The Competition Index 2007-08 provides an objective assessment of the advantages and disadvantages of undertaking business in Tasmania relative to the other Australian jurisdictions and, where comparable data are available, New Zealand. The report is prepared using the most recent data available for 2007-08 as at 31 October 2008.
This is the eighth edition of the Competition Index and the third year in which comparisons with the Northern Territory and the ACT have been included.
Compared with other jurisdictions, Tasmania has a number of cost advantages for businesses, such as low labour costs, a stable workforce, low land and accommodation costs and good port access.
However, the level of qualifications held by the Tasmanian workforce and the amount of work-related training courses undertaken are lower than in any other jurisdiction. Tasmania's relative isolation may also be a barrier to the establishment of firms that rely on access to a large customer base or specialised financial and business services. These factors are reflected in the indices.
Overall, in 2007-08, Tasmania is ranked first for twelve of the 35 indices and is ranked least favourable in five indices.
Comparing this year's rankings to those of the previous report, Tasmania has improved its ranking in five indices and deteriorated in six indices.
All indices have been developed by the Department of Treasury and Finance and represent average costs and benefits. They do not necessarily reflect the conditions for any individual firm. Also, the indices have been prepared on the basis of the conditions that would likely be faced by a new firm setting up rather than those faced by existing firms. Financial assistance provided to new firms by state or territory governments has not been reflected in the calculations.
This is the fifth year that a comparison with New Zealand has been included in the Competition Index. New Zealand's proximity and similarity to Australia means that it is likely to be considered as a possible alternative location for some businesses in the region.
The methodology used to calculate the indices is outlined in a paper titled The Competition Index: Background and Methodology, available on the Department of Treasury and Finance website, www.treasury.tas.gov.au. KPMG has reviewed previous reports and found the methodology to be objective, robust and appropriate, and not designed to favour Tasmania or any other jurisdiction.