Tasmania’s budget deficit has surged to $1.3 billion, according to new government figures.
The shortfall is $503.4 million higher than the originally forecast $792 million deficit and has pushed the state’s net debt to $5.7 billion, exceeding the forecast of $5.4 billion.
Treasurer Guy Barnett has pointed the finger at the federal government, blaming it for failing to meet its 45% funding commitment for hospitals.
“The report reflects additional health expenditure of $345 million,” he said.
“This failure represents a shortfall of approximately half a billion dollars over the last 10 years.”
Other overspending included $80 million for prisons, $42 million for emergency services compensation and $32 million in the Department of Resources and Natural Environment.
An underspend of $157 million in infrastructure projects helped offset some of the deficit.
Tasmania’s net debt is now expected to hit $9.6 billion by 2027-28, with annual borrowing costs projected at $500 million.
Barnett said there were some positive economic indicators. The state achieved higher-than-predicted economic growth at 1.75% compared to the forecasted 1.25%.
Unemployment was 1.25 percentage points below forecasts and CPI growth was lower than expected at 1.75% versus the predicted 2.75%.
“Today’s report indicates that our economy is forecast to continue growing which is good news for jobs and business,” Barnett said.
“Tasmania’s net debt is manageable and we will continue to invest in public services and economic-enabling infrastructure.”
“I do not underestimate the task in preparing for the May budget but I can assure Tasmanians that as Treasurer, I will maintain a steel like resolve to deliver a budget surplus by 2029-30.”
Labor’s Shadow Treasurer Josh Willie said the figures showed the state government has “completely lost control of Tasmania’s budget”.
“Make no mistake, there is no pathway to surplus or debt reduction to be seen,” he said.
“In fact, for every additional dollar of new revenue this year, the Government has spent ten dollars.”
“It’s clear that Tasmania is headed towards budget oblivion unless the Liberals acknowledge the problem and change course.”
