business leaders, community leaders,
and friends from across Tasmania
Thank you for being here.
And after two days of being in Budget Estimates hearings, I can honestly say it is a real pleasure to be here with you today.
It is great to have the opportunity to step back and reflect on where Tasmania's economy stands, the pressures we face, and the choices that will shape our future.
Those choices sit at the heart of the recent State Budget.
Because ultimately, securing Tasmania's tomorrow depends on the decisions we make today - decisions about how we manage our finances, where we invest, and how we prepare for an uncertain world.
That Budget is built on a clear principle:
discipline now creates capacity for the future.
It enables us to continue delivering essential services, provide targeted cost of living relief, and invest in the infrastructure our economy needs, while sparing Tasmanians the burden of new taxes.
And it reflects a broader reality facing governments everywhere.
We meet at a time of real global uncertainty.
Around the world, economies are adjusting to a more difficult environment, slower growth, interest rates that remain higher for longer, ongoing geopolitical instability, and the enduring effects of supply chain disruption.
The conflict in the Middle East has pushed up fuel prices and added to inflationary pressure, costs that are being felt directly by households and businesses.
These forces are real.
They are shaping investment decisions, influencing household confidence, and placing pressure on government budgets across every advanced economy.
That is precisely why fiscal discipline matters.
There was a time when governments quite rightly stepped in, during COVID and other shocks - with deficit spending to support the economy.
But now, the task has shifted.
Today, Tasmania's economy is worth around $40 billion a year.
Over the past decade, it has grown by more than a quarter - an outcome that reflects both strong private sector activity and sustained public investment.
Our Gross State Product has continued to expand, even as growth has moderated in parts of the national economy.
Importantly, Tasmania's per capita economic growth has in recent years outperformed the national average - an indication that our progress has not just been about scale, but about productivity and value.
Our labour market tells a similar story.
Unemployment has remained around 4 per cent or lower - near historic lows.
More Tasmanians are in work than ever before.
And workforce participation has trended steadily upward.
These are not just numbers.
They represent greater opportunity for Tasmanians, stronger communities, and a more resilient economy.
Small business has been central to this performance.
Tasmania is now home to more than 42,000 small businesses.
They employ the majority of our workforce.
They drive innovation, create jobs, and give life to our local economies - from our regions to our cities
Across agriculture, tourism, advanced manufacturing, healthcare, and professional services, we are seeing businesses adapt, invest, and grow.
And that matters.
Because strong economies are not built by governments.
They are built by individuals and enterprises prepared to invest, take risks, and create opportunity.
These results have not happened by accident.
They reflect policy choices grounded in discipline, confidence, and a willingness to invest for the long term.
Alongside these fundamentals, there is another strength that underpins Tasmania's economic position - one that is not always captured in headline numbers but increasingly shapes investment decisions.
Tasmania has built a strong and distinctive brand.
A brand grounded in sustainable growth, clean energy, and the responsible use of our natural assets.
A brand that reflects not just what we produce - but how we produce it.
For generations, Tasmania has led the nation in harnessing its natural advantages in a way that delivers both economic and environmental value.
Our hydro electric system is central to that story.
Built on the strength of our water resources, it has provided reliable, renewable power for decades.
It has shaped our industrial base, supported our communities, and positioned Tasmania as a leader in clean energy long before it became a national and global priority.
That same water resource continues to support irrigation schemes that are transforming agriculture and regional communities.
They are lifting productivity, expanding the diversity of what can be grown, strengthening regional communities, and opening new export opportunities.
Agriculture is one of Tasmania's clearest competitive strengths.
It reflects not just what we produce, but how we produce it.
Our producers operate in an environment defined by clean air, reliable water, and strong biosecurity.
That underpins a reputation for premium food and fibre that is recognised in markets around the world.
In that sense, agriculture is not just part of Tasmania's economic base: it is central to it.
It reinforces our global brand, strengthens our regions, and positions Tasmania exactly where future demand is heading: toward high quality, sustainable, and trusted production.
At the same time, Tasmania has made deliberate choices to preserve the natural assets that define us.
A significant proportion of our land mass is protected as reserve land - the highest in the country.
Some may argue this is a limitation on our ability to grow, and while there is a need to produce an effective offset policy, it is also part of what makes our growth sustainable - and increasingly, more valuable.
Because the global direction is clear.
Markets are shifting toward low emissions production.
Consumers are demanding transparency and traceability.
Investors are seeking jurisdictions that can demonstrate both economic strength and environmental responsibility.
Tasmania is not trying to adapt to that shift overnight.
We are already aligned with it.
That alignment gives us a genuine competitive advantage across multiple sectors - agriculture, tourism, advanced manufacturing, and emerging clean industries.
And it positions us strongly for the future.
Because the next phase of economic growth - both in Australia and globally - will favour jurisdictions that can grow their economies while reducing their reliance on fossil fuels.
Jurisdictions that can provide clean, reliable, and affordable energy.
Jurisdictions that can demonstrate that economic growth and sustainability are not competing objectives - but complementary ones.
That is where Tasmania will continue to lead.
We will build on our renewable energy strengths.
