David Killick analysis: Tasmania state budget 2025
The Liberals have promised surpluses many times, but keep moving the marker on when it will be delivered, Political Editor David Killick writes.
Tasmania
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Treasurer Guy Barnett has signalled the beginning of four years of austerity, handing down the government’s third billion-dollar-plus deficit in a row as Tasmania slides towards being $11bn in debt.
The central problem of the 2025/26 budget is the so-far illusory “pathway to surplus”, breaking the cycle of deficits that are piling debt on top of debt that will top $23,000 per Tasmanian this financial year.
The Liberal minority government’s spending next financial year will increase seven per cent on what was budgeted in 2024/25, but only 2.3 per cent on what it appears to have actually spent.
Inflation is currently running at 2.5 per cent. This year’s budget represents a cut in real terms.
This budget predicts cuts in spending growth from an average of nearly nine per cent over the last three financial years — to an average of just 0.2 per cent a year in dollar terms over the next four.
If delivered, they would be the deepest series of cuts to government spending in real terms this century.
Since the Liberals came to power, and particularly since Covid, the tide of red ink on the budget balance sheet has been rising.
It hasn’t just been the sudden shocks — like the Covid crisis — but the compounding of hundreds of millions of dollars pumped into health spending blowouts, the cost of continual infrastructure project overruns, and the staggering costs of compensating abuse survivors fairly.
A state whose ability and willingness to raise revenue has declined, a state that rejects the advice of learned and independent experts, a state that relies so on the generous interstate subsidies embedded in the GST arrangements, is on a path to reckoning far more certainly than on a path to surplus.
Peter Gutwein predicted four in a row in the 2019/20 budget and delivered none.
In 2020/21, he projected we’d be back in the black in 2022/23.
Chalk those misses up to Covid.
In 2021/22, it was to be 2023/24 and 2024/25.
In 2023/24, then Treasurer Ferguson projected we’d be in surplus in 2025/26 and 2026/27.
On Thursday, Mr Barnett said the next deficit will be delivered in 2029/30, beyond the black letter four-year forecasts of the forward estimates.
It means the Liberals are on track to deliver surpluses just four times in 15 budgets. The last was a bare $66m in 2018/19.
Spending has outstripped revenue by $3bln over the last decade.
(The 2024/25 deficit is on track to be $1.2bn, more than the combined total of every surplus this government has delivered since coming to power.)
The next surplus, whatever its size, if delivered, will follow ten deficits in a row.
Budget day Treasurers are full of braggadocio. Paths to surplus are easier spoken of than walked.
Originally published as David Killick analysis: Tasmania state budget 2025
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