$109m extra blowout bad start to campaign

Lara Giddings’s already record budget deficit has grown.

TASMANIA’S Labor government has started the state election campaign with an admission that it has blown out a record budget deficit by a further $109 million and cannot meet its debt target.

The bad fiscal news, revealed yesterday in the state’s mid-year financial report, coincided with the proroguing of parliament for a March 15 election.

It was seized on by both major parties: Premier Lara Giddings used the worsening outlook to demand that the opposition rein in spending promises while the Liberals claimed it as evidence of Labor mismanagement.

With polls consistently suggesting Labor cannot win majority government, Ms Giddings left open the possibility of continuing to govern in minority with as few as eight of the 25 House of Assembly seats.

Unlike the Liberals, led by Will Hodgman, who has ruled out governing as anything but a majority, Ms Giddings said Labor would not “run away from government” should voters fail to give any party a majority.

“We are prepared to stand up and govern if that is what is required for Tasmania,” Ms Giddings said, after entering caretaker mode.

“I don’t want a minority parliament but it’s in the hands of the Tasmanian people. And I will not be arrogant like Will Hodgman and refuse to accept a democratically elected outcome.”

Labor, which has been in power for 16 years, has plummeted in opinion polls, although its support received a small bounce after it dumped its power-sharing alliance with the Greens last month.

The mid-year budget report shows the deficit has blown out from $266.9m to $375.9m, while instead of net government debt being eliminated in 2016-17, it will rise from $116.5m to $194.7m.

Liberal Treasury spokesman Peter Gutwein said Ms Giddings had produced “an ocean of red ink” without telling voters how she would fix it.

“Labor and the Greens have comprehensively trashed the budget,” he said.

Ms Giddings blamed the carbon tax repeal for reducing revenue from the sale of renewable energy to the mainland by $150m.

She defended Labor’s decision to increase spending by $50m, despite the worsening outlook, as being necessary to grow jobs.

Ms Giddings accused the Liberals of irresponsibly pledging $390m in election promises already, but then refused to guarantee that Labor would match its campaign promises with new savings measures.

Currently, Labor and the Liberals hold 10 seats each and the Greens hold five.

An independent survey by local pollsters EMRS is due to be released today but ReachTEL polling for the Liberals released earlier this month had the Liberals on 48.8 per cent to Labor’s 25.8 per cent, the Greens on 15.3 per cent and the Palmer United Party on 4.8 per cent.

This would have the Liberals winning 14 seats and taking majority government, but Labor believes ReachTEL polling, conducted by automated phone calls, favours the Liberals and Greens.

Labor strategists believe they have a reasonable chance of holding the Liberals to 12 seats.