A new report has painted a grim picture of Tasmania’s economic future, warning of a decade of slow growth ahead.
The Deloitte Access Economics Business Outlook for June 2026 said that cost-of-living pressures and reduced government spending would put a cap on growth over the next financial year and beyond.
“Tasmania’s economy delivered a woeful result in the first quarter of 2026, with investment retreating faster than the James Boag Brewery,” it said.
“Meanwhile, government spending is declining, and household spending is flat in per capita terms as cost-of-living pressures bite.
“With many budget commitments still outstanding, the state budget will likely deteriorate even further than presented in the budget papers.
“Tangible budget restraint is now imperative and will require broadbased spending reductions and comprehensive tax reform to safeguard Tasmania’s economic future.”
The government has focused on spending cuts and cutting jobs to get the state budget back on track, and has ruled out new or increased taxes or asset sales.
The Deloitte report says the state is facing a decade in which growth will be sclerotic – due for a combination of reduced government spending, lacklustre private investment and shaky household spending.
“Following expected economic growth of 3.0 per cent in 2025/26, Tasmania’s economy is projected to slow to 0.9 per cent in 2026–27 as household spending weakens.
“Over the medium term, growth is forecast to average just 1.7 per cent per annum over the next decade – the lowest rate nationally.”
Minister for Business, Industry and Resources Felix Ellis on Wednesday unveiled a draft Economic Diversification and Investment Strategy “to secure the next decade of economic growth”.
“Tasmania has a lot to be proud of. We have reliable renewable energy, premium food and beverages, innovative advanced manufacturing and a brand recognised around the world,” Minister Ellis said.
“Over the past decade, Tasmania’s economy has grown by more than a quarter, created a record number of jobs and achieved nation-leading business confidence.
“We must do the work and continue to deliver to ensure the next decade is just as strong.”
Shadow Treasurer Dean Winter said the Deloitte report was alarming.
“The report outlined that years of overspending and waste that has propped up the state’s economy has contributed to the worst budget deterioration in the country,” he said.
“Eric Abetz’s response has been to impose massive cuts that will further weaken the economy, as Tasmanians pay the price for 13 years of Liberal waste.
“The Deloitte report comes alongside the latest data from the Australian Bureau of Statistics (ABS) detailing that 7,000 jobs have been lost since this government was formed in August last year.
“On these numbers, Tasmania’s economy is shrinking and economic conditions are the worst they have been since the Global Financial Crisis.
“Participation arguably remains the biggest economic inhibitor to Tasmanian economic growth.
“Childcare options are limited and the Liberals’ gutting of TAFE means it’s harder than even to get access to the skills needed to contribute to our economy.”