Tasmania’s Treasury has signalled it will resist broad cost-of-living handouts in response to soaring fuel prices, telling a parliamentary committee that “the best rationer is price”.
Treasury secretary Gary Swain made the comments at a Public Accounts Committee hearing on Wednesday into the state’s response to fuel impacts from the Iran conflict.
Swain said his department was deliberately steering the government away from COVID-style interventions.
“We’ve got to be careful not to default to front-of-mind solutions, so particularly the whole range of interventions around COVID,” he said.
He said COVID had combined supply restrictions with pent-up demand. The current situation was different.
“This is a supply-side event,” Swain said.
The hearing, chaired by independent MLC Ruth Forrest, heard Treasury had committed an estimated $2.5 million for free public transport this financial year, $500,000 for food relief organisations and a contribution to Commonwealth fuel excise relief.
But Swain conceded Treasury had not modelled several key impacts, including effects on Tasmania’s GST revenue or flow-on costs to essential goods like food and fertiliser.
“The short answer is no,” deputy secretary Dean Burgess said when asked about GST modelling.
Burgess said the bigger challenge was defining the problem.
“It really comes back to policy development 101. The first step is to work out what the problem is you’re trying to solve,” he said.
“And at the moment, that’s a problem in itself.”
Swain said income support and fuel reserves were Commonwealth responsibilities. The state would intervene only “by exception”.
“We don’t have the budget capacity and it’s not the government’s role to protect every participant in the private sector,” he said.
Treasury said it expected government-owned businesses to absorb fuel costs through their own pricing.
The TT-Line fuel surcharge was expected to be cost-neutral.
The hearing followed earlier evidence from State Growth officials, who confirmed Tasmania’s fuel supply remained stable.
