Compare the pair: politics and public policy in Tasmania and the ACT

Perhaps the main thing that both Labor/Greens governments have in common is that they like to spend.

It was recently announced that the ACT's budget deficit has blown out by another $107 million, takingthe deficit from $253.6 million to $360.6 million. If forecasts can be believed (despite continuing and deep cuts to the APS affecting the ACT economy), the outlook is supposed to improve from next year, with the budget deficit falling to $109.5 million, then to $20.5 million in 2015-16 and then a modest $11.2 million surplus in 2016-17.

Tasmania's Net Operating Balance has been progressively deteriorating since 2003-04. The recent mid-year financial report showed a deterioration since the Budget was handed down and that the budget forecast has taken a $450 million hit over the next four years. The Tasmanian Government has been forced to scrap plans to get the budget into surplus by 2016-17. The forecast deficit for this financial year of $267 million has blown out by more than $100 million. It is now expected to be at least $376 million, $50 million more than last year's deficit.

It can be argued that the future of the ACT economy will be determined more by decisions of the Australian Government than those of the Territory Government because of the dominance the APS bureaucracy in Territory employment. This may be just as well, given the current focus of the ACT Government on "progressive" issues. Also, given that ACT residents have the highest disposable incomes in the country, the Territory Government also has a better than average capacity to raise taxes.

Tasmania, being less affluent and dependent on the private sector for most of its economic activity, is in a different position. In the face of deteriorating market conditions for some of its traditional industries, Tasmania is said to have bred social attitudes that block many new development proposals that could help turn its economy around. Problems and challenges are said to get debated endlessly, with no resolution.

The ill-fated Gunn's Ltd pump mill proposal, which offered a higher value-added alternative to export wood chips, is illustrative. That proposal, as well as virtually any proposal involving Tasmanian timber, was targeted by the extreme Tasmanian Green movement. They seem to view eco-tourism and renewable energy (excepting a dam affecting the Franklin River) as the panacea for all the state's economic woes. It was not so much the opposition to building the pulp mill outside Launceston that damaged Tasmania's reputation. It was the determined opposition of these groups that it not be built anywhere in the State. Such extreme reaction, I believe, has left many business people unprepared to invest even two bob in Tasmania.

If Tasmania is to raise itself from the bottom of the economic and social league tables, its Government needs to seek out and embrace its development opportunities, and can't afford to be overly choosy in this regard. This looks likely to happen via a change in Government, which might also induce Tasmanian Labor to reinvent itself.