Treasury figures show $500m blowout to second-worst deficit on record

The state budget deficit blew out by half a billion dollars in 2024/25, reaching $1.3bn — the second-worst result on record, new Treasury figures show.

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The state budget deficit has blown out by half a billion dollars and is expected to reach $1.3bn in 2024/25 — the second-worst result on record, new Treasury figures show.

Treasurer Guy Barnett blamed the 62 per cent increase on the federal government.

The Revised Estimates report reveals the estimated budget deficit is up $503.4m on the $792m predicted less than six months ago.

It will be the state’s second-worst deficit, eclipsed only by the $1.5bn the financial year before.

The state’s net debt, predicted to be $5.4bn, will balloon by $328m to $5.7bn, the figures show.

Net debt is on track to hit $9.6bn in 2027/28, when the state will spend an estimated $500m a year on borrowing costs.

Minister Guy Barnett. GBE hearings 2024. Picture: Nikki Davis-Jones

The worsening result was partly due to health spending predicted to be running $345m over budget, but was made slightly better by the expected under-delivery of $157m in infrastructure spending.

There will also be significant overspends on prisons by the Department of Justice ($80m), on workers’ compensation Police, Fire and Emergency Management ($42m) and in the Department of Resources and Natural Environment ($32m).

The Liberals have delivered four surpluses since coming to power, totalling $1.3bn in the consecutive budgets between 2015/16 and 2018/19.

The six subsequent deficits in a row including 2024/25 equate to around $4bn.

Mr Barnett said the government remained committed to delivering a surplus by 2029-30.

“The report reflects additional health expenditure of $345 million,” the Treasurer said.

“This increase is directly impacted by the Federal Labor Government’s failure to meet their obligation of 45 per cent of the cost of servicing our hospitals.

“This failure represents a shortfall of approximately half a billion dollars over the last ten years.

Premier Jeremy Rockliff speaks to the media at the Australian Wooden Boat Festival in Hobart at Friday, February 7, 2025.

“We will always step up and support the demands on our health system.”

The Revised Estimates report pained a rosier picture of the state’s economic conditions with growth recorded at 1.75 per cent in 2024/25 up from the 1.25 per cent predicted, unemployment 1.25 percentage points below the forecasts and CPI growth at 1.75 per cent instead of the predicted 2.75 per cent.

“Today’s report indicates that our economy is forecast to continue growing which is good news for jobs and business,” Mr Barnett said.

Labor leader Dean Winter said the Liberals had spend ten dollars for every additional dollar received in the budget.

“Premier Rockliff and Treasurer Barnett have completely lost control of Tasmania’s budget and it’s clear that they have no plan to get our finances back on track,” he said.

“The Liberals’ horror September budget was just the tip of the iceberg as the Revised Estimates Report shows that Tasmania’s finances have deteriorated even further in the last five months.

“In his first mini-budget, Treasurer Barnett has managed to blow out the deficit by more than half a billion dollars and add another billion dollars to the state’s debt.”

Originally published as Treasury figures show $500m blowout to second-worst deficit on record