Tasmanian Treasurer dumped as leak reveals ‘generational’ budget bungle
Tasmania's finances have reached their ‘worst position’ ever, with Treasury warning it's ‘mathematically impossible’ to grow out of the mounting crisis.
Tasmania’s spiralling debt is a “generational burden” that will need a “decade of discipline” and tax hikes to repair, the state’s Treasury has warned, as national conservative stalwart Eric Abetz was installed to tackle the growing fiscal crisis.
The damning assessment of the Liberal government’s budget management was made in a briefing to incoming independent MPs by officials, including Treasury chief Gary Swain, earlier this week.
On Thursday, incumbent treasurer Guy Barnett was dumped in a reshuffle, in favour of Howard-era conservative Mr Abetz, who - should the minority government survive when parliament resumes - faces a $13bn-plus debt crisis.
It is understood Mr Swain’s frank briefing to independents described the “accelerating” debt burden – with net debt trebling over three years – as “alarming” and warned it was “mathematically impossible” to “grow our way out of this pain”.
The briefing reveals the state will in 2025-26 be borrowing $1.178bn for operational expenses, something it is understood Mr Swain likened to buying groceries on the same credit card used to pay off an interest-only mortgage.
An urgent need to repair the state budget has become a key issue for the independents who will help determine who governs the state from August 19, when the hung parliament elected on July 19 sits for the first time.
Treasurer in the last Rockliff government, Guy Barnett, was on Thursday dumped in a reshuffle. The last treasurer, Michael Ferguson, was forced to the backbench by a no-confidence motion and has not been resurrected.
Mr Rockliff was on Wednesday recommissioned by Governor Barbara Baker to try to form government, as the incumbent with the most seats, but must test the confidence of the Assembly on August 19.
Labor is seeking the support of the Greens and independents to move a “constructive no confidence motion” to oust the Liberals and replace them with a minority Labor administration.
Opposition leader Dean Winter met with all independents on Thursday to discuss his pitch for a parliamentary coup.
He cited budget repair as the first of three key “areas of focus”, along with “restoring trust” and making the parliament last full term.
“It was a productive and respectful first meeting and I look forward to furthering the discussions,” Mr Winter said.
Mr Rockliff unveiled his new cabinet, despite not knowing if his government will survive the fortnight. The Premier denied Mr Barnett had been sacked, arguing he was instead taking on “increased responsibility” as Attorney-General, and Justice and Small Business minister.
Two newcomers – former federal MPs Bridget Archer and Gavin Pearce, who made the switch to state politics at the election – join the cabinet. “We are getting on with the job for Tasmanians,” Mr Rockliff said.
He announced a new “crossbench liaison office” to help make the minority government work, and promised regular briefings for MPs, as well as “independent analysis of major policies and bills”.
However, it appears key kingmaker independents are losing trust with the Liberals’ ability to turn around their budget crisis.
Clark independent Kristie Johnston told The Australian it was “impossible to overstate the urgency for budget repair”. “The acceleration of the deterioration of Tasmania’s finances has Treasury pleading for immediate action, urging the next government to pull all available levers – now,” she said.
“We’ve never been in a worse position. The reality, on best Treasury estimates, is recovery requires a decade of budget discipline and tough choices.
“At the election, Tasmanians voted for a power-sharing, responsible government and a stable parliament. MPs should be able to unite on accepting the alarming extent of the problem and in finding ways of working together to start recovery.”
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