Tasmania - Economy

Economy

Tasmania's erratic economy was first experienced by colonists in the early 19th century. The reasons have been many and varied over the years. Lack of a federal infrastructure highway, lack of a gold rush, lack of open immigration initiatives, lack of population, decline in the wool and mineral economies, lack of early colonial initiatives, or lack of foreign investment have all been attributed as reasons for the erraticism of the economy. For the length of colonial history of Tasmania, a continuing exodus of youth to mainland Australia to seek employment opportunities has occurred.

Traditionally, Tasmania's main industries have been mining (including copper, zinc, tin, and iron), agriculture, forestry, and tourism. In the 1940s and 1950s, a hydro-industrialisation initiative was embodied in the state by Hydro Tasmania. These all have had varying fortunes over the last century and more, involved in ebbs and flows of population moving in and away dependent upon the specific requirements of the dominant industries of the time. The state also has a large number of food exporting sectors, including but not limited to seafood (such as Atlantic salmon, abalone and crayfish).

In the 1960s and 1970s there was a rapid decline in traditional crops such as apples and pears, with other crops and industries eventually rising in their place. During the 15 years until 2010, new agricultural produces such as wine, saffron, pyrethrum and cherries have been fostered by the Tasmanian Institute of Agricultural Research.

Manufacturing declined during the 1990s, leading to a drain of some of the island's trained and experienced working population to mainland Australia, especially to urban centres such as Melbourne and Sydney. Since 2001, however, the Tasmanian economy has experienced a significant improvement. Favourable economic conditions throughout Australia, cheaper air fares, and two new Spirit of Tasmania ferries have all contributed to what is now a booming tourism industry.

About 1.7% of the Tasmanian population are employed by local governments. Other major employers include the Federal Group, owner of several hotels and Tasmania's two casinos, and Gunns Limited, the state's biggest forestry company. Small business is a large part of the community life, including such success stories as International Catamarans, Moorilla Estate and Tassal. In the late 1990s, many national companies based their call centres in the state after obtaining cheap access to broad-band fibre optic connections.

Apparently the state's housing market was undervalued in the early part of 2000, and a large boom in the national housing market finally made Tasmanian housing prices rise dramatically. This has in part been attributed to increased levels of interstate and overseas immigration. A shortage of rental accommodation has caused problems for many of Tasmania's low income earners. Thirty-four percent of Tasmanians are reliant on welfare payments as their primary source of income. This number is in part due to the large number of older residents and retirees in Tasmania receiving Age Pensions.