Fast tracking of the Marinus Link Bass Strait electricity interconnector will encourage renewable energy investment in Tasmania, an economic forecaster believes.
Prime Minister Scott Morrison recently announced the $3.5 billion cable project would be fast tracked.
“This (the federal fast tracking) strengthens the business case for renewable energy projects currently in planning in Tasmania and provides greater opportunity for future investment,” Deloitte Access Economics said in its latest quarterly Investment Monitor report.
It said Tasmania’s engineering construction industry was continuing to grow, but at slower rates than in 2019.
Deloitte said that had mainly been driven by renewable energy projects.
“Current work includes the $280 million Granville Harbour Wind Farm, while planning continues on the Robbins Island and Jims Plain wind farms,” the report said.
It said the value of commercial construction work fell in the past year, and looked set to slow further.
Nationally, Deloitte said investment was expected to be among the hardest hit parts of the economy this year and in 2021.
“COVID-19 has led to a collapse in both demand and business confidence, and many businesses are responding by consolidating their operations and making savings where they can,” report lead author Stephen Smith said.
“That is likely to see an increase in the number of investment projects being cancelled or delayed, while there will also be fewer new projects announced, and private business investment is forecast to fall by 15 per cent in 2020, reaching its lowest point as a share of the economy in almost two decades.”
The report said coronavirus containment measures had “weighed heavily” on Tasmanian services exports, especially education and tourism.
“Activity in both industries will be slow to bounce back as the recovery of these industries is reliant on Australia’s ability to control the spread of COVID-19, as well as the effectiveness of containment efforts in other countries,” it said.
Deloitte expected property prices to fall due to weaker population growth and the pandemic’s effects on jobs and the economy.
It said the public sector would play a major role in the state’s recovery.