Tasmania has slumped to the bottom of the national economic rankings, marking a stark reversal of fortune for a state that spent years consistently topping the Commonwealth Bank’s “State of the States” report.
The latest quarterly analysis, which compares each state and territory’s economic performance against their decade-long average, places Tasmania last among all jurisdictions—a position it has held for the entirety of 2026. The figures present a grim outlook, highlighted by the highest unemployment rate in the country, which has surged from 3.8 per cent to 5.1 per cent over the past year.
According to the report, the state’s labour market is showing signs of significant strain. Employment growth has stagnated to the point where even slow population growth is failing to prevent the jobless rate from climbing. Compounding this, wage growth has decelerated, and total labour income is trailing behind almost every other state and territory, with only Western Australia and the ACT performing worse.
While business investment saw a marginal increase, the property sector remains a drag on the economy, with housing investment falling by 6.2 per cent. The state’s public demand ranking also sits at the bottom, though analysts noted this figure is currently distorted by the significant capital outlay required for the purchase of the new Spirit of Tasmania vessels.
The only bright spot in the report was household consumption, which grew by 2.1 per cent, lifting the state to fourth place in that specific category. Experts suggest this resilience may be tied to Tasmania’s older demographic, many of whom have already paid off their mortgages and are therefore cushioned from the pressures of rising interest rates. However, the report warned of a “clear risk” that the deteriorating labour market will eventually erode this spending power.
The fall from grace has sparked a fierce political row. Four years ago, the Liberal government frequently touted the state’s high rankings as proof that their economic plan was delivering for Tasmanians.
Labor Shadow Treasurer Dean Winter seized on the data to attack the government’s track record, calling the result an indictment of their economic management. “By their own test, today’s result proves their plan is failing,” Mr Winter said. “After 13 years, the Liberals have left Tasmania with the worst-performing economy in the country, rising unemployment, and a downgraded credit rating.”
In response, Treasurer Eric Abetz maintained that the state’s economy remains “resilient” despite national headwinds. Defending the government’s performance, Mr. Abetz cited recent NAB business surveys that ranked Tasmania highly for business confidence and pointed to major infrastructure projects—including the controversial Hobart stadium and the Launceston Convention Centre—as key drivers for future growth and job creation.
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