Economic performance across the states continues to vary significantly, with resource-driven regions maintaining a clear advantage. The latest State Economic Scorecard from the Institute of Public Affairs provides a comprehensive comparison based on ten key indicators, offering insight into which regions are leading and which are lagging.
Western Australia has once again secured the top position, underpinned by strong wage growth, robust retail turnover, and relatively low tax and debt burdens. Its economy continues to benefit from a resilient resources sector, which has supported both employment and income growth. This combination has helped the state outperform others across multiple metrics.
Tasmania has delivered a standout performance, ranking second overall. The state leads the nation in productivity and per capita economic growth, highlighting the effectiveness of its economic diversification efforts. Hobart, its capital, also recorded the lowest median rent among capital cities, adding to its appeal from both a lifestyle and affordability perspective.
Queensland placed third, reflecting a mixed performance. While the state remains competitive across several indicators, weaker wage growth in 2025 has weighed on its overall ranking. Nonetheless, its relative affordability and ongoing population growth continue to support economic activity.
South Australia ranked fourth, benefiting from what has been described as a dynamic business environment. However, higher energy costs and a decline in productivity have limited its overall performance. These factors highlight the challenges facing smaller economies in maintaining competitiveness.
Victoria and New South Wales occupy the lower end of the rankings, with structural challenges impacting their performance. Victoria remains in fifth place, largely due to high tax and debt levels combined with declining per capita economic output. Meanwhile, New South Wales sits at the bottom of the scorecard, affected by lower business investment, subdued retail activity, and higher living costs, including elevated rental prices in Sydney.
These rankings underscore the growing divergence between resource-rich states and those with more service-based economies. They also highlight the importance of fiscal management, productivity growth, and cost-of-living pressures in shaping economic outcomes.
Looking ahead, states that can balance economic growth with affordability and investment are likely to maintain a competitive edge. As national economic conditions evolve, these differences will continue to influence migration patterns, investment decisions, and housing demand.
