Looking at the 2018-19 numbers, the Tasmanian economy outshone the rest of the states. And while Tassie led the way, Victoria still did pretty well, but NSW was slowing. WA bought up the rear, still dealing with the end of the mining boom.
What matters for most people is the ability of the economy to provide disposable income growth (income growth after allowing for taxes and interest payments). Tasmanian per capita disposable incomes have grown the strongest, while they have fallen in WA.
WA takes the growth crown for the decade
While Tassie may have been the economic star this year, WA had the strongest economy over the course of the past decade, despite its recent shortcomings. Lucky for WA, the mining-boom powered early years have more than offset the weakness of recent years.
Interestingly there has been a significant difference in saving patterns between states over recent years. In most states the gross saving ratio (the proportion of gross disposable income saved) is above 10%. But the saving ratio is currently negative in Victoria – perhaps the result of a strong economy giving households the confidence to spend.
Nationally, the household saving ratio has declined by around three percentage points over the past five years. This has been a result of the fall of saving in Victoria (and to a lesser extent in NSW and WA), partly offset by higher saving in SA and Tasmania.
The current economic weighting of the states within the national economy is:
Over the past decade strong population growth has driven Victoria to become a bigger part of the national economy. The end of the mining construction boom has seen Queensland (and to a lesser extent WA) have a smaller share.
Industry growth over the past decade
Some of the industries that are growing fastest in Australia are Agriculture, Mining, Manufacturing and Construction. Here are the states where these industries have grown fastest over the past decade, along with their growth rate:
- Agriculture: NSW, 7%
- Mining: WA, 9%
- Manufacturing: Qld, 2%
- Construction: NSW/Vic, 7%
All up, Tasmania had a very good 2019 financial year. And momentum suggests another good year is ahead for Tassie. But it is Queensland and WA that have proven to be the consistent state economic chart toppers over the past three decades. We will have to see whether that relative performance continues over the coming decade.