The Civil Contractors Federation Tasmania has slammed suggestions that the state government should reduce infrastructure spending in the upcoming state budget, warning it would have a “devastating” impact on the local economy.
The concerns come in response to a report by economist Saul Eslake, which recommended cutting back on infrastructure spending as a way to address the state’s fragile budget.
The report found Tasmania is headed for $16 billion worth of debt by 2035, which Eslake said was “entirely attributable” to government policy decisions.
CCFTas CEO Andrew Winch said that civil contractors are the “backbone” of the Tasmanian economy and provide services throughout rural and regional areas.
“The reason why the sector has been calling for a pipeline of activity is to ensure there is a flow of work in the civil construction so that businesses can make longer-term investments and employ people securely,” he said.
“If this spending was now to be cut, many of our members would be facing significant impacts to a reduction of activity.”
He said that the state economy is too small and fragile for “knee-jerk decisions”.
“We need to be considerate about how we go about any budgetary changes and look at how this can be achieved while minimising the pain,” he said.
Treasurer Michael Ferguson said that the government is committed to investing in infrastructure and that Eslake’s report is just one of many that will be considered in the lead-up to the budget, describing it as an honest assessment.
“We can say… that while the state’s finances are sustainable, we always need to have discipline in the management of public finances. We need to have careful management,” he said.
The Eslake report recommended increasing the state government’s revenue through lowering payroll tax thresholds for businesses, replacing stamp duty with land tax and increasing motor vehicle registration costs & mining royalties.
