TAS: ALP regains power in Tasmania

AAP General News (Australia)
12-29-1998
TAS: ALP regains power in Tasmania

By Don Woolford

HOBART, AAP - Tasmania turned sharply to Labor in 1998, leaving the Liberals in disarray
and the Greens facing an uncertain future.

But the bigger question continued to be whether the island could drag itself out of its
economic hole of high unemployment and declining population.

Tasmania's return to Labor, in some respects a return to its past, was decisive at both the
state and federal levels.

In the August state election it won majority government for the first time for 16 years,
with the Liberals gaining only 38 per cent of the vote.

The Greens, which twice have held the balance of power in the last decade, were reduced to
a single member. However, this owed as much to the higher quota needed for election to the
smaller House of Assembly as to an actual drop in support.

Then in the federal election, Labor gained a state-wide swing of almost five per cent to
sweep the state's five House of Representatives seats for the first time for nearly 25 years.

Labor's successes owed much to suspicion of so-called economic rationalism - privatisation,
competition policy, the contraction and centralisation of staff by major institutions - and
never mind that these processes started under federal Labor governments.

It represented the return of the blue collar vote to Labor in the state's northwest. Its
old industrial heartland first turned away from Labor in the Whitlam period and the
disillusion was reinforced by issues like the Franklin Dam and the Wesley Vale pulp mill.

The government of Premier Jim Bacon is, in many respects, conservative. It plans greater
intervention in the economy, it's heavily pro-industry, its union links are strong and its
Green credentials minimal.

For the time being, with 14 members in the 25-seat lower house and growing influence in the
largely independent Legislative Council, its political hegemony is unchallenged.

The Liberals have problems. Former Premier Tony Rundle remains leader, though many
observers doubt if he'll stay. While there's no obvious replacement, deputy leader Sue Napier
would probably succeed should he go in the near future.

It's not a happy party. A recent fist fight in the party room left Bob Cheek, a potential
contender, with a black eye. Former Health Minister Peter Mackay, the key Liberal in the upper
house, has quit politics.

The Liberals remain committed to selling the Hydro-Electric Corporation, the state's most
important asset, and using the proceeds to clear debt. It was this issue, above all, that cost
it the election.

Another issue, that Labor particularly emphasised, was the need for a majority government
that wasn't dependent on Green support.

This was achieved, with Greens leader Christine Milne losing her seat and Peg Putt left as
the party's sole parliamentary representative.

There is a paradox here. Tasmania was one of the starting points for the Greens, who are
now a truly international movement.

Yet just as they are going from strength to strength overseas, particularly in Europe, they
are struggling to remain a force of consequence here, though it's far too early to write them
off, particularly with Senator Bob Brown's ability to mobilise national and international
support for issues like Jabiluka.

Their Tasmanian difficulties perhaps reflect the absence, despite continuing protests over
forest practices, of a defining environmental issue. It also reinforces the suspicion that
green issues lose their potency when times are bad.

Which they are.

The reasons for Tasmania's economic malaise seem clear enough.

The once dominant sectors - manufacturing, mining, dam construction and the public sectors
- have been wound back while financial services have been centralised in Sydney and Melbourne.

What's left of manufacturing is heavily oriented towards initial processing rather than
value adding.

Whereas Tasmania rebounded, if more slowly than the mainland states, from previous
recessions, there's been no rebound since 1991-92.

The "dead cat bounce" predicted for the national economy in the early 1990s did happen in
the smallest state economy.

There's been a vicious cycle of decreased investment, negative productivity, declining
population and an unemployment rate about three per cent worse than the national average.

There are a few promising straws in the economic wind.

A big magnesium mine and processing plant are expected to go ahead. The Asian crisis has so
far been weathered better than feared, which is important to a state heavily reliant on
exports to Asia.

Growth is forecast to move out of the red this financial year, but only by a modest 0.5 per
cent.

But there's nothing to suggest Labor's target of getting Tasmania's unemployment down to
the national average by the end of its first four-year term is more than a heroic hope. It's
now about three per cent above the average.

The government's main answer will to become much more active in business development.

It will help new businesses set up and existing ones to expand, with assistance dependent
on guarantees of new investment or jobs. It will foster innovation, help search out new
markets and give as much government business as it can to local companies.

Treasurer David Crean calls it "government working hand in hand with business" and a "bold
departure from the narrow focus of economic rationalism that has torn the heart out of
regional Australia".

With the government having been in power just over 100 days, it's still too early to tell
whether this approach - plus the greater certainty that Mr Bacon believes a majority
government can offer potential investors - will work.

AAP dw/kr/br

KEYWORD: YEARENDER TAS

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