“With the focus on Canberra, the federal budget and the upcoming election, the impact state governments have in affecting the livelihoods of Australians cannot be forgotten, especially when so many are making it harder to get ahead,” said Lachlan Clark, Research Fellow at the Institute of Public Affairs.
Today, the IPA released its second annual State Economic Scorecard, ranking the performance of Australian states on consistent key performance indicators. In the past year, the research found:
- Queensland is the nation’s overall best performing state, with the lowest state debt burden and best energy price outcomes.
- Tasmania moved up to be the nation’s overall second-best performing state, leading the nation in per capita state economic growth, wages growth, productivity growth, and with the lowest rental costs.
- Western Australia slipped from first to third. While still having the nation’s lowest tax burden, highest jobs growth and best retail trade conditions, deteriorating state economic growth, wages growth, productivity growth, and rental costs are concerning.
- South Australia slipped from second in 2024 to fourth in 2025 off the back of the nation’s worst outcomes in energy prices.
- Victoria was unsurprisingly the second worst performing state in the nation, still with the highest state tax and debt burdens, and poor state economic and jobs growth.
- New South Wales fell to be the worst overall performing state in the nation with the highest rental costs and the weakest retail trade.
“This year’s Scorecard highlights the importance of fiscal responsibility and a commitment to achieving economic growth through smart policy – such as cutting red tape and reducing reckless spending,” said Mr Clark
“Queensland and Tasmania – the two top performing state economies – are actively engaging in red tape reduction to improve business conditions and both are reaping the rewards. Getting government out of the way is critical to fostering economic dynamism.”
“In contrast, New South Wales is suffering from deteriorating business conditions, with some of the worst retail trade conditions, rental costs, wages growth, and state tax burdens in the nation.”
“Unsurprisingly, a decade of poor economic management is keeping Victoria near the bottom of the ladder thanks to out-of-control state debt and taxes, which is undermining the state’s economic and jobs growth’’ said Mr Clark.
Recent Australia Bureau of Statistics data confirmed Australians are continuing to fall further behind. Australians experienced the first two-year per capita economic recession in 41 years. The last time the personal economy contracted for two successive years was in 1982-83.
“Failure to rein in unsustainable migration and spending at a federal level is fuelling high inflation and a per capita recession. This is making it harder for state governments to deliver basic services, as well as setting Australia up for an economic and humanitarian disaster,” said Mr Clark.
“State governments have many levers at their disposal to address the challenges we are facing today, particularly in relation to cutting government spending, getting business growing by cutting red tape, accelerating housing construction and increasing baseload energy generation to cut costs.”
“While most people tend to look at Canberra for economic leadership, the policy decisions of state governments have significant real-world consequences for families and businesses. Measuring which states are performing better is critical considering the persistent economic headwinds Australia faces.”
“This is why it is vital that leaders at all levels of government get serious about making it easier to do business and to promote economic prosperity,” said Mr Clark.
To download the IPA’s State Economic Scorecard 2025 click here.