We will continue to invest in the infrastructure that allows that energy to support industry and create opportunity.
And we will leverage the strong brand we have built - carefully, deliberately, and in a way that delivers long-term benefit to Tasmanians.
Because reputation matters.
And Tasmania has built one of the strongest economic brands in the country.
In a world of elevated interest rates, budget responsibility is not optional - it is foundational.
Strong fiscal settings are not an end in themselves.
They are what allow governments to respond to change, manage shocks, and invest when it matters most.
That is why Tasmania's approach is clear.
We protect our credit strength.
We prioritise long life assets over short term fixes.
Responsible budgets are not about doing less.
They are about keeping our economic choices open.
Because when the world becomes more uncertain, flexibility becomes one of the most valuable assets a government can have.
Despite this strong foundation, Tasmania faces a set of structural challenges that are not unique to us - but are increasingly shaping outcomes across Australia and other advanced economies.
At their core, these challenges can be understood as scarcity.
Scarcity of housing.
Scarcity of labour.
Scarcity of energy capacity in the right place, at the right time.
Too often, governments respond to scarcity by managing demand - by deciding who gets access, and who does not.
But the lesson being reinforced globally is clear:
You cannot regulate your way out of shortages.
You have to build.
That principle matters enormously for Tasmania.
Because our future growth - and our ability to maintain living standards - depends on whether we expand capacity in the areas that matter most.
Housing is the most immediate and visible example.
Tasmania's population growth has stabilised at modest levels - around 0.2 to 0.3 per cent a year.
That is well below the national average.
And yet, even with that slower growth, housing supply has not kept pace with demand.
Building approvals have improved but remain volatile.
Vacancy rates are low.
These pressures are real - and they are being felt across the community.
Housing is often framed solely as a social issue.
And it is.
But it is also economic infrastructure.
When housing is scarce, the consequences extend far beyond the housing market itself.
Businesses struggle to attract workers.
Hospitals and aged care providers face staffing shortages.
Key services become harder to sustain.
And young Tasmanians are priced out of the communities they grew up in.
The economics are straightforward.
If supply does not increase, prices will.
That is why this Government is focussing firmly on construction.
We are backing large scale social and affordable housing delivery.
Unlocking government land.
Supporting partnerships with community housing providers and private investors.
And reforming planning systems so approvals move faster and with greater certainty.
Medium density housing, done well, will be critical.
Particularly in Greater Hobart, Launceston, and our larger regional centres.
Done properly, it can increase supply, support more vibrant communities, and make better use of existing infrastructure.
Let me be clear:
Tasmania does not have a housing demand problem.
We have a housing supply problem.
And supply is something governments can influence, and must act on.
Australia's housing crisis is not just about demand, it reflects deep structural problems in how we build.
The latest CEDA report shows construction productivity has stagnated for decades, while modern methods could reduce build times by up to 50 per cent, highlighting just how inefficient current approaches remain.
Traditional construction is labour intensive, fragmented, and prone to delay, meaning the system cannot keep pace with growing housing demand.
This has created a damaging cycle.
Low productivity drives higher costs per home, and those costs are significant, CEDA estimates modern methods could cut costs by around 20 per cent.
High costs make projects less viable, reducing supply and pushing home ownership further out of reach for many Australians.
The report makes clear that business as usual is not enough. Modern methods of construction - such as prefabrication and modular building - offer a practical path forward.
For Tasmania, the stakes are even higher.
A smaller workforce and higher input costs mean these inefficiencies hit harder and constrain supply more quickly.
Embracing faster, lower cost construction methods is not optional, it is essential to boosting housing supply, easing pressure on costs, and ensuring more Tasmanians can access secure and affordable housing.
But recognising the opportunity is only part of the task.
We also must remove the barriers that are holding it back.
Right now, one of the biggest constraints on modular and pre-fabricated housing is not capability; it is finance.
Traditional lending models were designed for homes built on-site, inspected stage by stage.
They do not align well with factory-built homes, where much of the construction happens off-site and often in a large weather-proof shed, before a bank can secure the asset.
That creates a funding gap - and in too many cases, it stops otherwise viable projects from proceeding.
So, we are acting to fix it.
The Government will introduce a Modular Housing Finance Guarantee: a targeted, practical reform to unlock faster housing delivery.
This initiative will partner with lenders to guarantee a portion of construction finance during the early, higher-risk phase of modular builds - when homes are being built in the factory, but before they are installed on site and become standard mortgage security.
As projects progress and risk reduces, that guarantee steps back.
It is a simple intervention.
But it addresses a very real market failure.
And the impact is significant.
It will reduce upfront costs for buyers.
It will give lenders the confidence to support more projects.
And it will allow builders to scale up production with greater certainty.
And, of course, we will still need our builders, plumbers, electricians, and all the other skilled trades required to build more homes for Tasmanians.
In short: it will get more homes built, faster.
Because modular housing has enormous potential for Tasmania.
It can cut build times dramatically.
It can lower costs.
And it can support the growth of a local manufacturing sector that creates skilled jobs right across the State.
This is exactly the kind of reform we need.
