Tasmanians’ material living standards have not advanced as rapidly as those of other Australians over the past 20 years. Since the early 1980s Tasmania’s economy has grown at about half the rate of mainland Australia’s. In a statistical sense, some of that difference is obviously attributable to Tasmania’s slower rate of population growth. But even in per capita terms, the production of goods and services has grown less than two-thirds as quickly in Tasmania as on the mainland over the past two decades.

That, in turn, has meant fewer jobs for Tasmanians. Last year, there were only 25,000 more jobs in Tasmania than there had been in 1981 (and 8000 fewer full-time jobs than there had been 20 years previously). Had employment grown as rapidly in Tasmania over the past two decades as it did on the mainland, another 50,000 Tasmanians would have gained employment last year.

Slow economic growth over the past two decades has also meant that Tasmanian incomes have declined relative to those of other Australians.Twenty years ago, household disposable income per head of population was 10 per cent below the national average. By the 2000-01 financial year, the gap had widened to 20 per cent; had it not done so, each Tasmanian household last year would have been nearly $6000 better off, on average, after tax.

Of course, income and wealth are not the only determinants of people’s standard of living, nor do they guarantee happiness or well-being.Tasmanians can rightly consider themselves well off in other ways: the quality of their environment, the richness of their historical and cultural heritage, their freedom from many of the stresses associated with life in bigger cities, and the vibrancy of their creative arts – all of which are regularly showcased in 40° South.Following the events of September 11,Tasmania’s relative tranquillity and remoteness from political and military conflict have arguably taken on even greater value.

Such factors surely played at least some role in prompting more than 12,500 people from other parts of Australia to move to Tasmania last year.

Indeed, over the past decade more than 120,000 mainlanders have made Tasmania their home, adding proportionately more to Tasmania’s population than to that of any other state except Queensland.These ‘immigrants’ do not fully offset the loss of over 147,000 Tasmanians (among them a disproportionately large number in their 20s and 30s) to the mainland during the same period.They do demonstrate, however, that the traffic is not as relentlessly one-way as is sometimes presumed.

Though readily documented because of the much greater frequency with which statistics are collected and published for states as distinct from regions within states,Tasmania’s experience of population loss caused by net emigration is shared by other areas of Australia and by similarly situated communities in other parts of the world.

And demographic projections suggest that population decline will become commonplace among Western nations over the next 50 years. In this sense, Tasmania’s experience of, and responses to, population decline may carry lessons for others.

But other aspects of Tasmanian life provide grounds for greater concern.

Tasmanians’ lives are (on average) about a year shorter than those of other Australians (except for those born in the Northern Territory).They are more likely to suffer from cancer, heart disease, obesity and diabetes.They are less likely to have completed schooling to year 12.

They are less likely to have a computer or access to the Internet at home. They are significantly more likely to be dependent on welfare. As children, they are less likely to have been fully immunized by age six, more likely to be living in a household where no parent is employed, and much less likely to have attended higher education by the time they are 24.

These outcomes – none of which is new – are inextricably linked to Tasmania’s economic performance. They are both causes and consequences of it.

The extensively chronicled connections (in both directions) between income and health, between educational attainment and productivity, between employment and social participation are no less relevant in Tasmania than in other places.

Tasmania’s poor economic performance, relative to other Australian states, also reflects the declining value attached by the rest of the world to the products of industries which have long been more important in Tasmania’s economy than in other states. It stems in part from the preference of previous Tasmanian governments to attempt to counter such trends rather than to facilitate the growth of new products and new industries. And it owes something to the tendency of forces such as globalization and technological change to result in the concentration of managerial, distribution and service activities in major metropolitan centres, despite the potential which new information and communication technologies ostensibly offer for overcoming the ‘tyranny of distance’ (to say nothing of that 180- kilometre stretch of water separating the rest of Australia from Tasmania).

Some people sincerely and passionately advocate the abandonment of economic growth as an objective. In 1997, a well-known Tasmanian author confessed that she “fail[ed] to see why we should get so distressed at the idea of living in a Third World economy”.

Critics of economic growth as an end in itself make an important and valid point when they observe that the standard yardsticks of economic performance, such as gross domestic product, are imperfect and inadequate measures of well-being. But among those who do regard sustained growth in, for example, per capita gross product, or household disposable income, as preferable to the alternatives of zero or negative growth, very few do so out of a belief that such growth is an end in itself.

Rather, they do so out of a belief in the intrinsic worth of the things that sustained economic growth can in turn make possible – including those things which are neither captured nor revealed by economic statistics.

It is difficult to accept that the combination of economic and social outcomes outlined above is one that would be consciously chosen, given the opportunity, by a majority of Tasmanians.

It is hard to believe that a majority of Tasmanians would not prefer to have more and better-paid jobs, better health, broader education or longer lives – and not to have to leave Tasmania permanently (or see their children leave) in order to obtain them. Indeed, a glance at the Tasmania Together website suggests that these are precisely the aspirations of Tasmanians (although the list is of course much longer than this).

