Election brings no mandate to repair ‘dire’ budget situation: Economist Saul Eslake

Saul Eslake has warned for years about the “dire” state of Tasmania’s finances. Read his sobering thoughts on the state election results.

Economist Saul Eslake speaks to the media at Parliament Square in Hobart.

In the wake of the election, the state’s budget crisis will worsen with no major party given a mandate to fix it, a leading economist predicts.

Saul Eslake said he was not surprised with the result from the poll and did not think the outcome “has any significant implications for the economy”.

“My big concern is that both major parties were in denial about what needs to be done to fix the budget - almost completely ignoring the dire warnings issued by Gary Swain (Treasury Secretary) in the Pre-election Financial Outlook (PEFO),” he said.

Independent economist Saul Eslake has issued a warning in the wake of the 2025 Tasmanian state election. Picture: iStock

“Neither side sought, nor has, a mandate to do what needs to be done to fix the budget so it will just get worse.

“And then the Liberals will claim they have a mandate for their ‘hare-brained’ scheme to put the state government back into the insurance business.”

The PEFO predicted Tasmania’s debt would grow to $13bn by 2028 and “required immediate and sustained action” to fix it.

Mr Eslake believes many Tasmanians did not want another election.

“I think people were annoyed at being forced to vote again so soon after a federal election as well as last year’s state election, and blamed Labor for forcing them to,” he said.

“Labor didn’t do enough to convince people that they’d do a better job than the Liberals.”

Mr Eslake said the Tasmanian economy was “under-performing” compared with how it was faring in 2019-22.

“Tasmania’s finances are in a dire position,” he said.

Economist Saul Eslake. Picture: Chris Kidd

“In many respects they are the worst in the nation, worse than even Victoria and the Northern Territory.”

Mr Eslake conducted a review of the finances for Premier Jeremy Rockliff last August and warned that Tasmania’s credit rating could be downgraded, if action to repair the budget was not taken.

He told the Mercury last month that overseas salmon owned companies should pay royalties for using the state’s waterways, in the same way mining companies pay royalties for accessing minerals which belong to Tasmanians.

Meanwhile, Tasmania’s senior federal Liberal Senator Jonathon Duniam said Labor in Tasmania did not mount a case for change.

“Sure they pointed out things were shit and they had a few sort of alternative approaches, and their answer to the health problem through TassieDoc, but they didn’t make the case around why you’d need to change government.

Liberal Senator Jonathon Duniam.

“It all happened very quickly and I think with lack of time to make the case, and frankly not a proper plan on the way through, they didn’t have it.”

He said the Liberal’s federal campaign, which saw four Labor MPS elected, was not specific to Tasmania.

“e were talking about things like nuclear (power). Who in Tasmania cares about or has supportive view of nuclear?

“It seemed to some anti-Tasmanian. If you’re talking about nuclear, you’re not talking about hydro, for example.”

“All politics is local. I think the Tassie Libs had a whole pro-team, pro-stadium, we’re going to do our own TasInsure and whether you like that or not, it seemed to resonate.”