David Walsh's MONA has played its part in the economic recovery. In the case of business conditions, daylight is second ahead of NSW third. And that's despite the state's electricity supply problems. If you wanted a pay rise last quarter, Tasmania was where you should have been. According to this week's ABS figures, Tasmanian hourly wages grew by 0.7 per cent while the national average was just 0.4 per cent. That national figure was a new low that reinforced our low inflation outlook, a labour market that remains soft overall, and perhaps the overly optimistic nature of some of Scott Morrison's budget forecasts. Meanwhile, the Hodgman government is enjoying greater acceptance of policies by its voters than any other state. Saul is back Tasmania also has the benefit now of having an eminent Economist in Residence – Saul Eslake having returned to his home state from which to run his independent consultancy after previously being chief economist for the ANZ and Bank of America Merrill Lynch, among other things. This means it's easy to get all sorts of interesting data on Tasmania by raiding Eslake's presentations and a paper for the Tasmanian Chamber of Commerce and Industry.

There are a number of things suddenly working well for Tasmania. Helped greatly by the weaker dollar, it's enjoying a MONA-led recovery as David Walsh's private art museum has turned into the island's biggest tourist attraction. Tasmania has quietly become a top real estate performer. Credit:Getty Images "MONA certainly has made a difference, not only in terms of the number of visitors it attracts but it has also prompted a significant improvement in the quality of restaurants and coffee shops catering to the requirements of the more 'up-market' visitors who come to Tasmania for an arts and cultural experience as opposed to the more traditional type of tourists," says Eslake. "It has prompted Qantas to put on more flights to Hobart from both Melbourne and Sydney, reversing what had been a trend towards completely Jetstar-ising Tasmania. There is now also something of a hotel-building boom beginning to get under way." Illustration: Cathy Wilcox.

International tourists heading south And it's not just domestic tourists flying south. Total visitor numbers rose 8.4 per cent last financial year to nearly 1.15 million. Within that, international visitors were up 22 per cent to 198,300. Tourism Tasmania claims tourism, directly and indirectly, provides about 9 per cent of gross state product and 16 per cent of total employment. Aside from the enhanced reputation for food and wine, Tasmania also is benefiting from wine makers seeking its cooler climate as climate change bites. And wine is just part of an agricultural sector that is proportionately higher in Tasmania than for the nation as a whole – 9 per cent of gross state product compared with about 3 per cent of national gross domestic product. That in turn means greater benefits from the weaker Aussie. There are a number of things suddenly working well for Tasmania. But Tasmania also is coming off a low base and has a long way to go to catch up with the Big Island on a number of key scores. It has by far the nation's lowest participation rate, labour productivity and educational attainment. Tasmanians are paid less than mainlanders and GSP per head is lower.

"The MONA effect is very Hobart-centric," cautions Eslake. "Other parts of Tasmania haven't benefited much from it. And remember that almost two-thirds of Tasmanians live outside Hobart and immediate surrounds. "In particular, Launceston and the northeast is still in pretty poor shape. The northwest is more of a mixed bag, having benefited from the 'dairy boom' in much the same way as New Zealand, though on a smaller scale of course. But is now being hard hit by the collapse in dairy prices. The recently announced cut back in opium poppy production – Tasmania is the largest supplier of legal opium in the world – will also hit the northwest pretty hard." Loading And Tasmania continues to bludge off the mainland, second only to the Northern Territory. That allows it to spend more on government services than average while raising the proportionately lowest amount of state taxes.

Tasmania's economic outperformance is potentially good news for all of us then, if it eventually helps wean the state off reliance on the federal taxpayer.