The Tasmanian Government has delivered a $10.46 billion budget forecasting a $1.008 billion deficit while rejecting spending cuts to maintain investment in essential services.
Treasurer Guy Barnett delivered the 2025-26 “Building a better Tasmania” budget on Thursday, with government spending rising 7.34% and revenues increasing 5.59% to $9.452 billion.
The deficit will reduce over coming years to $850.1 million in 2026-27, then $396.5 million and $236 million, before reaching surplus in 2029-30. Net debt will climb from $7.361 billion this year to $10.789 billion by 2029-30.
The state government has allocated $942 million to health services in its 2025-26 state budget while flagging the potential sale of government businesses to accelerate the state’s return to surplus.
Barnett outlined spending priorities across health, education and infrastructure without new taxes, as the state manages cost-of-living pressures and service demand.
Health receives $942 million over the forward estimates to meet increased demand for health and mental health services. The allocation includes $70 million over four years for elective surgeries and $7.5 million for diagnostic breast imaging clinics across the state.
Education spending reaches $2 billion next year, with $297 million allocated for school facilities over four years.
Schools receiving improvements include Clarence High School, Dodges Ferry Primary, East Derwent Primary, Lauderdale Primary, Lindisfarne North Primary, Princes Street Primary, Risdon Vale Primary and Rosetta Primary School.
Barnett said the budget acknowledges ongoing fiscal pressures from COVID-19 spending, estimated at over $2 billion and costs associated with implementing child sexual abuse inquiry recommendations.
The government targets a net operating surplus by 2029-30, with plans to achieve this earlier through public sector reforms and potential business divestments.
Cost-of-living measures
The government will provide $60 power bill credits to all Tasmanian households through its renewable energy dividend. Half-price bus fares for school children and regional routes will continue.
The budget includes $6.7 million for food relief programmes and increased concessions for low-income households.
Infrastructure and economic development
Infrastructure spending totals $1.6 billion across the budget period, covering road improvements including the Arthur Highway, Bass Highway and East and West Tamar highways.
The budget sets aside $300 million in equity for the Marinus Link project, contingent on a positive final investment decision by August.
Tourism receives $38 million over four years for marketing, while parks will receive $441 million in investment.
Government business reforms
The government announced reforms to government-owned businesses, with some potentially moving to private ownership as part of what it describes as the largest such review in decades.
Following assessment, six businesses will remain in government hands with improved governance: the Port Arthur Historic Site Management Authority, Tascorp, Tasracing, TasRail, Entura and the Public Trustee.
Plans to merge TasRail, TT-Line and Tasports have been abandoned and TT-Line will not be sold. Hydro Tasmania will also remain in public ownership.
Other government businesses and surplus Crown land remain under review for potential sale. The government says divestments would enable increased investment in essential services and help return the budget to surplus sooner.
Stadium and community spending
The budget includes funding for the Macquarie Point precinct development, which will house Tasmania’s AFL team.
Community safety receives $3.7 million for police equipment including metal detector wands, taser trials and body-worn cameras.
Small businesses will receive $2.5 million in support, including $500,000 for a new Start-Up Permit process designed to streamline business establishment.
Housing initiatives include nearly $500 million over four years for Homes Tasmania, while stamp duty remains abolished for first-home buyers purchasing existing properties up to $750,000.
