Dwelling approvals for December 2020 were up 95.4 per cent on the previous year.

Premier Peter Gutwein was all smiles when he delivered a better-than-expected mid-year budget update. FULL BUDGET UPDATE EXPLAINED >>

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TASMANIA’S frenzied construction and real estate sectors have helped prop the state’s economy in the wake of the COVID-19 crisis, according to Treasury’s mid-year update.

Premier and Treasurer Peter Gutwein said he was “very pleased” by the numbers in the 2020-21 revised estimates report released on Monday.

“Growth in the economy is up both in gross state product and state final demand, employment and our outcome expected there is up, importantly the number of Tasmanians looking for work in terms of participation is up,” Mr Gutwein said.

“Obviously in the budget we forecast we would have a significant deficit and while we still do have a significant deficit, there is a large improvement in that as a result of increased revenues across the board.”

Driven by the HomeBuilder grants, dwelling approvals for December 2020 were up 95.4 per cent on the previous year.

Tasmanian Premier Peter Gutwein. Picture: Nikki Davis-Jones

House sales drove an increase in state taxation of $184.7 million

The state also received increased GST.

“We’re seeing some extraordinary results in the housing space in terms of the number of dwelling approvals. If you look back to December, 463 dwelling approvals across the state which was the highest month total since the series began back in the eighties. Over the course of last year a record was set again … nearly 3500 dwelling approvals,” Mr Gutwein said.

Mr Gutwein 80 per cent of Tasmanians who had been out of work due to the COVID-19 pandemic were back at work.

The report says Tasmania’s merchandise exports have “broadly held up”, while service exports of tourism and education have been decimated, falling 38 per cent in the year to the September quarter.

Minister Elise Archer, Jeremy Rockliff and Premier Peter Gutwein talk to Luke Eiszele and some of his apprentices. New Tasmanian Premier Peter Gutwein out on a Sandy Bay building site. Picture: RICHARD JUPE

However Treasury acknowledged that “an underspend of estimated infrastructure expenditure in 2020-21 may occur”.

A key criticism of the state budget was the government’s promise to spend $1 billion on infrastructure this year was unlikely to materialise, given a history of underspending.

Mr Gutwein said the infrastructure program had increased employment.

“It’s not about what you spend it’s about how many people you’ve got at work. At the moment our construction sector, which was our aim, is basically almost at full employment,” he said.

Shadow Treasurer David O’Byrne said the report showed the government was failing to deliver on its big ticket state budget item.

”These figures confirm Tasmania will lag behind the rest of the nation, we will have the highest unemployment, we will have the lowest economic growth. And their one trick pony, their one strategy to take Tasmania out of the COVID economic crisis we find ourselves in is infrastructure. These documents show that not only will we underspend by $600 million this year, we will (have underspent) on infrastructure by $1 billion over the last four years. This is a house of cards strategy,” Mr O’Byrne said.

BY THE NUMBERS:

• NET operating deficit of $960.7 million – $157.3 million less than expected
• FISCAL deficit $1.6 billion – $158.1 million less than expected
• INCREASE in forecast GST revenue of $69.2 million
• INCREASED state taxation revenue of $184.7 million, primarily conveyance duty
• THE unemployment rate is forecast to be 7 per cent in year-average terms.
• DWELLING approvals up 94.4 per cent in December compared with the previous year

Source: Revised Estimates Report 2020-21