Not just identifying the problem; but removing the constraint.
Not just setting targets; but enabling delivery.
Because if we are serious about increasing supply,
we must back the methods that can deliver it -
and make sure the system supports them.
We will be looking to introduce legislation on this Guarantee in the August sitting of parliament.
But this is not something Tasmania can solve alone.
There is a clear role here for the Commonwealth to step up and support the adoption of modern construction methods at a national level.
Tasmania has been, and will continue to be, a fierce advocate to Canberra on this.
Energy is the second major pillar of our supply challenge, and also one of our greatest opportunities.
Tasmania's electricity system is already dominated by renewables.
Hydro and wind provide the bulk of our power.
Over the course of a year, Tasmania is capable of generating the equivalent of all its electricity needs from renewable sources.
That is a remarkable position to be in.
But capability alone is not enough.
Demand is growing.
Weather variability is increasing.
And the needs of modern industries are changing.
They require clean energy, but also reliable, firm, and affordable power.
That is why our focus is on building capacity.
Not simply managing demand - but expanding the system so it can support future growth.
That includes new renewable generation.
Long duration storage.
Transmission upgrades.
And projects like Marinus Link.
I recall speaking of Marinus in my first CEDA speech back in 2022.
Some back then thought it was, if you will pardon the pun, a pipe dream.
But we fought hard for it.
We landed a deal with the Commonwealth that is very good for Tasmania.
And now the pipe dream is a reality.
Work is underway on this transformational project.
These are investments that are foundational to Tasmania's economic future.
Energy policy today is economic policy.
It underpins housing construction, industrial development, transport electrification, and the growth of new sectors.
It shapes competitiveness.
It influences investment decisions.
And it affects household costs.
Over the long term, the most affordable energy is the energy we are prepared to build.
That is the choice before us.
While the rest of the nation argues, we are getting on with it.
The debate around renewables and net zero should be about delivery.
About economics.
Not ideology.
Housing and energy only deliver their full value when supported by modern infrastructure.
Infrastructure is where planning becomes real.
It is what connects homes to jobs, businesses to markets, and communities to opportunity.
The new Bridgewater Bridge is one example.
It is not just a construction project; it is a productivity investment.
It reduces travel times, improves freight efficiency, and strengthens the southern transport network.
Urban renewal at Macquarie Point is another.
It is an opportunity to bring together jobs, housing, culture, and public space in the heart of Hobart.
In my hometown of Devonport, the city has been revitalised.
A new hotel, a new school, and a new library in the CBD.
And, despite all the challenges, a brand-new wharf for our brand new ships.
Which will set up our visitor economy for years to come.
Devonport's regional GDP is now valued at $3.85 billion: growing faster than the Tasmanian average.
Right across the state we are ensuring that infrastructure is there to meet growth and to drive growth.
This brings us to planning.
Planning decisions influence housing supply, construction costs, and investment certainty more than almost any other policy lever.
Delays add cost.
Uncertainty reduces supply.
Complexity discourages investment.
Planning reform is not a technical exercise.
It is one of the most important economic reforms this Government can deliver.
That is why we are focused on:
clearer rules,
faster timeframes,
and greater certainty.
Good planning is not about saying no more politely.
It is about saying yes - clearly, consistently, and faster.
And that principle applies right across the economy.
We are applying the same approach to retail development -cutting through unnecessary complexity, simplifying standards, and removing outdated controls that have slowed investment for too long.
Because when the rules are clear, investment follows.
That means more confidence for businesses to expand.
More activity in our centres.
And more jobs in local communities.
Retail is not just about shops - it is about vibrant precincts, local employment, and economic activity in every part of the State.
And the lesson is consistent across housing, retail, and beyond:
If we want more investment, more jobs, and more opportunity -
we have to make it easier to build.
Whenever governments talk about growth, Tasmanians rightly ask a simple question:
Growth for whom?
It is an important question.
And it deserves a clear answer.
Because poorly managed growth can place pressure on communities and infrastructure.
But the alternative, scarcity, is far more damaging.
Scarcity is the most regressive outcome.
When housing is scarce, renters pay more.
When energy is constrained, households face higher bills.
When infrastructure lags, opportunity is lost.
Growth, when done well, expands opportunity.
It lifts living standards.
It supports services.
And it gives the next generation a stronger foundation.
That is what this Government is focused on.
Not growth at any cost - but building the capacity Tasmania needs to remain fair, resilient, and prosperous.
In an uncertain global environment, Tasmanians are looking for confidence: not complacency.
They want a government that manages money responsibly.
But they also want a government that understands a simple truth:
The future belongs to those who build it.
Responsible budgets give us the capacity to act.
Planning reform gives us the ability to deliver.
And Tasmania's natural advantages give us the opportunity to succeed.
Economic strength and community cohesion does not happen by accident.
It happens when governments remove barriers, enable investment, and stay the course.
That is what this Government is committed to doing.
Building homes.
Building energy capacity.
Building infrastructure.
And building on the strong brand that Tasmania has created: one based on sustainability, resilience, and responsible growth.
Because the future is not something we wait for.
It is something we build - together.
Thank you.
