Tasmania State Budget 2019: Billion-dollar debt bill and public sector cuts to fund infrastructure

Treasurer Peter Gutwein has handed down a taut Budget featuring a cut in government spending in real terms over the next financial year.

TREASURER Peter Gutwein has handed down a taut Budget featuring a cut in government spending in real terms over the next financial year.

Mr Gutwein has promised to deliver four more budget surpluses in a row — and he will snatch a positive result in the current financial year despite falling revenues and a bushfires crisis.

Budget Breakfast with Treasurer Peter Gutwein this morning. Picture: RICHARD JUPE

But the Budget shows the state will take on debt — up to $1.1 billion in four years, the first time in more than a decade the state will not have cash in the bank.

Under the theme of “Maintaining the momentum, investing for growth”, the Hodgman Government has forecast it will deliver a surplus of $57.4 million next financial year — and a total of $567 million in surpluses over the next four years.

“This is the budget I am most proud of,” Mr Gutwein said of his sixth presentation.

“It is a budget that will deliver not just for today, but for future generations of Tasmanians as well.”

MORE STATE BUDGET NEWS:

AT A GLANCE: QUICK GUIDE TO THE NUMBERS

HEALTH: WHAT GOVERNMENT IS DOING ABOUT THE RHH

ANALYSIS: DRESSING UP THE ORDINARY

EDUCATION: EARLY LEARNING A WINNER

BUILDING: FAST-TRACK PLAN FOR AFFORDABLE HOUSING

In his State Budget speech, Mr Gutwein promised the Government would hire more nurses, doctors, teachers, paramedics and police.

“This Budget unashamedly invests record amounts into infrastructure to drive our economy, to enable us to deliver record investments into health, education and looking after the more vulnerable,” he said.

But next year’s surplus will be delivered on the back of an $80 million raid on Government Business Enterprises.

The Motor Accidents Insurance Board will kick in $50 million, Hydro Tasmania $32 million, the Tasmanian Public Finance Corporation $39 million and Aurora Energy $10 million.

And further surpluses will depend on the Government making $450 million in savings across the forward estimates — a 0.75 per cent cut in agency expenditure under the guise of an “efficiency dividend”.

Mr Gutwein said the Government would target spending on consultants, travel and advertising — plus reduce staffing costs through taking advantage of vacancy control and natural attrition while exempting frontline services.

“Achievement of these savings, together with expenditure restraint, will be essential to the delivery of forecast budget outcomes,” the Budget notes.

Unions greeted the announcement with alarm, and the State Opposition lamented the rising debt forecasts.

‘WHERE HAVE THEY SPENT THIS MONEY?’

‘NO HELP IN SIGHT’ IN BUDGET, SAY UNIONS

The Budget predicts flat revenue and spending growth over the year ahead.

Revenues are predicted to increase by a bare 1.6 per cent to $6.4 billion next year.

Spending will rise by 0.8 per cent to $6.3 billion — additional spending of just $10 million over the 12 months.

Government spending will actually fall by $23 million in 2020-21. For the first time since 2004-05, the state will be in the red by $284 million next financial year.

The Treasurer was keen to spruik the Budget as an infrastructure budget.

Included in the $2.8 billion in spending over the next four years is $1.6 billion for roads and bridges.

Work on the Bridgewater Bridge will begin next year, with completion in 2024.

The few surprises included a new “point of consumption tax” for online gambling, at a rate of up to 15 per cent from 2020. It will be imposed on the bookmakers themselves rather than local gamblers.

The Budget also signalled a sweeping review of the legislation governing the public service workforce.