The state government says Tasmania’s budget is set to return to surplus within two years, with the state government forecasting a net operating surplus of $192.8 million in 2027-28.
Treasurer Eric Abetz will unveil the 2026-27 budget today and is framing it as a turning point for the state’s finances after years of deficit spending.
“Now is the right time to start paying down the debt and focus on our future generations,” Abetz said.
“We are restoring the budget to a surplus within two years and projecting to reduce debt over time.”
The return to surplus would be the first since before the pandemic.
The state has not posted an operating surplus since 2018-19, when annual government spending sat at $6.31 billion.
Abetz said getting back to surplus was essential to the state’s long-term financial health, saying the latest budget locks in a plan for Tasmania’s net debt to peak in 2028-29 before starting to fall.
“Achieving a surplus gives us the headroom we need for the future. It reduces the need for borrowing, lowers borrowing costs and gives us greater capacity to invest in the services Tasmanians rely on,” he said.
“We will reach peak net debt in 2028-29, after which net debt will begin to decline. That is a disciplined and responsible plan that secures Tasmania’s financial future.”
Despite the push to rein in spending, the government says two-thirds of its expenditure will still go to core services like health, education and public safety.
“We are strengthening the budget at the same time as we continue delivering for Tasmanians,” Abetz said.
He said the approach would give the state more room to deal with future economic shocks.
“This is about securing Tasmania’s future, ensuring we have the flexibility to respond to challenges, continuing to invest in our State and supporting our community now and into the future,” he said.
“This Budget delivers disciplined, responsible economic management, returning to surplus, reducing net debt and building a stronger Tasmania.”
Independent economist Saul Eslake has previously said the key test for the budget will be whether slower spending growth is backed by actual policy decisions.
The Tasmanian government spends around $10 billion per year. The state is forecast to have just over $7 billion of debt by the end of this financial year.
