Tasmania’s financial position is deteriorating, with Treasury now projecting the state’s net debt will blow out to $13 billion by 2028, about $3 billion worse than estimated in last month’s state budget.
The alarming figures were revealed in the 2025 Pre-election Financial Outlook released by Treasury as the state heads toward an early election.
Treasury officials have warned that Tasmania faces a structural budget problem where “we are spending more than we earn and the gap is growing.”
“Expenses, significantly driven by health demand and costs, are growing at a faster rate than the state’s current sources of revenue,” the report stated.
Without intervention, the cost of servicing the state’s borrowing would nearly triple from $230.9 million in 2024-25 to $697.9 million by 2027-28.
“This rate of growth in debt is not sustainable and the size of the problem will only increase if not addressed. Immediate and sustained action is needed,” the Treasury report cautioned.
Treasurer Guy Barnett defended the Liberal government’s recent budget, which failed to pass parliament after Premier Jeremy Rockliff lost a no-confidence motion.
“The government was taking the action required, and as demonstrated by the 2025/26 Budget, a range of measures proposed by the government would’ve seen a sensible return to surplus,” Barnett said.
“It was Dean Winter who stopped this corrective action and has sent Tasmania to an early election.”
Shadow Treasurer Josh Willie seized on the report as evidence of financial mismanagement.
“Today’s Pre-Election Financial Outlook Report shows the Liberals’ budget mess was even worse than they were admitting,” Willie said.
“The PEFO proves that the Liberals can’t be trusted to manage Tasmania’s finances. If you can’t manage the budget, you can’t govern Tasmania.”
