congratulate you Saul on the unbelievably good set of slides you just presented, possibly the best I have ever seen. You have set the bar very high.”

Dr Joe Flood, Adjunct Fellow, RMIT University, Pandemicia


“Thank you very much for your excellent presentation for the Economic Society today. It is always a great pleasure to hear your eloquent, up-to-date and comprehensive talks.”

Andrew Trembath, economist, Victorian and Australian Government agencies


Request Speaking Engagement

WHAT'S NEW

Most Recent Articles, Talks and Presentations


Productivity, Tax Reform and ‘Peak China’
Asian Economies, Economic Policies, Productivity, Taxation, The Australian Economy
13th March 2024


The Tasmanian Economy
Tasmania
29th February 2024


The worst public policy decision of the 21st Century
Economic Policies, Recent Media Interview
20th February 2024


Is ‘price gouging’ a major contributor to inflation?
Recent Media Interview
19th February 2024


The massive $50bn GST revenue distribution blow out (with Andy Park)
Economic Policies, Recent Media Interview
14th February 2024


The massive $50bn GST revenue distribution blow out (with Gary Adshead)
Economic Policies, Recent Media Interview
14th February 2024


Tasmania’s senior secondary education reform
Recent Media Interview, Tasmania
13th February 2024


Distribution of GST Revenue: the Worst Public Policy Decision of the 21st Century to date.
Australian Society and Politics, Economic Policies, The Australian Economy
4th February 2024


Insights on Asian Elections 2024 mentioned in The Economist
Asian Economies
30th January 2024


Alternatives to interest rates
Economic Policies, Recent Media Interview, The Australian Economy
29th January 2024


Reflections on ‘Australia Day’
Australian Society and Politics
26th January 2024


‘Stage 3’ tax cuts
Economic Policies, Recent Media Interview, The Australian Economy
25th January 2024


The proposed changes to the “stage 3 tax cuts”
Economic Policies, Recent Media Interview, The Australian Economy
24th January 2024


Don’t count your chickens when it comes to an RBA rate cut
Recent Media Interview, The Australian Economy
23rd January 2024


Have we passed ‘peak China’?
Asian Economies
23rd January 2024


VIDEO

Recent Presentations


See more


TESTIMONIALS

What Others Say


“You are one of the best at what you do in the world”
Gail Fosler, Chief Economist, The Conference Board, New York, December 2002

“I have never known an economist to have such a knowledge of world economic facts and to be able to bring to bear so much information in answering a question without notice”
Charles Goode, Chairman, ANZ Bank, July 2009

“Saul Eslake is … a highly regarded independent economist with the highest degree of integrity"
John Durie, Columnist, The Australian, July 2009

“… one of the few people in this world who can have so many oranges up in the air at the same time but still manage to catch them"
Andrew Clark, journalist, Australian Financial Review, November 2008

Read more

LINKS

Useful Links