Help businesses, sectors and public systems operate more efficiently

Tasmania's productivity gap relative to the national average is well documented. This reflects Tasmania’s industry composition and scale advantages that exist in other jurisdictions. That said, closing the gap where we can is the most direct path to higher wages, better job quality and improved living standards in every region.

Tasmania's largest sectors — health and social services, construction, education, retail, hospitality and tourism — shape everyday economic life across the state. They underpin regional communities, deliver essential services and account for the majority of employment. Their productivity performance matters to every Tasmanian.

Effective coordination and alignment with national competition policy and productivity reform will be critical in amplifying impacts in Tasmania and ensuring that national initiatives are fit-for-purpose and translate into practical gains for Tasmanian businesses and workers.

Realising these opportunities will depend on addressing the key barriers that hold back productivity - particularly digital capability across the workforce, the readiness of small and medium businesses to take up new tools, regulatory burden on businesses, and the underlying infrastructure that makes technology adoption possible. Reliable, affordable digital connectivity is a precondition for the productivity gains the Strategy seeks, particularly for businesses operating outside Tasmania's larger centres.

The embrace of digital and advanced technologies, particularly artificial intelligence and autonomous systems, is becoming a productivity imperative for Tasmanian businesses of every size, and for government. While complex and not without social and economic implications, the adoption of these technologies will be necessary for Tasmania to maintain its long-term competitiveness. Harnessed well, they can help address longstanding constraints to growth and may offset their own potential effects on employment.

Productivity reform: a national agenda

Addressing Australia’s stagnating productivity growth is central to national economic reform. The Productivity Commission released 47 recommendations across five reform pillars.

Several priorities fall squarely within state government influence:

• accelerating the adoption of digital technologies and AI across industries and government services
• reducing regulatory burden on business, especially where cumulative state and local requirements impede investment
• building a more responsive skills and workforce system
• streamlining planning and approvals processes, particularly for energy and housing infrastructure
• lifting the quality and efficiency of care services, including through greater investment in prevention.

The Commission estimates AI adoption alone could deliver $116 billion in productivity gains nationally over a decade.

Work is also progressing with the revitalised National Competition Framework, where reforms are being identified to increase productivity and competition. The reform priorities focus on:

• promoting a more dynamic business environment
• harnessing the benefits of competition in the net zero transition
• lowering barriers to labour mobility
• better harnessing choice, competition and contestability in human services
• leveraging the economic opportunities of data and digital technology.

State and territory governments have a central role to play in this national effort, and Tasmania must ensure its priorities keep pace. Reforms need to be fit for purpose for Tasmania with a clear demonstrated net benefit.