Tasmania’s budget shows Premier Jeremy Rockliff is treading water, as state drowns in debt

Tasmanian Premier Jeremy Rockliff and Treasurer Michael Ferguson at the Executive Building in Hobart on Thursday.

In minority and on the nose, the Rockliff government has squibbed on hard decisions to save its political skin.

Debt soars, cuts are minimal, spending growth continues, albeit glacially, and tax and other structural reforms are put off to the never, never.

And these could be the good times. After this budget period ends in 2026-27, the GST no worse of guarantee expires.

Unless Albo agrees to extend it, Tasmania will lose hundreds of millions of dollars across future forward estimates.

Treasury identifies plenty of risks to some pretty optimistic forecasts – not least blowouts in the AFL stadium, which no-one believes can be delivered for the promised $715m.

The budget papers describe the unpopular project as not “fully defined” and vulnerable to “supply constraints and cost escalations”.

It fades into insignificance, though, in comparison to the state’s plan to become the “battery of the nation” by building the Marinus Link cable under Bass Strait, backed by pumped hydro schemes and expansive new transmission lines.

All up, Treasury estimates this green dream will cost more than $6.4 billion, which the boffins politely point out is a “high level of materiality” in the Tassie context.

It warns “important decisions that have the potential to have a significant impact” on the state’s finances “will be required to be made in this (budget) period”.

“There is a risk that, prior to a final investment decision being made, there will be a requirement to underwrite or pre-commit significant funding to early works,” Treasury cautions.

All of which makes thin surpluses promised for the budget out years appear optimistic.

State debt is to double. Some at least is to fund commendable infrastructure: roads, bridges, health services, schools. And total spending is restrained.

But there is plenty of fodder for the government’s circling enemies and internal critics.

When challenged about when Tasmania would address structural reform, Premier Jeremy Rockliff, who this week lost the mantle as preferred premier, pointed to ill-defined future changes to fire and emergency services funding and local government reform.

However commendable, these fall far short of the kind of bold thinking needed to improve the sustainability of a state dependent on the feds for 67pc of its budget, with a $7.7b superannuation liability and which spends 42.5pc of expenses employing public servants.