It seems almost self-evident, both from Tasmania’s own experience and from that of places elsewhere in the world which have confronted similar problems (with varying degrees of success) that Tasmanians need to be more willing to embrace change if these aspirations are to be realised.

And yet, whether because of their isolation, or perhaps for other reasons, Tasmanians have been more wary of change than other Australians. As but one illustration, the ‘no’ vote has been higher in Tasmania than on the mainland in all but one of the 22 referenda held to alter the constitution since the end of World War II. (The apparent exception was the 1951 proposal to ban the Communist Party, where Tasmanians voted ‘yes’ but a majority of mainlanders voted ‘no’.) Although Tasmanians have had a soft spot for mavericks (and have sent a steady stream of them to Canberra), they appear less tolerant of dissenting opinion on local matters. Tasmanian State Labor governments have generally been seen as ‘conservative’ by national Labor standards, while state Liberal governments have typically been unadventurous by comparison with at least some of their mainland counter-parts.

And parochial attachments within Tasmania have long inhibited the development of visions or ideas for the state as a whole.

While these are not necessarily ‘faults’ in themselves,Tasmanians’ relatively deeper attachment to what might be termed ‘old ways’ may make it more difficult to grapple with the challenges of the new century.

Change rarely happens spontaneously. It usually occurs as a result of a crisis or in response to bold leadership. Tasmania’s long-term experience has been of slow, almost inexorable, decline, rather than crisis. The sustained outflow of people in their 20s and 30s has probably deprived Tasmania of many who might otherwise have assumed positions of leadership (and, with absolutely no disrespect intended to those who have been prominent in Tasmanian politics over the past two decades, it is remarkable how many of them have come from among the ranks of mainland immigrants).

The experience of those places which have confronted similar problems to Tasmania’s (including Ireland, Oregon and Newfoundland) highlights the importance of a creative role for government and of wide-ranging community participation in the formulation of government policy. As a generalisation, the smaller and more isolated the region, the less likely it is that sustained economic growth and rising living standards will be generated by the untrammelled operation of market forces; but, at the same time, the more likely it is that high taxes and onerous regulation may detract from economic performance. Thus, there may be more of an onus on government to lead, or intervene; it must, however, avoid being reactive or burdensome.

But change is rarely successful when wholly imposed from above. Com-munity participation is important in spreading a sense of ‘ownership’ of change, giving voice to those who may be adversely affected by it, and in diminishing fear of change.

Tasmania’s economic future cannot possibly lie predominantly in the volume production of essentially unprocessed commodities at lower prices than competitors with better access to larger and cheaper resources of both labour and capital, as well as better access (by virtue of distance or membership of trade blocs) to markets.

Rather, Tasmania’s economic prospects depend on the state’s capacity to produce and sell highly differentiated goods and services for which customers are willing to pay premium prices.

Already in the past few years, Tasmanian producers of wine, whisky, cheese, flowers, salmon (among others) – products not typically associated with Tasmania in the past – have established reputations for excellence in new national and overseas markets.

Tasmanian writers, composers and other artists have been gaining greater recognition on the mainland and in some cases, internationally. Activities such as these, together with tourism, aged care, design, marine engineering, environmental management, information and bio-technology services, personal financial services and niches within manufacturing and education are likely to be more valuable to Tasmania in (say) two decades’ time.

Although Tasmania’s unemploy-ment rate remains about two percentage points higher than the mainland’s, in some other aspects of its economic performance there are indications of real improvement.

The state’s finances are in better shape than they have been for almost two decades. Relationships between state and local governments are more 26 constructive. Surveys of Tasmanian consumers and businesses suggest they are more confident, relative to their mainland counterparts, than they were for most of the 1990s. Reflecting this, business investment has risen for two years in a row (for the first time since the mid-1980s) and seems likely to increase further in the current financial year. Significantly, the rate of net emigration to the mainland has slowed.

However, that does not mean there is widespread support for a vision of Tasmania’s future that differs significantly from nostalgic vistas of the past. For example, opinions regarding the role of forestry in Tasmania’s economic future seem no less bitterly divided than a decade ago. If a newspaper opinion poll published in January showing that 63 per cent of Tasmanians do not believe that children need a university education is in any way representative (and, to be fair, the newspaper concerned did not claim it was) then the challenges involved in improving Tasmania’s human capital remain formidable. In much the same vein, views widely held among Tasmanians about issues such as globalization, trade liberalization, the regulation of shopping hours and biotechnology may thwart efforts to attract investment, and to develop and retain talented people.

Tasmanians cannot, any more than the people of other small and relatively isolated communities, exert much influence over the technological, economic, social and other influences shaping the world, or the political and other ideas behind them. By contrast, they have considerable scope for choosing how they respond to those influences, for better or worse. Tasmania is a beautiful island, and for some that is and will continue to be enough. But it is probably not enough to sustain close to half-a-million people at the levels of material, spiritual and communal comfort to which most, quite properly, aspire.

The opinions expressed in this article are those of the author and do not necessarily represent the views of ANZ Bank.