Feature Article - The Nixon Report: Tasmania into the 21st Century
During the campaign for the 1996 Federal election, the Coalition unveiled a number of specific policies relating to Tasmania. One of these was the promise to establish a committee of inquiry, funded jointly by the Commonwealth and Tasmanian State governments, which would conduct a detailed investigation of the Tasmanian economy and advise on policies to improve its performance. This initiative was motivated by the chronically below-average performance of the Tasmanian economy, and the perception that this had become more pronounced during the 1990s.
In October 1996, the Hon. Peter Nixon, AO, a member of Federal Parliament from 1961 to 1983 and Minister under the Fraser Government, was appointed to chair this inquiry, known officially as the Commonwealth-State Inquiry into the Tasmanian Economy.
The principal task undertaken by the Inquiry was the comprehensive analysis of the Tasmanian economy and the legislative and executive environment that governs its operation. The analysis was performed on the basis of information collected from 5 main sources:
- Written submissions received from interested parties;
- Face-to-face meetings with representatives of various organisations;
- Public forums held in each region of Tasmania;
- Past reports undertaken into aspects of the Tasmanian economy; and
The Inquiry’s findings were made public on July 30 1997, as The Nixon Report: Tasmania Into the 21st Century.
In summary, the Nixon Report determined that Tasmania’s poor economic performance was the result of critical problems in 5 main areas. These were:
The structure of government in Tasmania compromises the strong and effective leadership of the State and impedes the development of policies to benefit the long-term development of the State. Significant problems were identified in both the structure and operations of Parliament, Cabinet, the bureaucracy and local government.
The existence of a very large government debt, primarily accrued during the 1980s, places severe constraints on the spending and taxation options of the State Government. Because of this, the debt exacerbates Tasmania’s weak economic performance and prevents the State Government taking effective action to assist economic development.
Education and training
Tasmanians have lower skill levels than the national average, and the State has a substantially lower proportion of students continuing education through to Year 12. School leavers are not perceived to be job-ready, and existing training regimes do not meet the needs of Tasmanian businesses.
Industry development business environment
Industry development policies are poorly focused and lack a strategic direction. The business environment in Tasmania is unattractive to investors: characterised by severe taxation and other on-costs, unavailability of finance, inefficient ports and archaic transport regulations.
The regulations regarding planning are complex and are not well understood by either developers or those administering the system. There is an excess of independent bodies, that are not accountable for their actions, involved with the planning process.
The Nixon Report detailed 122 separate recommendations designed both to overcome the identified problems and to build upon Tasmania’s advantages and opportunities including:
- Official statistical information, both published and unpublished.
- Both Houses of Parliament to be dissolved, and a new single chamber to be instituted, comprising 27 members elected from 9 three-member electorates;
- The Hare-Clark voting procedures to be retained;
- Parliament’s operations to be overseen by a Public Bodies and Accounts Committee (PBAC), modelled along the lines of the Federal PBAC;
- Cabinet to be reduced from 10 to 7 (including the Premier), each responsible for one of the 7 restructured government departments (reduced from the current 13);
- Department heads to be directly responsible to the Minister through performance agreements which contain both positive and negative incentives;
- The roles of local and State government to be clearly defined, with effective delegation of identified responsibilities;
- There should be a maximum of 8 local government areas on mainland Tasmania (compared to the present 29), with the Bass Strait islands administered separately and receiving greater support from the State Government.
- Tasmania should aim to have zero net public sector debt by the year 2000. In particular, the liabilities relating to the core operations of government (or general government) should be totally eliminated;
- This can only be achieved by the sale of public assets. Primarily, the Hydro-Electric Corporation (HEC) should be disaggregated into separate business units and totally privatised;
- Following this, budget deficits are to be outlawed, and procedures implemented which prevent the State Government accruing debt over successive years;
- The savings made from debt elimination, in the form of reduced interest payments, are to be used to reduce both payroll and land tax, and supplement infrastructure outlays and investment in business development;
EDUCATION AND TRAINING
- Further initiatives to assist economic growth to be funded by revenues from the sale of a number of other government businesses, including the port authorities, TT-line and the Motor Accident Insurance Board (MAIB).
- Support was given to the education-related initiatives detailed in the Government’s Directions Statement, which aim to ensure that all students achieve core literacy and numeracy competencies;
- The Government to remove the structural barriers which discourage students from regional areas from continuing schooling beyond Year 10;
INDUSTRY DEVELOPMENT POLICY
- Various reforms to the operation and organisation of TAFE, including a greater focus on the current and emerging skill needs of local industry, and a unified State-wide structure with clear accountability and responsibility of TAFE directors to the Minister.
- State Government should form the Department of State Development and Infrastructure, which should be allocated in each budget a fund for industry development lending. Lending from this fund would be the sole responsibility of the Tasmania-Development and Resources (TDR) Board, with the Government having no capability to direct the Board on any individual funding proposal;
- State Government to provide seed funding for the establishment of one or more pooled development funds in Tasmania;
- Adoption of reforms by both the State and Commonwealth governments to improve the competitiveness and efficiency of waterfront and transport operations.
- Overall streamlining of the planning regulation system, incorporating the following: development of an over-arching strategic direction for the planning process; rationalisation and standardisation of the proliferation of planning schemes; restriction of the scope for individuals to appeal against particular planning permits; and compulsory accreditation of those administering the planning system.
- Prior to privatisation, the HEC should be split into 5 competing generation enterprises (based on existing catchment areas), 2 competing franchised distribution operations (along north/south lines) and 1 transmission system enterprise;
- The privatised retailers/distributors should continue to be regulated, and this overseen by the Government Prices Oversight Commission (GPOC);
- State Government should facilitate the development of Basslink, to integrate Tasmania’s energy market with the mainland electricity grid and assist the move to a fully competitive energy market;
OTHER SECTOR SPECIFIC
- Outstanding Gordon-Below-Franklin compensation funds owed to Tasmania by the Commonwealth should be used to fund the exploration of natural gas from the Yolla gas field, together with the establishment of a natural gas market and a capacity to generate electricity from natural gas.
- A range of recommendations were also made for the reform and enhancement of the following sectors: forestry, agriculture, fisheries and also marine farming, tourism and other service industries, and leisure and entertainment.