Column in The Australian - Apple Isle Could Be Cherry On Our Asia Cake

Published in The Weekend Australian on 11.01.14

Tasmania is a stunningly beautiful place with unsurpassed natural assets yet since Federation has remained a mendicant state. No matter how much money is funnelled across Bass Strait, Tasmania's economic prospects scarcely seem to improve.

Already with the highest unemployment of any state, Tasmania is facing the likelihood of a constricted money funnel as the federal government makes necessary budget savings.

It need not be this way. Australia and New Zealand enjoy a hard-earned reputation as producers of clean, green agricultural goods. Australia has no history of foot and mouth disease or mad cow disease. Instances of food contamination are extremely rare and food grown and packaged in Australia is considered safe, reliable and of superior quality.

These are enormously valuable attributes in the Asian century, which is set to yield a middle class totalling three billion people within 16 years.

Infant formula from Australia and New Zealand is in heavy demand in China. So too is premium-quality cheese, wine, beef, seafood and fruit.

No part of Australia has a cleaner, greener image than Tasmania. Even more than the mainland, Tasmania is in the right place at the right time: in the Asian region in the Asian century. Yet many of the agricultural practices employed in Tasmania are outdated and incapable of operating at the scale needed to take full advantage of the opportunities presented. Tasmania needs investment capital to retool and upgrade its agricultural capacity.

Sadly, here's where politics can play its perverse role. As much as nationalists might wish and hope and think and pray that Australian agricultural companies and superannuation funds will come up with the necessary capital, there's been little sign of this happening.

China will supply much of the demand for premium agricultural produce in the coming decades and is capable of providing much of the capital. To her great credit, Tasmanian Premier Lara Giddings has had the foresight to recognise this, visiting China and actively encouraging Chinese investment in Tasmanian food production.

Giddings understands that high-value produce can bear the high freight costs to Asia while still turning a good profit for growers and distributors. Tasmania's future is in highly specialised, premium-quality food production, not in commoditised goods that suffer punitive freight-cost disadvantages.

This is why Giddings commissioned Australian National University professor Peter Drysdale to prepare a report on Tasmania's place in the Asian century, following the release by the previous federal government of the white paper on Australia in the Asian century. The Tasmanian strategy recognises the opportunities that can be created for the state from the Asian century but is also frank in its assessment of the obstacles the state faces: education and training deficiencies, inadequate infrastructure, a comparatively small ethnic Asian resident population and low Asia literacy.

Yet the federal government's response to Tasmania's malaise is to seek the delisting of World Heritage areas, reigniting the battles over Tasmania's forests. Australia is set to have the dubious distinction of being the first country to seek the removal of World Heritage protection for areas with confirmed World Heritage values.

A far more positive approach is for the federal government and local business groups to confirm that they welcome foreign investment, as Giddings has, to modernise the food production base and infrastructure. Tasmania has made a large-scale shift from apples to cherries, which are in heavy demand during Chinese New Year - which coincides with the harvesting season.

The previous federal government worked hard and successfully to gain access for Tasmanian cherries to the lucrative Chinese market. More of this market access work is needed.

Chinese tourism, too, can be a major source of income and jobs for Tasmanians. Tasmania's pristine environment is a wonderful natural attraction, but as the state government's Asian century strategy recognises, Tasmania needs to be better at handling big tour groups, the preferred mode of visitation of high-income Chinese tourists.

In its tourism promotion efforts in China, the federal government could devote extra resources to promoting Tasmania as one of the preferred Australian destinations. While all states and territories would want this treatment, it's in their interests that Tasmania have its own sustainable income sources, making it less reliant on income transfers from other states through the redistribution of GST revenue.

Instead of delisting World Heritage areas and accommodating vote-seeking nationalistic bleatings of partyroom members, the federal government should embrace the Tasmanian Asian century strategy, revive and rewrite, where necessary, the national Asian century white paper and work with the state government to give the state a strong economic future.

No place has more abundant and attractive natural attributes than our own Tasmania - ample rainfall, a pristine environment, fertile soils and a deserved reputation for safe, premium-quality produce.