Michael Ferguson issues GST warning after claiming Tasmania left off federal budget map

Warning Tasmanians should ‘brace for pain ahead’ with the state treasurer saying requests for key infrastructure projects has fallen on ‘deaf ears’. Reaction to last night’s federal budget >>

Return of state parliament for the first sitting day since the state election, Michael Ferguson MP. Picture: Chris Kidd

The Federal Government’s budget, released on Tuesday, has received mixed reviews. Tasmania’s Treasurer Michael Ferguson says the state has been left off the map; Farmers were left fuming over no investment in vital irrigation infrastructure, while money for an Antarctic icebreaker, RSV Nuyina, has been welcomed.

What budget means for RSV Nuyina

The Albanese government says its half-a-billion dollar boost to Antarctic science will support permanent jobs in Tasmania but concerns have been raised over a lack of funding for a new refuelling option for the RSV Nuyina.

In the 2024-25 federal budget, it was revealed that the $528m Nuyina would receive $127.2m over three years, starting this coming financial year, including $17.6m to deliver an additional 60 shipping days for marine science in both 2024-25 and 2025-26.

The remaining $109.6m will support the research vessel’s full operations, with contingency funding to provide flexibility as the ship finishes commissioning and testing of new capabilities.

Federal Labor will also invest $371m over nine years to rebuild and upgrade the sub-Antarctic research station on the World Heritage-listed Macquarie Island.

RSV Nuyina at Hobart. Picture: Chris Kidd

The troubled Nuyina is unable to refuel in Hobart and must make lengthy trips to Burnie to do so.

It has also been plagued with technical issues, such as malfunctioning cranes and software glitches.

Environment and Water Minister Tanya Plibersek said Antarctic science funding had “never been higher than under the Albanese Labor government”.

The funding comes after a Senate inquiry into the Australian Antarctic Division (AAD), chaired by Tasmanian Greens senator Peter Whish-Wilson, recommended a major overhaul of the agency and called for the acquisition of a second vessel to support the Nuyina.

Tasmanian Greens senator Peter Whish-Wilson.

Senator Whish-Wilson welcomed the extra support for the Nuyina, noting that one of the inquiry’s key recommendations was for the government to fund a further 50-100 shipping days per year while preparing a business plan for the purchase of an additional vessel.

Independent Clark MP Andrew Wilkie, however, said the Nuyina funding did not sufficiently address all the problems with the vessel.

“There was little funding [in the budget] specifically for Tasmania and our pressing needs, for instance a refuelling option for RSV Nuyina and the urgent repair of Macquarie Wharf, went unmet,” he said.

What farmers say: Steeper water costs to come

Farmers in South-East Tasmania are facing steeper water costs and uncertainty of supply after the federal government opted against funding a major proposed irrigation scheme for the region, according to a leading figure in the state’s agricultural sector.

Tasmanian Irrigation chief executive Andrew Kneebone said the state-owned company was disappointed that the federal budget did not include funding support for the 160km Greater South East Irrigation Scheme (GSEIS), a project which had been set for an early 2026 construction start and proposed to integrate three existing schemes.

“There’s a critical need in the South-East to integrate the three existing irrigation schemes, meet the demand for new water and address the reliability and cost issues for farmers,” he said.

“The scheme we are proposing also has great potential to add value to the state economy. The value of this development is undeniable.”

Tasmanian Irrigation CEO Andrew Kneebone. Picture: Supplied

Mr Kneebone said the proposed new scheme would deliver 37,200 megalitres of “high surety” water in what was traditionally “one of the driest areas of the state”, and create about $120m of on-farm investment and a $98.7m increase in Tasmania’s farmgate value.

According to the Tasmanian Irrigation boss, the lack of funding for the scheme meant “many” farmers in the region would now be facing an imminent rise in the cost of water and uncertainty of supply would be ongoing.

He said Tasmanian Irrigation would work with both the state and federal governments, as well as TasWater and irrigators to determine a way forward.

The Tasmanian government has committed $75m to the GSEIS and had sought a $150.6m funding package from the Commonwealth to make the scheme a reality.

The budget provided $235m over eight years to help farmers and regions manage drought and climate risks under the Future Drought Fund.

What Tasmania’s treasurer says: ‘pain ahead’

Treasurer Michael Ferguson has warned Tasmanians of “pain ahead” following Tuesday night’s federal budget, saying falling GST revenues would have serious implications for the state budget which is due to be handed down in September.

Federal Treasurer Jim Chalmers delivers the 2024-25 federal budget at Parliament House in Canberra. Picture: NCA NewsWire / Martin Ollman

While Mr Ferguson said it was too early to say exactly where the funding cuts would come from in the state’s fiscal blueprint, he indicated that falling GST receipts from the federal government would definitely impact Tasmania’s bottom line.

And Mr Ferguson accused federal Treasurer Jim Chalmers of leaving Tasmania off the fiscal map, saying state requests for funding of the Launceston General Hospital Masterplan, the Greater South East Irrigation Scheme, and the Burnie court complex had fallen on deaf ears.

“Tasmanians should brace for pain ahead,” said Mr Ferguson, the nation’s only Liberal state treasurer. 

Tasmania Treasurer Michael Ferguson speaks to media about the 2024/25 federal budget.

“And all state governments around the country are likely to be thinking the same, even if they don’t say it.

“If GST goes down, we have less money for state government public services.” 

Mr Ferguson said the “inflationary” federal budget meant that Tasmanians needed to brace for interest rates to remain high for longer than they otherwise would.