Tasmanian government announces $5.1bn spend on infrastructure over next four years
After an independent economist raised concerns about the sustainability of Tasmania’s infrastructure program, the state government is pushing ahead regardless. Here’s the latest.
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Treasurer Michael Ferguson has announced a $5.1bn spend on infrastructure over the next four years, despite warnings from a prominent independent economist that the state government is on an unsustainable financial footing.
The state budget is set to be handed down on Thursday and Mr Ferguson says it will focus on jobs, cost of living relief, and honouring the Liberals’ election commitments.
The budget comes amid mounting concerns regarding the state’s finances, following a report by economist Saul Eslake.
Mr Eslake’s report highlighted that the government would be “running the largest public sector infrastructure program, relative to the size of its economy, of any state or territory” over the next three years.
And he’s questioned whether Tasmania can afford such investment, recommending that capital works projects be ranked according to their “social and economic benefit relative to their costs”.
But Mr Ferguson and the government are pushing ahead with their infrastructure agenda as the Liberals prepare to pump more than $5bn into the pipeline of works across the forward estimates.
While the Treasurer said the government would be formally responding to Mr Eslake’s report in the coming months, he did not believe this was the moment to be “winding down some of the key stimulus [measures]”.
“This isn’t the right time to step down – we need to maintain that pipeline of work,” Mr Ferguson said.
“It’s also about supporting job creation and productive infrastructure which will be with us for decades to come.”
According to the Revised Estimates Report released prior to the election in February, the government recorded a $1.5bn deficit last financial year instead of the $297m that was forecast.
Mr Ferguson has signalled that the 2024-25 budget, which will be the third under his watch as Treasurer, will strengthen frontline services.
He has also warned of continuing national economic headwinds, for which he has blamed the policy decisions of the Albanese Labor government.
Master Builders Tasmania CEO David Clerk welcomed the Treasurer’s announcement of a $5.1bn investment in infrastructure, saying it would “put confidence into the [building and construction] industry”.
“These [infrastructure] projects are projects that will extend over multiple years and the important thing is to recognise that our commercial builders are looking for … pipeline certainty to invest in staff. That’s what’s going to provide more jobs training, more upskilling of individuals,” he said.
Civil Contractors Federation CEO Andrew Winch also praised the government’s commitment, which he said would attract workers to Tasmania and keep young apprentices from leaving the state.
“All the dollars spent on investment in infrastructure ends up in cafes and service stations and shopping centres and anywhere else around Tasmania,” he said.
‘Unbelievable’: Greens react to big spend
The state government’s move to inject more funding into infrastructure has been labelled “staggering” and “unbelievable” by Greens leader Rosalie Woodruff, who says Treasurer Michael Ferguson is “not even showing that he’s trending in the right direction in the sort of approach he’s taking with the budget”.
Responding to Mr Ferguson’s announcement of a $5.1bn spend on infrastructure over the coming four years, Dr Woodruff said the Treasurer should instead be scrapping the controversial efficiency dividend and walking away from the proposed Macquarie Point stadium.
She described the decision to continue to focus on infrastructure funding as a “staggering response from the minister” in the wake of a damning report into the state of Tasmania’s finances by economist Saul Eslake.
“[Mr] Eslake’s report … has said that the Tasmanian Liberals have been overspending massively on infrastructure and underspending on critical essential service workers,” Dr Woodruff said.
“It is unbelievable that he would continue to double down and go in harder into an area which shows how essentially warped the Liberals’ priorities are.”
Labor treasury spokesman Josh Willie was less critical of the infrastructure announcement but warned that Mr Ferguson was set to hand down the “worst” and “most unsustainable” budget in Tasmanian history.
“He’s just handed down a record deficit for the last financial year, which was nearly five times the deficit carried through Covid. We have record debt at $6.1bn across the forward estimates before [the Treasurer] tries to shoehorn in $1.7bn worth of new spending from the election that was completely unfunded,” Mr Willie said.
The Labor MP said there was “nothing wrong” with debt if the government used it to “grow the economy, increase opportunities for Tasmanians, and build revenues for government to deliver quality services”.
But Mr Willie said the Liberals had “nothing to show for record deficit and debt apart from an economy that’s flatlining”.
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